Midterm

Question 1

assessment of employees’job performance levels during a given period on the basis of systematic uniform performance standard

Answer 1

Performance Appraisal

Question 2

Measure Performance:

Answer 2

1. It allows management to specify what must be done and to combine feedback with goal setting. 2. Managers cannot manage and define what is expected, gives feedback and recognition without defining the basis or performance measures. 3. Employee cannot improve on what he is supposed to do without the necessary data before and after to see if performance is actually improving. 4. Creating high performance requires a definition or clear goals so you will know it when you see it. 5. Pay for performance requires metrics.

Question 3

Objectives of Performance Appraisal:

Answer 3

1. It provides information for promotion, transfer, demotion, layoff, discharge, and salary decisions. 2. It identifies employees’ strengths and weaknesses. 3. It identifies the training needs of employees. 4. It helps in the firm’s career planning process. 5. It allows easy monitoring and supervision. 6. It helps evaluate the relative individual or team contributions in achieving the organization’s goals 7. It provides information to evaluate effectiveness of selection and placement decisions.

Question 4

Performance Criteria:

Answer 4

 Relevance  Reliability  Freedom from contamination

Question 5

Performance Indicators/Matrix:

Answer 5

 Quantity  Quality  Timeliness  Cost-effectiveness  Absenteeism/tardiness  Creativity  Adherence to policy  Gossiping and other personal habits  Personal appearance/grooming

Question 6

1. Manager/Supervisor Appraisal

Answer 6

Hierarchical arrangement of formal authority in most organizations gives the supervisor or the manager legitimate authority to evaluate subordinates. They are in the best position to observe employees, and they should have a better understanding of the job being performed.

Question 7

2. Self-Appraisal:

Answer 7

The employee appraises his or her own performance, in many cases comparing the self-appraisal to management’s review.

Question 8

3. Subordinates appraisal

Answer 8

Provides unique information because subordinates know better than anyone else whether leadership is good or bad.

Question 9

4. Peer Appraisal

Answer 9

This method is based on the assumption that co-workers are most familiar with an employee’s performance

Question 10

5. Customer/Supplier

Answer 10

customers, vendors or suppliers can be potential evaluators.

Question 11

6. Team Appraisal:

Answer 11

Similar to peer appraisal in that members of a team, who may hold different positions, are asked to appraise each other’s work and work styles.

Question 12

7. Assessment Center:

Answer 12

The employee is appraised by professional assessors who may evaluate simulated or actual work activities.

Question 13

8. 360-Degree or “Full-Circle” Appraisal:

Answer 13

The employee’s performance is appraised by everyone with whom he or she interacts, including managers, peers, customers and members of other departments.

Question 14

Sources of Data in Employee PA:

Answer 14

1. Production Data – 2. Personnel Data – 3. Judgment of others –

Question 15

Production Data –

Answer 15

evaluate the degree of accomplishment by measuring the quantity and quality of performance such as units produced per hour, sales, profit

Question 16

Personnel Data –

Answer 16

information found in individual’s personnel files, such as absenteeism, tardiness, and training programs completed

Question 17

Judgment of others –

Answer 17

behaviors assessed by peers, customers, and suppliers

Question 18

Methods of Performance Evaluation:

Answer 18

A. Multiple Person Evaluation Methods B. Individual Evaluation Methods

Question 19

1. Ranking method

Answer 19

ranking of employees from best to worst, from the most efficient to the least capable on each trait or quality to be used in judging the employees’ performance

Question 20

2. Paired comparison method

Answer 20

considers only two individuals at one time and decides who is better

Question 21

3. Forced distribution method

Answer 21

refers to forced ranking where the rater is asked to rate employees in fixed distribution of categories, such as superior, above average, average, below average, and poor

Question 22

1. Critical incident method

Answer 22

– requires raters to write down positive and negative performance behavior of employees throughout the performance period

Question 23

2. Checklist and weighted checklist method

Answer 23

a set of objectives or descriptive statements where the rater checks the items if he believes that the employee possesses a trait listed, if otherwise, leaves it blank

Question 24

3. Graphic rating scales method

Answer 24

the oldest and most widely used method for PA where the rater is presented with a set of traits and asked to rate employees on each of the

Question 25

5. Productivity

Answer 25

– the quantity and efficiency of work produced in a specified period of time

Question 26

6. Behaviorally anchored rating scales (BARS) method

Answer 26

describes a performance rating that is focused on specific behaviors or sets as indicators of effective or ineffective performance

Question 27

7. Management by objectives (MBO) method

Answer 27

objectives set by managers and their subordinates for the employee to achieve within a specific period where in reward is given based on the result of output

Question 28

8. Multi-rater assessment or the 360-degree performance feedback method

Answer 28

confidential, anonymous feedback from people who work around employees, such as their immediate superior, peers, customers, or suppliers; a questionnaire to be completed by raters to evaluate employees

Question 29

1. Halo effect

Answer 29

Manager allows a general favorable impression of an employee to influence his judgment on each separate factor in the PA process.

