Chapter: 2

Foundation of Individual Behavior

Meaning of Biographical Characteristics:

Successful managers observe the behavior of their employees to understand their individual characteristics. Managers can use
this understanding to help employees improve their performance. Biographical characteristics represent an area of individual behavior
that affects employee performance.

Biographical characteristics are personal traits that can be observed and recorded in personnel files. These characteristics play
an important part in an employee's performance. Biographical characteristics are generic in nature and are inherited.

Biographical Characteristics includes:

i) Physical characteristics
ii) Age
iii) Gender
iv) Religion
v) Marital status
vi) Education
vii) Experience
viii) Intelligence
ix) Tenure

i) Physical characteristics: These characteristics are related to height, skin, complexion, vision, shape and size.

ii) Age: There are two distinct age groups i.e. younger and older. Psychologically, young people are expected to be more
energetic, innovative, adventurous, ambitious and risk taking whereas old people are supposed to be more conservative, set
their own way and less adaptable.

iii) Gender: There are two genders i.e. male and female. Studies and research has proved that there are few important
differences between man and woman that will affect their job performance. Women are more willing to conform to authority,
and men are more aggressive and more likely than women to have expectations of success and women have higher rates of
absenteeism.

iv) Religion: People from different religion may create conflict, so manager need to be sensitive.

v) Marital status: Research consistently indicates that married employees have fewer absences, undergo fewer turnovers, and
are more satisfied with their jobs than are their unmarried coworkers.

vi) Education:

vii) Experience: It is considered to be a good indicator of employee performance. There is a positive relationship between
experience and job performance.

viii) Intelligence: Whether it is an inherited trait or acquired trait, intelligence affects the behavior of the people.

ix) Tenure: Duration of time in the job also affects the job performance.

Meaning of Ability:
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 Ability is defined as the capacity of the individuals to perform various tasks in a specific job. Ability for basically mean that
we have the potential to do something. It is based on practice and personal training.

Types of Ability:
i) Intellectual Ability
ii) Physical Ability

i) Intellectual Ability:
Intellectual ability requires the individuals to do the mental activities. Intellectual abilities are the skills required to perform
mental tasks. The capacity to perform mental activities, i.e. thinking, reasoning and problem solving is called intellectual ability.

Dimensions of Intellectual Ability:

 Number aptitude: Ability related to calculating speed and accuracy.
 Verbal comprehension: Ability to understand what is read or heard.
 Perceptual speed: Ability to understand the similarities and differences, quickly and accurately.
 Inductive reasoning: Ability to identify logical sequence of problem and provide solution, moving from particular to general.
 Deductive reasoning: Ability to use logic and assess the implication of an argument, moving from general to particular.
 Spatial visualization: Ability to imagine and visualize about an object or situation.
 Memory: Ability to retain and recall past experience.

ii) Physical Ability:

Physical ability requires doing tasks demanding stamina, strength, dexterity and other similar characteristics.

Dimensions of Physical Ability:

 Dynamic strength: Ability to use muscular force on regular basis.
 Trunk strength: Ability to use muscular force using trunk or abdominal muscular.
 Static strength: Ability to use force against external objects.
 Explosive strength: Ability to expand maximum energy to one or series of acts in minimum time.
 Extent flexibility: Ability to move the trunk and back muscular as for as possible.
 Dynamic flexibility: Ability to make rapid, flexing movements.
 Body coordination: Ability to coordinate all parts of body.
 Balance: Ability to maintain balance while moving muscular body.
 Stamina: Ability to regularly use energy for long period of time.

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Meaning of Learning:
The acquisition of knowledge or skills through experience, practice or study is called learning. Learning can be achieved
through practice, training and experience. Learning is an important psychological process that determines human behavior because
learning capacity of individual differs from person to person. Learning is a change in behavior of the individual but the behavioral
change must be relatively permanent, any temporary change in behavior is not a part of learning. Change in behavior indicates that
learning has taken place. Organizations need people with learning capacity to adapt to changing environmental forces. Being a
manager of organization, one should create favorable environment where employees have opportunities to learn positive behavior.

