Unit 3-beh5051

In a profit indexed performance pay system, the typical range of possible multipliers is:

0-3 -The typical range of possible multipliers is typically from 0, which means the company is not profitable enough to pay anything, to about 3.

Management by exception involves:

1. inadawuitable reinforcement delivery 2. only attending to performance problems

Select the key concern(s) relating to piece-rate-based pay:

1. it requires a demand for the product 2.it may undermine safety

Which measured categories can the human resources (HR) job function influence?

1.project milestones 2.labor expense 3.client survey

A company decides to do profit indexed performance pay. What is the exposure if the total payroll is $240,000, and the company decides to implement a basis of 5% for all employees?

95,000 - To calculate exposure, multiply the total company payroll ($240,000) by the incentive pay basis percentage (5% or 0.05).

Gain sharing is inherently limited because: *

As expenses are reduced there is less money to share -As we continue to reduce expenses, cuts to expenses become marginally smaller, resulting in less and less money to share. This makes gain sharing inherently limited as a result of the lower limit of expense cuts that are available. Gain sharing does not require steady revenue growth. Management may request a greater share and organizations may choose not to share money, but that is not unique to gain sharing

Which of the following is an example of pay for performance? *

At Erik's company, employees earn monetary incentive based on factors such as completing end-of-day tasks and the score on their supervision scorecard.

Which of the following is an example of pay for performance? *

At the company where Lola works, employees earn a bonus based on factors such as scorecard measures and company profit

Which of the following is required to transition to a pay-for-performance system?

Both A and B -Transitions should not be rushed, and all parties should be prepared. This will involve both a formal plan, such as the four-level plan recommended by Abernathy. It also requires managers who are well-versed in performance management.

Staff hiring freezes are implemented in level ___, while management hiring freezes are implemented in level ___.

III,IV -Typically, staff hiring freezes occur during level III and management hiring occurs during level IV. Level I is focused on defining and measuring performance, and level II will involve voluntary switch-over to performance-based pay.

Jacob has started to create scorecards for measuring and evaluating his employee's performance and providing feedback when there is room for improvement. This company is at This company is in which level for transitioning to a pay-for-performance system? *

LEVEL 1: RESULTS FOCUS

A company has decided to transition to a performance management system. They have contracted with an individual skilled in OBM but have not yet implemented any performance management procedures. Which of the following levels will they move to next?

Level 1 -Performance management systems start at level I. During level I they will focus on establishing measures and developing scorecards. Levels II through IV will require some performance

Which of the following scenarios does not describe an example of the role of a manager in a pay-for-performance system?

Neal completes annual performance reviews based on managers' thoughts toward their supervisees' teamwork and discipline

Which of the following is a feature of the study by George and Hopkins (1989)

Participants' pay increased by 20-30%

Define open system *

System that receives input from outside its boundaries

Define exposure

The total cost of paying full pay-for-performance bonus before the company multiplier; calculated by multiplying all wages multiplied by the incentive pay basis percent.

Which of the following is a feature of the study by Long IIIet al. (2012)

Two out of three participants preferred the pay-for-time condition relative to the pay-for-performance condition

If a company has not yet implemented performance management procedures, they are in:

a conventional workspace

Which of the following is likely to be operating with the most closed organizational system?

a government agency that does not disclose its activities to the public -A closed system is one where input is not received from outside its boundaries; things are kept private and within that system. Of these choices, a courtroom would likely have components of both open and closed systems. For example, information on some court cases might not be known to the public, but this answer choice indicates that details of the case are being shared, making this more open. A newspaper in a democracy is also an open system; the idea that newspaper content is by and for the people, with an emphasis on transparency, is quite open for all to see. A government intelligence agency would have several components of a closed system; members of the agency, projects worked on, and methods used to work on those projects would not be available to the public.

Which of the following is an example of the role of a manager in a pay-for-performance system?

a restaurant manager arranges the daily and evening schedules so there are the appropriate number of servers based on how many customers are likely to come in

Work prospecting* a.Define b.Identify examples and non-examples

a.Define-Strategy that involves paying employees to build business by prospecting and marketing, engaging in special projects ,participating in training and development, or providing contract work to other companies b.Identify examples-

Stock options * a.Define b.Identify examples and non-examples

a.Define-plan that allows employees to buy company stock at a certain price ex- Scott begins new employment at a tech company. As part of his welcome package, he is offered the opportunity to own a share of the company at a reduced rate.

Gain sharing * a.Define b.Identify examples and non-examples

a.Define-plan that gives money saved through expenses reduction with employees b.Identify examples- Joslyn owns a small cookie shop. She has 3 employees. This year,Joslyn focused on reducing expenses by moving her cookie shop into smaller rental unit. Joslyn shared the money saved on expenses with her employees.

Cross-utilization * a.Define b.Identify examples and non-examples

a.Define-strategy in which employees are trained to complete other jobs within the company b.Identify examples- an employee retires and instead of hiring someone to replace that person, the company teachers other employees to do the duties and adds those tasks to their performance scorecards

Company multiplier * a.Define b.Identify, when given a sample multiplier scale

a.Define-value used in calculating employees profit indexed performance pay that is determined based on company profits b.Identify, when given a sample multiplier scale 1. determine the treshhold 2.decide how much profit to share

Which of the following businesses would probably be the least likely to need (or benefit from) a pay-for-performance system?

an independent taxi owner-operator -Pay-for-performance systems are designed to compensate employees based on the performance of the employee and the organization. Those who are self-employed tend to care a lot about the business and how successful it is, since the better the company does, the more money the individual makes. Therefore, the independent taxi owner-operator would benefit the least from a pay-for-performance system. An automobile company or service station would benefit from this system, since contingencies are in place in which better employee performance leads to better business outcomes. Though the trucking company utilizes independent drivers, other employees would still benefit from a pay-for-performance system.

Individuals who are self-employed probably do not require performance management to manage their own behavior because:

all contingencies in the company are aligned

The common result of weekly pay schemes results in employees:

becoming upset when they do not receive annual pay increase

The first employees to switch from base pay to pay for performance should be the: Answer Best performers was Correct. Feedback provided: The opportunity to earn more significant pay via pay for performance should first be used as a reward for the organization's best performers. These are the employees that are the most likely to quickly benefit from the system and can thus become champions of the transition process.

best performers

When developing organizational goals, they should include:

both long and short term goals -Organizational goals should include both long- and short-term goals. There should be a balance between both immediate and long-term priorities of the organization and the mission statement should be used as a guide for developing these goals

Dynamic Industries is transitioning to a pay-for-performance system. The company is no longer hiring new employees and is starting to give the current employees an opportunity to earn monthly bonuses based on measures of performance. This company is in which level for transitioning to a pay-for-performance system *

stakeholder pay

Gina is assisting the company's owner in developing an organizational scorecard. They start by listing all the objectives they would like to accomplish, including reducing expenses, improving productivity, marketing, and onboarding more clients. This is an example of which step in creating an organizational scorecard? *

step 1:identify and categorize goals

The vice presidents at Dynamic Industries are working together to create an organizational scorecard. They are currently working on identifying the relative importance of the major priorities for the organization. This is an example of which step in creating an organizational scorecard *

step 2: weight each goal category based on priority

Kasumi is helping out at her sister's company and is developing scorecards for the employees. Currently, she is working on what how to measure each of the company's goals. This is an example of which step in creating an organizational scorecard? *

step 3: list measures that impact the goal category

A large coffee chain has recently added additional perks to their employee benefits. Employees can now purchase shares in the company, which, depending on how the market is trending, can cash out at a higher rate than when they were purchased. This is an example of which alternative compensation strategy?

stock options

Scott begins new employment at a tech company. As part of his welcome package, he is offered the opportunity to own a share of the company at a reduced rate. This is an example of which alternative compensation strategy to pay for performance?*

stock options

In Abernathy's view, a primary problem with giving employees a yearly raise is that:

such a system does not account for variations in company revenues -In fix-cost pay, employees receive a yearly raise, regardless of what is happening with the organization. If, for example, the organization has a year where several regional offices were closed, employees still receive the raise. This is a problem when payroll costs increase and revenue stays the same; eventually, the organization is set up to pay out more money than it brings in. Employees enjoy yearly raises, though they can become "expected." This structure is also beneficial to employees, as they can plan for the additional income received. And, while raises do not always lead to unsustainable loss of profit, they can be problematic if the organization's revenue is not keeping up with payroll expenses. 6. entitlement thinking- the companies company owes the money not we need the company to do well ex- at the of the year, employers in the domosny except the holiday bonus

Define closed system *

system that does not receive input from outside its boundaries

Which of the following steps in transitioning to a PFP system is likely to come the latest (compared to the other steps listed)?

teach management how to improve the measures -The last step for transitioning to a pay-for-performance system involves teaching management how to improve the measures. Before this can happen, scorecards must be designed, and reporting databases must be created. It is only after these are initially implemented that managers can begin to improve them.

