MENT 3101: Midterm

perception

process through which ppl interpret sensory info to give meaning to their environment

• allows individuals to construct their subjective reality based on what they notice, how they interpret it, & what meaning they assign to it

• shaped by: individual factors (past experiences, emotions, expectations, & biases) & situational context

inattentional blindness

failure to see something obvious when focusing attention on something else

invisible gorilla experiment

• human perception is not infallible, we are often unaware of how much we can miss, even in situations where we think we are fully attentive 

• Serves as a metaphor for how ppl in organizations might overlook critical information or fail to see important signals due to their focus on specific tasks or goals 

cognitive framing

shapes how individuals approach a decision

• investments in unsound ventures, or failure to identify risk

task framing

the scope of what ppl are instructed to focus on

the power of first impressions:

1st impressions, especially visual ones, create perceptual anchors:

• These anchors shape how subsequent info is interpreted (confirmation bias) 

• When leaders or job candidates “look the part” others may assume they are the part... often without sufficient evidence 

shape perception

using appearance & actions to signal genius, innovation, & visionary leadership

• ex: Elizabeth Holmes (dressed like Steve Jobs) she was called the”IPod of healthcare”

perception in interviews

• interviewer forms initial impression of candidate within first few minutes, based on factors (appearance, handshake, & initial small talk)

  • this initial impression often creates a confirmation bias where interviewer unconsciously seeks info that confirms their early judgement 

• takeaways:

  • For interviewers: implement structured interviews w/ standardized questions & scoring systems to reduce the influence of 1st impressions 

  • For candidates: prepare for interviews by focusing on making a strong initial impression (also ensure the substance of your answers support it) 

perception in performance expectations

• if manager perceives an employee as a “high performer” they are more likely to rate that employee positively, even if their performance does not justify it  

• Due to the recency effect, managers might give higher ratings to recent performances rather than considering the entire evaluation period 

perception in performance evaluations

• Managers might: give more weight to recent performance OR favor employees who fit “ideal worker” norms like working long hours regardless of actual productivity 

• Takeaways: train managers to evaluate performance based on measurable outcomes rather than perceptions & implement feedback or objective metrics to ensure fair evaluations 

individual factors that influence perception

1. Attention- what we pay attention to 

2. Emotional state- can make us more attentive to certain stimuli or more prone to interpret things in a specific way 

3. Past experiences- memories & past experiences influence our current perception, forming expectations & biases 

4. Cognitive biases- mental shortcuts that our brains use to process info quickly, can lead to systematic errors in perception & judgement 

5. Motivation- our goals & motivations can influence what we pay attention to & how we interpret info 

organizational factors that affect perception

1. Organizational culture: shared values, norms, & beliefs within a company shapes how employees interpret info 

2. Leadership style: managers behavior sets tone for how employees perceive authority, fairness, & support 

3. Communication: clarity, tone, & transparency of org communication influence how employees perceive info. Poor comm can lead to misunderstandings & misaligned goals, while transparent comm fosters trust & cohesion 

4. Performance evaluation: how performance is assessed & rewarded can influence employee’s perceptions of fairness & motivation within org 

organizational strategies to mitigate biases

• Structured/standardized interviews & evaluation processes

• task reframing: broadening the scope of tasks can help employees focus on multiple dimensions rather than narrowly defined objectives

• fostering a feedback culture

traditional economic theory

assumes that ppl are unboundedly rational, they have unlimited processing capabilities that allow them to find optimal solutions & make optimal decisions (ppl are calculating, unemotional maximizers=homo economicus) 

1. Ridiculous bc most ppl don’t even try to optimize 

2. To optimize a decision requires that you can perfectly predict uncertain outcomes 

• Ppl are NOT unboundedly rational: this is particularly true in firms, as managers/employees work in uncertain environments w/ rapid changing: 

  • Personnel influencing problem & choice definitions, external conditions, IT requirements, etc 

