Exam II Management 433
1. specific and clear 2. challenging 3. agreed upon 4. significant 5. prioritized, 6. bound by time, 7. achievable, 8. fully communicated, 9. flexible 10. limited in number are all examples of __________.
characteristics of good objectives
2 types of systems used to evaluate competencies are:
comparative and absolute
simple rank order, alternation rank order, paired comparisons, and forced distribution are all examples of _______
comparative systems
Customer service, written or oral communication, creative thinking, and dependable are all examples of _______.
compentancies
___________ are clusters of KSA that are critical in determining how results are achieved.
compentancies
promotes staffing flexibility by training employees in one department with critical skills they would need to perform effectively in other departments
cross-departmental
Based on objective and subjective indicators of job performance Periodic performance reviews Realistic and attainable standards Pay increases reflect performance
Elements of Merit Pay
employees only compared in single overall category, employees not compared on individual behaviors, not specific therefore feedback difficult, rankings suspect to legal challenge, no information about distance between employees.
disadvantages of comparative systems
When measuring behaviors, we measure competency directly.
false *measure indicators that tell us if competency is present.
The _______________ method of computing an overall score relies on the weights given to indicate the relative importance of each performance dimension measured to prevent personal bias from entering into the rating. A. creative B. mechanical C. methodological D. judgmental
mechanical
Companies that are implementing ________ plans generally increase the amount of classroom and on-the-job training, as these types of plans make training necessary rather than optional.
pay-for-knowledge
All six appraisal meetings should be held as separate meetings.
False
The goal of rater error training is to increase rating accuracy by making raters aware of the errors they are likely to make intentionally.
False
The mechanical approach to computing an overall performance score involves taking every aspect of performance into consideration and arriving at a defensible summary.
False
Yearly performance appraisal meetings falling on the anniversary date of the employee's hire date are the ideal method of communicating performance expectations to the employee.
False
Suggestions to improve the quality of self-appraisals include all of the following EXCEPT:
Focus on the past
What are the two types of comparison systems
Forced distribution Paired comparisons
Used mainly for managerial and professional employees and typically evaluate employees' progress toward strategic planning objectives
Goal-oriented systems
False
Good objectives are set in stone and will not change throughout the performance review period
Skills at the same level of responsibility or difficulty
Horizontal skills
1. consider employees -involve EEs in system design (people support what they help create) -show how EE needs are met 2. emphasize the positive -use credible communicators -strike first - create positive attitude towards the new performance system before negative attitudes are created -provide facts and conclusions 3. repeat it, document it, be consistent -put it in writing -use multiple channels of communication -say it and then say it again
How to minimize cognitive biases affecting the communication plan:
Roll out test version with sample group Staff and jobs generalizable to organization Fully implement planned system All participants keep records of issues encountered Do not record appraisal scores Collect input from all participants
Implementing a Pilot Test
The ________ effect refers to a worker's willingness to work diligently to produce more quality output rather than simply attending work without putting in the effort.
Incentive
Amicable/non-retaliatory resolution of disagreements increases perception of system fairness. Employees can question two types of issues: -Judgmental (validity of evaluation) -Administrative (whether policies and procedures were followed)
Include an appeal process
Leniency (inflation) Severity (deflation) Central tendency
Intentional rating errors
-compensates employees for current jobs -pay limits set for each job -evaluations based on job descriptions and objectives
Job-Based Pay
encourages employees to develop skills and learn to perform jobs from different job families
Job-Point accrual
the rater assess a disproportionately large number of raters as performing well (positively leniency) or poorly (negative leniency) in contrast to their true level of performance
Leniency error
Which level does the following imply -internal/local organization -HR reviews facts, policies, and procedures -HR reports to supervisor/employee -HR attempts to negotiate a settlement
Level 1
Which level does the following imply -external/higher level organization -Arbitrator (panel of peers and managers) or -High-level manager - final decision
Level 2
Designed to: Pay grade maximum for length of service To reduce employee turnover
Longevity Pay
Used for most government employees General schedule system for federal employees
Longevity Pay
Bias errors Contrast errors Errors of central tendency Errors of leniency or strictness
Major types of Rater Errors
The 3 criteria used for determining the extent to which an objective is achieved are:
quantity, quality, and time.
Pay increases based on performance Reward excellent effort or results Motivate future performance Help retain valued employees In 2013, avg merit increase ranged between 2.5% & 2.8% The lowest performance earned 0.2%, avg, 2.6%, and highest 4.6%
Merit Pay Plans
What are the two main types of Job-Based Pay?