Question 30

2. Recency effect

Answer 30

Recent events tend to have an unusually strong influence on performance evaluation.

Question 31

3. Previous performance bias

Answer 31

Employee who has performed well in the distant past is assumed to be acceptable in the recent past also.

Question 32

4. Leniency/harshness/strictness error.

Answer 32

Some managers tend to give mostly favorable ratings while others tend to evaluate the same performance levels unfavorably

Question 33

5. Central tendency

Answer 33

When manager rates all employees as average by choosing the middle rating, thus, failing to discriminate between employees.

Question 34

6. Carelessness.

Answer 34

. Managers make quick guesses based on first impressions of an employee’s performance.

Question 35

7. Bias.

Answer 35

Individual differences among ratees in terms of characteristics, like age, race, sex, religious, and political affiliations.

Question 36

Feedback Interview or Appraisal Interview:

Answer 36

1. Review of over-all progress 2. Discussion of problems that were encountered 3. Discussion of sources of ineffective performance 4. Agreement about how performance can be improved 5. Discussions on how current performance fits with long-range career goals 6. Specific action plans for the coming year and how to reach short- and long-term objectives

Question 37

Promotion

Answer 37

 It involves the reassignment of an employee to a higher job position.  It refers to the upward or vertical movement of employees involving increases in duties and responsibilities, higher pay, and privileges.

Question 38

Benefits of Promotion

Answer 38

 maximizes employee’s abilities  encourages excellent performance  increases job satisfaction  provides recognition for a good job  improves employee morale

Question 39

1. Seniority

Answer 39

length of service

Question 40

2. Current and past performance

Answer 40

promotion is based on previous job performance and evaluation.

Question 41

“Unofficial” Promotion Criteria

Answer 41

1. Personal characteristics 2. Nepotism 3. Social factors/friendships

Question 42

Demotion

Answer 42

 This is the reassignment of an employee to a lower job involving fewer skills and responsibilities.  It is the movement of an employee to a less important job from a higher-level job in the organization.

Question 43

Reasons for Demotion

Answer 43

1. Reorganization, company merger, or business reverses resulting in fewer jobs 2. Below standards performance 3. A form of disciplinary action 4. Employee classified as a liability rather than an asset

Question 44

Transfer

Answer 44

This is the reassignment of an employee to a job with similar pay, status, duties and responsibilities, or to another work shift, or from one unit to another in the same company as part of management’s inherent power or prerogatives.

Question 45

Reasons for Transfer

Answer 45

1. Job dissatisfaction 2. In conflict with supervisor or coworkers 3. For employee’s convenience 4. Due to business expansion, retrenchment, erroneous placement, or to meet departmental requirements during peak season 5. For an employee to be better suited or adjusted to his job (remedial transfer)

Question 46

Separation

Answer 46

The termination of employment as a result of layoff, resignation, retirement, and termination.

Question 47

1. Layoff

Answer 47

the separation of an employee as initiated by the employer due to authorized causes, such as the installation of labor-saving devices, redundancy, retrenchment to prevent losses, and closure of business. The employee is entitled to receive a separation pay equivalent of one month pay or ½ month pay, whichever is higher for year of service.

Question 48

2. Resignation

Answer 48

when employees voluntarily decide to end their employment with an organization (Art. 285) • If resignation is without a cause, employee is required to give a 30-day advance written notice to employer. • If with a cause, such as serious insult by the employer, inhuman and unbearable treatment, commission of a crime or offense by the employer, no notice is required.

Question 49

3. Retirement

Answer 49

when employees having satisfied certain conditions under existing laws and/or provisions of the collective bargaining agreement or upon reaching the age of 60 or more (but not beyond 65) are separated from employment with entitlement to retirement benefits • ½ monthly salary for every year of service, a fraction of at least 6 months being considered as one whole year.

Question 50

2. Termination by employer / Dismissal

Answer 50

the practice of putting an end to the employer-employee relations initiated by the employer due to the following just cause: 1. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. 2. Gross and habitual neglect by the employee of his duties. 3. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. 4. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives. 5. Other causes analogous to the foregoing.

Question 51

Employee turnover

Answer 51

refers to losing and replacing employees who quit.

