SHRM - People
Salary Data - Leveling
Adjusts salaries when surveyed jobs are similar but not identical to jobs in the org
Growth Strategy: Turnkey operation
An existing facility and its operations are acquired and run by the purchaser without major changes.
Growth Strategy: Management contract
Another company is brought in to manage and run the daily operations of the local business. Decisions about financing and ownership reside with the host-country owners.
Bias
When an appraiser's values, beliefs, or prejudices distort ratings (either consciously or unconsciously).
Leniency
When appraisers do not want to give low scores.
Monthly voluntary turnover rate
When you see an increased trend in voluntary turnover, this usually correlates to low engagement
Successive Approximation Model
a version of ADDIE that gains feedback and builds models earlier in the process (preparation, iterative design, iterative development)
Vision statement
a vivid, guiding image of the organization's desired future—the future it hopes to attain through its strategy. It should inspire & motivate. Can be aspirational.
Job description
a written description of a job and its essential functions and requirements, including tasks, knowledge, skills, abilities, responsibilities, and reporting structure.
Leading indicator
action in this area can change future performance and help achieve future success Leading indicators are the best indicators of how the strategy is performing
Career planning
actions and activities individuals perform to give direction to their work lives. Focus on individual
Value drivers
actions, processes, or results that are needed to deliver a desired value.
Job enrichment
added depth of responsibilities in a job
Business strategy
addresses the way in which the enterprise will relate to its industry and marketplace—how it will define its particular value to its customers.
Team learning
aligning and developing the capacity of a team to create the results its members desire.
Employee life cycle
all of the activities associated with an employee's tenure in an organization (common phases = recruitment, integration, development, & transition)
Total rewards
all of the direct & indirect remuneration approaches used to attract, recognize, and retain workers. Contains direct (pay systems) & indirect (benefits & recognition) comp Compensatory time off is considered indirect compensation. Cash recognition and achievement awards (gift cards), overtime pay, and cash bonuses are all considered direct compensation.
Compensation
all other financial returns (beyond any tangible benefits payments or services), including salary and allowances
Job rotation
also known as cross-training, refers to employee movement between different jobs.
Balanced scorecard
an approach to identify KPIs and make sure that objectives used to measure performance are strategically aligned to the various sources of value (finance, customers, internal business processes, and learning & growth) It takes into consideration such intangibles as whether a business process has been improved or employees have learned new skills. It can be used in a single department or throughout the organization.
Learning management system (LMS)
an electronic system that holds course content information and suggested curriculum and certification paths
ADDIE Model
an instructional design model conducive to any type of learning style (ADDIE = Analysis of needs, design, development, implementation, and evaluation)
Employee survey
an instrument used to collect and assess information on employee engagement, satisfaction, and perceptions surrounding the work environment.
Selection screening
analyzing the candidates' application forms, curricula vitae, and résumés to locate the most-qualified candidates for an open job
Realistic job preview (RJP)
any part of the selection process that provides an applicant with honest and complete information about a job and the work environment
Discretionary method
applicant characteristics that are assessed are typically very subjective and rely heavily on the intuition of the decision maker.
Focus strategies
apply cost leadership or differentiation within narrow industry segments or niches.
Cross cultural assessment tools
cross-cultural adaptability inventory, cultural orientations indicator, intercultural development inventory, SAGE (self-assessment for global endeavors)
Revenue per employee
decrease in revenue per employee may correlate to decrease in engagement Total revenue/total number of employees
Planning
define strategic alignment, create a charter, define deliverables, create project schedule, assemble a team
Corporate strategy
defines the scope of the firm in terms of the industries and markets in which it competes (global expansion? Vertical integration? Diversification?) Growth is not a strategy, but is a strategic goal
Differential/variable pay
depends on performance, not added to base pay, example = hazard pay, shift pay, emergency-shift pay, overtime, etc.
Lagging indicator
describes effects that have already occurred and cannot be changed
Pay compression, or salary compression
describes situations where there is only a small difference in pay between employees regardless of their experience, skills, level, or seniority.
Behaviorally anchored rating scale (BARS)
describing examples of desirable & undesirable behavior, and then examples are measured against a scale of performance levels
Selection interviews
designed to probe areas of interest to the interviewer in order to determine how well the candidate meets the needs of the organization.
