Management Exam 2

Four functions of culture

- Establishes organizational identity for members - Fosters collective commitment - Acts as a sense making device - Social system stability

The competing values framework

- Helps managers understand, measure, and change an organization's culture - Was first developed by researchers trying to classify different ways to assess organizational effectiveness.

Encounter

-Employees can learn what the organization is really like -Onboarding programs: help employees to integrate, assimilate, and transition to new job by making them familiar with corporate policies, procedures, culture, and politics and by clarifying work-role expectations and responsibilities

Process of Performance Management

1. Define organizational goals and objectives 2. Develop measurement system 3. Encourage performance 4. Asses employee performance 5. identify ways to improve 6. Provide consequences

Fair Labor Standards Act

1938 act which provided for a minimum wage and restricted shipments of goods produced with child labor

Scanlon Plan

A bonus incentive plan using employee and management committees to gain cost-reduction improvements monetary bonuses paid to employees if the ratio of labor costs to the sales value of production is kept below a certain standard

Pay policy line

A mathematical expression that describes the relationship between a job's pay and its job evaluation points

Herzberg's Theory

A need theory that distinguishes between motivator needs (related to the nature of the work itself) and hygiene needs (related to the physical and psychological context in which the work is performed) and proposes that motivator needs must be met for motivation and job satisfaction to be high.

Upward Feedback

A performance appraisal process for managers that includes subordinates' evaluations.

efficiency wage theory

A theory stating that wages influence worker productivity

2%

According to research findings, when an organization changes from a pay strategy that has below average variability to one with above average variability, on average they will experience a return on assets of approximately

Maslow's Hierarchy of Needs

Based on physiological and esteem needs

Hierarchy

Companies with this culture has an internal focus, which produces a more formalized and structured work environment and values stability and control over flexibility. -They view efficiency as one measure of effectiveness.

Market

Companies with this culture have a strong external focus and value stability and control

Adhocracy

Companies with this culture have an external focus and value flexibility - They emphasize creation of new products and services. - They are highly responsive to marketplace changes.

Clan

Companies with this culture have an internal focus and value flexibility rather than stability and control

Benchmarking

Comparing an organization's practices, processes, and products against competitors

Values

Concepts or beliefs that pertain to desirable end states, transcend situations, guide selection of behavior and are ordered by relative importance Resemble personal values (prior lesson) Espoused values: explicitly stated values and norms that are preferred by an organization Enacted values: values and norms that are exhibited or converted into observable employee behavior

Reward system

Considered one of the strongest ways to embed organizational culture because they are meaningful and visible

Basic Assumptions

Constitute values that have become so taken for granted over time that they become assumptions that guide organizational behavior

Characteristics of the point factor system

Each evaluation score is typically weighted to account for its relative importance. The system yields evaluation scores for each compensable factor of a job.

Quality Approach

Emphasize managers and employees working together to solve performance problems. preventative approach to errors

McClelland's Theory of Needs

Employee behavior is driven by needs we acquire as we live our lives (learned not taught) need for achievement, need for power, need for affiliation

as it relates to the pay of their colleagues as a sign of status and success as a way of evaluating their relationship with the organization

Employees typically view their compensation in these terms

Unidirectionally, from supervisor to subordinate

Feedback in traditional merit pay programs typically flows in this direction

Values Philosophy Mission

Formal statements in an organization are those about organizational...

Adhocracy Hierarchy Clan Market

Fundamental types of organizational culture based on the competing values framework

Specificity Reliability Acceptability

Important criteria for evaluating a performance management system

Point-factor system

Job evaluation method that looks at compensable factors (such as skills and working conditions) that reflect how much a job adds value to the organization; points are assigned to each factor and then added to come up with an overall point value for the job.

Observable artifacts

Physical manifestation of an organization's culture Examples: acronyms, manner of dress, awards, stories, logos, colors, special parking spots

Delayering

Reducing the number of levels in the organization's job structure

The change and acquisition phase of Organizational Socialization model

Requires employees to master important tasks and roles and to adjust their work group's values and norms

Competencies

Set of behaviors encompassing skills, knowledge, abilities, and personal attributes that are critical to successful work accomplishment.

