Exam 2 Study Guide Flashcards
the selection process
5 steps:
1) screening applications and resumes
2) testing and reviewing work samples
3) interviewing candidates
4) checking references and background
5) selection
what is the goal of selection?
to maximize the number of “hits” and “minimize” the number of mistakes in hiring
“hits” are accurately predicting that a person would not have succeeded on the job and accurately predicting a person succeeding on the job
How do you know when the tools you’re using to select people are effective?
We look at several criteria that make selection tests effective including:
Person-organization fit, person-job fit, other kinds of fit.
Reliability
Validity
test-retest reliability
consistency of scores on a test over time
inter-rater reliability
consistency of scores across judges
validity of a test
the degree to which the test measures what it is supposed to measure
in the selection context, the degree to which a selection test predicts future job performance
content validity
extent to which the content on a test is representative of a job’s content
similarity between the selection test and the job description
criterion validity
correlation between selection test scores and job performance scores
2 forms: predictive and concurrent validity
concurrent criterion validity
extent to which scores on a selection test are related to job performance
predictive criterion validity
extent to which scores on a selection test correlates with future job performance
letters of recommendation, references, and applications
generally poor validity
better validity if it focuses on KSA’s
can be risky (could sue and file a defamation of character)
application forms
education experience national origin (protected class) references disabilities (protected class) EEO statements
good applications only focus on job-related information
they have moderate validity
companies should avoid asking for religion, age, race, and marital status (protected classes)
physical ability tests
generally valid
exclude women and those with disabilities
need to be certain that physical requirements are essential to job performance
cognitive ability tests
vernal and math skills, very controversial for adverse impact reasons
valid especially for complex jobs
adverse impact (mainly along racial lines)
some companies give cognitive ability tests less weight than other predictors
personality tests
can be valid depending on the job and job analysis results
big 5 personality inventory measures agreeableness, neuroticism/emotional stability, conscientiousness, openness, and extraversion
conscientiousness and extraversion are the biggest generally
integrity tests
identify applicants who might steal
theft tolerance, attitudes, towards dishonest behavior
moderate validity
polygraphs
employee polygraph protection act (1988) is protecting most employees at private companies
very poor validity and reliability
interviews
unstructured/non-directive have low reliability and validity
structured are better validity and reliability
based on job analysis, consistent questions
what does an interview uniquely capture?
critical thinking and rationale
interpersonal skills
detailed behavioral examples
can someone fail a personality test?
high neuroticism, high narcissism, and low agreeableness
situational questions in interviews
uses critical incidents to assess decision making in dilemma-type hypothetical situations
what are the challenges of interviewing?
the halo effect (interviewer has a positive bias towards the interviewee)
biasses focusing on negative information based on race, sex, age, and appearance
1st impression error
faulty memory
MANY MORE
what can help combat problems with interviewing?
interviewer training can help all of these, but they require a lot of effort and are very expensive
assessment centers
highly representative sample of the job content
in basket (give them a basket full of tasks and watch them get through it and delegate)
leaderless group discussion
dimensions to measure important parts of the job (critical thinking and teamwork)
nowadays, they give you an inbox of tasks and watch you tackle it!
what do assessment centers show you?
REAL behaviors. strongly related to future job performance and has low AI
bad interview questions
what is the origin of your name? what is your ancestry? how old are you? what is your date of birth? are you a man or a woman? what is your race? do you have any physical defects? what color are your eyes/hair? how tall are you?
multiple hurdle selection
many companies use a multiple hurdle approach
application - test - screening interview - 2nd interview - reference check - drug test and background check - HIRE
legal issues in selection
any preemployment test can be challenged legally if connection to job is not obvious
negligent hiring: company gets in trouble for hiring someone with a troubled past
- due diligence
- company is responsible for incidents occurring on work time
- thorough accurate background check is needed to avoid this
discrimination law - ADA, age discrimination act, and title VII and minimum qualifications
training
a company’s planned efforts to help employees gain job-related KSA’s so that employees can apply these KSA’s back to the job
what are the benefits of training?
more efficiency and productivity on the job
keep up with the rapidly chaining environment
employee motivation, interest, and retention
US business training $$ increase over time
this is true
costs involved in training
trainer's salary trainee's salary or wage materials and supplies training development costs consultants or contractors services fees travel and living expenses for the trainer and trainees transportation equipment costs support costs lost production (opportunity costs)
training vs development
training teaching specific KSA’s addressing deficiencies and is essential to job functioning (saves $$$ in the short run)
development is helping employees prepare for the future and can look similar to training, but perspective is long-term
can save $$$ long term with future job filling
can both training and development improve a company’s bottom line?
