HRIR 3021 Final Exam Definitions

merit pay

a system of linking pay increases to ratings on performance appraisals

What is job withdrawal? What factors cause it?

Job withdrawal: a set of behaviors with which employees try to avoid the work situation physically, mentally or emotionally; may take the form of behavior change, physical job withdrawal, psychological job withdrawal Factors that cause it... personal dispositions, nature of the job, supervisors, and coworkers, pay and the benefits, tasks and roles

open-door policy

an organization's policy of making managers available to hear complaints

Know how communication impacts compensation fairness and perceptions.

benchmarking the industry, if your company pays less you may think that it is unfair if you find out you are paid less than other employees you may feel like you are being paid unfairly if you find out you are being paid more than other employees you may feel guilty

Fair Labor Standards Act (FLSA)

federal law that establishes a minimum wage and requirements for overtime pay and child labor

consolidated omnibus budget reconcilitation act (COBRA)

federal law that requires employers to permit employees or their dependents to extends their health insurance coverage at group rates for up to 36 months following a qualifying event, such as a layoff, reduction in hours, or the employee's death

incentive pay

forms of pay linked to an employee's performance as an individual, group member or organization member

gainsharing

group incentive program that measures improvements in productivity and effectiveness objectives and distributes a portion of each gain to employees

vesting rights

guarantee that when employees become participants in a pension plan and work for a specified number of years, they will receive a pension at retirement age, regardless of whether they remained with the employers

patient protection and affordable care act

health care reform law passed in 2010 that includes incentives and penalties for employers providing health insurance as a benefit

consumer driven health plans (CDHP)

healthcare plans that provide incentives for employees to make decisions that help lower healthcare costs

straight piecework plan

incentive pay in which the employer pays the same rate per piece, no matter how much the worker produces

differential piece rates

incentive pay in which the piece rate is higher when a greater amount is produced

exempt employees

managers, outside salespeople and any other employees not covered by the FLSA requirement for overtime pay

graphic rating scale

method of performance measurement that lists traits and provides a rating scale for each trait; the employer uses the scale to indicate the extent to which an employee displays each trait

simple ranking

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

mixed standard scales

method of performance measurement that uses several statements describing each trait to produce a final score for that trait

alternative dispute resolution (ADR)

methods of solving a problem by bringing in an impartial outside but not using the court system

health maintenance organization (HMO)

a health care plan that requires patients to receive their medical care from the HMO's health care professionals, who are often paid a flat salary and provide all services on a prepaid basis

Why are wellness plans important from a benefits perspective?

Employee wellness program (EWP): a set of communications, activities, and facilities designed to change health-related behavior in ways that reduce health risks it cost saves for the company in the long run and gain it can be uses as a competitive advantage

culture shock

disillusionment and discomfort that occur during the process of adjusting to a new culture

long term disability insurance

insurance that pays a percentage of disabled employee's salary after an initial period and potentially for the rest of the employee's life

calibration meeting

meeting at which managers discuss employee performance ratings and provide evidence supporting their ratings with the goal of eliminating the influence of rating error

behaviorally anchored rating scale (BARS)

method of performance management that rates behavior in terms of a scale showing specific statements of behavior that describe different levels of performance

critical incident method

method of performance measurement based on managers records of specific examples of the employee acting in ways that are either effective or ineffective

force-distribution method

method of performance measurement that assigns a certain percentage of employees to each category in a set of categories

paired-comparison method

method of performance measurement that compares each employee with each other employee to establish rankings

Selection issues with employees overseas assignments and preparation.

organizations often hire host country nationals to fill their foreign positions because the nationals can more easily understand the values and customs of the local workforce (but sometimes the labor market does not offer enough qualified people training for and transporting families to foreign assignments is more expensive than hiring people in a foreign country; employees might also be reluctant to take a foreign assignment because of the difficulty moving overseas selection of employees for foreign assignments should reflect the criteria that have been associated with success in working overseas... -competency in the employee's area of expertise -ability to communicate verbally and nonverbally in the foreign country -flexibility, tolerance of ambiguity and sensitivity to cultural differences -motivation to succeed and enjoyment of challenges -willingness to learn about the foreign country's culture, language, and customs -support from family members personality issues; those who successfully completed their overseas assignment are mainly extroverted, agreeable and conscientious

Review HRM in a Global Environment Definitions

parent country: the country in which an organization's headquarters is located host country: a country (other than the parent country) in which an organization operates a facility third country: a country that is neither the parent country nor the host country of an employer expatriates: employees assigned to work in another country international organization: an organization that sets up one or a few facilities in one or a few foreign countries multinational company: an organization that builds facilities in a number of different countries in an effort to minimize production and distribution global organization: an organization that chooses to locate a facility based on the ability to effectively, efficiently and flexibility produce a product or service, using cultural differences as an advantage Transnational HRM system: type of HRM system that makes decisions from a global perspective, includes managers from many companies, and is based on ideas contributed by people representing a variety of cultures culture shock: disillusionment and discomfort that occur during the process of adjusting to a new culture cross-cultural preparation: training to prepare employees and their family members for an assignment in a foreign country repatriation: the process of preparing expatriates to return home from a foreign assignments

hourly wage

rate of pay per hour worked

peicework rate

rate of pay per unit produced

piecework rate

rate of pay per unit produced

salary

rate of pay per week, month or year worked

Benefits issues (i.e. host country vs. parent country)

takes into consideration the laws of each country involved as well as employees expectations and values in those countries; some countries require paid maternity leave and some have nationalized healthcare which would affect the value of private health insurance; countries benefit plans likelihood are different; paid vacation tends to be more generous in some countries creates the dilemma of it companies should give benefits and differences that reflect what workers are used to in their own countries

pay level

the average amount (including wages, salaries, and bonuses) the organization pays for a particular job

parent country

the country in which an organization's headquarters is located

organizational commitment

the degree to which an employee identifies with the organization and is willing to put forth effort on its behalf

job involvement

the degree to which people identify themselves with their jobs

social security

the federal old age, survivors, disability and health insurance (OASDHI) program, which combines old age (retirement) insurance, survivor's insurance, disability insurance, hospital insurance (Medicare Part A), and supplementary medical insurance (Medicare Part B) for the elderly

minimum wage

the lowest amount that employers may pay under federal or state law, stated as an amount of pay per hour

experience rating

the number of employees a company has laid off in the past and the cost of providing them with unemployment benefits

pay structure

the pay policy resulting from job structure and pay level decisions

repatriation

the process of preparing expatriates to return home from a foreign assignment

performance management

the process through which managers ensure that employees' activities and outputs contribute to the organization's goals, this process requires knowing what activities and outputs are desired, observing whether they occur and providing feedback to help employees meet expectations

job structure

the relative pay for different jobs within the organization

role

the set of behaviors that people expect of a person in a particular job

Why are exit interviews used?

Exit interviews: a meeting of a departing employee with the employee's supervisor and/or human resource specialist to discuss the employees reason for leaving Used to... gather information to retain employees, negotiate a return when the situation changes, offer a deeper look into your workplace culture, reduce turnover, gain feedback to improve the organization

What are the basic components of monitoring job satisfaction?

Hiring employees predisposed to being satisfied, referring depressed employees for help designing complex, meaningful jobs, establish clear, appropriate roles reinforcing shared values, encouraging social support, helping employees pursue goals setting satisfactory pay levels, communicating pay structure and policies

Why do managers inflate and deflate ratings? What types of biases/rating errors exist and how can a company deal with them?

Rater inflation motivation: maximize merit raise/reward, encourage employees, avoid creating written record, avoid confrontation, promote undesired employees out of unit, make managers look good Rater deflation motivation: shock, send a message, teach a lesson, build a case for termination Types of biases/rater errors: Similar to me error: people tend to give a higher evaluation to people they consider similar to themselves contrast error: comparison is made to other people, not to the performance standard distributional errors: tendency to use only one part of the rating scale -leniency: when the reviewer rates everyone near the top -strictness: when the rater favors lower rankings -central tendency: when the rater puts everyone near the middle of the scale Halo error: when the personal bias is in a favorable direction horns error: when the personal bias involves negative ratings Ways to reduce errors: training programs that offer tips in avoiding errors, bringing data analytics into the rating process, have raters justify their ratings preferably in a face to face meeting, calibration meeting: meeting at which managers discuss employee performance ratings and provide evidence supporting their rating with the goal of eliminating the influence of rating errors

Discuss the importance of benefits as a part of employee compensation.

attracting, retaining, and motivating employees; benefits are subject to government regulation, required by law (even though many kinds of benefits are not required by law, they have become so common that today's employees expect them); benefits can be used as a competitive advantage for companies; promotes employees to stay at the organization

Understand factors that affect HR in global markets: Labor Markets (Education and Skills available)

countries differ in the degree to which their labor market include people with education and skills of value to employers; educational opportunities also vary from one country to another; the education and skill levels of a country's labor force affect how and the extent to which companies want to operate there

Why use Multi-Rater feedback?

