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Scientific Contributions
The Job Selection Problem for Career Starters:
A Decision-Theoretical Application
Part 1: Structuring the Problem into Objectives, Alternatives and
Uncertainties
This two-piece paper analyzes how to solve a practical decision problem
using decision-theoretic methods. In this first paper, we structure a
decision situation into objectives, alternatives, and uncertainties (decision
front end) and show how to proceed in this process with the support of a
decision analyst. In the second paper, we show how to find an optimal alter-
native for the decision situation structured in the first paper using multi
attribute utility theory (decision back end) and the decision support tool
Entscheidungsnavi.
FH-Prof. PD Dr. habil. Johannes Siebert
is professor at the Management Center Inns-
bruck and Private Lecturer at the University
of Bayreuth.
Prof. Dr. Rüdiger von Nitzsch
is Head of the Research Area Decision
Research and Financial Services at the
RWTH Aachen University.
Summary: Choosing a career is arguably one of the
most important decisions fresh university graduates
make. We illustrate how this decision problem can be
well structured with the help of a decision analyst us-
ing decision-theoretic methods.
Stichwörter: Keywords: decision theory, problem
structuring, value-focused thinking, objectives,
alternatives
1. The high importance of good problem structuring
Many textbooks and lectures on decision theory focus on
solving decision problems. It is usually assumed that the
decision problem is completely structured, i.e. the relevant
objectives and alternatives are identified, and the alterna-
tives are assessed in terms of the objectives. In real-life set-
tings, however, this is rarely the case. Objectives and alter-
natives considered in particular decision situations often
do not characterize them sufficiently and accurately. In
fact, in theory and in practice, the problem-structuring
phase is generally given little attention. The literature
dealing with different biases in decision-making behavior
also speaks of ‘myopic problem representation bias’ or
‘omission bias’ (Montibeller/von Winterfeldt, 2015, p. 4).
Empirical studies show that people in general, and decision
makers in companies in particular have significant deficits
in problem structuring. For instance, Bond et al. (2008,
pp. 56) showed that individuals are able to identify only
about 50 % of the relevant objectives on their own. The in-
dividuals even rated the overlooked objectives as equally
important to the identified ones. Siebert and Keeney (2015)
showed similar weaknesses in creating alternatives. In
their study, the individuals were able to identify only about
one third of the relevant alternatives on their own. Almost
50 % of the individuals had even overlooked the alterna-
tive that they ultimately considered the best. Thus, a natu-
ral question arises: How can you make good decisions if
Identification and measurement of fundamental objectives
1. Identifying and structuring objectives
2. Measuring fundamental objectives
Generation and operationalization of alternatives
3. Identifying relevant alternatives
4. Assessing the consequences of the alternatives in terms of the fundamental objectives Fig. 1: Four steps of problem
structuring
you do not know what you want (your objectives) and how
you can get that (your alternatives)?
To achieve a well-founded structuring of a decision situa-
tion, decision makers seem to need guidance in form of a
systematic approach. In the following, such a systematic
approach is presented and illustrated in a case study. The
approach largely draws on value-focused thinking devel-
oped by Keeney (1992).
2. Case study: Peter’s choice of workplace
The practical case study concerns “choosing a job after
graduation” – a decision situation many students and grad-
uates face and the outcome of which has a significant im-
pact on their future lives.
Peter is going to submit his master thesis at RWTH Aa-
chen University in four months, successfully completing
his studies in business administration. He was thinking
about what he would like to do after the graduation. He
sees three alternatives. 1) The professor with whom he is
currently writing his master thesis and for whom he has
been working as a student assistant for three semesters
offered him a half-time position as a research assistant
with the opportunity to earn a PhD. 2) A management
consultancy in southern Germany, where he did an in-
ternship less than a year ago, has offered Peter a full-
time job. 3) His sister’s father-in-law, a department man-
ager in a medium-sized, fast-growing company in the Ei-
fel, could “get a job” for Peter. Peter is unsure what he
should do. However, he can state that money, work-life
balance and quality of life are important to him.
