1. Chapter 5

2. What is Perception and Why is it Important?
Perception is a process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.
It’s important because people’s behavior is based on their perception of what reality is, not on reality itself.

3. Factors
The Perceiver – attitudes, motives, interests, experiences, expectations
The Target – novelty, motions, sounds, size, background, proximity, similarity
The Situation – time, work setting, social situation

4. Attribution Theory Fundamental Attribution Error The tendency to…
Underestimate the influence of external factors (outside of a person’s control)
Overestimate the influence of internal (what you can control) factors
When making judgments about the behavior of others.

5. Attributions Self-Serving Bias
The tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factors.

6. Sample “Shortcuts” Selective Perception Halo Effect Contrast Effects
People selectively interpret what they see on the basis of their interest, background, experience, and attitudes.
Halo Effect
Drawing a general impression about an individual on the basis of a single characteristic.
Contrast Effects
Comparisons with other people recently encountered who rank higher or lower on the same characteristics.
Projection
Attributing one’s own characteristics to other people

7. Specific Applications in Organizations
Employment Interview
Perceptual biases affect the accuracy of interviewers’ judgments of applicants.
Performance Expectations
Self-fulfilling prophecy (pygmalion effect): The lower or higher performance of employees reflects preconceived expectations about employee capabilities.
Performance Evaluations
Appraisals are subjective perceptions of performance.
Employee Effort
Assessment of individual effort is a subjective judgment subject to perceptual distortion and bias.

8. Assumptions of the Rational Decision-Making Model
Problem clarity
Known options
Clear preferences
Constant preferences
No time or cost constraints
Maximum payoff

9. So, 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.
Intuitive Decision Making
Intuition = an unconscious process created out of distilled experience.

10. “Problems? What Problems?”
How and why are some problems identified?
Visibility over importance of problem
Attention-catching, high profile problems
Desire to “solve problems”
Self-interest (if problem concerns decision maker!)
Alternative Development
“Good enough”: seeking the first alternative that solves problem.

11. Organizational Constraints on Decision Makers
Performance Evaluation
Evaluation criteria influence the choice of actions.
Reward Systems
Decision makers make action choices that are favored by the organization.
Formal Regulations
Organizational rules and policies limit the alternative choices of decision makers.
System-imposed Time Constraints
Organizations require decisions by specific deadlines.
Historical Precedents
Past decisions influence current decisions.

12. Summary and Implications for Managers
Perception
- Individuals behave based on what they see or believe reality to be.
- Evidence suggests that what individuals perceive from their work situation will influence their productivity more than will the situation itself.
- Absenteeism, turnover, and job satisfaction are also reactions to the individual’s perceptions.

13. Summary (continued) Individual Decision Making
- Individuals think and reason before they act.
- Under some decision situations, people follow the rational decision- making model. However, this doesn’t happen very often…
So, what can managers do to improve their decision making?
- Analyze the situation.
- Be aware of biases.
- Combine rational analysis with intuition. - Don’t assume that your specific decision style is appropriate for every job.
- Use creativity-stimulation techniques when possible.