Selective perception is an automatic cognitive filtering response that selects stimulus to attend to. The selection is biased toward stimuli that are compatible with previous experience and preferences. What this means is that we may filter out dissonant or distasteful stimuli rather than attend to it. This is different from not paying any attention to it or discounting it; selective perception means the dis-selected stimuli is not perceived though readily available before us.
In business, selective perception is important to be aware of while in market planning because the approaches to public branding and advertising incorporated in decisions may automatically reduce a product's potential market if a negative socio-cultural element that general selective perception routinely negates is incorporated in the market planning. Conversely, selective perception can be used to advantage in market planning to advance the success of a product. An important effect of selective perception is the halo effect whereby people, places, products, product campaigns etc are more or less permanently categorized based on first or strongest impressions. The halo effect has potentially the greatest effect on organizational behavior because it can skew how individuals are perceived.
One way in which selective perception influences my decision-making is through the "confirmation bias." The confirmation bias is the brain's tendency to seek out and overvalue information that confirms what it already believes, while avoiding and dismissing information that challenged what it believes. I try to maintain awareness of that tendency and force myself to consider information that challenges my political and philosophical leanings, but the tendency is still there!
"Perception is the quality of being aware of the conditions in one's environment." The perceptions any individual brings to the decision-making process have an impact on the making of those decisions.
A person who has purchased a product from a particular source, for example a car of a specific make from a given dealer, develops perceptions about that type of vehicle and that dealer based on the experiences following the purchase. My husband and I purchased a van for a very good price a number of years ago. We are quite happy with the van but will never return to that particular dealership. We have had great difficulty in scheduling servicing for the van with that dealer. There have been a couple of specific issues that the dealership has not addressed satisfactorily, in our opinion.
Others probably have a very different perception of this dealership, but that business will never see any more of our money. Our past experience will influence our selection of where we go to purchase our next vehicle.
In the business context, selective perception can often lead to unfair treatment of subordinates. For this reason, it is important to try to prevent those in a position of power in a given business from engaging in selective perception. A manager might perceive one worker as good and another as bad. The manager then only notices good things done by the first worker and only bad things done by the second. This is a reason why it is very important to make sure that managers are evaluating workers based on at least some sorts of objective measures rather than just subjective perceptions.
Perception affects the decision-making process because who an individual is and how he or she sees the world is directly related to his or her experiences, and directly affects his or her decisions.
As an example, let’s take experience. If one employee has worked for the company for 20 years and a problem comes up, he is likely to solve the problem as the company always has. Let’s say his coworker has come from another company or just joined the company out of college. She will likely look at the problem differently and possibly not understand the first employee’s perspective since she has not always done it that way.
An example of this is illustrated in the enotes page on perception. Several boys from different socioeconomic groups were asked to draw a nickel.
Boys in this experiment who come from wealthy families tend to draw the nickel smaller in size than boys from poor families. (enotes)
The socioeconomic status of the boys affected their perception of the nickel, because to poorer boys the nickel meant more.
Each of us has a schema, a collection of ideas, experiences, and associations that we bring to a situation, and we have a tendency to open ourselves far more readily to input that fits in easily with what is already there. This means that information-gathering, an important part of the decision-making process, can be skewed in ways that harm the process. At the most primitive level, when I own a red car, I see red cars everywhere, causing me to believe that there are now more red cars on the road. That is not going to affect very much, so it's not a problem. However, if I am a manager, and I have recently read an article on wastefulness in the production process, if I need to cut costs somewhere, that is likely to be my focus, possibly causing me to miss some more important aspect of cost-cutting. So, selective perception can harm the decision-making process, cutting us off from observing viable alternatives.
I should say, on the other hand, that selective perception serves us well in many ways, since it helps prevent us from being "flooded" with too many perceptions at the same time. We cannot possibly take in everything in the world around us, so selective perception does act as a handy filter.
A good manager will have some awareness of the phenomenon, surround him or herself with those who can act as a corrective on the skewing of input, avoiding the harm in surrounding oneself with "yes men."