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Organizational Behavior

Eighteenth Edition, Global Edition

Chapter 5

Perception and Individual Decision Making

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Welcome to this Organizational Behavior course that uses the 18th edition of the textbook, Organizational Behavior by Robbins and Judge. This is considered among the most widely used OB textbooks in the world. Robbins and Judge are recognized as definitive aggregators of OB concepts, applications, and practices. The course and this book will provide you with a resource that will benefit you throughout your degree program and your professional life.

Learning Objectives

5.1 Explain the factors that influence perception.

5.2 Describe attribution theory.

5.3 Explain the link between perception and decision making.

5.4 Contrast the rational model of decision making with bounded rationality and intuition.

5.5 Explain how individual differences and organizational constraints affect decision making.

5.6 Contrast the three ethical decision criteria.

5.7 Describe the three-stage model of creativity.

After studying this chapter, you should be able to:

Explain the factors that influence perception.

Describe attribution theory.

Explain the link between perception and decision making.

Contrast the rational model of decision making with bounded rationality and intuition.

Explain how individual differences and organizational constraints affect decision making.

Contrast the three ethical decision criteria.

Describe the three-stage model of creativity.

Explain the Factors That Influence Perception (1 of 2)

Perception is a process by which individuals organize and interpret their sensory impressions to give meaning to their environment.

It is important to the study of OB because people’s behaviors are based on their perception of what reality is, not on reality itself.

Perception is a process by which individuals organize and interpret their sensory impressions to give meaning to their environment. It is important to the study of OB because people’s behaviors are based on their perception of what reality is, not on reality itself.

Explain the Factors That Influence Perception (2 of 2)

Exhibit 5-1 Factors That Influence Perception

Many factors shape and sometimes distort perception. These factors can reside in the perceiver, the object or target being perceived, or the situation in which the perception is made (see Exhibit 6-1).

Explain Attribution Theory (1 of 10)

Attribution theory suggests that when we observe an individual’s behavior, we attempt to determine whether it was internally or externally caused.

Determination depends on three factors:

Distinctiveness

Consensus

Consistency

Attribution theory suggests that when we observe an individual’s behavior, we attempt to determine whether it was internally or externally caused. That determination depends largely on three factors: distinctiveness, consensus, and consistency. We’ll talk more about each of these in a minute.

Explain Attribution Theory (2 of 10)

Clarification of the differences between internal and external causation

Internally caused – those that are believed to be under the personal control of the individual.

Externally caused – resulting from outside causes.

First, let’s clarify the differences between internal and external causation. Internally caused behaviors are those who are believed to be under the personal control of the individual. Externally caused behavior is seen as resulting from outside causes; that is, the person is seen as having been forced into the behavior by the situation.

Explain Attribution Theory (3 of 10)

Exhibit 5-2 Attribution Theory

Now, let’s look at each of the three determining factors shown here in Exhibit 6-2, more closely. Distinctiveness refers to whether an individual displays different behaviors in different situations. Consensus occurs if everyone who is faced with a similar situation responds in the same way. Finally, is there consistency in a person’s actions.

Explain Attribution Theory (4 of 10)

Fundamental attribution error

We have a tendency to underestimate the influence of external factors and overestimate the influence of internal or personal factors.

Self-serving bias

Individuals attribute their own successes to internal factors.

Errors or biases can distort attributions. Fundamental attribution error occurs when we underestimate the influence of external factors and overestimate the influence of internal or personal factors. Self-serving bias occurs when individuals attribute their own successes to internal factors, such as ability or effort, while putting the blame for failure on external factors, such as luck.

Explain Attribution Theory (5 of 10)

Common Shortcuts in Judging Others

Selective perception

Any characteristic that makes a person, object, or event stand out will increase the probability that it will be perceived.

Since we can’t observe everything going on around us, we engage in selective perception.

We use a number of shortcuts when we judge others, but it’s important to recognize that while these shortcuts can be helpful, they can also result in significant distortions.

Let’s begin with selective perception. Any characteristic that makes a person, object, or event stand out will increase the probability that it will be perceived. Since we can’t observe everything going on around us, we engage in selective perception.

Explain Attribution Theory (6 of 10)

Halo effect

The halo effect occurs when we draw a general impression based on a single characteristic.

Contrast effects

We do not evaluate a person in isolation.

Our reaction to one person is influenced by other persons we have recently encountered.

Another shortcut is the halo effect, which occurs when we draw a general impression on the basis of a single characteristic.

A third shortcut involves contrast effects. We do not evaluate a person in isolation. Our reaction to one person is influenced by other individuals we have recently encountered. For example, an interview situation in which one sees a pool of job applicants can distort perception. Distortions of any given candidate’s evaluation can occur as a result of his or her place in the interview schedule.

Explain Attribution Theory (7 of 10)

Stereotyping

Judging someone based on one’s perception of the group to which that person belongs.

We have to monitor ourselves to make sure we’re not unfairly applying a stereotype in our evaluations and decisions.

A fourth shortcut is stereotyping, wherein we judge someone based on our perception of the group to which that person belongs. Generalization is not without advantages – it is a means of simplifying a complex world, and it permits us to maintain consistency. The problem, of course, is when we inaccurately stereotype. We have to monitor ourselves to make sure we’re not unfairly applying a stereotype in our evaluations and decisions.

Explain Attribution Theory (8 of 10)

Applications of Shortcuts in Organizations

Employment Interview

Evidence indicates that interviewers make perceptual judgments that are often inaccurate.

Interviewers generally draw early impressions that become very quickly entrenched.

Studies indicate that most interviewers’ decisions change very little after the first four or five minutes of the interview.

Let’s look at some specific applications of shortcuts in organizations.

The first application is the employment interview. Evidence indicates that interviewers make perceptual judgments that are often inaccurate. Moreover, early impressions can become quickly entrenched. In fact, research shows that most interviewers’ decisions change very little after the first few minutes of an interview.

