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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. High Self-Esteem, Poor Decisions Most managers realize that praising employees' performance can lead to happier, more productive work environments. But some types of positive feedback may actually back- fire and lead employees to make poorer decisions in the long run, say researchers from Northwestern University in Evanston and the London Business School in the United Kingdom. Niro Sivanathan, lead author and doctoral candidate in management and organizations at Northwestern's Kellogg School of Management, worked with Daniel Molden, assistant professor of psychology at North- western; Adam Galinsky, professor of management and organizations at Kellogg; and Gillian Ku, assistant professor of organizational behavior at the London Business School. They looked across several studies that examined self-esteem in the work- place—particularly how boosting it affects an employee's tendency to jus- tify and recommit to bad decisions. In one study, participants acted as senior managers of a large invest- ment bank. Some participants received positive feedback that emphasized their excellent rational- ity, a trait closely related to their decision to hire a person who was not performing well. Those in this group overwhelmingly recommitted to the initial hiring decision. On the other hand, participants who received praise for skills unrelated to the questionable decision—on their creativity or innovation, for example—were less likely to recom- mit to the decision. "The more that people's feelings of self-worth are wrapped up in a more effectively boost employees' self-esteem. It would be a bad idea for a supervisor to praise a finance divi- sion for its analytical skills at the same time that its current allocation strategy is losing money, says Gal- insky. However, positive feedback that affirms employees' value to the company could lift their spirits and inspire them to change tactics. Their article, "The Promise poor decision they've made, the greater their impulse will be to jus- tify it," says Molden. To counteract this effect, the researchers suggest a framework that can help managers STUDY BRIEFS n CURRENCY FUND MANAGERS OVERRATED? Conventional wisdom holds that professional currency hedge fund managers earn their high fees with high returns. That's not true in most cases, finds a study by Rich- ard Levich, finance professor at New York University's Stern School of Business, and Momtchil Pojarliev, head of currencies at Hermes Investment Management. Levich and Pojarliev found that currency return indices outper- form the returns of 75 percent of cur- rency fund manag- ers—just as index funds outperform actively managed funds. These man- agers tend to use the same simple trading strategies of the indices. To earn their superior returns, the other 25 percent use strategies such as market timing. The full and Peril of Self-Affirmation in De-escalation of Commitment," is in press with the journal Organiza- tional Behavior and Human Deci- sion Processes.z study is online at w4.stern.nyu. edu/finance/docs/WP/2007/ pdf/wpa07023.pdf. n E-RECRUITMENT WORKS E-recruitment can be a cost-effective and efficient way for public companies to attract high-quality and diverse can- didates, says Emma Parry, a research fellow at the United Kingdom's Cran- field School of Management. For her white paper, "Effective Recruitment for the Public Sector: The Use of E-Recruitment," Parry interviewed 24 employers and surveyed 43 job appli- cants. She found that e-recruit- ment reduces organizations' reliance on recruitment agencies and reaches a higher number and more diverse group of candidates worldwide. In addition, online advertising and applications stan- dardize the process and reduce the time to hire. "It's possible for public sector organizations to find success with e-recruitment," says Parry, "providing they approach it in the right way in terms of candidate engagement." n z BizEd JULY/AUGUST 2008 57