Base Rate Neglect Bias: Can it be Observed in HRM Decisions and Can it be Decreased by Visually Presenting the Base Rates in HRM Decisions?

Abstract

The aim of this experimental research was to explore if the future HR managers are susceptible to the base rate neglect (BRN) bias and if the visual presentation of the base rates improves their reasoning. The BRN bias is a tendency to disregard a priori probabilities that are explicitly given for the class of observed objects. In this study, BRN is seen as the case of decision-making bias in the work-related context. Although it is inevitable part of the decision-making processes concerning employees`, the topic is not sufficiently studied. A total of 65 participants, enrolled in the master studies of HRM, were subjected to 4 different types of BRN tasks, in which five different HR activities were described. They were varied within subjects, representativeness of description, and format of base rate. Within each task there were five different situations that make 20 tasks in total. The two-way repeated-measures ANOVA revealed that the proportion of biased answers was significantly higher on the representative tasks when the tasks presented visually, with no interaction between representativeness and format of task. Results are in line with previous studies that observed an effect of BRN on decision-making process. Yet, unexpectedly, visual presentation of base rates did not facilitate unbiased reasoning implying that some other form of presentation might be more appropriate for the task.

Keywords

• base rate neglect
• cognitive bias
• HRM
• decision-making
• ecological rationality