REPORT:

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TOPIC: What are the most prevalent cognitive biases that influence managers in the finance sector
when making decisions related to employees?

Quality of the research and experimentation as evidenced by:

+ objective and reason for performing the research ( lý do lựa chọn)
+ the clarity in stating the problem ( xác định problem)
+ identification of the important variables ( xác định các yto quyết định )
+ originality and ingenuity in the research design ( tính độc nhất/ hay)
+ selection of proper equipment for the research task ( lựa chọn đúng công cụ - t đoán là
quanlitative hoặc quantitative)
+ quantity and quality of data generated by investigative procedures ( data)
+ recognition of the limitations in the accuracy and significance of the results obtained
( limitation)
+ and the degree to which the data supported the conclusion

Have the following sections:

+ Chapter 1 – Introduction: provide an introduction to your team topic which includes:
background of the report; the significance of the report; the problem statement;
research objectives; research questions; and scope and limitations.
+ Chapter 2 – (Brief) Literature Review: Define and briefly discuss important OB terms
or concepts and research model(s).
+ Chapter 3 – Methodology: briefly provide the research method (qualitative or
quantitative method) that the writers use.
+ Chapter 4 – Discussion: Analyze the findings.
+ Chapter 5 – Conclusion: Summarize the results; discuss the managerial implications;
and recommendations for future research.

▪ Showed and used 8 various sources from ProQuest Database ( or GG Scholar) to support
▪ 3500 words (minimum)

I. Chapter 1 – Introduction: provide an introduction to your team topic which includes:

PHÚC
1. background of the report ( các bài research trước)
 This study builds on a paper by Ivo Hristov, Riccardo Camilli, and Alessandro Mechelli in 2022,
in which the authors explored how various biases and heuristics can influence managers’
decisions during the implementation of a performance management system (PMS). The paper
suggests that biases, such as mental disorders, beliefs, and spirituality, can create dominant
coalitions that derail the intended PMS process. PMS steps may not fully capture all the strategic
decision points that managers face, and organizational structure can influence how managers
interact with the PMS. Cognitive biases can also arise in supplier-buyer relationships when PMSs
are used to manage external stakeholders. The report emphasizes that further qualitative research
through case studies and surveys is needed to more comprehensively map the cognitive
distortions that may influence PMS implementation. Additionally, the report notes that
interviewees’ own biases, such as self-serving bias and attribution bias, may have influenced the
qualitative data, highlighting the challenge of ensuring objectivity.

Moreover, this study also builds on Vincent Berthet’s 2022 paper, in which the author reviewed
the literature on the impact of cognitive biases (CB) on professional decision-making in four
fields: management, finance, medicine, and law. The review found that professionals in these
fields are susceptible to various cognitive biases in their decision-making. In management,
risk-selection framing effects and overconfidence influence decisions. In finance, overconfidence
and the distribution effect (due to loss aversion) influence individual investors. In medicine, there
is strong evidence that biases such as omission bias, relative risk bias, and availability bias
influence medical decisions. In law, anchoring bias, recall bias, and confirmation bias are well
documented in judicial decision-making.

2. the significance of the report ( bài của mình về cái gì)

Our paper focuses on the influence of biases such as anchoring, confirmation, and availability on
managers' decision making in areas such as KPI, Performance Evaluation, Reward System in the
finance field. The results of this paper can show the direct relationship between managers' biases
and employee-related problems. In addition, understanding these biases is crucial for managers
because these biases can distort decisions related to KPI, Performance Evaluation and Reward
System. Addressing these biases correctly can enhance decision quality, promote fairness, and
improve organizational performance by ensuring decisions are based on comprehensive and
balanced information. This leads to more accurate and equitable outcomes, cultivating a
motivated and productive workforce.

3. the problem statement

When cognitive biases such as anchoring, confirmation, and availability occur in the workplace,
they can lead to significant problems. These biases distort decision-making processes, resulting in
unfair performance evaluations, skewed KPIs, and biased reward systems. Anchoring bias might
cause managers to set unrealistic targets based on initial figures, while confirmation bias can lead
to favoritism by focusing only on information that supports pre-existing beliefs. Availability bias
can result in overemphasizing recent events, neglecting an employee’s overall performance.These
issues can undermine employee morale, create a sense of injustice, and ultimately hinder
organizational performance.
 4. research objectives:
The research aims to achieve several key objectives: firstly, to identify the cognitive biases that
influence decision-making in the field of management. Secondly, it seeks to determine which of
these biases specifically affect decisions related to employees, including performance evaluations,
KPIs, and reward systems. Thirdly, the research will analyze the impact of these biases across
three critical sectors of decision-making to understand their broader implications. Finally, the
study will provide solutions and suggestions to minimize these biases within organizational
settings, promoting fairer and more effective management practices.

