You are on your company’s senior leadership team and it is time to finalize your budget for fiscal year 2021. In 2018, the cost of living adjustment (COLA) based on the Consumer Price Index was 2.8% (see COLA chart below). In order to balance your budget, you were only be able to offer a 2% COLA to your employees. You have several star performers, who you believe contribute substantially to the profitability of your firm and you have several positions that after a market analysis you have determined you are 10% under market. Your profitability depends on maintaining the star performers and in this tight job market, you do not want to lose the people who are being paid substantially below market. In 2018 you gave a 1% COLA and disbursed the other 1% by means of merit raises and market adjustments. In the two previous years you were unable to offer raises and your employees’ salaries remained flat. In 2018, several employees were upset with the way merit raises were distributed because they said their supervisor did not effectively evaluate their performance. Some employees said their performance was stellar, but their supervisor would not give high ratings because the supervisor did not feel that anyone performed at the top level. The employees contended that the performance ratings should accurately reflect the quality of their work and the current system did not provide this assurance. You did not offer any salary increases in fiscal years 2019 or 2020. This year, even though COVID negatively impacted others in your industry, you are able to offer a 2% salary increase. Your senior leadership team has determined that you will give all employees a 2% COLA and there will not be additional compensation for stellar performance or market adjustments. You Strongly Agree Agree Disagree Strongly Disagree 2. Explain how you made the decision and the information you considered. Explain how bounded rationality may affect the quality of this decision. How would you prevent satisficing during this decision-making session?