Initiating Change

  1. There must be a compelling case for change.
  2. There must be time to change
  3. There must be help during the change process
  4. Lastly, as the perceived barriers to change are removed, it is important that some new problem, not before considered important or perhaps not even recognized doesn’t become a critical barrier.

-Peter Senge

Interesting BC Labour Laws – Part 1

I’ve been studying for the CHRP NKE and have been looking at some BC labour laws. Being a common law system in Canada, there are some pretty interesting cases and legislations that I wasn’t aware of before. This is just a small section of some that I’ve come across, and I think I’ll work on compiling another list some time in the future. For now though…

Interesting Facts on BC Labour Laws

  1. Largest award for punitive damages was approximately $809,000 for a wrongful termination claim. Remember that the onus is on the employer for proving ‘just cause’, so either pay the severance or have really good documentation. (source: http://www.canadianlawyermag.com/legalfeeds/977/B.C.-court-awards-largest-punitive-damages-ever-in-employment-case.html)
  2. Under section 21 of the Employment Standards Act, Employers are not permitted to deduct or without payment of employee’s wages. So even if an employee quits and owes money from a loan program designed to assist employees in purchasing home equipment, the employer is not permitted to pursue these funds through deductions unless there is an explicit written agreement (source: http://www.cwilson.com/services/20-services/subgroups/266-bc-employment-law-faqs.html#non-competition)
  3. Under section 55, and employer is not allowed to terminate, change conditions of employment, or suspend employees for attending jury duty.
  4. Injuries arising from workplace accidents are severely restricted by Section 10 of the Workers Compensation Act. In exchange for access to insurance schemes, the statute prevents workers from suing if they are injured in their course of employment by someone else in their course of employment. This even applies to situations where you are working from home or traveling for work! (source http://www.bcemployerlaw.com/2013/08/06/worker-cannot-sue-for-workplace-injury/ and http://bc-injury-law.com/blog/tag/section-10-workers-compensation-act)
  5. Changing a bonus structure can be considered constructive dismissal. In the case of Piron v Dominion Masonry Ltd. Removing an annual bonus was ruled to be constructive bonus even though it wasn’t explicitly written in the employment contract. Although Mr. Piron started without any bonuses since 1995, he was paid an annual bonus following 2005 until 2011. Having set the precedence, removing the bonus was considered a fundamental and unilateral alteration of the employment terms – this resulted in $106,250 in damages and an additional $20,000 for unpaid bosuses. (source http://www.beament.com/index.php/constructive-dismissal/)

 

 

On Innovation

Innovation is necessary for organizational survival. The organizational landscape continues to change, and in this day-and-age it seems to shift without much notice. Organizations that used to be household names – Kodak, Polaroid, and etc. – have gone under and a number of well regarded organizations seem to be in a bit of a rut – ie. Sony, Nokia (though that may change with Microsoft’s recent purchase), Blackberry, Microsoft, Yahoo, etc. Continue…

Sometimes changing the structure of the organization is enough to bring a company back in shape. To truly be a head of the game though, organizations need to innovate. What is innovation? The first couple of companies that come to mind are Apple and Google. Apple’s remarkable products disrupted the space surrounding devices – phones, personal music, laptops, etc. Google revolutionized the search space, and now the wearable computing space.

For me, innovation is a combination of several factors. The first is vision – to disrupt an entire field requires a vision of how things ought to be. It’s taking where we are now, and projecting where we could be. It takes a unique combination of creativity and rationality in order to establish a vision that is both game changing and feasible.

Execution is an important element of innovation. Steve Jobs had incredible vision for all the innovative Apple products – the iPod, the iPhone, and the iPad. However, he also needed a variety of support in order to execute his vision. Collaboration is one example. There are probably countless more innovative products that were inside the mind of the late Steve Jobs, but even he required top-notch teams to bring them to life. A lot of start-up founders have incredible ideas on changing the world. Only a handful of them follow through in building their products or services, and even fewer succeed in achieving their goals.

