Career Decision Making

Reporter: Have you made up your mind yet? Yogi Berra: Not that I know of.

Occupational choice is at the heart of adolescent identity formation. Work contributes to feelings and emotions, and to our adjustment with our peers; and more importantly, in this day and age, facilitates buying power. While some adults select their vocation early on and have been trained for the work the vocation demands, many young adults are unsure. The selection of a vocation has become increasingly difficult for each successive generation. One of the reasons for that is the everincreasing number of different kinds of work to choose from. Today, individuals are faced with unusual career options such as that of a funeral director and chicken sex-determiner to the traditional ones of doctor, lawyer, teacher, and so and so forth. This paper is broadly divided into three parts: 1. Factors determining an individuals choice of career 2. Mid-career blues 3. Types of decision making models.

Factors Determining Choice of Career

There are multiple levels at which these factors work. 1. Individual 2. Societal 3. Cultural

Individual:
Dunning-Kruger effect

An individuals ability is a crucial determinant of his/her vocational choice. Unfortunately, this is one area where the most errors in judgment are made. The cognitive bias which comes into play here is the Dunning-Kruger effect. The unskilled rate their ability as above average, much higher than it actually is. This is called illusory superiority. The highly skilled, on the other hand, underrate their abilities, suffering from illusory inferiority. This leads to the situation in which less competent people rate their own ability higher than more competent people. This bias leads to faulty decision making

which, when actual competence is realised, weakens self-confidence and affects job performance and satisfaction. Personality Dimensions

Career decision making can be explained by incorporating the personality dimensions of Eysencks work. Introverts are likely to be undecided and less interested in occupational areas requiring interpersonal skills as compared to extroverts. Additionally, people who score high on neuroticism show a preference for sedentary occupations like teaching, writing, etc. Such people also relate positively with indecisiveness. They find decision making anxiety arousing. Even after being given information about making a decision, they are unable to make an occupational choice. Indecisiveness is an outcome of a life history in which the person has failed to acquire the necessary cultural involvement, self-confidence, tolerance for ambiguity, sense of identity, and knowledge about the self and environment. Career Maturity

According to Erikson, adolescence is the time of role exploration and experimentation of the self. Individuals would be unlikely to display mature judgment during this period of experimentation and exploration, which is called psychosocial moratorium. Only those adolescents who successfully resolve the identity crisis score high on measures of career maturity whereas individuals still in the midst of the moratorium score high on measures of anxiety. Career maturity can also be explained by the twin concepts of 1) Career Choice Content: If an adolescent has more than one career choice, then these should be consistent with respect to the occupational field and level. E.g. if an individual has two choices physicist and biochemist, they are consistent because they are both in the same Field (science) and Level (professional). The same would not be the case with the choices of physicist and writer, both of which belong to different fields. 2) Realism of Career Choice: For a career choice to be labelled realistic, the individuals aptitudes, interests, and personality characteristics should agree with those required by the chosen occupation. Cognitive Factors

Individuals who have a high Need for Cognition spend a great deal of time thinking about things and options. People low in Need for Cognition tend to act without spending a lot of time thinking. A related concept is that of an individuals Need for Cognitive Closure which measures how much people want thinking situations to end. Someone high in Need for Cognitive Closure, makes decisions very quickly, while someone low in Need for Cognitive Closure, tends to avoid making a decision, preferring instead to deliberate about the options.

Emotions

There have been two opposing views about the role that emotion plays in decision making. One side reasons that emotions tend to highlight or make salient certain aspects of a decision to the exclusion of others. They cause certain dimensions of options to jump to the foreground and others to retreat to the background. Unidimensional thinking is the result of emotional arousal. Emotions promote unstable value judgments. On the flip side, psychologists have proposed that emotions are a crucial part of decision making and that when cut off from our feelings, making even the most banal decisions become impossible. A study on patients whose orbitofrontal cortex (small circuit of tissue which sits just behind the eyes, in the underbelly of the frontal lobe) was damaged revealed the involvement of emotions in the process of decision making. A patient suffering from such damage was asked to choose between two dates for the fixing of an appointment. The patient pulled out his appointment book and started consulting his calendar. And for longer than half an hour, enumerated reasons for and against each of the two dates: previous engagements, proximity to other engagements, possible meteorological conditions, virtually anything that one could reasonably think about concerning a simple date. Damage to the orbifrontal cortex results in a purely rational man whose every decision is devoid of all emotions. If the choosing of a date takes half an hour, the choice of career would take the better part of a decade.

