5018 Unit 6 Flashcards
Sub-discipline of ABA which is the application of the science of behavior guided by a single theory of human behavior and historically emphasized identification and modification of the environmental variables that affect directly observable or variable employee performance
Organizational Behavior Management
Subdivisions of OBM
Performance Management
Behavior Based Safety
Behavioral Systems Analysis
Pay for Performance Based Pay
Involves analyzing individual or small groups of employees and modifying the environment to improve performance; most straightforward application of ABA setting
Performance Management
Typical interventions in performance management
Antecedent
Training
Consequences
Process
Equitably aligns the contingencies in an origination so that the better the employees and company do, the more money they make
Pay for Performance
A system with input, an entity that changes its behavior in response to conditions outside its boundaries
Open System
Orienting employees to financial data before sharing and linking employee work to financial results
Open Book Management
7 Sin of Wages
Fix Cost Pay Pay for Time Corporate Socialism Performance-Based Promotions Management by Perception Management by Exception Entitlement Thinking
Fix Cost Pay
Every year employees are entitled to a raise
Pay for Time
When you pay for time, jobs will fill the time
Corporate Socialism
Conventional pay rewards underperforms and punishes top performers
Performance-Based Promotions
If management can not reward top performers by increasing pay, the only way to increase pay is through promotions
Management by Perception
Use of subjective measures to evaluate employees
Management by Exception
Employees are noticed typically because there are performance problems; punishes bad behavior and ignores good behavior
Entitlement Thinking
The company owes me money
Familiar, low effort, employees tend to prefer
Merit Increase
Management discretion, variable expense, becomes an expectation
Annual Bonus
Management control, variable expense, tax benefit
Stock Options
Based upon year-end profit, easy to administer
Profit Sharing
Pays from expense reduction, may promote cooperation, impacts performance relative to group size
Gain Sharing
Generates high production, equitable, no limits to earning
Piece Rate
Generates high production, equitable, no limits on earning potential; encourage discounting, selective selling, poor service, credit risks, discourages cooperation
Sales Commissions
Setting goals and paying money when goals are met
Goal Sharing
A fixed percentage of each employee’s base pay is assigned an incentive opportunity
Goal Sharing Budget
Expenses that employees control
Expense Control
A ratio of employee output to labor hours
Productivity
Payables, collections and inventory
Cash Flow
PIPP
Profit Indexed Performance Pay
PIPP Components
Basis %
Monthly Compensation
Performance Index Score
Company Multiplier
PIPP Formula
Incentive Pay
Salary x Basis % x Scorecard PI x Company Multiplier
PIPP Formula
Incentive Pay
Salary x Basis % x Scorecard PI x Company Multiplier
Exposure Formula
Wages x Basis %
Example: $300,000 X 4%= $12,000
Multiplier Scale
Exposure/ Profit % shared with employees
Example: $12,000/ 0.50 = $24,000
$24,000 + Threshold= 1
Creation of objective measurement and PM practices are instituted here
Level I Results Focus
Employees give up part of base pay to receive greater opportunity to earn based upon performance
Level II Stakeholder Pay
Implement hiring freeze
Level III Job Enrichment
All managers practice PM and manager hiring freeze is implemented
Level IV Self-Managing Employees
Base Pay Options
Raise reinstated below market value
Permanent freeze
Reduction in base pay
Use only when scorecard is reliable; each 1% given up will be offset by 3% above salary incentive opportunity
Voluntary Pay Reduction
Job enrichment opportunities
Cross utilization Job enlargement Job enrichment Flexible scheduling Work prospecting
Train employees to complete other jobs within the company
Cross Utilization
Increase job functions of a specific position
Job Enlargement
Increase authority of a specific position
Job Enrichment
As productivity increases, allow employees to work fewer hours
Flexible Scheduling