Negative emotions

Tend to travel faster and further in an organization

compensable factors

The characteristics of jobs that an organization values and chooses to pay for.

Equal Employment Opportunity

The equal right of all citizens to the opportunity to obtain employment regardless of their gender, age, race, country of origin, religion, or disabilities.

Specificity

The extent to which a performance measurement gives detailed guidance to employees about what is expected and how to meet those expectations relevant to employee development and achieving strategic goals

Strategic Congruence

The extent to which the performance management systems elicits job performance that is consistent with the organization's strategy, goals, and culture.

does not use actual market rates for key jobs

The pay-setting approach that uses the pay policy line to derive pay rates for both key and nonkey jobs

Anticipatory Socialization

The phase of organizational socialization that occurs before an individual actually joins an organization

Organizational Culture

The set of shared, taken-for granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments

Process Theories

The theories that focus on explaining the process by which internal and situational factors influence employee motivation

Basic underlying assumptions Espoused values Observable artifacts

The three levels of organizational culture

Visibility Resistance to change

The three levels of organizational culture differ in these ways

Change and acquisition Anticipatory socialization Encounter

The three phases in Daniel Feldman's Organizational Socialization model

The Human Side of Enterprise

The title of Douglas McGregor's book, which formulated two contrasting views of human nature

Employee activity and organizational goals

The top strategic purpose of performance management is establishing a link between these two things

organizational effectiveness performance employee attitudes

These are all things that can be impacted by an organization's culture

Deliberate role modeling, training, teaching, and coaching

These mechanisms for culture change most closely corresponds with Experian's emphasis on building culture organically through the use of informal networks

Positive Work Attitudes

This organizational outcome has the strongest correlation across the four major types of organizational culture

Self-determination theory

Three innate (not learned) needs to drive most employee behavior -Relatedness: desire to feel connected with others, be a part of the group, and to belong -Competence: dire to feel knowledgeable, qualified, and capable of completing a task -Autonomy: Desire to have freedom and discretion in what to do and how to do it

the company's home country

Typically, expatriate pay and benefits are linked most closely to

Feedback systems Measurement systems Definitions of the expected results

When implementing a performance management strategy, organizations develop....

behavioral approach

When managers attempt to define which behaviors employees have to exhibit in order to effectively complete their job

developing behavioral anchors associated with different levels of performance

When using behaviorally anchored rating scales, organizations seek to define performance dimensions by

Gainsharing

a compensation system in which companies share the financial value of performance gains, such as increased productivity, cost savings, or quality, with their workers

employee stock ownership plan

a compensation system that awards employees shares of company stock in addition to their regular compensation

profit sharing

a form of compensation whereby a percentage of company profits is distributed to the employees whose work helped to generate them

Executive Compensation

a governance mechanism that seeks to align the interests of managers and owners through salaries, bonuses, and long-term incentives such as stock awards and options

Behavioral Observation Scale (BOS)

a subjective measure on which the frequency with which an employee performs a behavior is indicated

Equity Theory

a theory that states that people will be motivated when they perceive that they are being treated fairly Explains how people strive for fairness and justice in social exchanges or give-and-take relationships

Agency Theory

a theory that views the firm as a nexus of legal contracts focuses on how employee compensation can be used to align the divergent interests and goals of an organizations' various stakeholders

Job design

altering jobs to improve employee experience and productivity

Compa-ratio

an index that indicates how an individual's or a group's salary relates to the midpoint of their relevant pay grades

job crafting

approach to job design in which individuals make physical and cognitive changes in the task or relational boundaries of their work

Key Jobs

benchmark jobs, used in pay surveys, that have relatively stable content and are common to many organizations

