Is speech perceived as set of phonemes by human? I am currently trying to understand how speech is being perceived and understood. I am currently aware of the workings of inner ears and the basilar membrane and its frequency filtering, but going from an acoustic signal to something meaningful such as perceiving speech is still very unclear. I am working with implementing speech recognition software, and what we do is recognising basic speech units namely phonemes, but it this is how the auditory system perceives speech?.. is speech perceived as basic units, or just something man made? or is the perception of speech (very) different, and how different?
Phonemes are the smallest units of speech sound, usually about 20 to 60 in number, and different for each language (1). They are what letter are to words, actually  alphabetic writing systems are derived from phonemes (2). A group of phonemes together form a chunk, that represent a word. These chunks are arbitrary and are created by culture, and are learned by humans from very early age. Furthermore these chunks point to specific concepts that are stored in our semantic memory.


  Concepts arise as abstractions or generalisations from experience;
  from the result of a transformation of existing ideas; or from innate
  properties. A concept is instantiated by all of its
  actual or potential instances, whether these are things in the real
  world or other ideas.
  
  Semantic memory refers to general world knowledge that we have
  accumulated throughout our lives. This general knowledge (facts,
  ideas, meaning and concepts) is intertwined in experience and
  dependent on culture.