Management Exam 2
Four functions of culture
- Establishes organizational identity for members - Fosters collective commitment - Acts as a sense making device - Social system stability
The competing values framework
- Helps managers understand, measure, and change an organization's culture - Was first developed by researchers trying to classify different ways to assess organizational effectiveness.
Encounter
-Employees can learn what the organization is really like -Onboarding programs: help employees to integrate, assimilate, and transition to new job by making them familiar with corporate policies, procedures, culture, and politics and by clarifying work-role expectations and responsibilities
Process of Performance Management
1. Define organizational goals and objectives 2. Develop measurement system 3. Encourage performance 4. Asses employee performance 5. identify ways to improve 6. Provide consequences
Fair Labor Standards Act
1938 act which provided for a minimum wage and restricted shipments of goods produced with child labor
Scanlon Plan
A bonus incentive plan using employee and management committees to gain cost-reduction improvements monetary bonuses paid to employees if the ratio of labor costs to the sales value of production is kept below a certain standard
Pay policy line
A mathematical expression that describes the relationship between a job's pay and its job evaluation points
Herzberg's Theory
A need theory that distinguishes between motivator needs (related to the nature of the work itself) and hygiene needs (related to the physical and psychological context in which the work is performed) and proposes that motivator needs must be met for motivation and job satisfaction to be high.
Upward Feedback
A performance appraisal process for managers that includes subordinates' evaluations.
efficiency wage theory
A theory stating that wages influence worker productivity
2%
According to research findings, when an organization changes from a pay strategy that has below average variability to one with above average variability, on average they will experience a return on assets of approximately
Maslow's Hierarchy of Needs
Based on physiological and esteem needs
Hierarchy
Companies with this culture has an internal focus, which produces a more formalized and structured work environment and values stability and control over flexibility. -They view efficiency as one measure of effectiveness.
Market
Companies with this culture have a strong external focus and value stability and control
Adhocracy
Companies with this culture have an external focus and value flexibility - They emphasize creation of new products and services. - They are highly responsive to marketplace changes.
Clan
Companies with this culture have an internal focus and value flexibility rather than stability and control
Benchmarking
Comparing an organization's practices, processes, and products against competitors
Values
Concepts or beliefs that pertain to desirable end states, transcend situations, guide selection of behavior and are ordered by relative importance Resemble personal values (prior lesson) Espoused values: explicitly stated values and norms that are preferred by an organization Enacted values: values and norms that are exhibited or converted into observable employee behavior
Reward system
Considered one of the strongest ways to embed organizational culture because they are meaningful and visible
Basic Assumptions
Constitute values that have become so taken for granted over time that they become assumptions that guide organizational behavior
Characteristics of the point factor system
Each evaluation score is typically weighted to account for its relative importance. The system yields evaluation scores for each compensable factor of a job.
Quality Approach
Emphasize managers and employees working together to solve performance problems. preventative approach to errors
McClelland's Theory of Needs
Employee behavior is driven by needs we acquire as we live our lives (learned not taught) need for achievement, need for power, need for affiliation
as it relates to the pay of their colleagues as a sign of status and success as a way of evaluating their relationship with the organization
Employees typically view their compensation in these terms
Unidirectionally, from supervisor to subordinate
Feedback in traditional merit pay programs typically flows in this direction
Values Philosophy Mission
Formal statements in an organization are those about organizational...
Adhocracy Hierarchy Clan Market
Fundamental types of organizational culture based on the competing values framework
Specificity Reliability Acceptability
Important criteria for evaluating a performance management system
Point-factor system
Job evaluation method that looks at compensable factors (such as skills and working conditions) that reflect how much a job adds value to the organization; points are assigned to each factor and then added to come up with an overall point value for the job.
Observable artifacts
Physical manifestation of an organization's culture Examples: acronyms, manner of dress, awards, stories, logos, colors, special parking spots
Delayering
Reducing the number of levels in the organization's job structure
The change and acquisition phase of Organizational Socialization model
Requires employees to master important tasks and roles and to adjust their work group's values and norms
Competencies
Set of behaviors encompassing skills, knowledge, abilities, and personal attributes that are critical to successful work accomplishment.
