MGT 764 ch.6

goal commitment

The extent to which a person is personally interested in reaching a goal

conditions for empowerment to enhance organizational effectiveness

First, the organization must be sincere in its efforts to spread power and autonomy to lower levels of the organization. Second, the organization must be committed to maintaining participation and empowerment. Third, the organization must be systematic and patient in its efforts to empower workers. Finally, the organization must be prepared to increase its commitment to training.

Which is true of the evidence concerning the validity of the balanced scorecard approach to performance management?

Most of the evidence is anecdotal in nature

BASE PAY

consists of the basic wage or salary paid employees in exchange for doing their jobs. You receive a job offer with a $55,000 salary.

awards

everything from seniority to perfect attendance, from zero defects (quality work) to cost reduction suggestions. Award programs can be costly in the time required to run them and in money if cash awards are given, but award systems can improve performance under the right conditions.

Job Design

how organizations define and structure jobs

the measuring method

provides the information managers use to make decisions about salary adjustment, promotion, transfer, training, and discipline

extended work schedule

work schedule that requires relatively long periods of work followed by relatively long periods of paid time off EX) extended work schedule include offshore petroleum-drilling platforms, transoceanic cargo ships, research labs in distant settings such as the South Pole, and movie crews filming in remote locations

reward system (pg232)

All organizational components, including people, processes, rules and procedures, and decision-making activities, involved in allocating compensation and benefits to employees in exchange for their contributions to the organization Possible behaviors include performance, longevity, attendance, loyalty, contributions to the "bottom line," responsibility, and conformity.

Flexible reward systems

Allows employees to choose the combination of benefits that best suits their needs

job enlargement (basic alternative to job specialization)

(or horizontal job loading) Involves giving workers more tasks to perform. Maytag was one of the first companies to use job enlargement Rather than having employees perform only one step of the product packaging process, management let each packaging employee package an entire product to reduce boredom from repetitively doing a single task.

job enrichment (basic alternative to job specialization)

(vertical job loading)Entails giving workers more tasks to perform and more control over how to perform them Giving employees more responsibility over their work and letting them set their own hourly goals as long as their company-assigned daily goals are met is an example of which job design approach?

goal acceptance

the extent to which a person accepts a goal as his or her own Because Julia thought that her supervisor's goal for her to sell a certain number of products to a client that presented a conflict of interest was unethical, she refused to comply with it.

Frequency of Appraisals

the organization usually conducts performance appraisals on a regular basis, typically once a year. Annual performance appraisals are convenient for administrative purposes such as record keeping and maintaining a level of routine that helps keep everyone comfortable.

MBO Challenges

top managers do not participate tendency to overemphasize quantitative goals to enhance verifiability. Another potential liability is that an MBO system requires a great deal of information processing and record keeping since every goal must be documented. Finally, some managers do not really let subordinates participate in goal setting but instead merely assign goals and order subordinates to accept them.

Pay Secrecy

When a company has a policy of open salary information, the exact salary amounts for employees are public knowledge. State governments, for instance, make public the salaries of everyone on their payrolls. A policy of complete secrecy means that no information is available to employees regarding other employees' salaries, average or percentage raises, or salary ranges.

Telecommuting

Work arrangement in which employees spend part of their time working off-site

compressed work schedule

Work schedule in which employees work a full forty-hour week in fewer than the traditional five days Most typically, this schedule involves working ten hours a day for four days, leaving an extra day off.

benefits

Rewards and incentives provided to employees in addition to their wages or salaries

Indirect Compensation

Employee benefits provided as a form of compensation

Participation

Entails giving employees a voice in making decisions about their own work

The appraiser

In most appraisal systems, the employee's primary evaluator is the supervisor

perquisites (perks)

Special privileges awarded to selected members of an organization, usually top managers. A car and driver, first-class travel, and a golf club membership are given to all employees at the Vice President level or higher.

Locke's goal-setting theory

assumes that behavior is a result of conscious goals and intentions. Therefore, by setting goals for people in the organization, a manager should be able to influence their behavior.

goal setting challenges

focus too much attention on the short-run at the expense of long-term considerations. acceptance and commitment, have been studied less frequently.