Societal
Compared with adults, adolescents have limited abilities in areas of psychosocial functioning, such as self-reliance, which likely interfere with the ability to act independently of the influence of others. Family

The society can overtly bludgeon or subtly coerce individuals into making a certain choice. An important agent influencing the individuals decision is the family. An individuals decisions may be influenced and oftentimes determined by parental advice (in either a conforming or opposing sense). Parents have been found to more influential in matters of religion; this finding attempts to explain the occupational choices that adolescents make with regard to entering the field of religion. Peers

Peers, apart from influencing day-to-day affairs, have been shown to play a decisive role in an individuals choice of career. The bandwagon effect, also known as the group-think bias or herd behaviour, influences an individuals occupational choice. The individuals vocational choice may be

the same as or similar to that of his peers. Or in a connected but opposite situation, the individual may demonstrate an anti-herd behaviour by deliberately not choosing the career which ones peers are. In the latter case, the individuals decisions are still being influenced by ones peers, just in an opposing sense. Psychosocial capacities that undergird the ability to resist peer pressure continue to develop throughout late adolescence and into early adulthood. Media

Visual media can have strong effect on creating and reinforcing gender stereotypes. In the mid1990s, 42% of IT (Information Technology) workers were female. There were realistic hopes that as the industry grew, females would hold at least half of jobs in this high skill-high pay field. That didnt happen. By 2003, women made up just 31% of IT workers. Researchers concluded that movies and television had presented unflattering images of women in technology jobs and thus turned young women away from this well-paid career choice. [Globalization is creating unprecedented uncertainties in the outlook for any career amidst increasing corporate access to a global labour market and the commoditization of intellectual property.]

One of the hallmarks of mature judgment is knowing where to turn for advice, knowing how to solicit it, and knowing whether and what extent to follow it. Individuals with low self-esteem or limited self-awareness may be hesitant in decision-making situations and likely to seek social approval rather than follow their best intuitions. Adolescents and psychologically less mature than adults and this immaturity impairs young peoples judgments. Mature individuals are those who report strong feelings of internal (as opposed to external) control and the ability to make decisions without excessive reliance on others.

Cultural
In all cultures, although varying degrees of emphasis are placed on the acquisition of superior status or competence, it is the individuals occupation, broadly conceived, through which status is largely attained or expressed. Societies differ along four major cultural dimensions: Power Distance

Power distance is the extent to which the less powerful individuals in a society accept inequality in power and consider it as normal. Such an acceptance reduces upward social mobility and restricts career choices by demarcating an individuals social and occupational role. Individualism

Individualist cultures are those societies in where individuals are primarily concerned with their own interests and the interests of their own immediate family. Cross-cultural evidence demonstrates the difference between Western and Asian adolescents judgments about democratic decision making. The Asian culture and psychology are collectivistic and oriented towards respect for authority and social hierarchy. There is a strong sense of responsibility towards the group than to the self. Therefore, the individuals vocational choice is likely to reflect his/her cultural norms. Masculinity