  • Information is uncertain such that employees cannot assign probabilities to various possible outcomes 

behavioral decision theory

ppl have limits (brainpower, time, forecasting, ability, processing ability) & cannot be expected to optimize all solutions & decisions (theory developed by Herbert Simon)  

• They “satisfice”: choose what is good enough though not necessarily the best

traditional vs. behavioral decision theory:

bounded rationality

idea that when people make decisions, their rational capacity is limited by the information they have, their cognitive processing limits, and the time available to choose

heuristics

cognitive short-cuts, “rules of thumb” used to make decisions 

• Make it easier to make decisions w/ uncertainty & limited info & therefore make for a more efficient decision-making process 

• Often lead to systematic errors (biases) 

types of heuristics

1. representativeness heuristic

2. availability heuristic

3. anchoring & adjustment heuristic

representativeness heuristic

you judge the probability of an object, person, or event by how closely it matches your existing mental prototype or stereotype

availability heuristic

judgmental heuristic where you judge how likely something is based on how easily an example comes to mind

anchoring & adjustment heuristic

decisions are made based on an initial anchor/value 

• Ex: A) Is the population of Chicago more or less than 200k? What is the population of Chicago? B) Is the population of Chicago more or less than 5mil? What is the population of Chicago 

  • Respondents to A estimated 600k, respondents to B estimated 5.05 mil 

  • High anchors selectively direct our attention toward the positive qualities 

  • Low anchors selectively direct our attention to the negative qualities 

sunk cost effect

tendency for ppl to remain committed to a course of action in which they have invested time, money, or resources even though they should not

• Ppl often invest more in an attempt to prevent their precious investment from being wasted rather than cutting their losses 

sunk cost

costs that have already been incurred & cannot be recovered 

• sunk costs should be ignored when making future decisions (incremental costs & benefits of different options should be considered) 

overconfidence bias

ppl are often overconfident in life, leads them to overestimate their probability of future success (overconfidence can be described as on of the most striking biases in decision making)

confirmation bias

tendency in which ppl seek out or interpret info in a way that confirms their pre-existing beliefs 

• Described as “you see what you want to see” 

status quo bias

decision-makers have an overwhelming tendency to accept defaults, to stick w/ the status quo

automation bias

when we trust the machine too much & when we delegate decisions to tech, we risk turning off our own judgement 

• Algorithms don’t remove bias, they scale it 

framing effect

occurs when different, but logically equivalent, descriptions of the same options produce different decisions 

• Positive frame emphasizes what may be gained or preserved (ex: “200 ppl will be saved” 

• Negative frame emphasizes what may be lost: “400 ppl will die” 

causal attributions

how ppl explain the causes of behavior (their own or that of others)

• Explanations fall into 2 categories: 

1. Personal (internal) attribution- explain behavior as being caused by the “person” (ex: dispositions, personality traits, characteristics, abilities, moods) 

2. Situational (external) attribution- explain behavior as being caused by the “situation” 

• Incorrect causal attributions: ppl are systematically biased toward certain explanations (especially when evaluating others) 

• Research shows that the situation is often more influential than the person (we overattribute behavior to the person than to the situation) 

self-serving bias

tend to attribute success to ourselves & failure to the external circumstances 

• Protects self-image but distorts accountability 

Milgram’s experiment

• question: under what conditions will ppl obey authority, even when it conflicts w/ their personal values?

• experiment: subjects are told they are “teachers” & must read a series of question to a “learner” who is actually an actor, & every time they answer wrong they must up the voltage & issue a shock. The experiment tests at what point the “teacher” will stop when being given these commands by an “authority figure”, in this case, a doctor, “experimenter”

• conclusion: substantial proportion of ppl do what they are told to do irrespective of the content of the act & w/out limitations of conscience, so long as they perceive that the command comes from legitimate authority 

• Implications: situational authority can override personal moral standard, in the “wrong” situation, even ordinary ppl can become agents in a terrible destructive process 

power of the situation (Milgram’s experiment)

• Yale’s version of this experiment added authenticity (bc of their prestigious reputation), causing subjects to continue administering electric shocks to high voltages even though they did not want to 