As Danette gains more experience, she learns how specific admin tasks, like scheduling and case management, are completed. Her boss hopes she will occasionally do some of these tasks after she fulfills her other responsibilities and plans to add the additional duties to her scorecard. This This company is using which strategy? *

job enlargement

Of the measures listed here, which is the lowest priority for the organization?

material disposal -With 10% of the organization's overall weighted priorities, projects billed is less important to the company than projects billed and projects obtained.

calculate past due

measure of past due highlighted x weight %

calculate performance index- projects billed

measure- goal projects billed x weight %

Long et al. (2012) demonstrated that PFP was ______ in increasing performance but was not preferred by ______ of the participants.

effictive;some - Long et al. (2012) demonstrated that pay for performance was effective in increasing performance but was not preferred by some—not all—of the participants.

Juliana normally conducts assessments at her organization. However, her boss recently approached her with the opportunity to seek out contracts from other organizations that need assessments completed.In exchange, Juliana would receive a percentage of any contract she brings in. This This company is using which strategy *

work prospecting

Which of the following terms refers to employees going to find new work opportunities, either within or outside of the organization? *

work prospecting -Work prospecting occurs when employees find new work opportunities, either within or outside the organization. Flexible scheduling allows employees to work fewer hours and receive compensation for increased productivity. Job enrichment occurs when an organization increases the authority of specific positions. A promotion occurs when an employee is elevated to a higher status within the company.

At the end of the financial year the department manager reviewed everyone's performance over the past year and decided that everyone had done a 'pretty good job' and had earned a raise. At the start of the new financial year everyone who he thought had done a 'good job' got a 5% raise. This is an example of which alternative compensation strategy to pay for performance? *

merit increase

At the end of the school year, all BCBAs are eligible to get up to a 4% increase in salary. The supervisor gives a 4% raise to all but one BCBA. That one BCBA receives a 3% increase due to some concerns brought to the supervisor about the BCBA's professional communication. This is an example of which alternative compensation strategy? *

merit increase -This is an example of a merit increase alternative compensation strategy. Merit increase is a raise in pay provided to an employee. All employees were eligible to receive up to a 4% increase in salary. The one BCBA only received a 3% increase due to the opinion of the supervisor. An annual bonus plan involves compensation being provided to an employee once a year in addition to base pay, but not a raise in annual salary. Goal sharing is a plan in which goals are predetermined and compensation is contingent on when those goals are achieved. Gain sharing is a plan that splits money saved through expense reduction with employees.

Curtis typically completes most of his work after 3-5 hours. When he's not trying to look busy, so his bosses don't give him more tasks, Curtis plays on his phone, converses with coworkers, and sometimes catches up on his shows. This is an example of which of Abernathy's sin of traditional wages?*

pay for time

Of the measures listed here, which is the highest priority for the organization?

projects billed -With 15% of the organization's overall weighted priorities, projects billed is more important to the company than materials disposal and past due

What is the best of the following options for changing employee behavior?

reengineer the organization's performance system -Restructuring the organization's performance system can maximize and sustain performance. Reengineering the system should include a meaningful assessment, proper measurement of performance, and appropriate performance strategies. These are the best tools for changing employee behavior, since the focus is on environmental contingencies. Convincing employees will likely have minimal impact, as that is vague and does not consider environmental contingencies, like competing contingencies or response effort. Hiring good employees would be great but cannot be the only solution. Lastly, punishing employees for misbehaving will likely lead to issues with morale and trust, with a lack of emphasis on establishing better performance repertoires in employees.

Job enrichment is usually accompanied by a(n):

employee hiring freeze -Job enrichment, which occurs in level III, is accompanied by a hiring freeze. A manager hiring freeze happens in level IV, as employees become self-managing. Layoffs of unessential employees, including managers, only occur if the organization's payroll exceeds its income or if a role becomes unnecessary.

Which component of the profit indexed performance pay calculation is based on what an employee makes? *

employee salary

All the following are positive impacts on management after transition to a pay-for-performance system, except:

employees are more likely to rise to management positions -In a pay-for-performance system, less managers are needed. However, the few managers that are needed will have more opportunities to earn greater amounts of money by being more productive. Also, employees are more likely to respond to manager feedback in pay-for-performance systems.

When a pay-for-performance system is in place, managers are not generally expected to:

examine worker clock in- and clock-out times -When a pay-for-performance system is in place, managers should expect to deliver reinforcement, help maximize earning potentials, improve scorecards, and remove work obstacles. They should also expect to evaluate scorecards and facilitate work prospecting. They should not expect to need to examine clo

The ___ is the total cost of paying full pay-for-performance bonus before the company multiplier; calculated by multiplying all wages multiplied by the incentive pay basis percent.

exposure *

Merit increases are generally:

implemented in inequitable way -Merit increases can often be subjective and lead to favoritism, which is why they may be implemented in an inequitable way. This doesn't require much effort since it is not based on objective data collection but on subjective reports of behavior. This also means that it is not very objective. Merit increases are usually preferred by employees because they are not tied to any real increases in effort.

Lewis works for Dana's company. Dana has assigned a specific number of tasks for each day. She tells Lewis he is allowed to leave work early if he completes the tasks before the end of the workday, but still compensates him for a portion of the time he had been scheduled to work. Dana's company is using which strategy for ensuring consistent pay opportunities? *

flexible scheduling

Which component of the profit indexed performance pay calculation is based the proportion (%) of the employee's salary that is eligible for incentive pay?

incentive pay basis percent *

Loosely, an open system is one in which information

is freely shared among all members -In an open system, there is overlap among what employees, managers, and upper management know about the organization. Information is bidirectional, where all parties are encouraged to provide and solicit feedback. Hierarchical structures are common in traditional management systems. These are often closed systems, where only the higher tiers are aware of what is happening in the business. Sharing information between managers is also a closed system, since only one level of the organization can communicate openly and freely. This is the same for top performers: sharing of information between top performers ignores other levels of the organization and is thus still a closed system.

All the following are likely problems with using gain sharing, except:

it does not promote cooperation among employees -It promotes cooperation, since everyone working together helps produce more savings, from which everyone benefits, at least in part. It is true that the continuous cutting of expenses due to gain sharing can result in reductions in quality of products and services. For employees who are more efficient, they are not identified easily, which results in inequitable payouts. There are also limits to the amount of savings that can be obtained, so there may be a peak performance level for employees.

List three common strategies for improving and sustaining employee performance *

1. hire only good employees and fire all bad ones 2.persuade employees that working hard is in their best interest 3.reengineer the organization's performance system to maximize and sustain performance

Select all the typical employee interventions in OBM:

1. antecedent interventions 2.process interventions 3.testing managers and employees -Interventions in OBM are designed to improve employee performance, by manipulating antecedents, consequences, and processes. Specifically, OBM interventions include task clarification, checklists, and training (antecedent interventions); lottery systems, goal setting, and feedback (consequence interventions); and redesigning a job itself (process interventions). Restructuring management may be necessary, but this is not a common intervention to change behavior. Testing to sort employees into workgroups is not a common intervention in OBM but may be used by I/O psychologists.

Select all that are alternative compensation strategies: *

1. commission 2. gain sharing 3. goal sharing =The only non-example of an alternative compensation strategy would be bartering. Bartering is not a way for a company to pay employees but is a way that individuals trade goods and services for other goods and services. Commissions, gain sharing, goal sharing, and merit increases all involve providing pay benefits to employees.

Select all that may be considered organizational targets:

1. customer service 2.expense control 3.strategic projects 4. regulatory compliance

Select all the problems associated with pay for time: *

1. jobs will extended to take up all the time allotted 2.might encourage overtime -Jobs that link pay to time worked produce several problems that are worth acknowledging. First, because pay is based on time and not behavior, the job may take longer to complete to match the allotted time. Rather than complete the job efficiently, an employee may spread out the task so they can maximize their pay. Second, pay for time may lead to additional overtime. The employee may find additional time at work more desirable due to the pay differential. For these reasons and others, employees often prefer a pay-for-time structure over performance-based pay.

Select objections to pay for performance:

1. rewards decrease intrinsic motivation 2. it manipulates employers 3. the program is too complex - The objections to pay for performance can vary, with some more valid than others. Often, the effectiveness of these systems is overlooked by those who hold criticisms. Some common objections include that using rewards decreases intrinsic motivation; employees are manipulated; programs are too complex to implement; and selecting correct measures can be difficult.

entify features of the study by Gaetani et al. (1985)

1. significant increase in both mechanics in the incentive condition

What would be the company multiplier if the company earned $107,900? 0.00 = $90,000 0.50 = $97,500 1.00 = $105,000 1.50 = $112,500 2.00 = $120,000 2.50 = $127,500 3.00 = $135,000

1.0 -If the company earned $107,900, that would indicate that the company multiplier would be between 1.0 and 1.5. We will always round down when selecting a company multiplier as going up would suggest that the company made more money than it actually did. This company profited enough to earn a 1.0 on the multiplier scale, but not enough to earn a 1.5.

This is a company's multiplier scale:• 0.0 = $150,000• 0.5 = $170,000• 1.0 = $190,000• 1.5 = $210,000• 2.0 = $230,000 2.5 = $250,000 3.0 = $270,000 The current month's profits are $225,750. What is the company multiplier?

