Organizational

Behaviour
 Define Organizational Behavior (OB)

 Organizational behavior (often abbreviated OB) is a field of study that investigates the
impact that individuals, groups, and structure have on behavior within organizations, for
the purpose of applying such knowledge toward improving an organization’s
effectiveness. That’s a mouthful, so let’s break it down.
 It studies three determinants of behavior in organizations: individuals, groups, and
structure. In addition, OB applies the knowledge gained about individuals, groups, and
the effect of structure on behavior in order to make organizations work more effectively.
Organizational Behavior
OB is the study of what people do in an organization and how their behavior
affects the organization’s performance. And because OB is concerned
specifically with employment-related situations, you should not be surprised that
it emphasizes behavior as related to concerns such as jobs, work, absenteeism,
employment turnover, productivity, human performance, and management.
According to L. M. Prasad, “Organisational behaviour can be defined as the
study and application of knowledge about human behaviour related to other
elements of an organisation such as structure, technology and social systems.”
Meaning and Definitions:

 In words of Stephen P. Robbins, “OB is a field of study that investigates the

impact that individuals, groups and structures have on behaviour within
organisations for the purpose of applying such knowledge towards improving an
organisation’s effectiveness.”
 According to Davis and Newstram, “Organisational behaviour is the study and
application of knowledge about how people act within organisations.”
 According to Fred Luthans, “Behaviour is directly concerned with the
understanding, prediction and control of human behaviour in organisations.”
Organisational Behaviour –
Scope
The scope of the organizational behavior is as under:

1. Impact of personality on performance

2. Employee motivation

3. Leadership

4. How to create effective teams and groups

5. Study of different organizational structures

6. Individual behavior, attitude and learning

7. Perception

8. Design and development of effective organization

9. Job design

10. Impact of culture on organizational behavior

11. Management of change

12. Management of conflict and stress

13. Organizational development

14. Organizational culture

15. Transactional analysis

16. Group behavior, power and politics

17. Job design

18. Study of emotions

Organisational Behaviour –
Nature:

1. A Separate Field of Study and Not a Discipline Only: O.B. has a multi-
interdisciplinary orientation and is, thus, not based on a specific theoretical
background. Therefore, it is better reasonable to call O.B. a separate field of study
rather than a discipline only.
2. An Interdisciplinary Approach:
Organizational behaviour is essentially an interdisci­plinary approach to study human
behaviour at work. It tries to integrate the relevant knowledge drawn from re­lated
disciplines like psychology, sociology and anthro­pology to make them applicable for
studying and analysing organizational behaviour.
3. An Applied Science:

The very nature of O.B. is applied. What O.B. basically does is the application of various
researches to solve the organizational problems related to human behaviour. The basic line of
difference between pure science and O.B. is that while the former concentrates of fundamental
researches, the latter concentrates on applied researches. O.B. involves both applied research and
its application in organizational analysis. Hence, O.B. can be called both science as well as art.

4. A Normative Science:

Organizational Behaviour is a normative science also. While the positive science discusses only
cause effect relationship, O.B. prescribes how the findings of applied researches can be applied to
socially accepted organizational goals. Thus, O.B. deals with what is accepted by individuals and
society engaged in an organization. Yes, it is not that O.B. is not normative at all. In fact, O.B. is
normative as well that is well underscored by the proliferation of management theories.
5. A Humanistic and Optimistic Approach:
Organizational Behaviour applies humanistic approach towards people working in the
organization. It, deals with the thinking and feeling of human beings. O.B. is based on the
belief that people have an innate desire to be independent, creative and productive. It also
realizes that people working in the organization can and will actualise these potentials if they
are given proper conditions and environment. Environment affects performance or workers
working in an organization.
6 A Total System Approach:
The system approach is one that integrates all the variables, affecting organizational
functioning. The systems approach has been developed by the behavioural scientists to analyse
human behaviour in view of his/her socio-psychological framework. Man’s socio-
psychological framework makes man a complex one and the systems approach tries to study
his/her complexity and find solution to it.
Organisational Behaviour – 6 Important Characteristics