The most wild element of innovation is probably environmental context (market and timing). Having an incredible vision and building an incredible product does not mean it will succeed. Although Apple was (and still is) wildly successful with their tablet category, Microsoft was probably one of the first companies to bring out tablets. It never caught on because people weren’t ready for that type of product. Sometimes ideas are way ahead of their time, and it’s a bummer. Innovation requires that the applicable consumers or stakeholders will actually perceive whatever product/service/etc will influence them positively now.

Building on the perception element, the reference point of consumers is a critical component of evaluating innovation. By reference point, I am referring to the notion of individual perceptual context. When evaluating anything, an individual assesses it by comparing it to their reference point – it could be past experience, a piece of knowledge, habituated or sensitized behaviour, etc. An example is Apple: their iPhone 5 and likele the 5s and 5c are all innovative products in the sense that the method of construction, design, and build quality are exceptional. Regardless, the general consumer has been habituated to the yearly release of iPhone products, with each iteration seemingly minor in product features. If it were any other company (like Google with their Moto X), the organization would be praised.

 

How do we facilitate innovation? I think an important consideration is risk. Teams must be free to take risks in order to build something amazing. Companies that have succeeded previously and have become too large would do well to establish a culture that permits risk taking or establish subsidiary organizations designed to build new ideas.

Another consideration is building on the creative process. For some people, creativity and innovative ideas flow are best facilitated through boundaries. By determining the sweet spot of having just the right amount of limitations, people are able to become truly creative – too much freedom or too much restriction negatively impacts innovation.

Woohoo You’ve Made It!

After years of trudging through the educational trenches, you’ve made it! You’ve earned an expensive piece of paper that I hope (and you really hope) will get you that job you really want. Unfortunately, life is tough and for grads it will be an uphill battle to get any decent job at all.

There are a lot of articles and commencement speeches going around that are truly inspirational and packed with great advice (a lot of which I wish I had gotten before graduation!). Many focus on taking the calculated risks, thinking bold, being innovative, and staying hungry. I particularly like Jim Kim’s speech, where he highlights the important of willpower in achieving your goals and only consistent thing in the world nowadays is uncertainty. My other favourite is DJ Patil’s, where he implores you to seek out those who will take a chance on you and in turn take a chance on others in the future.

I want to add some of my own experiences, having been a recent graduate myself (undergrad 2010 and grad school 2012) that really helped me grow.

Continue…

1. Travel

I know, I know, it’s pretty cliche by now but people don’t say it just for the heck of it. Travelling was one of the most enjoyable and eye-widening experiences I’ve ever had. When you travel, you get a chance to really see how adaptable you can be and how much uncertainty you can handle.

Travelling not only exposes you to the outside world, it also exposes you to who you really are. In a tough economy, travelling for a long time rather than building up job experience can be damning. Do your best to make something out of that travelling – take up a part time job or take some additional courses. I decided to do my grad studies abroad so that (at least on my resume) it didn’t look like I took a really long gap.

 

2. Plan and test your plan

I didn’t really know what I wanted to do with my degree (and still only have a fuzzy picture) but I did have some ideas. I went out to volunteer and work part time in some of the jobs I was planning to go into, but I realized that none of them were a good fit. It’s great to have a plan, but you save a lot of time and stress if you test it out early. Pick up some volunteer work or internships to see if your career plan is really what you want to do – sometimes it could just be that particular organization, so don’t be disheartened by your first exposure!

 

3. Get out and meet people

Networking is key, and that won’t really change unless you’re absolutely amazing at what you do and is incredible at marketing yourself. I didn’t get involved very much in school and didn’t try to go out and make connections until fairly recently – it’s a big mistake and I wish I had gone out earlier.

It doesn’t have to be professional – start off by just going out and trying new things with new people. Join an ultimate team or start up a new hobby. You’ll meet cool people and make yourself a more interesting person at the same time. Joining associations and going to slightly more official networking events is also incredibly useful for getting advice and gaining some inside knowledge on an industry you’re interested in.

