2.

Perception and Decision Making

People only see what they are prepared to see.

Ralph Waldo Emerson

Perception Process
Perception is the process through which people receive, organize, interpret and
respond to information from the environment. It serves as a filter for information. Perception
influences thoughts, feelings and actions, and as a result decides about the quality and
effectiveness of receipt of messages and response to a given situation1.
Researchers very often define perception as a transaction between the perceiver and the
perceived. As in any process, also there, are internal and external factors influencing its
quality, including the characteristics of parties as well as the context:
 the perceiver – his experience, needs and values, personality and attitudes tend to
influence the perception; e.g. values and needs can partly limit awareness of the
differences between people; every situation is defined in terms of needs;
 the perceived – his status, contrast, novelty and repetition are important factors in
perception process;
 the context – physical, social, organizational, which can influence the quality of the
transaction,
 the target – whatever the perceiver is trying to make sense of; it could affect other
person, event, object, idea.

Perception Barriers
The perception process is not always close to reality. Although perceivers try to be
objective and rational, the distortions in perceptual process still happen. The most typical are
as follows2:
 halo effect – situation in which one impression (positive or negative) is used as the
basis for the evaluation of a person or a situation; the mechanism is especially

1
See: S. Robbins, T. Judge (a), Organizational.. op.cit.; J. Schermerhorn, J. Hunt, R. Osborn, Organizational
Behavior, John Wiley & Sons, New York 2008.
2
See: R. Baron, D. Byrne, N. Branscombe, Mastering Social Psychology, Pearson, Boston 2007; J. George, G.
Jones,op.cit; J. Schermerhorn: Introduction to Management. John Wiley & Sons, New York 2010; S. Robbins, T.
Judge, op.cit.

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 important in the employees’ assessment process, when leader can assess subordinate
accordingly to a one random event;
 stereotyping – judgment about people made on the basis of one criteria or
characteristic; is the function of categorization – an attempt to organize reality through
assigning characteristics to some already known categories; the negative result of
stereotyping is that many unverified qualities or faults are assigned to others; and
people are not treated personally;
 selective attention / selective perception – the tendency to focus on some aspects of
situation or person, ignoring others; usually it helps to make faster decisions, however
perceived aspects tend to be consistent to perceiver’ existing beliefs, values or needs;
 contrast effects – situation in which an individual’s characteristics are contrasted with
those of others; the differences appear to be greater than in reality; this phenomenon
will be discussed more in chapter 8;
 similar-to-me effect – tendency to perceive people similar to perceiver more
positively than those who are different;
 self fulfilling prophecy – the tendency to find in a given situation or individual the
characteristics expected to find; in other words interpretation of events is always
consistent with perceiver’s beliefs and opinions;
 social habituation – customization to a stimulus and as a result weakening of a
reaction to the same intensity; the mechanism is crucial to motivation process and
team spirit maintenance.
The perception distortions result not only from mentality and general enduring ways of
thinking, but also from perceiver motivational state concerning a given situation (what he
wants to see and hear) and mood in a given moment (what he feels at the time of perception).

Perception Consequences
In relation with others perception has a twofold meaning. First, it can influence the
mechanisms of judging others. Individuals very often use heuristics – simplifying strategies
that help to judge and make potential decisions. There are few major judgmental heuristics3:
 avaibility heuristic – involves assessing a current event based on past occurrences;
 representativeness heuristic – involves assessing on the base of similarities between
people, or a given situation and stereotypes of similar occurrences;

3
J. Schermerhorn, J. Hunt, R. Osborn, op.cit.

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  anchoring and adjusting heuristic – involves assessing by taking an initial value
from historical source, and then adjusting this value to make the current assessment.
Secondly, the target of perception can be also others’ impressions and perception
management. People can use some tactics (e.g. appreciating others, being consistent in verbal
and non verbal communication, conforming to norms) to affect others and build more positive
personal image.
At this point, it is worth mentioning that the Johari window – traditionally used tool,
helps to understand better an interpersonal relationship. The concept based on cognition
theory (disscussed in chapter 3), strongly refers to perception essence. It helps to show how
the same individual can be perceived differently in different situations by different people.
It assumes that there are four different areas in cognition of others and self4, as it is shown
in fig. 2.2.

Fig. 2.2 The Johari Window

Known to others Not known to others

Known to self Known to self

Arena Façade

Blind Spot Unknown

Known to others Not known to others

Not known to self Not known to self
Source: own work based on: L. Zbiegien-Maciag, W. Pawnik, Zarzadzanie organizacja – aspekt socjologiczny,
Wyd. AGH, Krakow 1995, en.wikipedia.org.

The arena is the open area – the part of ourselves that we see and others see, the
things the individuals know about themselves and what others know about them. This
knowledge includes not only facts, but also feelings, needs, beliefs – all perception effects. In
the first contact between people this space is quite narrow, and enhances with getting more
and more information.
The façade represents information about the individual of which others are unaware. It
is a private space, which people keep from others. Knowing and trusting each other affects the

4
See: L. Zbiegien-Maciag, W. Pawnik: Zarzadzanie organizacja – aspekt socjologiczny. Wyd. AGH Krakow,
Krakow 1995, http://www.noogenesis.com/game_theory/johari/johari_window.html; J.Schermerhorn, op.cit.