1. Organisational behaviour is a rational thinking, not an emotional feeling about people. The
major goals of organisational behaviour are to explain and predict human behavioural in
organisations. It is action-oriented and goal-directed.
2. Organisational behavioural seeks to balanced human and technical values at work. It seeks
to achieve productivity by building and maintaining employee’s dignity, growth and
satisfaction, rather than at the expense of these values.
3. Organisational behaviour integrates behavioural sciences. Many of its core concepts are
borrowed from others fields and discipline like social psychology, sociology, and
anthropology, etc.
4. Organisational behaviour is both a science and an art, the knowledge about human behaviour
in organisations leans towards being science. Modern organisational behaviour is, at once,
empirical, interpretative, and critical. It is an interpretative science in the pursuit of knowledge
and meaning.
5. Organisational behaviour exists at multiple like levels. Behaviour occurs at the individual, the
group, and the organisational systems levels. Behaviour that is attributable to each of these levels
can be both identified and isolated but at the same time these three levels interact with each other
and OB-being affected by the behaviour of individuals, group level behaviour is affected by the
organisational level phenomena and so on.
6. Organisational behaviour does not exist in vacuum. Organisations are made up of both social
and technical components and therefore characterized as social-technical systems. The
operational implication of this is that any approach of looking at behaviour must also take into
account the technical component of organisation especially such issues as the nature of work and
the technology.
 Organisational Behaviour – 3 Levels: Individual, Group
and Organisational Level
1. Individual Level – Deals with the concepts at the individual level. Examples of individual-level
concepts are perception, personality, learning, motivation, and attitude.

2. Group Level – Deals with the concepts at the group level. Examples of group-level concepts are team,
conflict, leadership, power, and politics. Group-level concepts may include how groups are formed, how to
make effective teams, how individually and collectively the group activities can be improved, how to
motivate employees, and which type of group would be suitable for a particular assignment.

3. Organizational Level – Deals with the concepts at the organizational level. Examples of organizational-
level concepts are change management and organizational culture. Other topics discussed at organizational
level include the concept of organization, different organizational models, and organizational change along
with its impact and implementation. The working conditions and stress management are also discussed at
the organizational level.
Challenges and Opportunities of Organizational Behavior

•Globalization
•Managing Workforce Diversity
•Quality and Productivity
•Improving Employees Skills
•Empowerment of Employees
•Managing Organizational Change
•Maintain Ethical Behavior
•The Emergence of Information Technology
Zappos uses the Holacracy Management Style and to
facilitate this style of management, Zappos believed that
everyone in the company should be treated equally and be
given the right to manage their own job in order to achieve the
greatest benefit. Online shoe retailer Zappos.com understands
how organizational behavior affects an organization’s
performance. Zappos maintains good employee relationships
by providing generous benefits, extensive customer service
training, and a positive, fun-loving work environment.
Employees are empowered to make decisions that increase
customer satisfaction and are encouraged to create fun and a
little weirdness.” At Zappos, employee loyalty, job
satisfaction, and productivity are high, contributing to the
company’s growth.
OB Model
Citizenship Behaviour
Citizenship Behavior The discretionary behavior that is not part of an employee’s formal job
requirements, and that contributes to the psychological and social environment of the
workplace, is called citizenship behavior.
Successful organizations need employees who will do more than their usual job duties who
will provide performance beyond expectations.
In today’s dynamic workplace, where tasks are increasingly performed by teams and
flexibility is critical, employees who engage in “good citizenship” behaviors help others on
their team, volunteer for extra work, avoid unnecessary conflicts, respect the spirit as well as
the letter of rules and regulations, and gracefully tolerate occasional work-related
impositions and nuisances.
Withdrawal Behaviour
Withdrawal behavior is the set of actions that employees take to separate themselves from the
organization. There are many forms of withdrawal, ranging from showing up late or failing to
attend meetings to absenteeism and turnover.
Employee withdrawal can have a very negative effect on an organization. The cost of
employee turnover alone has been estimated to run into the thousands of dollars, even for
entry-level positions. Absenteeism also costs organizations significant amounts of money and
time every year.
It’s obviously difficult for an organization to operate smoothly and attain its objectives if
employees fail to report to their jobs. The work flow is disrupted, and important decisions may
be delayed.
Group Cohesion
 Group cohesion is the extent to which members of a group support and validate one
another at work. In other words, a cohesive group is one that sticks together. When
employees trust one another, seek common goals, and work together to achieve these
common ends, the group is cohesive; when employees are divided among themselves in
terms of what they want to achieve and have little loyalty to one another, the group is not
cohesive.
 Companies attempt to increase cohesion in a variety of ways ranging from brief
icebreaker sessions to social events like picnics, parties, and outdoor adventure-team
retreats.
Attitudes