1.5

Select all that are specific subspecialties of OBM:

1.behavior based safety 2. behavioral system analysis 3. pay for performance 4. performance management - OBM is a subdiscipline of ABA, the application of the science of behavior to problems of social significance. OBM also has its own subspecialities. Behavior-based safety, behavioral systems analysis, pay for performance, and performance management all exist under the umbrella of OBM. While training may be included in various applications of OBM, it is not a subspecialty. Curriculum design may inform training practices, but this again is not a specific subspecialty of organizational behavior management.

Define incentive pay basis percent

1.computing the multiplier scale 2.incentive pay basis percent: the proportion of salary eligible for incentive pay

Define threshold*

1.minimum amount of money the company needs to pay expenses that keep the business running 2. ensures that the required uncontrollable expenses are me without going broke

Alpha company would like to share 40% of profits over the threshold of $150,000. If the exposure was $5,500 what is the revenue if the multiplier is 1?

163,750 -Divide the exposure ($5,500) by the percentage of profit the organization shares (40% or 0.4). Add that value ($13,750) to the threshold amount ($150,000) to obtain $163,750. This value represents a one on the multiplier scale.

What would be the company multiplier if the company earned $129,000?

2.5 -If the company earned $129,900, that would indicate that the company multiplier would be between 2.5 and 3.0. Remember to round down when selecting a company multiplier as going up would suggest that the company made more money than it actually did. This company profited enough to earn a 2.5 on the multiplier scale, but not enough to earn 3.0

Parker's monthly salary is $5,000, and his incentive paybasis percent is 4%. This month, his performance indexscore is 90% and the company multiplier is 1.5. What isParker's profit indexed performance pay for this month?

270

What is the dollar amount for a multiplier scale of 1 if an organization decides to share 40% of profits with employees, has an exposure of 14,000, and a threshold of $250,000?

285,000 Divide the exposure ($14,000) by the percentage of profit the organization shares (40% or 0.4). Add that value ($35,000) to the threshold amount ($250,000) to obtain $285,000. This value represents a one on the multiplier scale.

Which of the following steps in transitioning to a pay-for-performance system is likely to come the latest (compared to the other steps listed)?

3 months of test reports and refinement

Bethany's monthly salary is $8,000, and her incentive pay basis percent is 6%. This month, his performance index score is 75% and the company multiplier is 1.4. What isBethany's profit indexed performance pay for this month?

504

What is the exposure if a company has $170,000 in payroll and decides to implement a basis of 4% for all employees?

6,800 -To calculate exposure, multiply the total company payroll ($170,000) by the incentive pay basis percentage (4% or 0.04).

Managers in companies implementing PFP systems are required:

In fewer numbers when compared to traditional management -When a PFP system is in place, fewer managers are needed, not more. Much of the performance is managed by the pay structure. A manager hiring freeze is implemented, but more team leaders are identified and trained.

In the human service example from the lecture, the company would have the lowest salary cost in which year?

In the year with the lowest revenue and the PFP system -The organization lost a contract in the third year and had to pay out the least amount in the pay-for-performance system. Had the company used the 4% annual increase, it would have paid more per month in the third year even though it had the lowest revenue. The year with the highest revenue also paid out the highest total amount in pay-for-performance costs. Also, the monthly payout was higher in the first year with the 4% increase.

Jonah and the management team at a coffee shop will be introducing a pay-for-performance initiative. Jonah and the management team evaluate the job tasks that will be targeted. These tasks include preparing coffee, prepping ingredients, interacting with customers, and taking inventory. This company is in which level of transitioning to a pay-for-performance system?

Level 1: results focus -The focus of Level I is to identify the measures and develop the scorecards. Evaluating the job tasks to be targeted describes a step in identifying the measures to include in the scorecard. Level II focuses on voluntary switch-over to pay for performance. Level III will involve a hiring freeze and ensuring pay-for-performance opportunities. Level IV will involve ensuring all managers are utilizing performance management, as well as identifying and training team leaders.

Upon implementing a scorecard initiative, Beth Ann has been given the opportunity to set aside a percentage of her salary to be dedicated for the initiative. Beth Ann believes that the success of the scorecard via the completion of the activities targeted will ultimately result in receiving more money than she would with her usual salary. This company is in which level of transitioning to a pay-for-performance system?

Level II:stakeholder pay -Voluntary participation in performance pay is the focus of Level II. Level I involves identifying the measures. Level III involves maximizing performance pay opportunities. Level IV focuses on identifying and training team leaders, as well as ensuring all managers utilize PM.

Which of the following is an example of the role of a manager in a pay-for-performance system? *

Petra evaluates and revises scorecards to ensure that performance is captured correctly

Total performance index score *

Projects Billed + Projects Due + Projects Obtained

Pay for performance (PFP) * a.Define b.Identify examples and non-examples

a.Define- A system of compensation in which employees earn pay based on the performance of the employee and of the organization b.Identify examples- Alyssa provides each of her workers with base pay. They can also earn money by completing objective goals that she has outlined and described for them

Merit increase * a.Define b.Identify examples and non-examples

a.Define- a raise in pay provided to an employee b.Identify example- At the end of the financial year the department manager reviewed everyone's performance over the past year and decided that everyone had done a 'pretty good job' and had earned a raise. At the start of the new financial year everyone who he thought had done a 'good job' got a 5% raise. This is an example of which alternative compensation strategy to pay for performance?

Flexible scheduling * a.Define b.Identify examples and non-examples

a.Define- allowing employees to work fewer hours and compensating b.Identify examples- Lewis works for Dana's company. Dana has assigned a specific number of tasks for each day. She tells Lewis he is allowed to leave work early if he completes the tasks before the end of the workday, but still compensates him for a portion of the time he had been scheduled to work.

Profit indexed performance pay (PIPP)* a.Define b.Identify four components c.Calculate, when given sample components

a.Define- compensation provided based on employee performance and the performance of the organization b.Identify four components 1. salary 2.basic percent(percent of salary eligible for incentives) 3.performance index(employees performance scorecard) 4. company multiplier(0-3 depending on profit) c.Calculate, when given sample components salary x basis % x performance index x company multiplier= a. salary= 3,000 b.basis %= 3% c.index score= 85% d.company multiplier=2 3,000x .03 x. 85 x 2= $153

Performance index score a.Define b.Calculate, when given a sample performance scorecard

a.Define- employee score derived from performance card b.Calculate, when given a sample performance scorecard-

Job enrichment * a.Define b.Identify examples

a.Define- increase the authority of a specific position b.Identify examples- ex- no longer need approval from managers to purchase supplies

Job enlargement * a.Define b.Identify examples and non-example

a.Define- increase the job functions of a specific position b.Identify examples- instead of being provided with supplies, employees now also purchase needed materials

Goal sharing * a.Define b.examples

a.Define- plan in which goals are set and compensation is provided when the goals are met b.examples-

Piece rate * a.Define b.Identify examples

a.Define- plan that pays employees a fixed amount for each unit b.Identify examples- At Dynamic Industries, welders are provided a bonus contingent on the number of machine parts they put together on each shift. Although this has increased the number of parts produced by the welders, there has also been an increase in injuries as workers have engaged in unsafebehavior in their efforts to work more quickly.

Sales commissions * a.Define b.Identify examples

a.Define- portion of the profits from sale provided to salesperson b.Identify examples- Marisol works as an aesthetician at a spa. Whenever, she is done giving a client a facial she shows them the product line that she used and tells them about it and encourages them to purchase some of the products they should be using everyday. If a client makes a purchase, she gets 15% of that sale.

Five steps for creating an organizational scorecard * a.Identify each b.Identify examples

a.Identify each b.Identify examples 1.identify short and long term goals - identify categories for goals, chance short and log term goals ex- 2.determine weights for each goal- decide the weight of each goal category based on order of priority ex-the vice presidents at Dynamic Industries are working together to create an organizational scorecard. They are currently working on identifying the relative importance of the major priorities for the organization. 3. select measures for each goal- list a specific measure that impacts the goal category ex-Kasumi is helping out at her sister's company and is developing scorecards for the employees. Currently, she is working on what how to measure each of the company's goals. 4. identify ranges for measures- decide measures and ranges in each category ex-Corbin's new coffee shop is starting to get busy. Once Corbin has selected the behaviors he wants to see from his employees, he determines how many opportunities the employees might have to engage in the desired behaviors. He identifies the baseline and then creates an upper limit for the expected performance and scores for each behavior. For example, he has identified upselling a pastry as a desired behavior, with a current baseline around 50% and an upper measure of 90% of opportunities for the behavior. 5.assign weight to each job- list jobs and assign weights on what employee can influence ex-Akira has recently created a comprehensive scorecard for her employees. Based on the organization's priorities, she has determined that the sales employees' customer-satisfaction-related behaviors are more important than their other assigned tasks. She applies a formula so that measures for behavior that the sales staff engage in related to customer satisfaction earn more points than other tasks on the scorecard.