Explain Attribution Theory (9 of 10)

Performance Expectations

Evidence demonstrates that people will attempt to validate their perceptions of reality, even when those perceptions are faulty.

Self-fulfilling prophecy, or the Pygmalion effect, characterizes the fact that people’s expectations determine their behavior.

Expectations become reality.

The second application of shortcuts involves performance expectations. Evidence demonstrates that people will attempt to validate their perceptions of reality, even when those perceptions are faulty. Self-fulfilling prophecy, or the Pygmalion effect, characterizes the fact that people’s expectations determine their behavior. Expectations become reality.

Explain Attribution Theory (10 of 10)

Performance Evaluation

An employee’s performance appraisal is very much dependent upon the perceptual process.

Many jobs are evaluated in subjective terms.

Subjective measures are problematic because of selective perception, contrast effects, halo effects, and so on.

The third application of shortcuts involves performance evaluation. An employee’s performance appraisal is very much dependent upon the perceptual process. Although the appraisal can be objective, many jobs are evaluated in subjective terms. Subjective measures can be problematic because of selective perception, contrast effects, halo effects, and so on.

Explain the Link Between Perception and Decision Making

Individuals make decisions – choosing from two or more alternatives.

Decision making occurs as a reaction to a problem.

There is a discrepancy between some current state of affairs and some desired state, requiring consideration of alternative courses of action.

One person’s problem is another’s satisfactory state of affairs.

Individuals in organizations constantly make decisions. They make choices from among two or more options many times during the day, and at different levels of importance or intensity.

Usually, decision making occurs as a reaction to a problem: there is a discrepancy between some current state of affairs and some desired state, requiring consideration of alternative courses of action. One person’s problem is another’s satisfactory state of affairs.

Every decision requires interpretation and evaluation of information. Data are typically received from multiple sources. The perceptions of the decision maker will decide which data are relevant to the decision and which are not. Alternatives will be developed, and the strengths and weaknesses of each need to be evaluated.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (1 of 12)

Exhibit 5-3 Steps in the Rational Decision-Making Model

Define the problem.

Identify the decision criteria.

Allocate weights to the criteria.

Develop the alternatives.

Evaluate the alternatives.

Select the best alternative.

We often think the best decision maker is rational and makes consistent, value-maximizing choices within specified constraints. This Rational Decision-Making process follows six steps, as shown here in Exhibit 6-3.

Step 1: Define the problem.

Step 2: Identify the decision criteria.

Step 3: Allocate weights to the criteria.

Step 4: Develop the alternatives.

Step 5: Evaluate the alternatives.

Step 6: Select the best alternative.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (2 of 12)

Assumptions of the Rational Model

The decision maker…

Has complete information.

Is able to identify all the relevant options in an unbiased manner.

Chooses the option with the highest utility.

Most decisions in the real world don’t follow the rational model.

The rational decision-making model assumes 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.

Most decisions in the real world don’t follow the rational model. People are usually content to find an acceptable or reasonable solution to a problem rather than an optimal one. Choices tend to be limited to the neighborhood of the problem symptom and the current alternative. As one expert in decision making put it, “Most significant decisions are made by judgment, rather than by a defined prescriptive model.” People are remarkably unaware of making suboptimal decisions.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (3 of 12)

Bounded Rationality

Most people respond to a complex problem by reducing it to a level at which it can be readily understood.

People satisfice – they seek solutions that are satisfactory and sufficient.

Individuals operate within the confines of bounded rationality.

They construct simplified models that extract the essential features.

When faced with a complex problem, most people respond by reducing the problem to a level at which it can be readily understood. This is because the limited information-processing capability of human beings makes it impossible to assimilate and understand all the information necessary to optimize. Instead, people satisfice; that is, they seek solutions that are satisfactory and sufficient. Individuals operate within the confines of bounded rationality and construct simplified models that extract the essential features.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (4 of 12)

How does bounded rationality work?

Once a problem is identified, the search for criteria and options begins.

A limited list of the more conspicuous choices is identified.

The decision maker then reviews the list, looking for a solution that is “good enough.”

How does bounded rationality work? Once a problem is identified, the search for criteria and options begins. The decision maker will identify a limited list made up of the more conspicuous choices, which are easy to find, tend to be highly visible, and represent familiar criteria and previously tried-and-true solutions. Once this limited set of options is identified, the decision maker will begin reviewing it.

The decision maker will begin with options that differ only in a relatively small degree from the choice currently in effect. The first option that meets the “good enough” criterion ends the search. (Satisficing is not always a bad idea. It is a simple process that may frequently be more sensible than the traditional rational decision-making model.)

To use the rational model in the real world, you need to gather a great deal of information about all the options, compute applicable weights, and then calculate values across a huge number of criteria. All these processes can cost time, energy, and money. If there are many unknown weights and preferences, the fully rational model may not be any more accurate than a best guess. Sometimes a fast-and-frugal process of solving problems is the best option.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (5 of 12)

Intuition

Intuitive decision making occurs outside conscious thought; it relies on holistic associations, or links between disparate pieces of information, is fast, and is affectively charged, meaning it usually engages the emotions.

The key is neither to abandon nor rely solely on intuition, but to supplement it with evidence and good judgment.

Another important decision-making technique is intuition. Perhaps the least rational way of making decisions, intuitive decision making is an unconscious process created from distilled experience. It occurs outside conscious thought, relies on holistic associations, or links between disparate pieces of information, is fast, and is affectively charged, meaning it usually engages the emotions. While intuition isn’t rational, it isn’t necessarily wrong. Nor does it always contradict rational analysis; rather, the two can complement each other. The key is neither to abandon nor rely solely on intuition, but to supplement it with evidence and good judgment.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (6 of 12)

Exhibit 5-4 Reducing Biases and Errors

Focus on Goals. Without goals, you can’t be rational, you don’t know what information you need, you don’t know which information is relevant and which is irrelevant, you’ll find it difficult to choose between alternatives, and you’re far more likely to experience regret over the choices you make. Clear goals make decision making easier and help you eliminate options that are inconsistent with your interests.

