Perception and Individual Decision Making PDF

TOPIC 4: PERCEPTION AND INDIVIDUAL DECISION MAKING FUNDAMENTAL OF PERCEPTION What Is Perception? Perception is a process by which we organize and interpret sensory impressions to give meaning to our environment. Why is perception important in the study of Organizational Behavior (OB)? It is importa...

TOPIC 4: PERCEPTION AND INDIVIDUAL DECISION MAKING FUNDAMENTAL OF PERCEPTION What Is Perception? Perception is a process by which we organize and interpret sensory impressions to give meaning to our environment. Why is perception important in the study of Organizational Behavior (OB)? It is important because people’s 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. In other words, our perception becomes the reality from which we act. Factors That Influence Perception - Perceiver (Attitudes/Motives/Interest/Experience/Expectations) - Object or target being perceived. Novelty/Motion/Sounds/Size/Background/Proximity/Similarity) - Situation in which the perception is made (Time/Work setting/Social setting) (see Exhibit 5-1 Page 174). Perceiver - When you look at a target, your interpretation of what you see is influenced by your personal characteristics—attitudes, personality, motives, interests, past experiences, and expectations. In some ways, we hear what we want to hear and we see what we want to see—not because it’s the truth, but because it conforms to our thinking. For instance, Supervisors perceived employees who started work earlier in the day as more conscientious and therefore as higher performers; however, supervisors who were night owls themselves were less likely to make that erroneous assumption. Some perceptions created by attitudes like these can be counteracted by objective evaluations, but others can be more insidious. For instance, Observer perceptions of a recent shooting in New York. There were two eyewitnesses—one said a police officer chased and shot a fleeing man; the other said a handcuffed man lying on the ground was shot. Neither perceived the situation correctly: The man was attempting to attack a police officer with a hammer when he was shot by another officer Target The characteristics of the target also affect what we perceive. Because we don’t look at targets in isolation, the relationship of a target to its background influences perception, as does our tendency to group close things and similar things together. We can perceive members of any group that has clearly distinguishable characteristics as alike in other, often unrelated ways. These assumptions can be harmful, as when people who have criminal records are prejudged in the workplace even when it is known they were wrongly arrested. Sometimes differences can work in our favor, though, such as when we are drawn to targets that are different from what we expect. For instance, Participants in a recent study respected a professor wearing a T-shirt and sneakers in the classroom more than the same professor dressed traditionally. The professor stood out from the norm for the classroom setting and was therefore perceived as an individualist. Context/Situation The time at which we see an object or event can influence our attention, as can location, light, heat, or situational factors. For instance, You may not notice someone dressed up for a formal event that you attended on a Saturday night. Yet if you were to notice that person dressed the same way for your Monday morning management class, he or she would likely catch your attention, if the students do not normally wear formal attire to class. Neither the perceiver nor the target has changed between Saturday night and Monday morning, but the situation is different. People are usually not aware of the factors that influence their view of reality. In fact, people are not even that perceptive about their own abilities. Thankfully, awareness and objective measures can reduce our perception distortion. For instance, When people are more aware of their own racial biases, they are more motivated to control their own prejudice and more attuned to perceiving their own biases. PERSON PERCEPTION: MAKING JUDGEMENT ABOUT OTHERS Attribution Theory When we observe people, we attempt to explain their behavior. Our perception and judgment of a person’s actions are influenced by the assumptions we make about that person’s state of mind. Attribution theory tries to explain the ways we judge people differently depending on the meaning we attribute to a behavior. For instance, Consider what you think when people smile at you. Do you think they are cooperative, exploitative, or competitive? We assign meaning to smiles and other expressions in many ways. Attribution theory also tries to explain what we do as a result of our attributions. Attribution theory - Suggests that when we observe an individual’s behavior, we attempt to determine whether it was internally or externally caused. That determination depends largely on three factors: - (1) distinctiveness - (2) consensus - (3) consistency. Internally caused behaviors - are those an observer believes to be under the personal behavioral control of individual. Externally caused behavior is what we imagine the situation forced the individual to do. If an employee is late for work, you might attribute that to his overnight partying and subsequent oversleeping. (Internal attribution) But if you attribute his lateness to a traffic snarl (External attribution) Distinctiveness - Refers to whether an individual displays different behavior in different situations. Is the employee who arrives late today also one who regularly “blows off” other kinds of commitments? What we want to know is whether this behavior is unusual. If it is, we are likely to give it an external attribution. If it is not, we will probably judge the behavior to be internal. If everyone who faces a similar situation responds in the same way, we can say the behavior