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The halo effect is a type of cognitive bias in which our overall impression of a person influences how we feel and think about his or her character. Essentially, your overall impression of a person ("He is nice!") impacts your evaluations of that person's specific traits ("He is also smart!"). This is also termed as “Halo Error” often made by people in judging a person or a product or a company as well.
This cognitive bias, which most of us are prone to exhibit to some extent, can affect many of our judgments. While this is a natural trait of human beings, but it is important that every individual needs to be aware of this phenomenon and introspect how much of this bias exists in them.
As a manager and leader, it is extremely important not to fall prey to this bias. Very often we end up stereotyping people. Someone is not good in coding, may mean this person is not good in anything else. Same way, someone is good in coding may lead us to believe that the person will be good in everything else. And this may not be true. Hence while dealing with people and team, a manager need to be very careful committing any kind of “Halo Errors” in judging people capability.
Halo Effects are used by marketing people also in creating a default perception in the minds of people. If one product from a company has come out good, people may tend to believe that other products also will be equally good. Likewise, if one product has come out bad, then people may tend to believe that all products will be bad.
Hence it is important for managers to be aware about the presence of this phenomenon of “Halo Effect” in every human being to some extent. And ensure that this does not become detrimental in decision making by means of bringing false perceptions and biases.
While in general “Halo Effect” can lead to bad decisions, it can also be used effectively by marketing people in creating a strong perception in the minds of their customers. And marketing teams do leverage this phenomenon. Halo Effects will be present in every walk of our life. This is a psychological phenomenon which can be used or misused depending on the situation.
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