Performance, Human Nature and Neurobiology

Most of what managers do to encourage high performance in organizations today likely produces the opposite of what they intend. Brain science provides powerful insights into the common suffering known as “the human condition.” In simple terms, this means people are fallible and imperfect. Since employees are people too, mangers need to be cognizant of this research.

As humans, we are bad at recognizing when we don’t know something and very good at making stuff up. We like to explain things to others (as well as to ourselves) even when the real explanation eludes us. We fail to look for information that might contradict our beliefs. We think our beliefs are based on facts and conclude those who disagree aren’t aware of the right information. We also tend to think we are “above average” in comparison to others.

We assume others are ignorant because we assume we are not. We draw swift and sweeping conclusions based on scanty evidence. We are supremely unmotivated to educate ourselves about facts with which we disagree. We quickly revise our theories to fit the circumstances when we are wrong. Our memories are pruned and shaped by an ego-enhancing bias that blurs the edges of past events, softens our culpability and distorts what really happened. We seek out, trust and align with those who are like us.

These self-deceptive beliefs are beneficial – they stave off depression, give meaning to our lives and make us happy. Take away our willingness to overestimate our abilities and we wouldn’t dare undertake half the things we do. Belief comes from the Old English verb “to hold dear” which is why we have a habit of falling in love with what we think. We look into our hearts and see objectivity. We look into our minds and see rational thinking. We look at our beliefs and see reality.

As fallible beings, each of us shares the impulse to justify and avoid taking responsibility for decisions that turn out to be wrong. This mental armor, called a blind spot, justifies our world view. It lets us sleep at night but distorts reality. It turns confidence into arrogance. The more confident we are, the less we admit our mistakes. When we are forced to examine disconfirming evidence, we search for ways to dismiss it so we can maintain and strengthen our existing beliefs. The technical term for this is confirmation bias – the search for consonance between what actually happened and what we think is true.

Conflicts are inevitable in manager-employee relations. This often happens because mangers see employees, not imperfect human beings. When the employee hears a manager’s criticism, the defensive self reacts with “whose definition of reality are we talking about here?” Criticism enters the gauntlet of the human tendency for cognitive dissonance reduction. Hence, poorly communicated, it has a negative effect on performance.

As humans strive to maintain their positive self-image, they react negatively to feedback that’s at variance with their self-concept. They ignore, discount or rationalize it away. If it’s perceived as faulty or punitive, they can react with either passivity or aggression toward the source. And the best way to do that is to persist in the behavior being criticized

The chemicals our bodies produce determine how we perform. Endorphins and dopamine are the reason we are driven to achieve – these neurotransmitters are our natural performance enhancing drugs. Endorphin hits come from physical labour. Dopamine gives us the feeling of satisfaction when we complete a task, like crossing something off a to-do list. It makes us goal oriented and enables us to stay focused on our work.

Serotonin and oxytocin are produced when we feel valued and trusted. They make us feel secure and fulfilled. Without these drugs in our system, we fail to cooperate and become aggressive towards others. Serotonin causes a feeling of pride when we perceive others respect us or approve what we do. When this happens, we feel accountable. Without oxytocin, we would have no empathy for others. The greater the trust, the more oxytocin flows.

The context for understanding the effect of our neurobiology on performance is that, according to the 2014 Deloitte Shift Index, only 20 per cent of employees today feel fulfilled and truly happy at work. Too many managers frustrate the natural (biological) inclination to trust and cooperate. They bring out the worst in their staff, not the best. In an underperforming workplace, there is a chemical imbalance. It’s not about managers being malicious; it’s just a failure to understand human nature. Utilizing the findings of neuroscience can help managers create work environments in which the right chemicals are released, resulting in heightened productivity, inspiration, courage and creativity.

Almost 90 per cent of companies today are addicted to performance-based compensation. Yet, a mountain of evidence, recently summed in the Harvard Business Review, tells us that bonuses are not effective in motivating performance. Brain scans indicate that dopamine, the pleasure neurotransmitter, is released when we’re fully engaged in the work that leads to the reward. The reward itself is not psychologically gratifying. Hence, most organizations waste precious resources vainly trying to thwart our natural inclinations.

Recognition of performance also falls victim to the vagaries of perception. The impact of a reward depends on the value the person receiving it places on it. An above average salary increase in tough economic times may seem generous to a manager but appears small or insulting to an employee. And when employees receive the same financial incentives repeatedly, they become accustomed to it. And It thereby loses its value.

Instead of criticising behaviour, managers would be more effective using methods that encourage people to willingly do what the company wants. Rather than telling them what to do, they might try asking them. Since questions aren’t damning assertions, they don’t run up against cognitive dissonance reduction. And when remedial decisions come from the employee rather than the manager, the likelihood of desired actions (bolstered by an intact self-esteem) is greatly enhanced. By using the right questions in the right way, managers can encourage employees to more honestly appraise their performance. If corrective action is required, it should be self-generated. GE found that active participation in the review process, starting with an employee self-appraisal, improved performance significantly.

Possibly the most effective way to raise employee performance is for managers to raise their own expectations. This is a self-fulfilling prophecy. In one of several similar studies, elementary schoolteachers were told at the beginning of the year their students were “bloomers” with a significantly higher IQ. When tested at the end of the year, the students’ scores on the Stanford-Binet IQ test went up fifteen points on average. The students, however, were no different than their peers – it was the teachers’ higher expectations of them that caused the increase. The goal of every manager should be to utilize human nature to advantage, rather than fighting it.


These and other approaches to increasing performance levels are examined and discussed in Building High Performance Teams, a one-day course offered by the Chartered Professional Accountants of Ontario on May 26th in downtown Toronto and open to the general public.