decrease potential bias, improves employee perception of performance, not just the opinion of the manager, platform for managers to discuss difficult performance issues, conveys organizations strong commitment to employee development, overall better performance, better data Manager: pros: have extensive knowledge of job requirements and enough opportunity to observe their employees, incentive to provide accurate and helpful feedback because their own success depends on their employee's performance, their feedback can improve performance and employees tend to perceive their appraisal as accurate cons: in some jobs, managers do not have enough opportunity to observe the employee performing job duties, horns/halo effect Customers: pros: often the only person who directly observes the service performance, when the job requires direct service to the customer or linking the customer to other services within the organization, when the organization is interested in gathering information to determine what products and services the customer wants cons: expensive Self pros: nobody knows an employee's behavior like themselves cons: inflation of assessments of their performance (great benefits when it involves pay), people tend to blame outside circumstances for their failures while taking large part of credit for their success, may not give credit when credit is due Subordinates pros: best chance to see how well a manager treats employees cons: power problems-subordinates are reluctant to say negative things about the person they report to, tend to emphasize employee satisfaction even at the expense of productivity Coworkers/peers pros: have the most opportunity to observe the employee in day-to-day activities, have excellent knowledge of job requirements, bring different perspective to evaluation and can provide valid assessments of performance cons: friendships/rivalries--bias ratings, when evaluations are done to support business administrative decisions, peers are uncomfortable with rating employees for decisions that may also affect themselves (intentional lowballing to make themselves look better)

challenges in managing and compensating employees overseas

differences may include which behaviors are rated, how and the extent to which performance is measured, who performs the rating and how feedback is provided pay structure: market pay structures can differ substantially across countries in terms of both pay level and relative worth of jobs; creates the dilemma of it companies should pay levels and differences that reflect what workers are used to in their own countries; affect the companies costs and ability to compete; culture and legal differences can also affect pay structure incentive pay: some countries don't offer incentives such as benefits and stock options; if they do offer, they may do it in different ways employee benefits: takes into consideration the laws of each country involved as well as employees expectations and values in those countries; some countries require paid maternity leave and some have nationalized healthcare which would affect the value of private health insurance; countries benefit plans likelihood are different; paid vacation tends to be more generous in some countries

What do organizations do to increase employees' job satisfaction and retain key employees?

they try to hire people with behaviors and goals that match well with the organization's, provide meaningful work with clear and appropriate rules, ensure fair pay and benefits and try to create an environment conducive of good relationships.

What is the average % cost of benefits per dollar paid to employees.

30%

cafeteria style plan

a benefits plan that offers employees a set of alternatives from which they can choose the types and amounts of benefits they want

Understand the growing need and strategies like cafeteria plans, that address the needs.

cafeteria style plan: a benefits plan that offers employees a set of alternatives which they can choose the types and amounts of benefits they want selection process can make employees more aware of the value of the benefits; enables each employee to match his or her needs to the companies benefits, increasing the actual value to the employees; company avoids the cost of providing benefits to employees that they don't value; have high administrative cost, especially in the design and start up stages; may increase rather than decrease costs if an employee frequently needs a benefit; costs can be difficult to estimate

employee benefits

compensation in forms other than cash

mediation

conflict resolution procedure in which a mediator hears the views of both sides and facilitated the negotiation process but has no formal authority to dictate a resolution

arbitration

conflict resolution procedure in which an arbitrator or arbitration board determines a binding settlement

defined benefit plan

pension plan that guarantees a specified level of retirement income

cross-cultural preparation

training to prepare employees and their family members for an assignment in a foreign country

Know the components of the strategic performance management model presented in the class slides.

(Bottom to Top) Positive Culture Strategic Performance Management Foundation Performance Planning Ongoing Performance Activities

Learning Objective 13.1: Discuss the connection between incentive pay and employee performance.

-Incentive pay is pay tied to individual performance, profits or other measures of success -organizations select forms of incentive pay to energize, direct or control employees' behavior -it is influential because the amount paid is linked to predefined behaviors or outcomes -to be effective, incentive pay should encourage the kinds of behavior that are most needed and employees must believe they have the ability to meet the performance standards. employees must value the rewards, have the resources they need to meet the standards and believe the pay plan is fair

Learning Objective 13.5: Describe how organizations combine incentive plans in a "balanced scorecard"

-a balanced scorecard is a combination of performance measures directed toward the company's long and short term goals and used as the basis for awarding incentive pay -typically it includes financial goals to satisfy stockholders, quality and price related goals for customer satisfaction, efficiency goals for improved operations and goals related to acquiring skills and knowledge in the future -the mix of pay programs is intended to balance the disadvantages of one type of incentive with the advantages of another type -the balanced scorecard also helps employees to understand and care about the organizations goals

Learning Objectives 12.1: Identify the kinds of decisions involved in establishing a pay structure

-a job structure establishes relative pay for different jobs within the organization -organizations establish relative pay for different functions and different levels of responsibility for each function -they also must establish pay levels, or the average paid for different jobs -these decisions are based on the organization's goals, market data, legal requirements, and principles of fairness -together job structure and pay level establish a pay structure policy.

Learning Objective 14.7: Explain how to choose the contents of an employee benefits package

-a logical place to begin is to establish organizational objectives and select benefits that support those objectives -organizations should also consider employees' expectations and values. at minimum, organizations offer the benefits employees have come to view as basic; some organizations go as far as to match extra benefits to individual employees' needs and interests -cafeteria-style plans are an intermediate step that gives employees control over the benefits they receive -employers must also weigh the costs of benefits, which are significant

Learning Objective 12.4: Describe how employees evaluate the fairness of a pay structure.

-according to equity theory, employees think of they pay relative to their inputs, such as training, experience and effort. to decide whether their pay is equitable, they compare their outcome (pay)/input ration with other people's outcome/input ratios -employees make these comparisons with people doing the same job in other organizations and with people doing the same or different jobs in the same organiztion -if employees conclude that their outcome/input ratio is less than the comparison person's, they conclude that their pay is unfair and may engaged in behaviors to create a situation they think it fair

Learning Objective 16.3: Discuss how differences among countries affect HR planning at organizations with international operations.

-as organizations consider decisions about their level of international activity, HR professionals should provide information about the relevant human resource issues -when organizations decide to operate internationally or globally, HR planning involves decisions about where and how many employees are needed for each international facility -some countries limit employers' ability to lay off workers, so organizations would less likely to staff for peak periods. other countries allow employers more flexibility in meeting human resource needs. HRM professionals need to be conversant with such differences.

Learning Objective 13.7: Discuss issues related to performance based pay executives

-because executives have such a strong influence over the organization's performance, incentive pay for them receives special attentions -executive pay usually combines long and short term incentives. by motivating executive, these incentives can significantly affect the organization's performance -the size of incentives should be motivating but also meet standards for equity -performance measures should encourage behavior that is in the organization's best interests, including ethical behavior. executives need ethical standards that keep them from insider trading or deceptive practices designed to manipulate the organization's stock price.

Learning Objective 11.5: Explain how job dissatisfaction affects employee behavior.

-circumstances involving the nature of a job, supervisors and co-workers, pay levels, or the employees own disposition may produce job dissatisfaction -when employees become dissatisfied, they may engage in job withdrawal: behavior change, physical job withdrawal or psychological job withdrawal -behavior change means employees try to bring about changes in policy and personnel through inside action or through whistle-blowing or lawsuits -physical job withdrawal may range from tardiness and absenteeism to job transfer or leaving the organization altogether -psychological withdrawal involves displaying low levels of job involvement and organizational commitment. it especially likely when employees cannot find another job.

Learning Objective 13.3: Identify ways to recognize group performance.

-common group incentives include gainsharing, bonuses and team awards -gainsharing programs measure increases in productivity and distribute a portion of each gain to employees -group bonuses reward the members of a group for attaining a specific goal, usually measured in terms of physical output -team awards are more likely to use a broad range of performance measures, such as cost savings, successful completion of a project or meeting a deadline

Learning Objective 14.9: Discuss the imporantance of effectively communicating the nature and value of benefits to employees.

-communicating information about benefits is important so that employees will appreciate the value of their benefits -communicating their value is the main way benefits attract, motivate and retain employees -employers have many options for communicating information about benefits, such as brochures, meetings, intranets, text messages and e-mail. using a combination of such methods increases employees' understanding.

Learning Objective 13.6: Summarize processes that can contribute to the success of incentive programs

-communication and participation in decisions can contribute to employee's feeling that the organization's incentive pay plans are fair -employee participation in pay-related decisions can be part of a general move toward employee empowerment. employees may put their own interests first in developing the plan, but they also have firsthand insight into the kinds of behavior that can contribute to organizational goals. -communicating with employees is important because it demonstrates the pay plan is fair and helps the understnad what is expected of them. communication is especially important when the organization is changing its pay plan.

Learning Objective 14.1: Discuss the importance of benefits as a part of employee compensation.

-compensation includes wages and salaries, incentive pay and benefits -like other forms of compensation, benefits help employers attract, retain and motivate employees -the variety of possible benefits helps employers tailor compensation packages to attract the right kinds of employees -employees expect at least a minimum level of benefits and providing more than the minimum helps an organization compete in the labor market. -benefits are also a significant expense -employers provide benefits because employees value them and many benefits are required by law

Learning Objective 16.2: Identify the factors that most strongly influence HRM in international markets.

-culture is by far the most important influence. each market's culture is its set of shared assumptions about how the world works and what ideals are worth striving for -a culture has the dimensions of individualism/collectivism, high or low power distance, high or low uncertainty avoidance, masculinity/femininity, and long term or short term orientation -education is a second influence. countries differ in the degree to which their labor markets include people with education and skills of value to employers -another influence is the foreign country's political-legal system--its government, laws and regulations -a final influence is a country's economic system. the system may be capitalist or socialist. the government's involvement in the country's economy such as through taxes and price controls is a strong factor in determining HRM practices

Learning Objective 11.4: Summarize ways in which organizations can discipline employees fairly.

-discipline should follow the principles of the hot stove rule, meaning discipline should give warning and have consequences that are consistent, objective and immediate -a system that can meet these requirements is called progressive discipline, in which rules are established and communicated, and increasingly severe consequences follow each violation of the rules. usually, consequences range from a spoken warning through written warnings, suspension and termination. these actions should be documented in writing. -organizations also may resolve problems through alternative dispute resolution including an open-door policy, peer review mediation and arbitration -when performance problems seems to result from substance abuse or mental illness, the manager may refer the employee to an employee substance program -when a manager terminates an employee or encourages an employee to leave, outplacement counseling may smooth the process

Learning Objective 11.3: Identify legal requirements for employee discipline.

