Perception and Individual Decision Making

1. Perception and Individual Decision Making Chapter 5 Chapter 5

2. Learning Objectives • Learn that two people can see the same thing and interpret it differently • List the three determinants of attribution • Describe how shortcuts can either assist or distort judgment • Examine perception and decision-making • Study the rational decision-making model Chapter 5

3. Learning Objectives • Describe the actions of the boundedly rational decision maker • Learn when individuals are most likely to use intuition in decision making • Describe four styles of decision making • Learn how heuristics bias decisions • Contrast the three ethical decision criteria Chapter 5

4. What is Perception • A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment Chapter 5

5. Target Perceiver Situation Factors ThatInfluence Perception Chapter 5

6. The Perceiver • Attitude • Motives • Interests • Past experiences • Expectations (stereotypes) Chapter 5

7. The Target • Novelty • Motion • Sounds • Size • Background • proximity • Persons, objects and events that similar to each other tend to be grouped together Chapter 5

8. The Situation • Time • Work setting • Social setting Chapter 5

9. Person Perception: making Judgments about Others • Attribution Theory • When individuals observe behavior, they attempt to determine whether it is internally or externally caused • Distinctiveness • Consensus • Consistency Chapter 5

10. Interpretation Attribution of Cause Observation High External Distinctiveness Attribution Theory and Individual Behavior Low Internal High External Consensus Low Internal High External Consistency Low Internal Chapter 5

11. Selective Perception Halo Effect Contrast Effect Projection Stereotyping Frequently Used Shortcuts When Judging Others Chapter 5

12. Perception Errors • Fundamental attribution error • Tendency to underestimate external factors and overestimate internal factors • Self-serving bias • Tendency for individuals to attribute their own successes to internal factors rather than external factors (i.e., luck) Chapter 5

13. Judgmental errors • Selective perception • 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 Chapter 5

14. Perception Errors • Contrast Effects • Evaluation of a person’s characteristics that are affected by comparisons with other people • Projection • Attributing one’s own characteristics to other people • Stereotyping • Judging someone on the basis of one’s perception of the group in which that person belongs Chapter 5

15. Specific Applications in Organizations • Employment interview • Performance expectations • Self-fulfilling prophecy: expectations cause behaviors consistent with original perceptions • Performance evaluation • Employee effort • More workers are fired for poor attitudes than for lack of ability • Employee loyalty Chapter 5

16. Awareness and Recognition of Problems Perception and Individual Decision Making Interpretation and Evaluation of Information Chapter 5

17. + A1 T E C H A1 A1 Set Decision Criteria A2 A2 A2 A3 Choice Problem Make Optimal Decision Identify and Define Problem A4 Criteria An An An Weight the Criteria Develop Alternatives Evaluate Alternatives Rational Model of Decision Making Chapter 5

18. Assumptions of the Model One: Problem Clarity Four: Constant Preferences Two: Known Options Five: No Constraints Three: Clear Preferences Six: Maximum Payoff Chapter 5

19. The Three Components of Creativity Expertise Creativity Task Motivation Creativity Skills Chapter 5

20. Bounded Rationality • Constraints • Time • Resources/costs • Information • Solutions • Acceptable, Satisfied, but may not optimal Chapter 5

21. A Model of Bounded Rationality Ascertain the Need for a Decision Select Criteria Identify a Limited Set of Alternatives Compare Alternatives Against Criteria Select the First “Good Enough” Choice Yes Simplify the Problem Expand Search for Alternatives A “Satisficing” Alternative Exists No Chapter 5

22. Intuitive Decision Making An unconscious process created out of distilled experience • High uncertainty levels • Little precedent • Hard to predictable variables • Limited facts • Unclear sense of direction • Analytical data is of little use • Several plausible alternatives • Time constraints Chapter 5

23. Problem Identification Alternative Development Two Important Decision-Making Phases Chapter 5

24. Availability Heuristic Representative Heuristic Escalation of Commitment Making Choices in the Workplace Chapter 5

25. Making Choices • Availability heuristic • The tendency for people to base their judgments on information that is readily available • Representative • Assessing the likelihood of an occurrence by matching it with a preexisting category • Escalating commitment • An increased commitment to a previous decision in spite of negative information Chapter 5

26. Decision-Making Styles High Analytic Conceptual Tolerance for Ambiguity Directive Behavioral Low Way of Thinking Rational Intuitive Chapter 5

27. Performance Evaluation Reward System Organizational Constraints Programmed Routines Historical Precedents Chapter 5

28. Time Orientation The Value of Rationality Cultural Differences Groups or Individuals Problem Identification Chapter 5

29. Utilitarian Rights Justice Ethics in Decision-Making Chapter 5

30. Discussion • Biases in decision making (p. 149) • Ethical dilemma (p. 150) • Video Case (p. 151) Chapter 5