Decision makers allow systematic biases and errors to creep into their judgments. People tend to rely on experience, impulses, gut feelings, and rules of thumb, which can all lead to distortions. Exhibit 6-4 suggests some techniques to avoid decision biases or errors beginning with focusing on goals.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (7 of 12)

[Exhibit 5-4 Continued]

Look for Information That Disconfirms Your Beliefs. One of the most effective means for counteracting overconfidence and the confirmation and hindsight biases is to actively look for information that contradicts your beliefs and assumptions. When we overtly consider various ways we could be wrong, we challenge our tendencies to think we’re smarter than we actually are.

Don’t Try to Create Meaning out of Random Events. The educated mind has been trained to look for cause-and-effect relationships. When something happens, we ask why. And when we can’t find reasons, we often invent them. You have to accept that there are events in life that are outside your control. Ask yourself if patterns can be meaningfully explained or whether they are merely coincidence. Don’t attempt to create meaning out of coincidence.

Additional techniques to avoid decision biases or errors include looking for information that disconfirms your beliefs and avoiding trying to create meaning out of random events.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (8 of 12)

[Exhibit 5-4 Continued]

Increase Your Options. No matter how many options you’ve identified, your final choice can be no better than the best of the option set you’ve selected. This argues for increasing your decision alternatives and for using creativity in developing a wide range of diverse choices. The more alternatives you can generate, and the more diverse those alternatives, the greater your chance of finding an outstanding one.

Source: Based on S. P. Robbins, Decide & Conquer: Making Winning Decisions and Taking Control of Your Life (Upper Saddle River, NJ: Financial Times/Prentice Hall, 2004), 164–68.

One more technique to avoid decision biases or errors is to increase your options.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (9 of 12)

Common Biases and Errors in Decision Making

Overconfidence Bias: individuals whose intellectual and interpersonal abilities are weakest are most likely to overestimate their performance and ability.

Anchoring Bias: fixating on initial information as a starting point and failing to adequately adjust for subsequent information.

Decision makers engage in bounded rationality, but they also allow systematic biases and errors to creep into their judgments.

The first is overconfidence bias. Individuals whose intellectual and interpersonal abilities are weakest are most likely to overestimate their performance and ability. The tendency to be too confident about their ideas might keep some from planning how to avoid problems that arise. Investor overconfidence operates in a variety of ways. People think they know more than they do, and it costs them. Investors, especially novices, overestimate not just their own skill in processing information, but also the quality of the information with which they’re working.

A second bias is anchoring bias. This involves fixating on initial information as a starting point and failing to adequately adjust for subsequent information. Anchors are widely used by people in advertising, management, politics, real estate, and law, where persuasion skills are important. Any time a negotiation takes place, so does anchoring.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (10 of 12)

Confirmation Bias: type of selective perception.

Seek out information that reaffirms past choices, and discount information that contradicts past judgments.

Availability Bias: tendency for people to base judgments on information that is readily available.

A third bias is confirmation bias. It is a type of selective perception. Here we seek out information that reaffirms past choices, and discount information that contradicts past judgments.

Fourth is availability bias, or the tendency for people to base judgments on information that is readily available.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (11 of 12)

Escalation of Commitment: staying with a decision even when there is clear evidence that it’s wrong.

Likely to occur when individuals view themselves as responsible for the outcome.

Randomness Error: our tendency to believe we can predict the outcome of random events.

Decision making becomes impaired when we try to create meaning out of random events.

Escalation of commitment is a bias that occurs when we stay with a decision even when there is clear evidence that it’s wrong. This type of bias is most likely to occur when individuals view themselves as responsible for the outcome.

Another bias is randomness error, which is rooted in our tendency to believe we can predict the outcome of random events. Decision making becomes impaired when we try to create meaning out of random events.

Rational Model of Decision Making vs. Bounded Rationality and Intuition (12 of 12)

Risk Aversion: the tendency to prefer a sure thing instead of a risky outcome.

Ambitious people with power that can be taken away appear to be especially risk averse.

People will more likely engage in risk-seeking behavior for negative outcomes, and risk-averse behavior for positive outcomes, when under stress.

Hindsight Bias: the tendency to believe falsely that one has accurately predicted the outcome of an event, after that outcome is actually known.

Another bias, risk aversion, is the tendency to prefer a sure thing instead of a risky outcome. Overall, the framing of a decision has an effect on whether or not people will engage in risk aversive behavior—when decisions are framed positively, such as a potential gain of $50, people will be more risk averse (conversely, when the decision is framed in a negative manner, such as a loss of $50, people will engage in riskier behaviors). Generally speaking, people will more likely engage in risk-seeking behavior for negative outcomes, and risk-averse behavior for positive outcomes, when under stress.

Finally, hindsight bias is the tendency to believe falsely that one has accurately predicted the outcome of an event, after that outcome is actually known. Hindsight bias reduces our ability to learn from the past.

Individual Differences, Organizational Constraints, and Decision Making (1 of 2)

Individual Differences

Personality

Conscientiousness

High self-esteem

Gender

Rumination

Mental Ability

Cultural Differences

Individual differences and organizational constraints also affect decision making.

Personality influences our decisions. Specific facets of conscientiousness—rather than the broad trait itself—may affect escalation of commitment.

Achievement-striving people are more likely to escalate their commitment, whereas dutiful people are less likely to do so. Achievement-oriented people hate to fail, so they escalate their commitment, hoping to forestall failure. Dutiful people, by contrast, are more inclined to do what they see as best for the organization. People with high self-esteem are strongly motivated to maintain it, so they use the self-serving bias to preserve it.