-employee discipline should not result in wrongful discharge, suc as termination that violates an implied contract or public policy. -discipline should be administered evenhandedly, without discrimination. -discipline should respect individual employee's privacy. searches and surveillance should be for a legitimate business purpose, and employees should know about and consent to them. reasons behind disciplinary actions should be shared only with those who need to know. -when termination is a part of a plant closing, employees should receive the legally required notice, if applicable.

Learning Objective 11.2: Discuss how employees determine whether the orgaization treats them fairly.

-employees draw conclusions based on the outcomes of decisions regarding them, the procedures applied, and the way managers treat employees when carrying out those procedures -outcome fairness is a judgement that the consequences are just. the consequences should be consistent, expected and in proportion to the significance of the behavior. -procedural justice is a judgement that fair methods were used to determine the consequences. the procedures should be consistent, unbiard, based on accurate information and correctable. they should take into account the viewpoints of everyone involved, and they should be consistent with prevailing ethical standards. -interactional justice is a judgement that the organization carried out its actions in a way that took the employee's feelings into account, for example by listening to the employee and treating the employee with dignity.

Learning Objective 14.6: Describe how organizations use other benefits to match employee's wants and needs

-employers have responded to work-family role conflicts by offering family friendly benefits, including paid family leave, child care services or referrals, college savings plans and elder care information and support -other employee benefits have traditionally included subsidized cafeterias, on-site health clinics, and reimbursement of moving expenses -stores and manufacturers may offer discounts on their products -tuition reimbursement encourages employees to continue learning -recreational services and employee outings provide social interactions as well as stress relief

Learning Objective 14.2: Summarize the types of employee benefits required by law.

-employers must contribute to the Old Age, Survivors, Disability and Health Insurance program known as Social Security through a payroll tax shared by employers and employees -employers must pay federal and state taxes for unemployment insurance, based on each employer's experience rating or percentage of employees a company has laid off in the past -state laws require that employers purchase workers' compensation insurance -under the Family and Medical Leave Act, employees who need to care for a baby following birth or adoption or for an ill family member must be granted unpaid leave of up to 12 weeks. -Under the Patient Protection and Affordable Care Act, organizations with 50 or more employees must choose between providing employees with health insurance or paying an Employer Shared Responsibility Payment

Learning Objective 14.8: Summarize the regulations affecting how employers design and administer benefits programs

-employers must provide the benefits that are required by law, and they may not improperly classify employees as "independent contractors" to avoid paying benefits -tax treatment of qualified plans is favorable, so organizations need to learn the requirements for setting up benefits as qualified plans, for example, ensuring that pension plans do not discriminate in favor of the organization's highly compensated employees -employers may not use employees' gender as the basis for discriminating against anyone, as in pension benefits on the basis that women as a group may live longer. Nor may employers discriminate against workers over the age of 40 in providing pay or benefits, such as pressuring older workers to retire by limiting retirement benefits -when employers offer early retirement, they must meet the requirements of the Older Workers Benefit Protection Act of 1990. -Under the Americans with Disabilities Act, employers must give disabled employees equal access to health insurance -to meet the requirements of the Financial Accounting Standards Board, employers must set aside the funds they expect to need for retirement benefits ahead of time, rather than funding the benefits on a pay-as-you-go basis

Learning Objective 10.8: Summarize ways to produce improvement in unsatisfactory performance.

-for an employee who is motivated but lacks ability, the manager should provide coaching and training, give detailed feedback about performance and consider restructuring the job -for an employee who has the ability but lacks motivation, the manager should investigate whether outside problems are a distraction and if so refer the employee for help. If the problem has to do with the employee's not feeling appreciated or rewarded, the manager should try to deliver more praise and evaluate whether additional pay and other rewards are appropriate. -for an employee lacking both ability and motivation, the manager should consider whether the employee is good fit for the position. Specific feedback or withholding rewards may spur improvement or the employee may have to be demoted or terminated. -solid employees who are high in ability and motivation will continue so and may be able to contribute even more if the manager provide appropriate direct feedback, rewards and opportunities for development.

Learning Objective 13.4: Explain how organizations link pay to their overall performance

-incentives for meeting organizational objectives include profit sharing and stock ownership -profit sharing plans pays workers a percentage of the organization's profts; these payments do not become part of the employee's base salary -stock ownership incentives may take the form of stock options or employee stock ownership plans -a stock option is the right to buy a certain number of shares at a specified price. the employee benefits by exercising the option at a price lower than the market price, so the employee benefits when the company's stock price rises -an employee stock ownership plan (ESOP) is an arrangement in which the organization distributes shares of its stock to employees by placing the stock in a trust managed on the employees' behalf. when employees leave the organization, they may sell their shares of stock

Learning Objective 11.1: Distinguish between involuntary and voluntary turnover, and describe their effects on an organization.

-involuntary turnover occurs when the organization requires employees to leave, often when they would prefer to stay -voluntary turnover occurs when employees initiate the turnover, often when the organization would prefer to keep them -both are costly because of the need to recruit, hire, and train replacements. involuntary turnover can also result in lawsuits and even violence.

Learning Objective 10.9: Discuss legal and ethical issues that affect performance management.

-lawsuits related performance management usually involve charges of discrimination or unjust dismissal. managers must make sure that performance management systems and decisions treat employees equally, without regard to their race, sex, or other protected status -organizations can do this by establishing and using valid performance measures and by training raters to evaluate performance accurately. a system is more likely to be legally defensible if it is based on behaviors and results, rather than on traits and if multiple raters evaluate each person's performance -the system should include a process for coaching or training employees to help them improve rather than simply dismissing poor performers. -an ethical issue of performance management is the use of electronic monitoring. this type of performance measurement provides detailed, accurate information but employees may find it demoralizing, degrading and stressful -employees are more likely to accept electronic monitoring if the organization explains its purpose, links it to help in improving performance and keeps the performance data private.

Learning Objective 16.4: Describe how companies select and train human resources in a global labor market.

-many organizations with foreign operations fill most positions with host-country nationals. these employees can more easily understand the values and customs of the local workforce, and hiring locally tends to be less expensive than moving employees to new locations -organizations also fill foreign positions with parent-country and third-country nationals who have human relations skills associated with success in foreign assignments -when sending employees on foreign assignments, organizations prepare the employees and often their families through cross-cultural training -before the assignment, the training provides instruction in the foreign country's language and culture -during the assignment, there is communication with the home country and mentoring -for the return home, the employer provides further training and development to aid retention

Learning Objective 14.4: Identify kinds of insurance benefits offered by employers

-medical insurance is one of the most valued employee benefits. such policies typically cover hospital expenses, surgical expenses and visits to physicians. some employers offer additional coverage such as dental care, vision care, birthing centers and prescription drug programs -under the Consolidated Omnibus Budget Reconciliation Act of 1985, employees must be permitted to extend their health insurance coverage at group rates for up to 36 months after they leave the organization -to manage the costs of health insurance, most organizations offer coverage through a health maintenance organization or preferred provider organization or they may offer flexible spending accounts, perhaps in conjunction with a consumer driven health plan. some encourage healthy behaviors through an employee wellness program -life insurance usually takes the form of group term life insurance with the usual benefit being two times the employee's yearly pay -employers may also offer short term and/or long term disability insurance, with disability payments being a percentage of the employee's salary -some employers provide long term care insurance to pay the costs associated with long term care such as nursing home care.

Learning Objective 16.1: Summarize how the growth in international business activity affects human resource management.

-more and more companies are entering international markets by exporting and operating foreign facilities. -organizations therefore need employees who understand customers and suppliers in other countries. they need to understand local laws and customs and be able to adapt their plans to local situations. -organizations may hire a combination of parent-country, host-country, and third country nationals -they may operate on the scale of an exporter or an international, global or multinational organization. -a global organization needs a transnational HRM system, which makes decisions from a global perspective, includes managers from many countries and is based on ideas contributed by people representing a variety of cultures

Learning Objective 11.6: Describe how organizations contribute to employee's job satisfaction and retain key employees.

-organizations can try to identify and select employees who have personal dispositions associated with job satisfaction. -they can make jobs more complex and meaningful, for example, through job enrichment and job rotation -they can use methods such as role analysis technique to make roles clear and appropriate -they can reinforce shared values and encourage social support among employees -they can try to establish satisfactory pay levels and communicate with employees about pay structure and pay raises -monitoring job satisfaction helps organizations identify which of these actions are likely to be most beneficial.

Learning Objective 10.2: Discuss the purpose of performance management systems

-organizations establish performance management systems to meet three broad purposes -the strategic purpose is aimed at meeting business objectives. the system does this by helping to link employees; behavior with the organization's goals -the administrative purpose of performance management is to provide information for day-to-day decisions about salary, benefits, recognition, and retention or termination -the developmental purpose of performance management in using the system as a basis for developing employees' knowledge and skill

Learning Objective 13.2: Describe how organizations recognize individual performance

-organizations may recognize individual performance through such incentives as piecework rates, standard hour plans, merit pay, sales commissions and bonuses for meeting individual performance objectives. -piecework rates pay employees according to the amount they produce -standard hour plans pay workers extra for work done in less than a preset "standard time" -merit pay links increases in wages or salaries to ratings on performance appraisals -bonuses are similar to merit pay, because they are paid for meeting individual goals but they are not rolled into base pay and they usually are based on achieving a specific output rather than subjective performance ratings -a sales commission is incentive pay calculated as a percentage of sales closed by a salesperson

Learning Objective 12.5 : Explain how organizations design pay structures related to jobs.