 

4. Read The Defining Decade

This book by Meg Jay (check out her TED talk here) is a really good read for any twentysomething year old. Our 20’s is the most important decade of our lives, so don’t throw it away. Don’t put off things you really want to do until you’re 30, but at the same time don’t try to do everything and ignore your career/relationships.

 

Gamification and HR

For 6 weeks, I spent every transit ride to and from work listening to Professor Kevin Werbach’s lectures on gamification. I just finished his Coursera course, and I must say that every HR professional who cares about emerging trends, engaging the employees in their work place, or wants to be a part of building the next big thing should take it as well.

We hear the word (well more like see) gamification a lot on social media nowadays. Before taking his course, my conceptualization of gamification was simply this – some process of turning the workplace or set of tasks into a game so that the people involved are motivated to do their work. Points, badges, and a lot of other fun stuff thrown in. After the course, I’ve realized that gamification is much much more and that the ideas behind gamification are very relevant to current HR issues.

Continue…

Gamification is a package – it is a term that encapsulates the psychology behind human motivation and effective systems design. When gamification is used effectively, it addresses the engagement gap. It gets people to spend time doing things because they want to, because it gives them value in some way (even something like Farmville!). A truly effective system taps into the player’s emotions and takes them on a progressive journey from novice to mastery. They are challenged and they get feedback. Sometimes players play just for the sake of playing, and other times players enjoy the game because of the extrinsic rewards.

When I think about a typical work place, I see gamification. I see gamification executed poorly. Players are presented with a number of tasks. It’s challenging at the beginning, but things get repetitive. There are no new levels to challenge and no new experience points to gain – the journey stalls. Feedback is infrequent and engagement wanes. Organizations focus a lot on extrinsic motivators – status, access, power, stuff (money, benefits, etc) but leave out a lot of intrinsic motivators.

I’m not advocating for the gamification of workplaces. I’m advocating for thinking about the workplace as a game already and the workers its players. Perhaps construing workers as players in a MMO will get decision makers to adopt the mindset of game designers, whose goals are to get your players playing, and keep them playing. Make sure employees get feedback and opportunities to develop their ‘journey’, build a narrative, integrate social, add value to the players, understand the mindset of your players, implement metrics, and don’t forget the fun!

 

Meaning of Work – How Do We Derive Meaning?

In a previous post, I reviewed the first half of Rosso et al.’s article on the meaning of work, which outlined where people derive meaning in work. In this post, I will outline some of the key mechanisms that result in meaningful work.

In their review Rosso et al. first identifies 7 key mechanisms that other scholars have used to explain how we derive meaning:

  1. Authenticity
  2. Self-efficacy
  3. Self-esteem
  4. Purpose
  5. Belongingness
  6. Transcendence
  7. Cultural and interpersonal sensemaking.

Continue…

Authenticity

Authenticity refers to the alignment of an individual’s behaviours and their own perceptions of their “true self”. In other words, the less often an individual runs into situations of dissonance, the more authentic they’ll feel themselves to be.

Here, the research suggests that work environments that promote this feeling of authenticity contributes to a sense of meaningfulness. This makes sense – if a work place is aligned with one’s values and beliefs, you don’t have to “fake” it. If you don’t have to “fake” it, the work that you are doing will not only affirm your personal identity, it will also make you feel engaged at work.

 

Self-efficacy

Refers to an individual’s belief that they can directly influence something, or produce some sort of intended effect. Essentially, it’s one’s perception on how much control they have over things.

Research has outlined how important this construct is as a motivator of behaviour. In the work context, it contributes to work meaningfulness by allowing employees to feel they are capable of influencing their environment. We’ve all heard about the important of providing autonomy and knowing that your work makes a difference. When work promotes self-efficacy, work becomes more meaningful.

 

Self-esteem

Is an individual’s self-evaluation of their self-worth. Self-esteem has been studied extensively, and was one thought of as the primary motivator of human behaviour.