YES. development = using formal education, job experience, relationships, and assessment to help employees become more competitive for future jobs
how does training tie into other HR functions in selection?
effective selection may reduce training needs, and training may permit hiring less qualified applicants
how does training tie into other HR functions in performance appraisal?
training aids in the achievement of performance and is a basis for assessing training needs and results
how does training tie into other HR functions in compensation management?
training and development may lead to higher pay and is a basis for determining employee’s rate of pay
training phase one: needs assessment (task analysis, person analysis, and organizational analysis)
identify problems/needs that the training program will satisfy
organizational analysis will identify orgs needs and goals/strategy, resources available for training, and level of support for training
task analysis: analyzes tasks and duties involved in the job and working conditions under which the task is performed
person analysis: who needs training? consider KSA’s needed that impact performance, and figure out the source of performance problems
why do a needs assessment?
to understand the source of the problems that prompted the needs assessment in the first place and decide whether training is needed or not
training phase two: design training program
establish training objectives
say what the employee is expected to do and the quality of performance that is acceptable (what participants should be able to do at the end of the training)
measurable performance standards
resources that will be provided to help employees achieve the goal
are employees willing and ready to be trained?
ability to learn, motivation, doesn’t hate trying, and use positive reinforcement and interesting lessons to peak peoples’ interest
in house or contractor for design of training program?
write up a request for proposal from contractors to bid on
focus on learning and transfer
goal setting (what will you get out of this training)
meaningfulness of presentation
behavioral modeling
recognizing individual learning differences (visual vs audio)
focus on method and process
practice and repetition
whole vs. part learning
mass vs. distributed learning
feedback and reinforcement - immediate feedback and behavioral modification via reinforcement
stage three: implement program
training formats: presentation (lecture style), hands on (on the job training, simulations, and assessment centers), and group based (group discussions, experiential programs, team training)
OTJ training job rotation apprenticeships internships coaching, assignments, special projects, action learning, and so on.
methods of training: classroom training
lecture, role play, group discussions and group activities
methods of training: computer-based learning
e-learining = online training/learning via computer based activities; flexible and easily updated
methods of training: simulations
artificially created - represents a real-life situation
virtual reality - assessment center simulations
MORE TRAINING METHODS
OJT, seminars, conferences, games, case studies, role play exercises, behavior modeling, and team training
stage four: evaluation of the program
did the program work?
trainee’s reactions, behavior, and learning
monetary outcomes - have customer services comments improved since the training was delivered?
validity - did the program train what it was designed to train? content and criterion validity vs. control group
pre-test vs post-test
transfer of training
benchmarking (seeing what competitors are doing)
transfer of training
good transfer means that people have learned the content, are able and willing to apply it back to the job
bad ones mean they haven’t understood the KSA’s, and aren’t applying what they learned for various reasons
benchmarking
measuring one’s own shrives and practices against the recognize leaders in the field to identify areas for improvement
training activity: how much training is occurring?
training results: do training and developments achieve their goals?
training efficiency: are resources utilized in the pursuit of the mission?
evaluating a training program
it takes time to see results
performance management
the process through which supervisors and managers check on and guide employees towards meeting the company’s goals
- define performance and management outcomes
- setting performance goals
- observing employee activities and performance
- giving constructive feedback
- taking action to improve performance
what is performance?
behaviors and outcomes that are congruent with a company’s goal
in-role (in job description) and extra-role (help others with their projects, volunteer for the company)
some employees are incredible at one or the other, and performance evals need to weigh both accordingly
directly tied to the bottom line is performance (this provides jobs for job management consultants)
performance appraisal
usually a meeting
helping employees understand their roles, objectives, expectations, and performance success
annual meeting between boss and employee
involves determining what areas of work the manager should evaluate, judging how well or poorly the employee is doing, and giving feedback, goals-setting, and coaching
performance management
the process of creating a work environment in which people can perform to the best of their abilities
1) set performance goals and make development plans
2) monitor goals progress
3) coaching by supervisor all year
4) monitor goal progress
5) annual appraisal, adjust goals and plan for next year
why use PM and PA?
administrative- compensation, job evaluation, and EEO/AAS support
developmental - individual evaluation, training, and career planning
challenges in identifying performance dimensions?
focusing on the right dimensions - what are the most important performance dimensions that need to be assessed for a sales person?