shows consensus. The behavior of our tardy employee meets this criterion if all employees who took the same route were also late. From an attribution perspective, if consensus is high, you would probably give an external attribution to the employee’s tardiness, whereas if other employees who took the same route made it to work on time, you would attribute his lateness to an internal cause. An observer looks for consistency in a person’s actions. Does the person respond the same way over time? Coming in 10 minutes late for work is not perceived the same for an employee who has not been late for several months as for an employee who is late three times a week. The more consistent the behavior, the more we are inclined to attribute it to internal causes. Exhibit 5-2 summarizes the key elements in attribution theory. For instance, That if an employee, Katelyn, generally performs at about the same level on related tasks as she does on her current task (low distinctiveness), other employees frequently perform differently— better or worse—than Katelyn on that task (low consensus), and Katelyn’s performance on this current task is consistent over time (high consistency), anyone judging Katelyn’s work will likely hold her primarily responsible for her task performance (internal attribution). Errors or biases distort attributions. When we make judgments about the behavior of other people, we tend to underestimate the influence of external factors and overestimate the influence of internal or personal factors. Example: Sales manager attributes the poor performance of her sales agents to laziness rather than to a competitor’s innovative product line. Individuals and organizations tend to attribute their own successes to internal factors such as ability or effort while blaming failure on external factors such as bad luck or difficult coworkers. People tend to attribute ambiguous information as relatively flattering, accept positive feedback, and reject negative feedback. This is called self-serving bias. Cultural differences in perception are mixed-Collectivist cultures making external attributions more frequently than internal attributions. A study of customer service employees from the same hotel chain in China and Canada examined the different reactions to mistreatment by customers based on cultural values. Analysis revealed that individualism and collectivism accounted for the reactions. North American employees responded with direct, active, and target-specific reactions such as acts of sabotage toward the source of the mistreatment. However, East Asian employees were more indirect, passive, and target general in their response, including the withdrawal of organizational citizenship behavior from customers as whole. ** The concept of attribution theory significantly advances our understanding of person perception by helping us identify why we draw certain conclusions from people’s behavior. Common Shortcuts in Judging Others Shortcuts for judging others often allow us to make accurate perceptions rapidly and provide valid data for making predictions. However, they can and do sometimes result in significant distortions. Selective Perception Any characteristic that makes a person, an object, or an event stand out will increase the probability we will perceive it. Based on things related/important to us: - Interests - Background - Experience - Attitudes. Halo and Horns Effects Halo Effect when we draw a positive impression about an individual based on a single characteristic like: - Intelligence - Sociability - Appearance The horns effect, on the other hand, is when we draw a negative impression from a single characteristic. Contrast Effects The perception is made base on comparison. Example: When interviewer make a comparison during interview session among candidate. Stereotyping When we judge someone based on our perception of the group to which he or she belongs. Example: One study that controlled for a wide array of factors (such as aggravating or mitigating circumstances) showed that the degree to which black defendants in murder trials looked “stereotypically black” essentially doubled their odds of receiving a death sentence if convicted. Example: Another study found that students tended to assign higher scores for leadership potential and effective leadership to whites than to minorities, supporting the stereotype of whites as better leaders. One problem with stereotypes is that they are widespread generalizations, although they may not contain a shred of truth when applied to a particular person or situation. We must monitor ourselves to make sure we’re not unfairly applying a stereotype in our evaluations and decisions. Stereotypes are an example of the warning, “The more useful, the more danger from misuse.” It should be obvious by now that our perceptions, many of which are near instantaneous and without conscious deliberation, color our outlook. Sometimes they have little impact on anyone, but more often our perceptions greatly influence our decisions. The first step toward increasing the effectiveness of organizational decision making is to understand the perception process on an individualized level. Specific Applications of Shortcuts in Organizations Employment Interview Few people are hired without an interview. But interviewers make perceptual judgments that are often inaccurate and draw early impressions that quickly become entrenched. Research shows that we form impressions of others within a tenth of a second, based on our first glance. Most interviewers’ decisions change very little after the first 4 or 5 minutes of an interview. Thus, information elicited early in the interview carries greater weight than does information elicited later, and a “good applicant” is probably characterized more by the absence of unfavourable characteristics than by the presence of favorable ones. Our individual intuition about a job candidate