Negative emotions
Tend to travel faster and further in an organization
compensable factors
The characteristics of jobs that an organization values and chooses to pay for.
Equal Employment Opportunity
The equal right of all citizens to the opportunity to obtain employment regardless of their gender, age, race, country of origin, religion, or disabilities.
Specificity
The extent to which a performance measurement gives detailed guidance to employees about what is expected and how to meet those expectations relevant to employee development and achieving strategic goals
Strategic Congruence
The extent to which the performance management systems elicits job performance that is consistent with the organization's strategy, goals, and culture.
does not use actual market rates for key jobs
The pay-setting approach that uses the pay policy line to derive pay rates for both key and nonkey jobs
Anticipatory Socialization
The phase of organizational socialization that occurs before an individual actually joins an organization
Organizational Culture
The 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
Process Theories
The theories that focus on explaining the process by which internal and situational factors influence employee motivation
Basic underlying assumptions Espoused values Observable artifacts
The three levels of organizational culture
Visibility Resistance to change
The three levels of organizational culture differ in these ways
Change and acquisition Anticipatory socialization Encounter
The three phases in Daniel Feldman's Organizational Socialization model
The Human Side of Enterprise
The title of Douglas McGregor's book, which formulated two contrasting views of human nature
Employee activity and organizational goals
The top strategic purpose of performance management is establishing a link between these two things
organizational effectiveness performance employee attitudes
These are all things that can be impacted by an organization's culture
Deliberate role modeling, training, teaching, and coaching
These mechanisms for culture change most closely corresponds with Experian's emphasis on building culture organically through the use of informal networks
Positive Work Attitudes
This organizational outcome has the strongest correlation across the four major types of organizational culture
Self-determination theory
Three innate (not learned) needs to drive most employee behavior -Relatedness: desire to feel connected with others, be a part of the group, and to belong -Competence: dire to feel knowledgeable, qualified, and capable of completing a task -Autonomy: Desire to have freedom and discretion in what to do and how to do it
the company's home country
Typically, expatriate pay and benefits are linked most closely to
Feedback systems Measurement systems Definitions of the expected results
When implementing a performance management strategy, organizations develop....
behavioral approach
When managers attempt to define which behaviors employees have to exhibit in order to effectively complete their job
developing behavioral anchors associated with different levels of performance
When using behaviorally anchored rating scales, organizations seek to define performance dimensions by
Gainsharing
a compensation system in which companies share the financial value of performance gains, such as increased productivity, cost savings, or quality, with their workers
employee stock ownership plan
a compensation system that awards employees shares of company stock in addition to their regular compensation
profit sharing
a form of compensation whereby a percentage of company profits is distributed to the employees whose work helped to generate them
Executive Compensation
a governance mechanism that seeks to align the interests of managers and owners through salaries, bonuses, and long-term incentives such as stock awards and options
Behavioral Observation Scale (BOS)
a subjective measure on which the frequency with which an employee performs a behavior is indicated
Equity Theory
a theory that states that people will be motivated when they perceive that they are being treated fairly Explains how people strive for fairness and justice in social exchanges or give-and-take relationships
Agency Theory
a theory that views the firm as a nexus of legal contracts focuses on how employee compensation can be used to align the divergent interests and goals of an organizations' various stakeholders
Job design
altering jobs to improve employee experience and productivity
Compa-ratio
an index that indicates how an individual's or a group's salary relates to the midpoint of their relevant pay grades
job crafting
approach to job design in which individuals make physical and cognitive changes in the task or relational boundaries of their work
Key Jobs
benchmark jobs, used in pay surveys, that have relatively stable content and are common to many organizations
Comparative Method
comparing employees by ranking
Internal comparsion
comparing oneself to someone in the same company
Customer Learning Operations
components of a balanced scorecard's perspectives of performance
Paid vacation Salary Stock Options
considered part of an employees total compensation
job enlargement (horizontal loading)
consists of increasing the number of tasks in a job to increase variety and motivation
Attribute
describes an approach to performance management that involves focusing on certain traits or characteristics possessed by individuals that are thought to be related to the company's success
J. Stacy Adams
developed equity theory
According to W. Edwards Deming, rating individual performance is an unfair practice because
differences between workers are almost entirely the result of the system they work in rather than the people
Direct reports
employee who reports directly to a particular manager
idiosyncratic deals
employment terms individuals negotiate for themselves (schedule development, flexibility, career development)
ownership
encourages employees to focus on organization's success, but may be less motivational the larger the organization.
