Researchers have long known that people are very frequently overconfident—they tend to believe they are more physically talented, socially adept, and skilled at their job than they actually are. (Know anyone like this in veterinary practice?) But this overconfidence can also have detrimental effects on their performance and decision-making. According to researchers at the University of California Berkeley’s Haas School of Business, the lure of social status promotes overconfidence. Studies found that overconfidence helped people attain social status. People who believed they were better than others, even when they weren’t, were given a higher place in the social ladder.
These findings also suggest one reason why in organizational settings, incompetent people are so often promoted over their more competent peers. In organizations, people are very easily swayed by others’ confidence even when that confidence is unjustified, the researchers say. Displays of confidence are given an inordinate amount of weight by employers. Social status is the respect, prominence, and influence individuals enjoy in the eyes of others. Within work groups, for example, higher status individuals tend to be more admired, listened to, and have more sway over the group’s discussions and decisions. These “alphas” of the group have more clout and prestige than other members.
Researchers say these findings are important because they help shed light on a longstanding puzzle: Why overconfidence is so common, in spite of its risks. The findings suggest that falsely believing one is better than others has profound social benefits for the individual. The bottom line? Researchers say organizations would benefit from taking individuals’ confidence with a grain of salt. Yes, confidence can be a sign of a person’s actual abilities, but it’s often not a very good sign. Many individuals are confident in their abilities even though they lack true skills or competence.
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