Author: EconLearner

These assessments help all kinds of businesses make decisions, such as where to take risks and how to improve their operations. But how do ratings affect the people being rated? New research from Kellogg’s Hatim Rahman suggests that despite the opacity of these algorithms—indeed in large part becauseof this opacity — shape people’s behavior in unexpected ways. Rahman, assistant professor of management and organizations, investigated the impact of algorithms on an online job platform for freelancers. “There’s a lot of talk about the future of work and what it’s going to look like,” says Rahman. “These platforms are part of…

It is a critical area with high stakes. For example, there is evidence that different groups perform better, because of the integration of different skills and perspectives, and that fair systems create employee loyalty by giving credit where credit is due. In addition, racial, ethnic, and other biases in hiring, promotion, and compensation have significant legal implications for businesses and other organizations.The good news is that there are new ways to improve diversity, equity and value — with the data already available in your business. New technology enables you to use data to visualize, understand and address diversity and performance…

Do you spot the problem here? While many of us have heard the phrase “correlation is not causation,” some of us have a harder time separating the two in practice. In this case, the relationship between app payment and spending could be causal, but it can also be boiled down to another simple fact: the people who download the app are already your best customers.The problem can be exacerbated when graphs and other data visualizations enter the picture. This is because our powerful visual system is designed to look for patterns. In fact, according to new research from the Kellogg…

This is no longer the case. Today, AI tools and workbenches allow you to click through some pretty advanced modeling techniques, with no coding or programming language knowledge required. This certainly does not mean that everyone can be a data scientist. But business professionals today can have AI at their fingertips to make data-driven projections. Sometimes, it’s as simple as clicking a button that says “prediction.”To put this in perspective, let’s look at the four phases of data analytics technology for the business—three that got us to this point and one for what’s next.Phase 1—Simple data managementFor years, businesses have…

But many data visualization gurus advocate a different approach. One method, called decluttering, involves making charts look clearer so that the audience can more easily process the information. Another method, called focus, highlights the information or trend the presenter wants the presenter to notice—for example, by making one line red and all others gray.Steven Franconeri, professor of psychology at Northwestern and professor of marketing at Kellogg (courtesy), and his colleagues wondered if these techniques really worked. Did decluttering or focusing help the presenters get their message across?In a study with college students, they found that using the two methods in…

On digital job platforms like Uber, TaskRabbit, and Upwork, this rating system is applied to individual workers—with huge consequences for those being rated.”It sorely lacks the variety and texture that exists in a work interaction,” she says Hatim Rahman, assistant professor of management and organizations at Kellogg. And employees tend to see the downsides of an overly simplistic appraisal system very quickly, adds Rahman: “They start saying, ‘Hey, this doesn’t make sense. there are so many cases where the rating someone leaves doesn’t accurately reflect what’s going on in the context of my job.”Perhaps employees would reject low ratings that…