Masculinity is the extent to which individuals in a society expect men (as opposed to women) to be assertive, ambitious, competitive, and to strive for material success. A team led by a University of Missouri researcher found that these stereotypes influence whether or not men and women decide to pursue entrepreneurship as a viable career option. It was found that men had higher entrepreneurial intentions than women. More examples of gender stereotypes include: A new study found a strong correlation between hidden or unconscious stereotypes that link males with science and mathematics to higher achievement among males in those fields. The study asked respondents to quickly associate male terms (e.g., he, father, son) or female terms (she, mother, daughter) with science terms (physics, chemistry, biology) or liberal arts (literature, history, arts). Most participants associated science terms with male terms rather than with female terms. The study also found these implicit connections at about the same rate among male and female respondents. Gender stereotypes and the expectations they produce about both what women are like (descriptive) and how they should behave (prescriptive) can result in devaluation of their performance, denial of credit to them for their successes. Because of gender bias and the way in which it influences evaluation in work settings, being competent provides no assurance that a woman will advance to the same organizational levels as an equivalently performing man Men consider women to be less adept at problem-solving, one of the qualities most commonly associated with effective leadership and a hallmark behaviour of a CEO. Since men far outnumber women in top management positions, this male-held stereotype dominates current corporate thinking and may contribute to the fact that although women hold more than one-half of all management and professional positions, they make up less than 2 percent of Fortune 500 and Fortune 1000 CEOs. Uncertainty Avoidance

Uncertainty avoidance is the extent to which individuals in a culture are made nervous by situations that are unstructured, unclear or unpredictable. The Western culture rates low on uncertainty

avoidance. This factor causes more individuals to foray into the entrepreneurial field as opposed to the Asian culture which is risk-aversive.

Mid-career Blues
Most individuals are more satisfied with their jobs in their early twenties than they are in their late twenties. The reason for this is that they feel glad to have a job, even if it is not entirely to their liking, because it gives them independence, particularly financial independence. Mid-career blues kick in due to the dissatisfaction which many individuals suffer from after having chosen a career. In this section, we will look at 1. Why such feelings occur (causes), and 2. The manner in which individuals react to them (response).

Causes
Discrepancy Between Desire and Availability

1. Too few adolescents want to enter the low-level occupations where the need for manpower is the greatest and in which a large number of them must eventually find employment. 2. Too many adolescents aspire to prepare for professional and technical fields that cannot possibly accommodate all those eager for admission. Vocational ambitions of adolescents are unrealistic and overly sanguine in terms of the statistical probabilities of their ever gaining entrance into their occupation of choice. Under these circumstances, a large number of people are doomed to chronic frustration, job disillusionment, and general dissatisfaction with what life has to offer them.

Optimism Bias

It is the demonstrated systematic tendency for people to be over-optimistic about the outcome of planned actions. This includes over-estimating the likelihood of positive events and under-estimating the likelihood of negative events. People have been found to assign higher probabilities to their attainment of desirable outcomes than either objective criteria or logical analysis warrants. Overly positive expectations about the consequences of ones actions may lead people to persist in vain to complete actions for which they are ill-prepared or seek outcomes that are impossible to achieve or that are noncontingent on continued efforts. Often, people engage in a different type of optimism bias in which they make optimistic social comparisons, believing their own chances of success are greater than the likelihood of other people succeeding.

Inaccurate Prediction of Future Self

A common reason why people make unsatisfactory job decisions is that they tend to regard their current preferences as much more stable and intrinsic than they actually are. In truth, many of our likes and dislikes are highly fluid and are determined by ever-changing external and cultural influences. This means that our preferences are likely to change with external drivers, yet we may underestimate the extent of this change and believe ourselves to be more immune to the vagaries of external influences than we truly are. This, in turn, leads us to believe that our future self will be more like our current self in terms of likes and dislikes than in fact it will be. Greater maturity of judgment is needed as well as more time to acquire related and vicarious experience that will provide more valid knowledge of jobs and vocational aspects of life. But this extension of time is not available before decisions have to be made. When it finally does become available, it is too late to scrap the investment already made in years and training and to start anew in search of a more appropriate vocation.

