How Effective Is a Number-crunching Approach to Managing People?

Human resource professionals have begun to use sophisticated data analysis for all sorts of people-related issues ranging from recruitment and performance evaluation to promotion and compensation. People analytics, as this approach is called, is making waves because it is said to eliminate biases that exist in human judgment. Cade Massey, practice professor of operations and information management at Wharton, works at the intersection of psychology and economics and has focused on this approach. His expertise is judgment under uncertainty, looking at optimism, overconfidence and learning. Massey’s research is based on both laboratory experiments and archival studies of real-world behavior, such as the draft picks of professional football teams and the investment decisions of employees holding stock options.