Goal-Setting Theory of Motivation

expanded theory on the goal-setting theory. so Locke, together with Gary Latham did it together The expanded theory argues that goal-directed effort is a function of four goal attributes: difficulty and specificity (previously discussed), and acceptance and commitmen

Taylor's view

grew from the historical writings about division of labor advocated by Scottish economist Adam Smith

quality circles

group of employees who voluntarily meet regularly to identify and propose solutions to problems related to quality. quickly evolved into a broader and more comprehensive array of workgroups, now generally called "work teams." These teams are collections of employees empowered to plan, organize, direct, and control their own work. Their supervisor, rather than being a traditional "boss," plays more the role of a coach.

Areas of Employee Participation

managers can ask employees to make their own decisions about how to do them. Based on their own expertise and experience with their tasks, workers might be able to improve their own productivity. In many situations, they might also be well qualified to make decisions about what materials to use, which tools to use, and so forth. If jobs are relatively independent of one another, employees might decide when to change shifts, take breaks, go to lunch, and so forth. A workgroup or team might also be able to schedule vacations and days off for all of its members.

Benefits of Telecommuting

1. Reduces capital costs 2. Increases flexibility and autonomy for workers 3. Provides a competitive advantage when recruiting 4. Increases job satisfaction 5. Increases productivity 6. Ability to tap into nontraditional workers (1) they can reduce absenteeism and turnover since employees will need to take less "formal" time off, and (2) they can save on facilities such as parking spaces because fewer people will be at work on any given day.

management by objectives, or MBO

A collaborative goal-setting process through which organizational goals cascade down throughout the organization

goal

A meaningful objective Used for 2 purposes: First, they provide a useful framework for managing motivation. Managers and employees can set goals for themselves and then work toward them. Second, goals are an effective control device (control meaning the monitoring by management of how well the organization is performing).

balanced scorecard, or BSC

A relatively structured performance management technique that identifies financial and nonfinancial performance measures and organizes them into a single model

MBO

A successful MBO program starts with top managers' establishing overall goals for the organization. After these goals have been set, managers and employees throughout the organization collaborate to set subsidiary goals. During the time frame set for goal attainment (usually one year), the manager periodically meets with each subordinate to check progress. At the end of the specified time period, managers hold a final evaluation meeting with each subordinate. At this meeting, manager and subordinate assess how well goals were met and discuss why. This meeting often serves as the annual performance review as well,

Practical ways to empower others include:

Articulating a clear vision and goals Fostering personal mastery experiences to enhance self-efficacy and build skills Modeling successful behaviors Sending positive messages and arousing positive emotions in employees Connecting employees with the outcomes of their work and giving them feedback Building employee confidence by showing competence, honesty, and fairness

Job Characteristics Theory

At the core of the theory is the idea of critical psychological states. These states are presumed to determine the extent to which characteristics of the job enhance employee responses to the task.

Job Specialization

Breaking jobs down into small component tasks and standardizing them across all workers doing those jobs Fredrick Taylor argued that jobs should be scientifically studied, broken down into small component tasks, and then standardized across all worker doing those jobs. Job specialization involves carefully studying jobs, breaking those jobs down into small component tasks, and then standardizing how those tasks should be performed across all workers performing the jobs EX)Rather than being a human resources generalist, Alice only handles payroll for her company.

the 3 critical psychological states are:

Experienced meaningfulness of the work: the degree to which the individual experiences the job as generally meaningful, valuable, and worthwhile Experienced responsibility for work outcomes: the degree to which individuals feel personally accountable and responsible for the results of their work Knowledge of results: the degree to which individuals continuously understand how effectively they are performing the job

weaknesses of job characteristic theory

First, the measures used to test the theory are not always as valid and reliable as they should be. Further, the role of individual differences frequently has not been supported by research. Finally, guidelines for implementation are not specific, so managers usually tailor them to their own particular circumstances. Still, the theory remains a popular perspective on studying and changing jobs.Footnote

flexible work schedule (sometime called flextime)

