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Decision fatigue refers to the deteriorating quality of decisions as one is forced to engage in more and more decision-making. If you’ve ever planned an event, re-designed a home or purchased a new car, you probably remember the exhaustion and indifference that eventually resulted from being faced with so many choices. Many companies put managers at risk of decision fatigue by creating performance management, compensation, staffing and development processes that require evaluating multiple people on multiple factors in a short period of time. For example, annual talent or compensation reviews where managers are required to make significant and critical decisions about multiple employee in less than 4 weeks, while also performing their full-time job.

Decision fatigue can lead to impulsive and irrational decision-making that can impact the accuracy of critical decisions related to employee promotion, staffing and compensation. Research shows that when our brains are tired, we tend to use mental short-cuts or heuristics to make decisions, rather than engage in effortful thought about a choice’s pros and cons. While heuristics can save decision-makers time and energy, they can also prove highly problematic for talent management decisions for several reasons.

First, reducing the mental energy required of a decision can result in overly simplified decision-making. For example, fatigued managers may choose to pay everyone the same amount because it’s quick and easy, rather than critically evaluate whether some employees warrant greater levels of investment given their past contributions and future potential. Second, heuristics can result in biased decision-making. For example, people exhibit the ‘familiarity heuristic’ or ‘similarity heuristic’ when their decision-making reflects a bias for familiarity over novelty. This suggests that employees who were promoted by a manager in the past could be favored over employees who were not, or that employees who are demographically similar to a manager might be favored over employees who are not. This bias could have disastrous consequences for underrepresented demographic groups.

It would be difficult to completely eliminate decision fatigue as a risk, but there are things your organization can do to mitigate its negative effects.

Conduct calibration talent reviews

Calibration sessions can reduce individual manager decision fatigue, but only if they are conducted the right way. One of the most compelling reasons to hold calibration sessions is that the conversations they promote provide managers with a deeper understanding of the unique skills and capabilities their employees have to offer. But this only works if you provide adequate time to discuss employees. Including too many employees or failing to dedicate enough time to talk about the employees in a session defeats their purpose. In fact, when designed ineffectively, calibration reviews can actually make decision fatigue more likely as people may rush through evaluating employees so they can end the meeting on time.

Two additional calibration session best practices can also help mitigate the effects of decision fatigue. First, include diverse group of raters with a variety of viewpoints and perspectives. Research suggests that group members can act as a ‘check & balance’ system against individuals’ biases, but only if all group members do not exhibit the same bias. Intentionally including raters who are not like other members of the rater group can help ensure that biases are detected and resolved before they affect decision-making. Second, randomize the order of evaluation. Having to evaluate a large number of employees in a small period of time may, in some cases, be unavoidable. In such cases, it is useful to randomize the order in which employees are evaluated. Research has shown that the order in which individuals are assessed can influence how they are assessed. Rather than using some arbitrary criteria like an employee’s last name or their manager to order assessment, create a standardized process for defining assessment order that can be used across the organization.

Encourage managers to engage in continuous feedback

One strategy for reducing decision fatigue is to spread out the number of decisions you make over time. Managers can simplify the number of critical decisions they must make during annual reviews by engaging in continuous dialogue with employees about their performance, progress and expectations throughout the year. Addressing these topics in small chunks can help reduce the burden of decision-making in terms of both the number of decisions that must be made as well as their level of criticality.

Managers are faced with an enormous number of decisions each day. While some of these may be insignificant, others, such as deciding who is up for promotion or a bonus, have critical long term consequences. It is amazing how often managers suffering from decision fatigue make these critical decisions in way that emphasizes efficiency over quality. Ensuring that your organization’s talent review process and philosophy protects managers against experiencing decision fatigue is important, not only for your managers’ senses of well-being but for the fairness and accuracy of your talent management decisions.

This article was first featured on Forbes.

About the Author

Lauren Bidwell, Ph.D.
Research Scientist, Human Capital Management Research

Dr. Lauren Bidwell is an Experimental Psychologist with a specialization in Decision Making research. Her role involves driving innovative thinking and best practices around talent management and the use of technology to support effective talent decisions. Lauren has engaged with dozens of customer organizations around the world and is an active author and presenter.

About SAP HR Research

Our research team advances the art and science of Human Capital Management by studying the relationship between technology, workforce psychology, and business performance. Our researchers and psychologists uncover trends to keep you on the cutting-edge of technology and thought leadership – and help shape the design of SAP SuccessFactors HCM software.

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