5. scope and limitations:

Scope: 8 vietnamese managers/…
There are some limitations to this study that should be noted. First, the study only interviewed 8
managers, so the results may not be representative of all managers. This limited number of
participants may result in a lack of diversity in perspectives and experiences, reducing the
reliability and general applicability of the study results. Second, all interviewees were
Vietnamese, so the results are only meaningful to a certain extent for Vietnamese people. For
other countries with different cultures, the results may be different due to differences in culture,
management style, and working environment. Finally, we randomly interviewed 8 managers
without considering whether they came from different organizations or companies. Differences in
organizations may have a certain degree of influence on their decisions, as each organization may
have its own processes, policies, and working culture. This may lead to differences in how
managers approach and handle management situations, thereby affecting the accuracy and
applicability of research results in different contexts.
II. Chapter 2 – (Brief) Literature Review: Kiệt
1. Define and briefly discuss important OB terms or concepts and research model(s).
What are the most prevalent cognitive biases that influence managers in the finance sector when
making decisions related to employees?
- Concept of Cognitive bias:
Cognitive biaes are unconscious and systematic errors in thinking that occur when people process and
interpret information in their surroundings and influence their decisions and judgments (Kahneman et al.,
2011).
Kahneman (2011). Thinking, Fast and Slow. New York, NY: Farrar, Straus and Giroux.
Những effects: https://www.britannica.com/science/cognitive-bias

- Concept of Management
According to Robbins and Coulter (2018), management is defined as the process of achieving
organizational goals through effective utilization of resources (p. 35). Daft (2021) elaborates that
management encompasses planning, organizing, leading, and controlling, all aimed at optimizing resource
use (p. 42). Furthermore, Jones and George (2022) highlight that decision-making is a critical function
within management that ensures the alignment of organizational actions with strategic objectives (p. 27).
Historically, Fayol (1949) emphasized the importance of management functions in coordinating activities
and resources to achieve efficiency and effectiveness in industrial enterprises (p. 19).
Robbins, S. P., & Coulter, M. (2018). Management (13th ed.). Pearson.
Daft, R. L. (2021). Management (14th ed.). Cengage Learning.
Jones, G. R., & George, J. M. (2022). Essentials of Contemporary Management (9th ed.). McGraw-Hill
Education.
Fayol, H. (1949). General and Industrial Management. Pitman.

- Concept of Decision making

Decision making theory describes the steps involved in making any decision, including recognizing that a
decision must be made, understanding the goals that one hopes to attain, making a list of options,
determining the consequences—both positive and negative—of each option, determining the desirability
of each consequence, evaluating the likelihood of each consequence, and integrating all the information.

National Research Council (US) and Institute of Medicine (US) Board on Children, Youth, and Families;
Fischhoff B, Crowell NA, Kipke M, editors. Adolescent Decision Making: Implications for Prevention
Programs: Summary of a Workshop. Washington (DC): National Academies Press (US); 1999. The
Decision-Making Framework. Available from: https://www.ncbi.nlm.nih.gov/books/NBK224102/

RESEARCH MODELS
Concept of a one-on-one interview
"A one-on-one interview, often utilized in qualitative research, is a method where an interviewer engages
directly with a single participant to explore their perspectives in depth. This type of interview can be
conducted in a semi-structured format, where the interviewer prepares a set of guiding questions but
remains flexible to follow the natural flow of conversation. This approach allows for open-ended
questions, encouraging participants to share their thoughts and experiences in their own words, thereby
providing rich, detailed data that can offer deeper insights into the research topic" (Kvale, 1996).

Concept of Thematic analysis

"Thematic analysis is a method for identifying, analyzing, and reporting patterns (themes) within data. It
involves a process of coding in six phases to create established, meaningful patterns: 1) Familiarization
with the data, 2) Generating initial codes, 3) Searching for themes, 4) Reviewing themes, 5) Defining and
naming themes, and 6) Producing the report. This method is used in a wide range of research contexts and
is particularly useful for examining the perspectives of different research participants, highlighting
similarities and differences, and generating unanticipated insights." Braun and Clarke (2006)

Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in
Psychology, 3(2), 77-101.