Give employees more personal control over the hours they work each day. gives employees less say about what days they work but more personal control over the times when they work on those days 27 million full-time workers in the United States have some degree of flexibility in when they begin and end their work days. If some of your employees need daycare, some want greater retirement contributions, and some want a more generous healthcare plan, which is the best reward system to implement?

surface value

Objective meaning or worth of a reward. Intrinsic and extrinsic rewards carry both surface and symbolic value. A salary increase of 5 percent, for example, means that an individual has 5 percent more spending power than before, whereas a promotion, on the surface, means new duties and responsibilities

problems with compressed work schedule

One problem with this schedule is that if everyone in the organization is off at the same time, the firm may have no one on duty to handle problems or deal with outsiders on the off day. On the other hand, if a company staggers days off across the workforce, people who don't get the more desirable days off (Monday and Friday, for most people) may be jealous or resentful. Another problem is that when employees put in too much time in a single day, they tend to get tired and perform at a lower level later in the day.

The Expatriate Compensation Balance Sheet

Organizations that ask employees to accept assignments in foreign locations usually must adjust their compensation levels to account for differences in cost of living and similar factors. Amoco uses the system shown here. The employee's domestic base salary is first broken down into the three categories: taxes, consumption, savings

Issues to Consider in Developing Reward Systems

PAY SECRECY Open, closed, partial Link with performance appraisal Equity perceptions EMPLOYEE PARTICIPATION By human resource department By joint employee/management committee FLEXIBLE SYSTEM Cafeteria-style benefits Annual lump sum or monthly bonus Salary versus benefits ABILITY TO PAY Organization's financial performance Expected future earnings ECONOMIC AND LABOR MARKET FACTORS Inflation rate Industry pay standards Unemployment rate IMPACT ON ORGANIZATIONAL PERFORMANCE Increase in costs Impact on performance EXPATRIATE COMPENSATION Cost-of-living differentials Managing related equity issue

typical benefits provided by businesses:

Payment for time not worked, both on and off the job. On-the-job free time includes lunch, rest, coffee breaks, and wash-up or get-ready time. Off-the-job time not worked includes vacation, sick leave, holidays, and personal days. Social Security contributions. The employer contributes half the money paid into the system established under the Federal Insurance Contributions Act (FICA). The employee pays the other half. Unemployment compensation. People who have lost their jobs or are temporarily laid off get a percentage of their wages from an insurance-like program. Disability and workers' compensation benefits. Employers contribute funds to help workers who cannot work due to occupational injury or ailment. Life and health insurance programs. Most organizations offer insurance at a cost far below what individuals would pay to buy insurance on their own. Pension or retirement plans. Most organizations offer plans to provide supplementary income to employees after they retire.

examples of incentive systems

Piecework programs, which tie a worker's earnings to the number of units produced Gain-sharing programs, which grant additional earnings to employees or workgroups for cost-reduction ideas Bonus systems, which provide managers with lump-sum payments from a special fund based on the financial performance of the organization or a unit Long-term compensation, which gives managers additional income based on stock price performance, earnings per share, or return on equity Merit pay plans, which base pay raises on the employee's performance Profit-sharing plans, which distribute a portion of the firm's profits to all employees at a predetermined rate Employee stock option plans, which set aside stock in the company for employees to purchase at a reduced rate.You believe that employees work more efficiently and are more committed to their employer if they share in the ownership of the company.

incentive systems

Plans in which employees can earn additional compensation in return for certain types of performance

5 characteristics of the job

Skill variety: the degree to which the job requires a variety of activities that involve different skills and talents Task identity: the degree to which the job requires completion of a "whole" and an identifiable piece of work; that is, the extent to which a job has a beginning and an end with a tangible outcome Task significance: the degree to which the job affects the lives or work of other people, both in the immediate organization and in the external environment Autonomy: the degree to which the job allows the individual substantial freedom, independence, and discretion to schedule the work and determine the procedures for carrying it out Feedback: the degree to which the job activities give the individual direct and clear information about the effectiveness of his or her performance

social learning theory

Social learning theory perhaps best describes the role and importance of goal setting in organizations.Footnote This perspective suggests that feelings of pride or shame about performance are a function of the extent to which people achieve their goals. Social learning theory provides insights into why and how goals can motivate behavior. It also helps us understand how different people cope with failure to reach their goals

symbolic value

Subjective and personal meaning or worth of a reward rewards convey to people not only how much they are valued by the organization but also their importance relative to others

job rotation ( basic alternative to job specialization)