Nonessential functions
desirable, but not necessary, aspects of the job.
Job evaluation
determines the value and price of a job in order to place and compare it within an organization as well as attract and retain employees in a competitive environment
Comparative methods
directly compare performance of each employee with that of others (ranking, paired-comparison, forced distribution)
Employee engagement survey
focuses more on job satisfaction, commitment, and morale
Lean Project management
focuses on eliminating waste by maintaining focus on intended value of project, empowering team to make decisions, analyzing & solving problems, and continuous learning
PESTLE analysis
for political, economic, social, technological, legal, and environmental categories
Sourcing
generates a pool of qualified & diverse applicants, is a precursor to recruiting.
Developmental activities
have a long-term focus, preparing for future responsibilities & capacities of current employees to perform jobs
Key workforce reporting metrics
headcount, representation of groups & subgroups (hourly, salaried, executive, manager, etc.), and demographics
Key performance indicators (KPIs)
help organizations make the right measurements. They are quantifiable measures of performance used to gauge progress toward strategic objectives or agreed standards of performance
Action learning
immediately implement what was learned
Aon Hewitt Engagement model
"say", "stay", "strive" Engaged employees say (speak positively about the org), stay (have a sense of belonging/desire to be a part of the org), and strive (are motivated and exert effort toward success)
Retention rate
# of employees who remain employed for entire measurement period/# of employees at start of measurement period * 100%
Monthly Turnover Rate
# of voluntary separations during month/avg # of employees during month * 100%
Growth Strategy: Contract manufacturing
A firm arranges for a local manufacturer to produce components or products as a means of lowering labor costs.
Growth Strategy: Merger/acquisition
A firm purchases the assets of a local firm outright, resulting in expanding the acquiring company's employee base and facilities. Integration of acquired companies often involves significant cultural, systems, and management challenges. Data privacy can be a big issue.
Common job description elements
job ID, position summary, minimum qualifications, duties & responsibilities, success factors, physical demands, working conditions, & performance standards.
Career development
process through which employees progress through a series of stages in their careers. Includes 1) career planning and 2) career management
Implementation
program is delivered to desired audience (make sure to pilot), instructor selection, logistics
Design thinking
places the customer at the center of the project by understanding the in-depth requirements of the project's intended end user or beneficiary.
3 stages to initiatives
planning, executing, closing
Authoritarian
power resides with top-level management
Substantive method
pre-employment tests, help to reduce the candidate pool to finalists for the job (cognitive ability, aptitude test, personality test, psychomotor test, assessment centers)
Dual career ladders
provide a meaningful career path for professional and technical employees without requiring that they be placed in supervisory or managerial positions
Types of interviews
structured, unstructured, behavioral, competency-based, group, stress interview
Job analysis
studies the tasks, responsibilities, and conditions that are associated with a job & which personal quals are necessary for the performance of the job.
Job specifications
the minimum qualifications necessary to perform a job
Head count
the number of people on the organization's payroll at a particular time.
Selection
the process of evaluating the most suitable candidates for a position.
Recruitment
the process of getting candidates to actually apply for jobs.
Performance management
the process of maintaining or improving employee job performance
Career management
the process of preparing, implementing, and monitoring an employee's career path. Focus on the organization
Strategic planning
the process of setting goals and designing a path toward a competitive position
Market based job evaluation
the relative worth and pay structure of different jobs are based on their market value or the going rate in the marketplace (i.e. market pricing)
Job-content-based job evaluation
the relative worth and the pay structure of different jobs are based on an assessment of their content (for example, responsibilities and requirements) and their relationship to other jobs within the organization.
Pedagogy
the study of education of children
Competency-based systems
set pay at the level at which an employee can operate in defined competencies (for example, directing or training others).
Pay range
sets the upper and lower limits of compensation for employees whose jobs fit within that particular grade The midpoint represents the market rate.
Needs analysis
should occur at individual, task, and org level
Strictness
some appraisers may be reluctant to give high ratings.
Perquisites
special incidental payments, benefits, or privileges given to individual employees, over and above their regular rewards. Free/discounted products or services, mobile devises, training programs, educational fees, etc. Perquisites are like perks at work!
