Perception and

Individual Decision Making

By :Dr Ipseeta Satpathy, D.Litt
Professor OB & HRM
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.

By:Dr Ipseeta
Factors influencing perception
 Personal characteristics that affect perception include
a person’s attitude,personality, motives, interests, past
experience, and expectations.
 EX: If you expect police officers to be authoritative,
young people to be lazy, or individuals holding public
office to be unscrupulous, you may perceive them as
such regardless of their actual traits.

By:Dr Ipseeta
Conti…..
 Characteristics of the target being observed can affect
what is perceived . Loud people are more likely to be
noticed in a group than quiet ones. So, too, are extremely
attractive or unattractive individuals.
 The context in which we see objects or events is also
important . The time at which an object or event is seen
can influence attention , as can location, light, heat, or any
number of situational factors. I may not notice a 22 year
old female in an evening gown and heavy make-up at a
nightclub on Saturday night yet the same woman will
catch attention if she is so attired for her classes.

By:Dr Ipseeta
Person Perception: Making Judgments
About Others

Attribution Theory
When individuals observe behavior, they attempt to
determine whether it is internally or externally caused.
Internally caused behaviors are those that are believed
to be under the personal control of the individual. Ex:
Employee coming late to work
Externally caused behavior is seen as resulting from
outside cause .
Ex: Late due to automobile accident.

By:Dr Ipseeta
Factors of attribution theory
 Distinctiveness: refers to weather an individual displays
different behaviors in different situations.Ex if a worker is
always late then it is internal,if a worker is rarely late than
it is an external attribution .
 Consensus: response is the same as others to same
situation.Ex all the employees taking the same route were
also late then external attribution,if they all reached on
time except one it is internal.
 Consistency: responds in the same way over time.Ex
Coming in 10 mins late for work is not perceived
 in the same way for the employee for whom it is an
unusual case as it is for the employee for whom it is part
of a routine pattern By:Dr Ipseeta
 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.
Ex: A sales manager attributes the poor performance of
a sales agent to laziness rather than to the innovative
product line introduced by a competitor.

By:Dr Ipseeta
 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.

By:Dr Ipseeta
Frequently Used Shortcuts in Judging
Others

Selective Perception
People selectively interpret what they see on the
basis of their interests, background, experience,
and attitudes.
EX: Dearborn and Simon's …. Perceptual study
involve 23 business executives.They read the case
describing the organisation and activities of a steel
company.

By:Dr Ipseeta
Frequently Used Shortcuts in Judging
Others
Halo Effect
Drawing a general impression
about an individual on the
basis of a single characteristic
such as intelligence,sociability
or appearance.
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.Ex a
candidate is likely to receive a more
favourable evaluation if preceded by
mediocore applicants
By:Dr Ipseeta
Frequently Used Shortcuts in Judging
Others
Projection Stereotyping
Attributing one’s own Judging someone on the
characteristics to other basis of one’s perception of
people.If you are the group to which that
honest you take it for person belongs.
granted that others are
EX: All Muslims are
also equally honest.
terrorist( Actually not)

By:Dr Ipseeta
Specific Applications in Organizations
 Employment Interview
 Information elicited early in the interview carries greater weight
than does information elicited later.
 Performance Expectations
 Self-fulfilling prophecy (pygmalion effect): The lower or higher
performance of employees reflects preconceived leader expectations
about employee capabilities.If a manager expects big things from the
people, they are not likely to put them down .
 Ex Sweden’s Volvo Car Corporation
 Ethnic Profiling
 A form of stereotyping in which a group of individuals are singled
out—typically on the basis of race or ethnicity—for intensive inquiry,
scrutinizing, or investigation.
 Ex: In Great Britain people from Ireland are considered as terrorist

By:Dr Ipseeta
 Specific Applications in Organizations
(cont’d)
 Performance Evaluations

 An employee’s future is closely tied to her appraisal –: Promotions ,

pay rises etc
 Employee Effort
 .
 An individual’s future in an organization is usually not dependent on
performance alone but also on the level of an employees' effort
Ex: A teacher frequently considers how hard you try in a course as
well as how you perform in examinations.

By:Dr Ipseeta
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. Once a
problem is identified , the search for criteria and
alternatives begins .

By:Dr Ipseeta
How Are Decisions Actually Made in
Organizations (cont’d)
 How does bounded rationality work
 Once a problem is identified, the search for criteria
and alternative begins.
 But the list of criteria is likely to be far from
exhaustive .
 The decision maker will identify a limited list made up
of the more conspicuous choices. These are the
choices that are easy to find and that tend to be highly
visible . In most cases , they will represent familiar
criteria and previously tried-and-true solutions. Once
this limited set of alternatives is identified , the
decision maker will begin reviewing them .
By:Dr Ipseeta
Conti…..
 But not all the alternatives will be carefully evaluated .
Instead, the decision maker will bring alternatives that
differ only in a relatively small degree. Following along
familiar and well-worn paths, the decision maker
proceeds to review alternatives only until he or she
identifies an alternative that is “ good enough” –one that
meets an acceptable level of performance. The first
alternative that meets the “good enough” criterion ends
the search.

By:Dr Ipseeta
 Common Biases and Errors
 Overconfidence Bias
 Believing too much in our own decision competencies.
 From an organizational stand point those individuals whose
intellectual and interpersonal abilities are weakest are most likely
to overestimate their performance.
 Anchoring Bias
 Fixating on early, first received information.Anchors are widely
used by professional people such as advertising , writers,
managers,politicians where persuasion skills are important .

 Confirmation Bias
 We seek out information that reaffirms our past choices and
contradicts past judgements .When we go to collect evidence we
tend to seek out places that are more likelyBy:Dr
to tell us what we
Ipseeta
Conti…
 Availability Bias
 Using information that is most readily at hand.
 Many people suffer from fear of flying than fear of driving in a
car . The reason is that many people think flying is more
dangerous. Ex Managers while doing annual performance
appraisals tend to give more weight to recent behaviours of an
employee than those behaviours of six or nine months ago.
 Representative Bias
 Assessing the likelihood of an occurrence by trying to match it
with a preexisting category.
 Managers for example frequently predict the performance of a
new product by relating it to a previous products success.Ex
Krispy Kreme CEO Scott launched roated coffee.
By:Dr Ipseeta
Common Biases and Errors
 Escalation of Commitment
 It refers to staying with a decision even when there is clear
evidence that it’s wronge.
 Randomness Error
 Trying to create meaning out of random events by falling a prey
to a false sense of control or superstitions.
 Ex: I always wear my lucky tie to important meetings
 Hindsight Bias
 Falsely believing to have accurately predicted the outcome of an
event, after that outcome is actually known.
 Ex: Some people seem to have been sure about the inevitability
of who would win the IPL on the day ,after the game than
they were the day before
By:Dr Ipseeta
Ethics in Decision Making
 Ethical Decision Criteria
 Utilitarianism
 Seeking the greatest good for the greatest number.
 By maximizing profit business executives can argue , he is securing the
greatest good for the greatest number.
 Rights
 Respecting and protecting basic rights of individuals such as
whistleblowers.
 Whistle blowers are individuals who report unethical or illegal
practices by their employer to outsiders .
 Justice
 Imposing and enforcing rules fairly and impartially.
 It justifies paying people the same wage for a given job.

By:Dr Ipseeta
Thank you…..

By:Dr Ipseeta