People make countless perceptual errors everyday. These errors are:
1. Selective Perception
People selectively interprets what they see on the basis of their interest, background, experience and attitudes. Such bias can exist in the decision making field because of his/her wrong interest or attitudes and they are following the principles of “we perceive what we like to perceive.”
We are constantly bombarded much with sensory information that it is impossible for us to pay attention for everything. Our subconscious mind scans our environment and selects what it seems easy to notice. Even then, people not see things the way they are, they also tend to see what they expect to see, as well as what they want to see.
When we perceive situation that looks familiar to us, our past experience often cause us to see the vent in terms of what we expect. Out limits spans of attention leads us to categorize things by aspects that appear similar to what we already know, and we save time and energy in assuming that the current situation is comparable to previous experience.
We not only tend to see what we expect, but we are also susceptible to seeing things the way we want them to be. For example, most people believe they are above average in intelligence as we are highly skilled drivers, because we want to believe flattering things about ourselves. When considering information, we have gathered, fail to support our preferences. People who are heavily committed to a given position allow the weight of their beliefs to influence how a situation is perceived. Employees who are strongly in favor of one side of a controversial work issue will actually perceive a meeting called to discuss possible options in a fundamentally different way than employees in the opposite camp.
We are extremely willing to take the credit for our successes and we blame our failures on external circumstances beyond our control. When a sports team wins sport, it is because of hard work and talents of team members. When they lose, it is due to bad officiating, weather conditions, lack of fan support, and so on. And students who perform well on a test do so because they understand the material, are knowledgeable, or possibly because they are gifted test takers. However, those who perform poorly on the very same test accuse the professor of testing uncovered materials, offering poorly worded questions, or applying unfair grading practices. We perceive internal cause for desirable outcomes and external interference for unfavorable consequences.
Corrective Procedures
- Take multiple perspectives
- Be aware of our expectations beforehand.
- Strive for objectivity.
- Ask how an impartial outside would view the situation.
- Be honest in our assessments of why we feel the way we do towards a person or event.
2. Impression Effect/ Halo Effect
This is the process of evaluating an individual performance based on his / her single characteristic. Such a biases is also called halo effect. The halo effect occurs when we believe a single characteristic possessed by someone is associated with a host of other desirable traits. For example, most attractive people are also believed to be smarter, warm people are rated as sociable and humorous and intelligent people are rated as better leaders. Just on the basis of individual attribute he or she will be evaluated favorably or unfavorably. This type of error has generally been seen at the time of employee selection and evaluating performance of employees in our organization. Such impression effect distorts decision making capacity of a manager by limiting evaluation of employees to a single characteristics.
Even before knowing any of the important features, people start having impressions and judge there by. This sometimes leads to wrong decisions when initial impressions are believed to be more relevant and important in rendering a decision than later impressions. This leads to the impression effects causing judgmental biases. Such bias is based on the principle of “first impression is the last one.”
Our first impressions are intuitive. Our always working subconscious processes have detected something about the person that triggers an emotional reaction resulting in feeling of like or dislike. A primary effect occurs when initial impressions are believed to be more relevant and important in rendering a decision than later impressions. Consistent evidence has been found to indicate that first impressions often are lasting ones, demonstrating that the sage advice mothers give their children “to be sure and make a good first impression” has merit. However, first impressions can also be misleading. Some attributes (such as attractiveness or high energy levels) often lead us to believe that people possessing such desirable qualities must have other positive dimensions as well.
The primary effect can occur when decision makers evaluate situations as well as people. When we are exposed to opposite sides of a controversial issue, the first presentation can carry more weight than subsequent presentations.
When evaluating resumes for potential new employees, interviewers tend to focus on one or two bits of information and make their initial impressions. When candidates are interviewed, those with favorable first impressions and stronger halo expectations are treated more pleasantly and tapped for confirming information by interviews, rather than being treated without bias.
Corrective Procedures
- Take multiple perspectives
- Force ourselves to consider events before and after the ones that readily come to mind.
- Play devil’s advocate to uncover the justification for what we believe.
3. Perceptual Defense
People often screen out perceptual stimuli that make them uncomfortable and dissatisfying. People have certain inherent tendencies to defend their reactions against new information which would be conflicting with their existing impressions. Perceptual defense is performed by:
a) Denying the existence or importance of conflicting information.
b) Distorting the new information to match the old.
c) Acknowledging the existence of new information but treating it as a non-representative exception.