Merit an Incentive Pay
Used mostly for employees who do physical work, increases these workers' pay as they master new skills
skills-based
_________ competencies are competencies which everyone needs to display to do the job to a minimally adequate standard.
threshold
Specific and Clear, Challenging, Agreed Upon, Significant, Prioritized, Bound by Time, Achievable, Fully Communicated, Flexible, Limited in number
Name the 10 characteristics of good Objectives
___________ are statements of an important and measurable outcome which ensure success in areas were the employee is accountable.
Objectives
reward managerial, service, or professional workers for successfully learning specific curricula
Pay-For-Knowledge
Three basic types of person-focused pay programs
Pay-for-knowledge, Skill-based pay, and Competency-based pay
Individual incentive plans help to promote the relationship between pay and ________.
Performance
Trait systems Comparison systems Behavioral systems Goal-oriented systems
Performance Appraisal Plans
Rewards employees for acquiring job-related competencies, knowledge, skills
Person-Focused Plans
_____________________ provide the basis for such rewards that are tightly coupled with strategic training and developmental activities.
Person-focused compensation programs
What rewards employees for acquiring job-related knowledge, skills, or competencies rather than for demonstrating successful job performance?
Person-focused pay plans
Provides ability to Discover potential problems Fix them
Pilot Testing
Gain information from potential participants Learn about difficulties/obstacles Collect recommendations on how to improve Understand personal reactions Get early buy-in Get higher rate of acceptance
Pilot Testing - benefits
Make raters aware of types of rating errors Help raters minimize errors Increase rating accuracy
Rater Error Training (RET)
-reasons for implementation and mechanics of the system -identifying, observing, recording, and evaluating job activities -how to interact with employees
Rater training programs
Designed to award job tenure Set base pay with time-designated increases Employees perceived that they are treated fairly Facilitates administration of pay Avoids perception of favoritism Poor fit with most competitive strategies
Seniority Pay
Applies to jobs within the same job family, but skills do not necessarily build on one another
Skill Block
Employee Supervisor Coworkers Subordinates Customers/clients
Sources of performance appraisal information
The steps represent jobs from a particular job family that differ in terms of complexity
Stair Step
Objective
Statements of important and measurable outcomes.
What is the objective of a developmental plan?
To encourage continuous learning, performance improvement, and personal growth
Quality of work Quantity of work Dependability Cooperation Initiative Judgement Leadership responsibility Decision-making ability Creativity
Trait System Characteristics
Ask raters to evaluate each employee's traits or characteristics
Trait systems
A Level 1 appeal occurs when a complaint is sent to the HR Department.
True
A key goal of MBO is to allow employees to translate organizational goals into individual goals.
True
MBO systems are likely to implement PM systems which include objectives and standards.
True
Self-appraisals should not be used as the only source of performance data because they may be more lenient and biased than other ratings.
True
The basic components that appraisal forms should contain are employee information; accountabilities, objectives, and standards; competencies and indicators; major achievements and contributions; developmental achievements; developmental needs; plans and goals; stakeholder input; employee comments; and signatures.
True
The inclusion of an appeals process increases perceptions of the performance management system's fairness.
True
The purpose of establishing objectives is to identify the highly important objectives that will have a dramatic impact on overall success of the organization
True
The steps that must be taken before the performance management system is launched include implementing a communication plan, establishing an appeals process, running training programs for raters, and pilot testing the system to fix any glitches.
True
differentiating competencies allows us to distinguish between average ans superior performers.
True
The main disadvantage of group incentive compensation is employee ________.
Turnover
Similar to Me Halo Primacy First Impression Contrast Stereotype Negativity Recency Spillover Attribution
Unintentional rating errors
Another name for incentive pay is ________ pay.
Variable
Skills that are traditionally considered supervisory
Vertical skills
What are the nine major components of Appraisal Forms?
1. Basic Employee Information 2. Signatures 3. Accountabilities, Objectives, and Standards 4. Competencies and Indicators 5. Major Achievements and Contributions 6. Stakeholder Input 7. Employee Comments 8. Developmental Achievements 9. Developmental -Needs -Plans -Goals
4 essential elements in describing a competency are:
1. Definition of a competency 2. Description of indicators that can be observed when competency done effectively 3. Description of behaviors likely to occur when competency not done effectively 4. List of suggestions for developing competency in question
What are the 8 desirable features of Appraisal Forms:
1. Simplicity 2. Relevancy 3. Descriptiveness 4. Adaptability 5. Comprehensiveness 6. Definitional Clarity 7. Communication 8. Time Orientation
A company using this competitive strategy seeks to offer a product or service that is completely unique from other competitors in their market segment. A) differentiation strategy B) defender strategy C) prospector strategy D) lowest-cost strategy
A) differentiation strategy
This group incentive system was designed to provide employees with financial incentives for increasing customer satisfaction, increasing productivity, lowering costs, or improving safety. A) gain sharing B) team based C) small group D) profit sharing
A) gain sharing
This term is defined as added pay for employees who have reached the maximum of a pay grade and who are unlikely to move into higher grades. A) longevity pay B) merit pay C) seniority-based pay D) incentive pay
A) longevity pay
Selective exposure may cause which of the following situations? A. Employees are likely to avoid exposing themselves to information with which they do not already agree. B. Employees may only read information that is written in handbooks. C. Employees may have a tendency not to believe information with which they do not already agree. D. Employees are likely to argue with any information that is presented.