Stephen P. Robbins –“Learning is a relatively permanent change in behavior that occurs as a result of experience.”

Characteristics of Learning:
1) Learning is a fundamental process of life
2) Learning is a lifelong process
3) Learning is universal
4) Learning is continuous
5) Learning is development

Components of Learning:
1) Change
2) Permanency
3) Behavior
4) Experience

1) Change: Change is the most important component of learning. Learning involves a change in behavior of the individual,
though this change in not necessarily an improvement over previous behavior. Such change can be good or bad for organization.
People learn both favorable as well as unfavorable behavior.

2) Permanency: The change resulting from learning must be relatively permanent. Any temporary change does not represent
learning. Permanency results from reinforcement of behavior.

3) Behavior: Learning affects the behavior of the individuals. Learning must directly change the behavior of individuals.
Change not accompanied by behavioral change is not learning. It requires change in actions.

4) Experience: Experience is necessary for learning. Change in behavior results from experience. The source of experience can
be direct and indirect. Direct experience is acquired through observation or practice. Indirect experience is acquired through reading.

Types of Learning:
1) Formal Learning
2) Spontaneous Learning
3) Observational Learning (Social Learning)

1) Formal Learning: Learning typically provided by education or training institutions is called formal learning. It is structured
in terms of learning objectives, duration, content, method and assessment and leads to certification.

2) Spontaneous Learning: Simply, spontaneous refers to things that happen without outside influence and happen all of a
sudden, on the prompt of the moment, without being planned. So, spontaneous learning means the self generated learning
without any apparent external cause. It comes from the natural feeling or native tendency without external constraint.
 
3) Observational Learning: It is the process of learning through observation and experience.

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Process of Learning:
1) Stimulus
2) Response
3) Motivation
4) Reward

1) Stimulus: There should be a stimulus. Stimulus is the object that exists in the environment in which a person lives. It should
be clearly understand by the learner. To get knowledge or to learn something, there should be a stimulus environment.

2) Response: To take place the learning, there should be change in the behavior and response should be provided. It means that,
there should be a response by the learner. It is the act which the learner performs. It should be physically observable. On the basis of
response provided by the learner, it is easy to understand that how much he learnt and how much he has to learn.

3) Motivation: There should be motivation to learn in the learner. The learner should have interest and aptitude to learn.

4) Reward: There should be reward to the learner. It can be monetary or non-monetary. It is an incentive. It satisfies a motive
of the learner.

Theories of Learning:
1) Classical Conditioning Theory
2) Operant Conditioning Theory
3) Cognitive Theory
4) Social Learning Theory

1) Classical Conditioning Theory: This theory was developed by the Russian psychologist Ivan P. Pavlov. This theory is also
known as S–R Theory i.e. Stimulus–Response Theory. When a stimulus gets associated with another neutral phenomenon, the neutral
phenomenon acquires the quality of the original stimulus to get the desired response. According to this theory, learning is a
conditioned response involves an association between a conditioned stimulus and unconditioned stimulus. Learning determines by the
nature of stimulus. It means the behavior of human being is condition by stimulus.

2) Operant Conditioning Theory: This theory was developed by B. F. Skinner. This theory is also known as R–S Theory i.e.
Response–Stimulus Theory. According to this theory, human behavior is the functions of consequences and human behavior will be
shaped by consequences. For example: If we want to repeat the positive behavior, there should be reward and if we want to restrict
negative behavior, there should be punishment.

3) Cognitive Theory: This theory was developed by Edward Tolman. This theory is also known as S–S Theory i.e. Stimulus–
Stimulus Theory. One stimulus leads to another stimulus. According to this theory, learning involves the relationship between
environmental cues (stimulus) and his/her own expectation. Further we can also say that, this theory states that human behavior will be
directed by their expectation and environmental stimulus.

