Human Behaviour In Organisation

(HBO)
Course Instructor: Dr. Shubhi Gupta
 Session 7 & 8

Perception and Decision making

Factors influencing perception, Errors in perception,

Perception and individual decision-making (bounded
rationality), Attribution Theory
What is Perception?

A process by which individuals organize and interpret their

sensory impressions in order to give meaning to their
environment.
People’s behavior is based on their perception of what reality is,
not on reality itself.

The world as it is perceived is the world that is behaviorally

important.
Perception
“Perception is a process by which people organize, interpret and
experience ideas and the use stimulus materials in the
environment so that they satisfy their needs”. - Joseph Reitz
Perceptual Process
Selective attention

Source: https://youtu.be/_bnnmWYI0lM
Perception And Selective Attention

Perception: The process of receiving information about and making

sense of the world around us

Selective attention: Selecting versus ignoring sensory information

Affected by characteristics of Emotional markers are assigned to
perceiver and object perceived selected information

Selective attention biases

Assumptions and expectations Confirmation bias

Perceptual Organization & Interpretation

Perceptual grouping processes reduce information volume

and complexity
(a) Categorical thinking – organizing people/things into
preconceived categories
(b) Mental model – Visual or relational image road maps

Perceptual grouping principles

• Similarity or proximity
• Closure -- filling in missing pieces
• Perceiving trends
Test your Brain
Test your Brain Cont’d
Nando’s tackling South African stereotypes

Source: M&C Saatchi Abel. (2018, 28 Nov). 2. TVC | #YOUPEOPLE [Video]. Youtube.
https://www.youtube.com/watch?v=Rl8wYtCgZAk
 • Assigning traits to people based on their
membership in social categories.
• Few kernels of truth, but embellished,
distorted, supplemented.

Stereotyping • Why people stereotype:

• Categorical thinking (non-conscious energy
saving process).
• Fulfills drive to comprehend and predict
others’ behaviour.
• Supports self-enhancement and social
identity (see next slide)
 Social identity and self-enhancement
reinforce stereotyping through:
Categorization, • Categorization: categorize people into
Homogenization, groups.
Differentiation • Homogenization: assign similar traits
within a group; different traits to other
groups.
• Differentiation: assign more
favourable attributes to our groups;
less favourable to other groups.
 Problems with stereotyping:
• Inaccurate description of most members.
• Stereotype threat- individual’s concern about
Problems confirming a negative stereotype about their
with group.
Stereotyping • Foundation of systemic and intentional
discrimination.
Overcoming stereotype biases:
• Difficult to prevent stereotype activation.
• Possible to minimize stereotype application.
Factors that Influence Perception
 In-Class Activity

➢ Choose a film that you have seen recently, and which you
particularly enjoyed. Now find a friend or colleague who
has seen the same film, and who hated it.

➢ Share your views of that film. What factors (age, sex,

background, education, interests, values and beliefs,
political views, past experience) can you identify that
explain the differences in perception between you and your
friend or colleague?
Person Perception: Making Judgments About Others

Distinctiveness: shows different behaviors in different situations.

Consensus: response is the same as others to same situation.
Consistency: responds in the same way over time.
Attribution Theory
Elements of Attribution Theory
Attribution Theory: Example
Imagine a situation in which an employee is making
poor-quality products on a particular machine.
• We would probably conclude that the employee lacks
skill or motivation (an internal attribution) if the
employee consistently makes poor-quality products on
this machine (high consistency), the employee makes
poor-quality products on other machines (low
distinctiveness), and other employees make good-
quality products on this machine (low consensus).
• In contrast, we would believe something is wrong
with the machine (an external attribution) if the
employee consistently makes poor-quality products on
this machine (high consistency), the employee makes
good-quality products on other machines (high
distinctiveness), and other employees make poor-
quality products on this machine (high consensus).
Errors and Biases in Attributions
Errors and Biases in Attributions (cont’d)
Frequently Used Shortcuts in Judging Others
Frequently Used Shortcuts in Judging Others
Frequently Used Shortcuts in Judging Others
Other Perceptual Effects

Overestimate
extent that
False-consensus effect
others share our
beliefs/traits

First impressions
Primacy effect are difficult to
change

Most recent
information
Recency effect
dominates
perceptions
 First Impressions Count for Job Applicants

