What Is Perception, and Why Is It Important?

Perception A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.

Peoples 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.

Factors Influencing Perception

Individuals looking the same object but may perceive it differently. There are factors that affects the perception. These factors can reside in perceiver, in the object or target being perceived, or in the context of the situation in which the perception is made.

Factors That Influence Perception

Person Perception: Making Judgments About Others

Attribution Theory When individuals observe behavior, they attempt to determine whether it is internally or externally caused.

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.

Person Perception
Making Judgments About Others. Attribution Theory: Our perception of people differ from our perception of inanimate objects. Non living objects are subject to law of nature. Our perception and judgment of a persons actions, will be significantly influenced by the assumptions we make about that persons internal state.

This theory basically explains how we judge people differently. The determination basically depends on three factors: Distinctiveness Consensus Consistency There are two kinds of behaviors: Internally caused behaviors are those that are believed to be under the personal control of the individual. Ex. One employee coming late for work because of late night partying, and getting up late in the morning. This would be an internal attribution.

 Externally caused behavior is the result of outside causes, i.e., the person is seen as having been forced into the behavior by the situation. Ex. Considering the same example if the late was caused by an accident on the road that tied up traffic on the road. This would be an external attribution. Distinctiveness: It refers to whether an individual behaves differently in different situations. We want to know whether the behavior is unusual. If the behavior is unusual it can be because of external attribution.

 Whereas if the behavior is usual we can judge it as internal attribution. Consensus: If everyone in the same situation behaves in the same way, then the behavior shows consensus. Consistency: This refers to consistency in persons action. Does the person responds the same way over time?

Attribution Theory

Errors and Biases in Attributions

Fundamental Attribution Error The tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgments about the behavior of others.

Errors and Biases in Attributions (cont d)

Self-Serving Bias The tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factors.

Frequently used shortcuts in Judging others

Selective Perception: Any characteristic that makes a person, object, or event stand out will increase the probability that it will be perceived. This is because we don t assimilate everything we see, only certain stimuli can be taken in. This involves a risk of drawing an inaccurate picture,

Frequently Used Shortcuts in Judging Others Halo Effect

Drawing a general impression about an individual on the basis of a single characteristic

Contrast Effects Evaluation of a person s characteristics that are affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics.

Projection

Frequently Used Shortcuts in Judging Others

Stereotyping Judging someone on the basis of one s perception of the group to which that person belongs.

Attributing one s own characteristics to other people.

Specific Applications in Organizations

Employment Interview
Perceptual biases of raters affect the accuracy of interviewers judgments of applicants.

Performance Expectations
Self-fulfilling prophecy :The lower or higher performance of employees reflects preconceived leader expectations about employee capabilities.

 Ethnic Profiling
A form of stereotyping in which a group of individuals is singled out typically on the basis of race or ethnicity for intensive inquiry, scrutinizing, or investigation.

Specific Applications in Organizations (cont d)

Performance Evaluations
Appraisals are often the subjective (judgmental) perceptions of appraisers of another employee s job performance.

Employee Effort
Assessment of individual effort is a subjective judgment subject to perceptual distortion and bias.

Decision Making

The Link Between Perceptions and Individual Decision Making

Decisions Choices made from among alternatives developed from data perceived as relevant.

Perception of the decision maker

Outcomes

Steps in the Rational DecisionMaking Model

1. Define the problem. 2. Identify the decision criteria. 3. Allocate weights to the criteria. 4. Develop the alternatives. 5. Evaluate the alternatives. 6. Select the best alternative.
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Assumptions of the Rational Decision-Making Model

Rational DecisionMaking Model Describes how individuals should behave in order to maximize some outcome. Model Assumptions Problem clarity Known options Clear preferences Constant preferences No time or cost constraints Maximum payoff

 Some assumptions to the model: 1. Problem clarity: Here the decision maker is assumed to have complete information regarding the decision situation. 2. Known options: Here the decision maker knows all the possible alternatives and consequences as well. 3. Clear preferences: Assumption here is that the criteria can be ranked and weighted to reflect their importance. 4. Constant preferences: It s assumed that the weight assigned to the various criteria will be constant overtime.

5. No time or cost constraints: The decision maker can obtain full information about criteria and alternatives because it s assumed that there is no time or cost constraints. 6. Maximum payoff: The rational decision maker will choose the alternative that yields the highest perceived value. The decision makers need creativity to produce normal and useful ideas.

The Three Components of Creativity Creativity

The ability to produce novel and useful ideas. Three-Component Model of Creativity Proposition that individual creativity requires expertise, creative-thinking skills, and intrinsic task motivation.
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Source: T.M. Amabile, Motivating Creativity in Organizations, California Management Review, Fall 1997, p. 43.

Three - Component Model of Creativity: Expertise: It is the foundation for all creative work. The potential for creativity is enhanced when individuals have abilities, knowledge, proficiencies in their field. Creative thinking skills: The ability to think differently i.e. innovative thinking as well as talent to see familiar in different light. Task Motivation: The desire to work on something because its interesting, exciting, personally challenging.

How Are Decisions Actually Made in Organizations

Bounded Rationality Individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.

 Bounded rationality: The capacity of human mind for formulating and solving complex problems is far too small to meet the requirements for full rationality.