Four levels for transitioning to a pay-for-performance system * a.Identify each b.Identify examples and non-examples of each

a.Identify each b.Identify examples and non-examples of each 1. results focus- implement performance management a.create objective measurement b. create scorecards c. performance management ex-Jacob has started to create scorecards for measuring and evaluating his employee's performance and providing feedback when there is room for improvement. 2.stakeholder pay- implement pay for performance a. employees give up part of their base pay to receive a greater opportunity to earn based upon performance b.move slowly; start with volunteers ex-Dynamic Industries is transitioning to a pay-for-performance system. The company is no longer hiring new employees and is starting to give the current employees an opportunity to earn monthly bonuses based on measures of performance. 3.job enrichment-expand job roles a.implement hiring freeze b. ensure consistent performance pay opportunities by implementing c. cross utilization, job enlargement, job enrichment, flexible scheduling, work prospecting ex-Juliana normally conducts assessments at her organization.However, her boss recently approached her with the opportunity to seek out contracts from other organizations that need assessments completed. In exchange, Juliana would receive a percentage of any contract she brings in 4. self-managing employees- change role of managers a. all mangers practice PM b.implement manager hiring freeze c.team leaders are identified and trained ex-Lakeshia preciously held a "supervisor" role at the company. However, during a recent transition, her boss gave her a new job title: "team leader." Rather than fulfill the duties of her old position, Lakeshia now ensures that her team has plenty of opportunities to maximize their pay

Abernathy's seven sins associated with traditional wages * a.List each b.Identify examples and non-examples of each

a.List each b.Identify examples and non-examples of each 1. fix-cost pay ex-employees receive a yearly raise, regardless of what is happening with the organization. If, for example, the organization has a year where several regional offices were closed, employees still receive the raise. when payroll exceeds the organization's income, the company must layoff employees 2. pay for time- when you pay for time, jobs will fill the time ex- scheduled to work 40 hrs a week, but task only 33 hours to complete; instead of leaving early, find ways to fill the time (but not working) 3.corporate socialism -conventional pay rewards under performers and punishes top performers ex- all employees get the same annual raise, regardless of performance 4. performance-based promotions - management can not reward top performers by increasing pay ex- instead of providing the highest performer with a raise, that employee is promoted to shift supervisor 5. management by perception- weekly paycheck are not dependent upon performance. Mangers often use subjectively measures to evaluate employees ex- since the company doesn't collect objective measures of performance, the only feedback is that employee is "doing pretty good" 6. management by exception-when employees are notices under a pay scheme, it is typically because, there are performance "problems" ex- employees who do their job well don't receive any feedback from the supervisor but if someone makes a mistake, the supervisor takes time to reprimand that person 7. entitlement thinking- pay/raise despite performance

Profit sharing * a.Define b.Identify examples and non-examples

a.define- plan that provides a portion of the year-end profit with the employees ex-This year the ABA clinic was able to pay for all their expenses and debt with some money left over. As a thank you to the employees, the director added10% of the left-over money to each employee's paycheck.

Which of the following is likely to be operating as the most open of the systems listed?

an internal based social network that enables the exchange to ideas across cultures -Open systems receive input from outside the boundaries of the system. They also allow for, and encourage, feedback among all invested parties. Here, an internet-based social network is likely to be the most open, as it allows for rapid change based on customer needs and feedback. A consumer tech company that is preparing to unveil a new product is likely a bit more closed, as the product has already been tested and developed; feedback from customers at the point of unveiling the product would likely not be sought as openly. A secret society, by its name, would likely keep things a bit more "in-house"; the likelihood of the society seeking feedback from customers would be low, since customers might not even know the society exists.

For the past 5 years, the owner of an ABA clinic has given employees an additional $1,500 at the end of the year. This year, the clinic lost a significant amount of money due to telehealth services, and the owner can only give employees $300 instead of $1,500. This is an example of which alternative compensation strategy? *

annual bonus -This is an example of an annual bonus. An annual bonus plan involves compensation being provided to an employee once a year in addition to base pay. For the past 5 years, the owner of an ABA clinic has provided employees with an additional $1,500 at the end of the year. This year it provided employees with $300 in addition to their base salary. Goal sharing is a plan in which goals are predetermined and compensation is contingent on when those goals are achieved. Gain sharing is a plan that splits the money saved through expense reduction with employees. Sales commissions are bonuses provided to an employee, based on the number of products that employee sells.

Cody gives all his employees a small bonus before the holidays at the end of the year. Everyone receives the same compensation regardless of their position. He does not base the bonus on performance as he feels "everyone always works their hardest." This is an example of which alternative compensation strategy to pay for performance?

annual bonus *

Open systems:

are very responsive to external events -By definition, open systems are open. This means that they are highly responsive to external events, sharing information freely about the organization. These systems put the focus on profits and customers, including open communication and transparency. Characteristics of open systems allow them to change rapidly, based on new information, customer needs, or market changes. Additionally, since they can adapt based on the external environment, there is a higher likelihood that the systems will sustain over time.

Which of the following is the first step in transitioning to a pay-for-performance system?

asses current management practices -The first level of transitioning to a pay-for-performance system involves implementing performance management throughout the organization. Before we can do this, we must assess the current management practices. Designing scorecards and setting up data collection systems occur much later in the process.

Akira has recently created a comprehensive scorecard for her employees. Based on the organization's priorities, she has determined that the sales employees' customer-satisfaction-related behaviors are more important than their other assigned tasks. She applies a formula so that measures for behavior that the sales staff engage in related to customer satisfaction earn more points than other tasks on the scorecard. This is an example of which step for creating an organizational scorecard?*

assign weights to each job -This is an example of the step of assigning weights to each job. Weights are assigned to each job based upon what they can influence. In this example, Akira develops a formula to ensure that measures for behavior that the sales staff engage in related to customer satisfaction earn more points than other tasks on the scorecard. She is assigning a higher weight to this task for the sales job than other tasks that this job function does. Identifying short- and long-term goals, determining weights for each goal, and selecting measures for each goal are steps that involve looking at the whole organization, not just the tasks for just one job function.

Typical (non-behaviorally based) management assumes that the causes of behavior:

come from a trait or some process inside of the individual employee -Traditional management practices are not often informed by the science of behavior. Because of this, traditional theories as to causes of behavior are most prevalent. Statements such as "They should want to do a good job" or "I'm not rewarding someone for doing something they already should be doing" are common. These statements fit the idea that behavior is primarily caused by internal processes; there is something happening within the person that causes them to behave a certain way. The influence of the environment is viewed as minimal, if at all.

Which component of the profit indexed performance pay calculation is based on company profits?

company multiplier *

Each RBT at the company is paid between $16-$20 an hour for their work. It doesn't seem to matter if the RBT is new, has been working for2 years, or 10 years, everyone is paid between $16-$20/hr without exception. This is an example of which of Abernathy's sin of traditional wages? *

corporate socialism

Thea is managing direct care staff at a group home. All direct care staff receive the same pay rate and pay increases annually. Some staff members only perform the minimum job requirements, while others perform the bulk of the daily work, sometimes doing work for others. Eventually, the top performers feel overworked and quit. This is an example of which of Abernathy's seven sins associated with traditional wages? *

corporate socialism -A key feature of corporate socialism is that all performers receive the same pay rate regardless of performance. Here, we see that Thea has established a standard pay rate for all employees, resulting in poor performers doing the minimum and high performers leaving as a result. This is not an example of performance-based promotions since there is nothing to indicate that the top performers are receiving promotions. It's possible that this could be a pay-for-time environment, but if this were an example of one of Abernathy's sins associated with traditional wages, it would include details of employees taking longer to do a job than is required, just to earn the maximum amount of money. Similarly, this company may have problems associated with this fix-cost pay system, but if this were an example of one of Abernathy's sins, there would be details about the company having to pay out increasing wages to employees even though the company hasn't increased their profits as much.

Lindsay primarily works in the billing department of her organization. However, as the company transitions to a PFP system, the human resources (HR) department's team leader has been teaching Lindsay to complete specific HR tasks. The organization's goal is to add the completion of these HR tasks to Lindsay's scorecard. This is an example of which strategy? *

criss utilization -Cross-utilization is a strategy in which employees are trained to complete other jobs within the company. In this example, Lindsay learns to complete tasks outside of her normal department. Flexible scheduling allows employees to work fewer hours and receive compensation for increased productivity, but this scenario does not indicate that Lindsay is getting that option here. Job enrichment occurs when an organization increases the authority of specific positions. While Lindsay is getting the opportunity to earn more by doing different tasks, there is no indication that she has been provided with greater authority to do the tasks she already does. Work prospecting occurs when employees find new work opportunities, either within or outside the organization. Lindsay is increasing the tasks that she does as part of her job, but these do not represent new streams of revenue for the organization

Jamie works for a bank. His role typically involves visiting clients[cardealerships] and other manager related activities, and finance related activities. During the pandemic most of Jamie's primary duties, such as visiting clients was paused. However, there was an influx of customer service calls. The higher-ups decided to train Jamie and others in similar positions on taking customer service calls from home (rather than hiring new staff). This company is using which strategy

cross-utilization. *

Select which of the following is likely be true of a compensation system based on sales commissions:

decreases cooperation among employees -A compensation system based on sales commissions decreases cooperation among employees. Compensation systems based on sales commissions involve each employee's compensation being contingent on that employee's individual performance, thus providing no incentive to cooperate among their colleagues. A compensation system based on sales commissions motivates employees since a portion of the profits from a sale are provided to the salesperson contingent on that employee's individual performance. The amount of money the employee earns is directly r

Annual bonus * a.Define b.Identify examples and non-examples

define- compensation provided to an employee once a year(in addition to base pay) ex-Cody gives all his employees a small bonus before the holidays at the end of the year. Everyone receives the same compensation regardless of their position. He does not base the bonus on performance as he feels "everyone always works their hardest."

