Unconscious biases influence our ability to make rational decisions about others, and directly impact diversity outcomes. Recognising this, the BMO Financial Group (BMO), one of the top ten banks in North America, has recently undertaken steps to both raise awareness and disrupt bias during recruitment and performance review processes, thereby helping leaders make more objective talent decisions.

It is a common assumption that human decision-making occurs rationally. However, research into psychology and behavioural economics has shed light on the motivations and limitations of rational decision-making. For example, in Thinking Fast and Slow, Daniel Kahneman explores how decisions are often based on rapid, intuitive and at times unconscious judgements.[1] Instead, decisions are often the result of cognitive biases, mental shortcuts, assumptions and defaults. (Further information on unconscious biases can be found here).

In the workplace, unconscious biases can manifest within business processes such as recruitment and performance reviews, leading decision-makers to unfairly advantage some, while disadvantaging others. For example, similarity attraction bias causes people to connect more quickly and deeply with those who are similar to themselves. Similarly, implicit stereotypes and attitudes result in positive and negative evaluations towards others based on their membership of a specific social group. In the context of recruitment, the end-results are teams comprising individuals with similar backgrounds and experiences, which negatively impact the potential for diversity of thinking within organisations.

Positively, research shows that organisations can take action to reduce the impact of unconscious bias during processes such as recruitment. For example, there is a well-known case of an orchestra using a ‘blind’ audition to hide the identity of auditioning musicians. When such an approach was used, it was reported to noticeably increase the proportion of female musicians selected.[2] A similar approach is also being trialled by the Victorian Government in Australia. In order to overcome unconscious bias in hiring, Victoria will trial removing personal details of applicants – such as names, gender, age, and location – from job applications.[3]

Case Study: BMO Financial Group

Deloitte worked with the BMO to support the Bank in raising awareness and reducing unconscious bias in recruitment and performance reviews. This intervention builds on the work the Bank had already undertaken in raising awareness within the senior leadership population about unconscious bias, and the impact of biases on good decision making – a platform which laid a strong foundation for this next tranche of work on making and taking accountability for process/practice changes.

The situation

BMO Financial Group is the fourth-largest bank in Canada by market capitalization and based on assets, and among the ten largest banks in North America.

The Bank had recognised that unconscious bias in talent decisions, such as recruitment and performance review processes, was potentially causing some to be advantaged, and others disadvantaged, reducing the diversity of teams.

While avoiding such biases had been a priority for some time, the challenge for BMO was how to take managers from awareness to practical changes. BMO partnered with Deloitte to take the next step – namely identifying and introducing new tips and practices to select and evaluate staff, while creating an environment where everyone felt valued, respected and heard.

The approach

The approach involved four key activities:

  1. Review:
  • Mapping the major steps in the recruitment and promotion processes and practices, especially the key moments with high levels of managerial discretion and high levels of impact on final decisions;
  • Identifying the types, and impact of, unconscious biases which could influence those steps in the processes and practices;
  1. Redesign:
  • Co-developing new tips and practices to nudge managers towards making meritocratic decisions by eliminating or reducing the chance for biases to manifest;
  • The design process itself was co-creative , engaging leaders and managers to review and provide input and revisions on proposed tips and practices to ensure they are practical and business relevant
  1. Communicate:
  • Undertaking a voluntary awareness raising campaign, targeted at managers, encouraging team discussion and introducing tips and new practices to focus on reducing bias in recruitment and performance review processes.
  1. Measure:
  • Developing multiple measures of success so as to create a feedback loop and track progress.

The Training

The training program was developed not merely to communicate best practices, but to enable managers to lead conversations with their teams about the value of learning from each other’s differences and understanding how bias can inhibit this. This starts with understanding we all have bias and that that we all have different biases (e.g. similarity attraction bias, confirmation bias and cognitive depletion). A team discussion guide provided tips to mitigate these biases in specific talent moments. In this way, the program was not a ‘show and tell’, but a ‘discuss and empower’, helping teams remedy processes they used.

The training included an introductory e-learning, an online hub with a facilitation guide with information and questions for reflection, as well as one-page ‘flyers’, that concisely conveyed the lessons to the team.

By way of example, the co-design team identified the initial application process as potentially problematic; there was minimal oversight of the decision to select a candidate for interview and decisions were often made at the end of the day, after a follow-up call when recruitment managers and when managers were tired and rushed. The co-design team identified the potential for similarity attraction bias to be amplified when managers were tired and suggested that calendar entries prompt managers to review CVs earlier in the day. The facilitation guide encouraged teams to think of when similarity attraction bias and cognitive depletion might also manifest themselves during the recruitment process, and how transparency and accountability could be built in.

The Bank’s Chief Inclusion Officer and Vice President of People Strategies and Insights, Sonya Kunkel, differentiates this program from others, “we co-created content with our business leaders and turned theory into practical business relevant actions that managers can take every day”.

Impact

All recruitment partners have attended the program and facilitated sessions are being delivered across the Bank. Kunkel reports that the new training and support materials are having a positive impact, with high levels of engagement and the adoption of new processes and practices. According to Kunkel, some managers have already adjusted their approach to hiring and “people are inspired to take action in ways that have a meaningful impact”.

Kunkel reports that managers are taking on board the ideas and demonstrating ownership and initiative. One manager told her they changed their approach to conducting interviews by consulting colleagues with diverse perspectives to ensure personal bias was not getting in the way of exceptional talent.

One of the short term benefits is that these changes will help “improve productivity by reducing the number of mistakes such as ‘false hires’”, said Kunkel. Longer term, Kunkel intends to measure changes to the demographic composition of hiring patterns and performance reviews.

Conclusion

Unconscious bias subtly affects all decision-making, including throughout key talent processes and practices. Mitigating the effect of unconscious bias holds value for organisations – laying the foundations for more diverse and inclusive teams, which improve organisational performance. With this in mind, many leading public and private sector organisations are increasingly examining business processes for unconscious bias, and taking action to address its impact. It is heartening to see organisations moving from awareness only training to awareness, capability building and process/practice changes. These deliberate steps will help organisations make the step change needed to embed diversity into the status quo.

For more information please contact Sonya Kunkel, Juliet Bourke or Amit Golder.

[1] Rise, C. (2013). “How blind auditions help orchestras to eliminate gender bias”, The Guardian, 14 October 2013.

[2] Perkins, M. (2016). “Victorian government trials blind job applications to overcome hiring bias”. The Age, 20 May 2016.

[3] Kahneman D. (2011). Thinking Fast and Slow, Penguin: London

  • Raja

    Interesting article. Readers should also look at the following article: Alison Booth et al “Does Ethnic Discrimination Vary Across Minority Groups? Evidence from a Field Experiment”, OXFORD BULLETIN OF ECONOMICS AND STATISTICS, 74, 4 (2012)