Additional individual characteristics include gender. For example, women, in general, are more likely than men to engage in rumination. Rumination refers to reflecting at length; in decision making, it translates to over-thinking problems. Evidence indicates that women analyze decisions more than men. The rumination tendency appears to be moderated by age. Differences are largest during young adulthood and smallest after age 65.

Next is mental ability. We know people with higher levels of mental ability are able to process information more quickly, solve problems more accurately, and learn faster, so you might expect them also to be less susceptible to common decision errors.

Cultural differences also come into play. The rational model makes no acknowledgment of cultural differences, nor does the bulk of OB research literature on decision making. However, it is important to recognize that the cultural background of a decision maker can significantly influence the selection of problems, the depth of analysis, the importance placed on logic and rationality, and whether organizational decisions should be made autocratically by an individual manager or collectively in groups. Cultures differ in their time orientation, the importance of rationality, their belief in the ability of people to solve problems, and their preference for collective decision making. While rationality is valued in North America, that’s not true elsewhere in the world.

Some cultures emphasize solving problems, while others focus on accepting situations as they are. The United States falls in the first category, while Thailand and Indonesia are examples of the second. Because problem-solving managers believe they can and should change situations to their benefit, U.S. managers might identify a problem long before their Thai or Indonesian counterparts would choose to recognize it. Decision making by Japanese managers is much more group-oriented than in the United States. The Japanese value conformity and cooperation. Before Japanese CEOs make an important decision, they collect a large amount of information, which they use in consensus-forming group decisions. In short, there are probably important cultural differences in decision making, but unfortunately there is not yet much research to identify them.

Individual Differences, Organizational Constraints, and Decision Making (2 of 2)

Organizational Constraints

Performance Evaluation Systems

Reward Systems

Formal Regulations

System-Imposed Time Constraints

Historical Precedents

Organizational constraints that impinge on decision making begin with performance evaluation. Managers are strongly influenced in their decision making by the criteria by which they are evaluated. The organization’s reward system influences decision makers by suggesting to them what choices are preferable in terms of personal payoff.

Other constraints are the formal rules, policies, procedures, and other formalized regulations created by organizations to standardize the behavior of their members. System-imposed time constraints are another influence wherein organizations impose deadlines on decisions.

Finally, historical precedents can serve to impede decision making. Decisions have a context. Individual decisions are more accurately characterized as points in a stream of decisions. Decisions made in the past are ghosts, which continually haunt current choices. For example, it is common knowledge that the largest determining factor of the size of any given year’s budget is last year’s budget.

Contrast the Three Ethical Decision Criteria (1 of 3)

Utilitarianism: decisions are made solely on the basis of their outcomes or consequences.

Focus on rights: calls on individuals to make decisions consistent with fundamental liberties and privileges as set forth in documents such as the Bill of Rights.

Protects whistle-blowers.

Impose and enforce rules fairly and impartially to ensure justice or an equitable distribution of benefits and costs.

Ethical considerations should be an important criterion in organizational decision making. The first is utilitarianism, which occurs when decisions are made solely on the basis of their outcomes or consequences. The focus on rights calls on individuals to make decisions consistent with fundamental liberties and privileges as set forth in documents such as the Bill of Rights; this particular criterion protects whistle-blowers in organizations. The third criterion involves imposing and enforcing rules fairly and impartially to ensure justice or an equitable distribution of benefits and costs. Union members typically favor this view.

Each criterion has advantages and liabilities. A focus on utilitarianism promotes efficiency and productivity, but it can sideline the rights of some individuals, particularly those with minority representation. The focus on rights protects individuals from injury and is consistent with freedom and privacy, but it can create a legalistic environment that hinders productivity and efficiency. A focus on justice protects the interests of the underrepresented and less powerful, but it can encourage a sense of entitlement that reduces risk-taking, innovation, and productivity.

Contrast the Three Ethical Decision Criteria (2 of 3)

Behavioral ethics: an area of study that analyzes how people behave when confronted with ethical dilemmas.

Individuals do not always follow ethical standards promulgated by their organizations, and we sometimes violate our own standards.

There are ways to increase ethical decision making in organizations.

Consider cultural differences.

Increasingly, researchers are turning to behavioral ethics – an area of study that analyzes how people behave when confronted with ethical dilemmas. Their research tells us that while ethical standards exist collectively (e.g., in society and organizations) and individually (e.g., personal ethics), individuals do not always follow ethical standards promulgated by their organizations and we sometimes violate our own standards.

How might we increase ethical decision making in organizations? First, seemingly superficial aspects of the environment—such as lighting, outward displays of wealth and status, and cleanliness—can affect ethical behavior in organizations. Second, managers should encourage conversations about moral issues; they may serve as a reminder and increase ethical decision making. Finally, we should be aware of our own moral “blind spots” — the tendency to see ourselves as more moral than we are, and others as less moral than they are.

Behavioral ethics research stresses the importance of culture in ethical decision-making. What is ethical in one culture may be unethical in another.

Without sensitivity to cultural differences in defining ethical conduct, organizations may encourage unethical conduct without even knowing it.

Contrast the Three Ethical Decision Criteria (3 of 3)

Lying

One of the top unethical activities we may indulge in daily.

It undermines all efforts toward sound decision making.

Managers—and organizations—simply cannot make good decisions when facts are misrepresented and people give false motives for their behaviors.

Lying is a big ethical problem as well.

Lying is one of the top unethical activities we may indulge in daily, and it undermines all efforts toward sound decision making. Lying is deadly to decision making, whether we sense the lies or not. Managers—and organizations—simply cannot make good decisions when facts are misrepresented and people give false motives for their behaviors.

Lying is a big ethical problem as well.

Describe the Three-Stage Model of Creativity (1 of 2)

Creativity is the ability to produce novel and useful ideas.

These are ideas that are different from what has been done before, but that are also appropriate to the problem.

Creativity is the ability to produce novel and useful ideas.