Although little research has directly tired self-esteem to meaningful work, social psychology has outlined the important effects of self-esteem. Terror management theory, for example, is hinged on the relationship between death salience and self-esteem. Group researchers have noted the important contributions of group identity and group comparisons to self-esteem. Work can become meaningful if it promotes high self-esteem. This could be from branding, roles, rewards, and more.

 

Purpose/Motivation

Defined as a sense of directedness and intentionality in life, it is clear that anything providing a sense of purpose can easily be considered as meaningful.

A sense of purpose can be derived from intrinsic motivation or driven from some external source. As long as the work is seen as significant (for the individual or by others), we can derive purpose from what we do. Work that contributes to society or a “greater purpose” can make the work meaningful to an individual. For example, non-profit work or volunteering in 3rd world countries are often viewed as serving a greater purpose. An organization that advocates corporate social responsibility may also elicit a sense of purpose and contribute to meaningful work for the employees of these organizations.

 

Belongingness

People are innately social, and the drive to belong is a powerful motivator. By providing membership and group identification, work can become meaningful. This is particularly true for workers that perceive the groups to which they belong as valuable and distinctive.

 

Transcendence

Refers to superceding the self to groups, experiences, or entities in a way that transcends the self. By connecting work to something outside or greater than the self, some individuals feel interconnected in a way that provides a sense of contributing to a power higher than themselves. The focus is on subordinating him/herself to the group, knowing that the collective impacts society as a whole.

 

Cultural and interpersonal sensemaking

Is the process of collective or co-construction of meaning/sensemaking. This concerns the production of meaning, where the focus is on looking at how meaning itself is constructed. In other words, this mechanism is a social construction rather than a fulfillment of a fundamental human need like the previous 6 mechanisms.

Cultural context is key to defining what makes work meaningful. Cues in the environment contribute directly to how individuals construct meaning and their definitions of meaning.

 

 

Based on the above 7 mechanisms, Rosso et al. constructed a theoretical framework on the pathways to meaningful work:

From Rosso et al. (2010)

From Rosso et al. (2010)

 

The Agency-Communion distinction is proposed for the different ways people approach work as driven by agency versus communion. The second distinction, Self-Others suggests that meaningfulness of work varies according to work experiences are directed toward the self or others.

 

These pathways to meaningful work are directly applicable in organizations, and should be on the radar of HR/leaders that want to focus on retaining and attracting employees. Although fitting people into strict boxes and applying processes or mechanisms associated with each box will not guarantee the prescribed outcome, it provides a good starting point for practitioners and sheds a lot of light onto how future researchers can further study meaningful work.

 

 Rosso, B. D., Dekas, K. H. & Wrzesniewski, A. (2010). On the meaning of work: A theoretical integration and review. Research in Organizational Behavior. 30, 91-127. 

Understanding Knowledge Work – Leveraging Technology

An article in the January 2013 issue of HBR  really piqued my interest. Titled “Redesigning Knowledge Work”, the article discusses the increasingly prominent shortage of experts in the knowledge sector of employment. As Boomers are retiring, organizations face a potential ‘brain-drain’ if they do not have appropriate succession planning or knowledge sharing schemes.

The authors, (Dewhurst, Hancock, and Ellsworth), suggest that the solution is redesigning the work that these experts are currently doing. In many cases, the prescribed work on an employee is dissonant from the actual work of an employee – experts are often bogged down by many operational (and maybe lower level strategic) tasks that have to be done but take up significant amounts of time. Continue…

If these operational tasks can be transferred to junior internal employees or outsourced, that frees up a lot of time for these experts. This makes sense for several reasons:

  1. As the Boomers near the age of retirement, employers will benefit most by retaining these employees. At the same time, many Boomers don’t want to retire but also would like to spend time with family or enjoy life. Flexible work arrangements is key to retaining them, and off-loading operational or low-level tasks to junior employees will free up much more of their time.
  2. There is a skills gap in organizations, and lower-level tasks can be excellent ways to train up junior employees.
  3. Resource allocation – organizations can definitely save a lot of money by off-loading operational duties to flexible employees whom, for example, may be willing to complete these tasks from home at a lower salary for the benefit of flexibility.