III. Chapter 3 – Methodology Nhi

We build the report based on existing knowledge and research more closely into one aspect within
a more specific scenario. A past study (Berthet, 2022) has provided an overview of which
cognitive biases affect some main occupations by conducting systematic literature with the Web
of Science database of terms “cognitive biases” and “decision making”.What the report discusses
is problems and decisions directly related to humans, which is the management area. Particularly,
 the focus will be on aspects of managerial decision-making concerning employees, which
reference from the research of Hristov, Camilli, & Mechelli:

+ Key Performance Indicators (KPIs): Which biases influence the decision-maker choose a
level of KPI.
+ Performance Evaluation: Which biases influence the fairness and accuracy of
performance assessment.
+ Reward Systems: Which biases influence the allocation of reward and recognition within
an organization.

To answer the question, the data is collected through a qualitative approach. One-on-one
interviews are conducted with semi-structured protocol to utilize gaining more insight (Cohen &
Crabtree, 2006) and perspective of the interviewees. Selected interview subjects are managers in
finance with years of experience ranging from beginners (a few years) to seniors (more than
twenty years). This ensures the diversity and integrity of the research. The open-end question will
be developed to prompt managers to express their opinions within real-life scenarios by their own
understanding. This allows interviewers to describe the situations and how it is challenging to
make decisions on aspects related to employees ( KPIs, Performance Evaluation and Reward
Systems). It is important to avoid mentioning the term “cognitive biases” as the purpose of
minimizing bias when participants answer the questions.
( câu hỏi apendix)
https://docs.google.com/document/d/1lgjHSItysWzmNWh6ZoDrFtQEdikYi5XcWB-WpPErXW
E/edit?usp=sharing

Interview transcripts will be analyzed by using thematic analysis, which examines the manager’s
description of a common theme or pattern, which allows us to index the record into categories of
“cognitive biases”. Advantage of this method is to easily catch main ideas in a large data set,
especially for in-depth interviews (Braun & Clarke, 2006). Furthermore, similarities between
interview answers can be emphasized through key words or themes. The most three prominent
cognitive biases are selected based on
+ Frequency: the number of times the interview data suggests a specific bias
+ Priority: The bias aligns with the pre-identified biases related to managerial decisions
With selected biases, the general effects of such biases on decision making will be discussed. This
will be taken as the foundation for exploration of how the identified biases affect aspects of
decision-making related to employees. Gaining the knowledge from existing literature and data
collected from the interviews, valuable insights on negative impacts will be collected, thereby
providing corresponding solutions to minimize or eliminate.

IV. Chapter 4 – Discussion: Analyze the findings.

1.
a. Selection from result of Previous Research
According to Berthet (2022), there exists multiple cognitive biases that influence the decision-making
process in the management field, which are:
 - The anchoring bias is a cognitive bias that causes us to rely heavily on the first piece of
information we are given about a topic (Pilat & Sekoul, 2021).
- The availability heuristic describes our tendency to use information that comes to mind quickly
and easily when making decisions about the future (Pilat & Sekoul, 2021).
- Confirmation bias is defined when people search for information that supports someone's beliefs,
interpreting, remembering such evidence and seeking for that (Nickerson, 1998).
- Disposition effect is defined when investors could not sell good stocks as soon as they could and
hold poor stocks as long as they could (Shefrin & Statman, 1985). It is generally related to loss
aversion (Kahneman & Tversky, 1979).
- Hindsight bias is a tendency to perceive events to be more predictable after it has happened
(Fischhoff, 1975).
- Omission bias is the tendency to prefer harm caused by omissions rather than equal or lesser harm
caused by actions (Baron & Ritov, 2004).
- Outcome bias is the process of evaluating post decision based on the information about the result
of the decision made. These judgments are wrong for the standard assumption that “information
that is available only after a decision is made is irrelevant to the quality of the decision” (Baron &
Hershey, 1988).
- Overconfidence bias is a tendency to overestimate their own ability when performing a specific
task (Brenner et al., 1996).
- Relative risk bias is the likelihood to choose a particular treatment towards the relative risk than
when presented with the identical information expressed in terms of the absolute risk (Forrow et
al., 1992).
- Susceptibility to framing is defined when people react differently depending on the single
choice’s result (Tversky & Kahneman, 1981).

https://www.emerald.com/insight/content/doi/10.1108/MRR-11-2021-0777/full/html#sec001

KPI:

- Availability
- Anchoring

PE:

- Self-interested
- Affect heuristic
- Confirmation
- Groupthink

Reward system:

- Self-interested
b. Selection of bias
( dựa trên frenquency xuất hiện, priority)
2. Ptich 3 biases ảnh hưởng đến 3 mặt
a. 3 bias ảnh hưởng đến decision making Huy add cite nha
Anchoring:
When plans or estimating outcomes are being set, we tend to see the first information as the base to
anchor around instead of seeing it objectively.

a. Individual Effect
Anchoring bias makes individuals commit to only one or little initial information, therefore, a lack of
flexibility will be exposed in the long run. Moreover, it can seriously prevent us from updating our
mindset to fit into the public, leading to a backward mindset.

b. Systemic Effect
The anchoring bias is extremely pervasive, and it’s thought to drive many other cognitive biases, such as
the planning fallacy and the spotlight effect . For example Anchoring can influence courtroom judgments,
where research shows that prison sentences assigned by jurors and judges can be swayed by providing an
anchor (Pilat & Sekoul, 2021). Moreover, in the financial market, investors would likely rely on forecasts
or valuations to make decisions. However, these estimates are not absolute leading to unexpected market
changes that will mess up the investors decision.

Confirmation
The confirmation bias describes the tendency of individuals to notice, focus and give greater credence to
evidence that fits their knowledge or existing belief. When making decisions, they give more credit to
information that they have proven to be true (Pilat & Sekoul, 2021).

a. Individual Effect
Confirmation bias can result in flawed decision-making by warping the reality from which individuals
gather evidence. In experimental settings, decision-makers frequently pursue and place more importance
on information that supports their existing beliefs, rather than considering evidence that introduces new
perspectives. This behavior distorts their understanding of facts and data, leading to biased and less
informed decisions.

b. Systemic Effect
Confirmation bias can have widespread effects on systems such as science, law enforcement, and public
policy, leading to systemic issues that affect large groups of people or society as a whole (Casad &
Luebering, 2024). In scientific research, confirmation bias can lead to publication bias as studies that have
positive results may have a higher chance of being public, whereas those that have negative results may
be concealed. Therefore, the body of knowledge would be skewed, creating inaccurate understanding.

Availability
a. Individual Effect
The availability heuristic can result in poor decision-making because people tend to rely on easily recalled
memories, which often do not provide an accurate assessment of how likely those events are to occur
again. This overestimation causes us to base our decisions on low-quality information, while more
relevant but less memorable events, which offer better evidence for making predictions, are often
overlooked (Casad & Luebering, 2024).
 b. Systemic Effect
Suppose there was a big market crash in the past, investors now are heavily influenced by the vivid
memories of the event. Therefore, they are overly scared that it will happen again leading to a reduction in
investment and hindering economic recovery. The dramatic event skewed the investors' behavior affecting
the market stability.

b. Effect of Selected Biases Đạt

KPI:
Availability
1. Availability Bias causes decision making to lack accuracy when KPIs are set to focus on
speculations that appear right in the manager's mind instead of having to do research and surveys
to find the cause. This guess is given large weight in the KPI setting process, which creates a
passive approach to the management of the company. As a result, other factors are underestimated
and ignored, these actions can lead to false decisions and not achieving initial goals.

Example: The company had to stop producing the product due to the problem that the sales revenue was
not meeting requirements and they heard some customers say bad things about their product quality.
Immediately, the company set strict KPIs on completing high-quality products to overcome this and they
ignored other important things without any data collection or research. As a result, the sales revenue still
did not meet requirements even after they had improved their product quality so much.

Appendix
Interviewer: You mentioned earlier that one product of your company must be discontinued. Can you
explain the reason for this?
Manager: At that time, The product quality was not up to standard according to the customers feedback.
But after stricter regulations and more careful inspection of the quality of each product, the quality did
improve.
Interviewer: So the quality issue has been resolved. I wonder whether the revenue will increase or not?
Manager: Not at all, we are still working on the research to find the root cause of this situation.

