MGMT 124 (Ch 8, 9, 11, 12, 13)
reasons for appraising an employee's performance
1. let boss and subordinate develop plan to correct any work related deficiencies 2. determine appropriate salary and bonuses 3. make decisions about pay and promotions 4. appraisals play a central role in employer's performance management process 5. provide an opportunity to review the employee's career plans in light of his/her strengths and weaknesses
methods for improving effectiveness of a performance appraisal
1. maintaining a diary of employees' performance during the year 2. knowing the advantages and disadvantages of different appraisal tools 3. developing a plan to assist employees with performance improvement
Methods to motivate subordinates
1. make sure employee has a doable goal and that he/she agrees to it 2. recognize an employee's contribution is a powerful motivation tool 3. managers can use social recognition as a daily positive reinforcement
Implications from Vroom's theory
1. managers should make incentive plans easy to understand 2. managers should provide training and support to employees 3. managers should boost the confidence level of employees
2 basic approaches to setting pay rates
1. market based approaches 2. job evaluation methods
characteristics of most interactive training programs
1. mastery of learning 2. responsive feedback 3. increased retention rate 4. reduced learning time
benefits of using computerized or web based performance appraisal systems
1. merging examples with performance ratings 2. helping managers maintain computerized notes 3. combining different performance appraisal tools
characteristics of cash balance plans
1. offers predictable benefits 2. considered hybrid pension plans 3. employees can earn interest on contributed amounts
how employers handle cost-of-living differentials
1. paying a nonrecurring amount spread over 1-3 years 2. paying a nonrecurring lump sum amount 3. raising an employee's salary
costs associated with granting leave to employees under the Family and Medical Leave Act
1. paying temporary workers 2. recruiting replacement workers 3. compensating for lower productivity of new workers
various service benefits
1. personal services 2. family friendly services 3. education subsidies 4. executive perquisites ("perks")
occupations commonly subjected to compressed workweeks
1. pilot 2. nurse 3. doctor 4. firefighter
advantages of piecework plans
1. powerful incentive to workers since rewards are proportionate to performance 2. understandable 3. appear equitable in principle
disability insurance health insurance pensions
Benefits not required by federal or state law
12 weeks
Bonnie, a data analyst, needs to take time off from work to care for her elderly mother. According to the Family and Medical Leave Act, what is the maximum number of weeks of unpaid, job-protected leave that Bonnie may take?
$490 1.5 x $10 = $15/hr for overtime $15 x 6 = $90 of overtime for the workweek $400 (40 hours) + $90 (6 hours overtime) = $490
Jill works as a cashier at a grocery store. She earns $10 an hour (or $400 for a 40-hour week). Last week, she worked 46 hours. What is the minimum amount that Jill earned last week?
coaching/understudy method
Mario hopes to be promoted to the head of his department next year. In the meantime, he has been assigned to spend a year as an assistant to the current department head. Which type of training is most likely being used in this example?
employee stock ownership plans (ESOPs)
McDonald Manufacturing contributes cash to a trust established to purchase shares of McDonald stock for employees. Which of the following is most likely offered by McDonald Manufacturing?
true Frederick Herzberg said the best way to motivate someone is to organize the job so that doing it provides the feedback and challenge that helps satisfy the person's "higher-level" needs for things like accomplishment and recognition. Satisfying "lower-level" needs for things like better pay and working conditions just keeps the person from becoming dissatisfied.
T/F: According to Herzberg's motivation theory, good working conditions will prevent dissatisfaction but will not lead to feelings of satisfaction
true
T/F: The standard hour plan is like the piece rate plan except instead of getting a rate per piece, the employee gets a premium equal to the percent by which his or her performance exceeds the standard.
false Employees deduct any amount up to the legal maximum. The IRS sets an annual dollar limit, which is currently about $15,000
T/F: There is no limit to the amount an employee can contribute pre-tax into a 401(k) plan each year
true
T/F: Vroom's expectancy theory observes that people will not pursue rewards that they find unattractive or where their chances of success are very low.
false explanation: time series design provides an initial reading on the program's effectiveness, but you can't be sure from this that the training caused any change; controlled experimentation is the evaluation process of choice by most firms
T/F: When designing a training evaluation study, most firms prefer to use a time series design instead of a controlled experiment because the time series design correlates change to training while the controlled experiment cannot
true
T/F: When employers offer domestic partner benefits to employees, it means that employees' same-sex domestic partners are eligible to receive the same benefits as do the husband, wife, or legal dependent of one of the firm's employees.
true
T/F: Women in the United States earn only about 80% as much as men despite more opportunities for education and an increase of working women
true
T/F: direct financial payments may be based on increments of time and performance
true
T/F: evidence suggests that web based instruction was a bit more effective than classroom instruction for teaching memory of facts and principles; web based instruction and classroom instruction were equally effective for teaching info about how to perform a task or action
true
T/F: most firms evaluate their training programs by measuring the reactions of participants
true
T/F: team training is used by many firms to develop strong management teams, enhance interpersonal skills, and encourage job flexibility
True
T/F: training sessions should be half-day or three-fourths day in length rather than a full day because the learning curve goes down late in the day
deferred profit sharing plan
Tanner's employer puts a predetermined portion of profits into a trust account for Tanner's retirement. Which of the following is most likely the type of profit-sharing plan used by Tanner's employer?
involves the firm distributing total annual profits each year among employees based on their merit rating
The Lincoln incentive system is an incentive plan that ________.
gainsharing
The Scanlon plan is an early version of a ________ plan, an incentive plan that engages employees in a common effort to achieve productivity objectives with any resulting cost savings gains shared among employees and the company
true distinguishing between top and bottom performers is usually not a problem when using a ranking method; the difficulty regards distinguishing meaningfully between the employees that fall in the middle
The basic problem with using a ranking method for performance appraisals is not identifying the extreme good and bad performers but differentiating meaningfully between the others.
rank employees
The best way to reduce the problem of central tendency in performance appraisals is to ________.
electronic performance support systems
Travel agents at Apollo Travel Services follow a computer program that displays question prompts and dialogue boxes with travel policies as the agent enters information about the consumer's travel plans. This is an example of a(n) ________.
lacks connection to performance The main disadvantage is that straight salary can demotivate potentially highperforming salespeople. The straight salary approach makes it easier to switch territories or to reassign salespeople, and it can foster sales staff loyalty.
Using a straight salary to compensate salespeople is most likely ineffective because it ________.
1. COBRA (Consolidated Omnibus Budget Reconciliation Act) 2. ERISA (Employee Retirement Income Security Act) 3. FMLA (Family and Medical Leave Act) 4. HIPAA (Health Insurance Portability and Accountability Act) 5. ADA (Americans with Disabilities Act)
What federal laws influence employers' pension and health plans?
wage rates
What has historically been the key issue in collective bargaining?
12 weeks
What is the maximum number of weeks of unpaid leave that an employee may take under the Family and Medical Leave Act?
long term incentives (like stock options) encourage the executive to increase the firm's value
What is the primary purpose of offering an executive stock options in a compensation package?
piecework
What type of pay plan is being used when workers are paid a sum for each unit they produce?
ratings are higher than when provided by supervisors self ratings are neither reliable nor valid in most cases
What usually occurs when employees rate themselves for performance appraisals?
1. provide specific examples of critical incidents and suggestions of what to do and why 2. should be done in private 3. avoid once a year "critical broadsides" by giving feedback periodically so that the formal review contains no surprises 4. keep criticism objective and free of personal bias
When a supervisor must criticize a subordinate in an appraisal interview, it is most important for the supervisor to ________.
classes
When using the job evaluation method of job classification, raters categorize jobs into groups of similar jobs called ________.
Scanlon plan
Which incentive plan is based on a philosophy that managers and employees must cooperate together?
point method
Which job evaluation method is used by most modern employers?
impose a performance distribution, or rank employees
Which of the follow is the best method for reducing the problems of leniency or strictness in performance appraisals?
unemployment insurance worker's compensation maternity leave
Which of the following benefits is required by federal or state law?
prohibit employer health plans fro using incentives to encourage employees to leave the hospital after childbirth sooner than legally required
Which of the following best describes the purpose of the Newborn Mother's Protection Act?
small companies are able to get better insurance rates Employee leasing firms (also called professional employer organizations or staff leasing firms) assume all or most of the employer's human resources chores. Insurance and benefits are usually the big attraction. Getting health and other insurance is a problem for smaller firms, and leasing firms enable them to join a larger pool.
