Career Testing
Career Testing
Career Testing
LEADERSHIP / SEP. 02, 2014
version 2, draft 2

Why Overconfidence Can Pay Off

Recently I wrote about our level of self-awareness, and how it’s generally not particularly good.  The research touched specifically upon our awareness of our assertiveness, and how we nearly always think the opposite of what we are.  There are numerous other studies reporting similar findings for a range of character traits, not least of which is our general ability.

I’m sure we’ve all come across these types in the office.  Those that have very high opinions of themselves and have a whole host of narcissistic character traits.  They’re pretty annoying, right?

They may be annoying, but a new study suggests that such people are rather successful.  The study, conducted by researchers from Newcastle and Exeter Universities found that people who think they’re better than they are tend to get more promotions and reach more influential positions within their organisations than their more level headed peers.

What’s more, it also suggested that their talent spotting abilities are equally bad, given that they tend to inflate the abilities of others to an equal extent as they inflate their own.  This often leads to excessive risk taking, with the obvious pitfalls of such an approach.

As if it couldn’t get any worse, the study also found that those who tend to underestimate their abilities were viewed as less able by their peers.  Ugh.

About the research

The study, which was published in PLOS ONE, asked participants to rate both their own ability and that of their peers on the first day of an assignment.  When the assignment was completed, it emerged that just under half of the group had underestimated their ability, whereas around 40% were over-confident, and a paltry 15% had managed to predict their outcome with a degree of accuracy.

Interestingly, each participant was also asked to predict the performance of other members of the group.  It emerged that other participants would also over-rate the outcome of the over-confident members of the group, even when the actual outcome showed that to be a false assumption.  What’s more, the opposite would occur for those who were under-confident in their predictions.

No accounting for experience

When the task was repeated six weeks later, i.e. with the initial results in their memory banks, and yet the findings remained the same.  The cocky and confident ones were rated higher than their meek peers.

"These findings suggest that people don’t always reward the most accomplished individual but rather the most self-deceived." the researchers say

"We think this supports an evolutionary theory of self-deception. It can be beneficial to have others believe you are better than you are and the best way to do this is to deceive yourself – which might be what we have evolved to do.

"This can cause problems as over confident people may also be more likely to take risks. So if too many people overrate themselves and deceive others about their abilities within organisations then this could lead to disastrous consequences such as airplane crashes or financial collapses."

The findings are fascinating as it is one of the first studies to not only look at how we perceive ourselves, but how this perception influences the perceptions of us by other people.

It provides an interesting input into the growing clamour for social/peer review systems in our workplaces that ask our employees to regularly rate one another.  The theory is that having regular and varied feedback would give us a better picture of an employee’s true performance.  This research suggests however that even this peer feedback may be more influenced by the confidence of the person than their actual performance. All of which raises an interesting point indeed and is certainly something HR managers need to be aware of.

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