Attitudes are evaluative statements—either favorable or unfavorable—about objects, people, or

events. They reflect how we feel about something. When I say “I like my job,” I am expressing my
attitude about work. Attitudes are complex. If you ask people about their attitude toward religion,
Lady Gaga, or the organization they work for, you may get a simple response, but the reasons
underlying it are probably complicated.

ABC Model of Attitude

The ABC Model of Attitudes, also known as the tri-component model, is a framework in psychology
that describes 3 components of attitudes (Eagly & Chaiken 1998)
 Cognitive Dissonance
Cognitive dissonance: Any incompatibility between two or more attitudes or between
behavior and attitudes.
Leon Festinger—argued that attitudes follow behavior. Did you ever notice how people
change what they say so it doesn’t contradict what they do? Perhaps a friend of yours has
consistently argued that the quality of U.S. cars isn’t up to that of imports and that he’d never
own anything but a Japanese or German car. But his dad gives him a late-model Ford Mustang,
and suddenly he says U.S. cars aren’t so bad. Festinger proposed that cases of attitude
following behavior illustrate the effects of cognitive dissonance, any incompatibility an
individual might perceive between two or more attitudes or between behavior and attitudes.
 Personality

The definition of personality we most frequently use was produced by Gordon Allport nearly 70 years
ago. Allport said personality is “the dynamic organization within the individual of those psychophysical
systems that determine his unique adjustments to his environment.”
Personality refers to the enduring characteristics and behavior that comprise a person's unique
adjustment to life, including major traits, interests, drives, values, self-concept, abilities, and emotional
patterns.
Personality is a structure gathering interrelated behavioral, cognitive and emotional patterns that
biological and environmental factors influence; these interrelated patterns are relatively stable over time
periods, but they change over the entire lifetime.
Personality - Definitions
•Feist and Feist said, “personality is a pattern of relatively permanent traits and unique
characteristics that give both consistency and individuality to a person’s behavior.”
•By personality, Ogburn means “the integration of the socio-psychological behavior of the
human being, represented by habits of action and feeling, attitudes and opinions.”
•According to Lundberg and others, “The term personality refers to the habits, attitudes and
other social traits that are characteristic of a given individual’s behavior.”
•Lawrence A. Pewin said, “Personality represents those structural and dynamic properties of an
individual or individuals as they reflect themselves in characteristic responses to situations.”
Characteristics or Features of Personality
•Personality is something that is unique in each individual
•Personality refers particularly to the persistent qualities of an individual.
•Personality represents a dynamic orientation of an organism to the
environment.
•Social interactions greatly influence personality.
•Personality represents a unique organization of persistent dynamic and social
predisposition.
•Consistency
• Psychological and physiological
•It impacts behaviors and actions.
•Multiple expressions
1.Environmental Factors
2.Physical Factors
3.Situational Factors
4.Hereditary
5.Family and Social Factors
6.Identification Process
7.Cultural Factors
8.Intelligence
9.Sex Differences
10.Psychological Factors
The Myers-Briggs Type Indicator

