Lecture 3 Judgement and Decisin Making Outline: Perceptin Prcess: - Gal - Expertise - Emtins Attributin Prcesses: - Three dimensins Fundamental Attributin Errr Uncnscius Decisin Making Judgement and Decisin Making Biases: - Overcnfidence Bias - Availability Heuristic - Representativeness Heuristic - Framing Heuristic - Self-serving bias - Escalatin f Cmmitment - Hindsight bias - Curse f knwledge - Winner s curse Perceptin receiving and making sense f infrmatin frm the envirnment Attributin discvering the causes r mtives behind an event r behaviur Judgement and Decisin Making reaching a cnclusin r pinin abut smething r smene, and develping a cmmitment t a curse f actin accrdingly Perceptin receiving and interpreting infrmatin thrugh ur senses t give meaning t the envirnment Reality Perceptin Reactin Smetimes perceptin reality (white and gld dress versus blue and black dress) We filter ut infrmatin that is nt relevant Biases frm the Perceiver Perceptin is influenced by sme perceiver characteristics Gals and Needs - Yur immediate needs might autmatically filter the infrmatin that yu receive - Example: Wrk Lunch yu might be really hungry s dn t take much in f the discussin Existing Knwledge - When yu have a hammer, everything lks like a nail - Defrmatin Prfessinnelle the tendency t lk at things frm the pint f view f ne s wn prfessin rather than frm a brader perspective - Example: analysing everything frm an accunting perspective if yu are an accuntant, r an ecnmic persn cming up with an ecnmic mdel t find a girlfriend Emtins - Yur emtinal experience will shape hw yu see the wrld Biases frm the Target A target s characteristics als shape ur perceptins Scial Identity Thery We tend t make references abut a persn s characteristics based n the scial categry he/she belngs t: - Scial Prttype: we autmatically fill in infrmatin abut smene based n ur simplified understanding f the scial grup the this persn belngs t (ie. if they belng t the music grup at Mnash) - Hal Effect: Drawing a general impressin abut an individual based n a single characteristic (eg. physical attractin) Will assciate the gd lking persn with fit, healthy, smart, ppular Assciating these traits with physical attractiveness
Attributin when we bserve an event r behaviur, we want t determine whether it is caused by internal factrs (ie. persnality, ability, mtivatin) r by external factrs (ie. situatin, scial pressure, weather, ecnmy) We attribute using three characteristics f the event/behaviur: 1. Distinctiveness Des the individual act the same way acrss different situatins? If yes = internal factrs 2. Cnsensus Des the individual act the same way tward ther peple? If yes = internal factrs 3. Cnsistency Des the individual act the same way ver time? If yes = internal factrs Fundamental Attributin Errr When explaining ther peple s behaviur, we tend t attribute mre t internal factrs than t external factrs Als called crrespndence bias Example: Rad Rage - When bserving a dangerus r annying driving behaviur r anther driver, we attribute the behaviur mre t internal factrs (eg. incmpetence r aggressive persnality) than t external factrs (eg. weather r rad cnditins) Example: Grup wrk - If smene desn t cmplete their part, we wuld attribute this behaviur mre t internal factrs (eg. lazy r stupid), but it culd be related t external factrs (eg. family prblems) Judgement and Decisin Making Biases Overcnfidence Bias Mther f all biases It s assciated with high rates f entrepreneurial entry and crprate mergers and acquisitins, despite lw success rate Scientific disasters Invasin and war Fur Specific Frms f Overcnfidence Biases: 1. Over-Precisin we are t sure that ur judgements and decisins are accurate (bth lay peple and experts are subject t this bias) 2. Illusin f Cntrl smetimes we think we have mre cntrl ver circumstances than we actually d - Example: when buying lttery tickets, yu wuld chse numbers that mean smething t yu ver chsing randmly generated numbers, as yu think yu might have a better chance f winning 3. Planning Fallacy we tend t verestimate the speed at which we will cmplete prjects and tasks - Applies t bth cmplex as well as simple tasks - Example: Uni assignments 4. Over-placement we tend t believe that we are better than thers in specific ways when we are nt - Example: When asked if yu think yu are better driver than 50% f the class (70-80% wuld say yes) - Negative cnsequences ie. law suits Availability Heuristic we assess the frequency, prbability r likely cause f an event by the degree t which instances r ccurrences f that event are readily available in memry - Vivid infrmatin is mre easily accessible and thus has mre influence n ur judgement and decisins Example: Tp causes f death in the US (a) tbacc, besity and alchl r (b) cancer, heart disease and aut incidents We wuld chse (b) because we hear abut it mre but the crrect answer is (a) - Infrmatin that is mre easily retrievable frm memry has the mst influence n judgement and decisins Example: In fur pages f a nvel, hw many wrds have the letter n as the secnd last letter? It s hard t think abut this BUT if it was phrased with hw many wrds end with ING? This is easier t think abut, which is why estimates are higher, althugh it shuld be lwer than the first