Question 52

Types of Employment:

Answer 52

 Regular employment -  Probationary employment –  Part-time employment –  Commission-paid employment –  Casual employment –  Contractual Employment –

Question 53

Regular employment -

Answer 53

the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer (Permanent or Full time employment)

Question 54

Probationary employment –

Answer 54

shall not exceed six (6) months

Question 55

Part-time employment –

Answer 55

refers to workers who render work for a period less than the normal eight-hour working day or those who work less than the normal six (6) working days in a week

Question 56

Commission-paid employment –

Answer 56

refers to those who are paid depending on the income they brought in for their employer

Question 57

Casual employment –

Answer 57

those who are hired for a particular period or season

Question 58

Contractual Employment –

Answer 58

those who are hired at any time but for a definite period not exceeding six (6) months

Question 59

Compensation

Answer 59

• The set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within the organizations

Question 60

Main Components of Compensation

Answer 60

1. Direct compensation 2. Benefits and perquisites 3. Indirect compensation

Question 61

1. Direct compensation

Answer 61

consists of cash directly paid to the employee in exchange for his work

Question 62

2. Benefits and perquisites

Answer 62

– paid in form of indirect cash or benefits that have monetary value

Question 63

3. Indirect compensation

Answer 63

– extremely important non-monetary rewards under the general umbrella of quality of work life; includes organizational culture, intrinsic value, and career opportunity

Question 64

1. Direct compensation

Answer 64

 Base pay – hourly wage or weekly/monthly salary earned  Premium pay – refers to the additional compensation required by law for work performed within eight (8) hours on nonworking days, such as rest days and special days.  Base pay progression – movement of base pay overtime, from year to year.  Variable pay – incentives or bonus pay that does not fall into base pay; such earnings may be based on performance against preset goals (incentives) or pay at the discretion of the company (bonuses)

Question 65

 Wage

Answer 65

refers to the hourly compensation paid to skilled and unskilled workers or those performing blue collar jobs with time as the basis in the computation

Question 66

 Salary

Answer 66

income paid to professional and managerial employees or those who are performing white collar jobs on the basis of performance

Question 67

Factors in Determining Pay Rates

Answer 67

External Factors: Organizational Factors: Job Factors: Individual Factors

Question 68

A. External Factors:

Answer 68

1. Market factors such as labor supply and demand and economic conditions and unemployment 2. Existing pay level in the community 3. Government regulations and laws

Question 69

Organizational Factors:

Answer 69

1. Type of industry 2. Profitability and company’s ability to pay 3. Unionized or non-unionized 4. Size of the company 5. Capital or labor intensive 6. Value of the job – contribution to the company

Question 70

Job Factors:

Answer 70

1. Skills a. Mental requirements b. Complexity of duties c. Personal qualifications needed d. Ability to make decisions, judgments e. Preparation for the job (education, training, and knowledge) 2. Responsibility a. Money, commitments b. Decision making c. Supervision – work of others d. Quality of work e. Materials, equipment, property f. Confidential information 3. Effort a. Physical and mental effort required b. Attention to details c. Pressure of work 4. Working conditions a. Job conditions b. Physical hazards

Question 71

Individual Factors

Answer 71

1. Performance, productivity 2. Experience 3. Seniority, length of service 4. Potential, promotability

Question 72

Establishing Pay Rates

Answer 72

1. Conduct the salary survey (benchmarking) to determine prevailing wage rates and collect data on benefits to provide a basis in making decision regarding benefits. 2. Determine the worth of each job through job evaluation.

Question 73

• Job Evaluation

Answer 73

a systematic and orderly process of determining the worth of a job in relation to other jobs, like in terms of effort, responsibility, and skills.

Question 74

Job Evaluation Methods

Answer 74

1. Ranking method – the simplest and oldest method, which involves ranking job relative to all other jobs based on overall difficulty 2. Job classification or job grading evaluation method – a simple, widely used method in which jobs are categorized into groups 3. Point system – which points are assigned based on skill required, physical and mental effort needed, working condition, and amount of responsibility involved in the job 4. Factor comparison method – similar to point method but more complex which involves monetary scale instead of a point scale

Question 75

Different Forms of Compensation

Answer 75

1. Payment for time worked. This method has no direct relation to the workers’ output. Pay is usually adjusted upward through six types of increases: a) General – across-the-board increase for all employees b) Merit increases – paid to employees based on some indicator of job performance. c) Cost of living adjustment d) Reclassification increase e) Level of adjustment f) Promotional increase 2. Incentive forms of compensation. Compensating employees on the basis of output, which means more production, more earnings. 3. Performance-based rewards. When rewards are associated with higher levels of performance, it will motivate the employees to work harder to achieve those awards. 4. Spot bonuses. These are spontaneous incentives awarded to individuals for accomplishing not readily measured by a standard, such as employee of the month, year, etc. 5. Skill and knowledge-based pay/competency-based pay. This sets pay levels on the basis of how many skills an employee has or how many jobs he can do. 6. Merit pay plans. Employees who make greater contributions are given higher pay than those who make lesser contribution. 7. Profit sharing. Some portion of the company’s profits are distributed to all employees. 8. Stock ownership plans. Employees are given major stake in ownership of a corporation by giving stocks based on seniority and performance, and each employee becomes an owner of the company. 9. Executive compensation. This includes base pay and incentive pay/executive perquisites, such as stock option plan.