The Development of the Myers-Briggs Test

The MBTI tool was developed by Isabel Briggs Myers and her mother Katharine
Cook Briggs in 1942 and is based on psychological conceptual theories proposed
by Swiss psychiatrist Carl Jung in his work, Psychological Types.
Jung’s theory of psychological types was based on the existence of four essential
psychological functions – judging functions (thinking and feeling) and
perceiving functions (sensation and intuition ).
The Myers-Briggs Type Indicator

 The Myers-Briggs Type Indicator (MBTI) is the most widely used personality-assessment
instrument in the world. It is a 100-question personality test that asks people how they
usually feel or act in particular situations. Respondents are classified as extraverted or
introverted (E or I), sensing or intuitive (S or N), thinking or feeling (T or F), and judging or
perceiving (J or P). These terms are defined as follows:
Extraverted (E) versus Introverted (I): Extraverted individuals are outgoing, sociable, and
assertive. Introverts are quiet and shy.
 Sensing (S) versus Intuitive (N). Sensing types are practical and prefer routine and order.
They focus on details. Intuitives rely on unconscious processes and look at the “big picture.”
•Thinking (T) versus Feeling (F). Thinking types use reason and logic to handle
problems. Feeling types rely on their personal values and emotions.
•Judging (J) versus Perceiving (P). Judging types want control and prefer their world to
be ordered and structured. Perceiving types are flexible and spontaneous.
•Myers-Briggs Type Indicator (MBTI) A personality test that taps four
characteristics and classifies people into 1 of 16 personality types.
These classifications together describe 16 personality types, identifying every person by
one trait from each of the four pairs. For example, Introverted/
Intuitive/Thinking/Judging people (INTJs) are visionaries with original minds and great
drive. They are skeptical, critical, independent, determined, and often stubborn. ESTJs
are organizers. They are realistic, logical, analytical, and decisive and have a natural
head for business or mechanics. The ENTP type is a conceptualizer, innovative,
individualistic, versatile, and attracted to entrepreneurial ideas. This person tends to be
resourceful in solving challenging problems but may neglect routine assignments
 The Four Dichotomies:

The purpose of this assessment is to assign

individuals into one of four categories based on
how they perceive the world and make decisions,
enabling respondents to further explore and
understand their own personalities.
The four categories are: introversion or
extraversion, sensing or intuition, thinking or
feeling, and judging or perceiving. Each person is
said to have one preferred quality from each
category, producing 16 unique personality types.
 The 16 Personality Types
ISTJ – The Logistician
These individuals tend to be serious, matter-of-fact, and reserved. They appreciate order and
organization and pay a great deal of attention to detail. They like to plan things out in advance
and place an emphasis on tradition and law. They are responsible and realistic and can be
described as dependable and trustworthy.
ISFJ – The Defender
These individuals are friendly, responsible, and reserved. They are service and work oriented,
committing to meeting their obligations and duties.
They are loyal, considerate, and place a lot of focus on the care of others. They are non-
confrontational and value an orderly and harmonious environment.
INFJ – The Advocate

People with this personality type are serious, logical and hardworking. They are also
compassionate, conscientious and reserved. They value close, deep connections and are sensitive
to the needs of others, but also need time and space alone to recharge.

INTJ The Architect

These people are highly independent, self-confident and prefer to work alone. They are
analytical, creative, logical, and driven. They place an emphasis on logic and fact rather than
emotion and can be viewed as perfectionist. They tend to have high expectations of competence
and performance for themselves and others.
ISTP – The Crafter

People with this personality type are fearless and independent. They love adventure, new
experiences, and risk-taking. They tend to be quiet observers and are not well attuned to the
emotional states of others, sometimes coming across as insensitive or stoic. They are results-
oriented, acting quickly to find workable solutions and understand the underlying cause of
practical problems.

ISFP – The Artist

These individuals are quiet, friendly, easy going, and sensitive. They have a strong need for
personal space and time alone to recharge. They value deep connection and prefer to spend time
with smaller groups of close friends and family. They are highly considerate and accepting,
avoiding confrontation and committed to their values and to people who are important to them.
INFP – The Mediator

These people are creative, idealistic, caring, and loyal. They have high values and morals, and are
constantly seeking out ways to understand people and to best serve humanity. They are family and
home oriented and prefer to interact with a select group of close friends.