job rotation
enlarging jobs by moving employees among several different jobs
Results Approach
focuses on managing the objective, measurable results of a job or work group
Attribute Approach
focuses on the extent to which individuals have certain attributes believed desirable for the company's success
pay survey
gathering information to learn how much employees are being paid by other organizations
Content Theories
identify different needs that may motivate individual behavior
Developmental purpose of performance management
identify employee weaknesses for managers to use in providing feedback and coaching it is designed to develop employees and improve performance
Biggest criticism of the merit pay system
it does not exsist
Non-key Jobs
jobs that are unique to organizations and that cannot be directly valued or compared through the use of market surveys
Merit pay programs
links performance-appraisal ratings to annual pay increases
Problems with scientific management methods
low sense of accomplishment high levels of dissatisfaction and stress poor mental health
variable pay
merit pay or merit bonuses
Simple Ranking
method of performance measurement that requires managers to rank employees in their group from the highest performer to the poorest performer
incentive pay
money offered to encourage employees to strive for higher levels of performance
Cognitive dissonance
motivates corrective action in equity theory
direct employee behavior control employee behavior energize employee behavior
pay plans are used to do these things
procedural justice
perceived fairness of the process used to make organizational decisions
ne advantage of using a pay grade system in planning employee compensation
reduces the administrative burden of setting separate pay rates for hundreds of jobs
Individual Incentives
reward individual performance but payments are not rolled into base pay. Performance is measured as physical output rather than by subjective ratings.
Labor costs
salary & wages bonuses health insurance
The top-down approaches to job design include
scientific management the job characteristics model job enlargement
Purposes of Performance Management
strategic, administrative, developmental, communication, organization, maintenance, documentation
Expectancy
the belief that effort will lead to performance
compareable worth
the concept that women and men should receive equal pay for jobs calling for comparable skill and responsibility
interrater reliability
the degree to which different observers agree on their observations
Range Spread
the distance between the minimum and maximum amounts in a pay grade
Interactional Justice
the form of organizational justice that reflects whether people are told the truth and treated with respect
Equity Theory
the idea that employees try to maintain equity between inputs and outputs compared to others in similar positions
Scientific Management
the method of job design that draws from observation, experiments, and reasoning jobs can be simple repetitive and boring
Instrumentality
the perceived relationship between performance and rewards
Valence
the perceived relationship between value of outcome and achieving performance goals
Operations Perspective
the performance perspective that focuses on processes that influence customer satisfaction
Job Structure
the relative pay for different jobs within the organization
Incentive Intensity
the strength of the relationship between performance and pay
Expectancy Theory
the theory that people will be motivated to the extent to which they believe that their efforts will lead to good performance, that good performance will be rewarded, and that they will be offered attractive rewards motivation will be high when all three elements are high (valence, instrumentality, expectancy)
Benefits of ESOPs for organizations
their financing advantages the defense they offer against takeovers their tax advantages
Reinforcement Theory
theory that positive and negative reinforcers motivate a person to behave in certain ways
Alternation
when managers look over a list of employees, decide who is best and cross that name off the list, decide who is the worst employee and cross that name off the list, and then repeat the process
Acceptability
whether or not a measure is valid and reliable, it must meet the practical standard of being acceptable to the people who use it