Searching for the best possible decisions can be a difficult process, and there are many methods and approaches to decision making that are used by all people who disregard their social position and cultural background. The use of heuristics is an approach to decision making that is based on well-known objective laws and consistent patterns rather than on specific calculations. Importantly, heuristics and biases are associated with scarce available information or messages that have been misinterpreted. As for the positive sides of the phenomenon, the use of heuristics involves the rule of thumb, and the latter is sometimes able to produce rather accurate results in cases without specific circumstances.
We will write a custom Essay on Performance Measurement Criteria specifically for you
301 certified writers online
Nowadays, researchers single out three types of heuristics. The first type, representative heuristics, refers to the use of false parallels when making a decision or solving a task. They are often associated with the inability to take into account the impact of the sample size. Also, it is pivotal to mention that representative heuristics are related to the inability to assess the probability of different outcomes in an objective manner. For instance, representative heuristics manifest themselves when people make false conclusions concerning the probability of an event based on the previous experience. Also, the given type of heuristics refers to cases when people apply stereotypes related to job or ethnicity to any person belonging to a specific group.
The second type of heuristics is called availability heuristics, and it refers to cases when the frequency of certain events is defined based on available information that can be inaccurate or incomplete. Availability heuristics have a significant impact on decision-making as it is manifested in people’s willingness to use their own experience (which is by definition limited) to make conclusions on the frequency of events. For instance, a person who knows twenty people who have a deficient color vision would be likely to think that such problems are much more common than they are usually believed to be.
Finally, there are adjustment and anchoring heuristics. They affect the decision-making process because they encourage people to use certain information as an “anchor” and perform further logical operations based on it in order to make a conclusion. This type of heuristics manifests itself in the tendency to assess possible results based on the degree to which they are similar to information that has been given, the anchor. This phenomenon impacts decision making, and anchors are often used to increase sales or encourage people to make charitable donations.
The use of heuristics often leads to biases of different nature and power, and there are some actions that can be taken to minimize its impact on conclusions and decisions. To overcome heuristics and biases, modern people in different fields are recommended to challenge the first assumptions that seem to be the most appropriate and use information from a few sources to make more informed conclusions. Also, people should stop regarding their personal experience as the most credible source of information.
When it comes to project management, open access to information on the phenomenon under consideration is not enough to mitigate the impact of heuristics. Project managers should make generalizations very carefully, taking into account all cases and circumstances instead of using only those arguments that support the preferred decisions. Also, specific norms need to be used during the planning, and those responsible for calculations are to explain factors that cause deviations from norms. Apart from that, it is recommended to use balance sheets that reflect the positive and negative outcomes associated with planned projects.