REALITY OF DECISION MAKING

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Decision making can be regarded as the mental processes (cognitive process) resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice.^[1] The output can be an action or an opinion of choice.

Overview

Human performance in decision terms has been the subject of active research from several perspectives. From a psychological perspective, it is necessary to examine individual decisions in the context of a set of needs, preferences an individual has and values they seek. From a cognitive perspective, the decision making process must be regarded as a continuous process integrated in the interaction with the environment. From a normative perspective, the analysis of individual decisions is concerned with the logic of decision making and rationality and the invariant choice it leads to.^[2]

Yet, at another level, it might be regarded as a problem solving activity which is terminated when a satisfactory solution is reached. Therefore, decision making is a reasoning or emotional process which can be rational or irrational, can be based on explicit assumptions or tacit assumptions.

One must keep in mind that most decisions are made unconsciously. Jim Nightingale, Author of Think Smart-Act Smart, states that "we simply decide without thinking much about the decision process." In a controlled environment, such as a classroom, instructors encourage students to weigh pros and cons before making a decision. However in the real world, most of our decisions are made unconsciously in our mind because frankly, it would take too much time to sit down and list the pros and cons of each decision we must make on a daily basis.

Logical decision making is an important part of all science-based professions, where specialists apply their knowledge in a given area to making informed decisions. For example, medical decision making often involves making a diagnosis and selecting an appropriate treatment. Some research using naturalistic methods shows, however, that in situations with higher time pressure, higher stakes, or increased ambiguities, experts use intuitive decision making rather than structured approaches, following a recognition primed decision approach to fit a set of indicators into the expert's experience and immediately arrive at a satisfactory course of action without weighing alternatives. Recent robust decision efforts have formally integrated uncertainty into the decision making process. However, Decision Analysis, recognized and included uncertainties with a structured and rationally justifiable method of decision making since its conception in 1964.

A major part of decision making involves the analysis of a finite set of alternatives described in terms of some evaluative criteria. These criteria may be benefit or cost in nature. Then the problem might be to rank these alternatives in terms of how attractive they are to the decision maker(s) when all the criteria are considered simultaneously. Another goal might be to just find the best alternative or to determine the relative total priority of each alternative (for instance, if alternatives represent projects competing for funds) when all the criteria are considered simultaneously. Solving such problems is the focus of multi-criteria decision analysis (MCDA) also known as multi-criteria decision making (MCDM). This area of decision making, although it is very old and has attracted the interest of many researchers and practitioners, is still highly debated as there are many MCDA / MCDM methods which may yield very different results when they are applied on exactly the same data.^[3] This leads to the formulation of a decision making paradox.

Problem Analysis vs Decision Making

It is important to differentiate between problem analysis and decision making. The concepts are completely separate from one another. Problem analysis must be done first, then the information gathered in that process may be used towards decision making.^[4]

Problem Analysis

• Analyze performance, what should the results be against what they actually are
• Problems are merely deviations from performance standards
• Problem must be precisely identified and described
• Problems are caused by some change from a distinctive feature
• Something can always be used to distinguish between what has and hasn't been effected by a cause
• Causes to problems can be deducted from relevant changes found in analyzing the problem
• Most likely cause to a problem is the one that exactly explains all the facts

Decision Making

• Objectives must first be established
• Objectives must be classified and placed in order of importance
• Alternative actions must be developed
• The alternative must be evaluated against all the objectives
• The alternative that is able to achieve all the objectives is the tentative decision
• The tentative decision is evaluated for more possible consequences
• The decisive actions are taken, and additional actions are taken to prevent any adverse consequences from becoming problems and starting both systems (problem analysis and decision making) all over again
• There are steps that are generally followed that result in a decision model that can be used to determine an optimal production plan.^[5]
• In a situation featuring conflict, role-playing is helpful for predicting decisions to be made by involved parties.^[6]

Decision Planning

Making a decision without planning is fairly common, but does not often end well. Planning allows for decisions to be made comfortably and in a smart way. Planning makes decision making a lot more simpler than it is. Decision will get four benefits out of planning: 1. Planning give chance to the establishment of independent goals. It is a conscious and directed series of choices. 2. Planning provides a standard of measurement. It is is a measurement of whether you are going towards or further away from your goal. 3. Planning converts values to action. You think twice about the plan and decide what will help advance your plan best. 4. Planning allows to limited resources to be committed in an orderly way. Always govern the use of what is limited to you (e.g money, time, etc..) ^[7]

Everyday techniques

Some of the decision making techniques people use in everyday life include:

• Pros and Cons: Listing the advantages and disadvantages of each option, popularized by Plato and Benjamin Franklin. Contrast the costs and benefits of all alternatives. Also called Rational decision making.
• Simple Prioritization: Choosing the alternative with the highest probability-weighted utility for each alternative (see Decision Analysis)
• Satisficing: Examine alternatives only until an acceptable one is found.
• Acquiesce to a person in authority or an "expert", just following orders
• Flipism: Flipping a coin, cutting a deck of playing cards, and other random or coincidence methods
• Prayer, tarot cards, astrology, augurs, revelation, or other forms of divination
• Taking the most opposite action compared to the advice of mistrusted authorities (parents, police officers, partners ...)
• Opportunity cost: calculating the opportunity cost of each options and decide the decision.
• Bureaucratic: Set up criteria for automated decisions.
• Political: Negotiate choices among interest groups.

