Module 10 Flashcards
Employee performance has been shown to depend on three general factors:
> Ability, Motivation, and a Supportive Environment.
Variables that affect the ability to successfully link individual pay to a compensation strategy include:
> the performance of individuals, the external environment, overall corporate performance and organizational objectives that may change.
Attaching rewards to motivation is a process of what?
> Attaching rewards to motivation is a process of determining what is important to a person, and offering it in exchange for a specific behaviour.
What are some motivation theories?
> Maslow’s Need Hierarchy ;
> Herzberg’s Two-Factor Theory;
> Expectancy Theory;
> Equity Theory; Reinforcement Theory;
> Goal Setting Theory; and Agency Theory.
What motivational theories focus on content?
> Some theories that focus on content (identifying what is important to people), such as Maslow and Herzberg state that people have certain needs: physiological, security and self-esteem that influence their behaviour.
What motivation theories focus more on the nature of the exchange?
> Other motivation theories focus more on the nature of the exchange.
> Expectancy Theory
Equity Theory
Agency Theory
What does expectancy theory state?
> states that people evaluate potential behaviours in relation to the reward they will get, and behave according to the best result.
What is equity theory based on?
> s based on the fairness of the rewards outcomes exchanged for employee inputs and what is expected vs what is received.
What does agency theory state?
> states that management/owners and employees operate opportunistically to obtain the most favourable outcome possible.
New employees are taught the culture of the organization through what process?
> New employees are taught the culture of the organization through the socialization process; i.e. long hours; not taking breaks etc.
What are the three ways companies get desired behaviours?
1) socialization process
2) Progressive companies also use the compensation system to assist by asking and answering questions specific to behaviours that the organization values and rewarding those behaviours.
3) Manager asks how compensation should motivate by addressing what the compensation system should do, and how they positively match rewards to desired behaviours?
A Total Reward System recognizes what about behaviour?
> A Total Reward System recognizes that nonfinancial rewards also influence behaviour.
Compensation motivates behavior by doing what?
> by affecting decisions about whether to join a firm, to stay or leave, to agree to developing job skills and to perform better.
Performance-based pay is the optimal compensation choice for what jobs?
> Performance-based pay is the optimal compensation choice for more complex jobs where monitoring employee’s work is difficult.
A total reward system includes what?
> A total reward system includes all financial and non financial rewards. Compensation is just one of the rewards.
> Rewards also include empowerment, recognition and opportunities for advancement.
Compensation Motivates Four Types of Behaviours:
1) In the decision to join the company;
2) In the decision to leave the company: turnover is high for bad performers when pay is based on individual performance; and higher for good performers when compensation is group incentive plan based;
3) Employees in skill-based jobs tend to develop job skills because of pay. Skill-based pay is intended in part to pay employees for learning new skills.
4) Employees in a non-unionized environment are shown to perform better because of pay; when behaviours are tied to performance. Unionized workers prefer seniority over performance for pay increases.
Performance needs to be measured through what kind of means?
> Performance needs to be measured through objective, measurable, and quantifiable means to get accurate results.
What do poor performance appraisals do? As a result, what targets are required?
> Poorly designed performance appraisals can result in not measuring what was intended.
> Performance targets need to be set to organizational goals.
Four Strategies to better understand and measure job performance include:
1) The first strategy is improving the evaluation format.
2) The second strategy is in selecting the right raters.
3) The third strategy is in understanding how raters process information.
4) The fourth strategy is to train raters to avoid common errors in appraising performance.
What is an evaluation format and how do we improve it?
> . An evaluation format is the method used to evaluate an employee’s performance.
> Improvement can be found by using either
a)ranking against all other employees’ rating (ranking the best against the worst: alternation or paired comparison); or
b)rating on one or more performance criteria.
What are the two rating methods
1) BARS, Behaviourally Anchored Rating Scales, that uses behavioural descriptions as anchors for different levels of performance on a scale.
2) MBO, Management by Objectives; uses outcomes to appraise performance. As a general guideline; if tasks are not routine then MBO might be the best and appropriate measure of whether a goal is achieved.
What should we consider with respect to evaluation formats?
> In assessing the above performance evaluation formats, consider the impacts of:
employee development potential from the format; > administrative ease;
HR research potential (for other uses);
cost effectiveness;
and validity (free from errors).
Using a single rater in isolation increases the chances for what? As a result, what feedback method is best?
> inaccuracies.
It is recommended that 360 feedback be used if possible, which could include feedback from as many as 5 sources including supervisor, peers, self, customers and subordinates.
What are the 5 important points about raters?
1) Supervisors are the most knowledgeable about the work done day-to-day, but are prone to making halo and leniency errors.
2) Peers can be appropriate raters if the work done is in groups, but it can lead to tensions if raters are not trained or misunderstand the purpose of the task.
3) Self as a rater can be used as the ratee has the most/best knowledge of their own performance. However, since a self-rater is more lenient than organization in most instances, these evaluations are often for developmental purposes.
4) Customer as a rater is relevant for quality measures. Companies are relying on this input more and more.
5) Subordinate as a rater is also valuable, but must be anonymous.
What is the third strategy in performance evaluation?
> The third strategy is in understanding how raters process information.
> Understanding how raters gather, store and use performance information can also help improve the accuracy of the process.
> It’s important to understand how raters view information and make judgments.
Raters make errors in performance -appraisals such as the following:
> Errors in Observation, or what receives attention, encompass raters being influenced by appearance; race.
> Errors in Storage and Recall include the rater storing information as traits, but retrieve the information as trait categories. Too much time between performance and when the appraisal is done can involve the rater lacking accurate memory;
> Errors in Actual Evaluation result when a rater is unwilling to differentiate between workers or is uneasy giving feedback. The rating can be affected by including personality traits that are not relevant to the performance assessment.
What is the fourth strategy to performance evaluations?
> The fourth strategy is to train raters to avoid common errors in appraising performance.
Research indicates that raters can be trained in three categories:
1) Rater-error training teaches raters to avoid errors like leniency, severity, central tendency,or halo by drawing attention to them;
2) Performance dimension training familiarizes raters with the performance dimensions in the rating system; and
3) Performance standard training; Which provides raters with a standard of comparison or frame of reference for making appraisals.
All Together the Performance Evaluation Process should have what 7 components?
1) A clear sense of direction;
2) An opportunity for the employee to participate in goal setting and standards of performance;
3) Prompt, honest and meaningful feedback;
4) Immediate and after reinforcement;
5) Coaching and suggestions for improving future performance;
6) Fair and respectful treatment;
7) An opportunity for employees to understand/influence decisions affecting them.
What three components are covered under efficiency?
1) Strategy: the pay-for-performance strategy should be aligned with the corporate objectives and HR strategy;
2) Structure: the organizational structure has many formats which influence a pay-for-performance plan;
3) Standards: before a plan is created, it is important that performance standards are met.
What is fairness as an objective?
> Fairness objective is to ensure the fairness to employees through both distributive and procedural justice.
What should be noted about pay-for-performance plans and legislative compliance?
> Pay-for-Performance plans should comply with existing laws.
> Do employees believe their raise is a reward for performance? With cost of living increases often mixed in sometimes it is hard to tell. Some organizations use guidelines to give raises based on performance.