 

To redesign the job and create new job descriptions, HR must analyze the work of experts to really understand where work is simply operational and where work adds value. As many people in HR and organizational research knows, only so much information can be elicited quantitatively and qualitatively. Tacit aspects of work is incredibly difficult to surface. This is where I believe upcoming technology provide amazing opportunities in creating a more complete picture of how an individual actually does his/her work.

 

Google’s Project Glass

Being able to actually see  how an employee goes about doing his/her work and following up with interviews has huge potential for unraveling some of the subtle nuances of job tasks. When this product is released and becomes common-place in the consumer marketplace, this device can provide information on who an employee interacts with (to get a job done), how a job is done, and how much time is spent doing various tasks.

Of course, there are alternatives, like portable eye-tracking devices (expensive!) or head-mounted cameras like GoPro, but I think something like this will be adopted by workers fairly quickly (at least in the tech industry) anyways.

 

Wearable Trackers

Misfit Shine – image taken from IndieGoGo

If you follow CES, then you probably already know that wearable trackers, like the Shine, FitBit, and Nike Fuel Band, are all the rave this year. This means that we can obtain real-time data on people – with some inhouse hacking and programming, you could probably use these devices to see how workers network with one another and how they move about the work place.

 

Apps

Graphic by Yrving Torrealba; image from Mashables.

Apps are fantastic, and, as the Apple tag-line goes, there’s generally always an “App for that”. This is true for apps that allow a person to track how their time is actually used. One tap on the iPhone could start/stop a timer for a some task category. Apps can be installed on Macs that display how much time you’re doing X category of work by tagging applications you use for each task.

There are clear limitations to those types of apps, but as smart watches start being produced by either Google or Apple, there are clear opportunities for tracking how much time each person spends doing operational work.

 

Of course, it’s important to highlight the fact that I don’t believe these technologies should be used to spy on employees. These should be used as opt-in programs or researchers to obtain a richer picture of how people go about doing their work. Anyone have any other neat ideas on leveraging technology to understand work processes?

Meaning of Work – Where Do We Derive Meaning?

One of the biggest aspects to understanding retaining, attracting, and engaging employees revolves around defining what makes work meaningful. How does a person find meaning in work? What makes work meaningful to one person but not another? These are fundamental questions that, if answered, can be directly applied to designing a happier and more effective work place.

As expected on a topic of such magnitude, there is an extant literature on the meaning of work. However, Rosso et al. (2010) notes that it is difficult to obtain a coherent picture of what the meaning of work actually means. Most research on this topic tends to focus on singular factors that influence the meaning of work. In reality, it is unlikely that we derive meaning from singular sources. As such, we are often left with oversimplified single sources of influences on individual meanings of work. Rosso et al. review the literature and segment it into two key issues: where we derive meaning from, and how work becomes meaningful. Continue…

In this post, I am going to discuss Rosso et al.’s review of the first issue and follow up on the mechanisms of how work becomes meaningful in the a future post.

 

Sources of Meaning

Rosso et al. identified 4 main sources of meaning in work:

  1. The Self
  2. Others
  3. Work Context
  4. Spiritual Life

 

The Self

There are three domains in the literature of the self that relate to the meaning of work: values, motivations, and beliefs about work. Work values differ from person-to-person and both shape and are shaped by their experiences at work. The process is cyclical, whereby social norms and interpersonal interactions also shape and are shaped by experiences of work. Similarly, individuals may self-select into occupations aligning with their values, or occupations may influence work values.

Work motivation refers to an individual’s experiences of positive internal feelings when working effectively on the job. Work that is characterized as allowing autonomy, challenging, and significant is associated with intrinsic motivation, which in turn results in meaningful work. Alternatively, work that is aligned with one’s self-concept (i.e. values and self-identify) also results in intrinsic motivation.