Which of the following best explains why many businesses use employee leasing firms?
the employee was injured while on the job doesn't matter if the person may have been at fault
Which of the following conditions must be met for an injured employee to earn workers' compensation from the employer?
Edward Deci Edward Deci's work highlights a potential downside to relying too heavily on extrinsic rewards: They may backfire. Deci found that extrinsic rewards could at times actually detract from the person's intrinsic motivation.
Which of the following found that extrinsic rewards could detract from an employee's intrinsic motivation
video conferencing
Which of the following involves a trainer in a central location teaching groups of employees at remote locations over cable broadband lines or the Internet?
developing an efficient and legally defensible wage curve First, paying for competencies enables companies to encourage employees to develop the competencies the companies require to achieve their strategic aims. Second, paying for measurable competencies provides a focus for the employer's talent management process. Third, traditional pay plans can backfire if a high-performance work system is your goal.
Which of the following is LEAST likely a benefit of using competency based pay?
paired comparison (method for ranking employee performance) job evaluation committee will probably use: ranking job classification point method
Which of the following is NOT one of the typical methods used by job evaluation committees to determine the worth of a job?
case management
Which of the following is a popular workers' compensation cost-control measure that involves coordinating the medical care and health insurance coverage for each injured employee?
health maintenance organization (HMO)
Which of the following is a prepaid health care system that provides medical services for employees who pay a nominal fee?
Managers can create a self-motivated workforce by providing feedback and recognition Instead of relying on lower-level hygienes, says Herzberg, managers interested in creating a self-motivated workforce should emphasize "job content" or motivator factors. Managers do this by enriching workers' jobs so that the jobs are more challenging and by providing feedback and recognition
Which of the following is a true statement about Herzberg's Hygiene-Motivator theory?
Shannon works from 7 am to 5 pm Monday-Thursday.
Which of the following is an example of a compressed workweek?
harm to employee morale forced distribution method isn't difficult to implement, time consuming, or costly
Which of the following is one of the primary complaints regarding the use of the forced distribution method for performance appraisals?
raising commission percentages
Which of the following is the LEAST likely way that an employer would address a cost-of-living differnetial?
using descriptive phrases to illustrate traits specificity results in more consistent and more easily explained appraisals
Which of the following is the best way for a supervisor to correct a performance appraisal problem caused by unclear standards?
graphic rating scale
Which of the following is the easiest and most popular technique for appraising employee performance?
appropriate for large groups (it's a quick and simple way to present knowledge)
Which of the following is the primary advantage of lecturing as a method of training?
1. Fair Labor Standards Act overtime requirements do not apply 2. employer doesn't have to pay unemployment compensation payroll taxes, social security taxes, or city/state/federal income taxes or compulsory workers' compensation for that worker
Which of the following is true for employers who use independent contractors?
benchmark job benchmark jobs are the anchor jobs around which employers slot their other jobs, based on each job's relative worth to the firm
Which of the following is used to anchor the employer's pay scale?
salary survey (survey of what other employers are paying) employers use salary surveys to price benchmark jobs benchmark jobs are the anchor jobs around which they slot their other jobs, based on each job's relative worth to the firm
Which of the following is used to ensure external equity?
communications, grievance mechanisms, employees' participation
Which of the following is used to ensure individual equity?
performance appraisal and incentive pay
Which of the following is used to maintain individual equity?
job analysis and job evaluation comparisons
Which of the following is used to maintain internal equity?
attitude survey
Which of the following is used to monitor employees' pay satisfaction?
unpaid medical leave unpaid medical leave is addressed by the Family and Medical Leave Act
Which of the following issues would LEAST likely be negotiated by unions?
newspaper writer if employee is considered nonexempt, they may earn overtime pay
Which of the following jobs is most likely categorized as nonexempt from the overtime pay provisions of the Fair Labor Standards Act?
Labor Management Relations Act Labor Management Relations Act prohibited unfair union labor practices and enumerated the rights of employees as union members and has no impact on compensation issues ADA, Family and Medical Leave Act, and ADEA all impact compensation decisions made by organizations
Which of the following laws has the LEAST amount of influence on compensation decisions?
pension plan
Which of the following provides a fixed sum when employees reach a predetermined retirement age or can no longer work due to disability?
Job Creation and Worker Assistance Act
Which of the following provides guidelines regarding what rates of return employers should use in computing their pension plan values?
workers' compensation
Which of the following provides income and medical benefits to employment-related accident victims or their dependents?
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Which of the following requires that most private employers continue to make health benefits available to terminated or retired employees and their families for a period of time, generally 18 months after separation?
straight (or strategic) piecework
Which of the following terms refers to an incentive plan in which a person is paid a sum for each item he or she makes or sells, with a strict proportionality between results and rewards?
merit pay different from a bonus in that it usually becomes part of the employee's base salary, whereas a bonus is a one-time payment
Which of the following terms refers to any salary increase the firm awards to an individual employee based on his or her individual performance?
supplemental pay benefits most costly benefit
Which of the following terms refers to benefits for time not worked?
behavior modification (BF Skinner)
Which of the following terms refers to changing behavior through rewards or punishments that are contingent on performance?
financial incentives
Which of the following terms refers to financial rewards paid to workers whose production exceeds some predetermined standard?
onboarding
Which of the following terms refers to helping new employees appreciate the values and culture of a firm?
vesting
Which of the following terms refers to the ownership employees build up in their pension plans should their employment with a firm end prior to retirement?
stock option
Which of the following terms refers to the right to purchase a stated number of shares of a company stock at today's price at some time in the future?
job design
Which of the following was shown by the Harvard Business School to have the greatest impact on employee engagement?
watching the audience's body language
Which of the following will most likely help a speaker improve the effectiveness of a training lecture?
Employee surveys indicate that many Wells Fargo bank tellers are uncertain about the best methods for handling angry customers, because computer simulations provide a representation of a situation and the tasks to be performed in the situation; simulations can help employees learn conflict resolution skills to deal with angry bank customers
Which of the following, if true, best supports the argument that Wells Fargo should integrate computer simulations into its training program for bank tellers?
Suzanne wants a quantitative rating of each employee based on competencies important to the firm, such as problem-solving skills graphic rating scales with competency based appraisal forms enable employers to focus on the extent to which an employee exhibits the competencies essential for the job
Which of the following, if true, best supports the argument that a graphic rating scale is the most appropriate performance appraisal tool for Suzanne to use?
Oshman executives want to align the firm's strategic plan with individual employee goals and development needs performance management doesn't necessarily eliminate problems like central tendency and bias; it instead focuses on monitoring an employee's performance and making sure it matches the needs of the firm
Which of the following, if true, best supports the argument to replace Oshman's traditional appraisal methods with the performance management approach?
Homelife plans to organize employees into teams, provide regular training, and frequently assess workers' skills and knowledge When used in conjunction with team-building and worker involvement programs, competency-based pay appears to lead to higher quality and lower absenteeism. Comparable worth and minority hiring are irrelevant to competency-based pay.
Which of the following, if true, best supports the decision by Homelife executives to implement competency-based pay?
Due to economic difficulties, the firm will be laying off the two lowest performing employees in Suzanne's department a firm that will be laying off the two lowest performing employees needs employees to be ranked from best to worst, and the critical incident method makes ranking difficult
Which of the following, if true, most likely undermines the argument that the critical incident method is the most appropriate performance appraisal tool for Suzanne to use?
deferred profit sharing plan
Which profit-sharing plan provides tax advantages for employees by postponing income taxes, often until the employee retires?
cafeteria benefits plan A cafeteria plan is one in which the employer gives each employee a benefits fund budget, and lets the person spend it on the benefits he or she prefers.
Which term refers to individualized plans allowed by employers to accommodate employee preferences for benefits?
golden parachute
Which term refers to payments companies make in connection with a change in ownership or control of a company?
employers
Who contributes funds for workers' compensation benefits?
