organizational behavior robbins & judge chapter 5 perception and individual decision making

Organizational Behavior

Robbins & Judge

Chapter 5

Perception and Individual Decision Making

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Summary of Lecture 27

- Ability

- Learning Theories

- Attitude

- Components of attitude

- Relationship between attitude and behavior

- Job satisfaction and other job attitudes

- Main causes of job satisfaction

- Employees responses to job dissatisfaction

Robbins and Judge (2008): Organizational Behavior, Pearson, Prentice Hall

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Learning Objectives

- What is perception?

- Determinants of attribution

- Shortcuts in judgment

- Perception and decision making

- Steps in rational decision making

- Bounded rationality

- Decision biases or errors

- Intuition and decision making

- Ethical decision

- Normative decision model


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Perception

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Perception

“Perception is a process by which individuals organize and interpret their sensory impressions

in order to give meaning to their environment”

- Perception is the process through which people select, organize, and interpret information.

- Individual behavior is based on perception of reality not on reality


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Process of Perception

OrganizationClassification

Interpretation

Beliefs &Values

Behavior Personal

Meanings

Attention & Selection

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Factors Influencing Perception:

1.) Perceiver

2.) The Perceived

3.) Situation

Perception

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Factors in the situationTimeWork settingSocial setting

Factors in the perceiverAttitudesMotivesInterestsExperienceExpectation

Factors in the targetNoveltyMotionSoundsSizeBackgroundProximitySimilarity

PERCEPTION

Factors that Influence Perception

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Organization• Classification

– Figure and Ground Differentiation• Figure

The Dominant feature being perceived.• Ground

The Surrounding, the compelling Stimuli.• Perceptual Closure

The mind’s tendency it fill in missing data when it receives incomplete information.

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Interpretation

• We add meanings to data take in by our past learning

experience as well as our current beliefs, assumptions,

attitudes, and values; all influence the meaning we add to

what we take in.

• Combined, they form our individual frame of reference,

which is mental filter through which perceptions are

interpreted and evaluated.

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Person Perception

Making Judgments About Others

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Attribution Theory Attribution process is a perceptual process whereby we

interpret the causes of behavior in terms of the person

(internal attributions) or the situation (external attributions).

Two Types of Causes:

1) Internal (internally caused behaviors are believed to be

under control)

2) External (behaviors resulting from outside causes or out of

control)

Absence

Internal: Sleeping, late night party: External: Road accident

Observation InterpretationAttribution of cause


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Factors of the Attribution Theory

1) Distinctiveness (whether person display different behaviors based on situation

2) Consensus (if everyone in given situation behaves in similar way)

3) Consistency (observer look for consistency in action)

EXAMPLE: Arriving late in meeting


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External attributions

Internal attributions

Low

Consistency

High

High

Distinctiveness

Low

High

consensus

Low


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Fundamental Attribution Error

When judge behaviors of others we often underestimate the influence of external factors and overestimate influence of personal of internal factors

EXAMPLE: Poor performance of salesperson is believed to be due to laziness and incompetence

Individuals also tend to attribute success to internal factor such as hard work, intelligence and effort

Individuals tend to attribute failure to external factors.


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Self Serving Bias

• A perceptual error whereby people tend to attribute their

own success to internal factors and their failures to

external factors

EXAMPLE: Iraq War


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Self-Fulfilling Prophecy

A phenomenon in which an observer’s expectations of

someone causes that person to act in a way that is

consistent with the observer’s expectations.

Errors or biases distort attributions are universal?

No Culture play its role: Japanese Managers


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Self-Fulfilling Prophecy Cycle

Supervisor forms expectations about employee

Expectations affect supervisor's behavior toward employee

Supervisor’s behavior affect employees ability and performance

Employee’s behavior becomes consistent with a supervisor’s expectations

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Shortcuts in Judging Others

1) Selective Perception

2) Halo Effect

3) Contrast Effects

4) Projection

5) Stereotyping

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• Selective Perception

The tendency to focus on those attributes of people and situations that fit our frame of reference.

– Example: Notice Car like you

Why we use selective perception?

- We can not analyze or assimilate all information

- We select information based on our interests, experience, attitude and background

• Halo Effect

The tendency to overrate a person based on a single trait.


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- Halo Effect: The tendency to overrate a person based on a single trait.

- For Example: judging bases on intelligence, sociability, communication and appearance

- Example: Judging teacher on its ability to deliver or style

- Contrast Error: Our reaction to person is influenced by other persons recently encountered.

- We don’t evaluate person in isolation

- Example: Selection Interview


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Projection

- Attributing one's own characteristics while judging other

- Easy to judge if we assume other similar to us

- If you are honest assume that others are also the same

- Fail to recognize individual differences

Stereotyping

- Judging others based on our perception of the group

- A rigid and biased perception of a person, group, object, or situation.

