SESSION 1

MOTIVATING ORGANIZATIONAL BEHAVIOUR

Self-esteem explains only 20% variance in job performance.

Herzbergs two-factor model

Two levels of motivation.
1. Hygiene factor (from dissatisfaction to no satisfaction)
2. Motivation (from no satisfaction to satisfaction)
Content theories
Five core motives oriented towards making people fit better into groups, thus
increasing an individuals physical and psychological well-being and survival.
Belonging: need for strong stable relationship
Money cant buy one happiness (So true! Ill share my account number, feel
free to transfer)
After an income of $75000, happiness levels dont go up with any further
increase in income Daniel Kahneman.
Intrinsic vs extrinsic motivation

Overjustification effect - an expected external incentive such as money or

prizes decreases a person's intrinsic motivation to perform a task.
As unbelievable as it sounds getting paid for doing something one like
reduces his/her level of performance as the task becomes more challenging.
Types of rewards
Engagement contingent (reward for doing a certain task)
Completion contingent (reward for completing task)
Performance contingent (reward for performing task well)
Engagement contingent motivation undermines intrinsic motivation while
completion and performance contingents might or might not do so.
Verbal appreciation doesnt undermine intrinsic motivation (I am expecting
some compliments to keep me intrinsically motivated :P :P )
However for boring tasks, intrinsic motivation doesnt play much of a role,
extrinsic incentives like money, rewards are needed ( is that why they gave
me a bunch of awards in my last job ???:P :P )
One will get what one rewards, so as a manager, you should incentivize
those tasks which aligns to your goals e.g. if you want innovative thinking,
you shouldnt be ignoring risk-takers and rewarding only those who play by
the book.
Expectancy theory

(Am just copying the slide here)

Desirability of outcome (a): How much is the reward/outcome desired?
Effort-performance expectancy (d): What is the probability that a level of
effort produces a level of performance?
Performance-outcome expectancy (c): What is the perceived probability that
a level of performance guarantees a reward?
Performance Level of goal (b): Is this properly defined and measured?
Equity Theory
Reward to effort ratio is perceived in relation to that of others e.g. if
everyone gets bad CP marks, its fine but if your friend gets more CP marks
than you for doing the same arbitrary CP, theres trouble in paradise dude
:P :P
We also tend to overestimate our efforts (e.g. my CP is better than your CP
huh! :P :P)
Procedural justice
People will accept negative outcomes if they feel that the process by which it
was obtained is fair (was ethical, free of bias, allowed expression of your
opinion) e.g. I got low CP marks in CSTR but I still didnt complain because
my lips were mostly sealed.

SESSION 2
DECISION-MAKING BIASES
**I would strongly recommend reading session 2 slides in details since its
pretty content heavy. Click here to read.
Heuristics are described as "judgmental shortcuts that generally get us where we
need to go and quickly but at the cost of occasionally sending us off course."

Rational decision making process

Rational decision-making model -> Understand the situation -> Define the
problem -> Identify all the issues -> Weight the issues -> List all the
alternatives -> Rate each alternative -> Choose best alternative

But the above model fails when there is lack of a) cognitive ability or b)
sufficient information and c) its expensive or efficient to hunt for facts and
figures.
Then people rely on bounded rationality which is based on figuring out the
acceptable alternative (satisfy and suffice the key criteria) rather than the
most optimal one.
2 modes of thinking
Automatic system : Instinctive reactions, subconscious decision-making
e.g. Humans
Reflective system : weigh multiple options, predict all the consequences of
each, and choose rationally e.g. Home economicus, 4-pointers :P
Sources of error in decision making
Cognitive heuristics & biases
1.Availability bias : Based on ease of recall, presumed associations
Number of deaths due to Alzheimers disease was more than death due to
homicide but since the latter gets reported more we think otherwise.
2. Representative bias : We depend on our mental representations based on
past experience.
Insensitivity to base rates : Simply put we dont think in percentages or
ratios, we think in absolute numbers ignoring the base/denominator. E.g. I
get 5 out of 20 and you get 5 out of 100, logically speaking I am the better
performer but apparently our brains are too stupid to register this quickly
Insensitivity to sample size : Most brains forget that the smaller the
sample, the larger is the probability of deviation from mean happening. (But I
expect ISB brains infused with Stats course to remember this.)
Misconceptions of chance : We think if something has occurred more
number of times earlier, its less likely to offer in future.
Regression to the mean : Often exceptional performances are followed by
more normal performances, so the change in performance is explained by
regression towards the mean but we often tend to associate a cause with it. It
simply might be that the person ran out of luck the 2 nd time.