Representative Heuristic when making a judgement abut an individual r event, peple lk fr characteristics the individual r event may have in cmmn with previusly frmed thughts (eg. steretypes) - Example: Linda is 31, single, utspken, and intelligent. She majred in philsphy. As a student, she was deeply cncerned with issues f discriminatin and scial justice and participated in antinuclear demnstratins. What is the pssibility that Linda is - a bank teller wh is active in the feminist mvement? 20-50% (verestimated) - a bank teller? 10% Framing Heuristic whether a questin is framed as a gain versus lss wuld influence individual s risk preferences when cllecting infrmatin and making decisins When a questin is framed as gain versus n gain, peple are reluctant t take risks - Example: Plan A: 2 millin peple will be saved, Plan B: 1/3 change that 6 millin will be saved and 2/3 chance that n ne will be saved (mst peple wuld g fr Plan A) When a questin is framed as lss versus n lss, peple are willing t take mre risks, presumably because they want t avid lss - Example: Plan C: 4 millin peple will die, Plan D: 1/3 chance that n ne will die, 2/3 chance that 6 millin peple will die (mst peple wuld g fr Plan D) Anchring Bias: We ften develp estimates by starting with an initial anchr that is based n whatever infrmatin is prvided We adjust frm the anchr t prvide a final estimate, unfrtunately the adjustment is usually nt sufficient t reach an accurate estimate Anchring ccurs even when anchrs are subliminal Anchring is strnger when it is prvided in smaller units - Car prices are nrmally advertised like $18,983 rather than $19,000 - Because if they say $19,000 yu think f units in the 000 s - T avid this, put yur wn price n the car Self-Serving Bias in Judgement we make judgements in ways that benefit urselves Example: we tend t believe that we have cntributed mre t teamwrk than we actually have - Why d music bands disband after success? Because each ne thinks they made the band successful, s they g sl Example: Endwment effect we tend t perceive that ur wn belngings are mre valuable than thers same/similar belngings - I wuld sell my laptp fr a higher price, but wuld nly pay a small amunt fr the same thing Escalatin f Cmmitment: Hw many f yu wuld break up with smene wh treats yu badly after: - Yu have been dating fr 3 weeks - Yu have been dating fr 3 years - Yu have been dating fr 9 years and have 3 kids Dilemma: When facing permanent lsses f resurces (ie. sunk csts), d yu invest mre resurces r try anther apprach? Escalatin f Cmmitment investing additinal resurces in an apparently failing curse f actin (nt trying smething new) - Eg prtectin and Self-justificatin: t try t change the result f the previus decisin t prve that ne is capable f making gd decisins - Slutin: Self-affirmatin fcus n gd decisins in ther areas - Change f decisin maker: the new decisin maker has n mtivatin t prtect the ec f the previus decisin maker
Hindsight Bias we tend t verestimate what we knew befrehand based upn what we later learned Smetime we feel that we are able t predict the results f independent events (eg. the result f the US electin) Advantage: self-flattering, allws us t criticise thers fr lack f fresight Disadvantage: reduces ur ability t learn frm the past Curse f Knwledge when we assess ther s decisins r behaviurs, we tend t ignre the fact that they might nt have the knwledge that we have When we judge smene else s behaviur we assume they have the same knwledge as us Example: when watching a hrrr mvie, we get angry when the actr makes certain decisins, but in the mvie they dn t knw Example: when giving friend s directins t yur huse, yu will assume they are familiar with all the rads yu knw Winner s Curse we suspect that we might have ver-bidden after we have wn a deal r auctin Yu feel like yu have been ripped ff Assciated with emtins such as regret, anger Can ccur fr varius reasns (eg. cmpetitive envirnment) Uncnscius Decisin Making The cnscius mind capacity is limited - 7 items maximum, try thinking simultaneusly f wrk, dinner, weekend, relatinship, wrld peace and aliens - Cnscius mind can prcess 10-60 bits f infrmatin per secnd The uncnscius mind is nt limited by lw capacity, and is mre suitable fr mre cmplicated tasks - The entire human system prcesses 11,200,000 bits per secnd, visual system alne prcesses 10,000,000 bits per secnd - Example: Prperty Purchase Decisin - Frced cntinuus prcesses might lead t pr perfrmance and decisin - Example: try t verbalise yur actin when playing a musical instrument