How central work is to an individual has significant impact on work meaning. If an individual perceives work to be more central than other domains of their life, then such individuals are likely to perceive greater meaningfulness in their work. However, these individuals also face greater devastation if they are terminated or forced to retire. Furthermore, an individual’s conceptualization or rationalization of work contributes to meaningful work. For example, an individual who conceptualizes work as a means to money will find work more meaningful if it is congruent with this conceptualization.

 

Others

Social groups play a significant role in shaping the meaning of work. Within the work domain, coworkers and leaders are key players. Many interpersonal relationships are formed in the work place, and research suggests that coworkers reinforce work values and aid in interpretation of their meaning of work through interpersonal sensemaking. In a similar fashion, leaders establish and make sense of team/organizational goals, shaping the nature of work for employees. When an employees’ goals and values are aligned with the leader’s vision, work is likely to be meaningful. Transformational leadership is particularly effective in developing meaningful work perceptions amongst employees because of its focus on vision and self-sacrifice in favour of collective interests.

Outside of work, family is a key influencer of work meaning. Family can, on one hand, put demands on time, energy, and economic resources, thereby shifting the conceptualization of work towards a fulfillment of economic needs. On the other hand, family can balance stressful aspects of work and confirm the role of the job, thereby establishing meaning in the work.

 

Work Context

Characteristics of the job influence individual perceptions of meaning. Work that allows for higher autonomy, skill variety, task identify, and task significance are viewed to provide more meaning to employees. In particular, when employees feel that their work significantly impacts others, they are more likely to view their work as meaningful.

Research on ‘job crafting’ also highlights the active nature of employees in shaping meaning of work – workers are constantly reshaping the task and social environment of their jobs to influence the meaning of their work. For example, people who derive greater meaningfulness through leisure activities often strive to make work feel more like “play” rather than “work”.

 

Spirituality

A large number of employees view work as a “calling from God”. When employees perceive work in such spiritual light, work takes on a deeper sense of meaning and purpose. Even menial tasks are perceived to provide a higher purpose, and work is imbued with meaning and a sense of duty. More research, however, is needed in this domain.

 

 

The literature reviewed by Rasso et al. highlights the notion of meaning of work as a combination of social, physical, and psychological spheres (Installation Theory). Interpersonal relationships are fundamental in establishing an individual’s life/work context and thus develop the lens through which all aspects of work are viewed. Physical space is directly related to job characteristics and shapes social interactions. Personal values shape an individual’s interaction with the social and physical spheres of work, which in turn feed back into an individual’s psychological sphere.

 

 Rosso, B. D., Dekas, K. H. & Wrzesniewski, A. (2010). On the meaning of work: A theoretical integration and review. Research in Organizational Behavior. 30, 91-127. 

Key to Retaining and Attracting All Generations: Flexibility

A large number of Baby Boomers will be retiring out of the work force within the next several decades. Their knowledge, expertise, and skills are necessary for the smooth operation of many organizations. Much of their knowledge and expertise are tacit, and many organizations are not prepared for them to leave in large numbers. Strategies facilitating knowledge sharing and the succession of senior roles to the younger Gen-Xers and Gen-Yers have not been high enough on the priority list. This is a problem that has been recognized by HR professionals for quite some time already. Continue…

Competitive organizations will implement strategies to attract retired Baby Boomers and skilled Gen-Xers as well as retain the ones already within the organization. Furthermore, the difference in values between Baby Boomers, Gen-Xers, and the Gen-Yers, who are just entering into the work force present a difficult challenge for the larger organizations in establishing a unified policy that appeals to all generations.

The authors suggest that, while all three generations have underlying differences in values and mental models of work, the organizations that recognize the overlapping similarities in desirable outcomes or rewards between all three generations and capitalize on them in designing HR strategies win the war for talent. The authors believe that ‘Flexibility’ is the key.

Some authors believe that retiring Baby Boomers desire to continue work for the sake of working – many retirees find meaning through work or use work as means to stay active and connected. Flexibility is key in attracting/retaining this generation when it comes to flex-work and accommodating work conditions. Designing the work for this generation such that it provides meaning (not repetitive), flexible in time (such as part-time arrangements), and work space that considers physical, auditory, and visual limitations will be the most attractive.

