HRTM - Test 3

Decision Support Systems

Computer software systems designed to help managers solve problems by showing how results vary when the manager alters assumptions or data.

Expert Systems

Computer systems that support decision making by incorporating the decision rules used by people who are considered to have expertise in a certain area.

Progressive Discipline

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

HRM Audit

A formal review of the outcomes of HRM functions, based on identifying key HRM functions and measures of business performance

Pay Policy Line

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

Procedural Justice

A judgment that fair methods were used to determine the consequences an employee receives.

Outcome Fairness

A judgment that the consequences given to employees are just.

Interactional Justice

A judgment that the organization carried out its actions in a way that took the employee's feelings into account

Exit Interview

A meeting of a departing employee with the employee's supervisor and/or a 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 job fulfills or allows for the fulfillment of one's important job values.

Benchmarking

A procedure in which an organization compares its 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

Arbitration

Binding process in which a professional arbitrator from outside the organization (usually a lawyer or judge) hears the case and resolves it by making a decision.

Fair Labor Standards Act (FLSA)

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

HR Dashboard

A display of a series of HR measures, showing human resource goals and objectives and progress toward meeting them.

Outplacement Counseling

A service in which professionals try to help dismissed employees manage the transition from one job to another

Job Withdrawal

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

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.

Behavioral Observation Scale (BOS)

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

Pay Differential

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

Job Evaluation

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

Role Conflict

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

Learning Organization

An organization that supports lifelong learning by enabling all employees to acquire and share knowledge

Open-Door Policy

An organization's policy of making managers available to hear complaints.

Transaction Processing

Computations and calculations involved in reviewing and documenting HRM decisions and practices

Continuous Learning

Each employee's and each group's ongoing efforts to gather information and apply the information to their decisions in a learning organization.

Nonexempt Employees

Employees covered by the FLSA requirements for overtime pa

Exempt Employees

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

Calibration Meeting

Meeting at which managers discuss employee performance ratings and provide evidence supporting their ratings with the goal of eliminating the infl uence of rating errors

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.

Forced-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.

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 trai

Behaviorally Anchored Rating Scale (BARS)

Method of performance measurement that rates behavior in terms of a scale showing specific statements of behavior that describe different levels of performance.

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 fi nal score for that trait

Alternative Dispute Resolution (ADR)

Methods of solving a problem by bringing in an impartial outsider but not using the court system.

Mediation

Nonbinding process in which a neutral party from outside the organization hears the case and tries to help the people in confl ict arrive at a settlement.

Skill-Based Pay Systems

Pay structures that set pay according to the employees' levels of skill 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 consequence

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.

Hourly Wage

Rate of pay for each hour worked

Piecework Rate

Rate of pay for each unit produced.

Salary

Rate of pay for each week, month, or year worked

Delayering

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

Pay Grades

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

Pay Level

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

Organizational Commitment

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

Employee Engagement

The degree to which employees are fully involved in their work and the strength of their job and company commitment.

Job Involvement

The degree to which people identify themselves with their jobs.

Minimum Wage

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

Pay Structure

The pay policy resulting from job structure and pay-level decisions

Cloud Computing

The practice of using a network of remote servers hosted on the Internet to store, manage, and process data

Brand Alignment

The process of ensuring that HR policies, practices, and programs support or are congruent with an organization's overall culture (or brand), products, and services

Performance Management

The process through which managers ensure that employees' activities and outputs contribute to the organization's goals.

Job Structure

The relative pay for different jobs within the organization.

High-Performance Work System

The right combination of people, technology, and organizational structure that makes full use of the organization's resources and opportunities in achieving its goals.

Role

The set of behaviors that people expect of a person in a particular job.

Involuntary Turnover

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

Voluntary Turnover

Turnover initiated by employees (often when the organization would prefer to keep them)

HR Analytics

Type of assessment of HRM effectiveness that involves determining the impact of, or the financial cost and benefits of, a program or practice

Role Ambiguity

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

Summarize the outcomes of a high-performance work system.

• A high-performance work system achieves the organization's goals, typically including growth, productivity, and high profits. • On the way to achieving these overall goals, the high-performance work system meets such intermediate goals as high quality, innovation, customer satisfaction, job satisfaction, and reduced absenteeism and turnover.

Define high-performance work systems, and identify the elements of such a system.

• A high-performance work system is the right combination of people, technology, and organizational structure that makes full use of the organization's resources and opportunities in achieving its goals. • The elements of a high-performance work system are organizational structure, task design, people, reward systems, and information systems. These elements must work together in a smoothly functioning whole.

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 the 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

Describe how employees evaluate the fairness of a pay structure.

• According to equity theory, employees think of their pay relative to their inputs, such as training, experience, and effort. To decide whether their pay is equitable, they compare their outcome (pay)/input ratio 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 organization. • If employees conclude that their outcome/input ratio is less than the comparison person's, they conclude that their pay is unfair and may engage in behaviors to create a situation they think is fair.

