Perception Decision Manager

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Perception in Decision-Making

Many, if not most, managerial decisions are made based on how the manager perceives a situation or employee. These perceptions can be affected by experiences the manager has had in the past with a similar type of situation or the same characteristics found in other employees. As a member of management, it is important to understand perception and how it can affect the way decisions are made. Herbert Simon noted that, “…it may be very important to know under what circumstances certain aspects of reality will be heeded and others ignored.” (1982, p. 374). Though Simon was speaking more to economic reasoning, the same can be applied to managerial reasoning and observation of employees. The perception that affects both reasoning and observation and leads to decision-making can have both positive and negative effects.

There are a number of “perceptive shortcuts” that can lead to positive and negative outcomes. One of these is termed the ‘halo' effect. The halo effect leads a person to draw a general conclusion “about an individual on the basis of a single characteristic, such as intelligence, sociability, or appearance” (Robbins, 2005, p.138). Most everyone has done this at one time or another - a well-dressed person with a firm handshake must be trustworthy. A person whom is not so well dressed and is constantly shifting his eyes is untrustworthy. A cliché that fits with this perceptive shortcut would be ‘judging a book by its cover.' While in some instances the halo effect could lead to a valid conclusion (for example, an outgoing person would make a good salesperson or spokesman), more often that not it will lead to an invalid conclusion about the individual in question. How often has an individual surprised a manager with knowledge or actions that manager was not aware of or did not expect? Clearly, managers should strive not to judge a book by its cover.

Another perceptive shortcut is projection. Projection can be defined as “the tendency to attribute one's own characteristics to others” (Robbins, 2005, p.139). When managers engage in projection, they can compromise their ability to respond to individual differences among employees. No employee thinks and feels exactly like any other. What one person thinks is a hard day's work, another may consider easy. More than likely, the employees' manager has another perception of what a hard days work encompasses. A manager needs to recognize that employee's thoughts and reactions may not be the same as his or her own. Failure to be aware of projection may result in misunderstandings.

Stereotyping is another perceptive shortcut that fails to take into account the individual, but instead judges someone on the basis of that person's perceived group identity (Robbins, 2005). While not always the case, stereotyping has taken on a mostly negative connotation in the modern world. Judging, or forming opinions of someone based on his or her race or sex, is generally not acceptable. There are, of course, exceptions: women are generally inferior weightlifters than men; white Norwegians tend to sunburn more quickly than black Nigerians. These are neither positive nor negative, simply statements of fact based on the physical world. Managers need to be very careful that they are aware of stereotyping. Not only does group identity diminish the value of the individual and his or her values but it can also produce ethical and legal troubles. Sexual or racial discrimination in the workplace can stem from a manager's stereotyping. Managers need to make decisions based on facts and not solely on perceptions. Many cases of sexual or racial discrimination have ended up in court over what probably started as a misunderstanding between employer and employee based on flawed perceptions.

Yet another perceptive shortcut is that of ‘selective' perception. “Because we cannot assimilate all we observe, we selectively take in bits and pieces…” chosen based on “…our interests, background, experience, and attitude” (Robbins, 2005, p. 138). Simply put, a person sees what he wants in any given situation or individual, thus increasing the chance to draw unwarranted or erroneous conclusions and decisions. “…These decisions are not made in a vacuum; they are made in anticipation of profit, and in the light of a host of expectations…. There is a genuine decisional process…involving all kinds of guesses, [and] hopes and fears about the future…” (Simon, 1982, p. 360). The guesses and hopes and fears Simon speaks of are all grounded in the person's experiences and attitudes, and no one is immune from these biases. What is the responsibility of a manager is to recognize that these biases exist, then proceed on the decision-making process with that bias in mind. Hopefully, with the knowledge of the bias, steps can be taken to counteract or nullify those biases and make a rational decision based on the best information available.

The last perceptive shortcut discussed is that of ‘contrast effects.' As people, we tend not to evaluate everything in isolation. Our reactions and perceptions to one person or event are influenced by other persons or events we have recently encountered (either similar or dissimilar). Simon says that, “In simplest terms, people usually react positively to actions that they perceive as being done by them, and negatively by those they perceive as being done to them.” (1982, p.191). How do Simon's thoughts correlate to the perceptive shortcut of contrast effects? To take a negative example, a manager produces a report for his supervisor that greatly displeases the upper-level supervisor. The manager is sent back to his office with a severe reprimand and an order to redo the report. Meanwhile, unrelated to the manager's situation, an employee of the manager is very pleased that he was able to complete an assignment on time and under budget. He goes to tell the manager of his success, and even though the door is closed, decides to interrupt him. The clash that happens next, of course, will be obvious to most observers. It is human nature to treat others as we have been treated. If someone is in a bad mood, that bad mood is likely to translate to most other interactions throughout the day, even if those interactions have nothing to do with the original source of the bad mood. Managers definitely need to be aware of this perceptive shortcut, as misunderstandings and hurt feelings are quite capable of occurring if this perceptive shortcut is not addressed.

The role of perception can have marked effects on decision-making. Some of these effects can be positive, like the ‘gut feeling' that someone is trustworthy (the ‘halo' effect) leading to a better relationship between manager and subordinate, or correctly assessing a potentially bad situation and nullifying its effect because the manager encountered it before (selective perception). However, many perceptive shortcuts could easily be undesirable or immoral, stereotyping someone because of his or her race, sex, or projecting ones own values onto another employee, thus failing to take into account his or her individuality. Managers must be aware of perceptive shortcuts and take steps to deal with them in order to become more effective decision makers.


Robbins, Stephen P. (2005). Organizational behavior (11th ed.). Upper Saddle River,

NJ: Pearson Education

Simon, Herbert. (1982).Models of Bounded Rationality. Cambridge, MA MIT Press.