-organizations typically begin with a job evaluation to measure the relative worth of their jobs. a job evaluation committee identifies each job's compensable factors and rates each factor -the committee may use a point manual to assign an appropriate number of points to each job -the committee can research market pay levels for key jobs and then identify appropriate rates of pay for other jobs based on their number of points relative to the key jobs. the organization can do this with a pay policy line, which plot a salary for each job -the organization can combine jobs into several groups called pay grades -for each pay grade or job, the organization typically establishes a pay range, using the market rate or pay policy line as the midpoint -differences in working conditions or labor markets sometimes call for the use of pay differentials to adjust pay levels.

Learning Objective 16.5: Discuss challenges related to managing performance and compensating employees from other countries.

-pay structures can differ substantially among countries in terms of pay level and the relative worth of jobs -organizations must decide whether to set pay levels and differences in terms of what workers are used to in their own countries or in terms of what employees' colleagues earn at headquarters. typically, companies have resolved this dilemma by linking pay and benefits more closely to those of the employee's country, but this practice may be weakening so that it depends more on the nature and length of the foreign assignment. -these decisions affect the organization's costs and ability to compete, so organizations consider local labor costs in their location decisions -along with the basic pay structure, organizations make decisions regarding incentive pay, such as bonuses and stock options -laws may dictate differences in benefits packages, and the value of benefits will differ if a country requires them or makes them a government service.

Learning Objective 10.6: Define types of rating errors, and explain how to minimize them.

-people observe behavior often without a practical way of knowing all the relevant circumstances and outcomes, so they necessarily interpret what they see -a common tendency is to give higher evaluations to people we consider similar to ourselves. -other errors involve using only part of the rating scale: giving all employees ratings at the high end of the scale is called leniency error. rating everyone at the low end of the scale is called strictness error. rating all employees at or near the middle is called central tendency. -the halo error refers to rating employees positively in all areas because of strong performance observed in one area. -the horns error is a rating employees negatively in all areas because of weak performance observed in one area. -ways to reduce rater error are training raters to be aware of their tendencies to make rating errors and training them to be sensitive to the complex nature of employee performance so they will consider many aspects of performance in greater depth. -politics also may influence ratings. organizations can minimize appraisal politics by establishing a fair appraisal system and bringing managers together to discuss ratings in calibration meetings.

Learning Objective 10.7: Explain how to provide performance feedback effectively.

-performance feedback should be a regular, scheduled management activity so that employees can correct problems as soon as they occur. -Managers should prepare by establishing a neutral location, emphasizing that feedback session will be a chance for discussion and asking the employee to prepare a self-assessment -during the feedback session, managers should strive for a problem-solving approach and encourage employees to voice their opinions and discuss performance goals. -the manager should look for opportunities to praise and should limit criticism -the discussion should focus on behavior and results rather than on personalities.

Learning Objective 10.5: Describe major sources of perfomance information in terms of their advantages and disadvantages.

-performance information may come from an employee's self appraisal and from appraisals by the employee's supervisor, employees, peers and customers. -using only one source makes the appraisal more subjective. Organizations may combine many sources into a 360-degree performance appraisal. -Gathering information from each employee's manager may produce accurate information, unless the supervisor has little opportunity to observe the employee. -Peers are excellent source of information about performance in a job where the supervisor does not often observe the employee. Disadvantages are that friendships (or rivalries) may bias ratings and peers may be uncomfortable with the role of rating a friend. -subordinates often have the best chance to see how a manager treats employees. Employees may be reluctant to contribute honest opinions about a supervisor unless they can provide information anonymously. -self-appraisals may be biased, but they do come from the person with the most knowledge of the employee's behavior on the job and they provide a basis for discussion in feedback sessions, opening up fruitful comparisons and areas of disagreement between the self-appraisal and other appraisals. -customers may be an excellent source of performance information, although obtaining customer feedback tends to be expensive.

Learning Objective 10.1: Identify the activities involved in performance management

-performance management is the process through which managers ensure that employees' activities and outputs contribute to the organization's goals -first the organization specifies which aspects of performance are relevant to the organization -next the organization measures the relevant aspects of performance through performance appraisal -finally, in person feedback sessions, managers provide employees with information about their performance so they can adjust their behavior to meet the organization's goals. feedback includes efforts to identify and solve problems

Learning Objective 10.4: Compare the major methods for measuring performance.

-performance measurement may use ranking systems such as simple ranking, forced distribution or paired comparisons to compare one individual's performance with that of other employees -these methods may be time consuming and they will be seen as unfair if actual performance is not distributed in the same way as the ranking system requires -however ranking counteracts some forms of rater bias and helps distinguish employees for administrative decisions -other approaches involve rating employees' attributes, behaviors or outcomes -rating attributes is relatively simple but not always valid, unless attributes are specifically defined -rating behaviors requires a great deal of information, byt these methods can be very effective. they can link behaviors to goals, and ratings by trained raters may be highly reliable. rating results, such as productivity or achievement of objectives, tends to be less subjective than other kinds of rating, making this approach high acceptable. -validity may be a problem because of factors outside the employee's control. this method also tends not to provide much basis for determining how to improve. -focusing on quality can provide practical benefits, but is not as useful for administrative and developmental decisions.

Learning Objective 10.3: Define 5 criteria for measuring the effectiveness of a performance management system.

-performance measures should be strategic--fitting with the organization's strategy by supporting its goals and culture -performance measures should be valid, so that they measure all of the relevant aspects of performance and do not measure irrelevant aspects of performance -these measures should also provide interrater and test-retest reliability, so that appraisals are consistent among raters and overtime -performance measurement systems should be acceptable to the people who use them or receive feedback from them -a performance measure should be specific, telling employees what is expected of them and how they can meet those expectations

Learning Objective 14.5: Define the types of retirement plans offered by employers.

-retirement plans may be contributory, meaning funded by contributions from employer and employee or noncontributory meaning funded only by the employer -these plans may be defined-benfit plans or defined-contribution plans -defined-benefit plans guarantee a specified level of retirement income, usually based on the employee's years or service, age and earnings level. benefits under these plans are protected by the Pension Benefit Guarantee Corporation -in defined contribution plan, such as a 401(K) plan, the employer sets up an individual account for each employee and guarantees the size of the investment into that account, rather than the amount to be paid out on retirement. because employees have control over investment decisions the organization may also offer financial planning services as employee benefit. -a cash balance plan combines some advantages of defined benefit plans and defined contribution plans. the employer sets up individual account and contributes a percentage of each employee's salary. the account earns interest at a predetermined rate, so the contributions and benefits are easier to predict.

Learning Objective 12.8: Discuss issues related to paying employees serving in the military and paying executives.

-the Uniformed Services Employment and Reemployment Rights Act requires employers to make jobs available to any of their employees who leave to fulfill military duties for up to 5 years -while these employees are performing their military service, many are earning far less. to demonstrate their commitment to these employees and to earn the public's goodwill, many companies pay the difference between their military and civilian earnings, even though this policy is costly. -executive pay has drawn public scrutiny because top executive pay is much higher than average workers pay -the great difference is an issue in terms of equity theory. Chief executive officers have an extremely large impact on the organization's performance, but critics complain that when performance falters, executive pay does not decline as fast as the organization's profits or stock price -top executives help set the organizations tone or culture and employees at all levels are affected by the behavior of the people at the top. therefore, employee's opinions about the equity of executive pay can have a large effect on the organization's performance

Learning Objective 12.7: Summarize how to ensure that pay is actually in line with pay structure.

-the human resource department should routinely compare actual pay with the pay structure to see that policies and practices match. -a common way to do this is to measure a compa-ratio for each job or pay grade. the compa-ration is the ratio of average pay to the midpoint of the pay range -assuming the pay structure supports the organizations goals, the compa-rations should be close to 1 -when compa-ratios are more or less than 1, HR department should work with managers to identify whether to adjust the pay structure or the organization's pay practices

Learning Objective 14.3: Describe the most common forms of paid leave

-the major categories of paid leave are vacations, holidays and sick leave -at large US companies, paid vacation is typically less than it is common in Western Europe -the typical number of paid holidays is 10 in both western Europe and the US -sick leave programs often provide full salary replacement for a limited period of time, with the amount of sick leave usually based on length of service. policies are needed to determine how the organization will handle unused sick days at the end of each year. some organizations let employees roll over some or all of the unused sick days into the next year, and others let unused days expire at the end of the year. -other forms of paid leave include personal days and floating holidays

Learning Objective 12.2: Summarize legal requirements for pay policies.

-to meet the standard of equal employment opportunity, employers must provide equal pay for equal work, regardless of an employee's age, race, sex, or other protected status. differences in pay must relate to factors such as a person's qualification or market levels of pay -under the Fair Labor Standards Act (FLSA), the employer must pay at least the minimum wage established by law. some state and local governments have established higher minimum wages. -The FLSA also requires overtime pay--at one and a half times the employee's regular pay rate, including bonuses--for hours worked beyond 40 in each week. managers, professionals, and outsides sales persons are exempt from the overtime pay requirement. -employers must meet FLSA requirements concerning child labor -federal contractors also must meet requirements to pay at least the prevailing wage in the area where their employees work

Learning Objective 12.6: Describe alternatives to job-based pay

-to obtain more flexibility, organizations may use delaying. they reduce the levels in the organization's job structure, creating bands of jobs with pay range for each -organizations may use skill-based pay. they reward employees according to their knowledge and skills by establishing skill-based pay systems. these are structures that set pay according to the employees' level of knowledge and capabilities -skill based pay encourages employees to be more flexible and adapt to changing technology. however if the organization does not also provide systems in which employees can apply new skills, it may be paying them for skills they do not actually use.