Developing organizational measures requires first:

defining what the organization wants to achieve -Developing organizational measures requires first defining what the organization wants to achieve. Through the scorecards, individual performance will be tied to the organization. The measures need to flow through an organization so that everyone is working on the same product and heading in the same direction. This highlights the concept of organizational strategy. Polling the employees, examining the organizational competition, and examining the safety processes will not necessarily provide information about the overall organizational mission and goals and therefore will not provide information about selecting organizational measures.

Abraham is helping an organization create a scorecard for its workers. After compiling a list of critical priorities through interviews and observations, Abraham presents the leadership team with a list of five. The group discusses each priority's relative importance to the company, decides that certain ones are more important than others, and asks Abraham to reflect their decision on the scorecard. This is an example of which step for creating an organizational scorecard? *

determine weights for each goal -This is an example of the step of determining weights for each goal. In this example, five of the critical priorities are evaluated based on relative importance to the company, which would be an example of determining weight for each goal. The weight of each goal category is based on order of priority for the organization. Ranges for measures in each category will be determined after measures have been selected for each goal, but those steps involve identifying the relevant performances, not prioritizing one over another (which is what is being described here). Identifying short- and long-term goals involves identifying the immediate and long-term priorities of the organization.

In a pay-for-performance system:

employees make more money as they6 and company perform better -In a pay-for-performance (PFP) system, if the employee and business are performing at a high level, the employee makes more money. In PFP systems, compensation partially depends on employee performance; bottom performers would not make more money than traditional systems, since their pay is still based on how well they do. This is also partially based on the overall organization's performance, so top performers are likely to make the most money, but only if the company makes a profit. Since there is an opportunity for high performers to earn more money, top performers are likely to do well and stay longer once a PFP system is implemented

In a pay-for-performance system the main job of a manager is to:

ensure that employees can engage in work effectively -The role of the manager shifts to that of a facilitator. The main focus will be on ensuring employees can maximize their earnings by working effectively. The managers should not focus on delivering punishment, nor should they expect to fill work gaps. Managers will have to monitor data, but their focus will not be on compiling data on employee compliance.

Without a pay-for-performance system, managers will likely have to spend extra time:

ensuring the employees are completing tasks as needed -Without a pay-for-performance system managers often have to manage the work of their employees. This includes ensuring the tasks are completed. Managers may or may not be involved in hiring, training, or assessing employees, but they are all responsible for the tasks to be performed.

Anna has been working as a barista for 5 years. It doesn't matter if she is early or late to shifts, makes good coffee or burns it. Each year during performance reviews she gets a pay raise. Whenever she doesn't get the pay raise amount she wanted, she will eat and drink product to 'make up' for the smaller raise. This is an example of which of Abernathy's sin of traditional wages?

entitlement thinking

Siggi barely performed the minimum job requirements and made several very costly errors during the year. Some resulted in coworker injuries. The company overall had a very successful year and will be giving bonuses to employees. Siggi feels he should receive the same bonus as everyone else, even though he made no significant contributions. This is an example of which of Abernathy's seven sins associated with traditional wages?*

entitlement thinking -This is an example of entitlement thinking as Siggi expects a bonus despite poor performance. This is not an example of corporate socialism since it does not refer to equal pay across employees, and the performance of top employees suffering as a result. Additionally, this is not specifically describing fix-cost pay as one of Abernathy's seven sins associated with traditional wages because there is no mention of increases in wages outpacing the company's profit. Finally, this is not an example of management by perception since this is not referencing any specific interactions with managers.

Of the objections to pay for performance, _____ likely has the least support.

extrinsic rewards can demotivate employees -Extrinsic rewards are said to demotivate employees. Employees are said to need to be intrinsically motivated, and while this is certainly an admirable goal, sometimes it is simply not the case. If intrinsic motivation does not exist, we can't simply ignore the problem. Instead, we must create systems to promote higher levels of performance. Employees can game the system, especially if the system is not set up correctly. Additionally, while programs can be complex, this doesn't negate their usefulness as an organizational need. Finally, appropriate measurement systems are required to ensure the system works as designed, and it may be challenging to select these measures.

The most important role of managers in a PFP system is to:

facilitate employee achievement -The most important responsibility of managers is to facilitate employee achievement. They will do this by removing obstacles, ensuring work prospecting, and monitoring data. They should have to perform less direct management of employees, as well as monitoring for problem behavior. The scorecards should be created in such a way that maximizes payout for employees while also ensuring performance that aligns with the interests of the company.

A company gives out a holiday bonus to all central administration staff at the end of the fiscal year. This year, the business significantly decreased profitability, forcing it to move to a remote model. After giving bonuses, the CEO notes that the company is much more in the red than last year and decides to cut each department's budget by $100,000. This is an example of which of Abernathy's seven sins associated with traditional wages? *

fix-cost pay -The company will have a fluctuating profit margin, yet payroll will continue to increase annually. This can result in circumstances like we see here, where budget cuts are necessary to maintain the current payroll structure. This example doesn't mention that employees would be provided feedback on their poor performance as you might see with management by exception. For this to be an example of entitlement thinking there would be an indication that employees expect annual pay increases. For this to be an example of pay for time as one of Abernathy's sins associated with traditional wages, the scenario would include information about employees who are not necessarily productive while on the clock, because they are just being paid for their time.

Weekly paychecks might be conceptualized as paying for time, which is much like a _____ schedule.

fixed time -Both fixed interval and fixed ratio schedules of reinforcement include a response requirement. Fixed time schedules are based on the passage of time and not on a specific behavioral criterion. Weekly paychecks will arrive for employees regardless of the behaviors that may have occurred during the week, effectively making this a fixed time 1-week schedule.

At the end of the year, Leland typically raises salaries by about 2-3% at the end of the year. This number typically varies depending on how the company did overall. During the first year of the pandemic, this number was much lower due to the toll on his company's industry. This is an example of which of Abernathy's sin of traditional wages *

fixed-cost pay

Lavania is tasked with several projects during the week. On some weeks, a task that might take 4 hours to complete may take her longer, while in other weeks, it may take less time. On weeks when the tasks take Lavania less time, she is given the choice to leave early, but still get paid a portion of her wages, as if she had stayed longer. This is an example of which strategy? *

flexible scheduling -Flexible scheduling allows employees to work fewer hours and receive compensation for increased productivity. In this example, Lavania can leave work early if she finishes sooner without forfeiting pay. Cross-utilization is a strategy in which employees are trained to complete other jobs within the company. Job enlargement is when an organization increases the job functions of a specific position. Job enrichment occurs when an organization increases the authority of particular positions. This scenario doesn't include any information about Lavania increasing her duties or authority, so it is not an example of any of these other options.

When a group of employees successfully reduces costs over the previous year, and the savings are split amongst the employees as a form of pay incentive, this practice is known as ______ sharing *

gain -Gain sharing is a plan that involves providing money, which was saved through expense reduction achieved by the employees, to employees as a form of pay incentive. Goal sharing is a plan in which goals are predetermined and compensation is provided contingent on when the goals are achieved. Profit sharing is a plan that provides a portion of the year-end profit with the employees. Cost sharing is not a type of traditional performance pay plan.

Regional teams are each given a marketing budget of $5,000 to use at their discretion. One region only spends $3,000, leaving them with $2,000 unspent. Since they came in under budget, the organization gives each of 10 regional employees a $200 stipend. This is an example of which alternative compensation strategy? *

gain sharing

Joslyn owns a small cookie shop. She has 3 employees. This year,Joslyn focused on reducing expenses by moving her cookie shop into smaller rental unit. Joslyn shared the money saved on expenses with her employees. This is an example of which alternative compensation strategy to pay for performance?

gain sharing *

While pay-for-performance procedures are highly recommended, other strategies are often used. Which is most likely to be effective at producing positive organizational outcomes and improved employee performance? *

goal sharing -Goal sharing is most likely to be effective at producing organizational outcomes and improved employee performance. This is because in this plan, goals are predetermined, and money is contingent on achieving these goals. The goals also produce higher levels of performance as it allows for goal-directed plans to be set and achieved. Commissions often do not produce positive organizational outcomes in terms of cooperation, as each employee's compensation is contingent on that employee's individual performance, thus providing no incentive to cooperate among their colleagues. Gain sharing is often unbalanced and results in suboptimal performance gains. Merit increases can often be subjective and lead to favoritism. Stock options have no impact on behavior and may be inequitable.

