Management Exam 2

Job Design

activities that involve alteration of specific jobs or sets of interdependent jobs to improve employee experience and motivation Top-down Managers change employee tasks with intent of increasing motivation; job design is management led Bottom-up Employees can change or redesign their own jobs to boost their own motivation; job design driven by employee

Pay

annual base pay increases usually linked to performance

merit increase grid

apply increases on groups based on performance rating and distribution of ratings

Pay Level

average amount the organization pays for a particular job

Behavior

behaviorally anchored rating scales (BARS): Behavioral anchors associated with different levels of performance Can increase interrater reliability Can vias info recall Behavioral observations scales (BOS): how frequently person meets goals

Reliability

consistency of performance measure Interrater reliability: consistency among individuals who evaluate employee's performance Test- retest reliability

Quality

customer orientation, prevention approach to errors, continuous improvement, primary goal is improving customer satisfaction

Expectancy Theory

desired combinations of expected outcomes (Vroom) Expectancy- "what are the chances of reaching my performance goal? Instrumentality- "What are the chances of receiving various outcomes if I achieve my performance goals? Valence- "how much do I value the outcomes i will receive by achieving my performance goals?"

Validity

extent to which a performance measure assesses all relevant aspects of performance Validity contamination- job performance measure Criterion deficiency - actual or "true" job performance

Acceptability

extent to which a performance measure is deemed satisfactory or adequate, May take too much time or not be accepted as fair

Organizational socialization

how we learn the culture People acquire the knowledge, skills, attitudes, and behaviors required to assume a work role

Issues in Developing Pay Structure

legal requirements, market forces, organization's goals, =pay level, job structure, and pay structure decisions

Performance Management

managers ensure that employee's activities and outputs are congruent with organization goals, help you achieve goals

gain sharing

measures group or plant performance rather than profits Payouts are more frequent and not deferred. More motivating to employees because they are more in control. Improves performance. Strong levels of cooperation, management commitment, and commitment to continuous improvement help gainsharing succeed

Equity Theory

model of motivation that explains how people strive for fairness and justice in social exchanges or give-and-take relationships

Profit Sharing

not apart of base pay PRO: employees think more like owners, the broad view of how to make the company more effective PRO: labor costs are automatically reduced during difficult economic times, wealth is shared during good times CON: most employees unlikely to see strong connection between what they do and what they earn CON: Decisions on business likely controlled at the top of a the business CON: most plans are deferred type (they lose their value)

Bonus

not permanent (like a salary increase) and may reward broad range of performance dimensions **Bonus' are liked the most**

performance appraisal

organization gets info on how well and employee is doing their job

4 functions of organizational culture

organizational identity collective commitment social system stability sense-making device

Specificity

performance measure tells employees what is expected of them and how they can meet these expectations

stock options

plan that gives employees the opportunity to buy company stock at a previously fixed price.

Performance Feedback

provides employees info regarding their performance effectiveness

Motivation

psychological mechanisms that guide the direction, intensity, and persistence of one's behaviors and thoughts

Difference between incentive rewards

raise bonus

Piecework Rate

rate of pay for each unit produced

organizational culture

set of shared, taken for granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments

4 Characteristics of Organizational culture

shared concept, learned over time, influences our behavior at work, impacts outcomes at multiple levels

Pay Structure

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

Job Structure

the relative pay for different jobs within the organization

Goal Setting Theory

use of feedback and participation in deciding how to achieving goals People are motivated to behave in ways the produce desired combinations of expected outcomes Goals create persistence

Pay Plan

used to energize, direct, sustain, or control the behavior of employees Effective of pay plans= incentive effect

Strategic Congruence

using non-financial performance measures (quality, customer satisfaction, etc) Performance management system elicits job performances that is congruent with the organization's strategy, goals, and culture

Competing Values Framework

way for managers to understand, measure, and change organizational culture Flexibility and discretion Internal focus and interrogation External focus and differentiation Stability and control

Concepts of Job Evaluation

Administrative procedure used to measure internal job worth Compensable factors and a weighting scheme Relies on point system

3 phase model of organizational socialization

Anticipatory socialization- before you join the team, learn from current employees Encounter- Change and acquisition- employees master important tasks and roles and adjust to their group's values and norms

point system of job evaluation

Apply a weighting scheme to account for the differing importance of compensable factors Determine compensable factors (decide how many levels) Assign points to levels of compensable factors

Levels of organization

Artifacts: physical manifestation of an organization's culture, what we actually see Espoused values: explicitly stated values and norms that are preferred by an organization Enacted values: values and norms actually exhibited or converted into employee behavior Basic Underlying Assumptions: values that have become so taken for granted over time that they become assumptions that guide organizational behavior

Thorndike's Law of Effect

Behavior with favorable consequences tend to be repeated

Methods of employee performance appraisal

Comparative- compare someone's performance to others; rank Attributes- evaluate list of traits on a 5-point scale; can be discrete scale or continuous

2 categories of motivation theories

Content Theory: focus on identifying internal factors that motivate people Process Theory: how internal and external factors motivate people

What results from a job-based pay structure

Decrease In lateral job movement Top-down decision making is reinforced Growing bureaucracy

Equal Pay Act of 1963

Differences in pay cannot be based on age, sex, race, or other protected status Laws don't guarantee equal pay;legitimate factors that influence earnings Such as dealing with changing labor market and demographic realities Comparable-worth policies are controversial