4) Social Learning Theory: This theory was developed by Albert Bandura. This theory explains that an individual can learn
through observation and direct experience. It combines Operant Conditioning Theory and Cognitive Theory. As in Operant
Conditioning Theory, it assumes that behavior is a function of consequences. And as in Cognitive Theory, it recognizes that people
respond to how they perceive and define consequences. For example: Learning through watching pictures, television, performance,
seniors and others.

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Meaning of Attitudes:
In simple words, an attitude is an individual’s point of view or an individual’s way of looking at something. Furthermore, an
attitude may be explained as the mental state of an individual, which prepares him to react or make him behave in a particular pre-
determined way.

In other words, attitudes are evaluative statements or judgments concerning objects, people or events. They reflect how an
individual feels about something. Attitudes can be favorable or unfavorable. Attitudes are acquired from parents, teachers, friends and
reference group members. Personal experiences, education, media and environmental factors also shape attitudes.

Stephen P. Robbins –“Attitudes are evaluative statements either favorable or unfavorable –concerning objects or persons in
one’s environment. ”

Components of Attitudes:
1) Cognitive Component
2) Affective Component
3) Behavioral Component (Intentional Component)

1) Cognitive Component: It is the knowledge or belief component of an attitude about objects, people or events.

2) Affective Component: The affective component of an attitude reflects ‘feelings and emotions’ that an individual has towards
a situation. Feelings can be positive, negative or neutral.

3) Behavioral Component: The behavioral component of an attitude reflects how an individual behave in a certain way toward
someone or something. It is the action component of attitude. It can be directly observed.

For example:
1) “They are the worst supply firm I have ever dealt with” –Cognitive component
2) “I don’t like that company” –Affective component
3) “I will never do business with them again” –Behavioral component

Types of Attitudes:
1) Job Satisfaction
2) Job Involvement
3) Organizational Commitment

1) Job Satisfaction: It describes an individual’s positive feeling about a job. Positive feelings imply high level of job
satisfaction. Negative feelings imply job dissatisfaction. Employee attitudes indicate job satisfaction.

2) Job Involvement: Job involvement refers to a person’s willingness to be a team member and work beyond the usual
standards of the job. Any person involving with job, we can understand their attitudes. An employee with high level of job
involvement has favorable attitudes toward his job. He is likely to be more productive. An employee with little job involvement is
motivated by extrinsic motivational factor and an employee with strong job involvement is motivated by intrinsic motivational factors.

3) Organizational Commitment: Organizational commitment is the individual’s feeling of identification with and attachment
to an organization. If any person is highly committed towards the organization, he is likely to be a better performer. Attachment of
employees to the organization may be emotional attachment as well as economical attachment.

Importance of Attitudes:
1) Attitudes determine job satisfaction and performance level of the individual employee.
2) Positive attitudes contribute to productivity.
3) Favorable attitudes give rise to positive feelings.
4) Attitudes help to reduce absenteeism, turnover, grievances and accidents.
5) Attitudes help people to adjust to their work environment.
6) Attitudes help to organize and select facts.

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Meaning of Job Satisfaction:
Job satisfaction can be defined as an individual’s or employee’s attitude towards his/her jobs. An individual with high level
of job satisfaction would have positive attitude towards their job and they may have positive job related behavior and vice-versa. In
short, high job satisfaction implies that the employee likes and values his job highly.

Job satisfaction is an overall attitude of liking or disliking of the job. It is determined by the discrepancy between what
individuals expect to get out of their jobs and what the job actually offers.

Stephen P. Robbins –“Job satisfaction is an individual’s positive feeling about one’s job.”

Factors influencing Job Satisfaction:

1) Salary and Wages
2) Nature of work/job
3) Working condition
4) Working environment
5) Promotion
6) Equitable reward
7) Supportive peers
8) Supervision
9) Behavior and Attitude of the boss
10) Respect and Recognition

Importance of Job Satisfaction:

Employees’ level of job satisfaction is an important aspect because employees’ level of job satisfaction directly links with
organizational employees’ efficiency, effectiveness, productivity and organizational commitment. Therefore, the managers of the
organization should be very careful about organizational employees’ level of job satisfaction. Furthermore, to minimize the
employee’s rate of absenteeism, employees’ turnover, managers should be very conscious about employees’ level of job satisfaction.
Behavioral scientist believes that “Happy and Satisfied workers are productive workers.”