Peter’s statement that “money”, “work-life balance”, and
“quality of life” are important to him is only the first step in
developing and evaluating alternatives. Such generic state-
ments rarely contain all of his relevant values. Therefore, it
isnecessarytoidentifysystematicallyallobjectives,which
are relevant for him. In addition, Peter has created the al-
ternatives with relatively little effort. In fact, he has just
named the obvious alternatives that had been offered to
him by others. Thus, he may spend a considerable amount
of time evaluating the given alternatives without ensuring
that the best possible alternatives are actually available.
Keeney (1992, pp. viii.) refers to this backward and reactive
approach as “alternative-focused”. In contrast, he recom-
mends investing more effort in exploring one’s objectives
and systematically using them to develop the best possible
alternatives. He calls this approach “value-focused”.
Learning about the pitfalls of an alternative-focused ap-
proach, Peter is willing to work with a decision analyst to
get the best out of the decision situation. The decision ana-
lyst tells him that they will go through the following four
steps together:
The following sections illustrate how a decision analyst
could assist Peter in structuring his decision problem.
3. Identification and measuring fundamental
objectives
In the first step, it is necessary to create an objective net-
work. In the objectives network, Peter should include and
well structure all his essential objectives that are relevant
to the decision situation. In the second step, a list of objec-
tives for evaluating the alternatives is extracted from this
objective network, which is then operationalized by using
suitable measurement scales (see Figure 1).
3.1. Identifying and structuring objectives
Establishing an objective network is a demanding and
highly creative process. A decision analyst can contribute
considerably to the quality of this process by asking the
right questions. First, the values of the decision maker
must be identified through open questions and concretized
with clearly formulated objectives (verb + object + direction
of preference). The values of the decision maker include
everything that is important to him or her. Subsequently,
differentiated inquiries of the decision analyst help to
identify additional objectives and determine relationships
between the objectives. The latter allows the differentiation
of strategic, fundamental and instrumental objectives.
Strategic objectives describe what a decision maker wants
to achieve in the long term. Fundamental objectives serve
to achieve these strategic objectives and are used to evalu-
ate the alternatives (for action) in a specific decision situa-
tion. For this purpose, fundamental objectives must be
Scientific Contributions
Maximize utility of leisure
activities
Maximize income Maximize career development
opportunities
Maximize pleasure on the job
Maximize quality of life
Maximize salary
Maximize benefits
Maximize promotion
opportunities within and
outside the organization
Maximize abilities and
experience
Maximize reputation
and networking
Maximize interest in
topics
Maximize intellectual
challenge
Maximizing collegiality
Maximizing own
responsibility
Maximize usable time
for leisure activities
Minimize
working hours
Minimize
commuting time
Maximize
flexibility of
working hours
Maximize leisure
opportunities
Maximize attractiveness of
housing situation
Minimize housing
costs
Minimize relocation
costs
Max. attractiveness
of local environment
Max. proximity to
family and friends Maximize home
comfort
Fig. 2: Peter’s objective network for the choice of the workplace
measurable and worded in sufficient detail. Means/Instru-
mental objectives are objectives without an own value for
the decision maker. They are only pursued to achieve other
(fundamental or means) objectives. An objective network
includes fundamental and means objectives as well as rela-
tions between them. Sometimes strategic objectives are
considered, too.
There are five types of questions to identify additional ob-
jectives and determine relationships between them:
“Identification of values”(typeValue questions): Rele-
vant values are collected by applying creative techniques,
wish lists, and other open questions.
“Formulation of objectives”(typeTransformation ques-
tions): The possibly abstractly formulated values are
transformed into concrete objectives with an object, a
verb (e.g. minimize or maximize) and a preference direc-
tion (e.g. implied by maximize of by adding “as much as
possible”; enjoy life as much as possible).
“Questioning fundamentality”(typeFundamentality ques-
tions): The decision analyst determines whether the objec-
tives are something that have their own value and are there-
fore fundamental objectives or whether they are just instru-
mental objectives (”why is this objective important?”).
