Perception & Individual

Decision Making

Dr. Daisy Chauhan

 SIGNIFICANCE OF PERCEPTION

 Perception is important in the study of OB

because people’s behaviour is based on their
perception of what reality is, not on reality itself.

 An important feature of Perception is to

understand that it is a unique interpretation of
the situation/event or person, not the exact
recording of it. Thus it may be quite different
from the reality.
 WHAT IS PERCEPTION ?

 Perception is the process by which people

select, organise, interpret and respond to
information from the world around them.

 It is a psychological process by which people

make sense of their world.

 Through perception people process

information inputs into responses involving
feelings and action (behaviour)
 PERCEPTUAL SELECTION

Individuals tend to selectively

pay attention to some aspects
of the environment and
selectively ignore other aspects.
 PERCEPTUAL SELECTION

Selective Perception : Tendency to

selectively interpret what one see on
the bases of one’s interest,
background, experience and attitude.
Selective Perception is also our
tendency to choose information that
supports our viewpoints. Because we
see what we want to see. SP allows us
to “speed-read” others.
 TYPES OF PERCEPTION

SOCIAL PERCEPTION : (Perception of Others)

How an Individual perceives other individuals

IMPRESSION MANAGEMENT: (Self Presentation)

How an individual attempts to manage or control the

perceptions others form about him/her
Factors Influencing Interpretation

Perceptual Set
Perceptual Defense (Protect oneself
against ideas, objects or situations that
are not in line with our way of looking
at things or to deal with conflicting
messages)
Factors Influencing Interpretation

 Stereotyping (gender, age, race,

ethnicity, caste). Generalization
about a group.

 Halo Effect : Perception based on

one + trait being generalised.
Horn Effect : Perception based on
one - trait being generalised.
Factors Influencing Interpretation

Contrast Effect

Projection (project one’s

own feelings, personality
characteristics, attitudes or
motives onto others)
Factors Influencing Interpretation

Expectancy Effect
Self Fulfilling Prophesy,
Pygmalion Effect
Self-fulfilling Prophecy Cycle

Superior forms
expectations about
employee

Employee’s
behaviour
become
Expectations
consistent with affect superior’s
superior’s behaviour
expectations Superior’s toward
behaviour affects
employee
abilities & self-
efficacy
 Person Perception
Primacy Effect : First information
 Pay less attention to subsequent
information
 Ignore information that contradicts
with the first impression
 Person Perception

Recency Effect:
Most recent information dominates
Earlier information loses
significance
 ATTRIBUTION
Finding an explanation to the cause of one’s own and
other’s behaviour.

What is Fundamental Attribution Error? (Fritz Heider

and H.H. Kelley’s Theory of Causal Attribution)
Tendency to incorrectly attribute the negative
behaviour of other people to internal more than
external factors. Or The tendency to
underestimate the influence of EXTERNAL
factors and overestimate the INTERNAL factors
when making judgements about the behaviour
 FACTORS FOR DECIDING
EXTERNAL/INTERNAL REASONS

This theory refer to decide whether a behaviour

is internally caused or externally caused. The
following three factors could be considered:

(1) Consistency
(2) Distinctiveness
(3) Consensus
 REASONS FOR BEHAVIOUR
 Consistency : Similar behaviour pattern in
similar jobs/situations, we attribute to Internal
reasons.
 Distinctiveness : Similar behaviour in different
situation/job, we attribute to Internal reasons.
 Consensus : Do others behave similarly in this
situation? If “Yes” it is External.
 ATTRIBUTION

What is Self-serving Bias?

The tendency to attribute their own
success to INTERNAL FACTORS and put
the blame for failures on EXTERNAL
FACTORS.
THE PERCEPTUAL PROCESS

EXTERNAL STIMULI OBSERVATION

(Sight, Hearing, Smell,
Touch, Taste)

PERCEPTUAL SELECTION
Int. Factors, Ext. Factors
PERCEPTUAL ORGANISATION
Perceptual Grouping
(Similarity, Proximity Closure,
Figure-Ground)

INTERPRETATION

Perceptual Errors Attributions RESPONSE

Stereotyping Internal vs Covert Overt
Halo Effect External Attitudes Behaviour
Projection Causes Motivations
Expectancy for Success/ Feelings
Effect Failure
 Impression Management

An attempt by an individual

to manipulate or control the
impression that others form
about them
 Impression Management

Impression Tactics:
 Behavioural Matching
 Self Promotion
 Conforming to Norms
 Flattering others
 Being consistent
PERCETION & INDIVIDUAL DM
Bounded Rationality
 Because of our limited capability to get/deal with all
information and too complex issues we reduce the
criteria for DM and look for a viable solution or a sub-
optimal decision.
 BIASES & ERRORS IN DM
1. Over-confidence Bias
2. Anchoring Bias: Reliance on Initial information
3. Confirmation Bias: Selectively gather information
4. Availability Bias
5. Escalation of Commitment: Staying with the
decision even when there is clear evidence that the
decision is wrong
6. Randomness Error: Create meaning from random
events
7. Risk Aversion
8. Hind-sight Bias: Tendency to believe falsely after the
outcome is known.
 Specific Applications in Organisations

Interviews
 Interviewers make perceptual
judgments
Interviewers generally draw early
impressions about candidates -
Primacy Effect
 Interviewers tend to make
comparisons - Contrast Effect
Specific Applications in Organisations

Performance Expectations
 Self-fulfilling prophecy – high
expectations lead to high performance
and vice versa
Specific Applications in Organisations

Performance Expectations
 Positive Self-fulfilling Prophecy can be used
as a valuable strategy to maximise employee
performance and help them to realise their
potential
Specific Applications in Organisations

Performance Evaluation
 Recency Effect: In performance appraisal most
recent information gains significance over earlier
information
 Performance appraisal takes into account
objective criteria but there is also a subjective
element in assessing individuals.
Employee Effort
Assessment of an individual’s effort is a subjective
judgment.
Specific Applications in Organisations

Perceptual Biases can cause problems in terms of:

 Cause discrimination
 Wrong selection/placement
 Career limitations
 Improper utilisation of employees
 Employee potential remaining untapped