Irrational Career Decision Making

1. Irrational Career Decision Making …and what we might do about it Dave Redekopp, June, 2014

2. Outline • Why irrationality, behavioural economics and positive psychology? • What are the key ideas? • What does the field of b.e. have to offer? There seem to be more of them than us doing research – let’s make use of it • What are the implications of these ideas for career development? • E.g., job uncertainty, self-evaluation, financial stability, decision-making, workplace behaviour, service evaluation • What might we do about these implications?

3. Why? • We know what’s right, good and true! • We tell clients what’s right, good and true • Clients do not do what we say • We do not do what we say • What we say may be right, good and true, but it’s unlikely to ever happen “The gap between planning and doing is an example of a psychological bias, a systematic deviation from rationale behavior” (Kirsten Rohde, 2014)

4. Why? • Let’s figure out what might actually happen • Consider “harm reduction” rather than “crime prevention” strategies • Engaging in counter-productive behaviour is not an “accident” – much of it is largely hard-wired

5. Why? • The big trends in conceptions of behaviourin the last two decades… • Positive Psychology • Happiness • Behavioural Economics • Mindfulness

6. Positive Psychology • Key figure – Martin Seligman • Early proponent – Abraham Maslow

7. Happiness • Key figure – Dan Gilbert

8. Behavioural Economics • Key figures • Daniel Kahneman • Dan Ariely (Predictable Irrationality) • Thaler & Sunstein (Nudge) • GerdGigerenzer (Risk Literacy)

9. Core Issues in Career Development • Anxiety • Beliefs • Decision-Making / Choice • Risk Management • Values • Preferences • Non-Cognitive Skills (Self-Management)

10. Behavioural Economics Core Concepts, Biases, Effects, Heuristics & Cognitive Illusions

11. First, thanks to…

12. Core Concepts • Study of judgment & decision-making • System 1: fast, intuitive, emotional, “automatic” • Considered mostly a nuisance in career theory and practice • System 2: slow, rational, deliberate, “reflective” • What we strive for in career development theory and practice

13. Examples • Group A: • Is the average income of a welder in more or less than US$50,000? • What is your best guess about the average income of a welder?

14. Examples (cont’d) • Group B: • Is the average income of a welder in more or less than US$30,000? • What is your best guess about the average income of a welder?

15. Example Intervention: “Clocky”

16. Reference Dependence/Anchoring/Priming • We evaluate not on absolutes but in terms of what we already have or what we expect • How do we change the salary anchors of the recently unemployed (or do we)? • How do we shift focus on one anchor (e.g., salary) to another anchor (e.g., meaningfulness) (or do we)?

17. The Endowment Effect/Loss Aversion • We value it because we own it • Our starting point shapes the outcomes in any trade • We own our jobs • Lateral moves are therefore losses! • Losses are weighted more heavily than gains • Example: Losing $10 has more emotional impact than winning $10

18. Hyperbolic Discounting • What we want depends on when you ask us • A cookie today or two tomorrow? • A cookie 365 days from now or two 366 days from now? • “Save More Tomorrow” plan • “Future” raises go to retirement investments • Need to opt out

19. Sunk Cost Bias • Past costs (sunk costs) are irrelevant to success but have an enormous impact on decisions • “No matter how far down the wrong road you’ve gone, turn back.” Turkish proverb • Past decisions and investments (e.g., education) lock us in • “Kristen Cumming Effect” • Demo auction

20. Framing (connects to Loss Aversion & Anchoring) • Losses are not the mirror image of gains • You can play for 10 more minutes before bed vs. • Bed in 10 minutes; you can play until then • The odds of survival 1 month after surgery are 90% vs. • Mortality within 1 month of surgery is 10% • 90% fat-free vs. • 10% fat

21. Framing (cont’d) • We plan to prevent 250,000 fatalities and serious injuries due to traffic collisions in the next decade • We plan to kill or seriously injure 250,000 Australians in the next decade • We will reduce fatalities and serious injuries due to traffic collisions by 50% over the next decade

22. Confirmation Bias / Halo Effect • People seek data likely to confirm their hypotheses • How do we jar clients out of their pre-conceived notions of: • Occupations? • Work world? • Personal agency? • (…or should we?) • How do we help clients make sure their first hours/days (in a class or at work) are exceptional (or should we?) • How do we help employers make sure the first hours/days are exceptional for the employee (or should we?)

23. Base Rate Neglect • People make mistakes in judging probabilities • “Sector X will grow by 99% next year!”

24. Overconfidence/ The Planning Fallacy • “I can be anything I want” • “…plans and forecasts that • Are unrealistically close to best-case scenarios • Could be improved by consulting the statistics of similar cases” (p. 250) • Need an “outside view”, not WYSIATI • Pre-mortems can be helpful

25. Crowding-Out • Extrinsic motivators ‘crowd-out’ intrinsic motivation

26. Priming • Embedding sub-conscious clues to change behaviour • How do clients enter your program/service? • What language do you use to introduce your program/service?

27. The Focusing Illusion / Focalism • “Nothing in life is as important as you think it is when you are thinking about it.” (p. 402) • Who has greater life satisfaction: Californians or Ohioians? • How much pleasure do you get from your car? • When do you think about your car? • Miswanting: bad choices arising from errors of affective forecasting

28. Remembering Self • There’s a big difference between the “experiencing self” and the “remembering self”

29. Broaden-and-Build Theory • Frederickson: • Positive affect increases ability to see possibilities • Negative affect reduces perceptual field

30. Practice, Programming & Profession • How could you change your marketing/ informational materials to prime clients for resourcefulness? • What could you change in your services to make “wise” choices built-in (i.e., having the client opt-out of “wise” choices)? • How can you change your evaluation practices to produce evidence that will nurture the success of the next group of clients?

31. Thank You! • For comments or questions, contact: Dave Redekopp liferole@telusplanet.net 780.451.1954 www.liferole.com