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.