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MGT 367 > Exam 3 - Study Guide > Flashcards

Exam 3 - Study Guide Flashcards

1
Q

Why do we do performance appraisal?

A
  • Administrative: for personnel decisions, legal requirements
  • Developmental: assess individuals strengths and weaknesses, provide feedback, set goals, identify training needs
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2
Q

360 degree feedback; also, understand the administration issues and feedback report related to implementing a 360-degree appraisal system (see Figure 7-12)

A

Solicits information for performance evaluation simultaneously from multiple sources, such as external customers, internal customers, selling team members, sales assistants, the sales manager, and the salesperson him- or herself.
Separate results from different sources; shows self ratings in comparison to other ratings (self perception vs perception of others)
Compare ratings with other norm groups

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3
Q

understand the administration issues and feedback report related to implementing a 360-degree appraisal system

A
  1. Select raters by using representative sample of those critical (and who have observed) the one being rated
  2. Adequate number of raters for an adequate sample; or elicit ratings from all qualified sources
  3. Instruct respondents on how data will be used and ensure confidentiality
  4. Alert and train raters regarding errors
  5. Raters should not indicate their names to ensure confidentiality
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4
Q

Understand the factors that influence performance

A

Ability
Motivation
environment

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5
Q

Error of central tendency:

A

rate everyone around average of scale

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6
Q

Leniency or error:

A

Leniency or error: unusually high ratings for everyone (leniency);

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7
Q

strictness error:

A

strictness error: unusually low ratings for everyone (strictness)

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8
Q

Recency error:

A

focus on what happened most recently

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9
Q

Contrast errors

A

Contrast errors: comparing individuals against each other

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10
Q

halo/horns error:

A

halo/horns error: reacts to one positive aspect then generalizes positivity to other aspects

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11
Q

How to conduct effective performance reviews (i.e., performance feedback sessions)?

A

Before review: prepare thoroughly; give yourself a self assessment; consider tie and place in scheduling
During review: discuss strengths and weaknesses; set joint goals; encourage participation and listen carefully; set follow up meetings

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12
Q

Know different types of performance appraisal including their advantages and disadvantages

A

Trait performance appraisal: subjective; focuses on the individual characteristics that are important to the job and the company
Pro: inexpensive, easy to use
Con: potential for error, poor feedback
Behavior
BARS: use of several behavioral anchors (1-low,3-average,5-high); behavioral descriptions with point along a scale
BOS: how frequently behavior occurs; use of behavior statement (always, sometimes, never)
Pro: more objective, accepted by employees, useful for feedback, ok for reward/promotion
Con: time consuming, costly
Results of performance appraisals: MBO- objectives and goal setting

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13
Q

Understand management by objectives

A

Appraisal system that calls for a comparison between specific, quantifiable target goals and actual results

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14
Q

Steps of MBO

A

Steps of MBO
Employee and employer set joint goals
Provide regular feedback
Discuss achievement of joint goals

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15
Q

Strategic relevance:

A

performance standards linked to organizational goals and competencies

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16
Q

Standards reliability:

A

measures that are consistent across raters and over time

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17
Q

Criterion deficiency:

A

aspects of actual performance that are not measured

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18
Q

Criterion contamination:

A

elements that affect the appraisal measures that are not part of the actual performance (measure when it should not have been)

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19
Q

Understand the objectives of pay system

A
  • Motivating
  • Equitable
  • Attractive
  • Complies with laws and regulation
  • Strategic (pay system reflects objectives)
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20
Q

Understand equity theory and employee reactions to inequity

A

Comparing your own output/input ratio to the output/input ratio of others to see if they are equal and fair or unequal and unfair

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21
Q

types of compensation

A

Cash:
wages/salaries, commissions, bonuses, gain sharing
Fringe:
Time not worked, insurance plans, security plans, employee services

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22
Q

Internal consistency

A
  • Based on job analysis and evaluation (relative worth of job)
  • To assure internal equity
  • Compared different jobs in same organization
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23
Q

External competitiveness

A
  • Compares same jobs in other organizations
  • Use of market survey
  • Determined by organizational influences
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24
Q

three job evaluation systems/methods

A

1) Job ranking system:
2) Job classification
3) Point system

25
Q

1) Job ranking system:

A

Compares jobs in order of importance (Rank); used in smaller companies and small segments of larger companies

26
Q

2) Job classification

A

Use of predetermined classifications/grades (grade 1, grade 2…); compare job descriptions with description of grades

27
Q

3) Point system

A

Comensate factors (what the company wants to pay for); importance of classification factors determined by weights/degree (to what worth/extent); all used to calculate points for a particular job (is it valuable)

28
Q

Pay range:

A

Pay range: salary range for each pay grade

29
Q

Pay grade:

A

Pay grade: groups of similar jobs as evaluated by points (grade 1, Grade 2..)