Learning Objective 12.3: Discuss how economic forces influence decisions about pay

-to remain competitive, employers must meet the demands of product and labor markets -product markets seek to buy at the lowest price, so organizations must limit their costs as much as possible. in this way, product markets place an upper limit on the pay an employer can afford to offer -Labor markets consist of workers who want to earn as much as possible. to attract and keep workers, employers must pay at least the going rate in their labor markets -organizations make decisions about whether to pay at, above or below the pay rate set by these market forces -paying above the market rate may make the organization less competitive in product markets but give it an advantage in labor markets. the organization benefits only if it can attract the best candidates and provide the systems that motivate and enable them to do their best work. -organizations that pay below the market rate need creative practices for recruiting and training workers so that they can find and keep enough qualified people.

Learning Objective 16.6: Explain how employers prepare managers for international assignments for their return home.

-when an organization has selected a manager for an overseas assignment, it must prepare the person for the experience. in cross cultural training, the soon-to-be expatriate learns about the foreign culture he or she is heading to, and studies her or his own home-country culture as well for insight. the trainee is given a detailed briefing on how to behave in business settings in the new country. -along with cross cultural training, preparation of the expatriate should include career development activities to help the individual acquire valuable career skills during the foreign assignment and at the end of the assignment to handle repatriation successfully. -communication of changes at home and validation of a job well done abroad help the expatriate through the repatriation process.

What are the steps in the recommended performance management process? How is this different from the traditional model?

1. define performance outcomes for company division and department 2. develop employee goals, behavior, and actions to achieve outcomes 3. Provide support and ongoing performance discussions and feedback (not just once or twice a year) 4. evaluate performance (compare targeted goals with actual results) 5. identify improvements needed 6. provide consequences for performance results (pay increase, bonuses, action plans, etc.) Traditional model thought of performance management as an event that happened once or twice a year rather than a PROCESS; it may have had fewer goals, been vague which in turn resulted in little feedback from supervisor

multinational company

an organization that builds facilities in a number of different countries in an effort to minimize production and distribution costs

Know the basics of a balanced scorecard.

Balanced scorecard: a combination of performance measures directed toward the company's long and short term goals and uses as the basis for awarding incentive pay Four categories of a balanced scoreboard... 1. Financial goals, to satisfy its stockholders (owners) 2. Customer goals, quantity and price related 3. Internal goals, efficiency goals to ensure better operations 4. Learning and growth goals, related to acquiring skills and knowledge for the future to fully tap into employees' potential

Understand basic overview of legal issues.

Benefits required by law Tax treatment of benefits: pensions involve vesting and nondiscrimination rules; nondiscrimination rules provide tax benefits to plans that do not discriminate in favor of the organizations highly compensated employees Anti Discrimination laws: legal treatment of men and women includes equal access to benefits; age discrimination is also relevant to benefit policies; American with Disabilities Act imposes requirements related to health insurance Accounting requirements (funding): financial statements must meet the many requirements of the Financial Accounting Standards Board (FASB); to ensure the financial statements are a true depiction of the company's financial status and the outsides can understand and compare financial statements; must set aside funds needed for benefits to be paid after retirement; these funds must appear as future cost obligations; COBRA; HIPPA

What are additional benefits/perks offered by employees?

Benefits required by law... -Social Security -Unemployment insurance -Workers' compensation insurance -family and medical leave -healthcare Additional Benefits... -life insurance -retirement plans -paid leave (vacations, holidays, sick leave, personal days, floating holidays)

Know at a basic level COBRA and HIPPA

COBRA: Consolidated Omnibus Budget Reconciliation Act; federal law that requires employers to permit employees or their dependants to extent their health insurance coverage at group rates for up to 36 months following a qualifying event, such as a layoff, reduction in hours or the employee's death HIPPA: Health Insurance Portability and Accountability Act; became a part of the social security act; primary purpose is to protect health care coverage for individuals who lose or change their jobs; protects medical confidentiality

Know the three main offerings from the buffet at the Performance Cafe discussed in class.

Comparative Methods: simple, alternating rank and forced distributions Absolute Methods: essays, behavior checklists, critical incidents, graphic rating scales, behavior anchor Results Methods: management by objectives (MBOs)

Compare and Contrast types of performance measures.

Comparative: poor fit with strategy (unless manager takes the time to make the link); validity can be high if ratings are done carefully; reliability depends on rater, but usually no measure of agreement is used; acceptability is moderate, it is easy to develop and use but resistant to normative standard; feedback specificity is very low Attribute: fit with strategy is usually low which requires manager to make the link; validity usually is low which can be fine if developed carefully; reliability is usually low which can be improved by specific definitions of attributes; acceptability is high, easy to develop and use; feedback specificality is very low Behavioral: can be quite high, minimizes contamination and deficiency; reliability is usually high; acceptability is moderate, difficult to develop, but accepted for well use; feedback specificity is very high Results: fit with strategy is very high; validity is usually high but can be both contaminated and deficient; reliability is high, main problem can be test-re-test depends on timing of measure; acceptability is high, usually developed with input from those to be evaluated; feedback specificity is high regarding results, but low regarding behaviors necessary to achieve them Quality: fit with strategy very high; validity high, but can be both contaminated and deficient; reliability is high; acceptability is high usually developed with input from those to be evaluated; feedback specificity is high regarding results but low regarding behaviors to achieve them

Know the methods for measuring performance.

Comparative: simple ranking, forced distribution, paired comparison method Attribute: graphic rating scale, mixed-standard scales, mixed standard scales Behavior: critical incident method, behaviorally anchored rating scales (BARS), behavioral observation scale (BOS), organizational behavior modifications (OBM) Results: management by objectives (MBO) Objectives Absolute

global organization

an organization that chooses to locate a facility based on the ability to effectively, efficiently and flexibly produce a product or service, using cultural differences as an advantage

Understand factors that affect HR in global markets: Culture.

Culture: a community's set of shared assumptions about how the world works and what ideals are worth striving for; often determines the other three international influences, cultural can affect a country's laws because laws are often based on culture's definitions of right and wrong; culture also influences what people value; determines Hofstede's 5 Dimensions of Culture 1. Individualism/Collectivism: describes the strength of the relation between an individual and other individuals in the society -high individualism= individual culture: people are unique, tend to think and act as individuals rather than members of a group, stand on their own feet rather than be protected by the group -high collectivism=collective cultures: people identified by the group they belong too, expected to devote themselves to the interests of the community and the community is expected to protect them when they are in trouble 2. Power distance: concerns the way the culture deals with unequal distribution of power and defines the amount of inequality that is normal -high power distance: culture defines it normal to maintain large differences in power, people address one another with titles -small power distance: people try to eliminate inequalities, in most situations use first names 3. Uncertainty avoidance: describe how cultures handle the fact that the future is unpredictable -high uncertainty avoidance: strong cultural preference for structured situations, rely heavily on religion, law and technology to give them a degree of security and clear rules about how to behave -low uncertainty avoidance: people take each day as it comes 4. Masculinity/Femininity: -masculine culture: culture that values achievement money making assertiveness and competition -feminine culture: culture that places a high value on relationships, service, care for the weak and preserving the environment 5. Long term/short term orientation: suggest whether the focus of cultural values is on future (long term) or the past and present (short term) -long term orientation: value saving and persistence, which tend to pay off in the future -short term orientation: promotes respect for past traditions and for fulfilling social obligations in the present

What is employee engagement and how does it benefit companies?

Employee Engagement: the degree to which employees are fully involved in their work and the strength of their job and company commitment Benefits... employee retention and reducing voluntary turnover, highly involved and committed employees gives their company a competitive advantage: greater productivity, better customer service, lower turnover

Why are retirement plans offered to employees? Define the types of retirement plans offered by employers.

Defined benefit plan: pension plans that guarantee a specified level of retirement income; employer sets up a pension fund to invest contributions; the employer must contribute enough for the plan to cover all the benefits to be paid out to retirees; costly for organizations Defined Contribution plan: retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into the account; money purchase plans, profit-sharing, and employee stock ownership plans, section 401K plans Cash balance plan: a retirement plan in which the employer sets up an individual account for each employee and contributes a percentage of the employee's salary; account earns interest at a predefined rate, arrangement helps employers plan their contributions and helps employees predict their retirement benefits; if employees change jobs, they can roll overbalance into an individual retirement account (IRA); not a common plan

What are Employee Assistance Programs (EAP) and why are they important?

Employee Assistance Programs (EAP): a referral service that employees can use to seek professional treatment for emotional problems or substance abuse, designed provide support for employees that are navigating life issues that may impact their ability to come to work and be productive in the workplace Important because... costs are reasonable compared to potential absenteeism, increased employee productivity, improve employee retention, fosters the importance of employee health

Know the concept and benefits of EAP's.

Employee Action Plans (EAP): a referral service that employees can use to seek professional treatment for emotional problems or substance abuse typically integrated into employer's overall health benefits plans; can be done online or in person; outplacement counseling; large variation of resources and tactics

Summarize legal requirements for pay policies.