Mission statement
specifies what activities the organization intends to pursue and what course management has charted for the future—a concise statement of the organization's strategy
Defined contribution
type of retirement plan, amount of money that is to be regularly contributed to the fund is specified
Defined benefit
type of retirement plan, promises specific benefit amount upon retirement
Push model of L&D
used for required trainings, etc.
Assessment methods
used throughout the selection process to identify applicant knowledge and skills that cannot be determined through interviews (substantive, discretionary, and contingent)
Organizational values
(to be distinguished from the economic value an enterprise produces for its stakeholders) are beliefs that are important to an organization and often dictate employee behavior. The process of developing mission, vision, and values statements is reiterated at the business unit and functional levels. Each unit considers its own work in light of the organization's strategic statements and expresses its own mission, vision, and values
Kirkpatrick's 4 Levels of Evaluation
1) Reaction level- measures client's reaction to program 2) Learning level- evaluates program by testing clients' new knowledge 3) Behavior level- evaluates program by measuring a change in behavior. 4) Results level- evaluates program by measuring organizational results.
Developing a pay structure
1) grouping jobs into pay grades, and 2) setting pay ranges
4 drivers of engagement
1. The work itself, including opportunities for development 2. Confidence & trust in leadership 3. Recognition & rewards 4. Org comms that are delivered in a timely & orderly way
SMARTER
7 qualities that characterize effective objectives (specific, measurable, achievable, relevant, time-based, evaluated, and revised)
Growth Strategy: Greenfield operation
A company builds a new location from the ground up. This represents a major task and a commitment to completely staff and equip the new location.
Growth Strategy: Brownfield operation
A company repurposes, through expansion or redevelopment, an abandoned, closed, or underutilized industrial or commercial property.
Growth Strategy: Licensing
A local firm is granted the rights to produce or sell a product. A low-risk entry strategy; avoids tariffs and quotas imposed on exports. However, there is little control of the licensee's activities and results.
Growth Strategy: Franchising
A trademark, product, or service is licensed for an initial fee and ongoing royalties. Often used in the fast-food industry. Similar to licensing as a low-risk entry strategy, although control over franchisee behavior is greater.
Growth Strategy: Strategic Alliance
Companies agree to share assets, such as technology or sales capabilities, to accomplish a goal. The relationship may have varying degrees of tightness and formality. Some alliances involve customers, partners, or competitors.
Porter's competitive strategies
Cost leadership, differentiation, focus strategies
Yield ratios
Determine which recruitment source or method or type of recruiter produces the greatest yield and identify areas that may need improvement
Strategic Planning & Management process
Formulation, development, implementation, and evaluation
Salary Data - Aging
Uses movement in market rates to adjust outdated salary data
Job documentation
Includes job description, job specifications, and job competencies.
Learning
Individuals & organization are encouraged to increase knowledge, competence, and performance
Development
Materials are created, purchased, modified (passive or participatory learning
Growth Strategy: Equity partnership
One firm acquires partial ownership through purchase of shares. The relationship may be general (sharing proportionally in control, profits, and liabilities) or limited (no managerial authority, liability limited to investment). Partnership agreements define such issues as leadership and division of profits and losses.
Incentives or premiums
Payments in return for the achievement of specific, time-limited, targeted objectives
Cost per hire
SHRM determined, cost per hire (CPH) is a measure of the effort exerted (defined in financial terms) to staff an open position in an organization. Basically same as cost of hire, but allows for variance within organizations. [(sum of external costs)+(sum of internal costs)]/total number of hires in a time period
Entitlement-oriented (culture)
Some organizations promote a caring, protective feeling and want employees to feel as if they are a part of the family. As benefits increase, there is more emphasis on the success of the org. as a whole
Benefits
Tangible payments or services provided to broad groups of employees to cover issues such as retirement, health care, sick pay/disability schemes, life insurance, and paid time off.
Contribution-oriented (culture)
The compensation programs of other organizations are more performance-driven, putting emphasis on the performance and contributions of individual employees.
