[Rating Errors] Beware of the Halo and Horns Effects
April 30th, 2010 at 11:54 pm (Sharpening Your Skills, The Successful Manager)

Preamble: We are often unaware of the many biases and prejudices that influence our social judgments. Psychologists call these the “bias blind spots.” I believe that we can overcome many of these subliminal biases by educating ourselves to be perceptive of them. This is the second in a series of articles on the common rating errors. See my earlier article on the recency bias.
Unconscious Judgments of an Investment Broker
A study conducted in year 2007, highlights two of the most common unconscious biases in social judgment. Prof. Emily Pronin of Princeton University showed study participants one of two pictures of the same man whom she introduced as an investment broker. One picture showed a suited man with a highly regarded Cornell degree and the other showed the man in casual clothing with a degree from a nondescript college. The professor asked her participants how much of a theoretical $1,000 they would invest with each. The participants rated the suited man as more competent. He got $535 on average without having his background checked. In contrast, the causal dresser got just $352. The participants did not consider the second broker as trustworthy and were more likely to have his credentials verified.
The Halo Effect
The “halo effect” is the concept by which a person who is judged positively on one aspect is automatically judged positively on several other aspects without much evidence. For instance, as a result of the halo effect,
- attractive people are often judged as competent and sociable. Film stars and other celebrities are assumed pleasant and sharp-witted,
- inexperienced interviewers tend to pay less attention to a candidate’s negative traits after discerning one or two positive traits in the first few minutes of a job interview,
- charismatic professionals tend to get noticed and move up the corporate ladder faster, irrespective of their technical and leadership skills,
- articulate speakers are likely to be more influential on their audiences even if their messages are poor in form and content.
Politicians, film and TV stars, sportspersons, celebrities and brand managers have learned to construct a halo effect and later capitalize on their perceptible reputations. Apple’s iPod generated positive impressions of other Apple products — the company capitalized on this halo effect and delivered excellent products in the iPhone and iPad. Renowned fashion designers can command higher price points even for ordinary clothes.
The Horns Effect
The “horns effect” or the “devil effect” is the concept by which a person who is judged negatively on one aspect is automatically judged negatively on several other aspects without much evidence. Clearly, this is the corollary to the halo effect.
- For years, American car manufacturers have battled the mistaken public perception that cars made by Japanese companies are of significantly better quality even if American car manufacturers use identical components from the same suppliers and assemble their cars using identical manufacturing processes. Even today, Japanese brand cars resell for much higher prices than American brand cars.

Call for Action
- Reflect on your decision-making process to steer clear of biases. As human beings, we are incessantly forming an opinion of people, objects, and events, both consciously and subconsciously. However, our judgment is rarely free of biases and our measures are not always comprehensive enough. Before reaching any important decision, be sure to collect all the relevant facts and reflect if your thought processes are free of the common biases.
- Understand that perception is reality and be conscious of the image you are projecting. People judge the proverbial book by its cover. Your friends and family, workplace and the society has a certain perception of who you are and what you can do, irrespective of the reality. As much as you would prefer to be evaluated based on who you actually are and what you can actually do, understand that your identity and prospects are based on the perception that other people have about you. Do everything you can to connect people’s perception to the reality. Look and play your role. Begin by reading the seminal article on the topic of personal branding, “The Brand Called You,” written by renowned management author, Tom Peters.
Recommended Reading
- Want to boost your self-confidence? Dress sharply and look neat
- Judging People: Talent is more than skin-deep
- Learn from the top performers in every field
- How to think and perform like a CEO
- Measuring leadership performance in context
***See other articles related to social judgment, rating errors, biases and prejudices, decision process, problem solving, Brand You


You have probably met corporate people who are five to ten years from retirement and have remained in their bottom-of-the-ladder “contributor” roles (as engineers, programmers, accountants, salespersons, etc.) for decades. Don’t they typically report to managers 10 to 15 years their juniors? Ever wonder why they never assumed managerial or leadership roles? Are they simply incompetent or unenthusiastic? Enquire around and you may be surprised to learn that they may have perhaps never desired to climb the corporate ladder. You will possibly learn that,
You probably recollect the days when corporate people had reasonably secure jobs, showed up at work every workday, clocked in, worked eight hours, clocked out, 


Do not get me wrong. There is enormous value in being helpful to the boss. After all, making yourself resourceful can go a long way in staying in the boss’s good graces. It can open professional opportunities and increase your access to new ideas, initiatives, and restricted information. However, there is an obvious boundary between doing favors and sucking up. Running an urgent errand when the boss is busy preparing for an important meeting or watching over his pet when he is travelling are well within reason. Compromising your values and priorities just to get on the boss’s side will not get you anywhere in the long term. Try these suggestions:
The ‘SMART’ technique (see this
Instead of “Join a fitness center and workout every day,” try “Lose fifteen pounds by 6-June to drop a clothes-size and look and feel better at my best friend’s wedding.”
Create checklists for all tasks. Consider preparing checklists for everything from cleaning the home to packing for travel. Checklists help you remember everything critical and thus reduce the persistent worry of forgetting something important.
In this
I believe that everybody is a CEO. Whatever your span of responsibilities — supervisory, managerial or leadership — you are accountable to the external stakeholders. These stakeholders measure you purely by your ability to identify opportunities and get things done through the resources you have. Here are five essential initiatives to help you think and act like a CEO.