Fair Labor Standards Act (FLSA): federal law that establishes a minimum wage and requirements for overtime pay and child labor EEO Compliance: employers may not base differences in pay on an employee's age, sex, race, or other protected status, any differences must be instead tied to such business related considerations such as job responsibilities or performance Minimum wage: the lowest amount that employers may pay under federal or state law, stated as an amount of pay per hour; also permits a lower "training wage" which employers can pay workers under the age of 20 for up to 90 days must be 85% of the minimum wage Overtime pay: employers must pay higher wages for overtime, defined as hours worked beyond 40 hours per week, overtime rate is 1.5 times the employee's usual hourly rate, including any bonuses and piece rate payments; not everyone is eligible for overtime pay: exempt employees= managers, outside salespeople and any other employees not covered by FLSA, nonexempt employees: employees covered by FLSA requirements for overtime Child Labor: children ages 14 and 15 may work after school hours in jobs defined as nonhazardous and for limited time periods; a child under 14 may not be employed in any work associated with interstate commerce (exemptions include farming, babysitting, acting and delivering newspaper); children ages 16 and 17 can't be employed in hazardous occupations Prevailing Wages: Davis Bacon Act of 1931 and Walsh Healy Public Contracts Act of 1936, govern pay policies of federal contractors; under these laws federal contractors must pay their employees at rats as least equal to the prevailing wages in the era; covers contractors that receive more than $2,000 in federal money (Davis Bacon); covers contractors receiving $10,000 or more in federal funds (Walsh Healy)

Know family friendly benefits

Family leave: grants employees time off to care for their children or other dependants childcare: the lowest level of involvement is for the organization to supply and help employees collect information about the cost and quality of available child care college savings: let parents and other members defer taxes on the earnings of their deposits into 529 accounts elder care: include referrals to the decision support experts in geriatric care, insurance, and the law, as well as flexible hours and paid time off

Be able to identify the five criteria to evaluate an effective performance evaluation system.

Fit with strategy: aim at achieving employees behavior and attitudes that support the organization's strategy, goals and culture Validity: whether the appraisal measures all the relevant aspects of performance and omits irrelevant aspects of performance Reliability: the consistency of the results that the performance measures will deliver -interrater reliability: consistency of results when more than one person measures the performance -test-retest reliability: consistency of results over time Acceptability: whether or not the measure is valid and reliable, it must meet the practical standard of being acceptable to the people who use it Specific Feedback: specifically tell employees what is expected of them and how they can meet those expectations

What are FSA's and HSA's? What are their key features and benefits?

Flexible spending account (FSA): employee controlled pretax income earnings set aside to pay for certain eligible expenses, such as healthcare expenses, need to be used during that calendar year. Health savings plans (HSA): offered by employers in conjunction with a high deductible health insurance policy, can be rolled over each year

Steps in progressive discipline

Hot stove rule: a principle of discipline that says discipline should be more like a hot stove, giving clear warning and following up with consistent, objective, immediate consequences; the burning stove gives warning not to touch, anyone who ignores the warning will be burned, the stove has no feelings to influence which people it burns and it delivers the same burn to any touch, finally the burn is immediate progressive discipline: a formal discipline process in which the consequences become more serious if the employee repeats the offense; a typical system identifies and communicates unacceptable behaviors and responds to a series of offenses with the actions shown in the previous question--spoken and then written warnings, temporary suspension and finally termination

Effects of Culture on Training Design

Impact on Training... Individualism: culture high in individualism expects participation in exercises and questioning to be determined by status in the company or culture Uncertainty avoidance: culture high in uncertainty avoidance expects formal instructional environments. there is less tolerance for impromptu style masculinity: culture low in masculinity values relationships with fellow trainees. female trainers are less likely to be resisted in low masculinity cultures. power distance: culture high in power distance expects trainers to be experts. trainers are expected to be authoritarian and controlling of the session. time orientation: culture with a long-term orientation will have trainees who are likely to accept development plans and assignments.

Understand the connection between incentive pay and employee performance.

Incentive pay: forms of pay linked to an employee's performance as an individual group member or organization member, pay specifically designed to energize, direct or maintain employees' behavior Ex. Commission--employee may try harder and get more creative knowing they can earn extra money for closing sales or meeting department goals -Offering higher pay for higher performance can make an organization attractive to high performers when trying to recruit and retain -if incentive pay is extremely rewarding, employees might only focus on the performance measures that are rewarded under the plan and ignore measures that are not rewarded Effective incentive pay plans meet the following requirements: performance measures are liked to the organization's goals; employees believe they can meet performance standards; the organization gives employees the resources they need to meet their goals; employees value the rewards given; employees believe the reward system is fair

Describe how organizations recognize both individual and group performance.

Individual Performance... -piecework rates: rate of pay per unit produced -standard hour plans: an incentive plan that pays workers extra for work done in less than a preset "standard time" -merit pay: a system of linking pay increases to ratings on performance appraisals -individual bonuses: reward individual performance, but bonuses are not rolled into base pay, the employee must re-earn them during each performance period -sales commission: incentive pay calculated as a percentage of sales, some salespeople earn a commission in addition to base salary Group Performance... -gainsharing: group incentive program that measures improvements in productivity and effectiveness objectives and distributes a portion of each gain to employees -group bonuses: reward members of a group for attaining a specific goal, usually measured in terms of physical output -team awards: they are more likely to use a broad range of performance measures, such as cost savings, successful completion of a project, or even meeting deadlines.

What are the effects of turnover on an organization?

Involuntary turnover... recruiting, selecting, and training replacements is expensive, lost productivity, lawsuits, workplace violence Voluntary turnover... recruiting, selecting and training replacements is expensive, lost productivity, loss of talented employees

Distinguish between different turnover classifications and examples of each.

Involuntary turnover: turnover initiated by an employer (often with employees who would prefer to stay) Voluntary turnover: employee initiates the turnover when the organization would prefer to keep them, typically either the worst or best performer

Describe how employees evaluate fairness of pay structure. Be able to explain what equity theory is and ways people react when there is under or over-rewarded equity.

Judging Fairness (Equity) *employees evaluate their pay relative to the pay of other employees against 3 things... 1. what they think employees in other organizations earn for doing the same job (external) 2. what they think employers in the same organization earn for doing the same job as theirs (internal) 3. what they think other employees holding different jobs within the organization earn for doing work at the same or different levels Equity Theory: describes how employees feel the fairness of pay based off of the pay of others within the organization Equity --> [My rewards (outcomes) / my contributions (inputs)] = [other's rewards (outcomes) / other's contributions (inputs)] Inequity (under-reward) --> [My rewards (outcomes) / my contributions (inputs)] < [other's rewards (outcomes) / other's contributions (inputs)] Inequity (over-reward)--> [My rewards (outcomes) / my contributions (inputs)] > [other's rewards (outcomes) / other's contributions (inputs)] Reaction to Under-Reward: ask for a raise; reduce contributions; try to get others to increase contribution, last resort, quit the job or choose another comparison Reaction to Over-Reward: increase contributions; ask for a pay cut; attempt to get others a raise; attempt to get others to reduce his or her contribution; at last resort quit the job or choose another comparison

Identify the types of decisions involved in establishing a pay structure.

Legal Requirements: equal pay for equal work, minimum wage, overtime pay, restrictions on child labor Market Forces: product markets, labor markets Organization's goals: high quality workforce, cost control, equity and fairness, legal compliance Pay Level Decisions, Job Structure Decisions, Pay Structure Decisions: pay rates, pay grades, pay ranges, pay differentials

international organization

an organization that sets up one or a few facilities in one or a few foreign countries

How do ability and motivation affect performance?

Low Ability/High Motivation: -Misdirected effort: coaching, frequent performance feedback, goal setting, training or temporary assignment for skill development, restructured job assignment High Ability/High Motivation: -Solid Performers: reward good performance, identify development opportunities, provide honest, direct feedback Low Ability/Low Motivation: -Deadwood: withholding pay increases, demotions, outplacement, firing, specific, direct feedback on performance problems High Ability/Low Motivation: -Under-utilizers: give honest, direct feedback, provide counseling, use team building and conflict resolution, link rewards to performance outcomes, offer training for needed knowledge or skills, manage stress levels

Know the basic types of healthcare plans.

Medical Insurance Managed care: insurer plays a role in decisions about healthcare, aimed at avoiding unnecessary procedures. the insurer may conduct claims review, studying claims to determine whether procedures are effective for the type of illness or injury. patients may be required to obtain approval before hospital admissions and the insurer may require alternatives to hospital stays Health maintenance organization (HMO): a health care plan that requires patients to receive their medical care from the HMO's health care professionals, who are often paid a flat salary and provides all services on a prepaid basis Preferred provider organization (PPO): a health care plan that contracts with health care professionals to provide services at a reduced fee and gives patients financial incentives to use network platforms Flexible spending account: employee controlled pretax earnings set aside to pay for certain eligible expenses, such as health care expenses, during the same year Consumer-driven health plans (CDHP): health care plans that provide incentives for employees to make decisions that help lower care costs Accountable Care Organizations (ACO): new models that the Affordable Care Act supports as a part of Medicare reforms, rather than a type of insurance, an ACO is a network of health care providers that practice value-based care; the agreed to be paid based on results Employee wellness program (EWP): a set of communications, activities, and facilities designed to change health-related behaviors in ways that reduce health risks Life Insurance Disability Insurance

Identify the kinds of insurance benefits offered (health, life, dential, STD/LTD, etc.)

Medical Insurance: usually covers hospital expenses, surgical expenses and visits to physicians; additional coverage may include dental care, vision care, birthing centers, prescription drug program, mental health parity act -health maintenance organization: health care plan that requires patients to receive their medical care from HMOs health care professionals -preferred provider organization: it is a healthcare plan that contracts with healthcare professionals to provide services at a reduced fee -consumer driven health plan: are intended to provided health coverage in a way that gets employees involved as consumers making decisions to lower costs Life insurance: employers may provide life insurance to employees or offer the opportunity to buy coverage at low group rates; with a term life insurance policy if the employee dies during the term of the policy, the employee's beneficiaries receive a payment called the death benefit Disability Insurance: employees risk losing their income if a disability makes the unable to work -short term disability insurance: insurance that pays a percentage of a disabled employee's salary as benefits to the employee for 6 months or less -long term disability insurance: insurance that pays a percentage of a disabled employee's salary after an initial period and potentially the rest of the employee's life Long Term Care Insurance: the cost of LTCI such as care in nursing homes can be devastating; they provide benefits toward the cost of LTC and related medical expenses

Discuss how employees determine whether the organization treats them fairly.