Category rating methods
The least complex means of appraising performance. The appraiser marks an employee's level of performance on a designated form Use either a graphic scale, like a Likert scale, a checklist, or forced choice
Objectives
The most specific and measurable of the strategic statements.
Well being
physical, psychological, and social health Engagement is more likely when employee well-being is high
Growth Strategy: Joint venture
Two or more companies invest together in forming a new company that is jointly owned. Equal contribution = stipulation.
Blended learning
a combo of on-the-job, self, and instructor led study
Systems thinking
a conceptual framework that makes patterns clearer and helps one see how things interrelate and how to change them.
Curriculum vitae (CV)
a fairly detailed overview of a candidate's accomplishments, especially those relevant to the realm of academia
Shared vision
a look into the future that fosters genuine commitment and is shared by all who need to possess it.
Assessment centers
a method of evaluating candidates who are presented with content-valid workplace situations to which they respond and who are then evaluated on their responses.
Compa-ratio (compensation ratio)
a metric used to determine how actual wages match, lead, or lag the target market. Computed by dividing the pay rate of an employee by the midpoint of the pay range.
Total rewards strategy
a plan or method implemented by an org that provides monetary, benefits-in-kind, and developmental rewards to employees who achieve specific biz goals
Environmental scanning
a process of systematically surveying and gathering data, from both internal and external sources, that can be analyzed to identify opportunities and threats and to strengthen strategic plans and goals.
Knowledge café
a process that introduces individuals from across the organization so that they can share knowledge & experience
Compensation philosophy
a short (broad) statement documenting the org's guiding principles & core values about employee comp.
SWOT analysis
a simple and effective process for assessing an organization's strategic capabilities in comparison to threats and opportunities identified during environmental scanning
Kaizen
a systematic approach for business improvement, requiring that all people and processes in an organization work to continuously improve (5 steps: know your customer, let it flow, go to Gemba, empower people, be transparent)
Job analysis
a systematic study of jobs to determine what activities (tasks) and responsibilities they include, the personal qualifications necessary for performance of jobs, and work conditions results in job competencies, requirements, and specifications. Should be completed on a regular & ongoing basis Must be completed prior to engaging in recruiting activities for a vacant position A common approach to keeping job descriptions updated is to review them during performance reviews.
Learning organization
a systems level concept in which an organization is characterized by its ability to adapt to changes in its environment and respond quickly to lessons of experience by altering org behavior. Committed to retaining knowledge over time.
Green-circle rates
are the opposite of red-circle rates—an employee's pay is below the minimum of the range.
Pay grades
are used to group jobs that have approximately the same relative worth in an organization. Helps to create a pay structure for the entire org as opposed to having to set up a separate pay range for each job.
Developing a total rewards strategy
assessment, design, implementation, and evaluation
Types of culture
authoritarian, mechanistic, participative, learning, high-performance
Skill-based systems
base pay on the number of different skills an employee is qualified to perform
Categories to measure employee engagement
career development (job enlargement, job enrichment, job rotation, and work specification), relationship w/management, comp & ben, work environment
70-20-10 ratio
challenging assignments = 70%, developmental relationships = 20%, coursework & training = 10%
Competencies
clusters of highly interrelated attributes, including knowledge, skills, and abilities (KSAs), needed to do the job.
Participative
collaborative decision making/group problem solving
Remuneration surveys
collect information on prevailing market compensation and benefits practices, including starting wage rates, base pay, pay ranges, other statutory and market cash payments, variable compensation, and time off.
Broadbanding (salary bands)
combines two or more salary grades to create larger ranges and give people wide latitude to move within their job without outgrowing the pay scale
5 Elements needed for effective implementation of strategy
communication outward to the entire team, communication inward toward leaders, leadership support of decisions made by subordinates, free flow of info across org. boundaries, enough info to allow team members to connect their work to the strategy
Differentiation
companies aim to charge a higher price by offering something different or by offering the same thing in a different way from competitors in their industry or market—or by creating the perception that a product is different through superior marketing
Cost leadership
companies try to capture market share via having the lowest price
Evaluate
compare program to stated objectives
Benefits gap analysis
compares organizational needs, employee needs, and the existing set of benefits to identify the benefits that best match the needs of the organization and its employees.