• Obedience decreased when learner & teacher were in the same room, teacher & experimenter were in different rooms, experiment was conducted in less prestigious setting, other “teachers” who were actors sat w/ the teacher & disobeyed the experimenter 

constructive nonconformity

positive & purposeful act of deviating from traditional norms, practices, or established ways of thinking 

• Ex: employees may question existing processes, offer alternative solutions, ask challenging questions, or propose novel ideas to improve efficiency, productivity, or workplace culture  

trait

relatively stable tendency to think, feel, & act in certain ways

• “neurodynamic structures” that have “more than nominal existence” (Allport (1931)) 

• More than just summaries of behavior, behavior can be misleading 

• Traits are learned (& can be unlearned but this is more difficult) 

• Traits-> similarity in perception across situations->similarity in behavior across situations 

big 5 personality traits (OCEAN)

1. openness

2. conscientiousness

3. extraversion

4. agreeableness

5. negative affectivity

openness

reflects a person’s willingness to explore new ideas & unconventional thinking as well as be imaginative, curious, broad-minded, & daring to take risks 

• has been found to contribute to likelihood of obtaining a leadership position 

• Managers who are low in openness may be less prone to take risks & be more conservative in their planning & decision making 

conscientiousness

reflects a person’s tendency to be dependable, responsible, & achievement oriented 

• Managers high in this trait are organized & self-disciplined 

• Managers low in this trait lack direction & self-discipline (tend to procrastinate) 

extraversion

reflects a person’s tendency to be sociable, gregarious, assertive, talkative, & active 

• Ppl high in extraversion (extroverts) draw energy (“recharge”) from interacting w/ others 

• Ppl low in extraversion (introverts) tend to be less inclined toward social interaction, they can be described as quiet, reserved, shy, etc 

agreeableness

reflects a person’s tendency to be courteous, flexible, trusting, good-natured, cooperative, forgiving, soft-hearted, tolerant 

• Managers high in this trait are likeable, affectionate, & care about others 

• Managers low in this trait may be distrustful, unsympathetic, uncooperative, & antagonistic 

negative affectivity

reflects a person’s tendency to experience negative emotions (ex: be anxious, depressed, angry, embarrassed, worried, & insecure) 

• Managers high in this trait (neurotics) may often feel angry & dissatisfied & complain about their own & others’ lack of progress 

• Managers low in this trait (emotionally stable) may not experience many negative emotions & moods & are less pessimistic & critical of themselves & others 

big 5 personality traits in hiring/recruiting process

• Personality assessments  

• Behavioral interviews (ask how candidates can handle certain scenarios) 

• Job-fit assessments (to assess how well candidate’s personality fits into existing team) 

• Team dynamics & cultural fit assessments (to assess how a candidate’s personality fits into existing team) 

• Leadership potential assessment 

• COMPANIES VALUE MOST: 1) conscientiousness 2) agreeableness

interpersonal trust

trust between 2 ppl

• Critical in business & organizations: 

  • Within organizations: employees need to decide whether to trust their colleagues, managers, & organizational leaders 

  • Outside/between organizations: employees need to decide whether to trust suppliers, consultants, regulators, customers, & other partners 

trust

the willingness of A to be vulnerable to B based on the expectation that B will perform a particular action important to A 

• Ppl differ in their general propensity to trust 

what influences our decision to trust others?

Mayer (1995) argues that 2 factors influence the decision to trust: 1) a trustor’s propensity to trust & 2) a trustor’s perceptions of the trustee’s trustworthiness

• factors of perceived trustworthiness:

1. ability

2. benevolence

3. integrity

ability

person’s competence in a particular area (skills, technical knowledge)

benevolence

the belief that the other person genuinely cares about our interests

integrity

belief that the other person follows principles we consider acceptable

more research on trust suggests that

1. trust is complex

2. trust is irrational (at least some of the time)

3. trust is dynamic & reciprocal

trust is complex

Does not depend on honesty alone ppl consider multiple dimensions (such as ability, benevolence, & integrity) 

