Study shows overconfidence helps your employer.
Cocky employees help their bosses make bank.
Workers’ overconfidence in their abilities “substantially increases firm profits,” according to a new working paper from the National Bureau of Economic Research. The reason: Workers who think they are far more productive than they actually are are less likely to quit, the study shows. That, in turn, helps reduce training and hiring costs.
For this study, the researchers asked 895 truckers — who get paid more when they drive more miles — to estimate the number of miles they thought they’d drive in a given week. They then compared it to the number of miles they actually drove. New drivers overestimated their mileage the most, tacking on 500 extra miles, but experienced workers overestimated too, though not by as much (roughly 150-200 miles).
When the researchers the looked at drivers likelihood of quitting they found this: After a little over a year, 57% of overconfident workers had quit, compared to 76% who had quit when the researchers removed the overconfidence factor.
Of course, this study just looked at truckers, but it’s not hard to imagine that this can apply to other fields as well. The truckers who thought they could fairly easily earn more by driving more miles, kept at it. And studies show that pay is a big reason employees stay and leave companies.
Think you work with a jerk? You might. A survey of more than 380,000 workers from Payscale.com found that the most arrogant workers work in these three professions: private chefs (74% think they are the best performer at their company for jobs similar to theirs), 72% of chief executives and 65% of art directors. These jobs round out the top 10: floral designers, bartenders, airfield operations specialists, plant and systems operators, sound engineering technicians and farmers and ranchers.
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