Describe the Three-Stage Model of Creativity (2 of 2)

Exhibit 5-5 Three-Stage Model of Creativity in Organizations

The three-stage model of creativity shown in Exhibit 6-5 suggests that creativity involves causes (creative potential and creative environment), creative behavior, and creative outcomes (innovation).

The first stage, causes of creative behavior, is composed of creative potential and creative environment. Most people have some of the characteristics shared by exceptionally creative people, but the more of these characteristics we have, the higher our creative potential. The potential for creativity is enhanced when individuals have abilities, knowledge, proficiencies, and similar expertise to their field of endeavor.

What environmental factors affect whether creative potential translates into creative behaviors? First and perhaps most important is motivation. If you aren’t motivated to be creative, it is unlikely you will be. It is also valuable to work in an environment that rewards and recognizes creative work. A recent nation-level study suggests that countries scoring high on Hofstede’s culture dimension of individuality are more creative. Good leadership matters to creativity, too. Studies show that diverse teams can be more creative, but only under certain conditions.

Creative behavior occurs in four steps, each of which leads to the next:

Problem formulation: the stage of creative behavior in which we identify a problem or opportunity that requires a solution yet unknown.

Information gathering: the stage of creative behavior when possible solutions to a problem incubate in an individual’s mind.

Idea generation: the process of creative behavior in which we develop possible solutions to a problem from relevant information and knowledge.

Idea evaluation: the process of creative behavior in which we evaluate potential solutions to identify the best one.

Lastly, we can define creative outcomes as ideas or solutions judged to be novel and useful by relevant stakeholders. Novelty itself does not generate a creative outcome if it isn’t useful; thus, “off-the-wall” solutions are creative only if they help solve the problem. Softs skills help translate ideas into results. Another important factor is organizational climate. A study of health care teams found that team creativity translated into innovation only when the climate actively supported innovation.

Implications for Managers (1 of 3)

Behavior follows perception, so to influence behavior at work, assess how people perceive their work. Often behaviors we find puzzling can be explained by understanding the initiating perceptions.

Make better decisions by recognizing perceptual biases and decision-making errors we tend to commit. Learning about these problems doesn’t always prevent us from making mistakes, but it does help.

Individuals base their behavior not on the way their external environment actually is, but rather on the way they see it or believe it to be. An understanding of the way people make decisions can help us explain and predict behavior, but few important decisions are simple or unambiguous enough for the rational model’s assumptions to apply. We find individuals looking for solutions that satisfice rather than optimize, injecting biases and prejudices into the decision process, and relying on intuition.

Managers should encourage creativity in employees and teams to create a route to innovative decision making. Specific implications for managers are:

Behavior follows perception, so to influence behavior at work, assess how people perceive their work. Often behaviors we find puzzling can be explained by understanding the initiating perceptions.

Make better decisions by recognizing perceptual biases and decision-making errors we tend to commit. Learning about these problems doesn’t always prevent us from making mistakes, but it does help.

Implications for Managers (2 of 3)

Adjust your decision-making approach to the national culture you’re operating in and to the criteria your organization values. If you’re in a country that doesn’t value rationality, don’t feel compelled to follow the rational decision-making model or to try to make your decisions appear rational. Adjust your decision approach to ensure compatibility with the organizational culture.

Implications for Managers (3 of 3)

Combine rational analysis with intuition. These are not conflicting approaches to decision making. By using both, you can improve your decision making effectiveness.

Try to enhance your creativity. Actively look for novel solutions to problems, attempt to see problems in new ways, use analogies, and hire creative talent. Try to remove work and organizational barriers that might impede your creativity.

Combine rational analysis with intuition. These are not conflicting approaches to decision making. By using both, you can improve your decision-making effectiveness.

Learning Objectives

5.1 Explain the factors that influence perception.

5.2 Describe attribution theory.

5.3 Explain the link between perception and decision making.

5.4 Contrast the rational model of decision making with bounded rationality and intuition.

5.5 Explain how individual differences and organizational constraints affect decision making.

5.6 Contrast the three ethical decision criteria.

5.7 Describe the three-stage model of creativity.

After studying this chapter, you should be able to:

Explain the factors that influence perception.

Describe attribution theory.

Explain the link between perception and decision making.

Contrast the rational model of decision making with bounded rationality and intuition.

Explain how individual differences and organizational constraints affect decision making.

Contrast the three ethical decision criteria.

Describe the three-stage model of creativity.

Questions?

Organizational Behavior

Eighteenth Edition, Global Edition

Chapter 6

Emotions and Moods

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Chapter 4: Emotions and Moods

Learning Objectives

6.1 Differentiate between emotions and moods.

6.2 Identify the sources of emotions and moods.

6.3 Show the impact emotional labor has on employees.

6.4 Describe affective events theory.

6.5 Describe emotional intelligence.

6.6 Identify strategies for emotion regulation.

6.7 Apply concepts about emotions and moods to specific OB issues.

After studying this chapter, you should be able to:

Differentiate between emotions and moods.

Identify the sources of emotions and moods.

Show the impact emotional labor has on employees.

Describe affective events theory.

Describe emotional intelligence.

Identify strategies for emotion regulation.

Apply concepts about emotions and moods to specific OB issues.

We will discuss each of these objectives in some detail.

Differentiate Between Emotions and Moods (1 of 7)

Exhibit 6-1 Affect, Emotions, and Moods

Three terms that are closely intertwined: affect, emotion, and moods.

Affect is a generic term that covers a broad range of feelings people experience. This includes both emotions and moods. Emotions are intense feelings that are directed at someone or something. Moods are the feelings that tend to be less intense than emotions and that lack a contextual stimulus.

Differentiate Between Emotions and Moods (2 of 7)

Six essentially universal emotions

Anger

Fear

Sadness

Happiness

Disgust

Surprise

Though not all psychologists agree, there do seem to be six basic emotions that emerge in studies: anger, fear, sadness, happiness, disgust, and surprise. All other emotions fall under these six categories. Sometimes as many as 12 emotions are identified.