Outcome -Outcome fairness: a judgment that the consequences given to the employee are just -consistent outcomes -knowledge of outcomes -outcomes in proportion to behaviors Procedural -Procedural Justice: a judgment that fair methods were used to determine the consequences an employee receives -consistent procedures -avoidance of bias -accurate information -ways to correct mistakes -representation of all interests -ethical standards Interactional Justice -Interactional justice: a judgment that the organization carried out its actions in a way that took the employee's feelings into account -explanation of decisions -respectful treatment -consideration -empathy

What are the basic definitions of pay ranges, salary grades, compa-ratios, etc.?

Pay ranges: a set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job or job within a particular pay grade -red circle rate: pay at a rate that falls above pay range for the job (STOP PAYING) -green circle rate: pay at a rate that falls below pay range for the job (PAY THEM MORE) Pay grade: sets of jobs having similar worth or content, grouped together to establish rates of pay Compa-ratios: the ratio of average pay to the midpoint of the pay range

What is the definition of performance management and what is its purpose?

Performance management: the process through which managers ensure that employee's activities and outputs contribute to the organization's goals, as well as to develop employees Purpose: identify problems and solutions, tell top performers they are valued, encourage communication between managers and their employees, establish consistent standards for evaluation, help the organization identify its strongest and weakest employees *strategic purpose: help the organization achieve its business objectives *administrative purpose: way in which the organizations use the system to provide information for day-to-day decisions about salary, benefits and recognition programs *developmental purpose: serves as a basis for developing employees' knowledge and skills, effective performance feedback makes employees aware of their strengths and areas in which they can improve

Understand how personal dispositions, tasks and roles, supervisors/coworkers, and pay/benefits contribute to job satisfaction.

Personal Dispositions (negative affectivity, core self-evaluation): positive or negative attitudes, ability to be satisfied Tasks and Roles (role ambiguity, role conflict, role overload): -Role ambiguity: uncertainty about what the organization expects from the employee in terms of what to do or how to do it -Role conflict: an employee's recognition that the demands of the job are incompatible or contradictory -role overload: a state in which too many expectations or demands are placed on a person Supervisors/Coworkers: the people share the same values, attitudes, and philosophies; the coworker and supervisor may provide social support, meaning they are sympathetic and caring; the coworkers or supervisor may help the person attain some valued outcome Pay/Benefits: the way the organization assigns different pay levels to different levels and job categories, pay raises, people generally expect that their pay will increase over time

Understand potential ethical issues (such as Wells Fargo)

Potential Issues... discrimination and privacy concerns with technology Wells Fargo: revealed that ambitious performance goals once through to have been behind the banks successful growth were instead driving employees and executive to engage in misdeeds to hit their target; employees earning bonuses linked to revenues we overcharging clients and others were opening fictious bank accounts for customers without their knowledge

Discuss how economic/market forces influence decisions about pay.

Product Markets: organizations product market includes organizations that offer competing goods and services, organizations in product markets are competing to serve the same customers; to succeed organizations must be able to sell their goods and services at a quantity and price that will bring them sufficient profit (a huge influence is cost to produce the goods and services) Labor Markets: organizations must compete to obtain human resources, workers prefer higher paying jobs, companies want to know what others are paying so that it will pay enough to attract and keep qualified employees, another influence is cost of living--the cost of a household's typical expenses, such as house payments, groceries, medical care and gasoline Pay Level: Deciding What to Pay: employers can be more flexible about pay policies if they use technology and work design to get better results from employees than their competitor; when organizations have a broad range in which to make decisions about pay, they can choose to pay at, above or below the rate set by market forces; having higher labor costs than your competitors is not necessarily bad if you also have the best and most effective workforce which produces more products of better quality; organizations must evaluate pay as more than a cost--it is an investment that can generate returns in attracting, retaining, and motivating a high-quality workforce Gathering Information About Market Pay: benchmarking--a procedure in which an organization compares its own practices against those of successful competitors; pay surveys are available for product markets and labor markets (primary collector of data is Bureau of Labor Statistics) Overall.... if the market is doing well and unemployment is low, if companies want to get the best talent, they will have to beat the market in terms of pay; if the market is doing poorly and unemployment is high, companies will simply have to meet the market to get decent talent

Explain how organizations link pay to their overall performance.

Profit sharing: incentive pay in which payments are a percentage of the organizations profits and don not become part of the employees' base salary, encourages employees to think more like owners Stock ownership: it makes employees part owners of the organization. it encourages employees to focus on the success of the organization as a whole stock options: rights to buy a certain number of shares of stock at a specified price, traditionally, organizations have granted stock options to their executives. studies suggest that organizations perform better when a large percentage of top and middle managers are eligible for long-term incentives. employee stock ownership plans (ESOP): an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust, when they leave the organization, they can sell the stock to the organization or on the open market. it gives employers a way to build pride in and commitment to the organization

What are SMART goals?

S- Specific M- Measurable A- Attainable R- Realistic T- Timely *provides clarity, focus and motivation you need to achieve your goals, can improve your ability to reach them by encouraging you to define objectives and set a completion date

Describe how to give performance feedback effectively.

Scheduling performance feedback: regular, expected management activity, annual feedback is not enough, managers are responsible for correcting performance deficiencies as soon as they occur, feedback is most effective when the information does not surprise the employee, employees have indicated that they are motivated and directed by regular feedback, they want to know if they are on the right taks preparing for a feedback session: managers should be well prepared and create the right content for the meeting, location should be neutral, manager should describe it as a chance to discuss the role of the employee, the role of the manager, and the relationship between the two, manager should say (and believe) that they would like the meeting to be an open dialogue, enable to the employee to be well-prepared (ask for a self-assessment ahead of time) Conducting the feedback session: "tell and sell" approach: managers tell the employees their ratings and then justify those ratings "tell and listen" approach: managers tell employees their ratings and then let the employees explain their side of the story "problem solving" approach: managers and employees work together to solve performance problems in an atmosphere of respect and encouragement, focuses more on the future rather than the past; superior approach

Explain the meaning of total rewards and the different value levels that people place on them.

Tangible rewards: elements of compensation that can be quantitatively measured and compared between organizations Intangible rewards: elements of compensation that cannot be easily measured or calculated (ex. culture) Base pay: basic compensation that an employee receives, usually as a wage or salary wages: payments calculated directly from the amount of time worked by employees salary: consistent payments made each period regardless of the number of hours worked variable pay: compensation liked directly to individual, team or organizational performance benefit: indirect reward given to an employee or group of employees as part of membership in the organization

Understand the different evaluation methods and their benefits and disadvantages and how they fit with strategy.

Simple ranking: method of performance measurement that requires managers to rank employees in their group from the highest performer to the poorest performer; the downside is validity (raises questions about fairness), often not linked to organization's goals Forced distribution method: method of performance measurement that assigns a certain percentage of employees to each category in a set of categories; works best if members of a group really do vary in performance, overcomes the temptation to rate everyone high in order to avoid conflict, often not linked to organizations goals paired-comparison method: method of performance measurement that compares each employee with each other employee to establish ranking; time-consuming, often not linked to the organization's goals graphic rating scale: method of performance measurement that lists traits and provides a rating scale for each trait; the employer uses the scale to indicate the extent to which an employee displays each trait; the drawback is that leaves the manager to make the decision about what "excellent knowledge" or "poor interpersonal skills", etc. is, low reliability because managers are likely to arrive at different judgments mixed-standard scales: method of performance measurement that uses several statements describing each trait to produce a final score for that trait critical incident method: method of performance measurement based on manager's records of specific examples of the employee acting in ways that are either effective or ineffective; requires significant effort, may be unique so it may not support comparison among other employees behaviorally anchored rating scales (BARS): method of performance measurement that rates behavior in terms of a scale showing specific statements of behavior that describe different levels of performance; can improve interrater reliability, this method can bias the manager's memory behavioral observation scale (BOS): a variation of BARS which uses all behaviors necessary for effective performance to rate performance at task; rate frequency, a drawback is the amount of information required. organizational behavior modification (OBM): a plan for managing the behavior of employees through a formal system of feedback and reinforcement; most have 4 components- 1. define a set of key behaviors necessary for job performance 2. use a measurement system to assess whether the employee exhibits the key behaviors 3. inform employees of the key behaviors, perhaps in terms of goals for how often to exhibit the behaviors 4. provide feedback and reinforcement based on employees behaviors management by objectives (MBO): a system in which people at each level of the organization set goals in a process that flows from top to bottom, so employees at all levels are contributing to the organization's overall goals; these goals become the standards for evaluating each employee's performance; has 3 components: 1. goals are specific, difficult and objective 2. managers and their employees work together to set the goals 3. the manager gives objective feedback through the rating period to monitor progress toward the goals; measuring results has validity problems because results may be affected by circumstances beyond each employee's performance, these measures do not provide guidance on how to improve, if individuals focus only on aspects of performance that are measured, they may neglect significant skills or behaviors 360 degree performance appraisal: performance measurement that combines information from the employee's managers, peers, subordinates, self and customers

Know employee benefits required by law, including social security, unemployment, worker's compensation.

