| Decisions | Guidelines
Option | Opportunity Cost |
| Need | Values | Search | Compare| Select | Implement | Review | Change |
Decision-making becomes tougher as the number of criteria and alternatives increase. Different alternatives may satisfy different criteria differently. Thus, the best alternative may not be clear. To break potential deadlocks to selecting one alternative over another, you will need to perform an analysis (comparison). Sometimes it helps to define a fictitious, best-possible alternative that represents the optimum the decision-maker can reasonably hope to find. Seldom does the ideal solution exist in the real world, but knowing what it is gives the decision-maker a target for and something to measure the candidate alternatives against.
To develop a good set of alternatives, including a best-alternative, the decision-maker must know specifically what they are looking for in a good solution. In short, the decision-maker must clearly define their value system - what aspects of the decision outcome is important to them - to ensure the "goodness of fit" between the decision and the need. Any aspect regarding the decision that the decision-maker cares about (place a value on) is considered a criterion for selection. In other words, the criteria that will be used to determine the goodness of any alternative that might satisfy a need represents the decision-maker's personal values. A unique set of criteria is only relevant for a unique decision-maker and for a unique decision. It turns out that most criteria repeat themselves for not only the same decision-maker and for different decisions but so, similar criteria also apply to different decision-makers as well. Human values are more common than they are different and have similar needs. Still, even if decision criteria are somewhat common, the the relative importance placed upon each criterion will change depending on the decision situation and the decision-maker.
A set of criteria used for judging the relative goodness of a group of alternatives can be any aspect, attribute, or characteristic of a outcome the decision-maker desires from the decision. For example, a decision-maker assessing alternatives for a new job would care about the commute distance, salary, benefits, working environment, job promotion prospects, and many other factors.. For some people, each one of these criteria may be more important than others. The amount of time one is willing to spend in commuting each day is a personal value. Some people have a high tolerance for commuting and some have none. Each aspect, attribute, or characteristic of a decision - hereafter called a criteria - could be valued very differently depending on the individual.
Defining the decision-maker's values, requires three steps. First, list all the criteria (characteristics or attributes of a solution) that are either desirable or undesirable about the decision under evaluation. In other words, what aspects of the decision does the decision-maker consider to be important in satisfying? In the example of a new job, the attributes of a good solution might be the following: salary & benefits, commute distance/time, job responsibility, promotion/growth potential, interesting work, perks/benefits, status or job title, congenial co-workers, comfortable work environment, and many others. The forgoing lists of criteria selected for a particular decision should include everything about a new job the decision-maker cares about (values). A good decision should meet as many of those criteria as possible, especially the important ones. If a new job had all the characteristics desired by the decision-maker, then switching jobs would be considered a good decision.
In the second step to defining the decision-maker's values, a measurement scale must be defined for each evaluation criteria. Many criteria have natural measurement scales such as time, money, distance, etc (salary, commute distance, job benefits, etc.). Many criteria lack a universally-defined measurement scale and are considered to be quantitative or intangible factors such as promotion/growth potential, job responsibility, congenial work environment, etc. While measurable criteria make the comparison between the alternatives easier, the most important criteria are often intangible, and hence, not easily measurable. With the criteria picked (what a good solution or decision choice would look like) and measurement scales developed to measure the relative goodness of each criteria, the decision-maker is ready to compare alternatives.
A separate web-page will illustrate how to construct a qualification measurement scale by defining narrative descriptions of possible outcomes and assigning them a relative value. In short, the most desirable narrative description will be assigned a score of 10 and the second best narrative description will be assigned a score of X (which is less than or equal to 10) depending on how much better one is compared to the other. This pair-wise process of comparing rank-ordered descriptions of outcomes is repeated until the least desirable narrative description is scored relative to the one above it.
Finally, the third step in defining the
decision-maker's values, is to know the relative importance of each of
the criteria. Not all criteria are equally important. Some
criterion are more important than others. The
decision-maker must define the relative weights for each criterion in
the set. The following method can be used to assign weights to your value.
1. List all the criteria that are important as outcomes to the solution to your need. Example, for the decision of which new job to choose, you list the following criteria - salary, promotion, and commute - as important to the outcome you seek.
2. Rank order the list of criteria from most important to least important for this need. As an example, suppose the decision-maker ranks the criteria as follows:
2 Growth Potential
3. Assign a weight of 10 to the most important criterion on the list (first item on the list).
4. Progressively assign to each of the successively less important criteria on the list a weight that is either an equal or less than the value assigned to the criterion above it. This will indicate its relative importance in comparison to the top criteria. In this example, "salary/benefits" was assigned a value of 10. Then the criterion "job promotion/growth potential" is compared to the top ranked criterion "salary/benefits". In comparison to the "salary/benefits" criterion, the decision-maker assigns a relative value of 8 to the "job promotion/growth potential" criterion . Likewise, the third ranked criterion, "commute distance/time" is weighted a 5 relative to an 8 that was assigned to the "job promotion/growth potential" criterion. Notice that the weights are relative and progress downward in value to reflect their lower importance in comparison to the criterion directly above it in the rank order list. The final weights assigned to the three criteria are shown below:
Rank Criteria Weight
1 Salary/Benefits 10
2 Growth Potential 8
3 Commute 5
In summary, criteria define the aspects of a decision outcome that the decision-maker most cares about, and the weights assigned to each criteria represent the importance the decision-maker attaches to them. This list of criteria and their relative weights are unique to this decision-maker in this particular decision context. The criteria list and their weights may be different in another decision context. Another decision-maker might have a completely different list of criteria and weights. Thus, even for the same decision (unmet needs) and set of alternatives to pick from, a different decision-maker may choose a completely different alternative ... because they have different values. Remember, different does not imply better, just different.
Website last updated on 10/19/08
Copyright ©2005 Charles W. Sooter. All rights reserved.