Frederick Herzberg says factors ("hygienes") that satisfy lower level needs are different from those ("motivators") that satisfy or partially satisfy higher level needs
Who proposed a two-factor theory that explains how motivator factors relate to satisfaction and hygiene factors relate to dissatisfaction?
phantom stock plans
With a ________, an executive receives units instead of shares of company stock. In the future, the executive receives cash equal to the appreciation of the units owned
key points or guidelines they're listed beside each step to provide clarification to the trainee
With job instruction training, which of the following should most likely be included beside each step listed?
premium priced options
With which of the following can an executive NOT profit until the stock makes significant gains?
professional development objective for this type of employee is to maintain satisfactory performance, so the best option is usually to find incentives that are important to the person (ie. extra time off, small bonus, recognition)
You are conducting an appraisal interview with an employee whose performance is satisfactory but for whom promotion is not possible. Which incentive listed below would be the LEAST effective option for maintaining satisfactory performance in this situation?
diversity training
_____ attempts to foster harmonious working relationships and to develop cross-cultural sensitivity among the employees of a firm
strategic training needs analysis
_____ identifies the training employees will need to fill future jobs
telecommuting
_____ involves employees using technology to work away from the office; this will often be computers, cellphones, tablets, and information technology
flextime
_____ is a work schedule in which employees' workdays are built around a core of midday hours, and employees determine, within limits, what other hours they will work
work sharing
_____ refers to a temporary reduction in work hours by a group of employees during economic downturns as a way to prevent layoffs.
workers' compensation laws
______ aim to provide sure, prompt income and medical benefits to work related accident victims or their dependents, regardless of fault
preferred provider organizations (PPO)
________ are groups of health care providers that contract with employers, insurance companies, or third-party payers to provide medical care services at a reduced fee; a cross between HMOs and traditional doctor-patient arrangements
social recognition program
________ is a program where informal manager-employee exchanges such as praise, approval, or expressions of appreciation are given for a job well done.
broadbanding
________ means collapsing salary grades and ranges into just a few wide levels, each of which contains a relatively wide range of jobs and salary levels
defining the job
________ means making sure that the manager and the subordinate agree on the subordinate's job standards and the appraisal method to be used.
employee assistance programs (EAPs)
________ provide services like financial counseling, child care referrals, elder care referrals, adoption assistance, mental health counseling, and life event planning.
work-life benefits or family-friendly benefits
________ seek(s) to enable employees to balance their job and family responsibilities.
job evaluation
a formal and systematic comparison of jobs to determine the worth of one job relative to another; eventually results in a wage or salary structure or hierarchy
competency model
a graphic model that presents a precise overview of the knowledge, skills, and behaviors someone would need to perform a job well is known as a(n) _____.
vestibule training
a method in which trainees learn on actual or simulated equipment but are trained away from the job; necessary when it's too costly or dangerous to train employees on the job (ie. pilots)
360 feedback
a performance appraisal based on surveys from peers, supervisors, subordinates, and customers
halo effect
a performance appraisal problem that occurs when a supervisor's rating of a subordinate on one trait biases the rating of that person on other traits (ex. supervisor rates unfriendly employee lower on all traits, rather than just on "gets along with others"
point method
a quantitative technique that involves identifying several compensable factors, each having several degrees, as well as the degree to which each of these factors is present in the job
learning portal
a section of an employer's Web site that provides employees with online access to job-related training courses
pay range
a series of steps or levels within a pay grade; lets the employer take a more flexible stance in the labor market
virtual classroom
a teaching method that uses special collaboration software to enable multiple remote learners to participate in live audio and visual discussions via a PC or laptop
early retirement window
a type of offering by which employees are encouraged to retire early, the incentive being liberal pension benefits plus perhaps a cash payment
Equal Pay Act
an amendment to the Fair Labor Standards Act; states that employees of one sex may not be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work
ongoing performance monitoring
an element of performance management that involves the use of computer based systems that measure an employee's progress and send out reports regarding an employee's performance
variable pay
an incentive plan that ties a group's pay to the firm's profitability or productivity, usually as one-time lump payments
leniency
appraisal problem associated with supervisors giving all of their subordinates consistently high ratings
strictness
appraisal problem is associated with supervisors giving all of their subordinates consistently low ratings
supplemental unemployment benefits
benefits that provide a guaranteed annual income when certain industries are forced to shut down temporarily; cash payments that supplement the employee's unemployment compensation, to help the person maintain his or her standard of living while out of work
Steps in on-the-job training
1. prepare the learner - involves familiarizing a worker with equipment, materials, tools, and trade terms 2. present the operation - explain requirements, go through the job at slow pace several times to explain key points 3. do a tryout - have the learner do the job, gradually building up skill and speed and making sure the task was learned by the trainee 4. follow up - designate who the learner should go to for help, gradually decrease supervision, correct any faulty work patterns before they become a habit, compliment good work
causes of appraisal bias
1. purpose of appraisal 2. personality of supervisor 3. personal characteristics of subordinate 4. relationship between the 2 parties
4 job relevant dimensions that can be measured by graphic rating scale method
1. quantity or quality of work 2. how well the employee exercises his/her specific job duties 3. extent to which employee exhibits the competencies 4. extent to which employee is achieving his/her objectives
4 basic categories of training program outcomes
1. reaction 2. learning 3. behavior 4. results
reasons employers provide severance pay when downsizing
1. reduces the chances of litigation from disgruntled former employees 2. ensures good public relations 3. reassures remaining employees
ways employers can reduce sick leave related costs
1. repurchase unused sick leave at the end of the year by paying their employees a sum for each unused sick day 2. monthly lotteries in which only employees with perfect attendance are eligible for a cash prize 3. trade some sick days for other benefits 4. investigate all absences, calling absent employees at home 5. pooled paid leave plans (lump together sick leave, vacation, and personal days into a single leave pool)
common health care cost-control methods used by employers
1. requiring employees to pay high premiums 2. benefits purchasing alliances 3. encouraging medical tourism
3 benefits provided by Social Security
1. retirement benefits (provide income to those who retire at age 62 or after) 2. survivor's or death benefits (provide monthly payments to dependents of the deceased individual regardless of the individual's age at death) 3. disability payments (provide payments to employees who become totally disabled and to their dependents if they work and meet certain requirements)
disadvantages of straight commission plans
1. salespeople avoid pushing hard to sell items 2. salespeople fail to service small accounts 3. significant variations in pay exist
4 basic types of appraisal interviews
1. satisfactory-promotable (performance is satisfactory and there's promotion ahead; objective is to discuss career plans and to develop specific action plan for the educational and professional development person needs to move up) 2. satisfactory-not promotable (performance is satisfactory but promotion isn't possible; objective is to maintain satisfactory performance by finding incentives that are important to the person) 3. unsatisfactory-correctable (objective is to develop an action plan for correcting the unsatisfactory performance) 4. unsatisfactory-uncorrectable (interview may even be skipped; the person's performance is tolerated or the person is dismissed)
3 steps of performance appraisal
1. setting work standards 2. assessing the employee's actual performance relative to those standards 3. providing feedback to the employee
purposes of written warnings
1. shake your employee out of his/her bad habits 2. can help you defend your rating to your boss and to the courts if needed
benefits required by federal or state law
1. social security 2. unemployment insurance 3. workers' compensation 4. leaves under the FMLA
2 primary components of computerized job evaluations
1. structured questionnaires 2. statistical models
examples of family friendly benefits
1. subsidized child care 2. elder care 3. on site fitness facilities 4. flexible work schedules 5. paid family leave 6. sick child benefits 7. educational subsidies
Social Security offers...
