Beyond Transparency: Using Cognitive Dissonance to Improve the Promotions Process in Firms

Abstract

In this study, we investigate self-deception among managers in a position to make a biased promotion recommendation. In a tournament, managers promote their weaker employees instead of their best in order to compete against them at later stages. However, we find that when their promotion recommendations are transparent, generating cognitive dissonance in managers prompts them to amend their behavior. Managers’ behavior becomes fairer and yet, they tend to feel more unfair – confirming the effect of cognitive dissonance on self-deception. On the other hand, making managers’ promotion recommendations transparent alone does not sufficiently improve their behavior. Our findings have important implications for improving promotions processes and decision-making in organizations.

Keywords: Promotion, recommendation, transparency, cognitive dissonance, self-deception, and fairness.

JEL Classification: M40, M41, M51