Source  : http://en.wikipedia.org/wiki/Decision_making

Conclusion : Some aspects in the decision to note and follow suit in stages and the rules of taking a decision. The decision is the most important thing to be possessed by a leader or manager. This will determine a choice for the future that will occur in a group or business association.

STEPS IN THE DECISIONS PROCESS

Decisions are a part and parcel of the life of every human being. In every area, be it personal or professional life, we need to take decisions. There are various types of decision-making, which can vary in importance. There could also be some instances where decisions may need to be taken very quickly. But when we are faced with problems or dilemmas where our decision has the ability to affect not only us, but others around us as well, then they have to be made very carefully. Many people take decisions depending just on their gut feeling. However, if the decision involves money or someone's life, it is important to analyze the situation carefully before making the final decision. The 8 steps to decision-making process can help us make significant decisions thoughtfully.

 

What are the Steps Involved in Decision-making?

Step 1: The first step involved in a decision-making process is to understand the importance of making the decision. You would have to make a list of some important factors like -

• Time required to make the decision
• Result of making a good and a bad decision
• People who would help you
• Who will face the consequences of the decision?
• Affect of the decision on you and the people around you
• What will happen if the decision is not made?

Step 2: Every decision is made to achieve some kind of goal or objective. So, the next step would involve charting down the goals that you want your decision to achieve. At this stage, it is also necessary to make a note of the consequences that are not desirable once the decision is made.

Step 3: For a person to make a decision, he or she has to be confronted with two or more options. If there is no option, making a decision would be impossible. So, the third step requires you to make a draft stating the options that are available to you. One can also create some options that do not exist in reality. Doing this may help you find some solution to your problem and make the decision process a little easier. Once you have listed the available options, you have to examine each option and make a section for options that sound to be very promising and those that seem not so relevant. However, you have to be careful not to take out any option from your list before it is analyzed in detail.

Step 4: Step 4 is where you have to analyze the different options in detail. Your analysis would be on the basis of what would be the result of each option available to you. You can take the help of different people at this stage, asking them to give their opinion on each option. Here, you would be able to recognize certain options that require more research or contemplation. This stage is a filtration process where the options that seem to be irrelevant should be taken out of the list and only the best possible ones retained.

Step 5: At this step, you have to develop some criteria, according to which you have to compare the various options available to you. These criteria are conditions that would help you in evaluating the different options and would aid you in taking the decision.

Step 6: Once you have decided on the criteria, it is time for analysis of each option according to the set conditions. Make a table, where the criteria appears in columns and options appear in rows. Rate each option with a numerical digit, as per how it would be beneficial for each criterion.

Step 7: After rating the available options according to criteria, at the seventh step, try to combine different options that are available to you and see whether you can come up with a better solution, instead of just choosing one option. You also have to summarize the results you got for each option to make the final decision.

Step 8: This is the final stage, where you have to make the ultimate decision. Before you do this it is important to go through all the steps and recheck all the information. This would be beneficial for delaying the time of taking the final decision, if you find any missing information. One very important thing that you have to keep in mind is that every decision you take would have some level of risk. Knowing the potential risk involved in the decision one makes would aid in preparing for the problem that arises with the decision.

These 8 steps to decision-making process are essential decision-making techniques that would prevent one from choosing the wrong option. This is also an important way of learning proper decision-making skills that would assist you in every decision you make.

SOURCE            : http://www.buzzle.com/

CONCLUSION    :

The 8 steps to decision-making process shows how a decision can be made in a systematic way. When important decisions are made in the span of a moment without involving a thoughtful process, there are high chances of it turning out to be a failure. It is very important to contemplate carefully and systematically before taking any crucial decision.

MANAGEMENT AND HUMAN RESOURCE DEVELOPMENT

 

Human Resources Applies to Any Size of Organization

This Topic Applies to Any Size of Organization

All organizations have people -- they have human resources. Regardless of the size of an organization or the extent of its resources, the organization survives -- and thrives -- because of the capabilities and performance of its people. The activities to maximize those capabilities and that performance are necessary regardless of whether the organization refers to them as Human Resource Management, Human Resource Development or Human Resources -- or has no formal name for those activities at all.

Those activities are the responsibility of all people in the organization. Thus, members of organizations, regardless of size or resources, will benefit from using the resources referenced from this topic.