1. survivor's benefits for those insured under the Social Security Act 2. disability payments to employees who become totally disabled 3. medicare program administration
2 primary ways to make direct financial payments
1. time based - the foundation of most employers' pay plans 2. performance based - piecework and sales commissions are examples
advantages of programmed learning
1. training time is significantly reduced 2. trainees can work at their own pace 3. trainees receive immediate feedback
problems with graphic rating scale
1. unclear standards 2. halo effect 3. central tendency 4. leniency or strictness 5. bias
how to handle subordinate who's defensive when told his/her performance is poor
1. understand that denial is a defense mechanism that's normal 2. never attack a person's defenses 3. postpone action because given sufficient time, a more rational reaction may take over 4. supervisor shouldn't try to be a psychologist (offer understanding, but don't try to deal with psychological problems)
strategies for minimizing costs associated with employee health care
1. wellness programs 2. on-site primary care 3. retaining cost containment specialists 4. offering health savings accounts 5. high deductible plans 6. defined contribution health insurance plans 7. accountable care organizations (ACO)
reasons mental health costs are rising
1. widespread drug and alcohol problems 2. laws requiring employers to offer mental health benefits 3. mental health claims tend to trigger other health care claims
Disadvantages of piecework plans
1. workers resist attempts to modify production standards 2. focus on production quantity instead of quality 3. dislike their new technology or processes
steps in developing a behaviorally anchored rating scale
1. write critical incidents - write specific illustrations (critical incidents) of effective/ineffective performance 2. develop performance dimensions - cluster the incidents into 5 or 10 performance dimensions (ie. salesmanship skills) 3. reallocate incidents - verify groupings by having another team who also knows the job reallocate the original critical incidents to the cluster they think fits best 4. scale the incidents - second group rates the behavior described by the incident as to how effectively/ineffectively it represents performance on the dimension 5. develop a final instrument - choose 6-7 incidents as the performance dimension's behavioral anchors
compressed workweek
A _____ involves working fewer but longer days each week, so working four 10-hour days is an example of a compressed workweek.
pay grade
A ________ is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.
job title competency based pay occurs when firm pays wages based on employees' knowledge, skills, behaviors, and abilities
A company using competency-based pay compensates employees for all of the following EXCEPT ________.
task analysis
A detailed study of the job to determine what specific skills the job requires
education Studies suggest that schooling's impact on earnings is greater for females than for males, other things equal. This may be because education reduces the male-female earnings gap attributable to female discrimination.
According to many experts, which of the following would most likely reduce the wage gap between men and women?
managers improve their performance
According to research, what is the typical result of upward feedback?
150% Provision in FLSA that governs overtime pay says employers must pay overtime at rate of at least 1.5 times normal pay for any hours worked over 40 in a workweek
According to the Fair Labor Standards Act, what rate of normal pay would a covered employee receive for working more than 40 hours in a workweek?
1. what technology is available to help managers gain immediate access to employee performance data? 2. how would work procedures need to be modified to provide more frequent feedback to employees? 3. how would the firm's mission and vision translate into departmental, team, and individual goals?
All of the following questions are relevant to Oshman's decision to replace its traditional appraisal methods with the performance management approach:
job sharing
Anne and Martha are both accountant supervisors at a large marketing firm. Anne works from 7:00 a.m. until 12:00 p.m. each day. Martha takes over the same position at 12:00 p.m. and works until 5:00 p.m. each day. Which of the following most likely describes this type of work arrangement?
management development
Any attempt to improve managerial performance by imparting knowledge, changing attitudes, or increasing skills; involves assessing the company's strategic needs, appraising the current performance of managers, and building the skills of managers
they combine the portability of defined contribution plans and the predictable benefits of defined benefit plans
cash balance plans are hybrid plans because _____.
compensable factors
central basic factors that establish how several jobs compare to one another and that determine the pay for each job
action research
collecting data about a group, department, or organization, and feeding the info back to employees so they can analyze it and develop hypotheses about what the problems might be
behaviorally anchored rating scale (BARS)
combines the benefits of narrative critical incidents and quantified ratings by assigning (anchoring) a quantified scale with specific examples of good or poor performance
employee stock ownership plan (ESOP)
company-wide plans in which the employer contributes shares of its own stock (or cash to be used to purchase such stock) to a trust established to purchase shares of the firm's stock for employees. The trust holds the stock in individual employee accounts. It then distributes the stock to employees upon retirement
first step of performance analysis
compare the person's actual performance to what it should be doing so helps to confirm that there's a performance deficiency and helps the manager identify its cause
disadvantage of combination plans
complicated and difficult to administer, and only the commission percentage is linked to performance
direction sharing
component of performance management that refers to communicating the company's higher-level goals (including its vision, mission, and strategy) throughout the company and then translating these into doable departmental, team, and individual goals
intelligent tutoring systems
computer-based training systems that adjust to meet each trainee's specific learning needs and enable trainees to work at their own pace
electronic performance support systems (EPSS)
computerized tools and displays that automate learning, documentation, and phone support
performance management
continuous process of identifying, measuring, and developing the performance of individuals/teams and aligning their performance with the organization's goals
supervisors (primarily performed by supervisors) peers subordinates rating committees
employee performance appraisals may be conducted by ____.
peer training
employer selects several employees who spend several days a week over several months learning what the tech or change will entail, and then spread the new skills to their colleagues back on the job
Walsh Healey Public Contract
enacted in 1936; sets basic labor standards for employees working on any government contract that amounts to more than $10,000 and addresses wages, safety, and overtime
advantage of forced distribution method
end up with a predetermined number of people in each group
Family and Medical Leave Act
entitles employees to take up to 12 weeks of unpaid, job protected leave for the birth of a child or care of a child/spouse/parent; applies to both men and women
strategic training needs analysis
focuses on training employees who will be needed to fill future jobs
current training needs analysis
focuses on training new employees or deficient employees for the purpose of improving current performance
external
form of equity that refers to how a job's pay rate in one company compares to the job's pay rate in other companies
internal
form of equity that refers to the fairness of a job's pay rate in comparison to other jobs within the same company
individual
form of equity that refers to the fairness of an individual's pay as compared with what his/her co-workers are earning for the same/very similar jobs within the company, based on each individual's performance (ex. between managers in different departments)
procedural
form of equity that refers to the perceived fairness of the processes used to make decisions regarding the allocation of pay
mixed standard scales
generally list a few behavioral examples for each performance dimension, and then "mixes" the resulting behavioral example statements when listing them aim is to reduce ratings errors (ie. leniency) by making it less obvious to the supervisor what performance dimensions he/she is rating and whether the behavioral example statements represent high, medium or low performance
National Labor Relations Act of 1935 (Wagner Act)
gives unions legal protection; grants employees right to organize/unionize, bargain collectively, and engage in concerted activities for the purpose of collective bargaining or other mutual aid/protection
on-the-job training
having a person learn a job by actually doing it
basic aim is the same: to attract and keep employees Managerial jobs tend to stress harder to quantify factors like judgment and problem solving more than do production/clerical jobs. There's more emphasis on paying managers and professionals based on results (performance or what they can do) rather than on the basis of static job demands (ie. work conditions). so job evaluation usually plays a secondary role to non-salary issues (ie. bonuses, incentives, market rates, benefits)
how does compensation for managers/professionals differ from compensation for clerical/production workers?
organization wide incentive plan
incentive plan in which all/most employees can participate
central tendency
refers to the tendency of supervisors to rate all employees as average
Employer Retirement Income Security Act (ERISA)
regulates vesting rights and portability rights (the transfer of an employee's vested rights from one organization to another); provided for the creation of government-run, employer-financed corporations to protect employees against the failure of their employers' pension plans
Mental Health Parity Act of 1996
sets minimum mental health care benefits; it also prohibits employer group health plans from adopting mental health benefits limitations without comparable limitations on medical and surgical benefits
management by objective (MBO)
setting specific measurable, organizationally relevant goals with each employee and then periodically reviewing the progress made
wage curve
shows the relationship between the value of the job and the average pay for this job; shows the pay rates currently paid for jobs in each pay grade, relative to the points/rankings assigned to each job/grade by the job evaluation
learning management systems (LMS)
special software tools that support Internet training by helping employers identify training needs, and to schedule, deliver, assess, and manage the online training itself
SMART goals
specific measurable attainable relevant timely
apprenticeship training
structured process by which people become skilled workers through a combination of formal learning and long term OTJ training
critical incident method
supervisor keeps a log of positive and negative examples (critical incidents) of a subordinate's work related behavior; every ~6 months, supervisor and subordinate meet to discuss the subordinate's performance, using the incidents as examples
management games
teams of managers compete by making computerized decisions regarding realistic but simulated situations; considered an effective training tool b/c trainees are actively involved and the activities help trainees focus on planning/solving problems
vested funds
the money employer and employee have placed in the latter's pension fund that can't be forfeited for any reason; the employees' contributions are always theirs
cliff vesting
the period for acquiring a nonforfeitable right to employer matching contributions (if any) is 3 years; so the employee must have nonforfeitable rights to these funds by the end of 3 years
upward feedback
the process of allowing subordinates to rate their supervisor's performance anonymously; helps top managers diagnose management styles, identify potential "people" problems, and take corrective action with individual managers as requried
performance appraisal
the process of evaluating an employee's current and/or past performance relative to his/her performance standards; assumes that employees knew what their performance standards were and that they received feedback required ti remove performance deficiencies
succession planning
the process through which a company plans for and fills senior level openings; ongoing process of systematically identifying, assessing, and developing organizational leadership to enhance performance
equity theory if a person perceives an inequity, a tension/drive will develop in the person's mind, and the person will be motivated to reduce/eliminate the tension and perceived inequity
theory of motivation that people are strongly motivated to maintain a balance between what they perceive as their contributions and their rewards
main advantage of combination plans
they offer salespeople a floor to their earnings
piecework
ties compensation to the number of pieces a worker produces
1. job complexity (span of control, the number of functional divisions over which the executive has direct responsibility, and management level) 2. employer's ability to pay (total profit and rate of return) 3. the executive's human capital (education level, field of study, work experience)
top executive compensation depends on _____.