A. Employees are likely to avoid exposing themselves to information with which they do not already agree.
One goal of rater error training is to: A. Increase rating accuracy B. Increase rater apprehension C. Increase rating speed D. Increase rating scores
A. Increase rating accuracy
What are the two main strategies to obtain an overall performance score for an employee? A. Judgmental and mechanical B. Judgmental and objective C. Subjective and objective D. Mechanical and industrial
A. Judgmental and mechanical
By and large, what is the cause of intentional rating errors? A. Motivation issues B. Disciplinary issues C. Communication issues D. Supervisory issues
A. Motivation issues
Management by objective is part of which type of performance appraisal system? A. goal-oriented system B. trait system C. behavioral observation scale D. behavioral anchored rating scale
A. goal-oriented system
When a filing clerk is trained to maintain employee attendance records, it is an example of acquiring which type of skills? A. horizontal B. vertical C. depth D. breadth
A. horizontal
Companies can control costs by replacing annual merit or seniority increases or fixed salaries with which type of plans? A. incentive B. longevity pay C. pay-for-knowledge pay D. base pay
A. incentive
Which of the following is based on the human capital theory? A. seniority pay system B. BOS C. merit pay system D. BARS
A. seniority pay system
-Leads to enhanced job performance -Quality -Productivity -Leads to reduced staffing -Leads to greater flexibility
Advantages of Person-Focused Pay Programs to Employers
-Can provide job enrichment/make jobs more interesting --Thus more intrinsically motivating -Can provide job security -Increases growth potential
Advantages of Person-Focused Pay Programs to the Employee
True
After determining the accountabilities of a particular job, the next step in measuring results is to determine specific objectives
Who can be included as possible sources of performance information? A. Supervisor B. Peers C. Subordinates D. All of these
All Of These
__________ is a behavior that suggests that a competency is present
An indicator
Number of meetings (annual, semi-annual,quarterly)
Appraisal Period
__________ systems base the measurement on comparing employees with a prescribed performance standard
absolute
essays, behavior checklists, critical incidents, and graphic rating scales are all examples of __________
absolute systems
in _____ systems, supervisors provide evaluations without making direct references to other employees
absolute systems
easy to explain, decisions resulting are straight forward, helps control biases/errors
advantages to using comparative systems
What is the typical annual Cost-of-living adjustments (COLAs) in recent years? A) 0 to 1 percent B) 2 to 3 percent C) 3 to 5 percent D) 8 to 10 percent
B) 2 to 3 percent
Which of the following is true of incentive pay? A) Incentive pay is considered part of an employee's fringe compensation. B) The criteria for judging an award tends to be objective, such as quantity produced. C) Award levels are subjective. D) The amount of the award paid for attainment of goals is not communicated in advance.
B) The criteria for judging an award tends to be objective, such as quantity produced.
