1. Dr. Fred Mugambi Mwirigi JKUAT
Perception and Individual Decision Making
Topic 3b
Dr. Fred Mugambi Mwirigi
JKUAT

2. Perception and Its Importance
A process by which individuals organise and interpret their sensory impressions in order to give meaning to their environment.
People’s behaviour is based on their perception of what reality is, not on reality itself.
The world as it is perceived is the world that is behaviourally important.
Saturday, April 22, 2017
compiled by Dr. Fred Mugambi

3. Factors that Influence Perception
Saturday, April 22, 2017
compiled by Dr. Fred Mugambi

4. Attribution Theory
Our perceptions of people differ from our perceptions of inanimate objects.
Attribution theory suggests that when we observe an individual’s behaviour, we attempt to determine whether it was internally or externally caused.
That determination depends largely on three factors:
Distinctiveness
Consensus
Consistency

5. Attribution Theory Contd.
Distinctiveness refers to whether an individual displays different behaviours in different situations. What we want to know is whether the observed behaviour is unusual.
Consensus occurs if everyone who is faced with a similar situation responds in the same way. For example, if consensus is high, you would be expected to give an external attribution to an employee’s lateness at work, whereas if other employees who took the same route made it to work on time, your conclusion as that causation would be internal.
Consistency in a person’s actions. Does the person respond the same way over time? The more consistent the behaviour, the more the observer is inclined to attribute it to internal causes.

6. Attribution Theory Contd.
Saturday, April 22, 2017
compiled by Dr. Fred Mugambi

7. Key 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 behaviour of others
Self-Serving Bias
The tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factors
Saturday, April 22, 2017
compiled by Dr. Fred Mugambi

8. Frequently Used Shortcuts in Judging Others
Selective Perception
People selectively interpret what they see on the basis of their interests, background, experience, and attitudes.
Halo Effect
Drawing a general impression about an individual on the basis of a single characteristic
Contrast Effects
Evaluation of a person’s characteristics based on comparisons with other people recently encountered who rank higher or lower on the same characteristics
Saturday, April 22, 2017
compiled by Dr. Fred Mugambi

9. Frequently Used Shortcuts in Judging Others Contd.
Projection
Attributing one’s own characteristics to other people
Stereotyping
Judging someone on the basis of one’s perception of the group to which that person belongs
Saturday, April 22, 2017
compiled by Dr. Fred Mugambi

10. Specific Applications in Organisations
Employment Interview: Perceptual biases of raters affect the accuracy of interviewers’ judgments of applicants
Performance Expectations: Self-fulfilling prophecy (Pygmalion effect): The lower or higher performance of employees reflects preconceived leader expectations about employee capabilities.
Ethnic Profiling: A form of stereotyping in which a group of individuals is singled out—typically on the basis of race or ethnicity—for intensive inquiry, scrutinising, or investigation
Performance Evaluations: Appraisals are often the subjective (judgmental) perceptions of appraisers of another employee’s job performance
Saturday, April 22, 2017
compiled by Dr. Fred Mugambi

11. The Link Between Perception and Individual decision Making
Perception of the Decision Maker
Outcomes
Problem A perceived discrepancy between the current state of affairs and a desired state
Decisions Choices made from among alternatives developed from data perceived as relevant

12. Assumptions of the Rational Decision Making Model
Describes how individuals should behave in order to maximise some outcome
Model Assumptions:
Problem clarity
Known options
Clear preferences
Constant preferences
No time or cost constraints
Maximum payoff

13. Steps in Rational decision Making
Define the problem
Identify the decision criteria
Allocate weights to the criteria
Develop the alternatives
Evaluate the alternatives
Select the best alternative.

14. 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.

15. Common Biases and Errors
Overconfidence Bias
Anchoring Bias
Confirmation Bias
Availability Bias
Winner’s Curse
Randomness Error
Hindsight Bias

16. Intuition Intuitive Decision-Making
An unconscious process created out of distilled experience
Conditions Favouring Intuitive Decision Making:
A high level of uncertainty
Little precedent to draw on
Less scientifically predictable Variables
Limited facts
Facts that don’t clearly point the way forward
Analytical data of little use
Existence of several plausible alternative solutions exist
Time limitation

17. Ethics in decision Making
Ethical Decision Criteria
Utilitarianism
Seeking the greatest good for the greatest number
Rights
Respecting and protecting basic rights of individuals such as whistleblowers
Justice
Imposing and enforcing rules fairly and impartially

18. Ways to Improve Decision Making
Analyse the situation and adjust your decision-making style to fit the situation.
Be aware of biases and try to limit their impact.
Combine rational analysis with intuition to increase decision-making effectiveness.
Don’t assume that your specific decision style is appropriate to every situation.
Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies.

19. Reducing Biases and Errors
Focus on goals
Clear goals make decision making easier and help to eliminate options inconsistent with your interests.
Look for information that disconfirms beliefs
Overtly considering ways we could be wrong challenges our tendencies to think we’re smarter than we actually are.
Don’t try to create meaning out of random events.
Don’t attempt to create meaning out of coincidence.
Increase your options
The number and diversity of alternatives generated will increase the chance of finding an outstanding one.

20. End of Topic Three