is not reliable in predicting job performance, so collecting input from multiple independent evaluators can be predictive. **During interview session, interviewer tend to judge base on first impression (first glance) not necessarily accurate, cannot be used as performance prediction. Use multiple independent sources to collect the data/info. Performance Expectations The terms self-fulfilling prophecy and Pygmalion effect describe how an individual’s behavior is determined by others’ expectations. Example: If a manager expects big things from her people, they are not likely to let her down. Similarly, if she expects only minimal performance, the employees will likely meet those low expectations. Expectations become reality. The self-fulfilling prophecy has been found to affect the performance of students, soldiers, accountants, and several other occupations. Performance Evaluations An employee’s future is closely tied to his or her appraisal— promotion, pay raises, and continuation of employment are among the outcomes. Although the appraisal can be objective (for example, a salesperson is appraised on how many dollars of sales he generates in his territory), many jobs are evaluated subjectively. Subjective evaluations, though often necessary, are problematic because of the errors we have discussed—selective perception, contrast effects, halo effects, and so on. Sometimes performance ratings say as much about the evaluator as they do about the employee! **Performance can be evaluated wrongly/inaccurate base on subjective evaluation with the existence of distortion like selective/halo effect evaluation. THE LINK BERWEEN PERCEPTION AND INDIVIDUAL DECISION MAKING Individuals make decisions- Largely influenced by their perceptions. Every decision requires us to interpret and evaluate information. We typically receive data from multiple sources that we need to screen, process, and interpret. Which data are relevant to the decision, and which are not? Our perceptions will answer that question. We also need to develop alternatives and evaluate their strengths and weaknesses. Finally, we should consider how our perceptions of the situation influence our decisions. OB improves the way we make decisions in organizations by addressing the decision-making errors people commit in addition to the perception errors we have discussed. DECISION MAKING IN ORGANIZATION Influences on Decision Making: Individual Differences and Organizational Constraints We turn here to factors that influence the way people make decisions and the degree to which they are susceptible to errors and biases. Individual Differences- decision making in practice is characterized by bounded rationality, common biases and errors, and the use of intuition. Individual differences such as personality also create deviations from the rational model. Personality-Influences our decisions. (Let us look at conscientiousness and self-esteem) - Conscientiousness—particularly achievement-striving and dutifulness—may affect escalation of commitment. First, achievement- oriented people hate to fail, so they escalate their commitment, hoping to forestall failure. Dutiful people, however, are more inclined to do what they see as best for the organization, so they are less likely to escalate their commitment. Second, achievement-striving individuals appear more susceptible to hindsight bias, perhaps because they have a need to justify their actions. We do not have evidence yet on whether dutiful people are immune to this bias. People with high self-esteem (a general perception of being good enough) are strongly motivated to maintain it, so they use the self-serving bias to preserve it. They blame others for their failures while taking credit for successes. In a more extreme case, those with the personality trait of grandiosity (a sense of specialness and self-importance) a facet of narcissism (see Chapter 4), tend to engage in the self-serving bias. Gender Who makes better decisions, men, or women? It depends on the situation: - When the situation is not stressful, decision making by men and women is about equal in quality. - In stressful situations, it appears that men become more egocentric and make more risky decisions, while women become more empathetic and their decision making improves. - Rumination, or reflecting at length, offers further insights into gender differences in decision making. Women spend more time than men analysing the past, present, and future. - Over analyse problems before deciding and to rehash a decision once made. This can make problems harder to solve, increase regret over past decisions, and increase depression. Women are nearly twice as likely as men to develop depression. Mental Ability Higher levels of mental ability can process information more quickly, solve problems more accurately, and learn faster, so you might expect them to be less susceptible to common decision errors. However, mental ability appears to help people avoid only some of them. Smart people are just as likely to fall prey to anchoring, over confidence, and escalation of commitment, probably because being smart does not alert you to the possibility that you are too confident or emotionally defensive. It is not that intelligence never matters. Once warned about decision-making errors, more intelligent people learn to avoid them more quickly. ** Intelligent people also make mistake in decision making Cultural Differences Need to recognize that the cultural background of a decision maker can significantly influence the selection of problems, the depth of analysis, the importance placed on logic and rationality, and whether organizational decisions should be made autocratically by an individual manager or collectively in groups. Cultures differ in time orientation, the value they place on rationality, their belief in the ability of people to solve problems, and their preference for collective decision