Decision Making Errors

Decision Making Problem Solving Employee Motivation EQ

Factors like stereotype, prejudice, discrimination, selective perception, projection, halo effect and tokenism get in the way of evaluation. They are the greatest contributory factors to decision making errors. Let’s look at selective perception, halo effect and stereotype, and their influence on decision making at personal and organizational level. The examination will be within the framework of attribution theory.

Attribution Theory and Decision Making Errors

The attribution theory advances an explanation of the ways people judge and ascribe meaning to behavior. Robbins & Judge, (2013) p168. The theory identifies internal and external behavior causation; were internal causation is due to personal factors and external causation is due to situational factors. The premise of the theory is that; people explain behavior as either internal or externally caused. Attribution, like all social cognition and judgement is susceptible to errors and biases. Attribution makes use of shortcuts for quick decision making which are valid sometimes and cause distorted in other instances. Some biases put undue emphasis on personal attributes while others emphasize situational factors. Attribution errors are due to personal interests, values, experiences, background and other social attributes on cognition and judgement.

Selective Perception in Decision Making

Selective perception is the tendency to filter sensory input and perceive only things that confirm existing positions, habits, values, attitudes, and beliefs: And attributes like age, gender, ethnicity and culture. It can happen consciously or unconsciously. Selective perception as a social judgement shortcut that can lead to valid or invalid attribution. (Robbins & Judge, 2013). It manifests in filtering out unfavorable things and perceiving only favorable things: As perceiving only the familiar things disregarding the unfamiliar. Or failure to pick out details that are not part of one’s repertoire. 

Advantages and Disadvantages

Selective perception is a useful tool for quick and efficient decision making. Realistically we cannot process all available information to make a judgement. Judgement and decisions are thus, made on partial information. The “perfect knowledge” situation is not realistic, and decision will be made on limited information. It needs to noted therefore that making attribution based on limited information leads to decision making errors. Such errors and inaccuracies can be costly and damaging for people and organizations. A case in point, selective perception by an executive with vested interest can lead to ethical or corporate governance issues. To guard against this, lawyers do not handle cases of people related to them. Executives do not adjudicate procurement tenders involving related parties and teachers do not assess their children for same reason.

Halo Effect in Decision Making

The halo effect is a tendency to rely on one attribute for forming an impression about the person or thing. It is a mental shortcut (heuristic) were partial information is used for social cognition. It has same advantages and disadvantages as selective perception above. Classic examples of halo effect are in how people view attractive people. Attractive people are judged favorably on other attributes like intelligence, sociability, warmth and skillfulness. Advertising exploits this tendency in people by using attractive models, famous celebrities, babies and animals in advertising. The attractiveness or cuteness overshadows all other attributes. In organizations, the halo effect is usually causing favoritism, which can lead to conflicts and discord.

Most first impression managements tips are based on halo effect. If you create a very good first impression, that impression will be the basis for favorable judgement on other attributes. It is exploited in interviews, sales and marketing presentations, among others. Managers need to understand these heuristics and deconstruct them to avoid bias in decision making.

Stereotype in Decision Making Errors

Stereotype is the positive or negative beliefs held about the characteristics of social group. We may decide that, “French people are romantic” or “old people are incompetent”. We may use those beliefs to guide our actions toward people from those groups. Stereotypes may develop prejudice, (an unjustifiable negative attitude toward an out-group or toward the members of that out-group). Prejudice can take the form of disliking, anger, fear, disgust, discomfort, and even hatred. Stereotypes and prejudices create discrimination, (unjustified negative behaviors toward members of out-groups based on their group membership) (Stangor, C, 2011).

Stereotype (cognition) leads to prejudice (affect), prejudice leads to discrimination (behaviour). Stereotypes also create self-fulfilling prophecy in the target of the stereotype. Stangor, C, (2011) cites studies where women performed poorly in maths after being reminded of the stereotype of women being bad at maths. He advances that people ascribe social categories to subjects, who they describe with group characteristics instead of personal ones.

Positive and Negative Effects

Stereotyping is negative, the social categorization that precedes it is not always negative. Drawing subject attributes from personal and group attributes provides more information for decision making. Social categorization is a heuristic for efficient mental processing of stimuli. The loss of individuality in favor of group attributes leads to loss of unique individual characteristics. The generalizations and assumed homogeneity, mean losses in unique perspective, skills and competencies in organizations. It is unfair for individual to loose their uniqueness and be lumped with a group. The phenomenon of conforming behavior to stereotype called “self-fulfilling prophecy” can be damaging on organizational performance.

Managers need to introspect on their evaluations to eliminate influence by stereotypes. They need to ask, Is this a generalization? Is the generalization valid, accurate and fair? Does the social categorization lead to prejudices and discrimination? How can negative stereotype, prejudice and discrimination be challenged and debunked?


Attribution errors need purposeful challenging and deconstruction to avoid costly decision making errors. Decision making processes, organizational culture and policies and practices need auditing for attribution errors. (recruitment, performance review)

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