As part of the CRÉ lunchtime conferences, Julia D. Hur (NYU) will offer us a presentation entitled « Money on Mind: Performance Incentive, Attention to Money, Environmental Sustainability ».

To participate via Zoom, click here.

Abstract

Environmental sustainability is one of the most pressing problems of our time, raising significant questions as to how to motivate organizational decision-makers to make substantive investments in environmental protection. The current work identifies performance incentives as a critical barrier that prevents organizational decision-makers from supporting sustainability initiatives. We also offer a novel psychological mechanism of how monetary incentives activate managers’ attentional fixation on money, intensifies their zero-sum mindset, and ultimately undermines commitment to investing in sustainability. Across two laboratory experiments (n = 702) and one archival study with a combination of data on executive compensation, corporate annual reports, and environmental performance (n = 14,126), we show that decision-makers whose pay is more contingent on financial performances are more likely to develop attentional fixation on money and less likely to support sustainability initiatives of their organization. Together, our findings demonstrate a novel pathway of how one of the most prevalently used types of financial incentives inadvertently undermine progress toward one of the most urgent organizational changes.