making. - First, differences in time orientation-Help us understand, for instance, why managers in Egypt make decisions at a much slower and more deliberate pace than their U.S. counterparts. - Second, while rationality is valued in North America, that is not true elsewhere. A North American manager might decide intuitively but know it is important to appear to proceed in a rational fashion because rationality is highly valued in the West. In countries such as Iran, where rationality is not paramount over other factors, it is not necessary for efforts to appear rational. - Third, some cultures emphasize solving problems, while others focus on accepting situations as they are. The United States falls in the first category; Thailand and Indonesia are examples of the second. Because problem-solving managers believe they can and should change situations to their benefit, U.S. managers might identify a problem long before their Thai or Indonesian counterparts would choose to recognize it as such. - Fourth, decision making in Japan is much more group-oriented than in the United States. The Japanese value conformity and cooperation, so before Japanese CEOs make an important decision, they collect a large amount of information to use in consensus-forming group decisions. Organizational Constraints Organizations can constrain decision makers, creating deviations from the rational model. For instance, managers shape decisions to reflect the organization’s performance evaluation and reward systems, to comply with formal regulations, and to meet organizationally imposed time constraints. Precedents can also limit decisions. Performance Evaluation Systems Managers are influenced by the criteria on which they are evaluated. If a division manager believes the manufacturing plants under his responsibility are operating best when he hears nothing negative, the plant managers will spend a good part of their time ensuring that negative information does not reach him. Reward Systems The organization’s reward systems influence decision makers by suggesting which choices have better personal payoffs. If the organization rewards risk aversion, managers are more likely to make conservative decisions. For instance: For over half a century (the 1930s through the mid-1980s), General Motors consistently gave promotions and bonuses to managers who kept a low profile and avoided controversy. These executives became adept at dodging tough issues and passing controversial decisions on to committees, which harmed the organization over time. Formal Regulations David, a shift manager at a Taco Bell restaurant in San Antonio, Texas, describes constraints he faces on his job: “I have got rules and regulations covering almost every decision I make—from how to make a burrito to how often I need to clean the restrooms. My job does not come with much freedom of choice.” David’s situation is not unique. All but the smallest organizations create rules and policies to program decisions and get individuals to act in the intended manner. In doing so, they limit decision choices. System-Imposed Time Constraints Almost all-important decisions come with explicit deadlines. For example, A report on new-product development may have to be ready for executive committee review by the first of the month. Such conditions often make it difficult, if not impossible, for managers to gather all information before making a final choice Historical Precedents Decisions are not made in a vacuum; they have context. Individual decisions are points in a stream of choices; those made in the past are like ghosts that haunt and constrain current choices. It is common knowledge that the largest determinant of the size of any given year’s budget is last year’s budget. Choices made today are largely a result of choices made over the years. Decision Making in Times of Crisis During the COVID-19 pandemic of 2020, employees and leaders of businesses alike were forced to make extremely difficult decisions amidst chaos, confusion, and uncertainty. Example, As Anjali Lai, a senior analyst at Forrester eloquently described, “unprecedented levels of uncertainty paired with a rapid flow of new information means [people forged] ahead with neither a template to follow, nor the luxury of pondering every decision.” Decision makers are particularly susceptible to biases and distortion during times of crisis. For example, Expert credit-rating agencies are more likely to provide negative or pessimistic ratings of credit worthiness during times of crisis, even when the credit worthiness of these target people or organizations would not be affected by the crisis. Furthermore, decisions made during times of crisis are more likely to be emotionally charged and intuitive. Not only does the strain of the crisis add an additional layer of anxiety and negative emotions to typical decisions, but the decisions in and of themselves may become highly charged, such as how doctors and nurses had to make extremely tough decisions as to who would receive treatment during the COVID-19 pandemic. Relatedly, justice and ethics in decision making (see the following section for more discussion) play a huge role in times of crisis. Indeed, perceptions of justice are incredibly important during times of crisis, influencing employee attitudes and customer reactions. ETHICS IN DECISION MAKING What about Ethics in Decision Making? Three Ethical Decision Criteria: - Utilitarianism-Making decisions solely based on their outcomes, ideally to provide the greatest good for all. This view dominates business decision making and is consistent with goals such as rationality, efficiency, productivity, and high profits. Keep in mind that utilitarianism is not always as objective as it sounds. Participants were given a moral dilemma: The weight of five people bends a footbridge so it is low to some train tracks. A train is about to hit the bridge. The