Perception

Definition
• Perception may be defined as
– the process by which an individual selects, organizes and interprets
stimuli
– into meaningful and coherent picture of the environment in which one
lives

• What we perceive can be substantially different from

Objective reality.

• Perception of two individuals may differ

– if they are exposed to the same stimuli, under the same conditions
Factors That Influence Perception
 Factors influencing Perception
• Factors in the Perceiver: A person’s attitudes, motives, interests, past
experiences and expectations affect his perception
Ex- Emergency meeting called after lay-off announcement

• Factors in the Target: Perception is affected by characteristics of the

stimulus like novelty, sound, size, background and proximity
Ex- Tall person in a crowd, Two people quitting job at the same
time

• Factors in the Situation: The context or environment in which

objects or events are seen influence an individual’s perception like
time and work or social environment
Ex- Going to a health club in a tracksuit and Coming to office in the
same tracksuit
 Factors in the Perceiver- Examples
• Attitude: Tendency to react and behave in a boring
meeting/lecture

• Motive: Hungry Manager looking at the snacks offered with

tea in a meeting

• Interests- The manager has no interest in guiding an internship

student at work

• Experience- Fixed Price tag may result into perception that the
price is correct

• Expectations- Police officers are perceived to be fearless and

authoritative
 Factors in the Target- Examples
• Novelty: Passbook printing machine installed in a bank

• Motion: Objects moving on a conveyor belt

• Sound: Loud sound of horns blown

• Size: Big Box of sweets

• Background: Scenery in a painting

• Proximity: Same department employees are friends

 Factors in the Situation- Examples

• Time: Punctuality for reaching to the office on time

• Work environment: The HOD encourages professional growth

of his staff members

• Social environment: The organization encourages charitable

work
 Social Perception
• Social Perception deals with how an individual perceives other
individuals and gets to know other individuals

• The primary factors that affect social perception are related to

psychological processes such as:

➢ Halo effect

➢ Stereotyping

➢ Attribution theory

• While attribution theory explains the reasons or the cause for an

individual’s behavior, stereotyping and the halo effect are problems
associated with social perception
 Perceptual Errors

• Stereotyping: It refers to the tendency of generalizing the

characteristics of all the members of a group

➢ When a perceiver judges some person based on his perception about the
group to which the person belongs it is known as stereotyping
➢ Ex- Since all politicians are manipulative, so the political party leader is
also manipulative

• Halo Effect: When people draw a general impression about an

individual based on a single characteristic, it is known as Halo effect
➢ certain positive trait of a person may outweigh all other characteristics that
have to be considered while making a perception

Ex- Suresh should get good marks in end- semester because he

was excellent in class participation /test
 Perceptual errors (Continued)

• Selective Perception: The tendency to selectively interpret

what one sees on the basis of one’s interests, background,
experience and attitudes
Ex- Subtle stimuli like the noise of people talking, sound of
air conditioner or noise of vehicles may not be registered
because they might not be perceived to be important

• Contrast Effect: Evaluation of a person’s characteristics

that is affected by comparison with other people recently
encountered who rank higher or lower on the same
characteristics
Ex- An interviewee is likely to receive a more favorable
evaluation if preceded by mediocre applicants and a less
favorable evaluation if preceded by strong applicants
 Attribution Theory
The way in which people explain the cause for their own or
others’ behavior is referred to as attribution

➢ Dispositional attribution: A person’s behavior is attributed to

the internal factors that characterize the person such as
personality traits, motivation and ability

➢ Situational attribution: A person’s behavior is attributed to

factors that are external to the person such as the equipment
that he may be handling and social influence he may be subject
to
 Attribution- The CCD approach – Harold Kelley
Kelley suggested other casual dimensions having an impact on the type of
attributions made by individuals

➢ Consensus Extent to which others behave in a similar manner in same situation

Ex- Your friend John smokes a cigarette when he goes out for a meal with
his friend. If his friend smokes, his behavior is high in consensus. If only John
smokes it is low.