Lecture 4 Will Pwer and Wrk Mtivatin Outline: Thery X and Thery Y Self-Regulatin Thery - Eg-depletin - Regulatry Fcus Thery Gal Setting Thery - Self-Efficacy - Gal Orientatin Expectancy Thery Equity Thery Cgnitive Evaluatin Thery Jb Characteristic Mdel Jb Satisfactin Organisatinal Citizenship Behaviur Organisatinal Cmmitment Definitin the intensity, directin and persistence f effrt a persn shws in reaching a gal: Directin Where effrt is channelled Intensity Hw hard a persn tries Persistence Hw lng effrt is maintained Thery X X fr punishment Emplyees dislike wrk and attempt t avid wrk Emplyees must be cerced, cntrlled r threatened with punishment if they are t perfrm Thery Y Emplyees like t wrk and are creative and seek respnsibility Emplyees can exercise self-directin and self-cntrl Under this thery management wuld prvide pprtunities fr individuals (like Ggle free fd, music, sleeping rms) Self-Regulatin The prcess where yu refrain frm impulsive tendencies and chse t behave ratinally (eg. chse lng term benefit, chse delayed gratificatin) Tw System Framewrk: - The Cl System: cgnitive, emtinally neutral, cntemplative, strategic (keeps us n track) - The Ht System: emtinality, passins, impulsive and reflexive - Example: If yu are trying t lse weight, the cl system wuld lead yu t chsing an apple t eat, but the ht system wuld lead yu t chsing a cake - Example: If yu were aiming t achieve a high scre n yur exam, the cl system wuld lead yu t study n Saturday night, whereas the ht system wuld lead yu t party n Saturday night Eg-Depletin ur self-regulatin ability (ie. will pwer) resembles a muscle, and exerting self-regulatin cnsumes resurces and reduces the amunt f resurces available fr subsequent self-cntrl effrts - Example: wrkut befre a demanding quiz might impair perfrmance (yu will be tired frm the gym) - Self-regulatin prcesses that might deplete yu: Cping with stress Regulating negative affect Resisting temptatins Prductivity Tricks: Pmdr Technique Refers t splitting up a big task int smaller tasks, like slicing up a tmat - Fcus n ne thing fr 25min than have a break fr 5min - Starting smaller tasks are easier than being cnfrnted with a massive prject
Dn t Break the Chain invented by Jerry Seinfeld, this technique invlves maintaining the mmentum - Mark ff days yu cmplete tasks with a red crss, yu ll have a chain f crsses s yu fcus n nt breaking it Regulatry Fcus We apprach a gal in tw distinct ways: 1. Prmtin Fcus emphasising grwth and pprtunity and the pursuit f psitive utcmes - Individuals with a prmtin fcus tend t: - Fcus n their ideals an aspiratins - They are sensitive tward psitive utcmes r prgress twards the gal - See a gain as a success and a nn-gain as failure - Strategies: strive fr gains, insure against errrs f missin 2. Preventin Fcus emphasising safety and security and the minimisatin f negative utcmes - Individuals with a preventin fcus tend t: - They are sensitive tward negative utcmes r setbacks tward the gal - See a nn-lss as success and a lss as failure - Strategies: crrectly reject lsses, insure against errrs f cmmissin Regulatry fcus has been shwn t influence a wide variety f utcmes: Decisin making Scial interactin Negtiatin utcmes Gal Setting Thery Specific and difficult gals tgether with feedback lead t higher perfrmance Specific gals (versus d yur best) increase perfrmance Difficult gals, when accepted, result in higher perfrmance than d easy gals Feedback leads t higher perfrmance than des nn-feedback Fr gals t be effective they shuld be SMART: Specific, Measurable, Attainable, Results Orientated, Time Bund Self-Efficacy an individual s belief that he r she is capable f perfrming a task - Frm scial cgnitive thery and scial learning thery - High self-efficacy will help emplyees accmplish gals mre successfully - This is the main key variable in gal setting thery cnfidence is s imprtant Fur Ways t effectively increase ne s self efficacy: 1. Enactive Mastery Practicing and gaining relevant experience (ie. the Rugby death crawl) 2. Vicarius Mdelling Cnfidence is gained by seeing smene else perfrm the task successfully (bserving smene else ding it, ie. a lecturer watching TED talks) 3. Verbal Persuasin Cnfidence is gained because smene cnvinces yu that yu have the necessary skills t succeed 4. Arusal An energised state can drive a persn t cmplete the task (physical arusal, ie. ding a 5min wrkut befre public speaking) Gal Orientatin Learning Gal Orientatin see the task as an pprtunity t acquire new skills and knwledge Perfrmance Gal Orientatin fcus n demnstrating perfrmance t prve cmpetence and avid failure Cmpared t perfrmance gal rientatin, a learning gal rientatin leads t: Mre mtivatinal beliefs Higher self-efficacy Less task anxiety
