Psychology of People Analytics

The attention to people analytics has increased enormously over the last few years. Many organizations have established people analytics teams, and several promising start-ups have developed software that can help HR with people analytics.

The assumption is that if we have access to the right data, if we have the right analysis tools and clever people to interpret the data, we will be able to predict human behavior – and that these predictions will be used in a sensible way in organizations. I have some doubts.

It is time to have a closer look at the psychology of people analytics.

Inspiration

Two books were a great inspiration, and a must-read for HR professionals and people analytics specialists.

On number one “Thinking, fast and slow” of Nobel prize winner Daniel Kahneman. Looking at the numbers that were sold of this book, you would expect almost everybody has read this book (or at least: has bought this book). When I studied experimental psychology (from 1975-1981) Kahneman was already famous. I still remember the famous article he published in 1974 with his colleague Amos Tversky: Judgment under uncertainty – heuristics and biases. I quote from this article: “The reliance on heuristics and the prevalence of biases are not restricted to laymen. Experienced researchers are also prone to the same biases when they think intuitively. For example, the tendency to predict the outcome that best represents the data, with insufficient regard for prior probability, has been observed in the intuitive judgments of individuals who have had extensive training in statistics”.

On number two “The art of thinking clearly”, written by Rolf Dobelli. His book is less scientific, but certainly a worthwhile read with many good lessons. In 99 chapters, he describes the most common thinking errors, with interesting examples.

I also used the list of cognitive biases on Wikipedia. A great and extensive list. This list inspired Buster Benson to cluster these cognitive biases in categories, which he describes in his excellent article Cognitive bias cheat sheet. Based on this article John Manoogian made a very interesting and informative infographic, the Cognitive Bias Codex.