Response
Choice-supportive Bias

It is a tendency to retroactively ascribe positive attributes to an option one has selected. Within the context of cognitive dissonance, choice-supportive bias would be seen as reducing the conflict between "I prefer X" and "I have committed to Y". This is the same as post-purchase rationalization. Status Quo Bias

It is the preference to remain in the same state rather than take a risk and move to another state. In such a case, the potential losses incurred by shifting from the status quo loom larger than the potential gains from the act of shifting. A dissatisfactory job is, by most definitions, a sunk cost. Some people dont abandon sunk cost ventures because the decision makers are trying to protect their future reputations as good and consistent decision makers. Some people try to postpone the pain of loss (in this case, of having made a poor decision in choosing an ill-suited career over a better-suited one) for as long as possible. This is termed as loss-aversion. Job-hopping

Job-hopping is the practice of changing jobs quickly and frequently. India has the highest Global Mobility Index score (141) which shows the extent to which employees are thinking of changing their jobs. Employees in the age group of 25-34 are most likely to change jobs. This shows that Indians are the fastest job-hoppers.

A particular practice which has been found useful in avoiding mid-career blues is the gaining of sustained firsthand experience with actual working conditions. This takes the glamour out of the jobs and also tests the genuineness of expressed interests. Job experience cushions the transition between college and work.

Types of Decision Making Models

Decision: Response in a situation that is composed of three parts. 1. More than one possible course of action under consideration in the choice set. 2. Decision maker can form expectations concerning future events and outcomes following from each course of action. 3. The consequences associated with the possible outcomes can be assessed on an evaluative continuum determined by current goals and personal values. Pragmatic Calibration of Knowledge Acquisition: It is critical to acquire knowledge in domains that are most relevant to fulfilling ones most important goals. Knowledge acquisition is effortful and the cognitive resources available for it are limited. A decision strategy which involves combining all pieces of information is described as compensatory. Non-compensatory strategy relies on less information.

Non-compensatory:
Heuristics:

Kahneman & Tversky (Heuristics and Biases): Rather than reason on the basis of formal rules of probability, people often use simplifying or shortcut heuristics to probability judgment. Take The Best (TTB) heuristic [non-compensatory]: when making a judgment based on multiple criteria, the criteria are tried one at a time according to their cue validity, and a decision is made based on the first criterion which discriminates between the alternatives. Processing steps of the TTB algorithm: People search the cues in descending order of feature validity until they discover a feature which discriminates one alternative from the other. Once this single discriminating feature has been found, the search is terminated (stopping rule) and the feature is used to make a decision (decision rule). Satisficing and Bounded Rationality

Decision makers cognitive capacity is rather limited; they must reduce information processing demands by simplifying the problems they encounter. To do so, they construct small worlds that are limited representations of the problem at hand. The representation contains only the most salient information and the decision maker proceeds to make his decision based solely on that bounded representation. Satisificing: Not a rational decision strategy. It allows the decision maker to arrive at a decision without the computational effort required by prescriptive theory. The idea is that the first option which comes along which meets all of the standards is the one that is selected. Satisficing is not rational in the prescriptive sense because the decision maker has no assurance that one or more standards an as-yet-unforeseen option might not be superior to the option that has been selected,

and he would therefore fail to select the best option. However, the simplicity of this decision strategy presumably makes it worthwhile to risk missing the best option in favour of choosing one that is at least sufficient. [strategy that attempts to meet criteria for adequacy, rather than to identify an optimal solution. A satisficing strategy may often be (near) optimal if the costs of the decision-making process itself, such as the cost of obtaining complete information, are considered in the outcome calculus.] Bounded rationality is the notion that in decision making, rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make decisions