2. KPI setting is based on metrics that are easy to remember, measurable, and frequent, and neglects
those that are rare or complex to calculate. While rare events are less likely to be remembered,
frequent events create a stronger impression. This creates blind spots and increases risk by
prioritizing specific situations.
Example After having a highly successful campaign with the Korean community in Phu My Hung area,
the sales teams continued to target this specific segment, ignoring other segments that may have higher
potential.
Appendix
Interviewer: I see that your customers are mainly Koreans, not Vietnamese
Manager: Well, we had a pretty successful campaign last year with Koreans in this area, so we have built
up a relatively good reputation
Interviewer: So you must have been pushing PR with Koreans a lot, right?
Manager: We have rented billboards in some cafes with Korean companies, but mainly in Phu My Hung
area
Interviewer: So the main customer segment is Koreans, what about Vietnamese
Manager: After that campaign, we changed all your customer segments to Vietnamese, not focusing on
Vietnamese anymore

Anchoring
1. Anchoring bias may have a huge impact on achieving KPIs. When evaluating performance
against KPIs, anchoring bias can lead to misunderstanding. If the initial performance (anchor)
was positive, managers might be less likely to recognize the need for improvement, even if KPIs
are not being fully met. Conversely, a negative initial performance (anchor) might lead to a
manager neglecting positive developments.
Example
When Covid 19 started to happen, the manager focused on pushing sales, increasing KPI level since the
previous in-store sale was high. However, this ignores consumer behavior when lockdowns make online
shopping more effective. The manager thought COVID 19 will end soon so he did not change the sales
strategy, which leads to a loss in sales revenue..

Appendix:
Interviewer: Is there any mistake that you have made while operating the store?
Manager: Actually yes, in that situation, I continued to push for high in-store sales numbers in the
beginning period of COVID 19 since I didn't see the severity and duration of it. At that time, when it was
just a lockdown in a specific area, I still set the KPI of in-store sales high instead of online sales.
Interviewer: Why would that be a mistake? Can you interpret it more clearly
Manager: Well, it brought us profit, but only in the beginning, the epidemic was too complicated, we did
not have a suitable plan, and the company suffered a lot of losses. We should have seen a clear shift
toward online shopping, however, we believed that it would end soon so we wanted to have high in-store
sales figures as the previous period and maintained those results
Interviewer: Can you share any advices for us if we were in that situation
Manager: Of course, regularly reassessing the strategies and being flexible enough to adapt to significant
changes in the market is essential, rather than sticking to the past performance metrics.
Interviewer: Thanks for sharing.

- The company uses previous year’s sales growth as the foundation for next year’s target. This
might lead to unrealistic expectations if the previous result was exceptionally good or bad or if
there were significant changes in the industry (Wrong RS,2024). More specifically, if the
previous year they had a good performance, maybe some high target can not be achieved, putting
pressure on the team and leading to burnout or illegal behavior as they strive to meet the goal.
Conversely, if the previous year they experienced a poor performance, this will lead to setting low
targets based on those results. As a result, the company will have a limitation on the potential
growth and restriction improvements. Additionally, significant industry changes, like new
regulations, technological advancements, or consumer behavior shifts, can make past
performance a poor predictor of future success.
Example: The company put a high expectation for having a high need for their products last year.
However, when the trend ends, the KPI does not change according to the situation. Under such pressure,
this leads to employee burnout and increasing employee turnover.
- Appendix:
Interviewer: According to you, the company is recruiting more employees because of a shortage of human
resources. Is it because the company is doing better and expanding?
Manager: No, the rate of employee resignation is high and productivity has also decreased compared to
the previous period, so we have taken appropriate measures.
Interviewer: Can you tell me the reason for the increasing turnover problem?
Manager: According to the sharing and survey of employees, the KPI was too high, leading to stress and
pressure on employees.
Interviewer: So right after that, did you adjust the KPI level?
Manager: Yes, this year's business situation is different from last year, so I have reviewed and adjusted
accordingly.