Hector's company provides in-home services to children with autism. With the company's recent growth, Hector and his team created an online scheduling assistant for all team members to review. To transition all staff to this new tool, Hector sets a company-wide goal that 90% of staff will have a schedule created in the next week. If the company reaches that 90%, each employee can get a small stipend or 4 hours of paid time off. This is an example of which alternative compensation strategy?*

goal sharing -Goal sharing is a plan in which goals are predetermined and compensation is contingent on when those goals are achieved. In this example, a company-wide goal is set, and a small stipend or 4 hours of paid time off will be provided, contingent on reaching the set goal. An annual bonus plan involves compensation being provided to an employee once a year in addition to base pay, but it is not contingent on any specific performance. Gain sharing is a plan that splits the money saved through expense reduction with employees. Piece rate involves paying employees based on the number of products they create.

What is not a good strategy for changing employee behavior?

hire only good employees - While hiring good employees should be a goal of all organizations, it simply is not how the world works. This view assumes several things: there is a strategy to find "really good employees"; there is an ongoing list of applicants who are "good employees"; firing people is easy; and firing poor employees has no impact on the organization. These simply are not true. For example, waiting for the "really good employees" to apply to a company, leaves the company with an extended period where their services are likely not being provided to customers. In another example, firing poor performers inevitably leaves a gap in services, since that employee is no longer present. Reinforcement programs, restructuring systems, and training are all effective strategies for changing employee behavior, based on the contingencies operating on the employees.

When creating an organizational scorecard, what can be done after organizational goals have been selected?

identify measures of how employees can impact -When creating an organizational scorecard, after organizational goals have been selected, the measures of how employees can impact the goals can be identified. This way we will know the importance of each goal and have the means to measure as we proceed. It is important to identify how different job functions can impact the goals, therefore determining ways in which only senior management can impact the goals would not be necessary. These goals are selected based on data that have been collected and analyzed, so they do not necessarily need to be evaluated by all employees. After identifying measures of how employees can impact the goals, the next step would be to identify ranges for measures and to assign weights to each job after that.

Corbin's new coffee shop is starting to get busy. Once Corbin has selected the behaviors he wants to see from his employees, he determines how many opportunities the employees might have to engage in the desired behaviors. He identifies the baseline and then creates an upper limit for the expected performance and scores for each behavior. For example, he has identified upselling a pastry as a desired behavior, with a current baseline around 50% and an upper measure of 90% of opportunities for the behavior. This is an example of which step for creating an organizational scorecard?

identify ranges for measures -Once Corbin has selected the behaviors he wants to see from his employees, he determines how many opportunities the employees might have to engage in the desired behaviors. He selects the ranges for the measures by determining what the current level of performance is and how much behavior he would like to see occurring. If Corbin were assigning weights to each job, he would be looking at one job function (e.g., the servers in the coffee shop) and determining the relative priority for each of the measures that that job function can influence. For example, they can influence sales more than they can influence labor costs, so sales would be weighed higher on the scorecard for sales than labor. Identifying short- and long-term goals and then determining weights for each of those goals is done before the measures can be selected and the ranges for those measures can be identified

Jesse has opened an auto shop and wants to bring in new customers. He thinks a pay-for-performance incentive plan may help. He decides that the most important immediate priorities for the shop are to increase sales and employee productivity. He knows that he also needs to focus on customer service but sees that as more of an ongoing priority for the shop. This is an example of which step for creating an organizational scorecard?*

identify short and long term goals -In this example, Jesse has prioritized both immediate and ongoing priorities for the shop—the overall goals for his company. Now that he has identified those goals, he can select measures and ranges of measures for each goal. For example, he might decide that the measure he will use for customer service is a survey he will provide to customers about the service provided, and then he may decide that an appropriate range for scores on this survey would be between 4-8, out of 10. Once these decisions are made, he can then look at each job function to determine which goals that job can influence and assign weights to each accordingly.

Some research suggests that when compared to traditional pay, pay for performance:

increases performance for most employees but not all employees prefer it -Research has shown that pay for performance increases performance for most employees. Research has not shown that pay-for-performance systems increase performance for every employee. Because pay-for-performance systems can be dependent on the success of the company, affordability is typically not an issue. Research has also shown that not all employees prefer the pay-for-performance system. Successful pay-for-performance systems typically require fewer managers in the organization, not more.

On a monthly scorecard (table form), baseline performance is listed for each category of performance in the vertical column:

indicated by a "0" at the top of the column -On a monthly scorecard (table form), baseline performance is listed for each category of performance in the vertical column is indicated by a "0" at the top of the column. The left-hand margin will list the measured categories, the right-hand margin will indicate the individual performer's scores, and the 100 at the top of the column will indicate the target level of performance.

Cherine's role at her ABA clinic has focused primarily on training and development of their clinical staff. Now that pay-for-performance systems are in place, her management team has asked that she also train the administrative employees. This is an example of which strategy?

job enlargement -Job enlargement is when an organization increases the job functions of a specific position. In this example, Cherine's role has expanded beyond training clinical staff as she also trains administrative staff. Job enrichment occurs when an organization increases the authority of specific positions. A related example of this might be if Cherine used to have to get approval to create a new training, but now she is allowed to create new trainings whenever she deems it appropriate to do so. Work prospecting occurs when employees find new work opportunities, either within or outside the organization. Flexible scheduling allows employees to work fewer hours and receive compensation for increased productivity. This scenario does not include details about either of these strategies.

During the transition to a pay-for-performance system, Susie, the CEO of an organization, institutes a hiring freeze. In addition, she has the heads of various departments start training employees from other departments on how to complete some essential job functions. For example, Chris, primarily a frontline worker, begins to learn more about the onboarding process and how to train others starting out in the company. This company is in which level of transitioning to a pay-for-performance system?

job enrichment - Level III involves a staff hiring freeze and cross-utilization to ensure performance pay opportunities. Level I involves creating the measurement system. Level II focuses on voluntary switch-over to performance pay. Level IV should include identifying team leaders and having all managers practicing performance management.

Basilio has been a shift supervisor at his coffee shop for the last several months. Recently, his manager has allowed him to place product orders and select roasts of coffee to have in stock without requiring additional approval. This is an example of which strategy?

job enrichment -Job enrichment occurs when an organization increases the authority of specific positions. In this example, Basilio can place product orders and select roasts to stock without requiring approval. Cross-utilization is a strategy in which employees are trained to complete other jobs within the company. A related example of this might be if Basilio were to be trained to do the duties of another employee in the shop, like the human resources manager. Flexible scheduling allows employees to work fewer hours and receive compensation for increased productivity, but this example doesn't provide any information about Basilio getting the opportunity to leave early. Work prospecting occurs when employees find new work opportunities, either within or outside the organization. This example does not suggest that Basilio is identifying other sources of revenue for the company.

Which measured category that the human resources (HR) job function can influence is the most important for the organization?

labor expense

In the human service example, the company paid ______ in payroll during the last year of pay-for-performance implementation.

less -During the last year, the company paid out an added $1,488 per month in pay for performance and would have paid $3,158 per month in added salary if using a traditional 4% pay increase. The amount was sustainable because it was based on the company's available revenue, and it was predictable with a range identified by calculating the monthly exposure.

Voluntary pay reductions should be implemented in which phase?

level 2

In which phase of a transition to a pay-for-performance system are hiring freezes most likely to be implemented?

level 3 -An organization would implement a hiring freeze in Level III. Unless the amount of work drastically increases, there is usually a set amount of work at this level and, therefore, less of a need to bring more people into the organization. Level I is the results-focused phase. This phase involves creating objective measures, developing a scorecard for each position in the company, and instituting performance management practices. Level II is the stakeholder pay phase. In this phase, the organization implements pay-for-performance. In level IV, the organization transitions to self-managing employees.

Juliana normally conducts assessments at her organization.However, her boss recently approached her with the opportunity to seek out contracts from other organizations that need assessments completed. In exchange, Juliana would receive a percentage of any contract she brings in.This company is at This company is in which level for transitioning to a pay-for-performance system? *

level 3: job enrichment

Lakeshia preciously held a "supervisor" role at the company. However, during a recent transition, her boss gave her a new job title: "team leader." Rather than fulfill the duties of her old position, Lakeshia now ensures that her team has plenty of opportunities to maximize their pay.This company is at This company is in which level for transitioning to a pay-for-performance system? *

level 4: self-managing employees

Kerry is a manager at a company transitioning to a pay-for-performance system that has just implemented a manager hiring freeze. As part of the transition, Kerry's boss has selected him to be a team leader for his original department, the training department. In addition, Kerry is also learning to lead the direct service department. With these increased responsibilities, Kerry's opportunities for performance pay have increased. This company is in which level for transitioning to a pay for performance system?

level IV: self-management -Identifying and training team leaders, as well as implementing a manager hiring freeze are steps in Level IV. Level I involves identifying the measures and scorecards. Level II involves rolling over to voluntary performance pay. Level III involves ensuring opportunities for performance pay.

In the human service example from the lecture, during the final year of the transition to a pay-for-performance system, the company had additional payroll costs that were:

lower than projected costs had they not implemented pay for performance -In the final year of the example scenario, the company paid out an additional $1,488 per month in pay-for-performance incentive. The additional cost was not eliminated but was lower than the years with higher revenue. The cost and variability was relatively predictable due to calculated exposure. The cost without using pay for performance was an added $3,158 per month, which makes the pay-for-performance costs lower.

