Biases in Decision Making and Implications for Human Resource Development

Biases in Decision Making and Implications for Human Resource Development

19 Pages · 2003 · 178 KB · English

tion, it describes the implications of decision-making biases for human. Advances in Developing Human Resources action found little adherence to the rational, linear model of decision making. (Wagner, 1991). Rothwell, W. J. (1996). Beyond training and development: State-of-the-art strategies for.

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101177/1523422303257287 ARTICLE Advances in Developing Human ResourcesNovember 2003 Korte / DECISION BIASES IN HRD Biases in Decision Making and Implications for Human Resource Development Russell F Korte The problem and the solutionEffectively solving problems is a common goal for individuals and organizations, and success ful problem solving is dependent on the quality of decisions made along the way Making decisions to diagnose and direct organizational performance improvement efforts is a continual task throughout the human resource development (HRD) pro cess However, evidence shows that there is a large gap between theory and practice in effective decision making In practice, the decisionmaking process is heavily influenced by the assump tions and biases of the decision makers This article describes decisionmaking processes and the many sources of bias that confound decision makers in their attempts to solve problems Furthermore, it describes the implications of these biases for HRD professionals and suggests ways to minimize the influence of biases in the decisionmaking process Attending to the pit falls of decisionmaking biases is crucial to improving the suc cess of decisions that drive HRD professionals’ efforts Keywords:biases; decisionmaking; HRD Traditional models of decision making are built on logic and rationality Although such models may be elegant in the logical structure of their pro cesses, reality shows that decision making rarely follows such a logical structure Decisionmaking processes vary and are often confounded by various assumptions and biases held by the decision makers Finding a more successful model of decision making requires recognition of the assump tions and biases affecting decisions, along with recommendations to mini mize their ill effects The purpose of this article is to present a brief survey of the literature on decision making and the ways in which biases undermine decisions In addi tion, it describes the implications of decisionmaking biases for human Advances in Developing Human Resources Vol 5, No 4 November 2003 440457 DOI: 101177/1523422303257287 Copyright 2003 Sage Publications resource development (HRD) professionals and suggests ways to minimize the hazards of biased decision making in HRD DecisionMaking Processes Decisionmaking models have traditionally identified a series of steps that help the decision maker arrive at the best solution out of a field of alternative solutions Such a rational model is based on a linear decisionmaking process that includes the steps summarized by Bazerman (1994), as follows: 1 Define the problem 2 Identify the criteria or objectives of the decision 3 Weight or prioritize the criteria or objectives of the decision 4 Generate alternative courses of action to solve the problem 5 Evaluate the alternatives against each criterion or objective 6 Compute the optimal decision Although the rational model is explicit, general, and based on scientific rea soning and the principles of logic, it contains three serious weaknesses First, it does not represent reality Second, there is growing skepticism of the validity of using general principles in the absence of specific content knowledge Finally, there is an increasing awareness of the biases and other limitations that charac terize the thinking of individuals (Wagner, 1991) The impracticality of the rational model of decision making stems from core assumptions seldom realized in practice It assumes the decision maker (a) has complete knowledge of the situation; (b) knows all the alternative solutions, along with their consequences and probabilities; (c) objectively follows the process; and (d) has the goal of maximizing economic gain or utility Empirical evidence gathered from decisionmaking behavior in real life situations uncovered major flaws with these assumptions (Beach, 1990; March, 1999) Decision makers, in real life, seldom balance costs with benefits or strive to maximize profit They seldom consider multiple options—usually con sidering only one option against the status quo—and they seldom make decisions in isolation—usually decisions are made to incrementally reach toward a larger goal and offer protection against failure (Beach, 1990) In organizations, managers have been found to make decisions opportunisti cally, to “satisfice,” and to jump into action at the first sign of a plausible idea (Isenberg, 1986) Decision making is not completely rational Several studies of managers in action found little adherence to

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