Performance Evaluation
- Anchoring bias:
1. Anchoring bias leads to managers relying heavily on the first piece of information they receive
about an employee's performance (the "anchor"). This can distort the overall evaluation.
(Mohanani, Rahul & Salman,et al., 2018).
+ Overestimation: If the initial performance is positive (high anchor), managers might
overestimate the employee's overall effectiveness, overlooking areas needing
improvement.
+ Underestimation: Conversely, a negative initial performance (low anchor) can lead to
underestimating subsequent improvements. Managers might focus on the initial
negativity, neglecting positive developments.
Example:
- The manager evaluates an employee's performance for the entire year, however the manager has
relatively too much weight for an employee's performance in the last few months. Recent performance
becomes the anchor and overshadows employee’s overall contributions throughout the year. Therefore,
staff who had a good performance earlier in the year might be unfairly rated lower.
Appendix:
Interviewer: How do your company usually evaluate the employees’ performance over the entire year?
Manager: HR department looks at their working effectiveness and attitude in the year contribution
throughout the year but sometimes the last few months performance could disproportionately affect their
evaluation.
Interviewer: Can you explain it more?
Manager: Sure, if an employee makes significant contributions early in the year, but the final months are
not so good, those months may overshadow their overall contributions, leading to an unfair evaluation.
Interviewer: So how do you avoid this situation?
Manager: I encourage the HR department to evaluate the employees' performance more often, maybe
every month and take notes, so that at the end of the year they can summarize and have a more objective
and fair evaluation.
2. Anchoring bias can have a huge impact on performance evaluations in the workplace when it
causes managers to selectively gather, interpret, and retain information that match their initial
impression about an employee. As a result, this can lead to the misjudgement of the employee
evaluations regarding an employee’s actual performance (Paige, W., & Margaret, L., & Lea, W.
,2016).
Example: if the manager has a positive view about an employee, they might focus and recall good
aspects of the employee’s performance while neglecting their mistakes. Conversely, if the manager has a
negative perception, the employee will be focused on their mistakes or weaknesses, ignoring any
improvements they achieved in the past.
Appendix:
Interviewer: I want to gather feedback about some employees and I would like to get your opinion. What
do you think about employee A’s performance recently?
Manager: She has been doing great, she is always punctual, consistently suggests new ideas and never late
on deadlines. She is such a reliable team member.
Interviewer: It’s great to hear that, but is there anything that she could improve?
Manager: Of course, she is just like everyone, sometimes she could be overwhelmed with the amount of
tasks, but at the end of the day, she handled it really well. But it is not a big issue, as long as she is not late
for the deadlines.
Interviewer: That sounds positive overall. How about employee B?
Manager: Recently, he has been late for some deadlines, and his communication skill is not as clear as it
should be. It’s been an issue that is hard to deal with to be honest.
Interviewer: That sounds challenging. Is there any achievement or strength that you would like to
mention?
Manager: Actually, it feels like he was trying to work overtime to fix his mistakes but it was nothing
compared to the mistakes he made. I would like him to be more responsible with his job.
Interviewer: Thank you for sharing.

Confirmation
- At the workplace, confirmation bias affects the performance evaluations process by reinforcing
existing stereotypes or biases related to gender, age or other demographic factors. When
managers allow these factors to influence their judgments, they might give disobjectiveness and
emotional evaluation to employees, rather than objectively assessing their actual performance. A
research by Garcia and Thompson revealed that "Confirmation bias in performance evaluations
can perpetuate workplace inequalities by reinforcing stereotypes about certain demographic
groups, leading to systemic biases in promotions, salary increases, and career advancement
opportunities."
- Ex: The manager will base on the harbor stereotype that the older employees are less adaptable to
advanced technologies. During the performance evaluation, they will only notice when thế
employees are struggling with new technology. The manager ignores their effort or the time they
 succeed to use innovative technology. Consequently, the evaluation might not correctly reflect the
ability and performance of the employees.

