|
 The professional workplace doesn’t
exactly encourage navel-gazing. And workers are often
encouraged to ignore their feelings in favor of more logical
and analytical behavior. But strong feelings—and an
awareness of those feelings—actually cause people to make
better decisions, according to recent research by Myeong-Gu
Seo, assistant professor of management and organization.
Seo, with co-author Lisa Feldman Barrett, Boston College,
examined the relationship between emotion and
decision-making in their paper “Being Emotional During
Decision Making—Good or Bad? An Empirical Investigation.”
Seo invited members of six investment
clubs to participate in the study. Each of the 118
participants were given $10,000 in play money and allowed to
invest the whole or a part of their cash on any of 12
anonymous stocks selected from the national stock market.
About 80 percent of the participants in the study were male,
which is consistent with the population of most investment
clubs.
Seo ran a stock investment simulation
for 20 business days, and had participants describe their
emotional states multiple times (once per day and just
before they made their investment decisions) during the
course of the simulation. He tracked both the types of
emotions participants experienced and the intensity of those
emotions.
He then looked at the degree to which
participants’ risk-taking behavior and their stock
investment performance varied depending on their emotional
state. Seo found that the more intense a participant’s
feelings were, the better their decision-making performance,
whether those feelings were negative or positive.
Seo also found that people who were
able to more accurately describe their feelings performed
better in stock investing regardless of the emotions they
were experiencing at the time. This is because participants
who understood their feelings seemed better able to keep
those feelings from having a direct impact on their
decision-making strategy (the level of risk-taking), and as
a result got higher investment returns.
“As soon as you are aware of your
emotions, suddenly that corrects many emotional biases,”
says Seo. “The starting point of regulating the influence of
your emotions is to be aware of what is going on. It is
important to have a clear understanding of what is going on
with you emotionally.”
These results will come as a surprise
to those who believe that emotions have no place in the
workplace, as it contradicts both past studies and the
common wisdom. But Seo thinks that understanding the
importance of emotions in decision-making is going to be
increasingly important in an economy that is not just
high-tech but also increasingly high-touch. Interpersonal
relationships play a large role in many organizations, where
most employees spend at least part of their time on
team-based work.
In focusing on the negative effects of
emotion in the workplace, managers are missing out on all
the positive effects of people’s feelings, including better
decision efficiency, engagement and creativity. Rather than
suppressing or constraining emotions, managers need to find
ways to use the positive effects of emotion in their
employees while mitigating the negative effects, says Seo.
But it is just as important that leaders stay in touch with
their own emotions in order to avoid making decisions driven
by emotional biases that they may not realize are affecting
their judgment. Training managers to better use their
emotional intelligence could also help them better manage
the interpersonal relationships and group dynamics that play
such an important part in today’s knowledge-based economy.
Seo’s research has been published in
the Academy of Management and the December 2007
Harvard Business Review. For more information,
contact
mseo@rhsmith.umd.edu. |
