Counterfactual thinking and how it affects your staff

in Managing by Nick Petrovic
(160 Ratings)
Counterfactual thinking

The theory of counterfactual thinking is where past events are considered and alternate outcomes are pondered. By discussing upward and downward counterfactuals, where either more positive or more negative outcomes may have resulted, suggestions can be made for dealing with workplace counterfactual thinking and improving your business.

When things happen in life, both positive and negative, it’s common for us to wonder what would have happened if things had been different. These ‘what ifs’ are the basis of what is known as counterfactual thinking, where we consider alternate realities as a way of understanding the reality in which we live.

You may think that looking back and considering how things might have been would only lead to regrets, and while this can happen, studies have shown that when we consider alternate outcomes, not only are we more analytical and able to learn from our mistakes, we also view turning point events as more meaningful. Ultimately, it solidifies the idea that the choices we make hold power in shaping the outcomes we experience.

Upward and downward counterfactuals

When we consider what could have been, we either imagine a better outcome, a worse outcome or the same outcome. When we view the alternatives as better than our current situation, we are considering upward counterfactuals. When they are worse, we are considering downward counterfactuals.

It’s not surprising that perception is key, and sometimes even situations that should result in positive feelings can leave us wondering if we could have done more. Take gold, silver and bronze medallists at the Olympics, for example. The logical assumption would be that winners of gold would be happiest, followed by silver and finally bronze. However, a study that analysed facial expressions of medallists found that while gold was (unsurprisingly) at the top, the bronze medallists appeared happier with their achievement than silver medallists.

At first glance, this might not make sense. However, when we consider counterfactuals, it is clear that the ‘what ifs’ are in play. Winning silver could easily be viewed as just missing out on gold, and therefore an upward counterfactual where better alternatives are considered is adopted. For bronze winners, though, the counterfactual tends to be a downward one, and a sense of gratitude for simply being one of the top three is adopted.

Counterfactual thinking in business

So what does this mean for business? Like all other psychological processes, counterfactual thinking is not limited to our personal lives. It can affect how we perceive our achievements and failures in business and can influence how our staff respond to feedback.

One area where counterfactual thinking can play a significant role in business is in relation to performance reviews. Staff can easily fall into upward counterfactual ways of thinking, wondering what could have been done better, which in some cases can result in anger, resentment or in more severe cases even grief and depression.

Minimising the chances of upward counterfactuals

Perhaps the best way to avoid upward counterfactual thinking is to ensure that the issues and concerns you aim to bring up during a performance review are already known to your staff members. In other words, avoid surprises.

Making concerns understood on a regular basis means that performance reviews become more of a formality rather than a source of new information. Remember also that communication goes both ways. Encourage your staff to ask as many questions as they need in order to be aware of where things stand at all times.

Increasing the meaningfulness of achievements

Rather than focusing on what could have been done, turn negatives into positives in order to motivate your staff. Don’t assume that the gravity of achievements is obvious to your staff, and try to point out how things would have been different had they not been successful. This not only makes their achievements more meaningful, it also shows that you appreciate their efforts and are aware of the fact that things are better because of them.

This article represents the views of the author only and not those of American Express.

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Nick Petrovic

Nick Petrovic is a registered psychologist and head of clinic at the Mind Profile Psychology Clinic and has more than 10 years' experience in the allied health and business. Nick has contributed to regular columns in more than a dozen business magazines and newspapers, advising on issues such as mental health, work related stress, strategic planning, business analysis and human resources.

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