XYZ Company pays a portion of company profits to its employees. The management offers this incentive plan as one kind of retirement program. What kind of companywide incentive plan does XYZ Co. offer? A) employee stock ownership plan B) deferred profit sharing plan C) current profit sharing plan D) employee stock option plan
B) deferred profit sharing plan
Customer satisfaction, labor cost savings, materials cost savings, and reduction in accidents were listed as typical performance measures for which type of incentive plan? A) individual B) group C) company-wide D) executive
B) group
A level ____ appeal occurs when an outside and unbiased arbitrator makes a final and binding resolution. A. 1 B. 2 C. 3 D. None of the above
B. 2
The basic component that requires forms to contain definitions of the various knowledge, skills, and abilities to be assessed together with their observable behaviors is referred to as: A. Accountabilities, objectives, and standards B. Competencies and indicators C. Basic employee information D. Major achievements and contributions
B. Competencies and indicators
The goals of rater error training include: A. Making raters aware of the performance standards required B. Making raters aware of the possible errors that might be made in rating C. Making raters aware of the possibility that subordinates will disagree with rates given D. Making raters aware of the possibility of lawsuits
B. Making raters aware of the possible errors that might be made in rating
________________ is the strategy used to gain support for a performance system that recommends creating documentation and making it available online. A. Provide facts and conclusions B. Put it in writing C. Strike first D. Say it and then say it again
B. Put it in writing
___________ are competencies that each employee needs to display to do the job to a minimally adequate standard. A. Differentiating competencies B. Threshold competencies C. Distinguishing competencies D. None of the above
B. Threshold Competencies
Which of the following is a motivation to inflate ratings? A. To build a strongly documented written record of poor performance B. To maximize merit raise/rewards C. To teach a rebellious employee a lesson D. To shock employees
B. To maximize merit raise/rewards
Which of the following is a motivation to inflate ratings? A. To build a strongly documented written record of poor performance B. To maximize merit raise/rewards C. To teach a rebellious employee a lesson D. To shock employees
B. To maximize merit raise/rewards
______________ rating errors result because of the complexities involved in observing performance, storing that information in memory, and then recalling that information while rating an employee. A. Intentional B. Unintentional C. Negative D. Positive
B. Unintentional
Use of essays, critical incidents, and graphic rating scales would be most appropriate in a(n) ______________ system of evaluating competencies. A. declarative B. absolute C. projective D. comparative
B. absolute
A manager expects high levels of performance from Ashley, a newly hired employee, because she graduated from a prestigious Ivy League university. A year later, the manager rates Ashley's job performance more highly than her actual performance based on his initial belief. What kind of rater error was made by the manager? A. negative halo effect B. first-impression-effect C. positive halo effect D. contrast errors
B. first-impression-effect
Gunther Rohn was rewarded for making a suggestion that saved Ewe and Eye Electronics thousands of dollars. Which type of incentive compensation approach might have worked best? A. group incentive programs B. gain sharing plan C. management incentive plans D. employee stock ownership plans
B. gain sharing plan
Which one of the following would be correct regarding person-focused pay programs? A. the skill blocks model only emphasizes horizontal skills B. the stair-step model addresses depth, while the skill blocks model emphasizes both horizontal and vertical skills C. employees do not progress to more complex jobs in the stair-step model D. the stair step model only addressed vertical skills
B. the stair-step model addresses depth, while the skill blocks model emphasizes both horizontal and vertical skills
Employee become more valuable over time Good employees may leave if not compensated fairly Rationale based on the human capital theory
Bases for seniority pay
Rate employees on the extent to which they display successful job performance behaviors Critical-incident technique (CIT) Behaviorally anchored rating scales (BARS) Behavioral observation scales (BOS)
Behavioral systems
First impression effect Positive halo effect Negative halo effect Similar to me effect Illegal discriminatory biases
Bias errors
Which of the following is true concerning incentive pay? A) The award is earned only when the predetermined work objective is totally completed. B) Motivates employees to be more productive, but does little to control payroll costs. C) Awards are granted in one-time payouts. D) Incentive levels are generally subjective in nature.
C) Awards are granted in one-time payouts.
Profit sharing plans and employee stock option plans are incentives on what level? A) individual B) group C) companywide D) executive
C) companywide
What type of pay system rewards employees for partially or completely attaining a predetermined work objective? A) seniority pay B) merit pay C) incentive pay D) skill-based pay
C) incentive pay
Which of the following performance measures corresponds to individual/ group/ companywide incentive plans respectively? A) customer satisfaction/quantity of work/market share B) quantity of work/market share/customer satisfaction C) quality of work output/customer satisfaction/market share D) customer satisfaction/market share/quality of work
C) quality of work output/customer satisfaction/market share
In addition to procedural knowledge, declarative knowledge, and motivation, ________________ also affect performance. A. HR practices B. work environments C. A and B D. None of the above
C. A and B
Rating behaviors are influenced by: A. Motivation to provide accurate ratings B. Motivation to distort ratings C. A and B D. None of the above
C. A and B
________________ systems base the measurement on comparing employees with a prespecified performance standard. A. Comparative B. Subjective C. Absolute D. Result
C. Absolute
The combination of each of the following factors allows some individuals to perform at higher levels than others EXCEPT: A. Declarative knowledge B. Procedural knowledge C. Biases D. Motivation