INTP – The Thinker

People with this personality type are described as quiet, contained, and analytical. They are highly
focused on how things work and on solving problems, and tend to be good at logic and math.They
are more interested in ideas and theoretical concepts than in social interaction. They are loyal and
affectionate to their closest friends and family, but tend to be difficult to get to know.
ESTP – The Persuader

These individuals are action-oriented, taking pragmatic approaches to obtain results and solve
problems quickly. They are often sophisticated, charming, and spontaneous.

They are outgoing and energetic, and enjoy spending time with a wide circle of friends and
acquaintances. They focus on the here and now and prefer the practical over the abstract.

ESFP – The Entertainer

These people tend to be outgoing, friendly, and impulsive, seizing energy from other people. They
love to be the center of attention and enjoy working with others in new environments.

They can be described as easy going, fun, and optimistic. They are spontaneous and focused on the
present moment, and enjoy learning through hands-on experiences with other people.
ENFP – The Champion

These individuals are enthusiastic, creative, energetic, and highly imaginative. They have excellent
people and communication skills and are good at giving others appreciation and support.

They do, however, seek approval from others. They value emotions and expression. They dislike
routine and might struggle with disorganization and procrastination.

ENTP – The Debater

People with this personality type can be described as innovative, outspoken, and lively. They are idea-
oriented and are more focused on the future rather than on the present moment.

They enjoy interacting with a wide variety of people and love to engage with others in debates. They
tend to be easy to get along with, but also can be argumentative at times. They are great
conversationalists and make good entrepreneurs.
ESTJ – The Director

These people are responsible, practical, and organized. They are assertive and like to take charge, focused
on getting results in the most efficient way possible. They have clear standards and place a high value on
tradition and rules. They can be seen as rigid, stubborn, or bossy as they are forceful in implementing
their plans. However, they tend to excel at putting plans into action because they are hardworking, self
confident, and dependable.

ESFJ – The Caregiver

These individuals are warmhearted, conscientious, and harmonious. They wear their hearts on their
sleeves and tend to see the best in others.

They enjoy helping others and providing the care that people need, but want to be appreciated and
noticed for their contributions. They are careful observers of others and excel in situations involving
personal contact and community.
ENFJ – Protagonist

These people are responsible, warm, and loyal. They are highly attuned to the emotions of others and
capable of forging friendships with essentially anybody.They have a desire to help others fulfill their
potential, and they derive personal satisfaction from helping others. They tend to make good leaders as
they are highly capable of facilitating agreement among diverse groups of people.

ENTJ – The Commander

These individuals like to take charge. They value organization and structure and appreciate long-term
planning and goal setting.They have strong people skills and enjoy interacting with others, but they are
not necessarily attuned to their own emotions or the emotions of others.They have strong leadership skills
and tend to make good executives, captains, and administrators.
 Benefits of MBTI:

•Companies can learn how to better support employees, assess management skills, and facilitate
teamwork
•Coaches can utilize the information to help understand their preferred coaching approach

•Teachers can assess student learning style

•Teens and young adults can better understand their learning, communication, and social interaction styles

•Teens can determine what occupational field they might be best suited for

•Individuals can gain insight into their behavior

•Partners can better understand themselves and their spouses, allowing for more cohesive teamwork and
greater productivity
 Criticisms of MBTI:
The MBTI has been criticized as a pseudoscience and does not tend to be widely endorsed by psychologists
or other researchers in the field. Some of these critiques include:
•There is little scientific evidence for the dichotomies as psychometric assessment research fails to support the
concept of a type, but rather shows that most people lie near the middle of a continuous curve.
•The scales show relatively weak validity as the psychological types created by Carl Jung were not based on
any controlled studies and many of the studies that endorse MBTI are methodologically weak or unscientific.
•There is a high likelihood of bias as individuals might be motivated to fake their responses to attain a socially
desirable personality type.
•Test-retest reliability is low (ie: test takers who retake the test often test as a different type)