Conjunction fallacy We forget that P (A n B) is <= P(A) or P(B) and think

that conjunction of two activities is more likely.
3.Anchoring and Adjustment
Insufficient anchor adjustment : The context influences how something
perceived. E.g. beer in a big restaurant seems to be more expensive than the
same sold in a small restaurant
Conjunctive and disjunctive event biases :
Example A person was given a conjunctive task (choosing a red marble seven
times in a row from a bag contained 90% red, 10% white), and a disjunctive task
(choosing a red marble at least one in 7 goes with a bag contained 10% red and
90% white), participants will choose the disjunctive task. The disjunctive task is
framed to avoid losses, but the other tasks have better odds. Regardless, people
avoid adjustments to their mentality and therefore have to deal with lower
odds.
Overconfidence :
4. Framing : The way information is put forward influences how its perceived
e.g. This plan will save one of the three plants and 2,000 jobs. as opposed
to saying This plan will result in the loss of two of the three plants and 4,000
job might impact our decision.
Overcoming Heuristics
Recognize when you are using them. Sometimes Heuristics need to be relied
on like when theres dearth of information.
Motivational biases
Escalation of Commitment : This is based on the feeling that if we give up
on a course of action, then we lose the money and time already committed to
that decision(motivation to justify previous decision and social consistency). In
response, we sometimes continue to commit resources in an attempt to turn our
failure around, thereby increasing the cost and making it that much harder to
just acknowledge a bad decision and move on.

Two types of escalation of commitment Unilateral ( Once you invest in a project you will continue even if logic says
its likely to fail)

Competitive (remember how Mike & Amit Bagla eventually got ready to pay
more than 500 to get the 500 rupee? :P the war of discounts between the
start-ups)
The way to get over the bias is - Set minimum targets for performance
Have different individuals assess initial and subsequent decisions about a
project Attain more frequent feedback about project completion and costs
Reduce penalties or risk for failure Make costs of persistence explicit
Confirmation Bias : Confirmation bias is a phenomenon wherein decision
makers have been shown to actively seek out and assign more weight to
evidence that confirms their hypothesis, and ignore or underweigh evidence
that could challenge their hypothesis.
Hindsight Bias : After an event occurs, we feel we already knew what was
going to happen even though there was no strong evidence to suggest so.
This makes us attach less value to the person who brings in new information
about what actually happened.
E.g. a manager might pretend to be a know-it-all and simple yawn and say I
knew it already when an employee brings in a forecast after much hard
work based on facts and figures.
Positive (Ego-centric) Illusions : We view ourselves, the world, and the
future in a considerably more positive light than is objectively likely or than
reality can sustain.
E.g. we many a times tend to consider ourselves as Gods gift to earth and
think we cant be wrong. We tend to blame everything else if we fail or make
a mistake (the questions were out of syllabus, the interviewer was biased, oh
I was drunk and it happened bla bla :P :P )
Emotion-related biases/Priming:
Our rational brain has the ability to capture only 7 new information at a time(
remember the monkey video?)
Hence under stress we start relying on factors other than immediately
available data or logical analysis.
Intuitive thinking: It means getting an idea or understanding, without being
able to explain how you have developed it.
When is right to rely on intuition?

If we have expertise relevant to the situation. Expert intuition strikes us as

magical, but it is not, its obviously based on past experience and expertise.
Mike/ Sushain/ a CA getting a feel that a companys stock is going to do well
and asking you to buy it.
Bejan Daruwalla telling you that I am your future wife (however catastrophic
it sounds, you have to believe it)
De-biasing yourself Availability Heuristic :
Use detailed documentation rather than recall
Dont rely on the first thing that comes to mind
Involve individuals with varied points of view
Representative Heuristic :
Seek out and use base rates
Dont make strong conclusions based on small samples
Be aware of making causal inferences when chance and regression to the
mean are equally plausible explanations
Make events or individuals more unique, harder to categorize (e.g., describe
inconsistencies in personal characteristics)
Present disconfirming evidence within logic of bias Increase diversity, i.e.,
involve more individuals with varied biases
Anchoring and Adjustment :
Actively consider information that is inconsistent with the anchor
Change reference point
Re-frame the problem frame all problems in terms of both gains and losses
Discuss arguments in terms of both losses and gains
Be very mindful of language and associations ( women - soft, old bad, pilot
- men)

Positive illusions :
Seek outside-alternate (non-ego) view points
Seek disconfirming evidence

SESSION 3
INFLUENCE AND PERSUASION
3 general principles behind framing strategies
a. Leveraging attention
People usually respond to/rely on
Heuristic cues of trustworthiness
Authority
Who we like (this is based on similarity, physical attractiveness,
flattery)
b. Leveraging framing of information
People usually respond to/rely on
Anchoring and adjustment heuristic
Representativeness heuristic
Availability heuristic --- Salience, Contrast and decoy effects,
c. Leveraging motivation
People usually respond to/rely on

Reciprocity (works by making one feel indebted or creating a

perception of giving a concession)
Social Proof (e.g. the tip jar, works by mirroring what the rest of the
people have done)
Scarcity (e.g. we tend to add more value to people/things who/which
are valuable but rare to come by e.g. the CAs, CFAs of ISB, limited
period offer)
When you want to exercise influence, think through these three
questions: How do I get/defuse attention? How can I frame the
information more effectively? Can I leverage fundamental motives
through social proof, scarcity, reciprocity, or commitment &
consistency techniques?
Conformity more likely when:
The judgment is difficult, public
When people are uncertain
People have low status
When people value & admire their team
When rest of group is unanimous
Conformity is less likely when:
Group is not unanimous
People feel confident about expertise
People have high status
People do not like or respect group
Judgment is private