Perception and Decision Making

Perception is the way that people organize and interpret everything around them in order to give meaning to experiences. The definition of perception does not change but each individual's perception of an experience can be different.

There are many things that influence a person's perception. Personal beliefs, attitude, and past experiences can change the way a situation is perceived. Situational awareness also factor's into perception. What might be normal in one situation might stand out in another. A person yelling at a football game would not stand out but the same person acting the same way in a church would be noticed. The situation is the only thing that changed yet the perception of the same person reacting in the same way in each place would be drastically different. The first thing a person would do in reaction to someone yelling in church would be to figure out why that person was behaving that way. Maybe there was a bee that caused the person to yell (an external factor) or maybe that person speaks very loud normally which would be considered an internal factor. What ever the cause might be, it is our nature to figure out why. After realizing the cause of the yelling, we then make determinations on that person's behavior and create a perception of him or her.

A person's perception of others can have an impact on business behavior in a number of ways. "For instance, there is substantial evidence that when we make judgments about the behavior of other people, we have a tendency to underestimate the influence of external factors and overestimate the influence of internal or personal factors" (Robbins, S. 2005). The fundamental attribution error occurs when blame is placed on a person for reasons that could be caused by outside factors rather than something the person was doing. For example, a manager at Wendy's might blame the employee for a low sales week because the employee did not offer an up-size rather than taking into consideration that the McDonald's across the street is automatically upgrading the meal size for free for the week. In the same sense, the opposite is true. When a person exceeds the expectation they often attribute the success to themselves rather than to an outside factor (the employee at McDonald's would say they sold more that week because they worked especially hard, rather than saying they sold more due to the free up-size) which is a self-serving bias. In other words, when someone fails at something they usually place blame on anything but themselves and if they are successful, they attribute it to themselves before they attribute it to an outside factor.

Just as perception has an affect on business behavior, perceptive "shortcuts" can have an affect on judging others. There are both positive and negative affects of using perceptive "shortcuts". There are many forms of perceptive "shortcuts"; there is selective perception (which will be discussed), the halo effect, the contrast effect, projection and stereotyping.

We have a tendency to use selective perception when we judge others. Selective perception can give us an idea about a person however it does have its inaccuracies. We see what we want to see instead of what really is, when we use selective perception. When meeting a new person we may be drawn to them right away because there were a few things we noticed that we find appealing and maybe even similar to ourselves but just because we see those things does not mean the person is who we made them out to be. Someone looking for a roommate might accept the application of a person who seems to be "on the same page" but after they move in and some time is spent getting to know them, they might find out that their new roommate has a tendency to be messy and lack responsibility. Selective perception can be beneficial as well. When a new employee can identify with an employer, or vice versa, due to selective perception, there may be a stronger bond formed. It is easier to respect someone when we perceive them to carry traits we find respectable and similar to our own rather than a person that we cannot identify with.

Decisions in real world organizations are formed in a number of ways. When companies are faced with tough decisions, they take only the information needed to come to a conclusion. Most of the time there is too much information to take in and it could complicate the decision making process so only selected information is taken. A person tries to satisfice, to come to the best possible solution that is sufficient, for the decision that needs to be made. A manager may need to change a schedule immediately to cover an unexpected absence. Instead of going through the company manual of rules and procedures first, then confirming the employees reason, and then calling all of the employees that are off, the manager may just accept the call from the employee, accept the absence, and call the first person on the list of people that are off to find a replacement. Simplifying the process is the goal of bounded rationality.

Another concept that is prevalent in real world organizations is overcoming overconfidence. Many people tend to make decisions based on the idea that they are correct in a specific situation. This creates problems when decisions are being made concerning issues that are not part of the person's area of normal work. Once a person is able to accept input from others, overconfidence will be less of an issue.

Anchoring biases are also problematic in decision making processes for real world organizations. Once a bias has been created, it is difficult to overcome. This bias could be difficult for a new employee that started off "on the wrong foot". If there was a situation such as an illness or car trouble that prevented the new employee from showing up to work anytime in the first few days of employment, this automatically creates an anchoring bias. This is the "first impression" that the new employee gave the company and now it is assumed that he or she might be a difficult employee since he or she did not "care enough" to show up to work in the first week of employment.

Everything that we encounter in life is perceived in one way or another. Perceptions even affect our ethical and moral decisions. There are certain criteria that determine ethical perceptions. The first is the utilitarian approach. The utilitarian approach to an ethical perception is that decisions are being made that benefit the "greater good". Giving cutbacks to employees because it saves money for the company is an example of the utilitarian concept. Another concept that determines ethical perceptions are the rights that people have. This form of ethical perception is based on the rights that are granted from civil liberties. This type of concept could go hand in hand with the justice concept (the concept that people are treated fairly). A Union is a good example of a group whose perceptions are based on these types of criteria. They fight for things like overtime pay and benefits for people that deserve them but do not get them from their companies. They also "speak up" for the people that are part of the Union. They demonstrate their right to free speech and equality. These types of criteria have their benefits and their disadvantages. Some decisions that are made are justified due to these ethical criteria however times are changing and these justifications cannot always be made. What is good for a company might not be good for its employees so the utilitarian criteria are not good for everyone.

Perception is a personal thing. What one person perceives may not be what another person perceives. This does and always will have an affect on how decisions, both personal and business, will be made.

Reference:

Robbins, S. (2005). Organizational Behavior (11^th Edition). Prentice Hall