Methods of measuring Job Satisfaction:

1) Single global rating method
2) Summation-of-job factors method
a) Job Descriptive Index (JDI)
b) Minnesota Satisfaction Questionnaire (MSQ)
c) Need Satisfaction Questionnaire (NSQ)

1) Single global rating method: In this method, each employee in the organization is asked to answer one question. To give
answer, they are given five choices form number 1 to 5. Those answers are kept respectively from “highly satisfied” to “highly
dissatisfied”. And employees give answer by circling a number between 1 to 5 and this help to measure their job satisfaction level.

For example:
Question: How satisfied are you with your job?
Option: 1. Highly Satisfied
2. Satisfied
3. Cannot decide
4. Dissatisfied
5. Highly Dissatisfied

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 2) Summation-of-job factors method: In this method, questions are made on the basis of key factors affecting job satisfaction.
The factors are rated on a standardized scale and then added up to create an overall fob satisfaction score.
The instruments available for this method are:

a) Job Descriptive Index (JDI): In this method, first of all, the key factors are identified affecting the job satisfaction.
Normally, job factors included are: nature of work, salary, promotion opportunities, supervision and relations with co-workers. After
identifying those factors, satisfaction score are determined.

For example:
Question: Are you satisfied with your salary?
Option: Yes
No
No Comment
This survey instrument is easy to administer. It has been used in a variety of organizations with employees from different
levels of education and income. However, it gives only a general picture of job satisfaction.

b) Minnesota Satisfaction Questionnaire (MSQ): In this method, 100 factors are identified which are used in measuring job
satisfaction. Among them 20 questions are asked which has 5 choices for each question. Employees give answer by circling in an
answer and job satisfaction is measured by summing up the scores of answers given by employees.

Option for answers:

Very Satisfied (VS)
Satisfied (S)
Cannot decide (N)
Dissatisfied (D)
Very Dissatisfied (VD)

c) Need Satisfaction Questionnaire (NSQ): This method is used for management employees to measure their job satisfaction.
The questions are focused on problems and challenges of managerial jobs. Each item has two questions: 1. What should be? 2. What is
now? The answer is given on a 1 to 7 scale. Scoring is done by subtracting the score of “What is now?” from “What should be?” The
greater the difference, the more dissatisfied the employees is with the job. Summing up of scores on all the items provides overall job
dissatisfaction.

For example:
Question: The feeling of security in your management position.
Option:
i) How much it there now?
1 2 3 4 5 6 7
ii) How much should there be?
1 2 3 4 5 6 7

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Meaning of Personality:
Personality is the key factor to understand and predict individual behavior. It directly influences an individual behavior or
personality shapes individual behavior. It reflects the totality of a person including their physical as well as psychological traits. It is
the sum total of ways in which an individual reacts and interacts with others. In other words, personality of an individual indicates the
behavior shown by individual, when s/he interacts with others. It involves how s/he speaks, walks, interacts with environment, what
kinds of foods they prefer to eat, what kinds of dresses they prefer to wear etc.

Therefore, we simply can say that personality is concerned with all the physical and psychological (mental) traits of an
individual.

Stephen P. Robbins –“Personality is the sum total of ways in which an individual reacts and interacts with others.”

Determinants of Personality:
1) Heredity factors
a) Biological
b) Physiological
c) Psychological
2) Situation factors
3) Environmental factors
a) Social
b) Cultural

1) Heredity factors: It is the genetic background inherited from parents. It consists of biological, physiological and
psychological factors. It influences an individual’s gender, physical stature, facial attractiveness, temperament, muscle composition,
energy level etc.

2) Situation factors: Situation factors also directly influences an individual behavior or personality. Interactions of individual
with situation shape personality. An individual’s personality tends to change in different situational contexts. Individual differences in
personality also result from situational influences. In other words, people have different personality depending upon different
situations.

