LECTURE 2

Perception and decision makin

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Objectives

1. Describe how perception is inherently subjective and how

characteristics of the perceiver, the target, and the situation
can influence perceptions.
2. Be aware of biases that can influence person perception
without perceivers being aware of their influences.
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Objectives

3. Appreciate why the effective management of diversity is an

imperative for all kinds of organizations and the steps that
organizations can take to ensure that different kinds of people
are treated fairly and that the organization is able to take
advantage of all they have to offer.
4. Understand how organizational learning can improve decision
making and explain the steps involved in creating a learning
organization.
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Contents

1. PERCEPTION
2. DECISION MAKING
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PART 1: Perception
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1.1. What is perception?

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Perception definition

A process by which individuals organize and interpret their

sensory impressions in order to give meaning to their
environment.

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

important.

Understanding and managing OB, 6th ed

 The nature of perception

▸ The perceiver is the person trying to interpret some observation

he or she has just made, or the input from his or her senses.
▸ The target of perception is whatever the perceiver is trying to
make sense of. The target can be another person, a group of
people, an event, a situation, an idea, a noise, or anything else the
perceiver focuses on. In organizational behavior, we are often
concerned with person perception, or a nother pers on a s the ta rget
of perception.
▸ The situation is the context in which perception ta kes place—a
comm ittee meeting, the ha llwa y, in front of the office coffee
m a chine, a nd s o on.
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Factors Influencing Perception

Perceiver

Situation Target

Perception
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1.2Characteristics
of the Perceiver
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Characteristics of the Perceiver

▸ Perceivers do not passively process information . Their

experience or knowledge (schemas), their needs and
desires (motivational states), and their feelings (moods)
filter information into their perceptions of reality. We now
consider the way each of these characteristics of the
perceiver affects perception.
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Characteristics of the Perceiver

Characteristics of the perceiver that affect perception

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Characteristics of the Perceiver

▸ Schema: The perceiver’s knowledge base

Our past experiences are organized into schemas, abstract
knowledge structures stored in memory that allow people to
organize and interpret information about a given target of
perception.
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Characteristics of the Perceiver

▸ The perceiver’s motivational state: The perceiver’s needs,

values, and desires at the time of perception—influences
his or her perception of the target.
▸ The perceiver’s moods: How the perceiver feels at the time
of perception—can also influence perception of the target.
▸ When employees are in a positive mood, they are likely to
perceive their coworkers, supervisors, subordinates, and
even their jobs in a more positive light than they would
when they are in a negative mood
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1.3Characteristics
of the target and situation
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Characteristics of the target and situation

▸ Ambiguity of the target : Refers to a lack of clearness or

definiteness . It is difficult for a perceiver to determine what
an ambiguous target is really like.

When the nature of a target is clear, different perceivers

have little difficulty forming similar perceptions of the
target that are close to its real nature. But when a target is
ambiguous, the perceiver needs to engage in a lot more
interpretation and active construction of reality to form a
perception of the target.
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Characteristics of the target and situation

▸ Social status is a person’s real or perceived position in

society or in an organization. In the minds of many people,
targets with a relatively high status are perceived to be
smarter, more credible, more knowledgeable, and more
responsible for their actions than lower-status targets.

A lower-status member of the organization who is more

knowledgeable than anyone else about the issue at hand is
likely to lack credibility because of his or her status .
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Characteristics of the target and situation

▸ Impression management is an attempt to control the

perceptions or impressions of others.45 Just as a
perceiver actively constructs reality through his or her
perceptions, a target of perception can also play an active
role in managing the perceptions that others have of him
or her.

People in organizations use several impression -

management tactics to affect how others perceive them.
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Characteristics of the target and situation

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Characteristics of the target and situation

▸ Information provided by the situation

The situation —the context or environment surrounding the
perceiver and the target—provides the perceiver with
additional information to use in interpreting the target.
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Characteristics of the target and situation

▸ Standing out in the crowd

The salience of the target in the situation is the extent to
which the target stands out in a group of people or things.
Salience, in and of itself, should not affect how a target is
perceived.
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Standing out in the crowd

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1.4Bias and problems in

perception
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Bias and problems in perception

▸A bias is a s ys tematic tendency to us e or interpret

information a bout a target in a wa y that res ults in
ina ccura te perceptions . When bia s a nd problems in pers on
perception exis t, perceivers form ina ccurate perceptions
of a ta rget.
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Bias and problems in perception

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Bias and problems in perception

▸ Primacy effects : is the biased perception that results

when the first pieces of information that people have
about some target have an inordinately large influence on
their perception of the target.
A common problem in interviews or in an evaluation of
long-term members of an organization.
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Bias and problems in perception

▸ A contrast effect is the biased perception that results when

perceptions of a target person are distorted by the perceiver’s
perception of others in the situation .
A manager’s perception of a subordinate whose performance
is average is likely to be less favorable if that subordinate is
in a group of very high performers than it would if that
subordinate were in a group of average or low performers .
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Bias and problems in perception

▸ A halo effect
The biased perception that results when the perceiver’s
general impression of a target distorts his or her
perception of the target on specific dimensions .