*“Careerbuilder Releases Study of Common and Not-So-Common Resume Mistakes That Can Cost You the Job,” News Release (Chicago: Careerbuilder, September
11, 2013);“The Most Unusual Interview Mistakes and Biggest Body Language Mishaps, According to Annual CareerBuilder Survey,” News Release (Chicago and
Atlanta: CareerBuilder, February 22, 2018); “Employers Share Their Most Outrageous Resume Mistakes and Instant Deal Breakers in a New CareerBuilder Study,”
News Release (Chicago and Atlanta: CareerBuilder, August 24, 2018).
Self-Fulfilling Prophecy Cycle

• Perception influences the reality

Contingencies of Self-Fulfilling Prophecy

Self-fulfilling prophecy effect is strongest:

• At the beginning of the relationship.

• When several people hold same expectations.

• When employee has low achievement.

 Improving Perceptions

1. Awareness of perceptual biases

• More mindful of our thoughts/actions
• Problems: has limited effect, may reinforce stereotypes
2. Improving self-awareness
• Implicit association test (IAT)
• Applying Johari Window
3. Meaningful interaction
• Based on contact hypothesis
• Improves empathy
• Specific conditions for meaningful interaction
 Implicit Association Test (Example)

Source: Dierker, L. ( 2020, Jul 27). Implicit Association Test [Video]. Youtube. https://www.youtube.com/watch?v=EOPbf3Ponew
Another video from Discovery: https://youtu.be/n5Q5FQfXZag
Specific Shortcut Applications in Organizations

➢ Employment Interview
– Perceptual biases of raters affect the accuracy of interviewers’
judgments of applicants
– Formed in a single glance – 1/10 of a second!
➢ Performance Expectations
– Self-fulfilling prophecy (Pygmalion effect): The lower or
higher performance of employees reflects preconceived leader
expectations about employee capabilities
➢ Performance Evaluations
– Appraisals are often the subjective (judgmental) perceptions of
appraisers of another employee’s job performance
– Critical impact on employees
The Link Between Perceptions and Individual
Decision Making

Perceptions
of the
decision
maker

Outcomes
Making Sense of How Our Brains Form Decisions

Source: Making Sense of How Our Brains Form Decisions--- https://youtu.be/2zxOBbAbQkA

Link Between Perception and Decision Making

➢ Individuals make decisions – choosing from two or more

alternatives.
➢ Decision making occurs as a reaction to a problem.
– There is a discrepancy between some current state of
affairs and some desired state, requiring consideration of
alternative courses of action.
• One person’s problem is another’s satisfactory state of
affairs.
 Netflix: How Does Decision-Making Work?

Source: Netflix Culture Explained: How Does Decision-Making Work?__ https://youtu.be/uU9Pz0w6fe4

Rational Model of Decision Making vs. Bounded
Rationality and Intuition (1 of 5)
Steps in the Rational Decision-Making Model

1. Define the
problem

6. Select the 2. Identify

best the decision
alternative criteria

5. Evaluate 3. Allocate
the weights to
alternatives the criteria
4. Develop
the
alternatives
Rational Model of Decision Making vs. Bounded
Rationality and Intuition (2 of 5)

➢ Assumptions of the Rational Model

– The decision maker…
• Has complete information.
• Is able to identify all the relevant options in an unbiased
manner.
• Chooses the option with the highest utility.

➢ Most decisions in the real world don’t follow the rational

model.
 Rational Model of Decision Making vs. Bounded
Rationality and Intuition (3 of 5)

➢Bounded Rationality
– Most people respond to a complex
problem by reducing it to a level at
which it can be readily understood.
▪ People satisfice – they seek
solutions that are satisfactory
and sufficient.
– Individuals operate within the
confines of bounded rationality.
▪ They construct simplified
models that extract the essential
features.
Rational Model of Decision Making vs. Bounded
Rationality and Intuition (4 of 5)

➢ How does bounded rationality work?