Mtivatinal Theries Mre effrt Higher perfrmance Expectancy Thery One s mtivatin t engage in a task is dependent n three critical cnditins. Mtivatin is high nly when ALL three are satisfied: Expectance the belief that exerting a certain amunt f effrt will lead t the desired perfrmance level Instrumentality the belief that perfrming at a particular level will lead t a certain reward frm the rganisatin Valence an estimate f the extent t which rganisatinal rewards can satisfy ne s needs r are attractive t the individual Example: I will ffer yu $100,000,000 if yu can memrise the Dictinary by tmrrw mrning. Why is this nt mtivating? - Expectance is nt satisfied even if yu put in all yur effrt it wuld be impssible t memrise - Instrumentality nt satisfied the persn wuld nt have that mney - Valence is satisfied yu wuld be happy with $100,000,000 Increasing Expectancy: Expectance: - Skills and training - Reasnable gals and tasks Instrumentality: - Recgnise perfrmance, deliver reward as prmised - Establish emplyee s trust that gd perfrmance will be well rewarded Valence: - Analyse what emplyees truly need (mney may nt be the mst imprtant t them) - Custmise rewards fr emplyees with different needs Equity Thery Emplyees cmpare the inputs they invest in a jb and the utcmes they receive frm the jb t inputs and utcmes f ther wrkers Respnses t inequity: Ask fr mre reward Reduce effrt in the jb Adjust perceptin f self perfrmance Adjust perceptin f c-wrker perfrmance Chse a different c-wrked t cmpare with Quit the jb Cgnitive Evaluatin Thery based n the ideas f intrinsic and extrinsic mtivatrs: Intrinsic Mtivatrs A persn s internal desire t d smething, due t such things as interest, challenge and persnal satisfactin Experience f Intrinsic Mtivatin Sense f chice, sense f cmpetence, sense f meaningfulness, sense f prgress Extrinsic Mtivatrs Mtivatin that cmes frm utside the persn, such as pay, bnuses and ther tangible rewards
The intrductin f extrinsic rewards fr wrk effrt that was previusly rewarded intrinsically will tend t decrease an emplyee s mtivatin - Example: Artists paint t live versus Artists live t paint - The grup that were asked t pain with lve perfrmed better than thse wh were asked t pain fr mney Jb Design the Jb Characteristic Mdel (JCM) identifies five cre jb dimensins f a jb psitin and their relatinship t persnal and wrk utcmes 1. Skill Variety the scpe f skills invlved in the jb (ie. CEO versus cashier), the mre skills, the mre mtivating 2. Task Identity the extent t which ne is invlved in all parts f an end prduct (ie. making a whle table versus making the legs nly), mre mtivating if an individual is invlved in the whle prcess 3. Task Significance the meaningfulness f the jb (eg. capturing murderers and majr criminals versus giving ut parking tickets) 4. Autnmy the amunt f freedm ne has while n the jb (eg. writing a manuscript versus serving in a restaurant) 5. Feedback the amunt f feedback ne received when ding the jb KNOW THE FORMULA TO CALCULATE THE MPS: Results f Wrk Mtivatin Jb Satisfactin ne s general attitude tward their jb - Key surces f jb satisfactin: wrk itself (if yu lve what yu d), pay and advancement, cwrkers (wrking with the right peple) - Enjying the wrk itself is almst always crrelated with high levels f jb satisfactin - Once a persn reaches the level f cmfrtable living, the relatinship between pay and satisfactin virtually disappears - Satisfactin affects: Individual prductivity Organisatinal prductivity Organisatinal Citizenship Behaviur Custmer satisfactin
Organisatinal Citizenship Behaviur is the vluntary, infrmal behaviurs that cntribute t rganisatinal effectiveness, but are nt rewarded r detected by frmal evaluatin systems Altruism being helpful, helping a c-wrker with their tasks Curtesy being friendly and cnsiderate twards c-wrkers Sprtsmanship exhibit n negative behaviurs when smething at wrk desn t g as planned, be a gd sprt Cnscientiusness shw mre self-discipline than what s required at wrk (wrking extra hurs but nt getting paid) Civic Virtue supprt a gd image f the rganisatin even utside f wrk When jb satisfactin is lw: When an emplyee s jb satisfactin is lw, their reactin depends n whether they adpt a cnstructive r destructive apprach, and whether they seek t reslve the dissatisfactin in an active r passive way Result f Wrk Mtivatin Organisatinal Cmmitment a state in which an emplyee identifies with a particular rganisatin and its gals, and wishes t maintain membership in the rganisatin Affective Cmmitment an emplyee s genuine emtinal cnnectin with the rganisatin (like true lve) Nrmative Cmmitment the bligatin an emplyee feels t staying with an rganisatin (dn t have feelings anymre, but have been tgether fr t lng) Cntinuance Cmmitment an emplyee s calculatin that it is in their best interest t stay with the rganisatin based n the perceived csts f leaving it (being in a relatinship with smene wh is really rich)