chapter 3 seniority pay and merit pay

Question 1

Seniority pay

Answer 1

rewards employees with periodic additions to base pay according to the employee’s length of service in performing their jobs.
* This is historically the longest pay system but it has been thrown out as it no longer matches with today’s economies and different jobs and more competition.

Question 2

Longevity pay

Answer 2

Address pay of employees who reach maximum pay
grade rates based on seniority
– Rewards employees with periodic pay increases that
do not become part of base pay

Question 3

Who uses the general schedule

Answer 3

longevity pay mostly for government jobs

Question 4

Advantages of seniority pay

Answer 4

• Avoid favoritism
• Employees feel they are treated fairly and equally

Question 5

disadvantages of seniority pay

Answer 5

• No incentives to improve
• Poor fit with the most competitive strategies
• Growing costs (if you want to retain employees you’ll have to pay them more)

Question 6

Merit pay plan

Answer 6

award permanent pay increases for performance. most commonly used

Question 7

Performance appraisal plans for merit pay

Answer 7

• trait system
• comparison systems
  *behavioral systems
  *goal oriented systems

Question 8

Trait systems

Answer 8

Ask raters to evaluate each employee’s
traits or characteristics using trait rate form

Question 9

comparison system

Answer 9

Evaluate a given employee’s performance against the performance of other employees. using forced distribution and paired comparison

Question 10

forced distribution performance appraisal rating form

Answer 10

You have to follow percentages and align your employees according to that percentage

Question 11

Paired comparison performance appraisal rating form

Answer 11

pair up employees and compare them to each other based on performance

Question 12

behavioral systems

Answer 12

Rate employees on the extent to which they display successful job performance behaviors using critical incident technique and behaviorally anchored rating scales (BARS)

Question 13

critical incident technique

Answer 13

a number of incidents someone should be able to do the employee is rated on.

Question 14

Behaviorally anchored rating scales (BARS)

Answer 14

based on 8-10 expected job behaviors and employees rated on ability to perform each behavior. “could be expected”

Question 15

goal-oriented systems

Answer 15

Used mainly for managerial and professional employees and typically evaluate employees’ progress toward strategic planning objectives

Question 16

what is a 360 degree performance appraisal

Answer 16

• Multiple people appraise your performance not just one: employee, supervisor, coworkers, subordinates, customers/clients