Abstract

This paper outlines the viewpoints and opposing perspectives in the scientific discourse on the issue of the impact of psychological factors on the working environment. The analysis of the literature proves that the efficiency of work performance and decision making in organizations also depends on psychological factors. The main goal of the paper is to explore whether psychological factors, cognitive biases and cognitive dissonance affect work performance and decision making․ Understanding the impact of psychological factors on the working environment is important for organizations and decision-making processes, as based on the results, innovative solutions may be applied for better management and HR policies. Methodological instruments are based on a survey and Pearson chi-square analysis. This empirical study presents survey results among 100 participants. According to the results, 83% of respondents think that the most effective managers/employees are calm and balanced people (phlegmatic). Cognitive biases and dissonance hinder work performance, although sometimes people do not realize it. Based on the situations that were frequent among participants, the most frequent cognitive biases are choice-supportive bias, groupthink, authority bias, ostrich effect, IKEA effect, optimism bias, confirmation bias, anchoring bias, etc. However, 90% do nothing to overcome cognitive biases, as many of them do not realize that they have biases. Similarly, 75% mentioned that they have experienced cognitive dissonance in their behavior, but they do nothing to overcome it. The study empirically and theoretically validates that cognitive biases and dissonance can affect decision-making, communications and interactions with other people. The results of the Pearson chi-square analysis showed that mainly phlegmatic people have experienced the influence of cognitive biases and cognitive dissonance on their work experience. Additionally, mainly choleric and phlegmatic people try to overcome cognitive biases, while sanguine people try to do something to overcome cognitive dissonance. The analysis may be useful for organizations, managers, and workers to understand the hindering factors that may affect decision making and work performance. Additionally, the paper recommends using innovative methods of group decision making, developing critical and innovative thinking skills among employees, adjusting HR policies, applying innovative forms and styles of leadership and participative management, etc.

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