“Means/Instrument to reach an objective”(typeInstru-
mentality questions): The decision analyst finds addition-
al instrumental objectives along the means-end-chain
(”how can you achieve this objectives”?).
“Specification”(typeSpecification questions): Hereby,
possibly too vaguely formulated objectives are concret-
ized by a description of logical sub-objectives, to improve
their measurability.
Table 1 (see next page) illustrates an exemplary excerpt
from a fictional dialog between Peter and a decision ana-
lyst. The first column from the left indicates the assignment
to the five question types. The second and third columns
show the question of the decision analyst and Peter’s an-
swer, respectively. The fourth column presents the inter-
pretation and conclusions.
Figure 2 shows Peter’s objective network. All objectives ul-
timately contribute to the strategic objective of “maximiz-
ing the quality of life”, which is presented at the first level.
In the second level, there are the five objectives classified
as fundamental according to Peter. Two fundamental objec-
tives, “maximize income” and “maximize the utility of lei-
sure activities”, are further specified in the objective net-
work with more fundamental aspects. Means-end relation-
ships can be found, for example, under the objectives
“maximizing career development opportunities” and “maxi-
mize usable time for leisure activities”. Such means objec-
tives may not be included in the list of objectives for evalu-
ating alternatives but could be used as prompts when cre-
ating alternatives.
3.2. Measuring fundamental objectives
For the evaluation of alternatives, only fundamental objec-
tives in the objective network should be used, because the
consideration of means objectives would distort the evalua-
tion due to double counting. Typically, a well-structured
objective network contains two to seven fundamental ob-
jectives. On the one hand, if too few objectives are consid-
ered, it has be too simplistic. On the other hand, a high
Siebert/von Nitzsch, The Job Selection Problem for Career Starters: A Decision-Theoretical Application
Typ e Question of the decision analyst Answer Interpretation / conclusion(s)
V What would you like to achieve with
your career choice?
I want to earn money, the work-life bal-
ance must be right and the quality of life
is important to me.
The values “money“, “work-life balance”
and “quality of life” are identified.
T What exactly do you mean by
“money”?
It is about getting a high salary. The value “money” is specified with the ob-
jective “maximize salary”.
F Why is a high salary important to
you? Does it serve another purpose,
for example, that you define your-self
by your salary level?
It is all about the money, I want to maxi-
mize my income.
“Maximize income” is identified as a fun-
damental objective.
S What does “maximizing income”
mean? In other words, are there other
components of your total income?
In addition to the salary other monetary
benefits are desirable, in particular a
company car.
The fundamental objective of maximizing
income is specified by the sub-objectives
“maximize salary” and “maximize benefits
(company car)”.
F Why is a company car important? Is
there any other reason, i.e. another
objective you pursue with a company
car?
No, I am only interested in a monetary
advantage of the company car.
It is ensured that “having a company car” is
not a means to an end for achieving another
fundamental objective.
T What exactly do you mean by “work-
life balance”?
I do not just want to work. The time I
spend at work and my free time should be
balanced.
The value “work-life balance” is specified
with the help of the objectives ”minimize
working hours” and “maximize usable time
for leisure activities”.
S What does “minimize working hours”
mean? In other words, are there any
other components of the time spent in
context with work?
Yes, I also want to minimize the travel
time to work.
“Minimize commuting time” is a relevant
objective in context of the time Peter invests
overall for his job.
F Why is it important to maximize your
usable time for leisure activities?
Because I want to have time for friends,
family and hobbies. That is important to
me.
“Maximize usable time for leisure activities“
is identified as a fundamental objective.
F Why is your quality of life important
to you?
Because this is what matters ultimately
for me. It is important to me in all life
decisions. With the right choice of work-
place, I try maximizing this sustainable.
“Maximize quality of life” is confirmed as a
strategic objective.
I How can you achieve a high quality
of life?
By enjoying what I am doing profession-
ally and having a successful career.