Systematically moving workers from one job to another in an attempt to minimize monotony and boredom Unfortunately, job rotation does not entirely address issues of monotony and boredom, however.Footnote That is, if a rotation cycle takes workers through the same old jobs, the workers simply experience several routine and boring jobs instead of just one. EX)Some companies use this approach to decrease the likelihood of repetitive motion injuries from repetitive physical work

goal specificity

The clarity and precision of a goal Some goals, such as those involving costs, output, profitability, and growth, can easily be stated in clear and precise terms. Other goals, such as improving employee job satisfaction and morale, company image and reputation, ethical behavior, and social responsibility, are much harder to state in specific or measurable terms. Rather than telling your employees to "do their best", it is better to give them a specific numerical target if possible. This is because Goal specificity helps employees strive for a target and know how close they are to getting there.

goal difficulty

The extent to which a goal is challenging and requires effort Pete was not motivated by his assigned goal because he thought he could never perform at that level. In this case, Goal difficulty was too high.

Expatriate Compensation

The firm will probably have to pay the manager some level of additional compensation to offset the decrement in quality of lifestyle. Thus, developing rewards for expatriates is a complicated process. Manager in Houston making $450,000 is asked to go to Tokyo where the cost of living is much higher`

Measuring performance

The foundation of good performance management is correctly identifying what should be measured and the selection of the best method(s) for measuring it. Accurately defining job performance is critical: measuring the wrong things well is not good performance management. Once the critical performance dimensions are known, the best way(s) of assessing them can be identified.

Issues when developing organizational reward systems

The organization must consider its ability to pay employees at certain levels, economic and labor market conditions, and the impact of the pay system on organizational financial performance.

performance appraisal

The process of assessing and evaluating an employee's work behaviors by measurement (1) evaluates an employee's work behaviors by measurement and comparison with previously established standards, (2) documents the results, and (3) communicates the results to the employee The ability to provide valuable feedback is one critical purpose.Providing job performance feedback is the primary use of appraisal information.

empowerment

The process of enabling workers to set their own work goals, make decisions, and solve problems within their sphere of responsibility and authority

compensation package

The total array of money (wages, salary, commissions), incentives, benefits, perquisites, and awards provided by the organization to an individual

elements of performance management

Three of the most important issues are who does the appraisals, how often they are done, and how performance is measured.

job sharing

Two or more part-time employees sharing one full-time job Two or more part-time employees sharing one full-time job

"nine-eighty" schedule

Under this arrangement, an employee works a traditional schedule one week and a compressed schedule the next, getting every other Friday off. That is, they work eighty hours (the equivalent of two weeks of full-time work) in nine days.

Job Characteristics Theory

Uses five motivational properties of tasks and three critical psychological to improve outcomes

multiple-rater system

incorporates the ratings of several people familiar with the employee's performance. One possible alternative, for example, is to use the employee as an evaluator. 360-degree feedback (also called a multicourse feedback)-A performance appraisal method in which employees receive performance feedback from those on all sides of them in the organization

Approaches to Participation and Empowerment

many managers today prefer the term "empowerment" to "participation" because it implies a more comprehensive level of involvement. The basic pattern is for an organization to eliminate layers from its hierarchy, thereby becoming much more decentralized. Power, responsibility, and authority are delegated as far down the organization as possible, so control of work is squarely in the hands of those who actually do it. Technology also helps organizations empower workers by making better and timelier information available to everyone in the organization.

Participative Pay Systems

may involve the employee in the system's design, administration, or both. A pay system can be designed by staff members of the organization's human resources department, a committee of managers in the organization, an outside consultant, the employees, or a combination of these sources