Objectivity in business as a determining factor of success. Objectivity is a neutral mindset that allows internal auditors to perform their work with honest confidence in the product of their work and without compromising its quality.
Objectivity requires that people do not take things personally, because this way they can make accurate and conscious decisions. Threats to objectivity must be addressed at all levels, individual auditor, job, functional, and organizational.
In simple words, objectivity is the quality of being free from personal bias. It is about evaluating a situation regardless of personal or subjective considerations and criteria.
The objective person is completely impartial, and it is assumed that to be objective when expressing a judgment, the internal auditor must abandon everything that is their own (ideas, beliefs, or personal preferences). Likewise, many people recognize objectivity as the value of seeing the world as it is (only the facts and evidence).
Importance of objectivity in business
Objectivity focuses on the reality of things and how they happen. It is not about feelings or emotions, but about factors and facts. Objective people are those who have greater success in companies because they make decisions based on the economic well-being of their business or employment.
Therefore, objectivity is a quality that can be difficult to practice, since human beings formulate a personal criterion of what they consider to be true, real, or false based on their experiences and perceptions, as well as their culture, beliefs, ideologies, or feelings.
Objectivity is closely related to justice, honesty, fairness, ethics, information analysis, truthfulness, and many other values. This promotes the intellectual and integral development of the human being.
Therefore, objectivity applies in different areas such as medicine, sports arbitration, judicial opinion, and the conclusions of a scientific experiment. The publication of journalistic information, the preparation of a scientific or informative text, among others.
Objective people present their knowledge in a neutral way. This means that they can only provide information if they need to believe themselves more than others, or underestimate everything they know.
Objective people know their strengths and weaknesses, and they are completely honest when it comes to business and personal life. They are never based on personal or subjective decisions because they are aware that this can affect their mood, their performance, and the quality of their work.
Objectivity as a factor for success
Managers in companies must exhibit the highest level of professional objectivity when gathering, evaluating, and communicating information about the activity or process to be examined. Internal auditors make a balanced assessment of all relevant circumstances and form their judgments without being influenced by their own interests or by others.
Therefore, every day, the leaders of the internal audit departments have to work to create an environment that allows us to develop a counter-balance caused by factors that affect the objectivity of our work, such as familiarity with the personnel of the area under review, personal relationships, self-review or another type of objectivity threat that could mislead the good judgment of any member of the audit team.
This allows job performance evaluations to be carried out more effectively and accurately, to ensure the well-being of the company. If people are not objective in these kinds of environments, they can jeopardize the social and economic stability of their jobs, affecting their employers, their colleagues, and the future of their workplace.
Emotions can become confusing and even damaging
When emotions and subjectivity take over our thinking, even the simplest and well-meaning emotions can become confusing and even damaging. Let’s take an example to illustrate this: let’s imagine that a natural disaster occurs in some part of the world and that a company collaborates with the country that has suffered the catastrophe. Here, it can happen:
- That the company is making donations to improve its reputation within the community. In this case, we cannot say that it is an act of charity, but of public relations.
- Let the company act because senior executives want to feel good about themselves. Here, it is a selfish act.
- That the company promotes, through intimidation (slight or not) exercised by its internal policy, that its employees make donations, the very nature of the charitable act is lost.
- For the company to make donations of reasonable amounts that are based on its earnings and it does so only to do the right thing, seeking no other reward, that is the real thing!
The reality in the business world is much less objective than it appears on the surface. Too many decisions are undermined by personal, sentiment-driven resolutions that counter the interests of the company. That’s one of the main reasons there are so few good executives. Over time, the more subjectively an executive thinks, the more likely they are to achieve failure.
6 Activities that strengthen people’s objectivity
1. Incentives (Rewards and Discipline or Punishment)
The reward system and discipline processes within the internal audit department and throughout the entity can contribute significantly to reducing threats to objectivity. Incentives in pay, time off, flexible work hours, and other positive reinforcements can help create the desired environment. Similarly, penalties have a direct impact on the quality of reviews.
2. Rotation/Reassignment, objectivity in business
Rotation of the work team can reduce the risks of familiarity and self-review. There are several types of rotation, among which are changing the entire work team that previously carried out a project or part of that team.
Proper training in new methods and approaches increases objectivity and helps the auditor to recognize possible objectivity risks, so that they can avoid or manage them in an effective and timely manner.
4. Supervision and Review, objectivity in business
Close supervision and careful review of each project encourages auditors to approach the work objectively, because it allows them to recognize they are responsible for the judgments and conclusions presented. Studies show that responsibility is a key ingredient in improving judgment and increasing objectivity.
5. Quality Reviews
Internal and external reviews of the internal audit activity, its services, processes and procedures can help ensure that threats to objectivity are managed effectively and professionalism is maintained. Ongoing monitoring and periodic reviews can help ensure that processes are executed effectively and that audit personnel carry out their activities under designated policies and procedures.
6. Hiring Practices, objectivity in business
It can improve the likelihood that the staff is free from bias and able to make objective judgments when performing internal audit work. For example, researching the history of new candidates can ensure that the potential employee does not have conflicts of interest that threaten their objectivity.
Determining whether applicants have family members who work for the organization, stocks or other investments in the organization, or who have family members in businesses related to the organization, can help ensure objectivity.
As you could learn in this post, objectivity is a determining factor in the success of a business. For this reason, all people must learn to be more objective to ensure their mental well-being and the success of their business.