contamination - when information is gathered but is irrelevant or not actually part of the job
deficiency: when important, performance-related information is not included in the performance evaluation
types of rating formats (4 types)
relative - comparing an employee’s performance to other employees doing the same job
absolute - judgments bade based on performance only; no comparisons made. easier to defend in court
ranking - ranking employees by performance using numbers
forced distribution - have a top ten percept, an average 40 percent, a below average 40%, and an unacceptable 10%
rating formats
traits, using graphic ratio scale (employee rated on individual characteristics using a scale)
behaviors (behaviorally anchored ratio scales)
behavior observation scale
critical incidents (manager tracks unusually good or bad performances and works in into the PA)
outcomes - productivity measures
which method of rating is best??
subjective vs objective? (absolute)
legally defensible? (trait)
useful for promotion or termination? (behaviors)
useful for developing employees? (outcomes)
which method is best?
relative method
who rates performance?
supervisor manager peers self subordinate customer/client 360 degree feedback (confusing, and best for development)
biases and fairness
rater biases (halo and horns) severity and leniency similar - to - me recency race, age, and gender
clear performance standards help with bias
halo example
impressions of someone’s teamwork skills may influence your impressions about other areas - “he must also be really smart”
how can you make PA more accurate?
rater training
frame of reference training (one of the best ways to deal with errors and bias in ratings, getting all the raters “on the same page” or getting a common frame or reference)
ratings are calibrated (people discuss why they gave the rating they did, and see how much others agree with their ratings)
Why are PA ratings such a mess?
inadequate preparation on the part of the manager
employees not given clear objectives at the beginning of the period
managers may not be able to observe performance or have all the information
performance standards may not be clear
inconsistency in rating among supervisors or other rates
manager rating personality rather than performance
the halo effect, contrast effect, or some other perceptual biases
things to figure out before appraisal meeting with employee
how often do we do performance meetings?
how do we define measure performance?
legally, are there trends leading to lawsuits?
do managers have the skills to do PA well?
is there an employee appeals process?
how will our written feedback look?
what does validity mean when talking about performance appraisal?
content validity
what does reliability mean when talking about performance appraisal?
inter-rater reliability
things to figure out during and after appraisal meeting with employee
lacking ability to do the job?
motivation lacking to do the job?
wrapping up the meeting, and after the meeting?
goal setting and action planning
career management and mentoring
compensation 101
goal is to attract, select, and maintain/retain the good talent
compensation is the process of:
- determining how much and how to pay employees, and paying them as fairly as possible in exchange for labor
directly and strongly predicts employee turnover
inequalities, fairness, and motivation
the feeling of quality in inequality is a very basic part of human experience
equity theory and pay equity “I work 50 hours a week and worked hard to get my degree. am i getting paid what i deserve? am i getting as much as the other people in the company?”
outcomes must match inputs
3 parts of compensation
indirect, direct, and non financial
indirect compensation
benefits
direct compensation
wages and salary
incentives
bonuses
commissions
non financial compensation
recognition programs rewarding work organizational support work environment flexibility
compensation system
internal equity = is pay structure within the company seen as fair?
external equity = is pay structure seen as fair when comparing to competitor rates for the same labor?
equity theory
we make both internal and external comparisons all the time
step 1 to building a competitive pay structure: strategically paying for performance
strategic compensation: linking employee pay to a company’s goals
- using goals to shape employee pay in such a way that it motivates employees
- evaluating the compensation program to see if they help the company and employees
pay for performance : a general terms referring to programs where $$ is tied to performance
- incentive pay, bonuses, commission, merit pay, and so on
- understanding what good and bad performance looks like
big decisions about pay
4 major steps:
1) figure out a company’s objectives and board/specific goals
2) consider internal and external factors, and do job evaluation
3) surveys on the competition (benchmarking), then integrating the dat with the job evaluation
4) evaluate how well your compensation system is doing
bases for compensation
hourly work - work paid on an hourly basis
piece work - work paid according to the number of units produced
salary workers - employees whose compensation is computed on the basis of weekly, biweekly, or monthly pay periods
step 2 to building a competitive pay structure: internal and external factors affecting the pay mix
pay mix: combo of compensation and employee benefits components that make up an employee’s total compensation package. many faros influence this combination.