cross-training program
training employees to do different tasks and jobs than their own to facilitate flexibility and job rotation
coaching/understudy method job rotation special assignments peer training
types of OTJ training
electronic performance monitoring (EPM) systems
use computer network technology to allow managers access to their employees' computers and telephones; allow managers to monitor the amount of computerized data an employee processes each day (can monitor employees' rate, accuracy, and time spend working online)
forced distribution
when supervisor places predetermined percentages of appraisees into various performance categories; similar to grading on a curve
on-the-job training (OTJ)
which of the following training methods is most frequently used by employers?
steps for launching a successful EAP program
1. everyone involved with the EAP must understand the importance of confidentiality 2. ensure files are locked, access limited and monitored, and identifying information is limited 3. be aware of legal issues 4. define the program's purpose, employee eligibility, the roles and responsibilities of EAP and employer personnel, and procedures for using the plan 5. ensure the vendors you use fulfill professional and state licensing requirements
best practices for administering fair performance appraisals
1. explaining how subordinates can improve their performance 2. basing appraisal on observable job behaviors 3. training supervisors how to conduct appraisals 4. clarify in advance the performance objectives
forms of equity related to compensation issues
1. external 2. internal 3. individual 4. procedural
varieties of cafeteria benefits plan
1. flexible spending accounts - reimburses employees for expenses they incur for buying certain qualified benefits 2. core plus option plan - employer specifies a core set of benefits; beyond those the employee can choose up to a limit which other benefits he/she wants
Protection and Affordable Care Act of 2010
1. in 2018, a 40% excise tax on high cost health insurance plans goes into effect 2. employers must offer coverage to employees including those working at least 30 hours/week 3. contributions to health care flexible spending accounts have been capped at $2,500 4. health plans with dependent coverage must expand eligibility up to age 26
reasons to use pay ranges for each pay grade
1. it lets the employer take a more flexible stance in the labor market (makes it easier to attract experienced, higher paid employees into a pay grade at the op of the range since the starting salary for the pay grade's lowest step may be too low to attract them) 2. let companies provide for performance differences between employees within the same pay grade or between those with different seniorities
advantages of team incentive plans
1. jealousy is reduced 2. team planning is reinforced 3. problem solving is encouraged 4. increased collaboration
issues to consider with a flexible work schedule
1. job satisfaction 2. productivity 3. absenteeism
3 contingencies supplemental unemployment benefits cover
1. layoffs 2. reduced workweeks 3. facility relocations
factors that determine design of an organization's pay plan
1. legal 2. union 3. company policy
tax on employee wages
How is the Social Security program funded?
valence
In Vroom's theory of motivation, which of the following terms refers to the perceived value a person attaches to a reward?
employees Job evaluation committee usually consists of ~5 members, most of whom are employees. Management has the right to serve on such committees, but employees may view this with suspicion
In most cases, the majority of the members on a job evaluation committee are ________.
current profit sharing
The employees at DataMax participate in a profit-sharing plan. DataMax distributes 15% of its profits as profit shares to employees at regular intervals. Which of the following is most likely used at DataMax?
performance analysis
The process of verifying that there is a performance deficiency and determining if such deficiencies should be corrected through training or through some other means is called ________.
primary advantages of using graphic rating scale
1. simple to use 2. provides quantitative ratings for each employee
1. what trainees learned from the program 2. participants' reactions to the program 3. changes in on-the-job behavior
What are the most common aspects measured when evaluating a training program?
group life insurance
Which of the following provides lower rates for the employer or employee and includes all employees regardless of health or physical condition?
what is the relevant labor market? With a market-competitive pay system, the employer's actual pay rates are competitive with those in the relevant labor markets
Which of the following questions is most relevant to developing a market-competitive pay system?
401(k) plan In any savings and thrift plan, employees contribute a portion of their earnings to a fund, and the employer usually matches this contribution completely or in part. The 401(k) plan is one example of a savings and thrift plan.
Which of the following refers to a plan in which employees contribute a portion of their earnings to a fund and the employer typically matches the contribution in whole or part?
mental illness
Which of the following represents the largest proportion of all reported disabilities?
Employee Retirement Income Security Act (ERISA)
Which of the following requires that pension rights be vested and protected by the Pension Benefits Guarantee Corporation?
market based approach to setting rates many firms, particularly smaller ones, use market based approach
involves conducting formal or informal salary surveys to determine what others in the relevant labor markets are paying for particular jobs
talent management philosphy
involves segmenting employees based on their value to the firm's success and providing those employees with special coaching, feedback, and development opportunities; involves actively managing mission-critical employees
grades grade descriptions are based on compensable factors listed in classification systems
job classification like the class system, but grades often contain dissimilar jobs
basic principle of job evaluations
jobs that require greater qualifications, more responsibilities, and more complex job duties should receive more pay than jobs with less requirements
Title VII of the Civil Rights Act
makes it unlawful for employers to discriminate against any individual with respect to hiring, compensation, terms, conditions, or privileges of employment because of race, color, religion, sex, or national origin
pooled plans
plans that lump together sick leave, vacation, and personal days; have been shown to reduce employee absences
Firms may borrow against employee stock held in trust The main reason that ESOPs are popular is that a firm gets a tax deduction equal to the fair market value of the shares it transfers to the trustee and can claim an income tax deduction for dividends paid on ESOP-owned stock. Employees are taxed when they receive a distribution from the trust, usually at retirement
primary benefit of employee stock ownership plans (ESOPs)
paired comparison method
ranking employees by making a chart of all possible pairs of employees from each trait and indicating which is the better employee of the pair for each trait, you pair and compare every subordinate with every other subordinate; helps make the ranking method more precise
alternation ranking method
ranking employees from best to worst on a particular trait, choosing highest then lowest until all are ranked; most popular method for ranking employees
aligned reward strategy
refers to a compensation plan that advances a firm's strategic goals; means creating a bundle of rewards (a total rewards package including wages, incentives, and benefits) that aims to produce employee behaviors to support/achieve its competitive strategy
controlled experimentation
refers to a formal method for testing the effectiveness of a training program with before/after tests and a control group
employee compensation
refers to all forms of pay/rewards going to employees and arising from their employment
unclear standards
refers to an appraisal that's too open to interpretation
portability
refers to an employee's ability to transfer his/her vested rights from one organization to another
comparable worth
refers to the requirement to pay men and women equal wages for jobs of roughly equivalent value to the employer; may involve comparing quite dissimilar jobs
1. holidays 2. vacations 3. jury duty 4. funeral leave 5. military duty 6. personal days 7. sick leave 8. sabbatical leave 9. maternity leave 10. unemployment insurance payments for laid off or terminated employees
Common time-off-with-pay periods (examples of supplemental pay benefits)
employee stock ownership plan (ESOP)
Elaine, the HR manager at Western Enterprises, will get stock distributed to her from a trust when she retires. This is known as a(n) _____.