Differentiate Between Emotions and Moods (3 of 7)

Moral Emotions

Moral emotions: emotions that have moral implications because of our instant judgement of the situation that evokes them.

Our responses to moral emotions differ from our responses to other emotions.

Moral emotions are developed during childhood.

Because morality is a construct that differs between cultures, so do moral emotions.

Researchers have been studying what are called moral emotions; that is, emotions that have moral implications because of our instant judgement of the situation that evokes them. Interestingly, research indicates that our responses to moral emotions differ from our responses to other emotions.

Moral emotions are developed during childhood as children learn moral norms and standards, so they depend upon the situation and norms more so than other emotions.

Because morality is a construct that differs between cultures, so do moral emotions. Therefore, we need to be aware of the moral aspects of situations that trigger our emotions and make certain we understand the context before we act, especially in the workplace.

Differentiate Between Emotions and Moods (4 of 7)

Exhibit 6-2 The Structure of Mood

Our basic moods carry positive and negative affects. They cannot be neutral. Emotions are grouped into general mood states as shown in Exhibit 4-2. These states impact how employees perceive reality; thereby, the moods can impact the work of employees.

At zero input, most people experience a mildly positive mood. This is referred to as positivity offset.

Differentiate Between Emotions and Moods (5 of 7)

OB Poll Emotional States

*Respondents in 148 countries worldwide during 2014 were asked whether they experienced five positive (well-rested, treated with respect, enjoyment, smiling and laughing, learning or doing something interesting) and five negative emotions (anger, stress, sadness, physical pain, worry) daily. Source: Based on J. Clifton, “Latin Americans Lead World in Emotions,” Gallup (August 27, 2015), http://www.gallup.com/poll/184631/latin-americans-leadworld- emotions.aspx.

As if it weren’t complex enough to consider the many distinct emotions and moods a person might identify, the reality is that we all experience moods and emotions differently.

For most people, positive moods are somewhat more common than negative moods. Indeed, research finds a positivity offset, meaning that at zero input (when nothing in particular is going on), most individuals experience a mildly positive mood.

Does the degree to which people experience positive and negative emotions vary across cultures? Yes (see the OB Poll).

People in most cultures appear to experience certain positive and negative emotions, and people interpret them in much the same way worldwide.

However, an individual’s experience of emotions appears to be culturally shaped.

Differentiate Between Emotions and Moods (6 of 7)

Do emotions make us irrational? There are some who think that emotions are linked to irrationality and that expressing emotions in public may be damaging to your career or status. However, research has shown that emotions are necessary for rational thinking. They help us make better decisions and help us understand the world around us. If we are going to make decisions, we need to incorporate both thinking and feeling.

Differentiate Between Emotions and Moods (7 of 7)

Do emotions make us ethical?

Research on moral emotions questions the previous belief that emotional decision making is based on higher-level cognitive processes.

Our beliefs are shaped by our groups, resulting in unconscious responses and a shared moral emotion.

This may allow us to justify purely emotional reactions as rationally ethical just because we share them with others.

A growing body of research has begun to examine the relationship between emotions and moral attitudes.

Examples of moral emotions include sympathy for the suffering of others, guilt about our own immoral behavior, anger about injustice done to others, contempt for those who behave unethically, and disgust at violations of moral norms. Numerous studies suggest that these reactions are largely based on feelings rather than on cognition.

Our beliefs are shaped by our groups, which influence our perceptions of the ethicality behind certain situations, resulting in unconscious responses and a shared moral emotion.” Unfortunately, these shared emotions may allow us to justify purely emotional reactions as “ethical” just because we share them with others.

We also tend to judge (and punish) outgroup members (anyone who is not in our group) more harshly for moral transgressions than ingroup members, even when we are trying to be objective. In addition, we tend to glorify ingroup members (anyone who is a part of our group) and are more lenient when judging their misdeeds, often leading to a double-standard in ethicality.

Identify the Sources of Emotions and Moods (1 of 4)

Personality

Moods and emotions have a trait component.

Affect intensity: how strongly people experience their emotions.

Time of Day

There is a common pattern for all of us.

Happier in the midpoint of the daily awake period.

Day of the Week

Happier toward the end of the week.

There are many things that impact our mood and emotions. Personality is a key component and will definitely impact the intensity of the emotions we feel. The day and time of the week is a common pattern for all of us as well.

Exhibit 4-3 in your text shows the results of recent research related to time of day. Positive emotions have their greatest effect in mid-morning and then remain stable before rising again until midnight.

In Exhibit 4-4, we can see how the day of the week affects emotions. As the week progresses, positive effects of emotions increases while negative effects decrease. So positive emotions are considerably higher toward the end of the week than they are at the beginning. This tends to be true among many cultures.

Identify the Sources of Emotions and Moods (2 of 4)

Weather

Illusory correlation – no effect.

Stress

Even low levels of constant stress can worsen moods.

Social Activities

Physical, informal, and dining activities increase positive moods.

Weather is thought to have an impact on our emotions, but there is no proven effect.

Stress is an important factor and even at low levels it can cause our mood to change. It is important to maintain a low level of stress to help control psychological and physical health.

Social activities have been shown to have a positive impact on our moods. This could be physical outlets such as playing in a basketball league, or as simple as going out to dinner with friends.

Identify the Sources of Emotions and Moods (3 of 4)

Sleep

Poor sleep quality increases negative affect.

Exercise

Does somewhat improve mood, especially for depressed people.

Some additional sources of emotion and moods include such factors as sleep and exercise. It is important to get enough and high-quality levels of sleep.

Physical activity can also aid in keeping our moods upbeat, particularly for people who are depressed.

Identify the Sources of Emotions and Moods (4 of 4)

Age

Older people tend to focus on more positive stimuli than younger adults.

Sex

Women tend to be more emotionally expressive, feel emotions more intensely, have longer-lasting moods, and express emotions more frequently than men.