- A process of using a few observable characteristics to assign people to preconceived social category or group

- Process of generalization make us to decide fast (simplifying complex world)

- Perception about Muslims after 9/11Robbins and Judge (2008): Organizational Behavior, Pearson, Prentice Hall

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Stereotyping Process

Model

Develop social categories & assign traits to them

Person is identified with a social category based on observable information

Assign social category’s cluster of traits to the person

Example

Athletes are energetic and hardworking. Best

salesman

This person is a athlete

This person is hard working hence good

salesman

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Specific Applications of Short cuts in Organizations

1) Employment Interview

2) Performance Expectations (Self Fulfilling Prophecy or Pygmalion effect)

3) Ethnic Profiling (increase in after 9/11)

4) Performance Evaluation


S. No.

Performance Appraisal Error Description

1 Leniency Error Extreme rating either on high or low side

2 Similarity Error Bias appraisal because of personal affiliation

3 Recency Error Recent behavior evaluation instead of entire performance appraisal period

4 Contrast Error Rating in comparison to other members

5 Central Tendency Error Average rating for all employees

6 Spill-Over Effect Past performance or standing dominate recent evaluation

7 Hallo Error One characteristic or aspect of performance dominate entire performance appraisal rating

8 Perceptual Error The previous held believe of perception influence appraisal

4 Performance Appraisal Errors

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Link between Perception and Individual Decision Making

- In organization individuals make decisions (choice between two or more alternatives)

- Decision making often occur in response to problem

- Decision require interpretation and evaluation of information and alternatives solutions/course of actions

- Quality of decision influenced by their perception

- Problem definition varies from person to person

EXAMPLE: Quarterly Sales data


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Rational Decision Making

The Rational Model1)Define problem

2) Identify the decision criteria

3) Allocate weight to the criteria

4) Develop the alternatives

5) Evaluate the alternatives

6) Select the best alternative

Assumptions

1) Problem clarity 2) Known options 3) clear preferences

4) Constant preferences 5) no time or cost constraints

6) Maximum payoffRobbins and Judge (2008): Organizational Behavior, Pearson, Prentice Hall

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How decisions are made in organizations?

1) Bounded rationality: Limited capacity of individual to observe, understand and interpret all information hence try to find satisfactory or sufficient solutions

Common Biases and Errors

1) Overconfidence bias

2) Anchoring bias

3) Confirmation bias

4) Availability bias

5) Representative bias

6) Escalation of commitment

7) Randomness error

8) Winner's Curse

9) Hindsight bias


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Intuitive Decision Making

- “Intuitive decision making can be defined as unconscious process created out of distilled experience”

- Expert based on his experience draw information form past patterns and apply them to current problem to make quick decision

When People make Intuitive Decision?

1 High level of uncertainty 2 Little precedent to draw

3 Variables are less scientifically predicted

4 Facts are limited 5 Facts don point the way

6 Analytical data are of little use

7 Several plausible alternatives 8 Time is limited


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Decision Making

1 Individual Differences

I) Personality

ii) Gender

2) Organizational Constraints

I) Performance evaluation

ii) Reward system

iii) Formal regulations

iv) System imposed time constraints

v) Historical precedents

3) Cultural Differences


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Creativity in Decision Making

Creative Potential

ExpertiseCreative skills

Task Motivation

Figure: Components of Creativity


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Creativity in Decision Making

- Traits of Creativity: Openness to experience, intelligence, independence, self confidence, risk taking, internal locus of control, perseverance in frustration and tolerance for ambiguity

1 Expertise (knowledge, skills, and experience)

2 Creative thinking skills (analogies, apply idea from one context to other

3 Intrinsic Task Motivation(work with interest and joy, love their work)

- Other important thing is presence of creativity driven culture


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Ethics in Decision Making

1 Utilitarian Criterion (interest of the organization or stakeholders)

2 Focus on Rights of individuals

3 Justice

- National Culture: No universal principle in this business world,

What is right in America may be wrong in China

- There are some issues where agreement otherwise few Grey areas influence criteria of ethics


The Normative Decision Model Decision Styles

Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

- Focus on matching leadership decision making style and situation

- Styles are assumed to be learnable

- Decision style depends onQuality requirement of decisionLikelihood of commitment from employees

1 Decide

- Leader makes decision with little or no subordinate input

2 Consult Individually

- Input from subordinates but leader makes decision

The Normative Decision Model

©Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

3 Consult Group- Consensus building- Leader shares decision making with group5 Facilitate: Helps define problems- Leader seeking participation and concurrence without

pushing own ideas 6 Delegate- Leader gives total decision making authority to

employees

The Normative Decision Model Decision Styles


Deciding Appropriate Leadership Style

1. 1 Decision Significance

2. 2 Importance of Commitment

3. 3 Leader Expertise

4. 4 Likelihood of Commitment

1. 5 Group Support for Objectives

2. 6 Group Expertise

3. 7 Team Competence


- Individuals behave based on their perception of environment and situation

- Absenteeism, job turn over, and job satisfaction behaviors are influenced by perception of individuals

- Individuals satisfaction and dissatisfaction level about work conditions, job, policies and structures are based on perception

- Reducing Errors or Biases1) Focus on goal 2) Analyze information that disconfirms your

beliefs 3) Don't try to create meaning out/from random events 4) Increase your options 5) Ask from yourself: Are you

committing biases- Enhance your decision quality by- Analyzing the situation - Adjust your style based on situation and culture – Be aware of biases - Use creativity (out of the box thinking) – Use intuition with rationality

Managerial Implication


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Discussion Question 1: How perception influence behavior?

Discussion Question 2: What are few shortcuts in judgment?

Discussion Question 3: What is relationship between perception and decision making?

Discussion Question 4: What is bounded rationality?

Discussion Question 5: What is intuition?

Discussion Question 6: What is your view point on ethical decision criteria?

Discussion Questions

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Summary

- What is perception?

- Determinants of attribution

- Shortcuts in judgment

- Perception and decision making

- Steps in rational decision making

- Bounded rationality

- Decision biases or errors

- Intuition and decision making

- Ethical decision

- Normative decision model


organizational behavior robbins & judge chapter 5 perception and individual decision making

Documents

causes of behavior

individual behavior

prentice hall

perception of reality

influence perception

individual decision

behaviorjob satisfaction

decision makingsteps