What Is Perception, and Why Is It

Important?
••People’s
People’s behavior
behavior isis
Perception based on their
based on their
A process by which perception
perception of of what
what
individuals organize reality
reality is, is, notnot on on
and interpret their reality
sensory impressions reality itself.
itself.
in order to give ••The
The world
world as as itit isis
meaning to their perceived
perceived isis the
the world
world
environment. that
that isis behaviorally
behaviorally
important.
important.
 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:
Distinctiveness:shows
showsdifferent
differentbehaviors
behaviorsinindifferent
differentsituations.
situations.
Consensus:
Consensus:response
responseisisthe
thesame
sameasasothers
otherstotosame
samesituation.
situation.
Consistency:
Consistency:responds
respondsininthe
thesame
sameway
wayover
overtime.
time.
Attribution Theory
Errors and Biases in Attributions

Fundamental Attribution Error

The tendency to underestimate the In general, we
influence of external factors and tend to blame the
overestimate the influence of internal person first, not
factors when making judgments the situation.
about the behavior of others.
We blame people first, not the
situation
Errors and Biases in Attributions

Self-Serving Bias
The tendency for individuals to attribute their own successes to
internal factors while putting the blame for failures on external
factors.
It is “our” success but “their” failure
Frequently Used Shortcuts in
Judging Others
Selective Perception
People selectively interpret what they see on the basis
of their interests, background, experience, and
attitudes.
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
 Frequently Used Shortcuts in
Judging Others
Projection
Attributing one’s own characteristics to other
people.
Stereotyping
Judging someone on the basis of one’s
perception of the group to which that
person belongs.

Profiling - A form of stereotyping in which

members of a group are singled out for
intense scrutiny based on a single, often
racial, trait.
Specific 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

Problem
A perceived discrepancy
between the current state
of affairs and a desired Perception
Perception
state. of
ofthe
the
decision
decision
Decisions maker
maker
Choices made from
among alternatives
developed from data
perceived as relevant.
Outcomes
Perceptions and Individual Decision
Making
• Problem
• A perceived discrepancy between the
current state of affairs and a desired
state
• Decisions
• Choices made from among alternatives
developed from data
• Perception Linkage:
• All elements of problem identification
and the decision-making process are
influenced by perception.
• Problems must be recognized
• Data must be selected and evaluated
Decision-Making Models in
Organizations
• Rational Decision Making
• The “perfect world” model: assumes complete information, all options known, and
maximum payoff
• Six-step decision-making process
• Bounded Reality
• The “real world” model: seeks satisfactory and sufficient solutions from limited
data and alternatives
• Intuition
• A non-conscious process created from distilled experience that results in quick
decisions
• Relies on holistic associations
• Affectively charged – engaging the emotions
Assumptions of the Rational
Decision-Making Model

Rational Decision-
Model
ModelAssumptions
Assumptions
Making Model
•• Problem
Problemclarity
clarity
Describes how
individuals should •• Known
Knownoptions
options
behave in order to •• Clear
Clearpreferences
preferences
maximize some •• Constant
outcome. Constant
preferences
preferences
•• No
Notime
timeor
orcost
cost
constraints
constraints
•• Maximum
Maximumpayoff
payoff
Steps in the Rational Decision-
Making 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.
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.
How Are Decisions Actually Made in
Organizations?
• 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 ability to make good decisions.

• Anchoring Bias
• Using early, first received information as the basis for making subsequent
judgments.

• Confirmation Bias
• Using only the facts that support our decision.
 Common Biases and Errors
• Availability Bias
• Using information that is most readily at hand.
• Recent
• Vivid

• Confirmation Bias
• Assessing the likelihood of an occurrence by trying to match it with a preexisting
category using only the facts that support our decision.

• Risk Aversion
• Risk aversion is a preference for a sure outcome over a gamble with higher or equal
expected value. Conversely, the rejection of a sure thing in favor of a gamble of lower
or equal expected value is known as risk-seeking behavior.
Common Biases and Errors
• Escalation of Commitment
• In spite of new negative information, commitment actually increases!

• Randomness Error
• Creating meaning out of random events

• Hindsight Bias
• Looking back, once the outcome has occurred, and believing that you
accurately predicted the outcome of an event
Individual Differences in
Decision Making
Personality
• Conscientiousness may effect escalation of commitment
• Achievement strivers are likely to increase commitment
• Dutiful people are less likely to have this bias
• Self-Esteem
• High self-esteem people are susceptible to self-serving
bias
Gender
• Women analyze decisions more than
men – rumination

• Mental Ability
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 collective decision making
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
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.
• 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.
 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.
Improving Creativity in Decision
Making
• Who has the greatest creative potential?
• Those who score high in Openness to Experience
• People who are intelligent, independent, self-confident, risk-taking, have an
internal locus of control, tolerant of ambiguity, low need for structure, and
who persevere in the face of frustration
The Three Component Model of Creativity
Proposition that
individual creativity
results from a mixture
of three components Intrinsic
Task Expertise
Motivation
• Expertise is the foundation
• Creative-Thinking Skills are the
personality characteristics
Creative-
associated with creativity
Thinking Skills
• Intrinsic Task Motivation is the
desire to do the job because of
its characteristics