1. McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Learning and Decision Making Chapter 8

2. 8-2 Class Agenda Learning defined Methods of learning Decision making defined Decision-making problems How important is learning? Best practices

3. 8-3

4. 8-4 Why Do Some Employees Learn to Make Decisions Better than Others?

5. 8-5 Learning Defined Permanent changes in an employee’s knowledge or skill that result from experience ๏ Employees learn two types of knowledge: ๏ Explicit - easy to communicate and teach ๏ Tacit - more difficult to communicate; gained with experience

6. 8-6 Methods of Learning How do employees learn? ๏ Reinforcement

7. 8-7 Methods of Learning

8. 8-8 Methods of Learning

9. 8-9 Methods of Learning How do employees learn? ๏ Reinforcement ๏ Observation

10. 8-10 Methods of Learning

11. 8-11 Methods of Learning OB on Screen: The Karate Kid ๏ What kind of learning methods are being used? ๏ What kind of knowledge is Dre gaining?

12. 8-12 Methods of Learning Some people learn differently, as a function of the goals and activities that they prioritize ๏ Goal orientation ๏ Learning ๏ Performance-prove ๏ Performance-avoid

13. 8-13 Learning Performance Prove Performance Avoid 20 15

14. 8-14 Decision Making The process of generating and choosing from a set of alternatives to solve a problem. ๏ Learning has a significant impact on decision making

15. 8-15 Decision Making Identify the problem Is the problem recognized? Has it been dealt with before? Programmed Decisions Nonprogrammed Decisions (Intuition, “Gut feeling”) (Rational decision making model) YesNo

16. 8-16 Decision Making Nonprogrammed decisions ๏ Rational decision- making model

17. 8-17 Decision Making Problems Common reasons for making bad decisions ๏ Limited information ๏ Faulty perceptions ๏ Faulty attributions ๏ Escalation of commitment

18. 8-18 Limited Information

19. 8-19 Faulty Perceptions Heuristics and decision-making biases ๏ Availability ๏ Anchoring ๏ Framing ๏ Representativeness ๏ Contract ๏ Recency ๏ Ratio Bias

20. 8-20 Faulty Attributions

21. 8-21 Escalation of Commitment The decision to continue to follow a failing course of action ๏ Throwing good money after bad

22. 8-22 Why Do Some Employees Learn to Make Decisions Better than Others?

23. 8-23 Why Do Some Employees Learn to Make Decisions Better than Others? Reinforcement Goal Orientation Observation Faulty Attributions Escalation of Commitment Faulty Perceptions Limited Information Reinforcement Goal Orientation Observation Limited Information Faulty Perceptions Faulty Attributions Escalation of Commitment

24. 8-24

25. 8-25 How Important is Learning?

26. 8-26 Application Training ๏ Behavior modeling ๏ Communities of practice Transfer of training ๏ Climate for transfer

27. 8-27 Best Practices: Tennessee Valley

28. 8-28 Best Practices: Tennessee Valley Largest public power company in the US Working to retain the knowledge of retirees (average at is 48 years old) Each employee gives nonbinding planned retirement age Shadowing and apprenticeship programs used to transfer knowledge Managers assign a “critical knowledge score” for each employee