Overconfidence can have detrimental effects on your employees, culture and bottom line, which is why it’s important to address it sooner rather than later. 

While some might assume a culture of arrogance comes down to disciplining the person or team displaying arrogance, new research from the US suggests such hubris can actually be contagious. 

Left unchecked, this behaviour can spread across an organisation and quickly infect its culture. As a result, employees start to engage in risky behaviours as they operate under the illusion of invincibility. This in turn presents a serious risk for workplaces, especially if these employees are dealing with the organisation’s finances.

Jodie Fox, director at Worklogic, helps employers promote positive behaviour and resolve conflict and complaints in the workplace. She is also a senior fellow at the University of Melbourne Law School where she teaches about managing workplace investigations.

Fox agrees with the findings of the study – that the self-assessment and confidence of a social group affects the confidence displayed by an individual. She offers some advice for HR professionals who find this occuring in their workplace. 

The impacts

The new research, published in the Journal of Experimental Psychology, paired up participants to see what impact confidence had on decision-making. They found people are more likely to become overconfident when others around them are confident – that is, overconfidence is ‘contagious’. Because of this, overconfidence – and, at its worse, arrogance – can permeate through organisations and influence people’s behaviour.

“This modelling can be really useful in building a workplace culture of excellence, where all of the members of a team strive to constantly meet high standards because they think of themselves as ‘the best’,”  says Fox. However, there is also an obvious downside to this phenomenon.

As HRM reported earlier this year, both positive and negative emotions can be ‘caught’ from others and it only takes one person to set off a chain reaction – this is called social contagion. Being the highly-social creatures we are, humans are very easily influenced not only by the emotions of others but by their behaviours and attitudes too.

In their experiment, the researchers asked participants to share their perceptions of their own performance and compared this with their actual performance. They found the more out of touch an individual was with the reality of their performance, the more likely they were to display overconfident behaviours.

Interestingly, this became more pronounced when the participants were involved in a similar experiment with another person – their “overconfidence levels converged”. Even when participants were incentivized with extra money to encourage more accuracy, the influence of an overconfident person still prevailed (participants still overshot which, in a real life scenario, can introduce unnecessary risk into an organisation).

The researchers found that when  the contagious behaviour is ‘overconfidence’, employees can feel encouraged to take greater risks and can potentially hamper innovation and collaboration efforts.

“The danger is where the confidence in the performance of the team is not backed by performance, or where the team thinks that their stellar reputation means they do not need to be open to suggestions, different ideas or perspectives,” says Fox. 

On top of this, when mistakes inevitably occur, overconfident teams often try to cover them up, rather than face up to them.  

A real world example of this the researchers cite is the Eron scandal that rocked Wall Street in the early 2000s. 

Eron was a billion-dollar energy corporation that collapsed seemingly overnight due to widespread fraud, corruption and deception within the organisation’s finance team. An investigation revealed a culture of bravado and arrogance plagued the team, leading them to take risks and hide any mistakes they made. Employees felt they “were part of an elite group and believed they were smarter than everyone else”, according to the researchers.

You could also make an argument that many of the finance institutions caught up in Australia’s Royal Banking Commission exhibited similar overconfident attitudes that sunk deep into the cultures in which they operated within.

“At their worst, these are environments where bullying and discrimination of junior employees is rife because it is assumed that everyone is lucky to work there,” says Fox. 

Even workplaces without overconfidence issues can experience bullying and harassment. Learn how to combat it with AHRI’s Bullying and Harassment short course.

When to address overconfidence

While workplace arrogance should be nipped in the bud, it’s not always possible to see the bigger picture – and when you do, this attitude may already be well-established.

When research participants were told their actions were being influenced by their partner in the experiment, they were surprised. This shows just how important it is for HR to learn how to uncover this behaviour and, of course, remedy it – because in most cases, individuals have no idea it’s happening to them 

“Sometimes arrogance is so widespread that all of the leadership group and governing board is caught up in its inflated aura. Unfortunately, arrogance tends to be acknowledged only when there have been some significant mistakes or consequences of the overconfident culture,” says Fox. And this is usually a hit to the bottom line.

If confidence develops into overconfidence, Fox recommends the following four initiatives for workplaces to undertake: 

1. Targeted training

In targeted training, the leadership group is encouraged to re-assess their investment in self-congratulation and reshape their organisational messaging so values other than ‘winning’ are celebrated. 

“This could be looking at things like reward structures that only reward individual effort,” says Fox. Or, as HRM has previously reported on, changing remuneration models to focus on output rather than time spent working.

“A healthy culture is one where mistakes are acknowledged openly and where a team works together to improve.”

2. A workplace culture review

Under a workplace culture review, all staff are interviewed under conditions of strict confidence (which is crucial) and encouraged to discuss any problems with workplace culture and identify the root causes of these.

Widespread arrogance will generally be exposed in this way, and once out in the open, it can better be addressed.

It should be noted that the researchers found overconfidence was only contagious between people from the same group. For example, if your marketing team is showing signs of arrogance, other teams might not be similarly impacted.

3. An organisation-wide values exercise

By holding an organisation-wide exercise focused on values, workplaces can consider how beliefs around honesty, vulnerability and withholding blame might yield better outcomes than rewarding arrogance.

An example of an activity that Worklogic runs in small groups is one where each table is assigned one of the organisation’s values. They discuss how they define that value and what that value looks like in action. 

“This includes ‘what we do if we demonstrate respect’ (for example), and ‘what we would do if we were not demonstrating respect’,” explains Fox. 

“Staff then share the outcomes of their discussion with the whole group.

“In our experience, staff gain an enormous amount of enjoyment, bonding and creative thinking when they workshop what the organisation’s values mean for them in their day-to-day work,” she says.

4. Addressing the individual

A confident individual, or even an arrogant one, doesn’t need to be managed simply because of their nature. 

 “It is not HR’s job to engage in social engineering and cure anyone of their personal ways,” says Fox. “That is of course until particular behaviours start to impact on colleagues or performance.” 

But even then, try not to slip into psychoanalysing character ‘flaws’. “Your concern should be to have fair but forthright conversations about behaviours of concern and to prompt a plan for improvement,” recommends Fox.

As is the case with all workplace behavioural issues, it’s also important to consider both sides of the coin. The researchers found underconfidence was also contagious. So, while one member of a team might be boosting others confidence, another could be bringing others down and perhaps discouraging people from seeking out important opportunities.