•The terminology of the MBTI is incomprehensive and vague, allowing any kind of behavior to fit any
personality type.
 Cattell's 16 Personality Factors

Psychologist Raymond Cattell analyzed Allport's list and whittled it down to 171 characteristics,
mostly by eliminating terms that were redundant or uncommon. He then used a statistical technique
known as factor analysis to identify traits that are related to one another. With this method, he was
able to whittle his list to 16 key personality factors.
According to Cattell, there is a continuum of personality traits. In other words, each person
contains all of these 16 traits to a certain degree, but they might be high in some traits and low in
others.
The 16 factors identified by Cattell were based on the original list of personality traits described
by Gordon Allport. However, other researchers believe these 16 factors can be further reduced to
fewer dimensions that underpin personality. The five-factor model is one example.
The following personality trait list describes some of the descriptive
terms used for each of the 16 personality dimensions described by
Cattell.

1.Abstractedness: Imaginative versus practical

2.Apprehension: Worried versus confident

3.Dominance: Forceful versus submissive

4.Emotional stability: Calm versus high-strung

5.Liveliness: Spontaneous versus restrained

6.Openness to change: Flexible versus attached to the familiar

7.Perfectionism: Controlled versus undisciplined

 16 personality dimensions
8. Privateness: Discreet versus open

9. Reasoning: Abstract versus concrete

10. Rule-consciousness: Conforming versus non-conforming

11. Self-reliance: Self-sufficient versus dependent

12. Sensitivity: Tender-hearted versus tough-minded

13. Social boldness: Uninhibited versus shy

14. Tension: Inpatient versus relaxed

15. Vigilance: Suspicious versus trusting

16. Warmth: Outgoing versus reserved

 Big Five Personality Traits: The 5-Factor Model of
Personality
History and Background
The Big Five model resulted from the contributions of many independent researchers. Gordon Allport
and Henry Odbert first formed a list of 4,500 terms relating to personality traits in 1936 (Vinney, 2018).
Their work provided the foundation for other psychologists to begin determining the basic dimensions of
personality. In the 1940s, Raymond Cattell and his colleagues used factor analysis (a statistical method) to
narrow down Allport’s list to sixteen traits. However, numerous psychologists examined Cattell’s list and
found that it could be further reduced to five traits. Among these psychologists were Donald Fiske,
Norman, Smith, Goldberg, and McCrae & Costa (Cherry, 2019).
In particular, Lewis Goldberg advocated heavily for five primary factors of personality (Ackerman,
2017). His work was expanded upon by McCrae & Costa, who confirmed the model’s validity and
provided the model used today: conscientiousness, agreeableness, neuroticism, openness to experience,
and extraversion.
 The Big Five Personality Model

The MBTI may lack strong supporting evidence, but an impressive body of research
supports the thesis of the Big Five Model—that five basic dimensions underlie all others
and encompass most of the significant variation in human personality. Moreover, test
scores of these traits do a very good job of predicting how people behave in a variety of
real-life situations. The theory states that personality can be boiled down to five core
factors, known by the acronym CANOE or OCEAN. The following are the Big Five
factors:
Extraversion. The extraversion dimension captures our comfort level with relationships.
Extraverts tend to be gregarious, assertive, and sociable. Introverts tend to be reserved,
timid, and quiet.
Agreeableness. The agreeableness dimension refers to an individual’s
propensity to defer to others. Highly agreeable people are cooperative, warm,
and trusting. People who score low on agreeableness are cold, disagreeable, and
antagonistic.
Conscientiousness. The conscientiousness dimension is a measure of reliability.
A highly conscientious person is responsible, organized, dependable, and
persistent. Those who score low on this dimension are easily distracted,
disorganized, and unreliable.
Emotional stability. The emotional stability dimension—often labeled by its
converse, neuroticism—taps a person’s ability to withstand stress. People with
positive emotional stability tend to be calm, self-confident, and secure. Those with
high negative scores tend to be nervous, anxious, depressed, and insecure.
Openness to experience. The openness to experience dimension addresses range of
interests and fascination with novelty. Extremely open people are creative, curious,
and artistically sensitive. Those at the other end of the category are conventional and
find comfort in the familiar.
Perception
Definitions:
According to Joseph Reitz, “Perception includes all those processes by which an individual
receives information about his environment—seeing, hearing, feeling, tasting and smelling.”