People generally build defenses against stimuli or events that are either personally or culturally unacceptable or threatening. From the view point of the organizations, perceptual defense plays an influential role in understanding superior-subordinate relationship.
4. Stereotyping/ Categorization Effect
Stereotyping is judging someone on the basis of one’s perception of the group to which that person belongs. It can be also called stereotyping bias or availability bias. It involves how information is stored and assessed in our minds. Representativeness occurs when we perceive information as typical or representative of the class to which we have categorized it, regression to the mean happens when we tend to ignore that fact that extreme events are likely to be more average the next they occur, and availability occurs when we are more likely to recall a memory due to its vividness or ease of retrieval from our minds and assume that the information is more typical or likely because it is easily imagined.
Corrective Procedures
- Take multiple perspectives.
- Examine assumptions to see if categorization may have biased our though processes.
- Support data retrieved from memory with hard facts.
- Separate seemingly related items to uncover the source of their connectivity.
- Be aware that random events occur and that we seek patterns where none may exist.
- Recognize that coincidence does happen.
5. Project / Presentation Effect
It is easy to judge others if they assume that they are similar to us. For instance, if we want challenge and responsibility in our job, we assume that others want the same. The tendency to attribute one’s own characteristics to other people is called as project. When managers are engaged in project, they compromise their ability to respond to individual differences. They tend to see people more homogeneous than they really are.
Presentation effects occur when we receive information influences how we decide. We often use an initial value as a starting point to our assessments and adjust from the beginning to achieve a final decision. It is mainly caused due to limited short term information processing capacity of the human mind. In other words, the limited short-term information processing capacity of the human mind leads decisions makers to focus on the most important aspects of a situation to solve a problem. Research indicates that even outrageously extreme anchors can unknowingly sway our judgments.
Moreover, how information is presented to us can also influence the way we use it to make decisions. The tendency for decision makers to anchor from an initial starting point can influence our judgment.
During job interviews, it is common practice for the interviewer to ask perspective hires the salary range they anticipate for the job. Interviewees who offer an amount, especially one that is too low, may allow themselves to fall victim to anchoring. The interviewer is likely to anchor on the given figure and adjust upward or downward only slightly, narrowing the salary range under consideration. Anchoring effects suggest that during the interview process, we are better served by responding with a less concrete answer that allows the salary range to be flexible.
When information becomes an anchor, we adjust insufficiently from that amount when making decisions. This is why persuasive arguments can sometimes be very successful if they present extreme initial views. Often, we are not even aware that an anchor value has been allowed to sway our judgment. Because of their pervasiveness, presentation effects can have a significant impact on business decisions.
Corrective Procedures
- Take multiple perspectives.
- Attempt to consider the problem before presentation information is provided.
- Be prepared with enough information to minimize presentation effect.
- Be aware of how our presentation of the problem may bias the opinions of others.
- Seek out other opinions and perspectives, especially from those not too close to the problem.
- Consider best, worst, and most likely scenarios.
6. Perceptual Change
In perception, is a transaction between the individual and the outside world in order that reality may become predictable? What are the conditions under which perceptual changes occur? Is a mere rational logical or intellectual understanding of one’s own perceptual tendencies or situations enough to bring about perceptual change? The answer is, No. The prime condition for perceptual change is frustration. When faced with frustration, a person is ready to change his perception. Research in the field of opinion and attitude change, has demonstrated this fact beyond doubt. People, working in a distorted room, continued to believe that the room was square (as most rooms are) until it became impossible for them to achieve their objectives with the faulty perception. Only then they were able to see that the room was distorted.
Another condition for perceptual change is the desire, willingness and determination to bring about such a change. As John Power said, “Perceptual change comes through awareness of one’s perceptions and perceptual framework.” This is possible only when there is willingness, desire and determination. Some other thinkers point out that, in some situations, determination may have negative effects. They advocated observation of self, processes as they occur, accompanied by purpose, analysis and interpretation. The very act of observation, they assert, breaks the influences of the past operating on perceptual processes, and frees it of all sources of possible distortions.
7. Framing Effects
Framing effects occur when decision makers tend to avoid risk or when problems are framed as gains or losses. It involves selecting and highlighting certain aspects while excluding or minimizing others. The effects of problem framing have been found in other types of decisions as well. For example, when patients are asked to select the form of cancer treatment they prefers, how the information is presented to them influences their decisions. More lung cancer patients select surgery when they are told that they have a “68% chance of living for more than 1 year” rather than when they are told that surgery results in a “32% chance of dying by the end of the year”.