30
Q

Minimum pay rate:

A

Minimum pay rate: the least amount of pay in a pay range

31
Q

Maximum pay rate:

A

Maximum pay rate: the most amount of pay in a pay range

32
Q

Red circle rate:

A

Red circle rate: when pay rate is above pay grade

33
Q

understand broadbanding and its advantages

A
  • Grouping narrow pay ranges with fewer, wider brands

- More motivating for employees

34
Q

comparable worth v. equal pay

A

Comparable worth: regardless of job content, men and women should be paid equal if jobs are equally important to the company
Equal pay: no discrimination in pay for the same job

35
Q

Provisions of the Fair Labor Standards Act: minimum wage, overtime pay, exempt employees

A
  • Minimum wage, child labor laws, overtime pay
  • Exempt: not getting paid overtime (executives, administrators, professionals, outside sales people, computer employees)
  • Nonexempt: able to get overtime pay (management trainees, secretaries)
36
Q

Employee benefits required by law

A 
Social security
Unemployment insurance
Worker’s compensation
Leaves without pay (12 weeks)
COBRA: leave job, but allowed to pay insurance at group rate with higher premium
Health insurance
37
Q

Discretionary benefits

A 
Time not worked payment
Pension plans
Wellness programs
Child care
Life and long term care insurance
38
Q

flexible benefits plans (cafeteria plan?)

A

Employee picks the most valuable benefits to them

39
Q

flexible benefits plans (cafeteria plan?) Advantages:

A

Advantages: accommodate differences in employee needs; prevent waste of benefits; employees gain better understanding of benefits

40
Q

flexible benefits plans (cafeteria plan?)

Disadvantages:

A

Disadvantages: difficult to design/administer; higher administrative costs; possible blame on employer is sole contributor to pension plan

41
Q

Noncontributory pension plan:

A

Noncontributory pension plan: employer is sole contributor to pension plan

42
Q

Contributory pension plan:

A

Contributory pension plan: contribution made by both employee and employer

43
Q

Defined benefit pension plan:

A

Defined benefit pension plan: amount after retirement is pre-specified

44
Q

Define contribution pension plan:

A

Define contribution pension plan: employee knows method to fund employer contribution (stocks, cash)

45
Q

What does ERISA do? (Employee Retirement Income Security Act)

A

Regulates employee pension plans and sets minimum standard for vesting
Vesting: point in time when pension monies set aside by a company becomes the actual property of the individual
SMART goals: specific; measurable; attainable; realistic; target dates

46
Q

What are the advantages of incentive plans? (4)

A
  • Focus employee effort
  • Variable costs (tied to operating performance)
  • Foster teamwork
  • Distribute success
47
Q

Piece rate:

A

Piece rate: for each unit produced, the more you get paid

48
Q

Standard hour plan:

A

Standard hour plan: predetermined time period of pay; if they finish faster they still get paid and can work on other things

49
Q

Bonuses:

A

Bonuses: goals achieved, one time incentive earned

50
Q

Merit raises:

A

Merit raises: incentive built into pay, continue to receive pay raise

51
Q

Commission:

A

Commission: based on amount of sales

52
Q

Gainsharing:

A

Gainsharing: based on improved productivity or cost savings

53
Q

Stock options:

A

Stock options: based on specific goals; stocks to employees

54
Q

Profit sharing:

A

Profit sharing: organizational profits distributed proportional to pay

55
Q

Stock ownership:

A

Stock ownership: special purchase plans or bonus distribution

56
Q

Understand the determinants of effective reward systems and the expectancy theory

A

Employee values outcome
Performance is measurable
Employee can control increase output
Employee believes that increase output will result in reward

57
Q
  1. Understand the legal implications of PFP
A
  • Possible disparate impact against women, minorities, and age in merit ratings system
  • Adverse impact requires employer to defend policy or performance measurement system
58
Q
  1. When do group incentive plans work best?
A

If teamwork and cooperation are important, but team members are competing for a set of numbers or awards

59
Q
  1. What are the managerial challenges for PFP programs? (hint: it’s in the section of “what are the managerial implications for PFP programs?” in the text)
A
  • Emphasizing on measure can lead to reduced performance levels in other measures
  • Increased overhead expense of installing and maintaining
  • Difficulty in setting standards that accurately reflect task requirements and are perceived as fair
  • Resistance to any change involving employee compensation

MGT 367 (26 decks)

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