James runs a private personal training business. He has 3 employees and allows them to create their own schedules. As long as they are working and bringing money in, he let's them be. Whenever, he sees abad online review, he immediately contacts the employee and reprimands them. In general, he notices his employees never reach out to him and then avoid him as much as possible. This is an example of which of Abernathy's sin of traditional wages?*

management by exception

Lucas manages employees at a warehouse where following safety protocols has been a concern. When employees follow the protocols, he typically just leaves them to their work. But when they don't follow protocols, he must take them aside, write them up, or threaten them with additional trainings. He finds he is spending a lot of time trying to make the corrections. This is an example of which of Abernathy's seven sins associated with traditional wages?*

management by exception -Lucas's focus is on behaviors that are a problem rather than behaviors that we want to maintain. If Lucas were to provide feedback and support for the safety behaviors occurring, we may be considering a different system. Lucas isn't basing his feedback on subjective measures, so we can rule out management by perception in this situation. If the discussion centered around the idea that employees were being paid for their time on the clock, we would consider pay for time as an option. If Lucas were to issue promotions to his top employees, we would then select performance-based promotions as an option here.

Out of everyone on the programming team, Jacob is the one that everyone goes to for help and advice when there is a problem or a particularly challenging task. Each week Casey gets updates from everyone who is working on the project and submits them to their manager. At the end of the year, only Casey is given a raise. This is an example of which of Abernathy's sin of traditional wages? *

management by perception

Brynn is the supervisor of a small team of behavior technicians who provide support in a public school. Since Brynn only visits the school once a month, she relies on teachers' reports to determine how her team is doing. After speaking with several teachers today, Brynn emails the technicians to tell them they are doing well and to keep providing the same quality of services. This is an example of which of Abernathy's seven sins associated with traditional wages? *

management by perception -In this example, there is no formal evaluation process established by Brynn. The minimal use of teacher reports without a specific evaluation system would suggest that this is an issue of management by perception. If this were an example of corporate socialism, Brynn would establish a base pay for all employees regardless of performance, which would cause the performance of top employees to suffer. If this were an example of management by exception, we would see Brynn only providing feedback to employees when there are performance issues but ignoring employees when they are performing well. Finally, this is not an example of performance-based promotions since there is no mention of promotions for the employees.

Performance scorecards are typically calculated on a ____ basis.

monthly

In the human service example, the company paid ______ in payroll during the first year of pay-for-performance implementation compared to traditional pay.

more -With pay for performance the company paid an added $6495 per month in bonus. It would have paid $2792 per month in added salary if using a traditional 4% pay increase. This pay was sustainable because it relied on an increase in company revenue. The amount was not unpredictable because the exposure (maximum payout) was already calculated.

Reducing base pay in exchange for earning a greater percentage of performance pay will usually result in the top performers earning:

more money

All these alternatives to pay for performance are likely noncontingent and inequitable, except

no exceptions; all of these tend to be noncontingent and inequitable

Management by perception refers primarily to managers: *

often evaluating employers without quantitative measures -Management by perception allows managers to evaluate employees based on what they THINK might be going on, not necessarily through objective performance measures. Managers who use management by perception do not measure any selected target behavior carefully because they do not typically collect much data at all. Any information collected is not likely to be quantitative but may incorporate subjective qualitative measures.

sidebar interaction. Press tab to begin. When managers employ the "management by exception" style they: *

often rely on excessive negative reinforcement and punishment - Management by exception relies on management noticing employee's poor performance, which is likely to result in some punishing contingency. Otherwise, employees simply avoid the manager, a key feature of negative reinforcement. Management by exception does not begin with objective data collection, nor does it include rewards for exceptional performance. Additionally, there is not a mechanism for "management by inspiration" due to employees actively avoiding managers who use this style of management.

Open book management can be considered a means of creating a(n)

open system -In open book management, employees receive information on financial data for the organization, so that their practices can align with financial results. This is a great example of an open system, since information is actively shared and made transparent among employees and the community. A closed system would involve an organization that does not share financial information, hiring practices, tools developed, etc., whether between members of the organization or the community. Pay-for-performance systems may involve open book management, but are not created by sharing financial data alone.

Which of the following statements is true regarding closed vs. open systems?

open systems tend to be more customer -Open systems are very responsive to external events and therefore tend to be more customer focused. These systems create many opportunities for feedback among all involved, which leads to the strongest investment by those parties. They can change and adapt to external events, including changes in the market. Open systems also lead to rapid improvement, are focused on the needs of the customer, and are resilient and sustainable.

Richie works at a local business that provides care for dogs during the day. Richie is scheduled to work from 9:00 a.m.-5:00 p.m., Monday through Friday. Richie is responsible for the direct care of the dogs. The dogs are picked up each day at 3:00 p.m. The last 2 hours of Richie's day, since there are no longer any dogs to care for, he spends the rest of his shift on his personal cell phone until his shift ends at 5:00 p.m. This is an example of which of Abernathy's seven sins associated with traditional wages? *

pay for time -Richie's pay is based on time and not task, which is why Richie is able to remain at the site without engaging in work-related behavior for the duration of his shift. This example would not be a fix-cost pay example since fix-cost pay typically refers to annual pay increases and the resulting problem when an organization must pay out more than they brought in during the year. This is also not an example of entitlement thinking or corporate socialism, where the employee expects certain pay increases or receives equal pay regardless of individual performance.

Which of the following is not a sin of wages?

paying extra foe excpetional performance

Which component of the profit indexed performance pay calculation is derived from the employee's performance scorecard? *

performance index score

The most straightforward application of ABA to business settings would be:

performance management -Performance management (PM) is the most straightforward application of ABA to business settings. PM involves analyzing individuals or groups of individuals and modifying the environment to improve performance. This typically involves increasing some aspect of performance, such as improving quality of work. Behavior-based safety and behavioral systems analysis require more complex analyses of environmental contingencies, as well as how different systems and processes relate to one another. Industrial/organizational (I/O) psychology is not an application of behavior analysis, but psychology applied in businesses.

A good pay-for-performance process will always have a(n) _____ component.

performance management -Pay-for-performance (PFP) systems will always include a performance management component since they are based on employee behavior and performance. Specific employees may be the focus of PFP systems, though this is probably best viewed through a performance management piece, rather than employee selection. PFP systems may be based on safety or the effectiveness of organizational systems

______ is a critical component to the success of a PFP system.

performance management -Performance management (PM) involves analyzing individuals or small groups of employees and modifying the environment to improve performance. PM is required for PFP to be effective. Behavior-based safety is OBM applied specifically to safety behavior. It is a subspecialty of OBM and is unnecessary for a PFP system. Forensic accounting and human factors are not necessary components to the success of a PFP system.

sidebar interaction. Press tab to begin. _____ is required for pay for performance to be effective

performance manegement -Pay for performance essentially pays employees based on their performance. Performance management is necessary here, because it looks at arranging the environment to promote performance. Behavioral systems analysis is used to analyze the relationships between the organization, its employees and processes, and the external environment; there is no specific contingency involved that influences pay for performance. Without performance management, pay for performance or systems analysis or anything else is going to be very difficult. Experimental analysis of behavior is another domain of behavior analysis, where basic research is conducted, and is not related to organizations or performance.

At Dynamic Industries, the best welders are recognized for their accomplishments by being placed in management positions. AlthoughDan is a hard worker and an excellent welder, he has struggled in his new position because he was never taught how to be a good manager.This is an example of which of Abernathy's sin of traditional wages? *

performance-based promotions

Eloise is the general manager of several electronic stores. She is in close contact with each store's manager and often asks how each salesperson is doing. If a salesperson is doing well, she suggests that the manager shift that employee to the loftier trainer role to encourage others to perform better. This situation has resulted in more trainers and fewer salespeople. This is an example of which of Abernathy's seven sins associated with traditional wages? *

performance-based promotions -Because exceptional performance is resulting in promotions, the current workforce begins to diminish as a result. There is no discussion about employees feeling entitled to pay raises or promotions in this example. Because the promotions are based on performance, we can determine that both management by exception (where employees are ignored unless there is a performance problem) and management by perception (where employees are judged subjectively) are not demonstrated here.

Performance management might include all the following except:

personnel selection -Performance management (PM) is a straightforward application of ABA to the business setting, where the focus is on improving the performance of an individual or group. Personnel selection typically falls outside of our purview and is done by other professionals. Job redesign is used in PM, where the job itself may be modified to include or exclude various responsibilities of an employee. Training, like job redesign, is an antecedent intervention that focuses on teaching the employee how to perform various tasks. Reinforcement systems may also be used in PM, to improve performance.

At Dynamic Industries, welders are provided a bonus contingent on the number of machine parts they put together on each shift. Although this has increased the number of parts produced by the welders, there has also been an increase in injuries as workers have engaged in unsafebehavior in their efforts to work more quickly. This is an example of which alternative compensation strategy to pay for performance? *

piece rate

Members of a tech team are asked to publish data reports across various departments in the company. Each time a tech team member publishes a report, they receive a $500 check. Team members have published many reports in the past few days, though those reports often missed important data and thus were not easy to understand. This is an example of which alternative compensation strategy? *

piece rate -Piece rate is a plan that pays employees a fixed amount for each unit or performance. In this example, the fixed amount of $500 was provided each time an employee published a report. Goal sharing is a plan in which goals are predetermined and compensation is contingent on when those goals are achieved. Merit increase is a raise in salary provided to an employee, not necessarily contingent on a specific performance. Sales commissions provide a portion of the profits from a sale to the employee who made the sale.