job evaluation: a way of establishing internal equity; it involves identifying the relative worth of jobs in a company (entry level sales person and entry level administration should have a similar salary)
point system involves looking at compensable factors such as experience, education, complexity of the job, working conditions (can be determined by job analysis)
internal factors affecting the pay mix
worth of the job
compensation strategy of organization
employee’s relative worth
employers ability to pay
external factors affecting the pay mix
conditions of the labor market area pay rates cost of living collective bargaining legal requirements
step 3 to building a competitive pay structure: how to find out what competitors are paying
wage and salary surveys: surveys of the wages paid to employee’s of other companies in the surveying organizations relevant labor market
salary surveys: if a company wants to do its own survey, it cam select key jobs, determine relevant labor market, select organizations, decide on information to collect (wages/benefits/pay policies), compile data received, determine wage structure and benefits to pay
pay structure and wage curve
relative value of each job and how much to pay; balances internal/external information (pay grades, pay rates/range, and red circle pay)
pay grades
a pay grade consists of a group of jobs that are similar somehow
“similar” jobs have similar rates
pay rates and ranges
each job or pay grade gets a range (min-max)
assessing the effectiveness of your compensation system…
assessing the effectiveness of your compensation system is vitally important to linking compensation with strategy
step 4 to building a competitive pay structure: evaluating your new or updated pay system
assessing the effectiveness of your compensation system is vitally important to linking compensation with strategy
evaluating your pay system can:
- help the company detect potential pay problems
- make compensation decision more transparent
- improve the alignment of compensation decisions with organizational objectives
-
compa ratio: numerical way to compare your company;s pay to the market rate (1 = market match rate, < 1 = market lag rate, > 1 = market lead rate)
legal requirements in compensation
equal employment opportunity
title VII (differences in pay cannot be based on differences in sex, race, or other protected classes)
Equal pay act 1963 - men and women paid equally for same jobs in terms of skill, effort, responsibility, and working conditions (exceptions are seniority, performance)
legal requirements in compensation
fair labor standards act of 1938 - establishes minimum wages, maximum hours, overtime, child labor protection.
driven much of our contemporary work life
pay compression/inversion
when pay spread between new hires and more qualified employees is small (threatens competitive advantage)
caused by failure to raise pay range limits, scarcity of qualified applicants
why do variable and incentive programs exist, and when do they work?
fixed pay: base pay; usually predictable monthly paycheck
variable pay: tying pay to some measure of individual, or group or organizational performance
incentive pay programs: establish a performance threshold to quality for incentive payments, must have clear, obvious link between performance and pay, getting involvement from employees in establishing the pay for performance program can result in fair, challenging yet achievable standards
NO RATCHETING UP
individual pay
piece rate, performance based bonuses, merit pay, and sales incentives
straight piecework: an incentive plan under which employees receive a certain rate for each unit produced
differential piece rate: a compensation rate under which employees whose production exceeds standard amount of output receive higher rate for all of their work than the rate paid to these who do not exceed the standard amount
bonus: incentive payment that is supplemental to the base wage for cost reduction, quality improvement, or other performance criteria
lump sum bonus: payment of entire increase at one time.
group level pay
team level bonuses and the group level rewards, gainsharing
rewarding employees for collective performance (team based and gainsharing)
measure of group performance: customer satisfaction, labor cost savings, materials cost savings, reduction in accidents, services cost savings
how are rewards for group performance structured?
equal incentive payments, differential payments based on contribution to goals, differential payments according to base pay
company level pay
stocked owned by employees, profit sharing
rewarding employees when company meets its goals
profit sharing: employer pays (in addition to the base pay) money based on the profits of the enterprise - a challenge is maintaining motivational connection of profit sharing to performance of employees
stock options = granting employees right to purchase a specific number of shares of the company’s stock at a guaranteed price during a designated period of time
merit pay
goals: reward excellent performance, motivate future performance, retain valued employees.
can be tricky and risky. company must specify which behaviors will be rewarded
behaviors should be in line with company values
ensure that employees don’t ignore goals that are not rewarded
sales incentives
straight salary, straight commission, salary and commission combinations
straight salary plan
fixed base compensation (risk-free from employee’s perspective)
advantages are that encourages building customer relationships and provides compensations during periods of poor sales
cons are may not maximize motivation
straight commission
based on fixed percentage of sales price
salespeople stress high priced products, customer services after sale may be neglected, and earnings can fluctuate widely between good and poor business periods
salary and commission combinations
most common plan; part of income is fixed (base salary) while other part is commission based.
motivates sales force to achieve specific company marketing objectives in addition to sales volume
gainsharing
incentives based on company’s performance goals like increased productivity, increased customer satisfaction
involves employee participation, and includes bonuses
comply applied to a single branch or location
pros and cons to group incentives
pros: companies can more easily develop performance measures for groups plans than individual plans, greater group cohesion,
cons: free riders, members may be uncomfortable with the fact that other members’ performance influences their compensation
chief executive and $$$
us executives are best paid in the world
they have disproportionate ability to influence organizational performance
executives have incentive pay
- base pay and benefits
- short and long term incentives
- perks
- golden parachute