C. Biases
All of the following are disadvantages of comparative systems EXCEPT: A. Competitive behaviors may become a problem B. Relative distance between employees' performance is unclear C. Higher risk of leniency, severity, and central tendency biases D. Risk of legal issues
C. Higher risk of leniency, severity, and central tendency biases
_______________ is the strategy used to gain support for a performance management system that recommends creating a positive attitude toward the new performance management system before any negative attitudes and rumors are created. A. Provide facts and conclusions B. Put it in writing C. Strike first D. Say it and then say it again
C. Strike first
_______________ is the strategy used to gain support for a performance management system that recommends creating a positive attitude toward the new performance management system before any negative attitudes and rumors are created. A. Provide facts and conclusions B. Put it in writing C. Strike first D. Say it and then say it again
C. Strike first
Which of the following is a motivation to give deflated ratings? A. To promote undesired employees out of the unit B. To make the manager look good to his/her supervisor C. To teach a rebellious employee a lesson D. To increase supervisor's likelihood of promotion
C. To teach a rebellious employee a lesson
In order to minimize intentional errors, we must focus on the rater's __________. A. personality B. area of expertise C. motivation D. position in the company
C. motivation
Behavioral Observation training focuses on how raters _____________, __________, __________, and use information about performance. A. rate; explain; test B. reward; coach; observe C. observe; store; recall D. none of the above
C. observe; store; recall
This is considered "at the heart" of person-focused pay programs. A. innovation B. management C. training D. data
C. training
A manager in a company gives 5 percent merit pay increases each year to employees who perform well. Some of those employees started with substantially lower base pay raises. Over time, which of the following could be a result? A. negative halo effect B. desire to be promoted C. undesirable social structures D. contrast errors
C. undesirable social structures
the rater assesses a disproportionately large number of ratees as performing in the central part of a distribution of rated performance in contrast to their true level of performance
Central-tendency error
1. selective exposure- we expose our minds only to ideas with which we already agree 2. selective perception- we perceive info as meaning what we want it to mean 3. selective retention- we remember only pieces of info with which we already agree
Cognitive Biases that affect communication plan's effectiveness:
Rates and ranks performance Pay raises based on ranking
Comparison Systems
Evaluate a given employee's performance against the performance of other employees
Comparison systems
The basic component that requires forms to contain definitions of the various knowledge, skills, and abilities to be assessed together with their observable behaviors is referred to as:
Competencies and indicators
This law made it illegal to pay women less for performing equal work as men. A) Equal Pay Act of 1963 B) Civil Rights Act of 1964 C) Davis — Bacon Act of 1931 D) Fair Labor Standards Act of 1938
D) Fair Labor Standards Act of 1938
Which of the following would be an example of a non-monetary reward? A) medical insurance B) vacations C) day care assistance D) all of the above
D) all of the above
Which of the following is true regarding group incentive plans as opposed to individual Incentive plans? A) there are more groups in a company than individuals to measure B) individual group members usually work more efficiently alone than in cohesive groups C) it is easier to develop performance measures for individual incentive plans than group incentive plans D) it is easier to develop performance measures for group incentive plans than individual incentive plans
D) it is easier to develop performance measures for group incentive plans than individual incentive plans
Jason works at a call center for an insurance company and he has been answering calls regarding auto insurance. Recently, he started to attend a training program about home insurance. Upon successful completion of this training program, Jason will be able to handle home insurance questions and queries as well. If this insurance company has a compensation policy that rewards Jason's completion of this training, then what type of pay system does it employ? A) incentive pay B) merit pay C) seniority pay D) pay-for-knowledge
D) pay-for-knowledge
By and large, what is the cause of unintentional rating errors? A. Discipline B. Communication C. Motivation D. Cognitive bias
D. Cognitive bias
Which of the following performance measures corresponds to individual-, group, and companywide incentive plans, respectively? A. customer satisfaction, quantity of work, and quality of work B. quantity of work, market share, and customer satisfaction C. quality of work output, customer satisfaction, and revenue D. customer satisfaction, market share, and quality of work
D. customer satisfaction, market share, and quality of work
Jack is a sales professional who is employed in an auto dealership. At the beginning of every year, he and his supervisor determine objectives for Jack together, which are tied to corporate objectives. One of the objectives is related to customer satisfaction. Jack always remains in contact with customers to whom he sold cars even after six months following the sale. His performance appraisal partially depends on the results of a customer satisfaction survey. What kind of performance appraisal system does this auto dealer use? A. trait B. comparison C. behavioral D. goal-orientated
D. goal-orientated
John is a design engineer in an auto manufacturer's research and development department. In addition to his normal duties, he is assigned to a team of other engineers developing a highly-automated assembly line for the new model of a passenger car. To which type of team is John assigned? A. incentive B. project C. work (process) D. parallel
D. parallel
Which of the following are among the major components of an appraisal form?
Developmental achievements
Can increase hourly labor costs Can increase training costs How to mesh with existing pay systems Wait for return on investment
Disadvantages of Person-Focused Pay Programs