3) Environmental factors: The environment to which an individual is exposed plays a significant role in shaping personality. It
involves social factors as well as cultural factors such as religion, social norms, values, friends circle, school environment, family
background, economic background, political background and other factors which are directly or indirectly related with social and
cultural aspect.

Personality Attributes influencing OB:

1) Locus of control
a) Internal Locus of control
b) External Locus of control
2) Machiavellianism
a) High Machs
b) Low Machs
3) Self esteem
4) Self efficacy
5) Self monitoring
6) Risk taking
7) Personality type
a) Personality A Type
b) Personality B Type

1) Locus of control: Locus of control is that attribute of personality in which people keep them in a circle of fate and believe
they are the masters of their own fate.

Locus of control can be:

a) Internal locus of control: The individuals who believe that they are the masters of their own fate and also believe that
success and failure of their life is totally under their control. They control what happens to them. These types of people will have high
level of self confidence and most of them will be satisfied with their jobs.

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 b) External locus of control: Individuals who believe that their fate is influenced or controlled by outside forces. They believe
that success and failure of their life is controlled by external factors. For example: They believe in luck, nepotism & favoritism. They
will have less level of self confidence and they will not be satisfied with their jobs.

2) Machiavellianism: It refers to an individual belief of having power to control others. In other words, it refers to a personality
trait involving willingness to manipulate others for one’s own purposes.

Machiavellianism can be:

a) High Machs: It refers to that personality attributes who does not hesitate to manipulate others for personal benefits. In other
words, they manipulate others in a ruthless manner for personal gain.

b) Low Machs: It is exactly opposite of high machs. It refers to that personality attributes who does not want to manipulate
others for personal benefits. They will be emotional and soft hearted. They will not try to manipulate others for personal gain.

3) Self esteem: It is an individual’s sense of self importance. This attribute believes that every person evaluates themselves so
everybody knows their positive and negative aspects. This also affects their personality. The person who has high self esteem can
perform the job in right way, they will have positive attitude. They take risks and choose unconventional jobs. They work for intrinsic
rewards. On the other hand, the person having low self esteem will have negative attitude and cannot perform the job in right way.
They look for security and money related rewards. They work at lower level in the organization.

4) Self efficacy: It is self perception of how well a person can cope with situations as they arise. It is situation specific.
Employees with high self efficacy tend to be high performers. They have “can do” attitude. Employees with low self efficacy tend to
be low performers.

5) Self monitoring: It refers to an individual’s ability to adjust behavior with the new environment or situations. Individuals can
have high self monitoring and low self monitoring. The people with high self monitoring can easily adjust their behavior with new
situations. They can behave differently in different situations. They are capable to work with different types of people and
organizations. Whereas, the people with low self monitoring cannot easily adjust their behavior with new environment or situations.
They find difficult to work in changing situations.

6) Risk taking: Risk taking capacity also defers from person to person. Some people prefer to take high risk, they tend to be
speculative. They make quick decisions with less information. They work in risky situations. And some people don’t want to take risk
at own. They avoid risk. They prefer to work in stable situations. Therefore, risk taking capacity determines personality or individual
behavior.

7) Personality type:
Personality A Type:
 Sense of time urgency
 Always moving and walking
 Eating rapidly
 They want to do two or more thing at once
 They are work Holics –devoted to work
 They avoid leisure time

Personality B Type:
 No sense of time urgency
 They always prefer to relax
 Play for fun and relaxation
 They are less competitive
 They won’t want to take responsibility
 They always prefer to have leisure time
 They do the thing very slowly

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Matching Personality with Jobs:
(Personality–Jobs Fit Theory)

 This theory was developed by John Holland.

Personality Type Personality Traits Matching Jobs
1. Realistic  Stable, Practical etc.  Mechanics, Operators etc.
2. Investigate  Analytical, Independent etc.  Economist, Journalist etc.
3. Social  Friendly, Cooperative etc.  Teacher, Social worker etc.
4. Conventional  Conforming, Inflexible etc.  Accountant, Banker etc.
5. Enterprising  Self confidence, Ambitious etc.  Lawyer, Business manager etc.
6. Artistic  Imaginative, Emotional etc.  Painter, Musician, Writer etc.