An employee whose attendance is framed in positive terms (of example, the percentage of days present on the job) is likely to be evaluated more favorably than another employee with the exact same rate of absenteeism whose attendance is framed negatively (the percentage of days absent from the job). People have a general tendency to evaluate the same characteristic more positively when given a positive description than when given a negative description.
Not only does the framing of our choice influence our decision processes, but the framing the outcomes of our choices has an impact on how we think as well.
Research suggest that decision makers perceive equal situations differently depending on how they are framed. Due to our limited mental capacity, we bias our thinking when we focus on the descriptive elements used to categorize what we see. What we perceive is condensed, summarized, and recorded by the mind according to what seems to be the most important aspect of the situation. Although we might recognize at an intellectual level that a glass that is half full is the same as one that is half empty, different frames systematically distort how we react to identical situations and how we make decisions.
Corrective Procedures
- Take multiple perspectives.
- Try to frame problems in terms of objectives we are trying to achieve.
- Never automatically accept a given frame – always reframe and look for distortion,
- Strive for neutrality.
- Frame the problem from the opposite perspective and attempt to justify the new viewpoint.
- Be aware of how our framing might influence the decisions of others.
8. Escalation of Commitment
Given the several thousand business decisions made every day, some are bound to be unsuccessful. Rationally, it makes sense that once we recognize that we’ve made a bad decision, we should take steps to correct the situation by cutting our losses. However, often bad solutions are followed by even more ineffective decisions. Investors purchase more and more shares of a company, even though the stock price keeps on declining.
Organizers pour large amounts of money into an operation even when it’s apparent that the event will lose money. The tendency of commitment – decisions that continue to support previously unsuccessful courses of action because too much has been invested to quit.
We are sometimes forced to make a decision as a result of a previous decision. For example, you personally hired to a new employee and you believed she would be an excellent performer in your department. However, initial indications are that she isn’t going to live up to your expectations, and in fact, she even seems to be having a detrimental effect on her colleagues. Should you terminate her? Perhaps she just needs time to adjust, and after all, you invested a lot of time and money in her selection and training. After more time passes, it still seems as though she isn’t working out, but now you even more invested in more in the hope of success and improvement in her. Should you fire her, or wait and see if things improve?
What if you’ve invested a significant amount of money in a project that has spent its budgeted amount but has yet to prove successful? You are faced with two choices, either accept the loss and end the project or invest more capital into the project in the hope of turning things around. How would you decide? On a more personal level, anyone who has been put on hold while on the telephone, faces escalating commitment.
Decision makers willingly escalate their commitment to unsuccessful decisions for a number of reasons.
- First, failure to support our own previous action openly acknowledges that the initial decision was a mistake, forcing us to “lose face” and reducing our political credibility. We seek self-justification and desire to look good to ourselves and others by proving that we are indeed rational and competent at resolving problems, therefore, we decide to continue even though all indications are that we should stop.
- Second, as mentioned under framing effects the way we frame a problem, influences our subsequent decision. The obvious loss of discontinuing a previous course of action biases us to prefer to “take the gamble” in the hopes of gains that may be realized if only we preserve long enough.
- Third, decision makers often believe that persistence is necessary and desirable to whether the storm get back on course. After all, traditional wisdom insists that “if at first you don’t succeed, try, try again,” and the future may still prove that our initial decision was correct.
- Fourth, as the amount of responsibility felt by the decision maker for the original decisions rises, the likelihood of escalating commitment increases. When we feel personally responsible for making the first decision, negative feedback about what we did biases us by limiting our objectivity and changing how we view and evaluate alternatives. So, if you are the one who decided to hire a new employee, you are not only less likely to fire her, but you are also more likely to distort your perceptions of her work performance and abilities in her favor.
Corrective Procedures
- Take multiple perspectives.
- Consider arguments from others, especially from those who were not involved in the initial decision.
- Be aware of why we are committing ourselves to a further course of action.
- Anticipate a possible withdrawal beforehand and factor the cost or retreat into our thinking.
- Explicitly share responsibility with others.
- Set limits in advance and stick to them. Select others who were not involved with the initial decision to make the new decision.
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