Benchmarking
compares performance levels and/or processes of one entity with those of another to identify performance gaps and set goals aimed at improving performance.
External equity
comparing an organization's compensation levels and benefits to those of other organizations that are in the same labor market and that compete for the same employees. The use of remuneration surveys is critical in assessing external equity.
There is a strong link between engagement, wellness, and 3 psychological needs
competence, autonomy, and relatedness
Mental models
our deeply ingrained assumptions that influence how we understand the world and how we take action.
Contingent method
drug tests, medical exams, etc.
Single-rate pay (flat-rate pay) systems
each incumbent of a job has the same rate of pay, regardless of performance or seniority.
Paired-comparison method
each job is compared with every other job being evaluated
Performance objectives should measure
effectiveness, efficiency, and impact.
Behavioral engagement
effort employees put into their jobs, which leads to greater value, creating higher performance than from their less-engaged counterparts
Six Sigma project management
emphasizes focusing on projects with a quantifiable return of value, encouraging team commitment to quality and involvement in problem solving, measuring results in a manner that allows empirical analysis, and fact-based decision making
Person-based pay
employee characteristics, rather than how the job is performed, determine pay.
Red-circle rates
employee pay rates above the range maximum.
IDP components
employee profile, career goals & objectives, development objectives, training & development objectives, outcomes, signatures & dates
Management by objectives (MBO)
employees help set objectives for themselves
Job ranking
establishing a hierarchy of jobs from lowest to highest based on each job's overall value to the organization
Quantitative methods
evaluate specific factors on a scale and provide a score that indicates how valuable one job is compared to another. They use a variety of measurement factors called compensable factors (which reflect how much the job adds value to the organization).
Performance standards
expectations of management translated into 2 key elements that employees can deliver (behaviors and results)
Recruitment cost ratio
external costs + internal costs/first year compensation of hires in a time period x 100% Can be interpreted as: for every $1 of first-year compensation of hires, 10 cents was spent on recruitment.
Strategic management
includes the actions that leaders take to move their organizations toward the goals set in strategic planning and to create value for all stakeholders. Provides the organization with: consistent, long-term goals, consistent decision-making by leaders, better competitive and external vision, and better internal vision.
Trait engagement
inherent personality-based elements that make an individual predisposed to being engaged
Strategic drift
is a phenomenon in which an organization fails to recognize and respond to changes in its environment that necessitate strategic change
Strategy
is essentially a plan of action for accomplishing an organization's long-range goals to create value. Must look inward, at the org, and outward, at competitive landscape Growth is the result of successful strategy
Critical chain project management
is used when resources cannot be increased to meet deadlines
Key Areas of Employee Engagement
leadership characteristics, team practices, organizational values, work itself
Pull model of L&D
learning and development is a continuous process, easily accessible anywhere and anytime
Organizational learning
learning processes/activities that may occur at one of many levels in the organization (individual, group, organization)
Growth-share matrix
matrix used to find where the greatest value in the organization lies (growth trend predicts greater value and larger market share indicates competitive position Business line that is growing with a dominant market share = star Static but dominant business line = cash cow Consuming resources without offering strong value or growth = dog Winner or loser = question mark
Employee opinion survey
measures data on specific issues
Vacancy rate
measures the percentage of job positions that remain vacant over a specific period of time
Executing
meeting objectives in terms of schedule, budget, and quality.
Point Factor system
most common, the compensable factors chosen for the evaluation must reflect the nature of the job. Each factor gets a score and then the job gets an overall point value, which is compared to other jobs.
Reasonable accommodation
necessary, appropriate modifications or adjustments that do not impose a disproportionate or undue burden on the employer
Essential functions
not always included, these are the primary job duties that a qualified individual must be able to perform, either with or without reasonable accommodation
Knowledge-based system
pay is based on the level of knowledge the employee has in a field.
Productivity-based pay system
pay is determined by the employee's output.
Recency
occurs when an appraiser gives more weight to recent occurrences and discounts or minimizes the employee's earlier performance during the appraisal period.
Primacy
occurs when an appraiser gives more weight to the employee's earlier performance and discounts or minimizes recent occurrences.
Central tendency
occurs when an appraiser rates all employees within a narrow range, regardless of differences in actual performance.
