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Managers make decisions about people based on gut instinct rather than objective data

Seven out of 10 line managers doubt their decision-making capability when it comes to people management.

According to the results of a study by workplace psychologists OPP, 71% of all line managers would change the people decisions they've made if given a second chance. It's an indictment on the ‘gut instinct' culture that costs UK businesses millions of pounds in performance issues each year.

Nearly four in 10 (39%) line managers said they still rely on gut instinct as one of the most important factors when making any decisions about their people. A quarter also admitted that whether they like someone personally was also a major influence.  

But people who had taken a psychometric test in the course of their career were twice as likely to find this kind of data important to them in making a range of decisions about people. This group is also much more likely to look for evidence in past behaviour than those who have not received feedback on a personality test in their career (68% vs 51%).
A major factor in this is managers' mistaken belief that they truly know their people - a view not shared by employees: 97% of managers feel they know their people fairly well or better; only 74% of workers agree with them.

Almost half (47%) of managers even say they know a great deal or everything there is to know about their people, while only 23% of employees share this view. Moreover, 45% said that they don't trust their manager's instincts on staff decisions relating to them or to others. The result is a workforce that is becoming increasingly distrustful of management decision-making.

Robert McHenry, CEO of OPP, said: "The results of this study make chastening reading for any management team. Organisations have to ask themselves why they demand objectivity and transparency in every other decision about resources, particularly in these difficult times when all investment is under scrutiny, but when it comes to people they allow themselves to ‘fly blind'? Managers are making the wrong people decisions more often than not, unable even to stand by their decisions after the fact. Mistakes range from overestimating the potential of a person to discovering information further down the line that would have changed the decision. In any case, these decisions are often made covertly and in the absence of hard facts.

"The economic cost of bad people decisions is well documented. Putting the wrong people in the wrong jobs has a direct impact on productivity and efficiency, and the cost of reversing the decision is often considerable.
"Management habits need to change. It's possible to obtain robust and objective information on which to decide. Considering proven, prior experience, data from psychometric testing and colleague feedback together creates a better foundation for these decisions. It's the best way for businesses to manage risk when it comes to their people, and it's a way that every CEO should demand."