Halos can be negative too: a supervisor who has a

negative overall impression of a subordinate may
mistakenly perceive that the subordinate is
uncooperative and spends too much time on the
telephone.
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Bias and problems in perception

▸ Similar -to-me effects : It is a fact of life that people tend to

like others similar to themselves.

During a performance appraisal, for example, supervisors

may rate subordinates similar to them more positively than
they deserve. Likewise, interviewers may evaluate potential
candidates similar to themselves more positively than they
rate candidates who are dissimilar .
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Bias and problems in perception

▸ Harshness, Leniency, and Average tendency biases:

When rating a subordinate’s performance, some
supervisors tend to be overly harsh, whereas some are
overly lenient.

High performers do not receive appropriate recognition and

rewards for their superior accomplishments, and low
performers do not receive the constructive feedback they
need to improve performance
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Bias and problems in perception

▸ Knowledge-of-predictor bias:
If coworkers, managers, or others in the organization know
a person’s standing on a predictor of performance, the
information may bias their perceptions of the person. This
problem is known as knowledge-of-predictor bias.
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1.5Attribution Theory
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Person Perception: Attribution Theory

▸ Attribution : An explanation of the cause of behavior.

▸ Attribution theory: A group of theories that des cribes how

people explain the ca us es of beha vior. Attribution theory is
interes ted in why people beha ve the way they do a nd what
ca n be done to cha nge their beha vior.
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Person Perception: Attribution Theory

Types of attributions
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Person Perception: Attribution Theory

Suggests that perceivers try to “attribute” the observed

behavior to a type of cause:

▹ Internal Attribution: An a ttribution that a s s igns the

ca us e of beha vior to s ome cha ra cteris tic of the ta rget.
▹ Externa l Attributions : An a ttribution tha t a s s igns the
ca us e of beha vior to outs ide forces .
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Attribution Errors

▸ Fundamental Attribution Error

The tendency to underestimate the influence of external
factors and overestimate that of internal factors .

▸ Self-Serving Bias
Occurs when individuals overestimate their own (internal)
influence on successes and overestimate the external
influences on their failures .
2. Decision making
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The Link Between Perception and Decision Making

Decision making: The process by which members of an

organization choose a specific course of action to respond to
both opportunities and problems

Perception influences:
 Awa renes s tha t a problem exis ts
 The interpretation a nd eva lua tion of informa tion
 Bia s of a na lys is a nd conclus ions
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Types of decisions

▸ Nonprogrammed decision making: Decision making in

response to novel opportunities and problems.
▸ Programmed decision making: Decision making in
response to recurring opportunities and problems.
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Ethical Decision Making

One criterion of a satisfactory decision in any organization is that

it be ethical. Ethical decisions promote well-being and do not
cause harm to members of an organization or to other
people affected by an organization’s activities .

 Utilitarian : Provide the grea tes t good for the grea tes t number
 Rights: Ma ke decis ions cons is tent with funda mental liberties
a nd privileges
 Justice : Impos e a nd enforce rules fa irly a nd impartially s o
tha t there is equa l dis tribution of benefits a nd cos ts
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The Decision
-Making Process

Classical decision -making model: A prescriptive approach

based on the assumptions that the decision maker has all the
necessary information and will choose the best possible
solution or response.

According to the classical model, a decision maker should

choose how to respond to opportunities and problems by
following these four steps:
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The Decision
-Making Process

1. List all the alternative courses of action from which the final
decision will be made: these alternatives represent different
responses to the problem or the opportunity .
2. List the consequences of each alternative: the consequences
are what would occur if a given alternative is selected.
3. Considering personal preferences for each alternative and its
set of consequences, rank the alternatives from most
preferred to least preferred.
4. Select the alternative that will result in the most preferred set
of consequences
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Assumptions of the Model

▸ Complete knowledge of the situation

▸ All relevant options are known in an unbiased manner
▸ The decision-maker seeks the highest utility
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Bounded Rationality

 The limited information -processing capability of human

beings makes it impossible to assimilate and understand all
the information necessary to optimize .
 So people seek solutions that are satisfactory and
sufficient, rather than optimal (they “satisfice”) .
 Bounded rationality is constructing simplified models that
extract the essential features from problems without
capturing all their complexity .
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Sources of error in decision making

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Group decision making

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Organizational learning
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Creativity in Decision Making

The ability to produce novel and useful ideas

Helps people to:

 Better unders ta nd the problem
 See problems others ca n’t s ee
 Identify a ll via ble a lterna tives
 Identify a lternatives tha t a ren’t rea dily a ppa rent
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Three-Component-Model of Creativity

Expertise

Creative- Intrinsic
Thinking Task
Skills Motivation
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Implications for Managers

Perception : To increase productivity, influence workers’

perceptions of their jobs
To improve decision making :
1. Analyze the situation
2. Adjust your decision approach
3. Be aware of biases and minimize their impact
4. Combine rational analysis with intuition
5. Try to enhance your creativity
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Topic for debate

Decision making is one of the most important processes in

all organizations. Now that you have a good understanding of
decision making, debate the following issue.
▸ Tea m A. Individua ls genera lly ma ke better decis ions than
groups .
▸ Tea m B. Groups genera lly ma ke better decis ions than
individua ls .
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Recap