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communication and allows to enlarge arena space at the expense of façade. This process is
called self-disclosure.
The blind spot quadrant is related to the information of self of which individual is not
aware but others are. They can inform about these blind spots (e.g. how they perceive the
individual) or not, depending on trust between parties, perceived importance of this
information and so on.
The last unknown quadrant - represents unconscious or subconscious part of
individual’s characteristics or behaviors not recognized by himself nor others. This may be
because there is a collective ignorance of the existence of a trait, because some traits are
revealed in new situations, with new stimuli. Thanks to experience new characteristics or
behaviors are discovered.
The interaction between two parties is always dynamic, the areas can change
depending on trust, accurate perception, consciousness, self-esteem, willingness to
communicate, as well as manipulation.
The Johari window is used in coaching, diagnosing group dynamics, communication
improvement, conflict resolution and negotiations.

Decisions – Definitions, Perspectives

In common understanding decision is perceived as a synonymous of choice or
problem solving. Decision making is a conscious choice from different alternatives. There are
choices which are not decisions (e.g. choosing one of two alternatives by throwing a coin:
(“heads or tails”). On the other hand, a choice is always a part of a decision making. Some
decisions help to solve problems, but there are routine decisions unrelated to problems (e.g.
formal acceptance of employee holidays’ dates).
In organizations every type of problem needs a different decision. Programmed
decisions concern routine problems in daily work. The solutions have already been elaborated
and determined in the past. In case of nonprogrammed decisions they refer to nonroutine
new problems, which is a huge part of managerial work.
Sometimes one can also mention the associative choices as a type of decision. These
are decisions loosely connected to problems, in which the most important is to be active, to
break down the inertia. The associative choices can be utilized as setting improvement

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manner5. They reflect rather the “organized anarchy” action (typical e.g. for high-tech or
consulting firms).
Rational decision making process is a model which assumes some sequence of steps
that enhance the probability of attaining a desired outcome6. It assumes that the decider
decision maker is able to: a) clearly identify the problem or define goals; b) then to collect all
possible alternatives and forecast their consequences, c) to choose the optimal option and d)
implement the solution.
The model is based on economic side of decision making, and does not take into
account the emotions, limited knowledge or limited ability to evaluate alternatives. It also
rests on assumption that decision maker has an access to all information needed to make
a decision.
As the classical model is unrealistic, the behavioral perspective was developed. It
assumes human’s limits: bounded rationality, perception and cognition barriers, as well as
emotional reactions. People stop the decision making when they are satisfied with the first
acceptable solution of the problem7.
The difference between the rational and behavioral models (of Herbert Simon and
James March) is that the rational model shows how we should make decisions, whereas the
behavioral approach focuses on decider’s limitations.

Perception and Decision Making

Heuristics help to make decisions or assessments faster, but also can cause
misevaluations and decrease efficiency of decisions. Among others, people are prone to the
confirmation trap and the control illusion. First bias means that decision maker seeks
confirmation for already preferred or chosen solution. The mechanism of selective perception
is activated. As a consequence, the very few options are under consideration, and decision
maker too early rejects non stereotype solutions. Control illusion is related to the tendency to
overestimate the possibility of controlling (accidental) events.
Another source of error in decision making is escalation of commitment. It explains
why people invest their time, money and effort into bad decisions. The major causes of this
mechanism are following8:

5
J. Schermerhorn, op.cit., J. Schermerhorn, J. Hunt, R. Osborn, op.cit.
6
S. Robbins, T. Judge (a), op.cit.
7
To read more see: H. Simon, Administrative Behavior, The Free Press, New York 1976.
8
J.George, G.Jones, op.cit.

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  one does not want to admit that the mistake was made – decision makers
prefer to commit much more resources and time to reconfirm the correctness
of the original decision to give up and choose another solution, the negative
consequences of changing behavior seem larger than they really are;
 one believes that additional commitment of resources is justified to regain
the loses – the decision makers forget about the sunk costs (costs that cannot
be reversed by any additional activity);
 one takes more risks when view decisions in negative terms – the wish to
make up for losses rather than generate profits motivate more stronger to
make the risk; e.g. losing gamblers tend to be more steadfast in their wish of
recovering lost money and suffer more from commitment escalation than
winners.
The problem is that people use heuristics or escalation of commitment without being
aware of these mechanisms. As a result, the poor quality of decision is always possible
regardless of decision maker knowledge. The use of IT (e.g. SAP ERP system) can, to some
degree, enhance the decision effectiveness. It helps to collect data, link decision makers from
different levels and locations in organization.

Check Your Knowledge!!!

1. How perceiver characteristics influence the perception accuracy?
2. How perception distortions affect individual’s behavior? Give some examples.
3. What is self-disclosure? What factors influence this process?

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