Module 7: Chapter 11 (Decision-Making), Chapter 4 (Fairness) Flashcards
State how the issue of fairness affects people and what are the three kinds of fairness?
Issues of fairness affect what people want from their jobs and how they react to the discrepancies or life
○ Distributive Fairness
○ Procedural fairness
○ Interactional fairness
define Distributive Fairness
Distributive Fairness: fairness that occurs when people receive the outcomes they think they deserve from their jobs
* Involves the distribution of work rewards and resources
* Individuals want “what is fair” but that does not mean a salary of $200,000
Define Equity Theory
Equity theory: a theory that jobs satisfaction stems from a comparison of the inputs one invests in a job and the outcomes one receives in comparison with the inputs and outcomes of another person or group
* Ex. Putting in 50 hours of studying and got a C grade and your friend got an A for 20 hours of studying
Define Inputs and Outcomes
Inputs: anything that people give up, offer, or trade to their organization in exchange for outcomes
* Ex. Education, training, seniority, hard work, etc.
Outcomes: factors that an organization distributes to employees in exchange for their inputs
* Ex. Pay, career opportunities, supervision, etc.
define Procedural fairness
Procedural fairness: fairness that occurs when the process used to determine the work outcomes is seen as reasonable
* Outcome’s such as raises, promotions, and layoffs
A factor relate to procedural fairness:
○ Managers use accurate information and appears unbiased
Define Interactional fairness
Interactional fairness: fairness that occurs when people feel they have received respectful and informative communication about an outcome
* procedures are carefully explained
define decision-making and the three ‘laws’
Decision making: the process of developing a commitment to some course of action
- Decision-making involves making a choice among several action alternatives
- Decision-making involves more than simply the final choice among alternatives - ex. If you accept that job offer
- “Commitment” refers to the dedication of resources such as money, time, or personnel
define Problem, then define Well-Structured Problems, Program, and Ill-Structured Problems
Problem: a perceived gap between and existing state and a desire state
Well-Structured Problems: a problem for which the existing state is clear, and how to get from one state to the other is fairly obvious
Because the problems are usually repetitive
Program: a standardized way of solving a problem
Ex. Rules, routines, standard operating procedures, etc.
Ill-Structured Problems: a problem for which the existing and desired states are unclear and the method of getting to the desire state is unknown
* Problems are unique, never been encountered before… cannot be solved with a program
* Ex. Covid-19 and the vaccine
define and explain the assumption with the The Rational Decision-Making Model and list the seven stages
How our mind works when making decisions
- It assumes at every stage were rational with our decisions
- Define the problem
- Search for Relevant Information
- Develop Altneratives Solutions to the Problem
- Evaluate the alternatives
- Select the best alternative
- Implement the best alternative
- Monitor and Evaluate Chosen Solution
Explain Perfect rationality and Bounded rationality- define Framing and Cognitive Biases
Perfect rationality: a decision strategy that is completely informed, perfectly logical, and orientated toward economic gain
Bounded rationality: a decision strategy that relies on limited information and that reflects time constraints and political considerations (We dumb down complex problems, which distorts the problem )
Framing: refers to the aspects of the presentation of information about a problem that are assumed by decision makers.
* Ex. “Bleach-ox wipes” “Kills 95% of all germs” versus “Only 5% of germs survive”
Cognitive Biases: are tendencies to acquire and process information in a particular way that is prone to error
* Shortcuts our brains take to get to the answer quickly
Too Little Information: define Availability bias, Confirmation bias, Not-invented bias
Availability bias: the tendency to favour information that can be accessed quickly and easily
* We tend to remember vivid recent events, such events may be irrelevant to current issue
Confirmation bias: the tendency to seek out information that conforms to one’s own definition or solution to the problem
Not-invented bias: the tendency for management to reject any idea that did not originate within the organization
Too much Information: define Information overload
Information overload: the reception of more information than is necessary to make effective decisions
* Decision makers seem to think that more is better
Alternate Development, Evaluation, and Choice: define Maximization, Anchoring effect, Satisficing
Maximization: the choice of the decision alternative with the greatest expected value
Anchoring effect: People base their decisions on the first piece of information they’re given about something
Satisficing: individuals only search for possible solutions until they find an acceptable option
Justification: define Sunk costs, Escalation of commitment
Sunk costs: permeant losses of resources incurred as the result of a decision
○ Since these resources have been lost (sunk) due to a past decision, they should not enter into future decisions
Escalation of commitment: the tendency to invest additional resources in an apparently failing course of action
Define Hindsight
Hindsight: the tendency to review the decision-making process to find what was done right or wrong
