Here’s a fact leaders struggle with: The least competent people often believe they are among the most competent.
They overestimate their competence and skill because they lack the foundation to assess their own performance objectively. In other words, they are incompetent at judging their incompetence.
Psychologists even have a name for this:The Dunning-Kruger effect is a well-known bias that shows less skillful people tend to be largely unaware of their inadequacies.
Why is this bias so pervasive?
The answer involves the nature of skill itself. Less competent people often lack the skill necessary to evaluate their own skills.
In most cases, the skills needed to be proficient at a given task are nearly identical to those required to assess one’s competency in those same skills.
As a result, less skilled and competent people don’t have the tools necessary to make an objective judgment. Worse yet, because they lack the core understandings that give rise to competence, they massively overestimate their abilities.
Judging your own competence depends upon your ability to think about your own skills and actions from a set of standards. Those low in skill often don’t appreciate or understand those standards.
As they think about their own performance, this prevents them from taking an outside and objective view. As far as they can tell, their abilities are just as strong as everyone else’s. This loop is self-reinforcing.
For instance, weak leaders often can’t tell they are poor at setting goals and expectations because they lack an understanding of why it is so important for performance, what a good goal-setting process looks like, or how to do it.
So, they do a poor job at it. But because they don’t know what constitutes effective goal setting or possess the required skills, they often misperceive their own skill, believing they are quite good at the process.
Experienced leaders know too well the reality of the Dunning-Kruger effect. Of the many strategies to help a team member overcome this bias, perhaps none is more important than involving peers and other experts in the feedback and review process.
Allowing an under-skilled team member to learn how others (not just the leader) view their performance and how those peers suggest developing those critical skills can promote a learning environment conducive to overcoming the effect.
A change in self-assessment and skill may occur slowly, but raising the awareness of the team member is critical for future performance.
Good leaders work hard to make gains and not accept weak performance from those who falsely overestimate their skills. On teams, it is the indifference to incompetence that is the ultimate agony.
As a coach for teachers and school leaders, I’ve seen firsthand how the Dunning-Kruger effect can impact teams and schools. Leaders—especially those new to their roles—may unknowingly overestimate their skills simply because they lack the experience or perspective to evaluate their performance. This isn't just frustrating; it can create blind spots that affect everyone involved.
To help leaders become more self-aware, I’ve found that structured peer feedback and modeling are essential. Encouraging teachers or principals to receive input from multiple perspectives gives them a clearer, more rounded view of their own abilities. Peers can help identify the gap between perceived and actual skills in a supportive way that builds understanding instead of defensiveness. I am that peer for many.
Another effective strategy is building a culture where feedback isn't just about "fixing" issues but is integrated into growth and skill development. That approach normalizes the process of improvement and encourages leaders to see their own gaps as opportunities rather than failures. It’s challenging but powerful work—and it really can make all the difference in helping them step out of their own echo chambers.
What are some peer-based or collaborative feedback methods you’ve found helpful for bridging that perception gap?
I love all the commentary today. We run a 10-month program based on the Admired Leadership platform and we have participants go through a 360 feedback process. We find during our debriefing sessions that participants value/weight their peer ratings the most - consistent with today's post and other content I've seen/heard on through the Admired Leadership universe. BTW - I love the Dunning-Kruger effect so much, I measured it comparing self-assessment ratings and manager ratings in annual performance reviews.
TLDR - Results
Regarding low performers - 101 employees with the lowest possible manager rating of "1" rated themselves on their self-assessments on average 3.84. This is higher then the next two groups (2 and 3) with average self-ratings of 3.54 and 3.74 respectively (Overestimate).
Regarding high performers - 4,967 employees with the highest possible rating of "5" rated themselves slightly lower at 4.60 on average (Underestimate).
If you're interested, you can view the analysis that is available in my github repository:
https://github.com/davidcmorris/hrmeasured/blob/67536020e0d06cb21102e8ab47be2068442c3270/Dunning-Kruger%20Effect%20on%20Self-Ratings%20in%20Performance%20Reviews.ipynb