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Meaning of Perception:
Perception is purely a cognitive process. In simple term, perception is an interpretation after interaction with people, object,
situation and environment. In other words, perception means giving a kind of impression towards the people, object, situation and
environment. Perception provides a unique picture of the world and such picture may be quite different from reality. Perception is a
mental process therefore; different people perceive the things in a different way. Two individuals may perceive the same situation
differently.

Stephen P. Robbins –“Perception is a process by which individuals organize and interpret their sensory impressions in order
to give meaning to their environment.”

Perception Process:
1) Environmental stimuli
2) Selection
3) Organization
4) Interpretation

1) Environmental stimuli: Environment is the source of stimuli. The perception process starts with external stimuli.
Environmental forces provide stimuli through the senses of seeing, hearing, smelling, tasting and feeling. Such stimuli are in the form
of raw data.

2) Selection: An individual gives selective attention to information received from the environment. Perception filters, modifies
or changes the relevant stimuli for processing purposes. Such stimuli should be supportive and satisfying to him.

3) Organization: The processed information is ordered and classified in a logical manner. The selected stimuli are grouped into
recognizable patterns.

4) Interpretation: It involves giving meaning to the stimuli to make sense out of them. It is the most important aspect of
perception. Every person has a unique filter to interpret the stimuli.

Elements of Perception Process:

1) Stimulus
2) Confrontation
3) Registration
4) Interpretation
5) Feedback
6) Behavioral response

1) Stimulus: It refers to internal instinct. Environment is the source of stimulus. Perception begins when an individual confronts
with stimulus.

2) Confrontation: This element refers to interaction between stimulus and situation of an individual. In other words,
organizational employees confront with the environmental factors or situations which stimulus to interact with object, people, situation
and environment.

3) Registration: This element involves a kind of mechanism which comes to sensory organs to register the stimulus in the
human brain.

4) Interpretation: On the basis of registration there will be interpretation or they will give certain meanings to the environment.
It is purely a psychological process because it directly relates with individual beliefs, attitudes, motivation, learning, personality, level
of education, religion, culture and related which directly influence the interpretation.

5) Feedback: This element refers to clarification of interpretation. In other words, it is a process of evaluating the interpretation.

6) Behavioral response: It is depend upon the perception of individual or individual behavior will be shaped by their perceptual
interpretation.

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Factors affecting Perception:
1) Factors to the perceiver:
a) Attitude
b) Motives (Intention)
c) Emotions
d) Interests
e) Experiences
f) Expectations

2) Factors to the Target:

a) Size
b) Motion
c) Sound
d) Novelty (New)
e) Proximity (Closeness)
f) Background

3) Factors to the Situation:

a) Time factor
b) Work setting
c) Social setting

1) Factors to the Perceiver:

a) Attitudes: Attitude is an individual’s point of view or an individual’s way of looking at something. It reflects how an
individual feels about something. It may be favorable or unfavorable. Attitudes have a powerful influence upon what we pay attention
to, what we remember and how we interpret information. Different attitudes lead to different interpretations.

b) Motives: A motive is an unsatisfied need. Human motives are created whenever where a physiological or psychological
imbalance is. Motives stimulate individuals. They use a strong influence on perception. For example: People who are hungry tend to
see images of food.

c) Emotions: They are intense feelings directed at someone or something. An individual’s emotional state strongly influences
his perception. Anger, agitation and frustration distort perception.

d) Interests: Individual interests differ considerably. Interests influence the focus of attention. Differences in individual
interests result in differing perceptions.

e) Experiences: Experiences influence perception. Past experiences affect the focus of attention. Individuals tend to perceive
those objects or events to which they can relate.

f) Expectations: People see what they expect to see. Expectations distort perception.

