The Manager as a Critical Thinker
The 10 steps of critical thinking Include: What are the issue and conclusion, what are the reasons, what words or phrases are ambiguous, what are the value and descriptive assumptions, are there any fallacies in the reasoning, how good is the evidence, are there any rival causes, are the statistics deceptive, what significant information has been omitted, what reasonable conclusions are possible.The book stated that “an Issue Is a question or controversy responsible for the conversation or discussion.It Is the stimulus for what is being said” (Browne & Kelley, 2012).
The book goes on to dividing the issue into two categories: descriptive and prescriptive.
The book defines descriptive issues as those that cause people to question the accuracy of vents In the past, present or future. And prescriptive Issues are those that raise questions about what is the right thing versus the wrong thing to do, good versus bad, what we should do. The issue in this scenario falls under the descriptive category. The CEO of PAS Manufacturing, Raymond Sesame’s compensation is significantly higher compared to the salary of Coos in other companies with similar characteristics.
James was hired In 2003 for a five year appointment with the starting salary at $400,000. During the first three years, the contract promised him raises of %, 5% and 7% consecutively. After the first three years, the Coo’s compensation continued to increase significantly while the company experienced zero growth In the year of 2006 and continued to experience loss ever since without signs of recovery. The impact of Sesame’s high compensation made headlines in a local newspaper. Employees of PAS are also expressing discontent with their current CEO.
As a conclusion, the senior vice president of Human Resources at PAS wrote a memo to the Board of Directors advising the board that the compensation for the current CEO s misaligned with the industry average. He is hoping that the Board would consider searching for a new candidate to replace James who would be able to contribute to the company’s growth. There are several reasons provided by the Director of HRS to support his recommendation In replacing the current CEO with a new candidate. Browne and Kelley define reason as explanations or rationales that support the validity of a conclusion (2012, P. 30).
In this case, the first reason is evidently provided in the table that compares the Coo’s salary to the company’s growth rate from 2003 o 2009. The Coo’s raise percentage continued to rise by 2 percent every year while the company’s growth seized In year 2006 and exhibit a loss trend In subsequent years. The HRS Director believes that compensation should be based on performance, 1 OFF reflect his performance. Another reason is that other Coo’s from companies with the same characteristics as PAS were only averaging about $391 ,659 in 2007 while Sesame’s salary was as much as $100,000 over the national average.
It indicates that the company is spending “unnecessary’ money. Lastly, the number of dissatisfaction or the current CEO is growing among the employees of PAS. The HRS Director fears that if union workers have lost respect for the CEO, it would be hard to stop other groups from losing faith as well. The next step is identifying the words or phrases that seem ambiguous in this situation. The book stated that ambiguous words or phrases should be looked in the reasons or conclusion areas because the author wants the reader to accept a conclusion. Therefore, I should look for words or phrases that affect my decision (P. 41).
In the last sentence, the HRS Director said that e hopes the successor “will be more hard-working and willing to do what is necessary’ which all sound very ambiguous. Because he never mentioned previously what constitutes as hard-working. Hard-working could mean different things to different people. And “willing to do what is necessary’, what does that mean exactly? There seems to be implied meanings to this phrase. A person might think doing whatever necessary as breaking the laws to achieve the goal while others might have an entirely different interpretation. Another ambiguous word is “greatness” in the same sentence.
Greatness could also mean many things in this case. It could mean that the company is able to recover its losses or the company is able to regain the trust from partners and employees. Once again, it is hard to determine exactly what the Director want to express by using these words and phrases. The next stage of critical thinking is identifying the value and descriptive assumptions. According to the text, “a value assumption is an implicit preference for one value over another in a particular context” while “a descriptive assumption is an unstated belief about how the world was, is or will become” (P. ). The HRS Director considers pay for performance as the best method to determine compensation. By supporting this idea, he believes that productivity is the determining factor in evaluating how good a worker is. Therefore, he prefers his company to follow the industry best practices in determining the Coo’s pay rather than the current practice. The descriptive assumption in this case is the belief that the company’s performance will improve under the direction and management of a new CEO. In other words, the company’s status cannot be improved by other means except for the replacement of the CEO.
There are several fallacies that the author used to persuade the reader’s opinion in this situation. The author attacked the Coo’s personality by pointing out that a local newspaper recently quoted the CEO saying the following line; “I’m worth every penny I’m paid; this town owes everything to me and my family’. This is an attempt to show that the CEO has disputable character and that he is a cocky ungrateful man. The author also went on to say that the CEO is a very wealthy man as the only grandson of the company’s founder. And because of his financial status, he has no inventive to ark hard for this company to strive.
Another fallacy that was used is the slippery slope technique in which the author assumes that one event will set off a chain of uncontrollable and undesirable outcomes. The author said that once union workers lose respect for the CEO by circulating an unflattering comic representation it will losing faith in the CEO as well. Next step in critical thinking is to determine the validity of the evidence presented. The first evidence provided by the author is the table listing the Coo’s annual raise versus the company’s annual growth rate from he company’s Human Resources Department.
This evidence could be considered as valid because these are probably based on exact figures provided on payroll as well as the company’s financial statements. The next evidence that the author presents is the average salary for other CEO in the same industry. At first glance, by using the phrase “according to the Economic Research Institute”, it would cause the reader to think that this must be a reliable source. But when looking at the footnote at the bottom of the page, the source was Just a salary calculator providing estimates.
There re no concrete facts to support that the figure presented was the actual average for the industry. That makes the source not very reliable on its accuracy. The author went on to say that research shows that Coo’s median total compensation fell yet the source for this research is from wick. Wick is not considered as a scholarly source for research. The next evidence provided is the survey of executive pay practices. The author stated that 64% from that survey reported salary freeze yet the author never stated how large the sample size was and failed to mention if the sample was Mandalay selected or not.
Surveys are often biased because it fail to truly represent how people truly feel instead people fill out answers as they think they have to give. Lastly, the author quoted another cite citing other cities. The author used a source that was quoted in the Baltimore Sun without examining to see if the original source is dependable or not. Lastly, the statement that “everyone in the Human Resources field knows” is a generalization. The book defines this as “a person draws a conclusion about a large group based on experience with only a few members of the group.
The author clearly has not met with everyone in the HRS field, therefore, he use his experience as being the HRS director to support his claim that this is the thinking of the whole field. The next step in critical thinking in the book is looking for rival causes. The books definition of “a rival cause is a plausible alternative explanation that can explain why a certain outcome occurred” (P. 128). The author was citing several sources to support his claim that the median compensation for CEO in the industry fell during Sesame’s terms, as well as a lot of companies were freezing or rimming salaries for their executives.
The author also cited another claim from a source stating that indeed, excessive CEO compensation was the actual cost of the economic recession in the United States during those years. This is the cause that the writer wants the readers to believe that the growth of PAS has stalled over the years is due to excessive compensation. There could be many other reasons that could arguably be the reason why the United States was experiencing a recession during that period such as high unemployment rate, foreign policy, war spending, amount of unsecured loans, etc.
Clearly, high CEO compensation cannot be considered as the sole cause of the recession as the author wants us to believe. The author in this scenario used several statistics in trying to support his claim. First he said that the medial total compensation fell by 7. 5 percent, in this case, we weren’t provided with the base number to determine if 7. 5 percent was significant or not. Once again, the author claimed that 64 percent of companies responding to the survey reported that omitted the total number of companies. 64 percent is an impressive number and we old have been easily swayed if we didn’t question the use of statistics.