Scanlon plan Scanlon formula divides payroll expenses by total sales
Employees at GameTime Software participate in a gainsharing plan. Employee bonuses are calculated by dividing payroll expenses by total sales. GameTime Software most likely uses which of the following plans?
time off with full pay employers must provide cash benefits and medical, surgical, and hospital services to employees who have work related injuries
Employers must provide employees who have work-related injuries with all of the following EXCEPT ________.
67 traditionally was 65 (usual age for retirement)
For individuals born in 1960 or later, the full retirement age for non-discounted Social Security benefits is ________.
systematic soldiering
Frederick Taylor referred to the tendency of employees to work at the slowest pace possible and to produce at the minimum acceptable level as ________.
physicians, engineers, teachers, scientists, cab drivers, personnel directors, computer systems analysts
In most cases, which of the following occupations is exempt from the overtime provisions of the Fair Labor Standards Act?
4-5 usually consists of employee's immediate supervisor and 3-4 other supervisors
In most firms, a rating committee used for performance appraisals consists of ________ members.
health savings account (HSA)
In which of the following can employers and employees deposit pretax wages to pay for noncatastrophic medical expenses?
standard hour plan
In which of the following do workers receive a basic hourly rate plus a premium equal to the percent by which their performance exceeds the standard?
task analysis
James, an HR manager, is currently identifying the specific knowledge and skills required for a telemarketing position at Newman Enterprises. James is most likely involved in which of the following?
contributory, defined contribution
Jenny must contribute at least 5% of her annual salary to her pension plan, and her employer contributes a set amount as well. She is given choices regarding how the money is invested. When she retires, the amount she has available will depend on how much she invested herself, and the rate of return on the investments she chose. This pension plan is most likely classified as ________.
65
Medicare provides a wide range of health services to people ________ or over.
$117,000
Taxes on employee wages to fund Social Security apply to all earnings up to ________.
point method
Which of the following job evaluation methods is associated with almost every comparable worth lawsuit?
job aid
a set of instructions, diagrams, or similar methods available at the job site to guide the worker (ex. a checklist of things that pilots should do prior to take off and landing)
performance management
continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning their performance with the organization's goals
mobile learning (aka on demand learning)
delivering learning content on demand via mobile devices (ie. cellphones, laptops) wherever and whenever the learner has time and desire to access it
disadvantage of team incentive plans
inequity in financial compensation because everyone is paid equally but doesn't work equally
workers' compensation
insurance for on-the-job injuries
unemployment insurance
insurance that provides benefits if a person is unable to work through no fault of his/her own
popular gain sharing plans
1. Improshare 2. Lincoln 3. Rucker
advantages of BARS
1. accuracy 2. clear standards 3. consistency 4. easier to explain ratings to employees
advantages of straight commission plans
1. easy to understand 2. easy to compute
policy issues employers must address when developing benefit plans
1. what benefits to offer 2. who receives coverage 3. whether to include retirees in the plan 4. whether to deny benefits to employees during the initial "probationary" periods 5. how to finance benefits 6. degree of employee choice in determining benefits 7. cost containment procedures 8. how to communicate benefits options to employees
job description
Anita, a manager at a department store, needs to determine whether one of her employees is exempt or nonexempt under the Fair Labor Standards Act. Which of the following would be the best resource for Anita?
work sharing
Curt works at a computer firm that is experiencing financial difficulties. In an attempt to save money and prevent layoffs, the firm is enforcing a temporary reduction in work hours for Curt's division. Curt now works 35 hours a week instead of 40. Which of the following most likely describes this situation?
effectively administer employee incentive programs
Enterprise incentive management systems enable firms to ________.
negligent training
MTR Enterprises failed to provide adequate safety training to one of its employees. As a result, the employee harmed a customer. A court would most likely find MTR liable for ________.
provide a pay raise If the current rates being paid for any of your jobs or grades fall well above or below the wage line, raises or a pay freeze for that job may be in order
Phil, the owner of Eastline Electronics, recently learned that the current rate being paid for the position of engineering assistant at his firm falls significantly below the wage line. Which of the following steps should Phil most likely take to correct this problem?
employees are unskilled but motivated Incentive plans are effective and appropriate when motivation (and not ability) is the problem. They are also appropriate when there is a clear relationship between employee effort and quantity or quality of output, the job is standardized, and delays are few or consistent
Top executives at DYS Enterprises are considering the idea of implementing an employee incentive plan. Which of the following suggests that an incentive plan would NOT be appropriate at DYS Enterprises?
1. identify the standards by which the employee is judged 2. make it clear that the employee was aware of the standard 3. specify any deficiencies relative to the standard 4. show the employee had an opportunity to correct his/her performance
When an employee's performance is so poor that a written warning is required, the warning should ________.
non-contributory
When an employer makes all of the contributions to the pension plan, the pension plan is classified as ________.
earnings-at-risk pay plan
When hired by Delmar Designs, Shane agreed to forego 6% of his normal pay if he didn't meet his goals in return for a 12% bonus if he exceeded his goals. In which type of plan does Shane most likely participate?
prescription drug coverage
Which health benefit is offered by almost all employers?
location and time of appraisal
Which of the following is LEAST likely to cause a supervisor's performance appraisal of a subordinate to be biased?
doesn't produce relative ratings for pay raise purposes
Which of the following is a downside of the critical incident method of compiling incidents?
human resource management
Which organizational development application involves methods like performance appraisals, reward systems, and diversity programs?
job sharing
_____ two or more people to share a single full-time job
pay performance plan
any plan that ties pay to some measure of performance (ie. productivity, profitability)
disadvantage of ranking method
can be problematic and unfair if all employees are excellent workers
action learning programs
give managers and others released time to work analyzing and solving problems in departments other than their own; includes carefully selected teams of 5-25 members, assigning the teams real world business problems, and structured learning through coaching and feedback
preventative services offered by employers
1. anti smoking incentives 2. low cost immunizations 3. stress management
Lewin's organizational change process
1. unfreezing - reduce the forces that are striving to maintain the status quo, usually by presenting a provocative problem to get people to recognize the need for change 2. moving - developing new behaviors, values, and attitudes; characterized by helping employees make the change, developing a vision, consolidating gains, and creating a leading coalition 3. refreezing - building reinforcement to make sure the organization doesn't slide back into its former way of doing things
disadvantages of piecework plans
1. unsavory reputation among many employees 2. in employees' minds, production standards become tied inseparably to the amount of money earned 3. piece rate systems risk engendering rigidity 4. resistance may occur when employer tries to revise production standards 5. employees become preoccupied with producing the number of units needed (become less focused on quality and may resist switching jobs)
using a graphic rating scale to ensure fair and consistent ratings graphic rating scales don't necessarily lead to effective performance appraisals since they're susceptible to problems like bias and central tendency
All of the following guidelines will most likely improve the effectiveness of a performance appraisal EXCEPT ________.
true Motivation = E x I x V
T/F: According to Vroom's theory, if expectancy, instrumentality, or valence is equal to zero, there will be no employee motivation
true Salary surveys are aimed at determining prevailing wage rates. A good salary survey provides specific wage rates for specific jobs. Formal written questionnaire surveys are the most comprehensive
T/F: Salary surveys are used by firms to collect data on employee benefits as well as wage rates for the purpose of pricing jobs
true
T/F: Straight commission plans are attractive to high-performing salespeople
true EAPs are increasingly popular, with more than 60% of larger firms offering such programs. One study found that personal mental health was the most common problem addressed by employee assistance programs, followed by family problems.
