Confusing Luck With Skill When Rewarding

Research published in THE REVIEW OF ECONOMICS AND STATISTICS found clear evidence that luck was overly influencing managers decisions and evaluator ratings. While the study was based around a football scenario, Professor Lionel Page, who led the study, suggests this tendency is likely to be widespread in business as well. We know that it can already be difficult for a manager to objectively assess employee performance, so educating them around outcome bias is key.

(Fooled by Performance Randomness: Overrewarding Luck, Romain Gauriot & Lionel Page. September 30, 2019)