Studies on Gen-Xers note that workers of this generation put family first. Organizations that recognize this will implement flexible working hours, child care centers, and work-from-home plans. Gen-Yers demand even greater flexibility and want work to be engaging.

However, policies on their own will not be enough. The major constraint to the actual uptake or usage of flexible plans is organizational culture. If workers that adopt the flexible plans are shamed by others or management, such policies will not work. The authors note that the typical problems for implementing flexible plans are managerial beliefs – managers in many organizations still view career progression as linear and “hours worked equals productivity”. The solution is establishing educational programs for managers on generational differences and the changing nature of work perspectives. Reverse mentoring is excellent for opening communication and developing a shared understanding of underlying generational differences while also adding value to the organization. Additionally, establishing and shaping the norms of the organization to address generational issues (such as cell phone and social media usage) may be more effective than strict policies and procedures (which Gen-Yers are not keen on).

 Eversole, B., Venneberg, D. L., & Crowder, C. L. (2012). Creating a flexible organizational culture to attract and retain talented workers across generations. Advances in Developing Human Resources, 14(4): 607-625. 

Being Sad Costs More Than You Think

There are plenty of reasons why a person should be happy instead of sad – you feel better, you have a better outlook on life, and other people like you more. Following the surge of research on positive psychology, happiness has been a relatively recent topic of interest. When talking about financials and happiness, there is an old saying – ‘Money can’t buy you happiness’ (unless you spend it according to the 8 principles outlined by Dunn, Gilbert & Norton (2011)). When it comes to purchases and choice, however, positive emotions has been associated with patience. When a person has to choose between obtaining a reward now versus a bigger reward later, people that feel positive are more likely to wait for the bigger prize (intertemporal choice). Continue…

Jennifer Lerner, Ye Li, and Elke Weber (2012) note, however, that no one has really looked at how negative emotions are associated with intertemporal choice. On one hand, cognitive and decision psychology suggests that a sad person may also increase patience because depressed and sad individuals are typically more rational and analytical in their decision processes [The sad-but-wiser hypothesis]. On the other hand, sadness might result in increased impatience due to the need for alleviating a sense of loss [The myopic-misery hypothesis]. Studies on terror management theory and consumer behaviour would support the latter hypothesis.

Lerner et al. (2012) conducted three experiments to determine how sadness influences intertemporal choice. In the first experiment, the researchers randomly divided the participants into three conditions – neutral, sad, and disgusted. The disgusted condition was used to determine whether any effects that arise would be attributed solely to a negative-state versus specifically sadness. This experiment followed procedures used in previous studies, which involves emotion-induction through video clips, writing an essay about the clip (making it salient), and having the participants make 27 choices in receiving cash amounts immediately versus later. To make it more realistic, one participant in the end of each session was paid his/her choice. The other two experiments were fairly similar to experiment 1, but were modified to a) test reliability of effects and b) to determine whether the effect of sadness is limited only to choices with immediate payoffs.

The general results demonstrate support for the myopic-misery hypothesis – ie. being sad (as opposed to neutral or disgust) makes a person prefer immediate gratification. Participants were also demonstrated to generate arguments in favour of an immediate reward first, as opposed to arguments in favour of a delayed reward. Although these findings contrast previous research that suggest sadness makes a person wiser, the results are in line with some of the research on terror management and consumer behaviour.

Myopic-misery has implications in organizations and beyond. Workers who become sad from work stress, lay-offs, home issues, and more may make terrible financial decisions that lead them into further sadness and monetary loss. As highlighted by the authors, those who are sad after the death of a family member may bring themselves into financial hardship through bad decisions. Traders who are sad or depressed may fail to see the big picture and buy/sell to obtain immediate wins, but lose in the long run.

 

 

 Lerner, J. S., Li, Y. & Weber, U. E. (2012). The financial costs of sadness. Psychological Science, 24, 72-79 .