Ch 3: Traditional Pay

Question 1

What is seniority Pay

Answer 1

These are permanent increases to pay- rewarding employees for their tenure. This is paid under the assumption of the human capital theory, which states that human capital becomes more valuable over time

Question 2

How did seniority pay come about?

Answer 2

Outcome of labour and management negotiations

Labour unions sought to ensure consistent treatment of workers including pay rates, pay increase amounts and frequency of pay increase rewards

Political pressures in public sector

Question 3

Advantages of Seniority

Answer 3

Employees perceive that they are treated fairly

Facilitates administration of pay

Avoids perception of favoritism

Question 4

Disadvantages of seniority pay

Answer 4

Poor fit with most competitive strategies- costs money and doesn’t reflect performance

No incentives to improve

Growing costs

Question 5

What is the merit pay approach to compensation

Answer 5

Pay should be determined at least in part by performance

So you get a permanent pay increase- given that you have consistenty proven you ability to perform

Question 6

What are 4 elements of effectie pay plan systems?

Answer 6

Periodic performance reviews

Realistic and attainable standards

Just-meaningful pay increases

Based on objective and subjective(in things like quality or be able to use judgment for jobs that don’t have objective things like art etc.)

Question 7

What are the 4 performance appraisal plans?

Answer 7

Trait systems: Ask raters to evaluate each employee’s
traits or characteristics

Comparison systems: Evaluate a given employee’s performance against the performance of other employees

Behavioural systems: Rate employees on the extent to
which they display successful job performance behaviours

Goal-oriented systems: Used mainly for managerial and
professional employees and typically evaluate employees’
progress toward strategic planning objectives

Question 8

What are sample traits for the trait appraisal system?

Answer 8

Judgment
* Leadership
* Dependability

Question 9

What are the advantages and disadvantages of trait systems

Answer 9

Easy to create, use and apply to many jobs

easy to quantify in merit systems

Dis:
Subjective- how one supervisor views quality may be free of errors, vs another who sees it as thoroughness

Focuses on subjective employee personalities, rather than on objective performance indicators

Question 10

Comparison systems characteristics

Answer 10

Rates and ranks performance

Pay raise based on ranking

Question 11

What are the types of Comparison systems?

Answer 11

Regular comparisons- rank employees from best to worst

Forced Distribution- :
employees to groups that represent the entire range of performance.- forces them into a category

Paired Comparisons- pair up and compare performance: best for small groups

Question 12

Disadvantages of comparisons systems

Answer 12

They tend to encourage subjective judgments, which increase the chance for rater errors and biases

Question 13

What are Behvioural systems and their types

Answer 13

Behavioural systems are programs that rate employees on the extent to which they display
successful job performance behaviours

Critical-incident Technique-

Behaviourally anchored rating scales

Question 14

What is the critical-incident technique and how does it work

Answer 14

Requires incumbents and their supervisors to identify performance incidents that distinguish successful performances from unsuccessful ones.

Have a specific behaviours and have options stating how often the person does the action

requires extensive documentation that identifies the successful and unsuccessful job performance by both employee and supervisors-

which makes it useful but can be burdensome to keep track

Question 15

Behavioural Anchored Rating scales and how it works

Answer 15

Based on CIT- looks at behaviours related to successful performance

You state behavioural expectations (as employees do not have to be at said level)

Not practical to put all behaviours related to job- use the most critical.

Then on a scale of 1(ineffective performance) to 7(effective performance)

Question 16

Advantages and disadvantages of BARS

Answer 16

Adv- Most defensible in court, objective behaviours measured, encourage raters to measure effectively

Dis- difficult to develop and maintain the volume of data necessary to make the method effective- requires appraisal docs for each job. As jobs change overtime, the docs must be updated for each job

Question 17

What are Behaviour obeservation scale?

Answer 17

BOS is developed in
the same way as a BARS instrument, except that it incorporates only positive performance behaviours. The BOS method tends to be difficult and time-consuming to develop and maintain.

Moreover, to ensure accurate appraisal, raters must be able to observe employees closely and
regularly. However, observing employees on a regular basis may not be feasible where supervisors are responsible for several people.

Question 18

Goal-oriented systems- definition, how does it work

Answer 18

supervisors and employees determine objectives for employees to meet during the rating period and employees appraise how well they have achieved their objectives.

After the time, employees write a report showcasing their progress towards the goals, then supervisor appraises

(usually for managerial and professional employees and typically evaluates progress towards strategic objectives)

Question 19

Adv and Dis of Goal-Oriented systems( MBO)

Answer 19

Could be most effective- because of meeting together, determining objectives and time frame

Can promote more effective communication between employers and supervisors

Dis:
Time consuming, and requires constant flow of info between employee and employer

Focus Is only on particular goals, often ignoring other important outcomes (customer satisfaction/retention/quality experience)
Result at any cost mentality

Question 20

Four practices to promote non-discriminatory performance appraisal Practices

Answer 20

1. Conduct Job analyses to ascertain characteristics necessary for successful job performance
2. Incorporate these characteristics into a rating instrument
3. Train the supervisor to use the rating instrument properly
4. Formal appeal mechanisms and review of ratings by upper-level personnel help make performance appraisal process more accurate and effectve- help to reveal issues- personal issues that could have affected performance for eg

Question 21

What are the 5 sources for performance appraisal info?

Answer 21

employee
supervisor
Coworkers
Subordinates
Customers/clients

Question 22

what is the 360 degree performance review?

Answer 22

Gets perspective of several parties to determine the performance of a worker

Question 23

what are the criteria to validate the appropriateness of the source for the 360-degree appraisal?

Answer 23

1. Evaluators should be aware of the objectives of the employee’s job
2. Evaluators should have frequent occasion to observe the employee on the job
3. Evaluators should be capable of determining whether the employee’s performance is satisfactory.

Question 24

What are the 4 Rating errors?

Answer 24

• Bias errors
• Contrast errors
• Errors of central tendency
• Errors of leniency or strictness

Question 25

Bias error and its forms

Answer 25

Occurs when rater rates based on psotive or negative impresssion.

First-impression effect- Inital impression blinds review

Halo: Psotive/negative- Generalizes employee good/bad behaviour on one aspect of job to all

So I have bad interpsonal skills, but i am proficient in my computer skills- but I get a bad rating

Similar-to-me effect
Can easily lead to illegal discriminatory bias- where person is rated more favorably with based on similarity in race, sex, nationality etc.

Question 26

What are contrast Errors?

Answer 26

Comparing employees with another, rather than objective standards

Question 27

Errors of central tendency

Answer 27

Rating everyone average or close to average

Usually happens as hr is forced to justify only extreme behaviours

Should require justification at all levels not just extremes