“Maximize pleasure on the job” and “maxi-
mize career development opportunities”
were identified as objectives. Since they
contribute to achieve the strategic objective,
they are candidates for fundamental objectives
I How can you maximize your pleasure
on the job?
By working on interesting topics in a col-
legial environment. In addition, I would
like to be able to act on my own responsi-
bility and my tasks should be intellectu-
ally rewarding.
“Maximize interest in topics”, “maximize
intellectual challenge”, “maximize collegial-
ity” and “maximize own responsibility” are
means objectives for “maximize pleasure on
the job”.
F Why is it important to maximize your
career development opportunities? Do
you pursue a different objective or is
it an end in itself?
If I know that I have good career oppor-
tunities in the future, then I will sleep
well at night. It contributes to the quality
of my life, as my income, my leisure
benefits, and my pleasure on the job do.
“Maximize career development opportuni-
ties” was confirmed as a fundamental objec-
tive.
Tab. 1: Dialog for the identification of objectives and structuring them in an objective network
number of objectives may give the impression of a careful
and high-quality decision analysis. However, this is often
not the case, because if there are too many objectives,
there is a risk of losing sight of the essentials, and the ef-
fort involved in the quantitative evaluation increases con-
siderably.
Some fundamental objectives may be too general to be
measured well. If so, it makes sense to specify a fundamen-
tal objective more precisely in sub-objectives and use those
sub-objectives for assessing the consequences of alterna-
tives. This was done with the fundamental objective “maxi-
mize income” in Peter’s objective network, where two sub-
ordinate fundamental objectives were included. It should
also be avoided that some fundamental objectives are spec-
ified in much greater detail than other fundamental objec-
tives, since this can lead to distortions in the objective
weighting (splitting bias, see Montibeller/von Winterfeldt,
2015, p. 5).
Once the objectives have been set, they must be operatio-
nalized, i.e. measured. Therefore, it is necessary to find
suitable criteria for each fundamental objective. For some
objectives, there is a natural measurement scale available,
which makes the measurement relatively easy. For exam-
ple, one can measure the salary and monetary benefits
Scientific Contributions
No. Objective Measurement scale
1 Maximize income Gross income in Euro from 0 T€ to 250 T€ (in the next three years)
2 Maximize pleasure on the job Linguistic: “none”, “little”, “medium”, “much” and “very much”
3 Maximize career development opportunities Linguistic: “very bad”, “bad”, “medium”, “good”, “very good” and
“excellent”
4 Maximize leisure opportunities A to F (school grades)
5 Maximize usable time for leisure activities 0% (no time at all) to 100% (he maximum time you can imagine for a full-
time job)
6
Maximize attractiveness of the housing situation Linguistic: “bad”, “below average”, “average”, “above average”, and “good”
Tab. 2: Peter’s objectives for evaluating alternatives with associated measurement scales
without difficulty in Euro per year. Since Peter sees no dif-
ference between salary and monetary benefits, their
amounts can simply be added to income per year.Formany
objectives, however, it is not easy to derive a numerical
measurement. For example, there is no obvious (commonly
used) numerical scale to measure the objectives “maximize
pleasure on the job”, “maximize career development oppor-
tunities”, or “maximize attractiveness of the housing situa-
tion”. In such cases, the decision maker must construct his
or her own scale in which he or she verbally describes some
possible assessments in categories and assigns each alter-
native to one of the categories. Here we recommend using
a few clear descriptions, e.g. for the objective “maximize
pleasure on the job”, the categories could be described as
“none”, “little”, “medium”, “much” and “very much” (plea-
sure on the job).
In principle, the objective “maximize the utility of leisure
activities” could be operationalized using categories. An
even simpler solution is to award grades. School grades
have the advantage that everyone can understand them
well.
We can see in the objective network that the objective
“maximize usable time for leisure activities” depends on
the three means objectives “minimize working hour”, “min-
imize commuting time”, and “maximize flexibility of work-
ing hours”. The first to relate to how much time is ultimate-
ly left after work and commuting for leisure activities. How-
ever, an employee may have sufficient free time but due to
shift work, this time may not coincide with the free time of
one’s friends and family. One may also not be able to enjoy
the beautiful weather because of inflexible working hours.