• prosocial lies & trust experiment: Levine & Schweitzer showed that some forms of deception can increase trust: prosocial lies can increase trust in someone’s benevolent intentions while decreasing trust in that person’s honesty & integrity

• conflict of interest (COI) & trust experiment: federal trade commission guidance states that influencers should make material connections to brands obvious (ex: receiving payment, free products, discounts, or other benefits)

trust is irrational

Traditional models often portray the decision to trust as (mostly) rational, but its not, at least not always, research shows that normatively irrelevant factors (factors that shouldnt) influence the decision to trust others 

• superfluous apologies experiment: an actor was told to ask people to borrow their phone: half he said “Im sorry about the rain!” to before asking for the phone: 47% of the ppl who received the apology gave their phone, 9% of ppl who didnt receive the apology gave their phones 

• touch experiment: experimenter made it a point while describing the task to lightly touch the backs of the participants: participants who were touched were more likely to cooperate w/ their partner than participants who were not 

trust is dynamic & reciprocal

Trust evolves over time as ppl interact & learn about one another 

motivation & money

Study found that the correlation between pay levels & job satisfaction=.15 MEANING ppl’s satisfaction w/ their job is mostly independent of their pay level 

• Implications: being a pay leader is not likely, by itself, to result in a satisfied workforce, employers interested in having a satisfied workforce may need to turn elsewhere to raise job satisfaction levels 

money & motivation example: lottery winners

Question: who is happier: lottery winners or the control group? 

• Results: lottery winners & controls were not significantly different in their ratings of past, present, & future happiness (meaning large sums of money have a small effect on present & predicted happiness)

money & motivation examples: day care center

• Situation: parents at a daycare center consistently arrive late to pick up their children, result is anxious children & anxious teachers, what can they do to stop late pickups? 

• Design: 1st 4 weeks: They simply kept track of # of late pickups; Fifth week: Fine enacted: Any parent arriving more than 10 minutes late would pay $3 per child, per incident. Fee would be added to the monthly bill 

• Results: # of late pickups increased-> before the fine parents had a moral & social incentive to pickup on time after the fee those were replaced w/ an economic incentive so parents could simply just pay it & escape the moral or social guilt 

money & motivation example: AARP

• AARP asked lawyers if they would offer less expensive services to needy retirees 

• They said no 

• Later AARP asked lawyers if they would offer their services to needy retirees for free: they said yes 

• When no money was mentioned they used social norms & were willing to volunteer their time instead of being paid below the market rate 

money & motivation example: financial rewards (POSITIVE impact)

1. Positive impact on motivation: can serve as powerful extrinsic motivators, provide recognition for efforts, & can encourage higher performance & productivity, can attract individuals to pursue certain goals they may not have considered otherwise

2. Enhancing Performance: In certain contexts, financial rewards can lead to improved performance & goal attainment, when appropriately structured, these can incentivize employees to take on more challenging tasks & achieve higher levels of success. 

3. Attracting Talent (e.g., in competitive industries) 

4. Employee Retention: Financial rewards can contribute to higher job satisfaction & employee retention, especially when employees feel fairly compensated for their efforts 

money & motivation example: financial rewards (NEGATIVE impact)

1. Crowding Out Intrinsic Motivation: excessive financial rewards can diminish employees' intrinsic motivation for tasks they initially found enjoyable or meaningful, can lead to a decline in creativity & long-term engagement. (overjustification effect)

2. Short-Term Focus: Financial rewards may lead employees to prioritize short-term gains & immediate financial benefits over long-term organizational goals or ethical considerations. 

3. Negative Competition: Introducing financial incentives in a competitive environment can lead to unhealthy competition among employees, fostering a "win-at-all-costs" mentality. 