Some characteristics that are beyond our control can impact our moods, such as age and sex.

Elderly people tend to have fewer negative emotions.

Older adults tend to focus on more positive stimuli (and on less negative stimuli) than younger adults, a finding confirmed across nearly 100 studies. Furthermore, these older adults tend to self-regulate by actively trying to increase the positivity (and decrease the negativity) in their attention and memory.

Women tend to express their emotions readily and their moods tend to last longer. Research has shown that this is due more to cultural socialization than to biology. People also tend to attribute men’s and women’s emotions in ways that might be based on stereotypes of typical emotional reactions.

Show the Impact Emotional Labor Has on Employees (1 of 2)

Emotional labor: an employee’s expression of organizationally desired emotions during interpersonal transactions at work.

Types of Emotions

Felt: the individual’s actual emotions.

Displayed: required or appropriate emotions.

Surface acting: hiding feelings and foregoing emotional expressions in response to display rules.

Deep acting: trying to modify true inner feelings based on display rules.

In many jobs, there is an implied agreement on the types of emotions that should be expressed. For example, waitresses are supposed to be friendly and cheerful, whether they are currently feeling that emotion or not.

An employee’s actual emotions are their felt emotions. The emotions that are required or deemed appropriate by the employer are called displayed emotions. Displaying fake emotions requires suppressing real ones and acting.

Surface acting occurs when an employee displays the appropriate emotions even when he or she don’t feel those emotions. Deep acting occurs when the employee actually changes his or her internal feelings to match display rules; this level of acting can be very stressful.

Show the Impact Emotional Labor Has on Employees (2 of 2)

Emotional dissonance: Inconsistencies between the emotions people feel and the emotions they project.

Long-term emotional dissonance is a predictor for job burnout, declines in job performance, and lower job satisfaction.

When employees must project one emotion while feeling another, this disparity is called emotional dissonance.

Bottled-up feelings of frustration, anger, and resentment can lead to emotional exhaustion.

Long-term emotional dissonance is a predictor for job burnout, declines in job performance, and lowers job satisfaction.

However, research from Germany and Australia suggests that employees who have a high capacity for self-control, who get a daily good night’s sleep on a daily basis, and who have strong relationships with their customers or clients tend to be buffered to some degree from the negative side effects of emotional dissonance.

Describe Affective Events Theory

Affective events theory (AET): employees react emotionally to things that happen to them at work and this influences job performance and satisfaction.

Emotions provide valuable insights into how workplace events influence employee performance and satisfaction.

Employees and managers shouldn’t ignore emotions or the events that cause them, even when they appear minor, because they accumulate.

Affective Events Theory, or AET, demonstrates that employees react emotionally to things that happen to them at work, which can influence their job performance and job satisfaction. The intensity of these responses will be based on emotion and mood.

In sum, AET offers two important messages.71 First, emotions provide valuable insights into how workplace events influence employee performance and satisfaction. Second, employees and managers shouldn’t ignore emotions or the events that cause them, even when they appear minor, because they accumulate.

Describe Emotional Intelligence (1 of 2)

Emotional Intelligence:

A person’s ability to:

Perceive emotions in the self and others.

Understand the meaning of these emotions.

Regulate one’s emotions accordingly in a cascading model.

Emotional Intelligence is a person’s ability to be self-aware, which is to recognize his or her own experienced emotions and to understand them. More significantly is the ability to observe and detect emotion in others, and to regulate the emotions in a cascading relationship. People who know their emotions and can read emotional cues are likely to be most effective.

Describe Emotional Intelligence (2 of 2)

Exhibit 6-5 A Cascading Model of Emotional Intelligence

Source: Based on D. L. Joseph and D. A. Newman, “Emotional Intelligence: An Integrative Meta-Analysis and Cascading Model,” Journal of Applied Psychology 95, no. 1 (2010): 54–78.

Exhibit 4-5 illustrates the Cascading Model of Emotional Intelligence. Here we see the suggested relationship between Conscientiousness, Cognitive, and Emotional Stability, and the outcomes of detecting one’s own and others’ emotions, understanding what they mean, and regulating the emotions successfully.

Identify Strategies for Emotion Regulation (1 of 2)

Emotion regulation involves identifying and modifying the emotions you feel.

Emotion Regulation Influences and Outcomes

Diversity in work groups may help us to regulate our emotions more consciously and effectively.

The process of identifying and modifying emotions you feel is called emotion regulation.

As you might suspect, not everyone is equally good at regulating emotions.

Individuals who are higher in the personality trait of neuroticism have more trouble doing so and often find their moods are beyond their ability to control.

The workplace environment has an effect on an individual’s tendency to employ emotion regulation.

In general, diversity in work groups increases the likelihood that you will regulate your emotions. Racial diversity also has an effect: if diversity is low, the minority will engage in emotion regulation, perhaps to “fit in” with the majority race as much as possible; if diversity is high and many different races are represented, the majority race will employ emotion regulation, perhaps to integrate themselves with the whole group.

These findings suggest a beneficial outcome of diversity—it may cause us to regulate our emotions more consciously and effectively.

It’s important to note that there is a downside to trying to change the way you feel. The effort involved can be exhausting.

From another perspective, research suggests that avoiding negative emotional experiences is less likely to lead to positive moods than does seeking out positive emotional experiences.

Identify Strategies for Emotion Regulation (2 of 2)

Emotion Regulation Techniques

Surface acting

Deep acting

Emotional suppression

Cognitive reappraisal

Social sharing

Mindfulness

The best option though is to recruit positive-minded individuals and train leaders to manage their moods, attitudes, and performance.

Researchers of emotion regulation often study the strategies people employ to change their emotions.

One technique of emotion regulation is emotional suppression, or suppressing initial emotional responses to situations. This response seems to facilitate practical thinking in the short term. However, it appears to be helpful only when a strongly negative event would illicit a distressed emotional reaction during a crisis. Thus, unless we’re truly in a crisis, acknowledging rather than suppressing our emotional responses to situations, and re-evaluating events after they occur, yields the best outcomes.