According to B. V. H. Gilmer, “Perception is the process of becoming aware of situations, of

adding meaningful associations to sensations.

Uday Pareek said perception can be defined as “the process of receiving, selecting, organizing,
interpreting, checking, and reacting to sensory stimuli or data.”

According to S. P. Robbins, perception can be defined as “the process by which individuals

organize and interpret their sensory impressions to give meaning to their environments.”
Perception: Perception is a process by which individuals organize and interpret their
sensory impressions in order to give meaning to their environment.
1. Selection
2. Organization
3. Interpretation
Attribution Theory
Attribution theory tries to explain the ways in which we judge people differently, depending on
the meaning we attribute to a given behavior. It suggests that when we observe an individual’s
behavior, we attempt to determine whether it was internally or externally caused. That
determination, however, depends largely on three factors: (1) distinctiveness- Distinctiveness
refers to whether an individual displays different behaviors in different situations (2) consensus-
If everyone who faces a similar situation responds in the same way, we can say the behavior
shows consensus. and (3) consistency-an observer looks for consistency in a person’s actions.
Internally caused behaviors are those we believe to be under the personal control of the
individual. Externally caused behavior is what we imagine the situation forced the individual to
do.
 Perception is the process of analyzing and understanding a stimulus as it is. But it may
not always be possible to perceive the stimuli as they are. Knowingly or unknowingly,
we mistake the stimulus and perceive it wrongly.

Many times the prejudices in the individual, time of perception, unfavorable background, lack of clarity of
stimulus, confusion, conflict in mind, and other factors are responsible for errors in perception. There are some
errors in perception;

• Illusion.

• Hallucination.

• Halo Effect.

• Stereotyping.

• Similarity.

• Horn Effect.

• Contrast.
Illusion

The illusion is a false perception. Here the person will mistake a stimulus and perceive it
wrongly.
For example, in the dark, a rope is mistaken for a snake or vice versa. The voice of an
unknown person is mistaken as a friend’s voice. A person standing at a distance who is
not known may be perceived as a known person
Hallucination

Sometimes we come across instances where the individual perceives some stimulus,
even when it is not present.
This phenomenon is known as a hallucination. The person may see an object, person,
etc. or he may listen to some voice though there are no objects and sounds in reality.
Selective Perception

Selective perception is when people selectively interpret what they see on the basis of
their interests, background, experience, and attitudes.
It means any characteristics that make a person, object, or event stand out will increase
the probability that it will be perceived.
Because it is impossible for us to assimilate everything we see, only certain stimuli can
be taken in.
Halo Effect

The individual is evaluated on the basis of perceived positive quality, feature, or trait. A
halo effect operates when we draw a general impression about an individual based
on a single characteristic, such as intelligence, sociability, or appearance.
In other words, this is the tendency to rate a man uniformly high or low in other traits if
he is extraordinarily high or low in one particular trait: If a worker has few absences, his
supervisor might give him a high rating in all other areas of work.
Stereotyping

People usually can fall into at least one general category based on physical or behavioral
traits then they will be evaluated. When we judge someone on the basis of our
perception of the group to which he or she belongs, we are using a shortcut called
stereotyping.
For example, a boss might assume that a worker from a Middle East country is lazy and
cannot meet performance objectives, even if the worker tried his best.
Similarity

Often, people tend to seek out and rate those who are similar to themselves more positively. This
tendency to approve of similarity may cause evaluators to give better ratings to employees who
exhibit the same interests, work methods, points of view, or standards.
Horn Effect

When the individual is completely evaluated based on a negative quality or feature perceived,
this results in an overall lower rating than an acceptable rate.