Therefore, simply using “hours” as a measurement scale is
not useful in this case. The decision analyst therefore pro-
poses a scale from 0 % (no time for any leisure activity at
all) to 100 % (the maximum time you can imagine for a
full-time job).
Table 2 summarizes the fundamental objectives used for
the evaluation of the alternatives and the associated or
measurement scales.
4. Generation and operationalization of alternatives
The third step in problem structuring as many good alter-
natives as possible should be identified. In the fourth step,
the alternatives are then operationalized, i.e. their conse-
quences in terms the fundamental objectives must be as-
sessed using the scales defined in the second step.
4.1. Identifying relevant alternatives
In many cases – as in Peter’s case study – some alternatives
are already obvious without further thought. In the studies
of Bond et al. (2008) and Siebert and Keeney (2015) men-
tioned in Sec. 1, however, it became clear that more alter-
natives usually exist, of which the decision maker does not
think directly but may discover them with systematic sup-
port. The concept of value-focused thinking suggests using
objectives as prompt to stimulate the search for further al-
ternatives (Siebert and Keeney, 2015, pp. 1144). There are
two ways: the invention and the improvement of alterna-
tives.
In the case of invention, one does not look at already iden-
tified alternatives. Instead, the objectives are considered
successively to create new alternatives. First, for each ob-
jective, it is individually considered how, that is, with
which alternative, this objective can be achieved. It is not
yet necessary for an alternative to perform well on the other
objectives. In further steps, one looks at how two objec-
tives can be achieved at the same time, and, finally, how as
many objectives as possible can be achieved (Siebert/Kee-
ney, 2015, pp. 1144).
After some alternatives have been identified, it is possible
to search for additional alternatives by improving the exist-
ing alternatives. One way is to ask for which objective an
improvement might be easily realized. Another way is to fo-
cus on an objective that could lead to the greatest possible
increase in usefulness when improving it. Creating new al-
ternatives by improving the existing ones is usually more
difficult than inventing alternatives. Moreover, it is not
guaranteed that better alternatives are actually found by
this procedure.
Siebert/von Nitzsch, The Job Selection Problem for Career Starters: A Decision-Theoretical Application
Gross income of the
next three years
(T €)
Enjoyment at
work
Opportunities
for further
professional
development
Leisure op-
portunities
(grade)
Usable time for
leisure activities
(%)
Attractiveness of
the housing
situation
Research. assistant
(half-time position) 75 T€ very much excellent B 60% average
Research. assistant
(upgraded position)
75 T€ « 125 T€
(job upgrading) very much excellent B 30% « 60%
(job upgrading) average
Department office
in a company in the
Eifel
120 T€ little very bad A 70% good
Trainee position in
a company in the
Eifel
140 T€ much good B 40% good
Big consulting
firm in southern
Germany
200 T€
none « much
(working at-
mosphere)
excellent D 10% bad
Small consulting
firm near Aachen 140 T€ much medium D 30% average
Start-up
Zero « 250 T€
(depending on the
success of start-up)
very much
bad « very good
(success of
start-up)
E 0% average
Tab. 3: Peter’s consequence table
In our case study, Peter could already name three obvious
alternatives:
a half-time position as a research associate, including the
possibility of doing his PhD,
a full-time position in a management consultancy in
southern Germany,
apositioninamedium-sizedcompanyintheEifel.
In our case study, the decision analyst is helping Peter to
identify completely new alternatives by focusing on the re-
spective objectives. In particular, the focus on the objec-
tive “maximize income” turns out to be successful. The of-
fer of the large management consultancy in southern Ger-
many is already at the upper limit of what he can earn as an
employee. Another way to earn much money would be, the-
oretically, to engage in a start-up business. Peter has some
ideas for a start-up business but, so far, he has lacked the
courage to try this. Therefore, Peter now considers “start-
up” as a further relevant alternative. In the subsequent
run-through of the other objectives, neither of them finds
any further alternatives.