– Once a problem is identified, the search for criteria and
options begins.
• A limited list of the more conspicuous choices is
identified.
• The decision maker then reviews the list, looking for a
solution that is “good enough.”
 Rational Model of Decision Making vs. Bounded
Rationality and Intuition (5 of 5)
➢ Intuition
–Intuitive decision making occurs
outside conscious thought; it relies
on holistic associations, or links
between disparate pieces of
information, is fast, and is affectively
charged, meaning it usually engages
the emotions.
–The key is neither to abandon nor
rely solely on intuition, but to
supplement it with evidence and
good judgment.
 The Hidden Traps in Decision Making

Source: Decision Traps - Harvard Business Review - Vast Be Mess_ https://youtu.be/k_ylpnvwdvM

For more examples in details: The Hidden Traps in Decision Making_ https://youtu.be/9WgbQ_fpAtU
Article: The Hidden Traps in Decision Making by John S. Hammond, Ralph L. Keeney, and Howard Raiffa__ https://hbr.org/1998/09/the-
hidden-traps-in-decision-making-2
Reducing Biases and Errors in Decision Making
(1 of 4)

(1) Focus on Goals

Without goals, you can’t be rational, you don’t know what
information you need, you don’t know which information is
relevant and which is irrelevant, you’ll find it difficult to choose
between alternatives, and you’re far more likely to experience
regret over the choices you make. Clear goals make decision
making easier and help you eliminate options that are inconsistent
with your interests.
 Reducing Biases and Errors in Decision Making
(2 of 4)

(2) Look for Information That Disconfirms Your Beliefs

One of the most effective means for counteracting overconfidence
and the confirmation and hindsight biases is to actively look for
information that contradicts your beliefs and assumptions. When
we overtly consider various ways we could be wrong, we challenge
our tendencies to think we’re smarter than we actually are.
Reducing Biases and Errors in Decision Making
(3 of 4)

(3) Don’t Try to Create Meaning out of Random Events

The educated mind has been trained to look for cause-and-effect

relationships. When something happens, we ask why. And when
we can’t find reasons, we often invent them. You have to accept
that there are events in life that are outside your control. Ask
yourself if patterns can be meaningfully explained or whether they
are merely coincidence. Don’t attempt to create meaning out of
coincidence.
 Reducing Biases and Errors in Decision Making
(4 of 4)

(4) Increase Your Options

No matter how many options you’ve identified, your final choice
can be no better than the best of the option set you’ve selected.
This argues for increasing your decision alternatives and for
using creativity in developing a wide range of diverse choices.
The more alternatives you can generate, and the more diverse
those alternatives, the greater your chance of finding an
outstanding one.
Source: Based on S. P. Robbins, Decide & Conquer: Making Winning Decisions and Taking Control of Your Life (Upper
Saddle River, NJ: Financial Times/Prentice Hall, 2004), 164–68.
Article: The hidden traps in decision making by John S. Hammond, Ralph L. Keeney, and Howard Raiffa (HBR, 2006)
Common Biases and Errors in Decision Making
(1 of 4)

➢ Overconfidence Bias: individuals whose intellectual and

interpersonal abilities are weakest are most likely to
overestimate their performance and ability.

➢ Anchoring Bias: fixating on initial information as a starting

point and failing to adequately adjust for subsequent
information.
 Common Biases and Errors in Decision Making
(2 of 4)

➢ Confirmation Bias: type of selective perception.

– Seek out information that reaffirms past choices, and

discount information that contradicts past judgments.

➢ Availability Bias: a tendency for people to base judgments on

information that is readily available.
Common Biases and Errors in Decision Making
(3 of 4)

➢ Escalation of Commitment: staying with a decision even

when there is clear evidence that it’s wrong.
– Likely to occur when individuals view themselves as
responsible for the outcome.

➢ Randomness Error: our tendency to believe we can predict

the outcome of random events.
– Decision making becomes impaired when we try to create
meaning out of random events.
Common Biases and Errors in Decision Making
(4 of 4)

➢ Risk Aversion: the tendency to prefer a sure thing instead of a

risky outcome.
– Ambitious people with power that can be taken away
appear to be especially risk averse.
– People will more likely engage in risk-seeking behavior for
negative outcomes, and risk-averse behavior for positive
outcomes, when under stress.