Comparative Method

comparing employees by ranking

Internal comparsion

comparing oneself to someone in the same company

Customer Learning Operations

components of a balanced scorecard's perspectives of performance

Paid vacation Salary Stock Options

considered part of an employees total compensation

job enlargement (horizontal loading)

consists of increasing the number of tasks in a job to increase variety and motivation

Attribute

describes an approach to performance management that involves focusing on certain traits or characteristics possessed by individuals that are thought to be related to the company's success

J. Stacy Adams

developed equity theory

According to W. Edwards Deming, rating individual performance is an unfair practice because

differences between workers are almost entirely the result of the system they work in rather than the people

Direct reports

employee who reports directly to a particular manager

idiosyncratic deals

employment terms individuals negotiate for themselves (schedule development, flexibility, career development)

ownership

encourages employees to focus on organization's success, but may be less motivational the larger the organization.

job rotation

enlarging jobs by moving employees among several different jobs

Results Approach

focuses on managing the objective, measurable results of a job or work group

Attribute Approach

focuses on the extent to which individuals have certain attributes believed desirable for the company's success

pay survey

gathering information to learn how much employees are being paid by other organizations

Content Theories

identify different needs that may motivate individual behavior

Developmental purpose of performance management

identify employee weaknesses for managers to use in providing feedback and coaching it is designed to develop employees and improve performance

Biggest criticism of the merit pay system

it does not exsist

Non-key Jobs

jobs that are unique to organizations and that cannot be directly valued or compared through the use of market surveys

Merit pay programs

links performance-appraisal ratings to annual pay increases

Problems with scientific management methods

low sense of accomplishment high levels of dissatisfaction and stress poor mental health

variable pay

merit pay or merit bonuses

Simple Ranking

method of performance measurement that requires managers to rank employees in their group from the highest performer to the poorest performer

incentive pay

money offered to encourage employees to strive for higher levels of performance

Cognitive dissonance

motivates corrective action in equity theory

direct employee behavior control employee behavior energize employee behavior

pay plans are used to do these things

procedural justice

perceived fairness of the process used to make organizational decisions

ne advantage of using a pay grade system in planning employee compensation

reduces the administrative burden of setting separate pay rates for hundreds of jobs

Individual Incentives

reward individual performance but payments are not rolled into base pay. Performance is measured as physical output rather than by subjective ratings.

Labor costs

salary & wages bonuses health insurance

The top-down approaches to job design include

scientific management the job characteristics model job enlargement

Purposes of Performance Management

strategic, administrative, developmental, communication, organization, maintenance, documentation

Expectancy

the belief that effort will lead to performance

compareable worth

the concept that women and men should receive equal pay for jobs calling for comparable skill and responsibility

interrater reliability

the degree to which different observers agree on their observations

Range Spread

the distance between the minimum and maximum amounts in a pay grade

Interactional Justice

the form of organizational justice that reflects whether people are told the truth and treated with respect

Equity Theory

the idea that employees try to maintain equity between inputs and outputs compared to others in similar positions

Scientific Management

the method of job design that draws from observation, experiments, and reasoning jobs can be simple repetitive and boring

Instrumentality

the perceived relationship between performance and rewards

Valence

the perceived relationship between value of outcome and achieving performance goals

Operations Perspective

the performance perspective that focuses on processes that influence customer satisfaction

Job Structure

the relative pay for different jobs within the organization

Incentive Intensity

the strength of the relationship between performance and pay

Expectancy Theory

the theory that people will be motivated to the extent to which they believe that their efforts will lead to good performance, that good performance will be rewarded, and that they will be offered attractive rewards motivation will be high when all three elements are high (valence, instrumentality, expectancy)

Benefits of ESOPs for organizations

their financing advantages the defense they offer against takeovers their tax advantages

Reinforcement Theory

theory that positive and negative reinforcers motivate a person to behave in certain ways

Alternation

when managers look over a list of employees, decide who is best and cross that name off the list, decide who is the worst employee and cross that name off the list, and then repeat the process

Acceptability

whether or not a measure is valid and reliable, it must meet the practical standard of being acceptable to the people who use it