He is not formally dressed up in the office. That’s why he may be casual at work too.
Contrast

The tendency to rate people relative to others rather than the individual performance he
or she is doing. Rather will evaluate an employee by comparing that employee’s
performance with other employees.
 The link between Perception and Decision Making

 Decision making occurs as a reaction to a problem.

 One person’s problem is another person’s satisfactory state of affairs. One manager may view her
division’s 2 percent decline in quarterly sales to be a serious problem requiring immediate action on her
part. In contrast, her counterpart in another division, who also had a 2 percent sales decrease, might
consider that quite acceptable. So awareness that a problem exists and that a decision might or might not
be needed is a perceptual issue.
Every decision requires us to interpret and evaluate information. We typically receive data from
multiple sources and need to screen, process, and interpret them. We also need to develop alternatives
and evaluate their strengths and weaknesses. Again, our perceptual process will affect the final outcome
The Rational Model, Bounded Rationality, and Intuition

Rational Decision Making We often think the best decision maker is rational and makes
consistent, value-maximizing choices within specified constraints. These decisions follow a six-
step rational decision-making model

The rational decision-making model relies on a number of assumptions, including that the
decision maker has complete information, is able to identify all the relevant options in an
unbiased manner, and chooses the option with the highest utility.
Bounded Rationality
Our limited information-processing capability makes it impossible to assimilate and understand
all the information necessary to optimize. So most people respond to a complex problem by
reducing it to a level at which they can readily understand it. Also many problems don’t have an
optimal solution because they are too complicated to fit the rational decision-making model. So
people satisfice; they seek solutions that are satisfactory and sufficient.
Intuition
Intuition Perhaps the least rational way of making decisions is intuitive decision making, an
unconscious process created from distilled experience.35 It occurs outside conscious thought; it
relies on holistic associations, or links between disparate pieces of information; it’s fast; and it’s
affectively charged, meaning it usually engages the emotions.
Common Biases and Errors in Decision
Making
Overconfidence Bias It’s been said that “no problem in judgment and decision making is more
prevalent and more potentially catastrophic than overconfidence. When we’re given factual
questions and asked to judge the probability that our answers are correct, we tend to be far too
optimistic.
Anchoring Bias
Anchoring Bias The anchoring bias is a tendency to fixate on initial information and fail to
adequately adjust for subsequent information. It occurs because our mind appears to give a
disproportionate amount of emphasis to the first information it receives. Anchors are widely used
by people in professions in which persuasion skills are important—advertising, management,
politics, real estate, and law.
Confirmation Bias
Confirmation Bias The rational decision-making process assumes we objectively gather
information. But we don’t. We selectively gather it. The confirmation bias represents a specific
case of selective perception: we seek out information that reaffirms our past choices, and we
discount information that contradicts them.
Availability Bias
Availability Bias More people fear flying than fear driving in a car. But if flying on a commercial
airline really were as dangerous as driving, the equivalent of two 747s filled to capacity would
crash every week, killing all aboard. Because the media give much more attention to air
accidents, we tend to overstate the risk of flying and understate the risk of driving. The
availability bias is our tendency to base judgments on information readily available. Events that
evoke emotions, are particularly vivid, or are more recent tend to be more available in our
memory, leading us to overestimate the chances of unlikely events such as an airplane crash.
Individual differences and organizational constraints
affect decision making.

Individual Differences

Personality

Gender

Mental Ability

Cultural Differences
Organizational Constraints
Learning
Definitions
1. Learning is a relatively permanent change in behaviour that occurs as a result of prior

experience.”

2. “Learning has taken place if an individual behaves, reacts, and responds as a result of
experience in a manner different from the way he formerly behaved.”

3.“Learning can be defined as relatively permanent change in behaviour potentiality that results

from reinforced practice or experience.