Boosting staff self-esteem may backfire

A fascinating research suggests that giving employees positive feedback in the hope of promoting better decision making could backfire.

According to the study, which is set to be published in the journal Organizational Behavior and Human Decision Processes, 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 research at the American Kellogg School of Management at Northwestern University and the London Business School examined how boosting self-esteem -- whether contemplating one's own accomplishments or receiving positive feedback from others -- affects the face-saving impulse to justify and recommit to decisions whose outcomes seem dubious.

"The more that people's feelings of self-worth are wrapped up in a poor decision they have made, the greater their impulse will be to justify it in some way," Daniel C Molden, assistant professor of psychology at Northwestern and one of the researchers, was quoted as saying by the ScienceDaily online.

In modern organisational life, many people feel threatened by their poor decisions and end up escalating their commitment to them, wasting additional time and resources and creating even worse outcomes, the study suggests.

The research provides a framework for how organisations might most effectively bolster their employees' self-esteem as well as the bottom line.

"Our research indicates that a supervisor could make a problem even worse when he or she tries to restore the confidence of, say, the finance division by reminding everyone that they are skilled analysts at the same time the current allocation strategy is bleeding money and is in need of reassessment," said Kellogg's Adam Galinsky.