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Personnel selection decisions can lead to favorable outcomes, such as when a hired individual is successful, or unfavorable outcomes, such as when the hired individual underperforms in the workplace. Depending on the favorability of the outcome, the decision maker may believe that the outcome was foreseeable, an effect known as the hindsight bias. In addition, decision makers may engage in should counterfactuals, or thoughts regarding what they should have done. The current study examined the role of outcomes favorability and should counterfactuals (i.e., thoughts regarding what should have occurred) on the hindsight bias. In addition, the role of narcissism on predicting the hindsight bias and should counterfactuals is examined. Data from 169 participants revealed that outcome favorability is positively associated with the hindsight bias and negatively with should counterfactuals. Narcissism was also found to be positively related to the hindsight bias. Interestingly, support was also found for a mediated moderation in which narcissism and outcome favorability interactively influence should counterfactuals, which then influences the hindsight bias. Implications and directions for future research are discussed.
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