Elements of Justice Theory

Distributive and procedural have strongest relationships with outcomes Interactional not a leading indicator of outcomes Distributive Justice: perceived fairness of the way resources and rewards are distributed Procedural Justice: perceived fairness of the process and procedures used to make allocated decisions Interactional Justice: describes the "quality of the interpersonal treatment people receive when procedures are implemented"

Exempt vs. Non-Exempt

Exempt: managers, outside salespeople, and other employees not covered by FLSA requirements (no overtime) Nonexempt: employees are covered by FLSA requirements for overtime pay FLSA: overtime is hours worked beyond 40 work week, employers must pay 1.5 times employee's usual rate

Fair Labor Standards Act of 1938

Federal law that establishes minimum wage and requirements for overtime pay and child labor Provides for a training wage for 90 days

Employee Stock Ownership Plan (ESOP)

Give employers certain tax and financial advantages when stock is granted to employees ESOPS can carry significant risk for employees

basic forms of compensation

Hourly: rate of pay per each hour worked Salary: rate of pay per week, month, or year

Concepts of equity regarding compensation

Internal: fairness of one's pay relative to pay of coworkers External: fairness of one's pay relative to what employees in other organizations earn doing the same job

Deciding what to pay

It is discretionary and based on a broad range Org has to decide to pay at, below, or above market average Efficiency wage theory- wages influence worker productivity Ranges depend on competitive environment Pay polices are on of the most important structures and tailored to particular jobs

Economic Influences on Pay

Labor Markets: must compete for talent that establishes minimum pay, cost of living Product Markets: org that offer similar goods and services, compete on quality price and services Top end in the Labor, bottom you can afford is product

Sources of performances management info

Managers, peers, subordinates, self, customers, 360 degree

Factors that determine pay level

Market competition Labor market competition Market pay surveys

Important components in the process of collecting market wage data

Market pay surveys Benchmarking: comparing against others in the market Pay surveyors, Bureau of Labor Statistics, Society for Human Resource Management, consulting groups key/non-key jobs: Key -Benchmark jobs that have relatively stable content Non- Unique to organizations and cannot be directly valued or compared through the use of market surveys

Pay Ratio Reporting

Must report ratio of CEO pay to pay of median employee Consumer protection Act of 2010 Increases transparency and social responsibility

McClelland's Theory of Needs

Need for Affiliation- maintain social relations, be liked, and join groups Need for Achievement- excel, overcome obstacles, solve problems, and rival and surpass others Need for Power- influence, coach, teach, or encourage others to achieve

Pay-Policy Line

On graph shows relationship between job evaluation points and pay rates Reflects the pay structure in the market; doesn't always match rates in organization

Key Jobs

Organizations define key jobs to create pay structures Relatively stable content and are common among many organizations so market-pay survey data can be obtained Pay for key jobs can be based on survey data

Pay Rates

Rates of key jobs based on market research non-key jobs often have no survey data available; rate must be based of job evaluation by plotting data on graph

Broad Banding

Reducing number of layers in organization's job structure More assignments combined into single layer called a broadband More emphasis on acquiring experiences, not promotions Easier to manage, harder to focus on improving career Rewards high performers with merit increases

Relationship between pay and individual employee behavior

Reinforcement theory- provide a reward they are likely to do it again Expectancy theory- expectancy, instrumentality, and valence; i reached my goal, will i get my reward Instrumentality is the link between behaviors and pay Agency theory- focuses on divergent interests and goals of org's stakeholders Getting close enough to give employers and stockholders what they want Align principal (business) and agent (employees)

Skinner Respondent and operant behavior

Respondent- automatic reactions to stimuli Operate- behavior that are learned and occur when we operate on the environment to produce consequences Contingent consequences control behavior with positive & negative reinforcement, punishment, extinction

Pay Grades

Sets of jobs having similar worth or content grouped together to establish rates of pay Promote people to a higher grade without pay more May not match market rate Range spread- distance between minimum and maximum

Rating errors that can influence performance ratings

Similar-to-me-effect Strictness Central tendency Leniency Contrast effects Halo effect Horns effect

Difference between team compensations plans and individual incentive plans

Team compensations Individual incentives

Pay Equity

Term for policies and practices to eliminate pay discrimination Comparable worth= pay equity

How stock options work as a component of executive compensation

Their performance/ success depends on how much they get in their stock Troubled Asset Relief Program regulated executive pay in forms receiving government "bailout" money

Performance Management Process

Traditional- very structured, step by step, top-down Continuous performance management process:ongoing conversations between managers and teams focused on work progress, feedback, goals and needs; agile, changing, focused on real time

Criticisms of Merit Pay Plans

Unfair to rate individual performance because differences arise from the system Individual focus of merit pay discourages teamwork If performance measure is perceived as unfair, the entire program can break down Merit pay does not really exist, most employees don't perceive a payoff to higher performance

Merit Pay Plan

Used to differentiate top performers Ability to game the system is mitigated Multiple measures of performance are used Performance measures accurate, consistent, and aligned with goals and outcomes

gainsharing as a group incentive plan

You get more the better your team does Pertain to a smaller work group May use broader range of performance measures

12 mechanisms for changing organizational culture

1. Formal statements 2. Design of physical space, work environment, and buildings 3. Slogans, language, acronyms, sayings 4. Deliberate role modeling, training programs, teaching, and coaching by others 5. Explicit rewards, status symbol, and promotion criteria 6. Stories, legends, or myths about key people and events 7. Organizational activities, processes, or outcomes 8. Leader reactions to critical incidents and organizational crises 9. Rites and rituals 10. Work flow and organizational structure 11. Organizational systems and procedures 12. Organizational goals and criteria throughout employee cycle (hire to retire)