T/F: Studies indicate that employee assistance programs most frequently provide help with personal mental health issues and family problems.
true
T/F: Studies suggest that employees don't see a strong connection between pay and performance, and their performance is not particularly influenced by the company's incentive plan. About 83% of companies with such programs say their programs are only somewhat successful or not successful at all
1. eligible employees must have worked for the employer for at least 1 year 2. employees must be employed at job sites with at least 50 employees 3. up to 12 weeks must be granted in a 12 month period
Which of the following are true statements regarding the application of the Family and Medical Leave Act?
programmed learning
a systematic, step by step self-learning method for teaching job skills that involves presenting questions or facts, allowing the person to respond, and giving the learner immediate feedback on the accuracy of his or her answers
organizational development
an approach to organizational change in which employees formulate the change that's required and implement it
disadvantage of forced distribution method
employees' appraisal results depend on your choice of cutoff points
Davis-Bacon Act
enacted in 1931 for the purpose of setting wage rates for laborers and mechanics employed by contractors working for the federal government
bias
tendency to allow individual differences such as age, race, and sex to affect the appraisal ratings that employees receive
training
the methods used to give or present employees the skills they need to perform their jobs are called ______.
true
T/F: 360 feedback is generally used for developmental purposes rather than for pay increases
ADDIE training process
1. Analyze the training need - identify the specific knowledge and skills the job requires and compare these with the prospective trainees' knowledge and skills 2. Design the overall training program - formulate specific measurable knowledge and performance training objectives, review possible training content, and estimate a budget for the training program 3. Develop the course - actually assemble/create training materials 4. Implement the training - actually training the targeted employee group using methods like on-the-job training or online training 5. Evaluate the course's effectiveness
5 suggestions for making training material more meaningful for employees
1. an overall picture of the training material that'll be presented should be provided at the start of training 2. familiar examples should be used 3. info should be logically organized and presented 4. the vocab used during training should be familiar to the trainees 5. many visual aids should be used
When conducting an appraisal interview, supervisors should do all of the following ________. it's inappropriate to compare the person's performance with that of another employee
1. ask open ended questions to encourage conversation 2. give specific examples of poor performance (speak in terms of objective work data) 3. write up an action plan with goals and dates
4 main compensation elements for top executives sales commissions aren't a typical compensation for top executives
1. base pay 2. short term incentives (ie. bonuses) 3. long term incentives 4. executive perks (ie. pension plans, supplemental life insurance)
how to develop/conduct a legally defensible performance appraisal
1. base performance appraisal criteria on a job analysis 2. communicate performance standards to employees in writing and avoid abstract trait names when using graphic rating scales 3. using a single overall rating of performance isn't acceptable to courts (so use multiple methods) 4. include an employee appeals process 5. one appraiser should never have absolute authority to determine a person's actions (use multiple raters) 6. document all info bearing on a personnel decision in writing 7. train supervisors
basic principles of behavior modification
1. behavior that appears to lead to a reward tends to be repeated, and behavior that appears to lead to punishment tends to not be repeated 2. managers can get someone to change his/her behavior by providing properly scheduled rewards/punishments
characteristics of 401(k) plans doesn't replace the social security tax
1. categorized as a defined contribution plan 2. pretax salary deductions invested 3. considered a savings and thrift plan 4. usually administered by investment firms
3 ways pension plans are classified
1. contributory vs non-contributory 2. qualified vs non-qualified 3. defined contribution vs defined benefit plans
5 features of Scanlon plan
1. cooperation - assumes that managers and workers must rid themselves of "us" and "them" attitudes that normally inhibit employees from developing a sense of ownership in the company 2. identity - clear articulation of the company mission, and employees must understand how the business operates in terms of customers, prices, and costs 3. competency - employee abilities 4. involvement system - employees present improvement suggestions to the appropriate departmental level committees, which transmit the value ones to the executive level committee, and it then decides whether to implement the suggestion 5. sharing of benefits formula - if suggestion is implemented and successful, all employees usually share in 75% of the savings
disadvantages of classification method But many employers use this method with success
1. difficult to write the class/grade description 2. considerable judgment is required
2 main components of employee compensation
1. direct financial payments (ie. wages, salaries, incentives, commissions, bonuses) 2. indirect financial payments (ie. employer paid insurance, vacations)
6 elements of performance management
1. direction sharing - communicating the company's goal through higher level goals throughout the organization and translating these into doable departmental goals 2. goal alignment - having a process that allows managers to see the link between an employee's goals and those of the department and organization 3. ongoing performance monitoring - using computer based systems to measure and report on employee progress toward meeting performance goals 4. ongoing feedback - includes face to face and computer based feedback regarding progress towards goals 5. coaching and developmental support - should be an integral part of feedback process 6. recognition and awards - provide the consequences necessary to keep employee performance on target
discretionary benefits
1. disability insurance 2. health insurance 3. life insurance 4. pension plans 5. executive perks 6. paid time off 7. employee assistance programs 8. family friendly benefits
methods for controlling unemployment insurance costs
1. documenting employee absences 2. conducting exit interviews 3. requiring written approval for personal leave
advantages of ranking method
1. easy to use 2. avoids central tendency problems
recommended guidelines for setting effective employee goals
1. effective goals should be specific, measurable, attainable, relevant, and timely 2. effective goals should be challenging but doable 3. employee participation should be encouraged
5 main elements of a competency based pay plan
1. employer defines specific required skills 2. employer chooses a method for basing the person's pay on his/her skills 3. training system lets employees acquire skills 4. there's a formal competency testing system 5. the work is designed so that employees can easily move among jobs of varying skill levels
scientific management
A management approach based on improving work methods through observation and analysis is known as ________.
defined benefit pension plan With defined benefit pension plans, employees know ahead of time the pension benefits they will receive
A plan that contains a formula for determining retirement benefits is known as a ________.
finding new clients Some firms pay salespeople fixed salaries, which makes sense when the main task involves prospecting (finding new clients) or account servicing (such as participating in trade shows). Meeting with clients and selling difficult items should be paid with commissions
A straight salary is most appropriate when a salesperson's primary duties involve ________.
re-evaluate how employees accomplish tasks Performance management means continuously re-evaluating and (if needed) modifying how the employee and team get their work done. Depending on the issue, this may mean additional training, changing work procedures, or instituting new incentive plans, for instance. Performance management also involves continuous rather than annual performance appraisals, which are managed through computerized systems
A supervisor working for a firm that uses performance management should most likely expect to ________.
probability that effort will lead to success
According to Victor Vroom, expectancy could also be referred to as the ________.
What's the difference between Social Security and COBRA?
COBRA provides health benefits to retired and terminated employees and their families for 18 months following the employee's separation from the firm, while Social Security provides income for retirees
pay for performance
John is a sales representative in a jewelry store. He typically works 40 hours per week and his pay is completely based on his sales. He earns a 5% commission for every sale he makes. Which of the following terms best describes John's situation?
job instruction training (JIT)
John is doing is doing a training method to learn a new job where there's a logical sequence of steps he is supposed to learn step-by-step. This method is called _____.
9 hours FLSA states that if an employee receives time off for overtime hours instead of money, the employer must compute the number of hours granted off at 1.5 times rate 6 x 1.5 = 9 hours
Joseph worked 6 hours of overtime this week but has decided to take time off instead of overtime pay. How many hours will Joseph receive in time off from work?
unemployment insurance
Keith works as a construction foreman, and he is viewed as a reliable, competent employee. Keith was recently injured in a car accident while on vacation, and his injuries are so severe that he will not be able to return to work. Which of the following would most likely provide Keith with benefits?
benefits
Nonfinancial payments like health and life insurance, pensions, time off with pay, and child care facilities are examples of ________
employee orientation
On Alicia's first day of work at a software firm, she attended a meeting with the HR manager and other new employees. Alicia learned about employee benefits packages, personnel policies, and the structure of the company. In which of the following did Alicia most likely participate?
true
T/F: A primary benefit of 401(k) plans is that payments made by employees into the plan are pretax, so the employee pays no tax on those dollars until after he or she retires or withdraws the money
true The Wagner Act created the National Labor Relations Board (NLRB) to oversee employer practices and ensure that employees receive their rights. Employers must give the union a written explanation of the employer's wage curves and provide the union with its members' salaries
T/F: A union is entitled to know the salary of each employee it is representing
false Studies have found that highly flexible programs are actually less effective than less flexible ones
T/F: The more flexible a work schedule, the greater the effectiveness of the program.
job rotation
Rebekah was hired soon after graduation and assigned to complete a management trainee program. She will move to various jobs each month for a nine-month period of time. Her employer is utilizing the ________ form of training.
increase employee commitmnet
Research indicates that employee stock ownership plans most likely ________.
