Final Terms Flashcards
skill analysis
a systematic process of identifying and collecting about skills required to perform work in an organization
How to skill analysis
collect specific info on every aspect of the production process
How to competency analysis
personal characteristics, visionary, organization specific
the perfect pay structure
provide sufficient ambiguity to afford flexibility
Variable pay improve performance results?
plans often have too small payout, unattainable goals, outdated metrics, too Many metrics
spot award
a good way to recognized performance shortly after the performance was completed
performance ratings
rating an employee based on how well they perform their job, usually on a scale
MBOs
(manage by objective) uses outcomes as the standard of performance measure
360 degree feedback
receiving feedback from subordinates, colleagues supersvisors, and self eval
Types of team incentive plane
group incentive, gain-sharing plans
group incentive plans
team performance is measure against a set standard to determine incentive pay
gain sharing plans
pay offs for teams defined at the level of a strategic business unit (use operating measures to gauge performance
Five causes of failure for team incentive plans
team variety, the level problem, complexity, control, comm
profit sharing plans
use financial measures
Explosive interest in LTI plans
spurred by a desire to motivate longer term value creation
RSU
have value regardless if the stock price goes up from grant date
Stock options
(3 options need to be granted to = 1 RSU) only have value if the stock goes up from grant/exercise price
term
length of time a stock option can be exercised; typically 7 years
employee stock ownership plans
generate LT effects, foster employee willingness to participate in the decision making process, little impact on productivity or profit
performance plans
driven by financial earnings or return measures, pay for meeting or exceeding goals
Broad based option plans
are stock grans and versatile
combination plans
mixing individual and group plans
self funding plans
payouts only occur after the company reaches a certain profit target
criterion deficient
just because something is quantifiable does not mean it is an objective measure of performance
managers grouped into one of three categories
performance, counterproductive performance or both
balance scorecard approach
looks at what contributes value in a an organization
equal employment opportunity
forces organizations to document decisions to ensure they are firmly tied to performance or expected performance
general increases
give equal increases to all employees, regardless of performance
across the board increases
are linked with cost of living and adjusts base pay for all employees
seniority increases
come close to tying pay to performance, progressive pre set pay increases
tying pay to performance requires three things
a definition of performance, a continuum showing levels from low to high, awarded merit increase at each level
components of exec comp
base salary, annual bonuses, LTI, benefits, prerequisites
Diff btw exec and regular comp
execs receive higher benefits