Compensatory:
Rational Choice Theory

A rational choice is: 1. Based on the decision makers current assets. Assets include not only money but also physiological state, psychological capacities, social relationships, and feelings. 2. Based on the possible consequences of the choice. 3. When these consequences are uncertain, their likelihood is evaluated according to the basic rules of probability theory. 4. A choice that is adaptive within the constraints of those probabilities and the values or satisfactions associated with each of the possible consequences of the choice. The theory assumes that people make decisions by multiplying the probability of getting what they want by the amount of pleasure (utility) that getting what they want will bring. Maximize happiness which is what rational agents are always supposed to do. Dorsolateral Prefrontal Cortex (DLPFC) is generally regarded as the rational centre of the brain. The prefrontal cortex is the last brain area to fully mature. Utility of an outcome corresponds to how much the decision maker values the outcome Average Probability Weighted Utility: Business/Academia Business: Success 10%; Utility 80 Failure 90%; Utility 15 APU: (0.1 x 80) + (0.9 x 15) = 21.5 Academia: Success 40%; Utility 70 Failure 60%; Utility 40 APU: (0.4 x 70) + (0.6 x 40) = 52 The same decision choice (business v/s academia) being analysed in a more detailed manner: BUSINESS PRODUCT 16 6 40 40 ACADEMIA SCORE PRODUCT 8 4

CRITERIA Economic Peak income Final Wealth

WEIGHT 0.2 0.1 80 60

SCORE

Non-economic Quality of Life Work Interest Prestige TOTAL

0.3 0.2 0.2

50 30 40

15 6 8 51

60 80 70

18 16 14 60

Very often the criterion scores dont have a real interpretation (like money which is a convenient natural metric); they artificially constructed (scale of 0 to 100). In the case of an artificiallyconstructed scale, the two extreme values are called anchors. They should be plausible range anchors. A scale shouldnt be too extreme otherwise it wont permit sharp differentiation among outcomes. *0 is bankruptcy and 100 is Bill gates on a financial outcome scale.] Analytic Hierarchy Process (AHP)

Priorities are numbers associated with the nodes of an AHP hierarchy. They represent the relative weights of the nodes in any group. Like probabilities, priorities are absolute numbers between zero and one, without units or dimensions. A node with priority .200 has twice the weight in reaching the goal as one with priority .100, ten times the weight of one with priority .020, and so forth. Depending on the problem at hand, "weight" can refer to importance, or preference, or likelihood, or whatever factor is being considered by the decision makers. Priorities are distributed over a hierarchy according to its architecture, and their values depend on the information entered by users of the process. Priorities of the Goal, the Criteria, and the Alternatives are intimately related, but need to be considered separately. By definition, the priority of the Goal is 1.000. The priorities of the Alternatives always add up to 1.000. Stages of Judgment: Acquiring information (pre-decisional acquisition of information) is a strategy engaged in the hope of reducing the risk of making an erroneous decision. Deciding how to decide involves a trade-off between the accuracy of a decision and the (cognitive) effort (and time) involved in making the decision. [alternative-wise...making a summary evaluation...weighted additive linear rule v/s attribute-wise search strategy] . [Normative: how people ought to make decisions; descriptive: how people actually make decisions]

Prescriptive decision theory views the decision maker as a maximizer of expected value. Expected value: multiply the potential gains or losses (dollars) by the chance of winning or losing that outcome. This is called expected value of the outcome. If one option has a larger expected value

than the other, it is regarded as the better of the two options. Maximizing expected utility. Two variables: pay-offs and probability.

Rational Expectations Principle: Utility = Sigma (Probability of i x Value of i) The equation prescribes that for each alternative course of action under consideration, we need to weight each of the potential consequences by its probability of occurrence and then add up all the component products to yield a summary evaluation called an expected utility for each alternative course of action. Departure from optimal happens because we simply dont have the capacity to compute the optimal solutions because our working memory imposes limits on how much information we can use.

Reference class forecasting for a specific project involves the following three steps: 1. Identify a reference class of past, similar projects. 2. Establish a probability distribution for the selected reference class for the parameter that is being forecast. 3. Compare the specific project with the reference class distribution, in order to establish the most likely outcome for the specific project. (1) Identification of a relevant reference class of past, similar projects. The class must be broad enough to be statistically meaningful but narrow enough to be truly comparable with the specific project. (2) Establishing a probability distribution for the selected reference class. This requires access to credible, empirical data for a sufficient number of projects within the reference class to make statistically meaningful conclusions. (3) Comparing the specific project with the reference class distribution, in order to establish the most likely outcome for the specific project.