Managers at Thomas Canyon Credit Union have given employees raises year after year based on what they had given the year before, even though now their employees were quite underpaid compared to similar positions with other credit unions.This is an example of a(n)
A)anchoring and adjustment bias.
B)escalation of commitment bias.
C)sunk-cost bias.
D)availability bias.
E)representativeness bias.

Question

Quizplus · Accepted Answer

Managers will often give their employees a standard percentage raise in salary, even though the raise may be completely out of alignment with what other companies are paying for the same skills.This is an instance of the anchoring and adjustment bias, the tendency to make decisions based on an initial figure.

Managers at Thomas Canyon Credit Union Have Given Employees Raises