Review

Question 1

Compensation

Answer 1

Represents all financial and non-financial rewards given for work done (Intrinsic and extrinsic)

Question 2

Core compensation

Answer 2

Base Pay: Hourly Pay, Annual Pay

How base pay is adjusted overtime: COLA, Seniority Pay, Merit Pay, Incentive Pay, Person-focused pay: Pay for knowledge and skilled-based pay)

Question 3

Compensable factors

Answer 3

-What base pay is based on- such as skill level, effort, responsibility, working conditions

Question 4

Seniority Pay & Merit: Traditional Bases

Answer 4

Seniority- length of service; pulls from human capital theory- KSA should grow over time, productivity should also increase
-Doesn’t line up with competitive strategy as pay is based on time, not necessarily on performance improvement

Merit Pay : Permanent increase based on increase in performance

-Just-meaningful pay increase

Question 5

Incentive pay

Answer 5

• increaces given for performance, fluctuates based on attainment of standards
• Indidvudal, group, company wide plans

Question 6

Person based- Pay for knowledge, Pay for skill

Answer 6

• Pay for knowledge: pay for learning certain curricula
• Skill based: pay for mastering of new skills

Question 7

Performance Appraisals type and Merit programme

Answer 7

Trait Systems: employee characteristics (work quality, deportment); rate each; easy to do; highly subjective

Comparison Systems: Employees compared to each other- rank, biases

Behavioural Systems: looks at how much employees display successful, job performance behaviours- Critical incident, BARS,

Goal-oriented systems- Agreed upon objectives set by employee and manager that they should meet during rating period

Question 8

Performance appraisal process

Answer 8

Job analysis to get characteristics necessary for job performance

Incorporate characteristics into rating instrument

Train supervisors to use the instrument

have formal appeal process

Question 9

Sources of appraisal information

Answer 9

Employee
supervisor
Co workers
Supervisees
Customers or clients

-360 degree appraisals

Question 10

Bias errors

Answer 10

First-impression bias
Halo effect-positive/negative
similar-to-me effect

Question 11

Contrast errors

Answer 11

• occurs in comparisons- avaerage person may look below average compared to above average person

Question 12

Errors of central tendency

Answer 12

rate everyone at average to avoid explaining why

Question 13

Errors of leniency or strictness

Answer 13

• giving undue favor or disfavour in performance ratings

Question 14

How to strengthen pay-for-performance link

Answer 14

Standards should be linked to business goals (help)

Analyze jobs: clarify job duties and responsibilities

Communicate: help employees clearly understand what they need to do

Establish effective appraisals: based on standards, allow for rememedial action and growth

Empower performers

Differentiate among performers