Contrast
occurs when an employee's rating is based on how his or her performance compares to that of another employee instead of on objective performance standards.
Training delivery methods
on-the-job training, self-directed study, instructor-led study
Employee engagement
organizational and employees' willingness to "go the extra mile". The antithesis of burnout (vigor, dedication, and absorption). Not the same thing as involvement, although involvement can boost engagement.
Training
providing knowledge, skills, & abilities specific to a particular task or job
Measures of employee performance
quality, quantity, timeliness, cost-effectiveness
Systems thinking
recognizes that organizations are composed of interacting and sometimes interdependent parts that together create a dynamic internal environment
Gantt charts
represent the scheduling of tasks visually, showing the length and timing of specific activities
Performance-based pay system
the individual employee's performance on the job is the basis for the amount and timing of pay increases
Applicant tracking system (ATS)
systems that provide an automated way for organizations to manage the recruiting process.
5 disciplines that support an environment of learning
systems thinking, mental models, personal mastery, team learning, and shared vision
High-performance
talent is championed
Mechanistic
tasks & responsibilities defined clearly, communication processes, accountability
Andragogy
that discipline that studies how adults learn
Staffing
the HR function that acts on the organizational human capital needs identified through workforce planning and attempts to provide an adequate supply of qualified individuals to complete the body of work necessary for the organization's financial success
Retention
the ability to keep talented employees in the organization
Ethnocentrism
the belief that one's own culture and practices are more correct than other cultures' expressions.
Strategic fit
the consonance or compatibility of an organization's strategy with its external and internal environments, especially with regard to the goals and values it chooses and the resources and capabilities that can be deployed toward strategic goals
Straight piece-rate system
the employee receives a base wage rate and is awarded additional compensation for the amount of output produced
Differential piece-rate system
the employee receives one piece rate up to the standard and then a higher rate once the standard has been exceeded.
Time-based step-rate pay system
the employee's pay rate is based on longevity in the job. Pay increases occur on a pre-determined schedule.
Employee value proposition (EVP)
the foundation of an employer brand. Helps explain why someone wants to work at the company, and while they will continue to do so.
Personal mastery
the high level of proficiency in a subject or skill area.
Employment brand
the identity an organization presents to current or prospective employees. the process of positioning an organization as an "employer of choice" in the labor market
Cost of hire
the traditional measure of recruiting costs, determined by taking the total (recruiting) costs of all hires and dividing that figure by the number of new hires. Can calculate cost of hire by employee type to make sure we don't average out too much
Performance appraisal
the typical method of measuring employee's adherence to performance standards & providing feedback
Learning style
the way individuals take in and process new information. 3 distinct types: visual, auditory, and kinesthetic (tactile)
Boudreau and Ramstad criticism of job descriptions
they say that job descriptions only describe the current state of the job, and they don't do a good job ID-ing emerging role challenges.
Action mapping
training should be tightly focused on specific performance measures that the org has determined are important
Incentive pay
used to motivate employees to perform at a higher level by paying for performance that exceeds base-pay expectations (like sales based commissions) Incentivizing executives to meet business objectives is the most critical factor in designing executive compensation plans.
Agile project management
used when the assumptions on which a project is based are unclear or may evolve as project work proceeds. The project focuses on iterations of the deliverables
Critical path analysis
uses information about start or mandatory end dates, the logical relationship of tasks, and the length of each task to find the earliest completion date
Halo/horn effect
when an employee is extremely competent in one area and is therefore rated high in all categories. Conversely, the horn effect may occur when one weakness results in an overall low rating.
Job enlargement
when an employee is given additional, different tasks in the same job
Stay interviews
when current employees discuss what they do and don't like about their jobs
Internal equity
when employees feel that performance or job differences result in corresponding differences in rewards that are fair.
Nonquantitative methods
will indicate that one job is more important than another, but will not specify how much more
State engagement
workplace conditions & practices that can be improved through org interventions
Job classification
writes descriptions for each class of jobs. Individual jobs are then put into the grade that best matches their class description, based on the judgment of the evaluator
Narrative methods
written narrative performance appraisals (essay, critical incidents, field review)