2. Resistance to Change: This bias causes them to focus only on information that confirms their
initial judgments and to dismiss evidence that contradicts their evaluation. This, coupled with a
desire for consistency and a difficulty admitting to being wrong, adds to the resistance. As a
result, employees who feel their efforts are not recognized or feel unfair about the evaluation may
experience decreased morale and motivation, leading to lower performance and productivity.
Besides, those who are favored by managers tend to be lazier, slowing down their progress
because they believe they still receive good reviews from managers. This results in a slow
development, not realizing the full potential of the company.
- Example: Employee C is a project manager who has always been highly regarded and top-performing
by his management due to some outstanding achievements in the early stages of his career. But recently,
the projects he leads have been behind schedule, and he has received negative feedback from his
subordinates and colleagues. However, his management has overlooked these issues and continues to
highly regard him, which has made him arrogant, believing that his previous achievements will always
protect his position.
Appendix:
Interviewer: Recently I have seen a lot of negative feedback for employee C, but I still see him being
highly appreciated. How did you evaluate that employee's performance?
Manager: Actually, I think everyone will make mistakes in their career, it's just whether they know how to
change or not. Besides, he has brought a lot of profit to the company before, so I still believe in his ability.
Interviewer: But recent projects are all behind schedule, and many employees have reported that his work
attitude is very bad. Do you think you should reconsider your assessment of employee C?
Manager: It is worth considering, maybe I will have to judge by the current performance he is bringing to
the company instead of his previous achievements. Thank you.
Availability bias
1. Can lead managers and employees overemphasizing recent or memorable events when evaluating
performance. Managers may pay too much attention to striking events that remain in their mind
rather than the overall performance of the employee. This could lead to an inaccurate perception
of an employee’s ability and effort, and they might easily conclude that the employee is
incompetent if the managers recall several mistakes even though their overall track record is
strong.
- Example: Employee B has consistently delivered on projects, met all the deadlines, and received
positive feedback from her superiors and colleagues. But recently, he missed two deadlines due to
unforeseen personal circumstances, and that made the manager wonder whether he was trustworthy
enough to take on a higher position. Ultimately, the manager decided not to consider him for a new
leadership position, a decision influenced more by the recent event than by the employee's long-term
performance.
Appendix:
Interviewer: I would like to discuss employee B’s performance as I have seen that he was passed over for
a leadership position while he has a strong track record. Can you tell me the reason for this decision?
Manager: Certainly, although he has a solid performance history, recently he has missed two important
deadlines, this made me concerned about his reliability in a leadership role.
Interviewer: I understand your concern but do you think recent events have overshadowed his consistent
performance over a long period, and that has led to your decision being unfair?
Manager: Maybe, I was overestimating those mistakes rather than his overall performance, when making
decisions, those missed deadlines were fresh in my mind during the process.
2. Managers may also overlook the long-term performance in favor of dramatic events which could
result in failure of recognizing ongoing improvement or deterioration. This short-term focus can
cause unfair evaluations, as the few recent successes or failures may overshadow the overall
performance history. Leading to a promotion of an employee that has recently been excellent but
has a poor performance in the past or penalizing a worker that consistently improves but recently
faces a setback.
- Example: Employee A always had bad performance at work such as being late for work, not
concentrating on work, missing deadlines but recently she won a profitable contract for the company.
Based on that, the manager was impressed and promoted her but forgot about the mistakes she made
during work, this caused resentment among other employees who worked hard every day.
Appendix:
Interviewer: I would like to discuss a recent promotion as I have seen that employee A who had a record
of poor performance throughout the year, but she was promoted, can you tell me more about your
decision-making process?
Manager: Although she had performed poorly, she recently won a major contract for the company, which
demonstrates her potential and the contract has significantly benefited us and I felt that it is essential to
recognize her contribution.
Interviewer: But do you think that this promotion is unfair for other employees who are consistently
performing well but receive no recognition?
Manager: That is such considering, it is also important to balance recognizing outstanding achievements
and consistent performance.

Reward System
Anchoring bias will make the manager rely too much on initial information when deciding about
the employee's rewards.Not paying attention to other factors such as the economic condition or company
status makes the reward level or reward-receiving criteria not aligned and suitable. Furthermore,
anchoring bias also leads to unfair reward distributions among employees. This can cause demotivation
and discouragement among employees because they feel that their performance is not recognized.
(Kahneman, 2011).
- Example: Company applied the performance reward system based on the criterias in the previous year
for this year. The managers use the previous benchmarks for rewarding, even though this year experiences
less profit and company loss. Therefore, employees have tried really hard but still do not meet the criteria,
which means they did not receive the reward.
Appendix:
Interviewer: I want to discuss with you about the reward system, can you explain more on how the criteria
were set?
Manager: Of course, the criteria were set based on the previous year benchmarks, we aim to maintain the
consistency of our evaluation process and revenue.
Interviewer: But I see revenue is down and the company suffered some losses, is it unfair for the
employees to keep the criteria the same?
Manager: In hindsight, yes. We did not anticipate the changes and that has left many employees working
hard but still not receiving rewards.
Interviewer: This can make employees feel unfair and unmotivated, how did the employees react?
Manager: Understandably, they were quite frustrated that their contributions weren't recognized, so we
decided to re-evaluate their performance more fairly.

- Anchoring bias affects a disproportionate influence between initial offers with employees'
compassion and bonus. The managers and HR department of the company will based on the
initial negotiations or historical compensation data when considering employee rewards (Gino
and Moore, 2008). As a result, it can lead to unfair or ineffective compensation structures that
accurately reflect an employee’s value or market rates. This will make the employee feel
undervalued and unmotivated to contribute to the company.
- Example: When the employee was hired at a lower salary during the recession, even if the employee's
contributions and performance standing out or market conditions have changed, their salary growth is still
based on that initial low figure.