flextime
Stephanie has opted to work from 7 am to 3 pm so that she can be home when her son finishes school in the afternoons. Her company must offer ________ for Stephanie to have this
behaviorally anchored rating scale (BARS)
Stephanie manages the accounting department at an advertising agency. She needs to conduct performance appraisals for the eight employees in her department. Stephanie wants a performance appraisal tool that is highly accurate, ranks employees, and uses critical incidents to help explain ratings to appraisees. Which performance appraisal tool is best suited for Stephanie?
employee performance merit pay linked to company profits or employees' salaries, overtime, or awards are less likely to be effective
Studies indicate that in order for merit pay to be most effective, it should be linked to ________.
sense of ownership
Studies suggest that ESOPs probably do lead to increases in employee:
80%
Surveys estimate that as much as ___% of what employees learn on the job they learn through informal means.
false There is no single rule or test for determining whether an individual is an independent contractor or a bona fide employee. Instead, the courts will look at the total activity or situation. The major consideration is this: The more the employer controls what the worker does and how he or she does it, the more likely it is that the courts will find the worker is actually an employee. Health insurance benefits are not a distinguishing factor
T/F: According to the court system, the test that distinguishes an independent contractor from an employee is whether or not the firm provides the worker with health insurance benefits
false FLSA sets minimum wage, which sets a floor for employees covered by the act. Many states/cities have their own minimum wage laws, so the minimum wage varies from state to state
T/F: Because the minimum wage is set by the Fair Labor Standards Act, there is no variation from state to state in the minimum wage paid to hourly workers.
true job evaluation is more efficient, but competency based pay offers firms more flexibility because workers are compensated for their skills/knowledge rather than a specific job title
T/F: Competency-based pay systems offer employers more flexibility but are less efficient than traditional job evaluation methods
true benefits usually range from 50-75% of the employee's base pay if he/she is disabled
T/F: Disability insurance provides income protection for salary loss due to illness or accident.
true
T/F: Employee benefits account for a little over one-third of wages and salaries.
true
T/F: Employers are prohibited from inquiring about an applicant's past workers' compensation history by the Americans with Disabilities Act.
true
T/F: Employers are shifting away from piecework in many industries due to the incentive plan's poor reputation
false FLSA states both overtime pay and time off for overtime work must be calculated at 1.5 times rate
T/F: Employers prefer to give time off in lieu of overtime pay because they only have to grant the same number of hours off as the employee worked overtime, while overtime pay is calculated at 150% of normal pay
true
T/F: Equal Pay Act focuses on 4 compensable factors - skills, effort, responsibility, and working conditions
true
T/F: Firms that subsidize day care centers are hoping to recruit employees, reduce absenteeism, decrease turnover, and improve morale
true HR department is responsible for training supervisors to improve their appraisal skills, monitoring the appraisal system's effectiveness, and ensuring that it complies with EEO laws
T/F: HR department monitors the performance appraisal system, but is typically not involved in rating employees
true
T/F: Hygiene factors are factors outside the job itself, such as working conditions, salary, and incentive pay. Motivator factors include challenging tasks, feedback, and recognition
true a pay grade is comprised of jobs of approximately equal difficulty or importance as established by job evaluation
T/F: If a job evaluation committee uses the ranking method, then the pay grade consists of all jobs that fall within two or three ranks
false neither state nor federal government contributes funds for workers' compensation
T/F: In addition to the funds contributed by employers, each state also contributes to funds for workers' compensation
false most states have a time limit (ie. 500 weeks) for which benefits can be paid
T/F: In most states, workers' compensation benefits have no time limit, so injured employees may receive monetary and medical compensation for the duration of their employment.
true
T/F: In order for merit raises to be effective, there should be a clear and consistent connection between productivity and merit pay
true
T/F: Legally required benefits, such as unemployment insurance, are more costly to employers than health insurance.
true
T/F: Lump sum merit increases can be a more significant motivator than traditional merit pay because the amount seems greater when received all at once
true they price professional jobs in the marketplace as best they can to establish the values for benchmark jobs. then they slot these benchmark jobs and their other professional jobs into a salary structure
T/F: Most organizations use a market-pricing approach when determining compensation for professional employees such as engineers and scientists
true
T/F: Organizational development is usually characterized by the use of action research and application of behavioral science knowledge; the human process category of OD includes T-groups, process consultation, and third party intervention
false time based pay is still the foundation of most employers' pay plans (blue collar works get hourly/daily wages and managers tend to be salaried and paid by the week/month/year)
T/F: Performance-based pay is more popular than time-based pay among most employers in the U.S
true
T/F: Piecework is the oldest and still most popular individual incentive plan
true
T/F: Portability makes it easy for employees who leave one firm to work for another firm to take their accumulated pension funds with them.
false managers who receive feedback from subordinates who identify themselves view the upward appraisal process more positively than managers who receive anonymous feedback; but subordinates are more comfortable giving anonymous feedback, and those who have to identify themselves tend to provide inflated ratings
T/F: Studies suggest that managers who receive upward feedback from identified subordinates view the upward appraisal process more negatively than do managers who receive anonymous upward feedback.
true
T/F: The Medicare Modernization Act allows employers to establish tax-free health savings accounts (HSAs); assumption is that this will motivate employees to utilize less expensive health care options, and thus avoid big deductibles
benefits
The indirect financial and nonfinancial payments employees receive for continuing their employment with a company are called ________.
all or most employees can participate the basic thinking is that sharing ownership in the company with employees makes motivational and practical sense
The main feature of broad-based stock option plans is _____.
salary grade
The most common eligibility determinant for bonuses is _____.
special assignments
The on-the-job method of ________ involves give lower-level executives firsthand experience in working on actual problems.
instrumentality
The perceived relationship between successful performance and obtaining the reward is referred to by Vroom as ________.
provides greater flexibility into employee assignments it's especially sensible where firms organize into self managing teams
The primary advantage of broadbanding is that it _____.
PPOs allow patients to choose from a list of doctors without referrals/gatekeeper approval
The primary difference between health maintenance organizations and preferred provider organizations is that ________.
remove any performance deficiencies
The primary purpose of providing employees with feedback during a performance appraisal is to motivate employees to ________.
case management
The treatment of injured workers on a case-by-case basis by an assigned manager, usually a registered nurse, who coordinates with the physician and health plan to determine which care settings are the most effective for quality care and cost
With job-based pay (JBP), the employee receives the pay attached to the job regardless of whether the employee has the necessary competency for performing the job With JBP, pay changes when one switches jobs JBP systems may tie pay to grade or seniority With competency-based pay (CBP), the supervisor certifies employee competency prior to any pay increases With CBP, one must demonstrate proficiency prior to getting a raise CBP pays for competencies, not seniority There is more advancement possible with CBP plans than with JBP CBP enhances organizational flexibility because workers' skills are applicable to more jobs, and therefore more portable
key differences between competency based pay and traditional job based pay
graphic rating scale
lists traits (ie. quality, teamwork) and a range of performance values (ie. unsatisfactory, outstanding) for each trait; the supervisor rates each subordinate by circling/checking the score that best describes the subordinate's performance for each trait
problem with sick leave
many employees use sick leave for reasons other than illness; some use days as vacation or to take care of family issues, personal needs, and stress; this absenteeism is costly to employers
case study method
off the job management training technique where manager trainee is presented with a written description of an organizational problem to diagnose and solve
severance pay
one-time separation payment when terminating an employee; a humanitarian gesture; not a government requirement
Fair Labor Standards Act
passed in 1938; contains minimum wage, maximum hours, overtime pay, equal pay, record-keeping, and child labor provisions that are familiar to most working people. It covers the majority of U.S. workers—virtually all those engaged in the production and/or sale of goods for interstate and foreign commerce
reduce social loafing improve group viability improve group cohesion improve task motivation improve satisfaction
peer appraisals have been shown to ____.
graded vesting
pension plan participants must receive nonforfeitable rights to the matching contributions as follows: 20% after 2 years, and then 20% for each succeeding year, with 100% nonforfeitable rights by the end of 6 years
defined contribution pension plans
pension plans that specify what contribution the employee and/or employer will make to the employee's retirement or savings fund
team (or group) incentive plan
plan in which a production standard is set for a specific work group, and its members are paid incentives if the group exceeds the production standard
profit sharing plan
plan whereby all/most employees share in the company's profits