Pygmalion Effect In A Nutshell

The Pygmalion effect is a psychological phenomenon where higher expectations lead to an increase in performance. The Pygmalion effect was defined by psychologist Robert Rosenthal, who described it as “the phenomenon whereby one person’s expectation for another person’s behavior comes to serve as a self-fulfilling prophecy.”

Understanding the Pygmalion effect

To study the effect, Rosenthal joined forces with a Californian elementary school principal named Lenore Jacobsen.

During the study, each student completed an IQ-test but the results were not disclosed to teachers.

However, they were told the names of students who were identified as ‘intellectual bloomers’.

One year later, the students took the test again.

While all managed to achieve a higher score, the students identified as more intellectual made the most progress.

In other words, students who had higher expectations placed on them by teachers performed better. 

Teachers were more likely to pay closer attention to these students by providing in-depth feedback and continuing to challenge them.

The mood and attitude of each teacher toward intellectual students were also hypothesized to be a contributing factor in high performance.

How does the Pygmalion effect work?

As noted by Rosenthal, the Pygmalion effect is a self-fulling prophecy. As a result, it is helpful to consider the effect as a cyclical process:

  1. First, the beliefs and expectations of Person A affect their interaction with Person B.
  2. Then, this interaction influences the beliefs or expectations that Person B considers true about themselves.
  3. In turn, these beliefs or expectations impact Person B’s performance.
  4. Once the performance of Person B has been impacted, the initial beliefs and expectations of Person A have been verified.
  5. At this point, the cycle begins again. During the interactions between Person A and Person B, certain beliefs and expectations are reinforced by Person A to get the desired result.

Best practices for using the Pygmalion effect in business

In business, it’s helpful to consider that employees are no different from the students in Rosenthal’s original study. The same mechanisms can be used to encourage high performance to further personal and professional goals alike.

Here are some best practices for use in a business setting:

Manage expectations

It’s important to note that the Pygmalion effect works both ways.

While positive expectations contribute to high performance, negative expectations contribute to poor performance.

Leaders should therefore seek to identify strengths in their team members and not dwell on weaknesses.

Using the effect, this style of leadership primarily focuses on employee potential.

Set challenges that are ambitious

With the bar set high, overcoming these challenges increases a feeling of empowerment in employees.

Leaders who set high standards are also likely to do everything they can to help someone else reach their goal.

Ultimately, this enhances the culture of an organization.

Use positive language

Perhaps an obvious point, but one that bears repeating. Words are inherently powerful, so leaders should use them to their advantage.

Complimenting the positive attributes of an employee is vital, particularly if they typically have a low opinion of themselves.

This increases trust and commitment to the process in both parties.

Pygmalion Effect Vs Hawthorne Effect

The Hawthorne Effect refers to an inclination of some people to work harder or perform better when they know they are being observed. The effect is most associated with those who are experiment participants, who alter their behavior due to the attention they are receiving and not due to any manipulation of independent variables. Therefore, the Hawthorne Effect describes the tendency for a person to change their behavior with the awareness that they are being observed.

The Pygmalion effect is a psychological phenomenon that describes how expectations modify behavior or performance.

Similarly, the Hawthorne Effect tends to change a person’s behavior due to an awareness of being observed.

Just like the Pygmalion effect can be used in business to encourage strong leadership and higher employee performance, the Hawthorne Effect might help enhance ideation, leadership, and collaboration in young companies.

Key takeaways

  • The Pygmalion effect is a psychological phenomenon that describes how expectations modify behavior or performance.
  • The Pygmalion effect can be thought of as a cyclical, self-fulfilling process between two parties. 
  • The Pygmalion effect can be used in business to encourage strong leadership and higher employee performance. Managing expectations and the setting of ambitious goals are crucial. Positive affirmation is also important as a means of increasing trust and buy-in.

Connected Business Concepts


As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.

Bounded Rationality

Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.

Second-Order Thinking

Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.

Lateral Thinking

Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.

Moonshot Thinking

Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.


The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.

Dunning-Kruger Effect

The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.

Occam’s Razor

Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.

Mandela Effect

The Mandela effect is a phenomenon where a large group of people remembers an event differently from how it occurred. The Mandela effect was first described in relation to Fiona Broome, who believed that former South African President Nelson Mandela died in prison during the 1980s. While Mandela was released from prison in 1990 and died 23 years later, Broome remembered news coverage of his death in prison and even a speech from his widow. Of course, neither event occurred in reality. But Broome was later to discover that she was not the only one with the same recollection of events.

Crowding-Out Effect

The crowding-out effect occurs when public sector spending reduces spending in the private sector.

Bandwagon Effect

The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What is marketing can be associated with social proof.

Read Next: BiasesBounded RationalityMandela EffectDunning-Kruger

Read Next: HeuristicsBiases.

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