choice is to let all five people perish, or push the one heavy man off the bridge to save four people. In the United States, South Korea, France, and Israel, 20 percent of respondents chose to push the man off the bridge; in Spain, 18 percent chose to do so; and in Korea, none did. These might speak to cultural utilitarian values, but a minor change, asking people to answer in a non-native language they knew, caused more participants to push the man overboard: In one group, 33 percent pushed the man, and in another group 44 percent did. The emotional distance of answering in a nonnative language thus seemed to foster a utilitarian viewpoint. It appears that our view of what we consider pragmatic is changeable. - Another ethical criterion is to make decisions consistent with fundamental liberties and privileges, as set forth in documents such as the U.S. Bill of Rights. An emphasis on rights in decision making means respecting and protecting the basic rights of individuals, such as the right to privacy, free speech, and due process. This criterion protects whistle-blowers when they reveal an organization’s unethical practices to the press or government agencies, using their right to free speech.  - A third criterion is to impose and enforce rules fairly and impartially to ensure justice or an equitable distribution of benefits and costs. This criterion is often approached from a denounce standpoint (employees feel as if they ought to behave in a certain way, as laid out in rules, laws, norms, or moral principles). For example, Some employees might feel as if they should not steal from their workplace because it is ethically “wrong” by moral norms, principles, or standards or it is forbidden by rules or laws. Notably, this “ought to force” is present regardless of whether organizational rules exist; often, a decision is regarded as unfair or unjust because it violates a moral norm or principle. Decision makers, particularly in for-profit organizations, feel comfortable with utilitarianism. The “best interests” of the organization and its stockholders can justify a lot of questionable actions, such as large layoffs. However, while raising prices, selling products with questionable effects on consumer health, closing inefficient plants, laying off large numbers of employees, and moving production overseas to cut costs can be justified in utilitarian terms, there may no longer be a single measure by which good decisions are judged. This presents a challenge because satisfying individual rights and social justice creates far more ambiguities than clear-cut utilitarian effects on efficiency and profits. Indeed, the ethical-decision making process itself is complex and the traditional perspective of viewing these criteria as separate is giving way to one that views them as interrelated and contingent upon whether decisions are made about the self or judging others’ behavior. This is where corporate social responsibility (CSR) comes in to effect a positive change. Consumers increasingly choose to purchase goods and services from organizations with effective CSR initiatives, high performers are attracted to work at CSR organizations. Behavioral ethics—Study that analyses how people behave when confronted with ethical dilemmas. Their research tells us that, while ethical standards exist collectively in societies and organizations, and individually in the form of personal ethics, we do not always follow ethical standards promoted by our organizations, and we sometimes violate our own standards. Our ethical behavior varies widely from one situation to the next. How might we increase ethical decision making in organizations? – - First, seemingly superficial aspects of the environment—such as lighting, outward displays of wealth and status, and cleanliness— can affect ethical behavior in organizations. Managers must first realize that ethical behavior can be affected by these signals; for example, if signs of status and money are everywhere, an employee may perceive those, rather than ethical standards, to be of the highest importance. - Second, managers should encourage conversations about moral issues; they may serve as a reminder and increase ethical decision making. We should be aware of our own moral “blind spots”—the tendency to see ourselves as more moral than we are and others as less moral than they are. Behavioral ethics research stresses the importance of culture to ethical decision making. There are few global standards for ethical decision making, as contrasts between Asia and the West illustrate. What is ethical in one culture may be unethical in another. For example,  Because bribery is more common in countries such as China, a Canadian working in China might face a dilemma: Should I pay a bribe to secure business if it is an accepted part of that country’s culture? Although some companies, such as IBM, explicitly address this issue, many do not. Without sensitivity to cultural differences as part of the definition of ethical conduct, organizations may encourage unethical conduct without even knowing it. Lying Lying is one of the top unethical activities we may indulge in daily, and it undermines all efforts toward sound decision making. Although lying might depend on both situational characteristics and individual differences, a large volume of research suggests that lying and dishonest behavior are very common. Perhaps one of the reasons we lie is because lying is difficult for others to detect. (like thro body language/facial expression/nonverbal/verbal cues/lie detector etc) Managers and employees simply cannot make good decisions when facts are misrepresented and people give false motives for their behaviors. Lying is a big ethical problem as well. The most lasting solution comes from organizational behavior, which studies ways to prevent lying by working with our natural propensities to create environments not conducive to lying.