4. Unintended Consequences: Financial rewards can create unintended consequences & may encourage unethical behavior or gaming the system to achieve rewards without genuine performance improvements 

money & motivation examples: CONCLUSION

we misinterpret the effect of money; we exhibit a bias: we know that we are mostly motivated by factors other than money, we assume other ppl are mostly motivated by money

motivation

set of forces (within & outside an individual) that initiates work-related effort, & determines its direction, intensity, & persistence (DIP)

DIP

1. Direction of effort: Effort that is channeled toward, & consistent with, organizational goals. 

2. Intensity of effort: How hard are you going to work on it? As hard as you can, or only half-speed? 

3. Persistence of effort: How long are you going to work on it? For five hours or five minutes

Motivation-hygiene theory (Herzberg)

there are 2 completely separate factors that lead to feelings of satisfaction & dissatisfaction (satisfaction & dissatisfaction are not the opposite of each other-> opposite of satisfaction is no satisfaction & same w/ dissatisfaction)

• “a satisfied worker is a motivated worker” 

• Motivator factors (lead directly to feelings of satisfaction): achievement, recognition, work itself (task, challenge), responsibility, professional growth & advancement 

• Hygiene factors (ensure an employee does not become dissatisfied): the organization & its policies & admin, kind of supervision, relationship w/ supervisor, work conditions, salary, status, job security, interpersonal relations 

Expectancy theory (Vroom)

employees choose to invest effort in courses of action by weighing their relative utilities, their probabilities of achieving desired outcomes 

• Effort (or motivation) is a positive function of 3 beliefs: expectancy, instrumentality, & valence 

• Ppl will be motivated if they 

1. Believe that effort will lead to performance (expectancy) 

2. Believe that performance will lead to an outcome (or reward) (instrumentality) 

3. Value the outcome (valence) 

• Implications for managers: need to ensure that they help employees who are willing to put forth effort to succeed; need to follow through w/ a reward system that is tied to performance 

equity theory (Adams)

• model of motivation that explains how ppl strive for fairness & justice in social exchanges, ppl will expend effort to restore equity when inputs & outcomes are perceived to be out of balance 

• 5 key features: 

1. People hold beliefs about their inputs & outcomes

2. People compare themselves to a referent other

3. People form beliefs about others’ inputs and outcomes. 

4. People compare their input/outcome ratio with others’ input/outcome ratio. 

5. Perceptions of inequity motivate behavior to restore equity 

• Implications for managers: should avoid under or overpaying employees, should treat employees equitably, give opportunities to contribute to decision making 

goal-setting theory (Locke & Latham)

goals serve as an important source of employee motivation, specific & difficult goals lead to higher performance 

• Mechanisms by which difficult goals affect performance:

1. Goals serve a directive function (toward goal-reliant activities). Specific goals direct our attention to relevant activities and filter out distractions! 

2. Goals serve an energizer function (energize people to work harder). 

3. Goals affect persistence (“keep trucking along”). They help us follow through on long, difficult tasks. 

4. Goals lead to the discovery, and/or use of task-relevant knowledge (e.g., goals enhance discovery of relevant knowledge to complete the task; that is, they make us more effective and efficient). 

• Moderators- factors that weaken the relationship between specific goals & performance 

1. Commitment: higher goal commitment=stronger relationship 

2. Feedback: for goals to be effective, managers need to provide feedback 

3. Task complexity: high task complexity=weaker relationship 

• Implications for managers: specific & reasonably difficult goals increase employee performance, managers should involve employees in the goal setting process, should provide feedback 

SMART goals (goal-setting theory)

• Specific: what, where, how

• Measurable: from & to

• Assignable: who?

• Realistic: feasible?

• Time-based: when

• Problems w these types of goals: provide no help in determining whether the goal itself is a good idea 

autonomy (Dan Pink)

the urge to direct our own lives

• Fedex days: days where workers are allowed to work/develop on anything they want as long as it doesn’t pertain to their job

• 20% time: workers are allowed to use 20% of their time to work on/develop anything they want

• Rowe: workers have no schedules and don’t have to be in the office, they just have to get their work done

mastery (Dan Pink)

the desire to keep getting better at something that matters

purpose (Dan Pink)

the yearning to do what we do in the service of something larger than ourselves