Perception, Decision Making and Attitudes

Session 2Nimruji Prasad J, Ph.D.

Indian Institute of Management Calcutta

What Is Perception?

• Perception is the basis on which we come to understand organisations and the individuals we encounter within them: customers, recruits, staff, peers, shareholders, regulators, markets…)

• It is not simply the things we perceive but the sense we make

• Perception is our sensory experience of the world around us and involves both the recognition of environmental stimuli and actions in response to these stimuli.

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

• The organization, identification and interpretation of stimuli

Why understand Perception?

• 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.

• Everyday sensemaking involves different perceptual shortcuts. We need to be aware of how these are used and abused in organising contexts.

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Factors That Influence Perception

Perceptual Shortcuts in Judging Others

• Selective Perception– People selectively interpret what they see on

the basis of their interests, background, experience, and attitudes

– We see things as we are– The Hamun Brian is so Azaming, as Inog as the

Frist and Isat Iteter is the Same you wlil Make Snese of the Snetene!

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• Halo Effect– Drawing a general impression about an individual

on the basis of a single characteristic

• Contrast Effect– 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

StereotypingJudging someone on the basis of one’s perception of the group to which that person belongs – a prevalent and often useful, if not always accurate, generalization

•Profiling– A form of stereotyping in which members of a group

are singled out for intense scrutiny based on a single, often racial, trait.

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Specific Shortcut 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

• Performance Evaluations– Appraisals are often the subjective (judgmental)

perceptions of appraisers of another employee’s job performance

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Perceptions and Individual Decision Making

• Problem– Problems must be recognized.

• Decisions• Data must be selected and

evaluated.

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Common Biases and Errors in Decision Making

• Overconfidence Bias– Believing too much in our own ability to make good

decisions, especially when outside of own expertise• Anchoring Bias– Using early, first received information as the basis

for making subsequent judgments• Confirmation Bias– Selecting and using only facts that support our

decision

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More Common Decision-Making Errors

• Escalation of Commitment– Increasing commitment to a decision in spite of

evidence that it is wrong – especially if responsible for the decision!

• Hindsight Bias– After an outcome is already known, believing it

could have been accurately predicted beforehand

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

• Women analyze decisions more than men – rumination• Differences develop early

• Mental Ability

Attribution Theory: Judging Others

• Our perception and judgment of others is significantly influenced by our assumptions of the other person’s internal state.– When individuals observe behavior, they attempt

to determine whether it is internally or externally caused.• Internal causes are under that person’s control• External causes are not under the person’s control

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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

– We blame people first, not the situation

• 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

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Elements of Attribution Theory

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E X H I B I T 6-2E X H I B I T 6-2

Organizational Factors Influencing Perception

• Performance Evaluation– Managerial evaluation criteria influence actions

• Reward Systems– Managers will make the decision with the greatest

personal payoff for them• Formal Regulations– Limit the alternative choices of decision makers

• System-Imposed Time Constraints– Restrict ability to gather or evaluate information

Attitudes

• Attitude: positive or negative evaluations we hold

• A Cognitive Component• An Affective Component• A Behavioural Component• Attitudes predict behaviour

Moderating Variables • The most powerful moderators of the attitude-

behavior relationship are:– Importance of the attitude– Correspondence to behavior– Accessibility– Existence of social pressures– Personal and direct experience of the attitude

BehaviorPredictAttitudes

Moderating Variables

Predicting Behavior from Attitudes– Important attitudes have a strong relationship to behavior.– The closer the match between attitude and behavior, the stronger

the relationship:• Specific attitudes predict specific behavior• General attitudes predict general behavior

– The more frequently expressed an attitude, the better predictor it is.– High social pressures reduce the relationship and may cause

dissonance.– Attitudes based on personal experience are stronger predictors.

• Cognitive Dissonance• When there is a contradiction/inconsistency

between an attitude and behaviour, or between two attitudes, then dissonance is produce.

• Attitudes or Behaviours are adjusted to reduce the tension.

• Pay influences job satisfaction only to a point.– Once an individual reaches a comfortable level of

living, there is no relationship between amount of pay and job satisfaction.

– Money may bring happiness, but not necessarily job satisfaction.

• Personality can influence job satisfaction.– Negative people are usually not satisfied with their

jobs.– Those with positive core self-evaluation are more

satisfied with their jobs.

Causes of Job Satisfaction

Employee Responses to Dissatisfaction

Exit• Behavior directed

toward leaving the organization

Voice• Active and

constructive attempts to improve conditions

Neglect• Allowing

conditions to worsen

Loyalty• Passively waiting

for conditions to improve

Active

Passive

ConstructiveDestructive

Outcomes of Job Satisfaction• Job Performance– Satisfied workers are more productive AND more

productive workers are more satisfied! – The causality may run both ways.

• Organizational Citizenship Behaviors– Satisfaction influences OCB through perceptions of

fairness.

• Customer Satisfaction– Satisfied frontline employees increase customer

satisfaction and loyalty.

• Absenteeism– Satisfied employees are moderately less likely to miss

work.