Consistency of Exchange Signals Matters In Managerial Decision To Grant I-Deals: A Cognitive Dissonance Perspective

Idiosyncratic deals (i-deals) are motivational tools used by organizations to retain key talent. Little research has been done to understand the nuances of negotiating i-deal requests to the granting managers, and this research draws on cognitive dissonance theory to investigate the nuances of an i-deal request. We propose and test the act of an i-deal request as a function of two i-deal types (financial versus task-related) and two framing styles (gain versus loss) that signal different levels of socio-economic exchanges. Further, we propose that (in)consistency of exchange signals from the i-deal type and framing will predict managers’ willingness to grant the i-deal. We also investigate the mediating role of dissonance. In two experiments, we found an inverted-U-shape relationship between exchange signal inconsistency and managers’ willingness to grant the i-deal. In a third experiment, using managers and manipulating dissonance, we show that dissonance predicts managerial granting. Research implications are discussed.