2) Factors to the Target:

a) Size: Size of the object affects the perception of individuals. We can easily perceive large sized object in compare to small
sized object. It means if the size of targeted object is large, it draws our attention easily.

b) Motion: Normally, movable object gets out attention rather than stable object. So, motion of the object affects in perception.

c) Sound: Loud people are more likely to be noticed. So it affects in perception.

d) Novelty: Novel targets are more likely to be noticed than the targets observed in the past.

e) Proximity: Objects that are close to us can be easily perceived than the far objects.

f) Background: A target is not looked at in isolation. The relationship of a target to its background influences perception.

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 3) Factors to the Situation:
a) Time factor: The time at which an object or event is seen affects perception. For example: A daily report arriving after two
days may be ignored by the perceiver.

b) Work setting: The changing context of the work setting influences perception. For example: Stressful work situations
distort perception.

c) Social setting: The changing social setting influences perception. For example: A male student wearing earrings may not be
noticed in a disco but he will be highly noticeable in the classroom.

Attribution Theory:
Attribution theory was developed by psychologist Kelly. Therefore, this theory is also known as Kelly’s Attribution
Theory. Attribution theory simply defines person’s perception on the assumptions made about an individual’s internal or external
states. Attribution theory explains the cause of behavior and it determines an individual’s behavior is internally or externally caused.
This theory also defines that internally caused behavior will be under the control of the individual whereas externally caused behavior
cannot be under the control of individuals.

Determinants of Internal & External causes of behavior:

1) Distinctiveness
2) Consensus
3) Consistency

1) Distinctiveness: If an individual shows different behaviors in different situations, it is due to internal factor.
2) Consensus: If everyone shows similar behavior in similar situation, it is due to internal factor.
3) Consistency: If an individual shows the same behavior over a time (for a long time), it is due to internal factor.

Perceptual Errors:
1) Selective perception
2) Halo effect
3) Stereotyping

1) Selective perception: People selectively interpret what they see on the basis of their interests, attitudes, experiences and
expectations ignoring the actual reality, it could be a perceptual error.
2) Halo effect: Perceiving by considering a single attribute. For example: Perceiving someone is beautiful by looking at her
eyes only.
3) Stereotyping: Perceiving on the basis of generalizing the situation. For example: Women are poor riders.

Perception and Individual Decision Making:

Decision making is the process of selecting the best option from the available alternatives to solve any kind of problem. For
an individual to make decisions, he should collect the information, organize the information and interpret the information about the
related problem. And these all activities are influenced by the perception of the individual.

The steps involved in individual decision making are influenced by perception. The steps are:
1) Defining the problem
2) Developing alternatives
3) Evaluating alternatives
4) Making a choice

1) Defining the problem: A problem exists when there is discrepancy between an existing and desired state of affairs. The
problem should be clearly defined and to define the problem precisely perception plays a vital role.

2) Developing alternatives: Possible alternatives should be developed to resolve the problem. And perception of the decision
maker focuses on what kind of alternatives to develop.

3) Evaluating alternatives: Each alternative should be evaluated to find out its strengths and weakness.

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 4) Making a choice: Decision making is making a choice from among the alternatives. The final choice is influenced by the
perception of the decision maker.
Meaning of Motivation:
Motivation is purely a psychological process. In simple term, motivation refers to the process of encouraging or stimulating
or creating willingness to perform the job who are capable to do the job. But one should analyze whether the employees are capable to
do the job or not. If not then it will be useless to motivate them.

Motivation has great impact on employees’ performance. A capable employee, if well motivated, can contribute more to an
organization. So, we can say that, motivation has direct link with employee’s efficiency, effectiveness as well as individual
productivity and organizational productivity. Therefore, a manager of an organization should always develop strategies to uplift the
employee’s level of motivation.

Highly motivated employees get higher satisfaction, which may lead to higher efficiency. Motivating tools may differ from
individual to individual depending on personality, needs, competence and other factors. Motivation may be positive as well as
negative. Positive motivation includes incentives, rewards and other benefits while negative motivation implies some punishment,
fear, use of force etc.