Human Resource Guidelines Apply to For-Profits and Nonprofits

These Human Resource Guidelines Apply to For-Profits and Nonprofits

The vast majority of resources in this topic apply to nonprofits as well as for-profits. There's a misconception that there is a big difference in managing human resources in for-profit versus nonprofit organizations. Actually, they should managed similarly. Nonprofits often have unpaid human resources (volunteers), but we're learning that volunteers should be managed much like employees -- it's just that they're not compensated with money; they're compensated in other ways. Managing volunteers is very similar to paid staff -- their roles should be carefully specified, they should be recruited carefully, they should be oriented and trained, they should be organized into appropriate teams or with suitable supervisors, they should be delegated to, their performance should be monitored, performance issues should be addressed, and they should be rewarded for their performance. Also, organizations should consider the risks and liabilities that can occur with volunteers, much like with employees. So nonprofit organizations should consider the resources in this topic as well.

Clarifying Some Terms -- Human Resource Management, Human Resources, HRD, Talent Management

The Human Resource Management (HRM) function includes a variety of activities, and key among them is responsibility forhuman resources -- for deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have -- and are aware of -- personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.

Some people distinguish a difference between HRM and Human Resource Development (HRD), a profession. Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of organizations, e.g., career development, training, organization development, etc.

The HRM function and HRD profession have undergone tremendous change over the past 20-30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner. There is a long-standing argument about where HR-related functions should be organized into large organizations, eg, "should HR be in the Organization Development department or the other way around?"

Recently, the phrase "talent management" is being used to refer the activities to attract, develop and retain employees. Some people and organizations use the phrase to refer especially to talented and/or high-potential employees. The phrase often is used interchangeably with HR -- although as the field of talent management matures, it's very likely there will be an increasing number of people who will strongly disagree about the interchange of these fields.

Many people use the phrase "Human Resource Management," "Human Resource Development" and "Human Resources" interchangeably, and abbreviate Human Resources as HR -- HR has become a conventional term to refer to all of these phrases.

Thus, this Library uses the phrase "Human Resources" and the term "HR," not just for simplicity, but to help the reader to see the important, broader perspective on human resources in organizations -- what's required to maximize the capabilities and performance of people in organizations, regardless of the correct phrase or term to be applied when doing that.

HUMAN RESOURCE DEVELOPMENT

Human Resource Development (HRD) is the framework for helping employees develop their personal and organizational skills, knowledge, and abilities. Human Resource Development includes such opportunities as employee training, employee career development, performance management and development, coaching, mentoring, succession planning, key employee identification, tuition assistance, and organization development.

The focus of all aspects of Human Resource Development is on developing the most superior workforce so that the organization and individual employees can accomplish their work goals in service to customers.

Organizations have many opportunities for human resources or employee development, both within and outside of the workplace.

Human Resource Development can be formal such as in classroom training, a college course, or an organizational planned change effort. Or, Human Resource Development. can be informal as in employee coaching by a manager. Healthy organizations believe in Human Resource Development and cover all of these bases.

HUMAN RESOURCE MANAGEMENT

Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. HRM can also be performed by line managers.

HRM is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

HRM is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization's goals and objectives.

HRM is moving away from traditional personnel, administration, and transactional roles, which are increasingly outsourced. HRM is now expected to add value to the strategic utilization of employees and that employee programs impact the business in measurable ways. The new role of HRM involves strategic direction and HRM metrics and measurements to demonstrate value.

SOURCE          : http://humanresources.about.com/

CONCLUSION         :

The terms for human resource management and development has indeed evolved through the centuries. The term ‘human resource management” has evolved from personnel management in the early 1900s and through to the current use of the term ‘human capital management’- popularly used by many large firms. Human Resource Development in Management is the integrated use of training, organization, and career development efforts to improve individual, group and organizational effectiveness  Similarly goes to the term ‘human resource development’- most practitioners understood the term ‘training’ as similar to HRD and the term ‘training’ is being popularly used to.

MANAGEMENT FUNCTIONS

Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”. According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.

1. Planning

It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”. A plan is a future course of actions.

It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing

It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves:

• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.
2. Staffing

It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”. Staffing involves:

• Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place).
• Recruitment, selection & placement.
• Training & development.
• Remuneration.
• Performance appraisal.
• Promotions & transfer.
3. Directing

It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following elements:

• Supervision
• Motivation
• Leadership
• Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.

5. Controlling

It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. Therefore controlling has following steps:

a.    Establishment of standard performance.

b.    Measurement of actual performance.

c.    Comparison of actual performance with the standards and finding out deviation if any.

d.    Corrective action.

Source : http://managementstudguide.com/management_functions.htm

CONCLUSION :.

Management has been identified as asystematic body of knowledge based ongeneral principles, concepts, theories andtechniques which are variable in terms of business practice. These are embodied in the managerialfunctions of planning, organizing, staffing,directing and controlling which form the job of a manager.