In the next step, the decision analyst investigates the al-
ready available alternatives and looks for improvements. He
immediately notices that the position as a research assis-
tant has a major disadvantage, namely the comparatively
poor pay, in a half-time position. Nevertheless, a significant
improvement could be achieved here. For example, Peter
could for instance search together with the professor for
third-party projects that could bring additional funds for
the chair in the next few years. Alternatively, there might
be a university-based management consultancy, which
awards subprojects to doctoral students. Even when there
are no such possibilities now, the professor could assure Pe-
ter that he would work on upgrading the position. Having
this in mind, they define the alternative “research assistant
with an attempt at an upgrade” as a new alternative.
Peter and the decision analyst now focus their attention on
the second alternative – a mid-sized company in the Eifel re-
gion – and note that this alternative has major weaknesses
in the objectives “maximize career opportunities” and “max-
imize pleasure on the job”. On the one hand, Peter easily ful-
fills the requirements for this job. On the other hand, he
does not enjoy some of the core activities of this job and the
opportunities for advancement in many companies are more
limited when starting in a department. The junior staff for
middle and senior management is often systematically pre-
pared for management tasks in trainee programs. Peter
could try to get a job as a trainee in this company.
Finally, both consider the job in the big consulting firm.
Here, the disadvantage is the small total amount of usable
free time. Due to the long working hours, the main location
in southern Germany, and the frequent external projects,
Peter could maintain his social contacts only in an ex-
tremely limited way. Moreover, Peter remembers having ob-
served questionable and antisocial behavior several times
during his internship in the company. He decides to talk
about this to acquaintances working in other large-scale
consulting firms, and he is told that such behavior is quite
common. Therefore, Peter decides to search for other,
smaller consulting firms in Aachen and the surrounding
area. One firm raises his interest and after a promising
phone call with its boss, he decides to include this im-
proved alternative in his list.
Scientific Contributions
Alternative Uncertainty factor States/conditions Relevance in objectives
Research assistant
(upgrade position) position upgrading none
¾-position after one year
full position after one year
income
75 T€
100 T€
125 T€
usable time for leisure
60%
45%
30%
Big consulting firm down south
working atmos-
phere
bad
medium
good
Pleasure at work
none
medium
much
Start-up
success of
start-up
unsuccessful
moderate success
great success
income
0 T€
100 T€
250 T€
Career development
bad
medium
very good
Tab. 4: Definition of the uncertainty factors and their effects in the consequence table
4.2. Assessing consequences for the alternatives
As a final step, Peter must assess the consequences of the
seven alternatives on the measurement scales defined for
the objectives. This can be illustrated in a so-called conse-
quence table (Table 3).
The fact that some assessments of the alternatives in the
consequence table contain intervals instead of single val-
ues is due to uncertainties that are inevitably linked to the
corresponding alternative. In such cases, the assessment of
the impact must be supplemented by the influencing fac-
tors with which the uncertainty can be modeled in the form
of possible “environmental conditions”. Environmental
conditions are developments that cannot be influenced by
thedecisionmakerbuthaveadecisiveeffectontheout-
come. Table 4 lists all uncertainties and the corresponding
manifestations of the environmental conditions that Peter
regards as relevant in his decision situation.
5. Conclusion
In practice, the process of choosing one of existing alterna-
tives is often given the greatest attention while properly
structuring a decision situation is neglected. In this first
paper, we have explained how a decision situation can be
structured into objectives, alternatives, and uncertainties
(decision front end). The result is an objective network,
which includes a list of the fundamental objectives to be
used for the evaluation of alternatives as well as a conse-
quence table in which the consequences of the alternatives
are assessed in terms of all fundamental objectives. The
second part of this paper shows how a decision can be
made based on the set of alternatives by determining pref-
erences and probabilities using multi attribute utility theo-
ry (decision back end).
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Siebert/von Nitzsch, The Job Selection Problem for Career Starters: A Decision-Theoretical Application