➢ Consistency Pattern (Frequency) of behavior which may be relatively stable

or unstable
Ex-If John only smokes every time when he is out with friends,
consistency is high. If he only smokes on one special occasion, consistency is
low

➢ Distinctiveness Indication of whether a person’s behavior is similar for all

tasks /situations or whether his/her behavior differs from one task to another
Ex-If John only smokes when he is out with friends, his behavior is high in
distinctiveness. If he smokes at any time or place, distinctiveness is low
Attribution Theory
 Ex-1

Everyday in the morning, the boss wishes all

the staff members with a typical smile under
any circumstances
 Ex-1-Key- Consensus

Everyday in the morning, the boss wishes all the

staff members with a typical smile under any
circumstances

Similar Manner: Typical Smile

Same situation: Every morning
 Ex- 2

The boss is polite to all staff members when

the staff meets him at 9 am, 10.30 am, 2pm
and 4.30 pm but becomes slightly impolite at
6 pm
 Ex-2-Key- Consistency

The boss is polite to all staff members when

the staff meets him at 9 am, 10.30 am, 2pm
and 4.30 pm but becomes slightly impolite at
6 pm

Pattern of behavior: Politeness (4 times a day)

Stable or unstable: Unstable at 6 pm
 Ex-3

The boss is competent in resolving

administrative issues of the customers and
also handles field work proficiently
 Ex-3-Key- Distinctiveness

The boss is competent in resolving administrative

issues of the customers and also handles field
work proficiently

Behavior in one task: Being Competent in

administrative work

Behavior in other tasks: Being proficient in field

work
 Attribution Errors
• Fundamental Attribution error The tendency to underestimate the
influence of external factors and overestimate the influence of internal
factors when making judgments about the behavior of others
• It explains why we often judge others harshly while
letting ourselves off the hook at the same time by
rationalizing our own unethical behavior.
Ex- Sales manager attributes the poor performance of her sales agents to
their laziness rather than the innovative product line

• Self Serving Bias The tendency for individuals to attribute their own
successes to internal factors and put the blame for failures on external
factors
• The common habit of a person taking credit for
positive events or outcomes, but blaming outside
factors for negative events.
Ex- A company attributes its income/profit achieved to its own ability or
effort and blames bad luck and unproductive workers for not working up
to the mark
 Attribution Errors ( Continued)
• Self-fulfilling Prophecy (Pygmalion effect) A situation in which
one person inaccurately perceives a second person and the resulting
expectations cause the second person to behave in ways consistent
with the original perception
Ex- If a manager expects big things from his subordinates and
doesn’t get the results, then the subordinates will be punished more
than they actually deserve

• Projection Error A projection error is the unconscious assumption

that others think, feel, judge, or perceive more or less what we do.
People tend to defend themselves against their own unconscious
impulses or qualities (both positive and negative) by denying
their existence in themselves while attributing them to others

Ex- Those who drink (or abstain from) alcohol tend to overestimate
(or underestimate) the drinking habits of others
 How do people resort to shortcuts in
judging others
• Selective Perception

• Halo Effect

• Contrast Effect

• Stereotyping Effect

• Projection Error
 Perception and Decision-making
• Decision-making by an individual is in response to a problem

• Its need arises when there is a discrepancy between current

state and desired state

• It requires the decision-maker to consider various alternative

courses of action and decide upon the best option to solve the
problem

• Awareness of the existence of a problem and realization of

the need to make a decision to solve the problem are matters of
perception
 Rational Decision-making steps
It describes how individuals should behave in order to maximize outcome by
making consistent, value maximizing choices within specified constraints.

