Giving employees positive feedback in the hopes of promoting better decisions for the upliftment of the company can sometimes backfire, suggests new research.
According to a new study by the psychology department and the Kellogg School of Management at Northwestern University and the London Business School, some types of positive feedback actually can escalate perceived threats to the ego and increase the need to prove that a questionable decision was the right one.
The specifics of the positive feedback or self-affirmation that occurs at a critical juncture of decision-making are key to whether a person recommits or walks away from a questionable decision, the studies suggest.
In one study, participants, acting as senior managers of a large investment bank, received positive feedback that emphasized how rational they were. Despite being positive, this feedback also closely related to a decision they made to hire someone who was not performing well.
Those "senior managers" overwhelmingly recommitted themselves to the initial hiring decision and recommended spending additional time and money training that person, rather than simply acknowledging the poor decision and cutting their losses.
The esteem-boosting feedback backfired, the research suggests, because it was so closely linked to the particular skills that should have prevented the questionable decision in the first place.
"The more that people's feelings of self-worth are wrapped up in a poor decision they've made, the greater their impulse will be to justify it in some way," said Daniel C. Molden, assistant professor of psychology at Northwestern and one of the researchers.
In contrast to the outcome of decision-relevant feedback, study participants who received praise for skills unrelated to the questionable decision (e.g., creativity or innovation) or more global affirmation of positive qualities were less likely to recommit to the decision.
"There always are some people who will continue to hang on to stocks that are tanking in the belief that their judgment will be vindicated in the end," Molden said.
"Our research suggests that these are more likely to be the people who take pride in being expert analysts or who have received lots of accolades for past investment success," Molden added.
The research titled "The Promise and Peril of Self-affirmation in De-escalation of Commitment," is currently in press at the journal Organizational Behavior and Human Decision Processes.