Do you believe that relying on average scores alone is an accurate way to evaluate employee productivity?
Are you tired of using average data to make important business decisions?
Is using averages as the sole customer satisfaction metric enough to understand their needs truly?
How often do you come into situations where individual experiences vastly differ from the average? How does that impact decision-making?
In this post, learn about the problem with averages, what it is, who typically falls victim to it, and how to protect yourself.
Understanding the “The Problem With Averages”
The problem with averages is a behavioral bias; here, people think one number can represent many different things. This happens when people compare other groups or try to use the same numbers for many different situations. People often do this because they want it to be true, but it’s not always accurate.
To get an idea of what people in a metropolitan city earn, do the average salary figures of the region help?
Would these numbers always reflect the full reality?
So if some individuals work in corporate jobs, some with the government, others earn daily wages, and so on. Then the average would be far from perfect for helping us understand incomes within any given region, isn’t it?
When it comes to making important decisions, it’s essential to consider the unique outlook of each individual involved. Averages are a good starting point for understanding what might be an appropriate outcome; however, they should not be viewed as gospel and always be taken with caution!
Exploited And Exploiters
The typical victims of “The Problem With Averages” rely on the averages to make decisions about individuals or groups without looking into their situations. Those who take advantage of this cognitive bias tend to be companies or organizations that can benefit from mass-produced decisions and save time and money.
This is because they will likely make decisions that favor their bottom line rather than considering each individual’s unique needs.
Suppose that, a company may use averages to determine salary ranges for certain positions within their organization. While this could save them money in the short term, it could also mean that some employees need to be offered salaries that accurately reflect their work and qualifications – potentially leading to major financial losses down the line.
Day-To-Day The Problem With Averages
- Relying on average results when choosing a restaurant for dinner – only to discover after eating the meal that it is different from what was promised in reviews.
- Believing in an average amount of salary offered at a certain job position, only to find out later that the company or organization needs to pay the right wages for this specific role.
- Using average statistics and numbers to make assumptions about a group or individual’s traits, only to realize later that this is untrue and this person/group had unique characteristics that were not considered.
- Assuming that the average cost of living in a certain city will be affordable, but discovering upon moving there that expenses are much higher than expected due to various factors such as taxes and housing costs.
Recognizing When You Are Slipping Into The Problem With Averages Trap
Identifying when you may fall into the trap of “The Problem With Averages” (in cognitive biases) can be tricky. Still, there are some things to keep in mind that can help. Firstly, always look at the range of data available and consider outliers or extreme factors that could alter the average.
Secondly, look closely at the context of each situation and consider how situational factors may play a role in skewing averages. Finally, remember that averages represent general trends and do not necessarily reflect individual cases – it’s important to remember this distinction when making decisions based on these numbers.
Overcoming The Problem With Averages
Acknowledge the potential bias
It is important to be aware of when averages might be misleading and take the necessary steps to get an accurate figure.
Understand the impact of data
Understanding how the data has been collected and what it reflects is essential to understand its full implications.
Research multiple sources
Rather than relying on one source, research several different data sources to understand the situation better.
Collect your data
Collect your data that more accurately reflects reality rather than relying solely on averaged results from other sources.
Look for outliers
Pay attention to any outliers in the dataset, as they can provide valuable insight into unexpected real-world situations that may not have been accounted for in the average calculation.
Consider seasonality
Many datasets can show seasonal trends, which should be factored into average calculations to accurately reflect real-world conditions.
Adjust accordingly
Adjust decisions based on averaged figures according to any special circumstances or additional data points found during analysis to make a more informed decision.
Final Thoughts
We enthusiastically wanted to watch this latest super-hero movie with an average rating of 6 out of 10, which seemed far from decent! But when we watched it, did we realize that half of the people who rated it gave it a 10 and the other half gave it a 2! and we fit into that group that absolutely did not enjoy it!
The concept of relying on average ratings can be deceiving and often fails to accurately represent a movie, commodity, or any other object in question. Relying solely on average ratings can lead to disappointment and frustration, particularly if there is a wide range of opinions.
Along these lines, to make informed decisions either shopping or rating a movie or an eatery or another thing. Here it is essential to look beyond the average rating and consider the specific comments and reviews other users provide. By taking this approach, we can acquire significant insights and context that facilitate making well-informed decisions in line with our preferences and expectations.
Finally
A look at the individual ratings and reviews for insight into whether it’ll fit your taste would be better. Averaging reviews can be tricky; one person’s five-star experience could easily become another’s two stars.
Don’t forget that sometimes taking chances on something new opens doors to great experiences; to know more about these biases, do subscribe to our newsletter.
Reference
The above article is based on the book Thinking Clearly; this article is here to help us learn and understand how our minds can be tricked by something called cognitive biases.