The steps are:

» Define the problem

» Identify the decision criteria

» Allocate weights to the criteria

» Develop the alternatives

» Evaluate the alternatives

» Select the best alternative

 Bounded Rationality and Intuitive Decision-
making
• Individuals make decisions by constructing simplified models that extract
the essential features from problems without capturing all their complexity

• When faced with a complex problem, most people respond by reducing the
problem to a level at which it can be readily understood

• People satisfice; that is, they seek solutions that are satisfactory and
sufficient (decide and pursue a course of action that will
satisfy the minimum requirements necessary to
achieve a particular goal)
• They seek solutions that are satisfactory and sufficient to operate within the
confines of bounded rationality

• Intuitive Decision-making It is an unconscious process created out of

distilled experience that depends on holistic associations, links between
desperate pieces of information and engaged emotions
 Ethics in Decision-making

The ethical decision making criteria are:

• Utilitarianism: It is a system in which decisions are made to
provide the greatest good for the greatest number

• Whistle-blowers: They are individuals who report unethical

practices by their employer to outsiders

• Justice: It deals with imposing and enforcing rules fairly and

impartially to ensure justice or an equitable distribution of
benefits and costs

• Behavioral ethics: It is an area of analyzing how people

actually behave when confronted with ethical dilemmas
 Errors in decision making
• Overconfidence Bias: It is a tendency to be overconfident in
taking decision

• Anchoring Bias: It is a tendency to fixate (excessively rely)

on initial information, from which one then fails to
adequately adjust for subsequent information

• Confirmation Bias: The tendency to seek out information

that reaffirms past choices and to discount information that
contradicts past judgments

• Availability Bias: It is the tendency for people to base their

judgments on information that is readily available to them
 Errors in decision making (Continued)
• Escalation of Commitment: It is an increased commitment to a
previous decision in spite of negative information

• Randomness error: It is the tendency of individuals to believe that

they can predict the outcome of random events

• Risk aversion: It is the tendency to prefer a sure gain of a moderate

amount over a riskier outcome, even if the riskier outcome might
have a higher expected payoff

• Hindsight bias: It is the tendency to believe falsely, after an

outcome of an event is actually known, that one would have
accurately predicted that outcome when managers falsely
believe that they predicted the result of a
decision after the outcome is known.
 Reducing Biases and Errors

• Focus on Goals

• Look for information that disconfirms your beliefs

• Don’t try to create meaning out of random events

• Increase your options

Examples of Perceptual, Attribution and
Decision making errors
 Ex-1

Imagine that you are traveling to Las Vegas with a

friend. You've been there a couple of times before so
you assume that you know the route you should take
and you instruct your friend to take a particular exit
that you believe is the correct one. Unfortunately, you
misremembered the route and the exit turns out to be
the wrong one
 Ex-1-Key

Imagine that you are traveling to Las Vegas with a

friend. You've been there a couple of times before so
you assume that you know the route you should take
and you instruct your friend to take a particular exit
that you believe is the correct one. Unfortunately, you
misremembered the route and the exit turns out to be
the wrong one- Overconfidence Bias
 Ex-2

The head of the marketing department at We Sell

decided to send Avinash to sell a product to a
particular client. His decision to send Avinash was
based on the fact that he had good communication
skills and thinks that Avinash will be able to convince
the client
 Ex-2-Key

The head of the marketing department at We Sell

decided to send Avinash to sell a product to a
particular client. His decision to send Avinash was
based on the fact that he had good communication
skills and thinks that Avinash will be able to convince
the client- Halo Effect
 Ex-3

When F. Scott Fitzgerald said, “The very rich are

different from you and me” and Hemingway replied,
“Yes, they have more money,” Hemingway refused to
engage in
 Ex-3-Key

When F. Scott Fitzgerald said, “The very rich are

different from you and me” and Hemingway replied,
“Yes, they have more money,” Hemingway refused to
engage in- Stereotyping
 Ex-4

Rating a good professor as average because you

compared his or her performance with three of the
best professors you have ever had in college. You are
currently taking courses from the three excellent
professors
 Ex-4-Key

Rating a good professor as average because you

compared his or her performance with three of the
best professors you have ever had in college. You are
currently taking courses from the three excellent
professors- Contrast Effect
 Ex-5

Akriti comments on Sumita’s poor performance in her

exam as “It is natural of her to fail, as she barely
studies and is least interested in her studies”
 Ex-5-Key

Akriti comments on Sumita’s poor performance in her

exam as “It is natural of her to fail, as she barely
studies and is least interested in her studies”-
Fundamental Attribution Error
 Ex-6

