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In this chapter, we present a theory on how organizational performance feedback influences individual decision-maker cognitions and thereby changes a team’s attention focus in terms of strategy. We argue that when performance compares unfavorably to aspiration levels, decision-makers reconsider current strategies in favor of unfamiliar, uncertain ones and become more risk tolerant. Furthermore, as decision-makers devote additional cognitive resources to do so, changes in attention focus in a decision-making team will be observed. Using data from a business simulation and repeated questionnaires, we capture the teams’ attention focus and the organizational performance feedback evaluation process of the individuals and teams.

Corporate social responsibility (CSR) captures organizational actions that account for economic, social and environmental performance. CSR is becoming increasingly relevant for organizations because of changing societal norms and attitudes. Prior research on CSR shows that socially responsible actions are beneficial for the firm and the society. However, much less is known about the antecedents of CSR. The authors suggest that CSR is a strategic organizational decision and use organizational performance feedback theory to explain how organizations decide on CSR activities.

Using a longitudinal sample of 189 US public firms with 1,050 observations, the authors test how performance decreases below aspirations and performance increases above aspirations influence CSR. The authors also test for the moderation effect of LGBT inclusion on these relationships as a proxy for CSR consistency and stakeholder support.

The authors find that as organizational performance decreases further below aspirations, CSR increases and LGBT inclusion strengthens this increase. The authors also find that as performance increases above aspirations, organizations become more engaged in CSR, but LGBT inclusion does not moderate this relationship.

Prior research recently started extending the performance feedback theory to CSR, but empirical findings on the relationships between performance feedback and CSR are seemingly inconclusive. Moreover, studies had primarily focused on performance below aspirations and to a much lesser extent on performance above aspirations. This study aims to better integrate organizational performance feedback theory to the CSR discourse.

We examine the influence of the self-assessment and self-enhancement motives on the choice of comparison organizations in two experimental studies. Study 1 shows that: (1) self-assessment generally prevailed over self-enhancement, guiding decision makers to choose organizations that were more similar and had better performance; (2) self-enhancement was more pronounced under conditions of low performance, leading participants to more frequently choose organizations that were less similar and had lower performance; and (3) self-enhancing comparisons inhibited perceptions of failure and the propensity to make changes. Study 2 extends the results of Study 1 by showing that participants were more likely to choose comparison organizations that had lower performance and were less similar when they were in a self-enhancement mindset than when they were in a self-assessment mindset. The combined effects of self-assessment and self-enhancement on the choice of comparison organizations are discussed in relation to the broader organizational literature on learning from performance feedback.

Organizational behavior scholars have long recognized the importance of a variety of emotion-related phenomena in everyday work life. Indeed, after three decades, the span of research on emotions in the workplace encompasses a wide variety of affective variables such as emotional climate, emotional labor, emotion regulation, positive and negative affect, empathy, and more recently, specific emotions. Emotions operate in complex ways across multiple levels of analysis (i.e., within-person, between-person, interpersonal, group, and organizational) to exert influence on work behavior and outcomes, but their linkages to human resource management (HRM) policies and practices have not always been explicit or well understood. This chapter offers a review and integration of the bourgeoning research on discrete positive and negative emotions, offering insights about why these emotions are relevant to HRM policies and practices. We review some of the dominant theories that have emerged out of functionalist perspectives on emotions, connecting these to a strategic HRM framework. We then define and describe four discrete positive and negative emotions (fear, pride, guilt, and interest) highlighting how they relate to five HRM practices: (1) selection, (2) training/learning, (3) performance management, (4) incentives/rewards, and (5) employee voice. Following this, we discuss the emotion perception and regulation implications of these and other discrete emotions for leaders and HRM managers. We conclude with some challenges associated with understanding discrete emotions in organizations as well as some opportunities and future directions for improving our appreciation and understanding of the role of discrete emotional experiences in HRM.