Cognitive reappraisal, or reframing our outlook on an emotional situation, is one way to effectively regulate emotions. This result suggests that cognitive reappraisal may allow people to change their emotional responses, even when the subject matter is highly emotionally charged.

Another technique with potential for emotion regulation is social sharing, or venting. Research shows that the open expression of emotions can help individuals to regulate their emotions, as opposed to keeping emotions “bottled up.” Social sharing can reduce anger reactions when people can talk about the facts of a bad situation, their feelings about the situation, or any positive aspects of the situation.

99A final emotion regulation technique, mindfulness—receptively paying attention to and being aware of the present moment, events, and experiences—has started to become popular in organizations. However, studies on employee mindfulness are new and we have yet to fully realize its causes and outcomes, along with the most effective methods for achieving and sustaining mindful states.

Thus, while there is much promise in emotion regulation techniques, the best route to a positive workplace is to recruit positive-minded individuals and train leaders to manage their moods, job attitudes, and performance. The best leaders manage emotions as much as they do tasks and activities. The best employees can use their knowledge of emotion regulation to decide when to speak up and how to express themselves effectively.

Apply Concepts About Emotions and Moods to Specific OB Issues (1 of 4)

Selection

EI should be a hiring factor, especially for social jobs.

Decision Making

Positive emotions can lead to better decisions.

Creativity

Positive mood increases flexibility, openness, and creativity.

Understanding emotions and moods can help us explain and predict selection, decision making, creativity, motivation, leadership, interpersonal conflict, negotiation, customer service, job attitudes, and deviant workplace behaviors. When it comes to selection, EI should be a hiring factor to ensure employee fit. Positive emotions can lead to better decisions and often more creative ones as well.

Apply Concepts About Emotions and Moods to Specific OB Issues (2 of 4)

Motivation

Positive mood affects expectations of success.

Feedback amplifies this effect.

Leadership

Emotions are important to acceptance of messages from organizational leaders.

Negotiation

Emotions can affect negotiations.

Positive mood affects expectations of success by all people, which contributes to their motivation for performance. Leadership is affected by mood and emotion, as people in a positive emotional state are found to be more receptive of messages from leaders. Emotions, those both held and displayed, are effective contributors to negotiation, as the potential impact of displayed emotion on negotiation is large. The best negotiators are probably those who remain emotionally detached.

Apply Concepts About Emotions and Moods to Specific OB Issues (3 of 4)

Customer Service

Emotions influence customer service.

Influences repeat business and customer satisfaction.

Emotional contagion: “catching” emotions.

Work-Life Satisfaction

A good day at work tends to be followed by a good mood at home and vice versa.

This usually dissipates overnight.

Emotions affect customer service in a number of ways, ranging from the attitude of the employee, to the effectiveness of communication with customers, to overall feelings about the outcome. Research has found that people who are on an emotional high at the end of a day take the positive feelings home with them, and vice versa. This good mood, however, tends to dissipate overnight.

Apply Concepts About Emotions and Moods to Specific OB Issues (4 of 4)

Deviant Workplace Behaviors

Negative emotions lead to workplace deviant behaviors.

Actions that violate norms and threaten the organization.

Safety and Injury at Work

Don’t do dangerous work when in a bad mood.

Negative emotions can lead to deviant workplace behaviors. These are actions that violate norms and threaten the organization.

Once aggression starts, it’s likely that other people will become angry and aggressive, so the stage is set for a serious escalation of negative behavior.

Managers, therefore, need to stay connected with their employees to gauge emotions and emotional intensity levels.

In addition, research has found that workers asked to do dangerous work while in negative emotional states are more likely to have accidents. Selecting positive team members can have a contagion effect, as positive moods transmit from team member to team member.

Implications for Managers (1 of 2)

Recognize that emotions are a natural part of the workplace and good management does not mean creating an emotion-free environment.

To foster effective decision making, creativity, and motivation in employees, look to model positive emotions and moods as much as is authentically possible.

Provide positive feedback to increase the positivity of employees. Of course, it also helps to hire people who are predisposed to positive moods.

Finally,

Recognize that emotions are a natural part of the workplace and good management does not mean creating an emotion-free environment.

To foster effective decision making, creativity, and motivation in employees, look to model positive emotions and moods as much as is authentically possible.

Provide positive feedback to increase the positivity of employees. Of course, it also helps to hire people who are predisposed to positive moods.

Implications for Managers (2 of 2)

In the service sector, encourage positive displays of emotion, which make customers feel more positive and thus, improve customer service interactions and negotiations.

Understand the role of emotions and moods to significantly improve your ability to explain and predict your coworkers’ and others’ behavior.

Finally,

In the service sector, encourage positive displays of emotion, which make customers feel more positive and thus, improve customer service interactions and negotiations.

Understand the role of emotions and moods to significantly improve your ability to explain and predict your coworkers’ and others’ behavior.

As one consultant aptly put it, “You can’t divorce emotions from the workplace because you can’t divorce emotions from people.” Managers who understand the role of emotions and moods will significantly improve their ability to explain and predict their coworkers’ and employees’ behavior.

Learning Objectives

6.1 Differentiate between emotions and moods.

6.2 Identify the sources of emotions and moods.

6.3 Show the impact emotional labor has on employees.

6.4 Describe affective events theory.

6.5 Describe emotional intelligence.

6.6 Identify strategies for emotion regulation.

6.7 Apply concepts about emotions and moods to specific OB issues.

After studying this chapter, you should be able to:

Differentiate between emotions and moods.

Identify the sources of emotions and moods.

Show the impact emotional labor has on employees.

Describe affective events theory.

Describe emotional intelligence.

Identify strategies for emotion regulation.

Apply concepts about emotions and moods to specific OB issues.

We will discuss each of these objectives in some detail.

Questions?