Appendix:
Interviewer: I want to discuss the salary growth of recruited employees during the recession and despite
their contribution, and changing market conditions, the salary increases they receive are still based on the
initial growth figure. Can you explain this situation?
Manager: We hired them during the recession period, so we had budget constraints and when the
economy improved, we had to raise the salary based on their initial wage that had been previously agreed.
I knew many employees would be unhappy with this because it did not fully recognize their contribution
and ability.
Interviewer: So how do you think you can address that?
Manager: We are planning for a market salary review and a more flexible salary adjustment policy that
aligns with their performance and the market condition.
Interviewer: That is great to hear.

Availability bias makes high-visibility roles more likely to be rewarded. High-profile positions or
those with direct customer contact are more likely to be noticed and therefore more likely to be rewarded.
Because of the nature of these jobs, employees are more visible and achievements are more likely to be
recalled, which leads to inequity and demotivation for back-office employees.

Example: most company rewards are given to sales staff or customer service departments for
positive feedback from customers. Meanwhile, contributions of employees like IT or finance are
taken as granted or standard.

Appendix:
Interviewer: In your company, which department does the best job?
Manager: I see that customer service departments often receive compliments from customers, and
also receive quite a lot of rewards compared to other departments
Interviewer: Is it because other departments do not work well?
 Manager: Not really, mainly because the work is related to data and technology, so it is required
to be accurate, so there are no outstanding achievements, just need to have correct data.

2. When a team achieves a certain achievement, the team leader's contributions are more visible than the
team members'. This leads to undervaluing the collaborative effort and work of the remaining members.
As a result, the team leader being rewarded and appreciated more will cause unfairness, lack of solidarity
and internal conflicts within the team.

Example: A team has just achieved success in successfully predicting imported merchandise
suitable for this season. However, only the team leader is rewarded and recognized in front of the
whole company because only one representative needs to come up to receive the award.
Appendix:
Interviewer: In your company, which employee does the best job?
Manager: Oh, Mr. xxxx. At the most recent award ceremony, Mr. XXXX came up to receive the
award because his team had outstanding achievements. I don't remember the rest of the team very
well.
Interviewer: Why did only one member come up for the collaborative achievements?
Manager: Well, it's just symbolic, one person is fine.

- Chapter 5 – Conclusion: Summarize the results; discuss the managerial implications; and
recommendations for future research.
https://sci-hub.st/10.1108/mrr-03-2016-0054
1. Summarize result Huy ( RS, PE, KPI bị ảnh hưởng bởi những bias nào)
2. Implication Phúc PRACTICE / POLICIES
3. Recommend for future research Kiệt ( tham khảo phần limitation)

Trân: appendix + viết thêm kqua research

Huy: Đọc comment trong bài + Viết implication ( cách áp dụng vào cty/ managers) LÀM ĐÀNG
HOÀNG NHA, PHẦN NÀY QUAN TRỌNG ĐÓ
Kiệt: Đọc comment trong bài + Paraphrase lại + Recommend for future research
Phúc: Viết scope + implication
Nhi: Viết lý do chọn 3 biases
Đạt:

VI. APPENDIX:

Phóng Vấn
Năm kinh nghiệm - chức vụ - phòng ban - cty
● Bố LXH (Kinh doanh)
● Bố Nhi ( Engineer)
● Anh Đạt (Banking) - 10+ năm kinh nghiệm - Trưởng Phòng Kiểm toán ngân hàng BIDV chi
nhánh Vũng Tàu.
 ● Mẹ Trân (Law)
● Mẹ Phúc ( Account ): 20+ năm kinh nghiệm - Kế toán trưởng- CTy cấp thoát nước bến tre
● Mentor của Kiệt ( Tài chính ) - 12+ năm kinh nghiệm - Co-founder & Advisor của Fundiin.
● Bạn của Kiệt ( Business of company CNTT ) - 15+ năm kinh nghiệm - Advisor of FPT Software
Central Region Company Limited & Director of Research and Development Center at FPT
Information System Da Nang.
● Mẹ Nhi

Overconfident Excessive self-belief

Overconfidence bias
Inflexible Underestimation of uncertainty
Not pay attention Decision-making errors Poor
Starting point, first decision
Initial information dominance Anchoring bias
impression making,
Unfair bargaining Negotiation poor
organization
False memory Overconfidence in past knowledge al
Second-guessing Criticizing decisions Hindsight bias performanc
e, employee
disengagem
ent
Availability bias

Confirmation bias

Keywords Themes Bias anizational Im

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