Perception attribution and individual decision making Interactive lecture III Jolanta Babiak Winter semester 2018/2019

Perception Ascribing meaning to the environment Sensory impressions Organizing and interpreting Ascribing meaning to the environment

Why is perception important to OB? Peoples’ behavior is based on their perception of what reality is, not on reality itself

Factors that influence perception Factors in the situation - Time - Work setting - Social setting Factors in the perceiver - Attitudes - Motives - Interests - Experience - Expectations Perception Factors in the target - Novelty - Motion - Sounds - Size - Background - Proximity - Similarity

Making judgments about others Person Perception Making judgments about others We have beliefs, expectations, or motives that’s why when we observe people we try to explain why they behave in certain ways. Our perceptions and judgments will therefore be heavily influenced by the assumptions we make about that person internal state.

Attribution theory Judgments we make Meanings we attribute Observed behavior of another person 1. Distinctiveness 2. Consensus 3. Consistency Judgments we make Meanings we attribute We determine the source of causation of that behavior Internal vs External causes

Attribution theory observation interpretation Attribution of cause

Differences between internal vs external causation Internally caused behavior Externally caused behavior Under the control of the individual Employee is late for work: he was partying and then overslept Colleague is gaining weight: he is socializing a lot and overeating Manager is in tensed mood: he wants to evoke fear in us purposefully What the situation forced the individual to do Employee is late for work: must have run into tied up traffic due to some accident on the way Colleague is gaining weight: could have some health issues, maybe thyroid Manager is in tensed mood: he must have been under fire during yesterday’s board meeting

Three determining factors: (1) Distinctiveness Behavior is unusual External attribution Behavior is usual Internal attribution

Three determining factors: (2) Consensus High consensus: others behaved in similar fashion External attribution Low consensus: behavior stands out from among others in a similar situation Internal attribution

Three determining factors: (3) Consistency Does the person responds in the same way over time? If not… External attribution If yes Internal attribution

Most important finding: fundamental attribution error While making judgments about the behavior of other people We tend to overestimate the effects of internal factors; e.g. sales dropped recently - my sales agents are just lazy We tend to underestimate the effects of the external factors; sales dropped recently – it cannot be the innovative product introduced by the competitor

Most important finding: fundamental attribution error While making judgments about our own behavior We tend to attribute our own success to internal factors; e.g. ability, effort We tend to blame failure on the external factors; e.g. bad luck, poor performance of others

Fundamental attribution error: cultural differences non-Western managers are less likely to use self-serving bias: tend to assume responsibility for failure Asian cultures: group-based attributions – more likely to blame institutions or whole organizations Western cultures – individuals should get blame or praise

Shortcuts in judging others: selective perception Interests Background Experience Attitudes Other information

Shortcuts in judging others: halo effect We draw a general impression about an individual on the basis of a single characteristic; here: appearance

Shortcuts in judging others: contrast effect Our reaction is influenced by other persons we have recently encountered; attention: job interviews

Shortcuts in judging others: stereotyping Less difficult to deal with unmanageable number of stimuli if we use heuristics Problem occurs when we generalize inaccurately or too much We usually stereotype based on: Gender Age Race Religion Ethnicity Weight Stereotypes operate emotionally and often below the level of conscious awareness

Specific applications of shortcuts in Organizations Employment interview We form impressions of others within tenth of a second: first glance Good applicant: absence of negative characteristics Performance expectations Self-fulfilling prophecy: one’s behavior is determined by others’ expectations Expectations become reality Performance evaluations Depend on the perceptual process: subjective Some are luckily evaluated objectively: sales people

How is perception linked to decision making process Every individual makes decisions Managers make many! decisions every single day Top managers: determine organization’s goals, what products to offer, how best to finance operations, where to locate new manufacturing plant Middle managers: set production schedules, select new employees, how to allocate pay raises Lower-level managers: how to resolve a conflict between two new employees, when to seek advice from upper management, how best to explain coworkers scope, money and time constraints for the new project Non managerial employees make decisions about their effort , engagement and compliance with boss’s request

Decision making – important part of organizational behavior Nonmanagerial staff gets empowered with decision making authority (historically reserved for managers) They way individuals make decisions is based on their thinking style and problem solving style Quality of choices in decision making is influenced by perception processes Decision making occurs as a reaction to a problem

To make or not to make a decision – perceptual process Decisions require interpretation and evaluation of information Decisions require to screen, process and choose relevant data Decisions require development of alternatives and evaluation of their strengths and weaknesses Perceptual distortions can bias analysis and conclusions

Rational decision making model Define the problem Identify the decision criteria Allocate weights to the criteria Develop the alternatives Evaluate the alternatives Select the best alternative

Role of intuition in decision making Intuitive decision making – unconscious process created from experience Occurs outside conscious thought Relies on holistic associations It is fast and affectively charged Least rational way of decision making, but not necessarily wrong It is highly complex and developed form of reasoning that is based on years of experience and learning Intuition can improve overall decision making process

Common biases and errors in decision making process (1) overconfidence Can produce catastrophic results Being 100 percent sure of an outcome equals to ca. 70% accuracy Studies show that individuals overestimate their intellectual and interpersonal abilities the more entrepreneurs are optimistic about their new venture the less successful it becomes new investors overestimate their skills and the quality of information they have

Common biases and errors in decision making process (2) anchoring bias Fixation on initial information Failure to adjust to subsequent information Reason: our mind emphasizes first information it receives Anchors are widely used by persuasion masters: marketing specialists, politicians, managers, legal workers, realtors During negotiations anchoring takes place as well

Common biases and errors in decision making process (3) confirmation We gather information selectively not objectively Confirmation bias is a case of selective perception: we seek information that is in line with what we already know, or with our preconceived views e.g. our past choices; we rather omit information which is incongruent with it We select information that support our views and we give it too much attention in comparison to contradictory views When we strongly believe in our opinion we are mostly prone to confirmation bias

Common biases and errors in decision making process (4) availability Example: overstating the risk of flying and understating the risk of driving Availability bias is tendency to base judgements on information readily available The availability bias can explain errors managers make when performing performance reviews: more weight is given to recent employee behavior

Bibliography Gerrig, R. J., Zimbardo, P. G. (2010). Psychology and life. New Jersey: Person education, Inc. Robbins, S. P., Judge, T. A. (2013). Organizational behavior. New Jersey: Person education, Inc. Whetten, D. A., Cameron K. S. (2011). Developing Management Skills. New Jersey: Person education, Inc