Explain how job dissatisfaction affects employee behavior.

• Circumstances involving the nature of a job, supervisors and co-workers, pay levels, or the employee's 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 is especially likely when employees cannot find another job.

Summarize ways in which organizations can discipline employees fairl

• Discipline should follow the principles of the hotstove 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 opendoor policy, peer review, mediation, and arbitration. • When performance problems seem to result from substance abuse or mental illness, the manager may refer the employee to an employee assistance program. • When a manager terminates an employee or encourages an employee to leave, outplacement counseling may smooth the process.

Identify legal requirements for employee discipline.

• Employee discipline should not result in wrongful discharge, such as a termination that violates an implied contract or public policy. • Discipline should be administered evenhandedly, without discrimination. • Discipline should respect individual employees' 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 them. • When termination is part of a plant closing, employees should receive the legally required notice, if applicable.

Discuss how employees determine whether the organization 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 judgment that the consequences are just. The consequences should be consistent, expected, and in proportion to the significance of the behavior. • Procedural justice is a judgment that fair methods were used to determine the consequences. The procedures should be consistent, unbiased, 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 judgment 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.

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 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 a 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 provides appropriate direct feedback, rewards, and opportunities for development.

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.

Explain how human resource management can contribute to high performance.

• Jobs should be designed to foster teamwork and employee empowerment. • Recruitment and selection should focus on obtaining employees who have the qualities necessary for teamwork, empowerment, and knowledge sharing. • When the organization selects for teamwork and decision-making skills, it may have to provide training in specific job tasks. Training also is important because of its role in creating a learning organization. • The performance management system should be related to the organization's goals, with a focus on meeting internal and external customers' needs. • Compensation should include links to performance, and employees should be included in decisions about compensation. • Research suggests that it is more effective to improve HRM practices as a whole than to focus on one or two isolated practices.

Discuss legal and ethical issues that affect performance management.

• Lawsuits related to 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.

Describe the conditions that create a high-performance work system

• Many conditions contribute to high-performance work systems by giving employees skills, incentives, knowledge, autonomy, and employee satisfaction. • Teamwork and empowerment can make work more satisfying and provide a means for employees to improve quality and productivity. • Organizations can improve performance by creating a learning organization in which people constantly learn and share knowledge so that they continually expand their capacity to achieve the results they desire. • In a high-performance organization, employees experience job satisfaction or even "occupational intimacy." • For long-run high performance, organizations and employees must be ethical as well.

Describe how organizations contribute to employees' 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 the 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.

Discuss the purposes 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, benefi ts, recognition, and retention or termination. • The developmental purpose of performance management is using the system as a basis for developing employees' knowledge and skills.

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 plots 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.

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 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 infl uence ratings. Organizations can minimize appraisal politics by establishing a fair appraisal system and bringing managers together to discuss ratings in calibration meetings.

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 the 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.

Describe major sources of performance 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 an 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.

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 performance 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.

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, but 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 highly 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.

Define five 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 they measure all 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 over time. • 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.

Summarize ways to measure the effectiveness of human resource management

• Taking a customer-oriented approach, HRM can improve quality by defining the internal customers who use its services and determining whether it is meeting those customers' needs. • One way to do this is with an HRM audit, a formal review of the outcomes of HRM functions. The audit may look at any measure associated with successful management of human resources. Audit information may come from the organization's documents and surveys of customer satisfaction. • Another way to measure HRM effectiveness is to analyze specifi c programs or activities. HR analytics can measure success in terms of whether a program met its objectives and whether it delivered value in an economic sense, such as by leading to productivity improvements.

Discuss the role of HRM technology in high performance work systems.

• Technology can improve the efficiency of the human resource management functions and support knowledge sharing. • HRM applications involve transaction processing, decision support systems, and expert systems. • These often are part of a human resource information system using relational databases, which can improve the efficiency of routine tasks and the quality of decisions. • With Internet technology, organizations can use e-HRM to let all the organization's employees help themselves to the HR information they need whenever they need it.

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 five 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 offi cers 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 profi ts or stock price. • Top executives help set the organization's tone or culture, and employees at all levels are affected by the behavior of the people at the top. Therefore, employees' opinions about the equity of executive pay can have a large effect on the organization's performance.

Summarize how to ensure that pay is actually in line with the 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 comparatio for each job or pay grade. The compa-ratio is the ratio of average pay to the midpoint of the pay range. • Assuming the pay structure supports the organization's goals, the compa-ratios should be close to 1. • When compa-ratios are more or less than 1, the HR department should work with managers to identify whether to adjust the pay structure or the organization's pay practices.

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 qualifications 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 outside salespersons 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.

Describe alternatives to job-based pay.

• To obtain more flexibility, organizations may use delayering. They reduce the levels in the organization's job structure, creating broad bands of jobs with a 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.

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 benefi ts 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