The macroeconomic environment and the psychology of work evaluation

- Macroeconomic environments shape how people make attributions.
- More prosperous environments prompt attributions to individuals.
- Less prosperous environments prompt attributions to contextual influences.
- The effect is due to changes in the generalized sense of control.

This research tested the idea that the perception of the state of the macroeconomic environment impacts the psychology underlying an essential organizational function: The evaluation of employees' work and the associated promotion and demotion decisions. We predicted that when the macroeconomic environment is perceived to be more (less) prosperous, people's generalized sense of the extent to which individuals have control over outcomes increases (decreases), leading them to attribute more (less) responsibility for work outcomes to individuals rather than contextual influences. In Study 1, we tested this theory using data from 124,400 respondents surveyed across 57 countries and 19 years and data about objective indicators of their macroeconomic environments. We found that in more prosperous times, people reported a higher generalized sense of control and were less likely to believe that contextual influences, such as luck, matter for work success. In Studies 2 and 3, we manipulated the perception of the macroeconomic environment among employees working in organizations, and we found that those who perceived their economic environment to be more prosperous had a higher generalized sense of control and in turn attributed more responsibility for a work outcome to the individual performing the work, resulting in more extreme promotion and demotion decisions. The consideration of the macroeconomic context of organizational decision making bridges the macro-micro divide in organizational sciences to provide a novel explanation for individual psychology and behavior underlying fundamental organizational processes.