Social Security: flat payroll tax of employees and employers Unemployment insurance: a federally mandated program to minimize the hardships of unemployment through payments to unemployed workers, help in finding new jobs and incentives to stabilize employment; can only qualify is not discharged for cause, did not quit voluntarily, and are not out of work due to a labor dispute Workers compensation insurance: state programs that provide benefits to workers who suffer work related injuries or illnesses, or to their survivors (2/3 of their pay tax free) Unpaid family and medical leave... Family and Medical Leave Act (FLMA): federal law requiring organizations with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption; to care for a seriously ill family member or for an employee's own serious illness; or to take care of urgent needs that arise when a spouse, child or parent in the National Guard or reserve is called to active duty Healthcare... Patient Protection and Affordable Care Act: healthcare reform law passed in 2010 that includes incentives and penalties for employers providing health insurance as a benefit; for employees with at least 50 employees, payment of a fine to the federal government if employer does not want to provide health insurance benefits

Summarize ways in which organizations can fairly discipline employees.

Unofficial spoken warning --> official written warning --> 2nd written warning plus threat of temporary suspension --> temporary suspension plus written notice that this is a last chance to improve --> termination

Describe the most common forms of leave, both paid and unpaid.

Unpaid leave... Family and Medical Leave Act (FLMA): a federal law requiring organizations with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption; to care for a seriously ill family member or for an employee's own serious illness; or to take care of urgent needs that arise when a spouse, child or parent in the National Guard or reserve is called to active duty if a family member is injured in active duty, the employee may take up to 26 weeks of unpaid leave; must guarantee employee the same or comparable job when they return to work; the law does not cover employees who have less than one year of service, work fewer than 25 hours per week or are among the organizations 10% highest paid Paid Leave... vacations, holidays, sick leave (the amount of sick leave is often based on length of service, so that it accumulates over time)

Know the types of performance information.

Trait Approach: who you are as an individual, the traits/attributes you bring to an organization Behavior Approach: how you work/how you do the work, the behaviors you exhibit Results Approach: what you produce as an individual, are you doing things that benefit the organization's growth?

Know vesting rights.

Vesting rights: guarantee that when employees become participants in a pension plan and work for a specified number of years, they will receive a pension at retirement age, regardless of whether they remained with the employer Employees contributions to their pension plans are always completely vested in most cases, the vesting of employer funded pension benefits must take place under one of the two schedules selected by the employer... 1. the employer may vest employees after 5 years and may provide zero vesting until that time 2. the employer may vest employees over a 3-7 year period with at least 20% vesting in the third year and at least an additional 20% each year after the third year *employers may vest employees quicker if they wish

balanced scoreboard

a combination of performance measures directed toward the company's long and short term goals and used as the basis for awarding incentive pay

host country

a country (other than the parent country) in which an organization operates a facility

third country

a country that is neither the parent country nor the host country of an employer

Understand factors that affect HR in global markets: Economic System

a country's economic system, whether capitalist or socialist, as well as the government's involvement in the economy through taxes or compensations, price controls and other activities, influences human resource management practice economic system is likely to be closely tied, providing many of the incentives or disincentives for developing the value of the labor force socialist economic systems provide ample opportunities for educational development because the educational system is free; at the same time it may not provide economic rewards (higher pay for increasing one's education); socialist systems take a higher percentage of worker's income in capitalist systems, students bear more of the cost of their education, but the employers reward those who invest in education; capitalist tend to let workers keep more of their earnings developed countries with great wealth labor costs are relatively high

Understand factors that affect HR in global markets: Political and Legal Systems

a country's policital-legal system: its government, laws, regulations strongly impinges on HRM; laws often dictate the requirements for certain HRM practices, such as training, compensation, hiring, firing, and layoffs; takes into consideration cultural values

unemployment insurance

a federally mandated program to minimize the hardships of unemployment through payments to unemployed workers, help in finding new jobs and incentives to stabilize employment

progressive discipline

a formal discipline process in which that consequences become more serious if the employee repeats the offense

pay policy line

a graphed line showing the mathematical relationship between job evaluation points and pay rate

preferred provider organization (PPO)

a health care plan that contracts with healthcare professionals to provide services at a reduced fee and gives patients financial incentives to use network providers

procedural justice

a judgement that fair methods were used to determine the consequences an employee receives

outcome fairness

a judgement that the consequences given to employees are just

interactional justice

a judgement that the organization carried out its actions in a way that took the employees feelings into account

short term disability insurance

insurance that pays a percentage of a disabled employee's salary as benefits to the employee for six months or less

Know the basics of legal requirements and steps to ensure effective performance management.

a legally defensible performance management system... based on a valid job analysis, with requirements for job success clearly communicated to employees, evaluates behaviors or results, rather than traits, multiple raters including self-appraisals, all performance ratings reviewed by upper level managers and set up a system for employees to appeal when they believe they were evaluated unfairly, appeals mechanisms for employees, documentation, ensures ethical behavior

exit interview

a meeting of a departing employee with the employee's supervisor and/or human resource specialist to discuss the employee's reasons for leaving

organizational behavior modification (OBM)

a plan for managing the behavior of employees through a formal system of feedback and reinforcement

job satisfaction

a pleasant feeling resulting from the perception that one's jobs fulfills or allows for the fulfillment of one's important job values

benchmarking

a procedure in which an organization companies it own practices against those of successful competitors

role analysis technique

a process of formally identifying expectations associated with a role

employee assistance program (EAP)

a referral service that employees can use to seek professional treatment for emotional problems or substance abuse

outplacement counseling

a service in which professionals try to help dismissed employees manage the transition from on job to another

job withdrawl

a set of behaviors with which employees try to avoid the work situation physically, mentally, or emotionally

employee wellness program (EWP)

a set of communications, activities, and facilities designed to change health related behaviors in ways that reduce health risks

pay range

a set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job or a job within a particular pay grade

role overload

a state in which too many expectations or demands are placed on a person

management by objectives (MBO)

a system in which people at each level of the organization set goals in a process that flows from top to bottom, so employees at all levels are contributing to the organization's overall goals; these goals become the standards for evaluating each employee's performance

behavior observation scale (BOS)

a variation of a BARS which uses all behaviors necessary for effective performance to rate performance at a task

pay differential

adjustments to a pay rate to reflect differences in working conditions or labor markets

Where does wage inequality come from?

age, gender or racial discrimination based on historical inequalities acceptable reasons for different pay include... exceeding quota, producing more units, been with the company longer, merit/education, certifications

job evaluation

an administrative procedure for measuring the relative internal worth of the organization's jobs

employee stock ownership plan (ESOP)

an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust

role conflict

an employee's recognition that demands of the job are incompatible or contradictory

standard hour plan

an incentive plan that pays workers extra for work done in less than a preset "standard time"

flexible spending account

employee controlled pre-tax earnings set aside to pay for certain eligible expenses, such as healthcare expenses, during the same year

expatriates

employees assigned to work in another country

nonexempt employees

employees covered by the FLSA requirements for overtime pay

pension benefit guarantee corporation (PBGC)

federal agency that ensures retirement benefits and guarantees retirees a basic benefit if the employer experiences financial difficulties

family and medical leave act (FMLA)

federal law requiring organizations with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption; to take care of a seriously ill family member or for an employee's own serious illness; or to take care of urgent needs that arise when a spouse, child or parent in the National Guard or Reserve is called to active duty

employee retirement income security act (ERISA)

federal law that increase the responsibility of pension plan trustees to protect retirees, established certain rights related to vesting and portablity and created the pension benefit guarantee corporation

commissions

incentive pay calculated as a percentage of sales

incentive pay in which payments are a percentage of the organization's profits and do not become part of the employee's base salary

incentive pay in which payments are a percentage f the organization's profits and do not become part of the employee's base salary

Summarize how to ensure that pay is actually in line with the pay structure. Remember how companies can use these tools like the job evaluation to evaluate compensable job factor.

pay structure represents an organization's policy, however what the organization is actually doing may be different; HR compares actual pay to pay structure, making sure that policies and practices match; compa-ratio is a common way to do this (individual salary in relation to the mean)

skill-based pay systems

pay structures that set pay according to the employee's levels or skills or knowledge and what they are capable of doing

360-degree performance appraisal

performance measurement that combines information from the employee's managers, peers, subordinates, self and customers

hot-stove rule

principle of discipline that says discipline should be like a hot stove, giving clear warning and following up with consistent, objective immediate consequences

peer review

process for resolving disputes by taking them to a panel composed of representatives from the organization at the same levels as the people in the dispute

delayering

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

summary plan description (SPD)

report that describes a pension plan's funding, eligibility requirements, risks and other details

contributory plan

retirement plan funded by contributions from the employer and employee

noncontributory plan

retirement plan funded entirely by contributions from the employer

cash balance plan

retirement plan in which the employer sets up an individual account for each employee and contributes a percentage of the employee's salary; the account earns interest at a predefined rate

defined contribution plan

retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into that account

stock options

rights to buy a certain number of shares of stock at a specified price

pay grades

sets of jobs having similar worth or content, grouped together to establish rates of pay

worker's compensation

state programs that provide benefits to workers who suffer work-related injuries or illnesses or to their survivors

Training Issues for employees with overseas assignments.

training and development programs should be effective for all participating employees, regardless of their country of origin (effectiveness of training techniques, strategies, and media depends on learners and culture; training program must consider international economic, educational and cultural differences) when organizations hire employees to work in a foreign country and transfer them to another country, the employer needs to provide the employees with training in how to handle the challenges associated with working in a foreign country returning home can be challenging as well

voluntary turnover

turnover initiated by an employee (often when the organization would prefer to keep them)

involuntary turnover

turnover initiated by an employer (often with employees who would prefer to stay)

transnational HRM system

type of HRM system that makes decisions from a global perspective, includes managers from many companies and is based on ideas contributed by people representing a variety of cultures

role ambiguity

uncertainty about what the organization expects from the employee in terms of what to do or how to do it