Define open book management *

practice that involves orienting and sharing financial data with employees so that work and non-fianancial measures can be linked to financial results

This year the ABA clinic was able to pay for all their expenses and debt with some money left over. As a thank you to the employees, the director added10% of the left-over money to each employee's paycheck. This is an example of which alternative compensation strategy to pay for performance? *

profit sharing

A company that creates educational materials for practitioners has had an exceptional fiscal year. To reward all their employees for their hard work throughout the year, the leadership team decided to provide a bonus to all employees by divvying up the organization's extra money. In previous years, they could not offer this bonus to employees due to the company mostly breaking even during its first few years. This is an example of which alternative compensation strategy? *

profit sharing -Since the organization is taking annual profits and dividing them up among employees, we would call this an example of profit sharing. This is not an increase on salary based on merit, nor is it a set annual bonus that would be granted to the employees independent of the company's profits. This is also not an example of stock options since it does not allow employees to purchase and own shares.

Define multiplier scale *

profitability index that is used to determine the company multiplier

Corporate socialism refers primarily to the tendency of typical pay structures to:

reward. undeprperformers the same as top performers - In a corporate socialism context, all performers are rewarded in a uniform manner, resulting in underperformers receiving the same rewards and benefits as top performers. Employee behavior is not differentiated, which allows those who complete the bare minimum to reap similar rewards. Corporate socialism doesn't impact tax brackets or exclude groups of employees from certain promotions. Additionally, this does not keep poor workers around longer than warranted although it may result in poor performers staying longer due to the balanced pay structure.In a corporate socialism context, all performers are rewarded in a uniform manner, resulting in underperformers receiving the same rewards and benefits as top performers. Employee behavior is not differentiated, which allows those who complete the bare minimum to reap similar rewards. Corporate socialism doesn't impact tax brackets or exclude groups of employees from certain promotions. Additionally, this does not keep poor workers around longer than warranted although it may result in poor performers staying longer due to the balanced pay structure.

Hannalee works as a floor manager at a furniture store. As part of her duties there, she is responsible for assisting customers when they purchase couches, bedroom furniture, or dining sets. For every piece of furniture that one of her customers buys, Hannalee receives a percentage of the profit earned. This an example of?

sales commission

Marisol works as an aesthetician at a spa. Whenever, she is done giving a client a facial she shows them the product line that she used and tells them about it and encourages them to purchase some of the products they should be using everyday. If a client makes a purchase, she gets 15% of that sale. This is an example of which alternative compensation strategy to pay for performance?*

sales commission

The leadership team of an adult day program is deciding what critical behaviors to focus on as they transition to performance scorecards. They describe two key behaviors: clocking in and out of work on time and completing the assigned end-of-day task. They decide to record these behaviors by the percentage of times they occur per week. This is an example of which step for creating an organizational scorecard?*

select measure for each goal -The leadership team decided the critical behaviors to focus on as they transition to performance scorecards. After determining the two key behaviors, they select measures for each of these goals by determining the percentage of times they occur per week. Before doing this, they have likely already identified the company's short- and long-term goals and then determined the relative priority of each goal and assigned weights for each goal. Both tasks are related to the overall organizational mission and strategy. Now that the leadership team has selected measures for at least some of the goals, they can now identify ranges for each of the measures (i.e., what are the lowest and highest expected percentages for each of these measures?). They could then look at each job function and assign weights to each of these tasks based on that job's ability to influence that measure.

Which of the following is an advantage of an open system (vs. a closed system)?

tends to promote continuous improvements - Open systems have several benefits. These include being responsive to external events, allowing for rapid adaptation to changes, continuous improvement, a focus on customers and profits, and sustainability over time. These systems are in touch with the external environment, not avoidant of it. They also promote rapid change and allow for flexibility based on a customer focus. Since open systems actively seek feedback from other employees and customers, there is a frequent opportunity for continuous improvement based on that feedback.

The last step of creating a multiplier scale is to:

test the scale on financial data from the previous year -Just prior to implementing a multiplier scale within a pay for performance system, we want to first test the scale on actual financial data. This is the last step before implementation. The goal will be to make sure that, based on the scale, employees would have earned a payout (because the multiplier value was above zero) at least one time in the 6 months prior.

A multiplier score of 0 indicates that:

the company did not make enough profit to share with employees -The typical range of possible multipliers is typically from 0, which means that the company is not profitable enough to pay anything, to about 3, which indicates that the organization did very well.

Under a traditional 4% annual pay increase, what happens if a company has less revenue in a given year?

the company may lose money for the year -Under a traditional 4% annual pay increase, even if the company is less profitable during the year, they will owe the 4% increase. This may result in the company losing money for the year. Over time, if the company continues to lose money, it may fail, but a single year of loss does not guarantee that it will. A pay-for-performance system can be set up to vary payouts with company profitability.

The first level when transitioning to a pay-for-performance system most closely aligns with:

the implementation of a performance management process - Performance management (PM) involves analyzing individuals or small groups of employees and modifying the environment to improve performance. PM is required for pay-for-performance (PFP) to be effective. The consultant establishes a PM process by teaching higher-level leaders about PM rather than a behavioral systems analysis/systems change or behavior-based safety, which would involve a more comprehensive view of other variables.

A multiplier score of 3 would indicate that:

the organization was very profitable -The typical range of possible multipliers is typically from 0, which means that the company is not profitable enough to pay anything, to about 3, which indicates that the organization did very well. Values between 0-3 would indicate that the company was somewhat profitable.

Which of the following is a feature of the study by Gaetaniet al. (1985)?

the results showed a significant increase in daily productivity during the incentive condition

Performance-based promotions refer to: *

the tendency to promote high performers -Abernathy describes performance-based promotions as one of the sins of traditional wage systems because it takes the higher and more consistent performers at the employment site and promotes them to managers instead of just rewarding them for their good performance. This creates a problem for many reasons, but this does not refer to preventing or excluding any groups from promotion opportunities. Poor performers are unlikely to received performance-based promotions and so this is not likely to increase how long these employees stay with the company. This also does not refer to the use of reinforcement programs but setting up systems of reinforcement may serve to avoid the need to promote an employee into a management position just to reward good performance

Define performance scorecard *

tool used to identify employee performance in areas important to the organization based on objective measures

Define organizational scorecard

tools used to guide the development of employee performance card

Which of the following statements is false regarding performance-based promotions?

top performers are almost always great managers, since they know the job so well -Being a top performer at a specific job does not always equate to having good management skills. Management may require different skills from the job itself, so knowing the job does not immediately result in a transfer to management skills. Performance-based promotions can lead to competitive tension among employees as people may continue to strive toward being the top performer in their department or organization. Some companies may have policies in place that require an employee to be promoted into a management position before receiving deserved raises, meaning that it may be the only way available to reward top performers with increased salaries. One of the major problems with performance-based promotions is that it takes the best employees away from the jobs at which they excel and into a management position that they might not be as prepared to do.

Identify features of the study by George & Hopkins (1989)

total money earned increased -The results of the George and Hopkins (1989) study showed that the total money earned increased across waitstaff. It did not demonstrate effects on the predictability of money earned, nor did it examine the waitstaff's attending to money earned.

In calculating profit indexed performance pay, the threshold represents the:

total operating expenses before indexed performance payouts -In calculating profit indexed performance pay, the threshold represents the total operating expenses before indexed performance payouts. Moreover, it refers to the minimum amount of money the company needs to pay expenses that keep the business running. This ensures that the required uncontrollable expenses are met without having severe financial troubles.

Which of the following would be considered an intervention in OBM rather than a specific subspecialty of OBM?

training and instruction -Subspecialties in OBM include behavioral systems analysis, pay for performance, behavior-based safety, and performance management. These are not specific interventions, but rather specialty areas where OBM can be applied and used. Training and instruction is not a subspecialty, but rather something that can be implemented to change employee behavior. Think of token systems: token systems are specific behavior-change procedures used in ABA. Similarly, training and instruction are behavior-change procedures used in OBM.

Sal owns a produce shop. He currently employs a team of 10 employees who are responsible for shop duties. The shop is open from 9 a.m. to 3 p.m. During this time, the shop employees stock produce, assist customers, and complete other shop tasks. Once the shop closes at 3 p.m., Sal started having the employees spend the rest of the afternoon working on marketing tasks and contracts with other grocery stores. This is an example of which strategy? *

work prospecting -Work prospecting occurs when employees find new work opportunities, either within or outside the organization. In this example, Sal had his employees work on tasks for other shops after they finished their shifts. Cross-utilization is a strategy in which employees are trained to complete other jobs within the company. Job enlargement is when an organization increases the job functions of a specific position. Job enrichment occurs when an organization increases the authority of a particular position. Sal hasn't increased the duties for a given job or authority within any job functions, but instead has identified new sources of income for his shop.