➢ Hindsight Bias: the tendency to believe falsely that one has

accurately predicted the outcome of an event, after that
outcome is actually known.
Individual Differences, Organizational Constraints,
and Decision Making (1 of 2)

➢ Individual Differences
– Personality
• Conscientiousness
• High self-esteem
– Gender
• Rumination
– Mental Ability
– Cultural Differences
Individual Differences, Organizational Constraints,
and Decision Making (2 of 2)

➢ Organizational Constraints
– Performance Evaluation Systems
– Reward Systems
– Formal Regulations
– System-Imposed Time Constraints
– Historical Precedents
 • EY encourages employees to develop a
global mindset through international
Global
secondments. The professional services
Mindset at EY firm also actively looks for this perceptual
ability in job applicants.
Global Mindset- Team
Exercise

• Teams will prepare a list of global

mindset–enhancing activities
organized around two categories:

(1) organizationally generated

activities and

(2) personal development activities.

Global Mindset- Team
Exercise
• Organizationally generated activities: What
organizational practices—interventions or
conditions created deliberately by the
organization—have you experienced or know that
others have experienced that develop a person’s
global mindset? Be specific in your description of
each activity and, where possible, identify the
element (elements) of global mindset that improves
through that activity.
• Personal development activities: Suppose
someone asked you what personal steps they could
take to develop a global mindset. What would you
recommend? Think about ways that you have
personally developed your (or have good
knowledge of someone else who has developed
their) global mindset. Your suggestions should say
what specific elements of global mindset are
improved through each activity.
Implications for Managers

➢ Behavior follows perception, so to influence behavior at

work, assess how people perceive their work. Often
behaviors we find puzzling can be explained by
understanding the initiating perceptions.

➢ Make better decisions by recognizing perceptual biases and

decision-making errors we tend to commit. Learning about
these problems doesn’t always prevent us from making
mistakes, but it does help.
Implications for Managers

➢ Adjust your decision-making approach to the national

culture you’re operating in and to the criteria your
organization values. If you’re in a country that doesn’t value
rationality, don’t feel compelled to follow the rational
decision-making model or to try to make your decisions
appear rational. Adjust your decision approach to ensure
compatibility with the organizational culture.

➢ Combine rational analysis with intuition. These are not

conflicting approaches to decision making. By using both,
you can improve your decision making effectiveness.
 Appendix: Attribution Rules

Consistency -- Did this person act this way in this situation in the past?
Distinctiveness -- Does this person act this way in other situations?
Consensus -- Do other people act this way in this situation?

Internal attribution when:

• High consistency – a person has had same behaviour/outcomes in this situation in
the past
• Low distinctiveness – a person has same behaviour/outcomes in other
• Low consensus – other people have different behaviour/outcomes in this situation
External attribution when:
• High consistency – a person has had same behaviour/outcome in this situation in
the past
• High distinctiveness – a person has different behaviour/outcomes in other
situations
• High consensus – other people also behave this way in similar situations
Appendix: Rational Decision Making And
Bounded Rationality Contrasted

Appendix
 Critical Thinking Questions
➢ Not everything that is sensed is perceived. Do you think
there could ever be a case where something could be
perceived without being sensed?

➢ Many people experience nausea while travelling in a car,

plane, or boat. How might you explain this as a function of
sensory interaction?

➢ Take a look at the following figure. How might you

influence whether people see a duck or a rabbit?
 References & Useful Weblinks
❑ The content of this PowerPoint presentation has been derived from the below mentioned
sources:
• Robbins, S. P., Judge, T. and Vohra, N. (2020). Organizational Behavior”, 19 th Ed.,
Pearson Education, New Delhi.
• McShane and Von Glinow (2017). Organizational Behaviour, 6th Ed., McGraw Hill,
New Delhi.
❑ The students may also refer to the below mentioned Weblinks for more clarification of the
concepts discussed in the chapter:
➢ https://youtu.be/fldhEliglgU - Perceptual Process
➢ https://youtu.be/doMOHcTlK7o - Attribution Theory 1
➢ https://youtu.be/-OI10fqy9YE - Attribution Theory 2
➢ https://youtu.be/0DDDHrhpSrs - Self-Fulfilling Prophecy
➢ https://youtu.be/opaZlJPEa20 - Perceptual Errors in the Workplace
➢ https://www.youtube.com/watch?v=w9HU_9afkbs Discussion on the movie ‘the eye of
the beholder’
❑ The student may also read the following:
• The hidden traps in decision making by John S. Hammond, Ralph L. Keeney, and
Howard Raiffa (HBR, 2006)
 Thank You and Have a great day!
For any queries, please email to
shubhi.gupta@fsm.ac.in

These slides contain copyrighted material. Please do not repost. Intended for class use
only at FORE School of Management, New Delhi