[blyuher]

Actually, according to Cialdini's Influence, complimenting works even when people understand that it is, in fact, flattery: "First, the evaluator who provided only praise was liked best by the men. Second, this was the case even though the men fully realized that the flatterer stood to gain from their liking him. Finally, unlike the other types of comments, pure praise did not have to be accurate to work. Positive comments produced just as much liking for the flatterer when they were untrue as when they were true." [1]

[1] Specifically, he cites Drachman et al. (1978) study.

[RivieraKid]

It's because people translate any compliment as a more sophisticated way of saying "I like you".

[vardhanw]

So, does that mean you are worse off providing genuine feedback if it is negative, if it is in your best interest to just flatter someone with false goodiness?

[J3L2404]

If you are in sales, yes.