How Are Decisions Actually Made in Organizations (cont d)

How/Why problems are identified
Visibility over importance of problem
Attention-catching, high profile problems Desire to solve problems

Self-interest (if problem concerns decision maker)

 Alternative Development
Satisficing: seeking the first alternative that solves problem. Engaging in incremental rather than unique problem solving through successive limited comparison of alternatives to the current alternative in effect.

Common Biases and Errors

Overconfidence Bias
Believing too much in our own decision competencies.

Anchoring Bias
Fixating on early, first received information.

Confirmation Bias
Using only the facts that support our decision.

Availability Bias
Using information that is most readily at hand.

 Representative Bias
Assessing the likelihood of an occurrence by trying to match it with a preexisting category.

Common Biases and Errors

Escalation of Commitment
Increasing commitment to a previous decision in spite of negative information.

Randomness Error
Trying to create meaning out of random events by falling prey to a false sense of control or superstitions.

Hindsight Bias
Falsely believing to have accurately predicted the outcome of an event, after that outcome is actually known.

Intuition
Intuitive Decision Making
An unconscious process created out of distilled experience.

Conditions Favoring Intuitive Decision Making

A high level of uncertainty exists There is little precedent to draw on Variables are less scientifically predictable Facts are limited Facts don t clearly point the way Analytical data are of little use Several plausible alternative solutions exist Time is limited and pressing for the right decision

Decision-Style Model

 Intuitive decision making: Its an unconscious process created out of distilled experience. There are 8 conditions when people are most likely to use intuitive decision making: 1. When a high level of uncertainty exist 2. When there are few examples to draw on, 3. When variables are less scientifically predictable

4. 5. 6. 7. 8.

When facts are limited When facts don t clearly point the way When analytical data are of little use When there are various possible solutions When time is less and there is pressure to come up with the appropriate decision.

Organizational Constraints on Decision Makers

Performance Evaluation
Evaluation criteria influence the choice of actions.

Reward Systems
Decision makers make action choices that are favored by the organization.

Formal Regulations
Organizational rules and policies limit the alternative choices of decision makers.

System-imposed Time Constraints

Organizations require decisions by specific deadlines.

Organizational Constraints on Decision Makers

Performance Evaluation
Evaluation criteria influence the choice of actions.

Reward Systems
Decision makers make action choices that are favored by the organization.

Formal Regulations
Organizational rules and policies limit the alternative choices of decision makers.

 System-imposed Time Constraints

Organizations require decisions by specific deadlines.

Historical Precedents
Past decisions influence current decisions.

Cultural Differences in Decision Making

Problems selected Time orientation Importance of logic and rationality Belief in the ability of people to solve problems Preference for collect decision making

Ethics in Decision Making

Ethical Decision Criteria
Utilitarianism
Seeking the greatest good for the greatest number.

Rights
Respecting and protecting basic rights of individuals such as whistleblowers.

Justice
Imposing and enforcing rules fairly and impartially.

Ethics in Decision Making

Ethics and National Culture
There are no global ethical standards. The ethical principles of global organizations that reflect and respect local cultural norms are necessary for high standards and consistent practices.

Ways to Improve Decision Making

1. Analyze the situation and adjust your decision making style to fit the situation. 2. Be aware of biases and try to limit their impact. 3. Combine rational analysis with intuition to increase decision-making effectiveness. 4. Don t assume that your specific decision style is appropriate to every situation.

 Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies.

 Focus on goals.

Toward Reducing Bias and Errors

Clear goals make decision making easier and help to eliminate options inconsistent with your interests.

Look for information that disconfirms beliefs.

Overtly considering ways we could be wrong challenges our tendencies to think we re smarter than we actually are.

Source: S.P. Robbins, Decide & Conquer: Making Winning Decisions and Taking Control of Your Life (Upper Saddle River, NJ: Financial Times/Prentice Hall, 2004), pp. 16468.

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 Don t try to create meaning out of random events.

Don t attempt to create meaning out of coincidence.

Increase your options.

The number and diversity of alternatives generated increases the chance of finding an outstanding one.

Cultural Differences in Decision Making

Problems selected Time orientation Importance of logic and rationality Belief in the ability of people to solve problems Preference for collect decision making

Ethics in Decision Making

Ethical Decision Criteria
Utilitarianism
Seeking the greatest good for the greatest number.

Rights
Respecting and protecting basic rights of individuals such as whistleblowers.

Justice
Imposing and enforcing rules fairly and impartially.

Ethics in Decision Making

Ethics and National Culture
There are no global ethical standards. The ethical principles of global organizations that reflect and respect local cultural norms are necessary for high standards and consistent practices.

Ways to Improve Decision Making

1. Analyze the situation and adjust your decision making style to fit the situation. 2. Be aware of biases and try to limit their impact. 3. Combine rational analysis with intuition to increase decision-making effectiveness. 4. Don t assume that your specific decision style is appropriate to every situation. 5. .

 Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies

Toward Reducing Bias and Errors

Focus on goals.
Clear goals make decision making easier and help to eliminate options inconsistent with your interests.

Look for information that disconfirms beliefs.

Overtly considering ways we could be wrong challenges our tendencies to think we re smarter than we actually are.
Source: S.P. Robbins, Decide & Conquer: Making Winning Decisions and Taking Control of Your Life (Upper Saddle River, NJ: Financial Times/Prentice Hall, 2004), pp. 16468.

EXHIBIT 56

 Don t try to create meaning out of random events.

Don t attempt to create meaning out of coincidence.

Increase your options.

The number and diversity of alternatives generated increases the chance of finding an outstanding one.