A star quarterback discusses the hard work and team-

mindedness of his fellow players when asked to explain
a big win. A few weeks later, after his team loses a
game, the same quarterback explains that “it just wasn’t
our night”
 Ex-6-Key

A star quarterback discusses the hard work and team-

mindedness of his fellow players when asked to explain
a big win. A few weeks later, after his team loses a
game, the same quarterback explains that “it just wasn’t
our night”- Self serving bias
 Ex-7

Hemant is looking to buy a used car and he

focuses excessively on the odometer reading and
the year of the car, and uses those criteria as a
basis for evaluating the value of the car, rather
than considering how well the engine or the
transmission is maintained
 Ex-7-Key

Hemant is looking to buy a used car and he

focuses excessively on the odometer reading and
the year of the car, and uses those criteria as a
basis for evaluating the value of the car, rather
than considering how well the engine or the
transmission is maintained-Anchoring Bias
 Ex-8

Rita believes that she is more likely to die from a

car accident than from heart disease because car
accident makes big news
 Ex-8-Key

Rita believes that she is more likely to die from a

car accident than from heart disease because car
accident makes big news-Availability Bias
 Ex-9

A friend has been dating someone for several

years. Although he admits things aren’t going too
well, he says he is still going to marry her. His
justification is that he has invested a lot in the
relationship
 Ex-9-Key

A friend has been dating someone for several

years. Although he admits things aren’t going too
well, he says he is still going to marry her. His
justification is that he has invested a lot in the
relationship- Escalation of Commitment
 Ex-10

Tiger Woods often wears a red shirt during a golf

tournament’s final round because he won many
junior tournaments wearing red shirts
 Ex-10-Key

Tiger Woods often wears a red shirt during a golf

tournament’s final round because he won many
junior tournaments wearing red shirts-
Randomness Error
 Ex-11

Rajesh holds a belief that left-handed people are

more creative than right-handed people.
Whenever he encounters a person that is both
left-handed and creative, he places greater
importance on this "evidence" that supports what
he already believes
 Ex-11-Key

Rajesh holds a belief that left-handed people are

more creative than right-handed people.
Whenever he encounters a person that is both
left-handed and creative, he places greater
importance on this "evidence" that supports what
he already believes-Confirmation Bias
 Ex-12

Amar is given a choice between two scenarios,

one with a guaranteed payoff and one without. In
the guaranteed scenario, Amar may receive $50.
In the uncertain scenario, a coin is flipped to
decide whether Amar receives $100 or nothing.
The expected payoff for both scenarios is
$50.However, Amar prefers the first scenario
 Ex-12-Key

Amar is given a choice between two scenarios,

one with a guaranteed payoff and one without. In
the guaranteed scenario, Amar may receive $50.
In the uncertain scenario, a coin is flipped to
decide whether Amar receives $100 or nothing.
The expected payoff for both scenarios is
$50.However, Amar prefers the first scenario-
Risk Aversion
 Ex-13

Imagine that you're cleaning out your kitchen

cupboards, and you put a glass platter near the
edge of the counter. As you continue cleaning,
you bump the counter and the platter falls to the
ground, shattering into pieces. You say to
yourself, 'Oh man! Of course that was going to
happen
 Ex-13-Key

Imagine that you're cleaning out your kitchen

cupboards, and you put a glass platter near the
edge of the counter. As you continue cleaning,
you bump the counter and the platter falls to the
ground, shattering into pieces. You say to
yourself, 'Oh man! Of course, that was going to
happen- Hindsight Bias
 Ex-14

A professor expected that one of his meritorious

students would excel in the final exam of his
subject. However, his poor performance in the
final exam made the professor so angry that he
failed him even after his decent performance in
the exam which could have fetched him passing
marks
 Ex-14-Key

A professor expected that one of his meritorious

students would excel in the final exam of his
subject. However, his poor performance in the
final exam made the professor so angry that he
failed him even after his decent performance in
the exam which could have fetched him passing
marks- Self Fulfilling Prophecy