Reference Level

“Action comes about if and only if we find a discrepancy between what we are experiencing and what we want to experience.” — Philip J. Runkel, professor of psychology and education, University of Oregon

Key Ideas:

• The key element of every Perceptual Control is its Reference Level: a range of perceptions that indicate the system is “under control.”
• There are three kinds of Reference Levels:
  
  
  • Set point. A minimum or maximum level. Business finances are handled this way:  as long as your revenue and expenses are over and below the respective limits, you’re ok.
  • Range. A spread of acceptable values. The difference with a set point is that there’s an upper and a lower limit, and the perception must be in between those limits to be under control.
  • Error. Set point defined as zero: anything that’s not zero is out of control. The pain receptors in your skin, or customer service complaints are good examples of this.
• To change behavior, you must either change the Reference Levels or the Environment. You are now able to act differently and still be under control, even if the perceptions are the same. Think of a big marketing campaign: you know a big expense is coming, but you’ve changed the Reference Level.
• Change the Reference Level and your behavior will change completely.

Questions for Consideration:

• What constitutes the ‘normal’ operating reference levels for this particular system, and how do you know when things aren’t normal?
• Is it a range of values, a setpoint, or an error?