The Ironic Effects of Motivational Tools on Attention and Decision Making

Abstract

Decision makers often display bounded awareness – a tendency to miss or overlook easily accessible, critical information and contextual cues – and make suboptimal decisions. In popular parlance, these defective attentional strategies that seem astonishing with the benefit of hindsight have been described with terms such as “tunnel vision” or “wearing blinders”. In my dissertation, I examine whether certain types of motivational tools commonly used by organizations increase the tendency for bounded awareness. Specifically, using laboratory experiments, I demonstrate that winner-takes-all type of incentive schemes, social comparison, and specific and challenging goals result in excessive and rigid focusing (e.g., on performance benchmarks stated in goals and/or performing better than rivals), decrease scanning of the social context for relevant information, impair ability to deal with uncertainty and ambiguity, and negatively affect decision making performance. These findings indicate that these types of motivational tools should be used with care in managerial and higher-level work where detection of new opportunities, threats and shifts in the organizational environment are of utmost importance. Furthermore, results show that variable reward schemes, broadly-defined goals, and an emphasis on individual performance and accomplishments (compared to an emphasis on performance relative to others) are more effective in inducing flexible, sophisticated attentional strategies. In addition to contributing to the literature on motivation, goal-setting, competition and decision making, results add to a growing body of research on inattentional blindness by exploring the properties of social context (instead of the properties of the stimuli/information) that affect individuals’ ability to notice important information or contextual cues.