What is a cognitive bias and what are its different types?

By Indeed Editorial Team

Updated 1 December 2022

Published 5 May 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Cognitive biases are errors in thinking that occur as a result of someone processing information incorrectly. This is because the brain tries to simplify certain cognitive processes and create shortcuts. Employers take cognitive bias seriously as it can reduce the quality of work and can create issues in recruitment processes. In this article, we answer 'What is cognitive bias?', outline some of the different types of cognitive bias and explain how they might be relevant in the workplace.

What is cognitive bias?

Learning the answer to 'What is cognitive bias?' can help you better understand how people process information. Cognitive bias is a deviation from rational judgement, based on someone's perceptions. It can stem from someone creating a subjective reality based on their interpretation of the information they receive. This bias can have an impact on the world around them if their distorted perception changes their thoughts and behaviour. This most commonly materialises as inaccurate judgement, illogical interpretation of facts, irrational thinking or decision making.

It's in an employer's interest to minimise these behaviours. Many employers place a significant value on creating awareness around cognitive bias in the workplace. Psychologists believe that cognitive bias may have evolved as a shortcut to help speed up decision making. On a very basic level, these shortcuts can save time and energy. Some bias may also arise because of a limitation in our ability to process information. For employers, there are many disadvantages to these biases and so they do their best to minimise the occurrence of cognitive bias amongst employees.

Related: 8 types of biases and how they may affect you

Different types of cognitive bias

Evolutionary biologists, psychologists and many other scientists have identified a wide range of different cognitive biases over at least the last 60 years. Many relate to the impressions we form of others and how we seek to build relationships with them. These types of bias may be of significance in workplaces with a strong emphasis on teamwork, or for any employee who is actively involved in interviewing or recruiting others.

Other biases can impact how we interpret information and share it with others. For example, if someone is writing a report, cognitive bias can occur in the information that they're choosing to include in it and how they shape their argument. This makes understanding the different types of cognitive bias valuable for employees and job seekers across many industries. The following types of cognitive bias are some of the most concerning for employers:

Actor observer bias

Actor observer bias is the tendency to view things differently when they relate to you, as compared to when they relate to other people. It means you attribute your actions to external causes where you would otherwise attribute the same actions to internal causes if it was someone else behaving in that way. For example, you might attribute your failure to meet a work deadline to poor delegation and time management by your management or colleagues, you might consider others who fail to meet deadlines to be lazy or distracted.

Anchoring bias

Anchoring bias is the tendency to let the first piece of information you hear about a particular subject significantly influence your thoughts and judgement. For example, if you hear that the average cost of replacing the carpet in an office is a certain amount, you might willingly accept any quote that comes in below that price. This may stop you from bothering to look for other quotes, without having necessarily shopped around to confirm that the average price you heard was a fair reflection of the prices available.

Related: What is anchoring bias? (Definition, examples and effects)

Confirmation bias

Confirmation bias is one of the best-known types of cognitive bias. It is the tendency to favour any new pieces of information that back up your existing opinions and to discount information that contradicts the view you already hold. For example, if you are conducting online research to write a report, you might browse through news articles that present arguments that both agree with your view and some which disagree. Confirmation bias occurs when you choose to only include the articles that agree with your view in the report because you perceive they are more accurate and reliable.

The Dunning Kruger effect

This is a hypothesised type of cognitive bias that directly relates to a person's ability. It's the tendency for underperforming people to overestimate their competence. Similarly, the theory suggests that people with higher abilities often underestimate their abilities. In the workplace, this can materialise as employees who are unable to accept flaws in their work or who fail to take on board constructive criticism because they believe it's unfair or unfounded.

Employers may test job applicants for evidence of this kind of bias at an interview or throughout an assessment process. This can help to determine whether they demonstrate self-awareness and have a good understanding of their strengths, weaknesses and abilities. All of these qualities are desirable for job applicants and help counteract the Dunning Kruger effect.

Related: Personal skills employers look for in candidates

Halo effect

This is one of the most relevant types of bias, particularly when it comes to interviews and the first impression an employer makes when meeting job applicants. The Halo effect is the tendency for your first impression of a person to influence how you feel about them and shape the judgements you form about their character. Since people often view it in the context of physical characteristics, the Halo effect is the type of bias that occurs when your impression of someone's attractiveness influences your perspective on unrelated aspects, such as their intelligence or personality.

Related: A guide to using the halo effect in your professional life

Status quo bias

This often comes up in a workplace context in relation to employees showing resistance to change. It relates to risk aversion and occurs when a decision-maker has an increased propensity to stick with the default option. In a work context, this can make it hard for people driving change to gather popular support. In some industries, status quo bias is also of relevance to consumers, particularly with service or commodity providers. Consumers with status quo bias are likely to stay with their existing provider for a long time, even when alternative suppliers may offer cheaper prices.

Common internal signs of cognitive bias

Learning to identify cognitive bias in your thoughts and behaviour can help you better manage these occurrences in the workplace and minimise them. Here are some common signs of cognitive bias that you may experience:

  • taking into consideration only those opinions that confirm your judgement

  • blaming external factors when something you care about doesn't go as you planned it

  • thinking that others accomplish things thanks to luck

  • taking too much personal credit for the things you managed to accomplish

  • assuming that everyone thinks in the same way and has the same opinions as you

Related: How to describe your personality in a job interview

Ways to minimise cognitive bias in the workplace

Everyone is likely to exhibit some kind of cognitive bias from time to time. The important thing for a productive working environment is that employees can understand the different types of bias and recognise situations where they, or others, might be prone to them. Discussing these risks and taking a holistic view of the situation, such as stepping back to make sure no cognitive bias is at play, can help minimise the negative effects that undetected cognitive bias could have. Some techniques that can help with this include:

Be aware of bias

There's a lot of information available about cognitive bias in the workplace. It often focuses on the importance of inclusivity and explains how cognitive bias can lead to indirect discrimination at work. Educating yourself on the different ways cognitive bias can manifest in different scenarios can have a big impact on your ability to recognise and overcome bias. For example, this can exhibit itself through project work, joining a new team, and interviewing or recruiting candidates.

Related: Guide: physical barriers to communication

Think out your decisions

Important decisions that people make in haste may fall victim to cognitive bias. If you find yourself in this position, consider what factors are influencing your decision. Actively recognising whether issues like overconfidence, self-interest or ignoring issues that would make your decision more challenging can help you become a better decision-maker and more accomplished leader.

Related: Why is strategic decision-making important? (A guide)

Challenge bias

If you recognise that factors are influencing the choices that you or others are making in the workplace, focus on actively challenging these. This could be done by reviewing and reevaluating what other sources of information are available. Consider whether you have missed any factors or are placing too much weight on certain factors. This is an example of where critical thinking in the workplace can help you challenge biases and address the underlying issues competently.

Explore more articles