Stephen P. Robbins –“Motivation is a process that accounts for an individual’s intensity, direction and persistence of efforts
toward attaining a goal.”

Characteristics of Motivation:
1) Psychological concept
2) Complex and unpredictable
3) Continuous process
4) Pervasive
5) Goal oriented

1) Psychological concept: Motivation is concerned with needs, desires, motives and drives. It is a psychological concept. It
involves efforts to satisfy needs.

2) Complex and unpredictable: Motivation is complex. It is difficult to predict. Individuals differ in motivation. Motivation
changes from time to time.

3) Continuous process: Motivation is s continuous process. Individuals have many needs. When one need is satisfied, another
emerges.

4) Pervasive: All managers need to motivate their subordinates for higher performance. It is the job of all levels of managers.

5) Goal oriented: Motivation involves efforts to achieve goals. It leads to efforts and actions for achieving goals.

Importance of Motivation:
1) Motivated employees make goal-directed efforts.
2) Motivated employees are more loyal and sincere.
3) Motivated employees do their work efficiently and effectively.
4) Motivation reduces absenteeism and labor turnover.
5) Motivation also helps in improving the image of an organization.

Motivation Techniques:
1) Management By Objectives (MBO)
2) Employee Involvement Program
3) Job Redesign
4) Reward System
a) Variable pay plan
b) Skills based pay plan
c) Flexible benefit plan

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 1) Management by Objectives (MBO): Management by Objectives (MBO) is used as a technique for self control of
performance by the employees through goal setting. Superior and sub-ordinates jointly participate to set goals for subordinates. Goals
must be specific, measurable and challenging. Standards in terms of expected results are defined. Subordinate’s performance is
reviewed and evaluated in terms of standards. It is done periodically. Feedback is provided to subordinate about performance results.
Rewards are also given to them to goal achievement.

2) Employee Involvement Program: Involvement is physical and mental participation. Employees’ involvement in
management decision making is an important motivation technique. Involvement provides the feeling of belonging, recognition,
acceptance, accomplishment and responsibility. Most people are motivated by being consulted on actions affecting them. Involvement
fulfils the social and esteem needs of employees.

Involvement can be done through:

i) Delegation of authority
ii) Participative management
a) Suggestion scheme
b) Joint consultation
c) Representation in Board of Directors
iii) Work teams

3) Job Redesign: Job redesign simply means the change in the way the work is structured. And changing the nature of job.
Furthermore, restructuring the elements including tasks, duties and responsibilities of a specific job in order to make it more
encouraging and inspiring for the employees in known as job redesign. Managers can use any of the alternatives such as job rotation,
job enlargement, job enrichment etc.

4) Reward System:
a) Variable pay plan: The pay is performance linked. It varies with performance results. It can be for individual or group. It is
also known as incentive system. It can be:
 Piecework: Pay is based on number of units produced.
 Commission: Pay is based on sales performance in terms of value.
 Bonus: Time bound one-time lumpsum payment based on financial performance of the organization.

b) Skills based pay plan: Skills based pay is competency based pay where the company pays for the employee’s range, depth
and types of knowledge, skills and behaviors. It is not based on title of the job. The pay is job oriented rather than based on job
description.

Elements in Skills based pay are:

 Pay is tied to his skill level
 Training is provided for acquiring skills
 A formal testing system is put in place
 Work design is made flexible

c) Flexible benefit plan: Flexible benefits are payment in addition to pay. Employees receive them as a result of their
employment and position in the organization. They can be:
 Pay for time not worked: Paid vacation, holidays, leaves
 Protection programs: Pension, gratuity, provident fund, Medicare, insurance payments
 Executive benefits: Telephone rental, free newspapers etc.

Theories of Motivation:
1) Need Based Motivation
i) Need Hierarchy Theory
ii) Dual Factor Theory
iii) ERG Theory
iv) Achievement Motivation Theory
v) Theory X and Theory Y
2) Process Based Motivation
a) Equity Theory
b) Expectancy Theory
c) Reinforcement Theory
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