How do organizations respond to negative feedback regarding their innovation activities? In this chapter, the authors reconcile contradictory predictions stemming from behavioral learning and from the escalation of commitment (EoC) perspectives regarding persistence under negative performance feedback. The authors core argument suggests that the seemingly contradictory psychological processes indicated by these two perspectives occur simultaneously in decision makers but that the design of organizational roles and reward systems affects their prevalence in decision-making tasks. Specifically, the authors argue that for decision makers responsible for an individual project, responses given to negative performance feedback regarding a project are dominated by self-justification and loss-avoidance mechanisms predicted by the EoC literature, while for decision makers responsible for a portfolio of projects, responses to negative performance regarding a project are dominated by an under-sampling of poorly performing alternatives that behavioral learning theory predicts. In addition to assigning decision-making authority to different organizational roles, organizational designers shape the strength of these mechanisms through the design of reward systems and specifically by setting more or less ambiguous goals, aspiration levels, time horizons of incentives provided, and levels of failure tolerance.

Organization development is focused on implementing a planned process of positive humanistic change in organizations through the use of social science theory, action research, and data-based feedback methods. The role of personality in that change process, however, has historically been ignored or relegated to a limited set of interventions. The purpose of this chapter is to provide a conceptual overview of the linkages between personality and OD, discuss the current state of personality in the field including key trends in talent management, and offer a new multi-level framework for conceptualizing applications of personality for different types of OD efforts. The chapter concludes with implications for research and practice.

This study investigates how a firm's regulatory focus (i.e. promotion and prevention foci) affects growth- and efficiency-oriented strategic change, highlighting the role of organizational-level regulatory focus as a cognitive frame within which to interpret performance feedback and its subsequent effects on strategic decisions.

The authors collected longitudinal data on 98 S&P 500 manufacturing firms for a seven-year period. The panel data, which includes texts from the firms' 10-K filings, were then analyzed using a feasible generalized least squares (FGLS) regression estimator to test the authors’ hypotheses.

A firm's strategic change orientation is affected by its regulatory focus and performance feedback: a promotion focus increases the magnitude of growth-oriented strategic change, while a prevention focus favors efficiency-oriented strategic change. Furthermore, both foci moderate the effect of performance feedback on the strategic change orientation: under negative performance feedback, a promotion (prevention) focus increases (decreases) the magnitude of growth-oriented strategic change relative to that of efficiency-oriented change. The findings provide robust evidence that regulatory focus can influence how organizations learn from feedback and formulate strategic change.

The authors’ examination of regulatory focus and organizational learning process relied on large manufacturing firms in the USA. However, learning process could be quite different in small and/or young firms. Future work should expand to a wider range of organizational types, such as nascent entrepreneurial ventures. In addition, the authors’ measurement of regulatory focus using corporate text has inherent weakness and could be supplemented with alternative research methods, such as surveys, interviews or experiments. All in all, however, the findings of this study offer a novel behavioral perspective while demonstrating that a regulatory focus is an important antecedent of organizational learning.

This study highlights the importance of motivational characteristics of the top managers in the process of organizational learning from performance feedback. Furthermore, recruitment of a new top manager should be aligned with the organizational context, values and goals. In addition, corporate governance systems such as managerial compensation schemes need to be carefully designed so as to maximize organizational resilience, especially in the context of performance downturn or environmental change. Establishing a constructive organizational culture so that strategic decisions are not overly swayed by the performance outcomes would also be crucial to the organizational learning process.

This study highlights the importance of understanding the motivational orientations of top managers in organizational learning. In terms of managerial compensation, for instance, an optimal incentive system should reflect the desired performance output by encouraging managerial behavior that corresponds to its objective. Furthermore, motivational orientation of new recruits should be considered in the context of the composition of the top management team members in order to achieve “optimal fit.” In addition, this study suggests that top executives' regulatory focus can be a key factor for organizations in balancing goals of different value orientations.

The findings of this study demonstrated that a firm-level regulatory focus has a significant effect on organizational learning and strategic change following performance feedback. The authors hope this study provides an impetus for future discussions on the microcognitive mechanisms of organizational learning by exploring the relations between organizations' regulatory foci, performance feedback and strategic change orientations.

The examination of contextual factors that enhance or stifle employees’ creative performance is a new but rapidly growing research area. Theory and research in this area have focused on antecedents of employee creativity. In this paper, we review and discuss the major theoretical frameworks that have served as conceptual foundations for empirical studies. We then provide a review and critical appraisal of these empirical studies. Based on this review, we propose exciting possibilities for future research directions. Finally, we discuss implications of this body of work for human resource management.