Test 4 Flashcards
The process of creating a work environment in which people can perform to the best of their abilities.
Performance Management
A process, typically performed annually by a supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success.
Performance Appraisal
A process whereby managers meet to discuss the performance of individual employees to ensure their employee appraisals are in line with one another
calibration
Must be based on job-related requirements derived from job analysis and reflected in job description and job specifications.
Help translate an organization’s goals and objectives into job requirements that define acceptable and unacceptable performance levels.
Calibration
Establishing Performance Standards
Individual standards directly relate to strategic goals.
strategic relevance
Occurs when standards don’t capture all of an individual’s contributions. Focus on minimizing this.
criterion deficiency
Occurs when performance capability is reduced by external factors. Focus on minimizing this.
criterion contamination
Standards are quantifiable, measurable, and stable.
reliability (consistency)
Appraisal done by an employee’s manager and reviewed by a manager one level higher.
Manager and/or Supervisor
Appraisal done by the employee being evaluated, generally on an appraisal form completed by the employee prior to the performance interview.
self appraisal
Appraisal of a superior by an employee, which is more appropriate for developmental than for administrative purposes.
subordinate appraisal
Appraisal by fellow employees, compiled into a single profile for use in an interview conducted by the employee’s manager.
peer appraisal
Based on TQM concepts; recognizes team accomplishment rather than individual performance
teram appraisal
A performance appraisal that, like team appraisal, is based on TQM concepts and seeks evaluation from both external and internal customers
customer appraisal
- Communicating effectively
- Diagnosing the root causes of performance problems
- Setting goals and objectives
feedback skills training
- Observe other managers making errors
- Actively participate in discovering their own errors
- Practice job-related tasks to reduce the errors they tend to make
rating error training
A trait approach to performance appraisal whereby each employee is rated according to a scale of individual characteristics.
graphic rating scale method
An approach to performance appraisal similar to other scale methods but based on comparison with (better than, equal to, or worse than) a standard.
mixed standard scale method
- A performance appraisal that measures the frequency of observed behavior (critical incidents).
- Preferred over BARS for maintaining objectivity, distinguishing good performers from poor performers, providing feedback, and identifying training needs.
Behavior Observation Scale (BOS)
Consists of a series of vertical scales, one for each dimension of job performance; typically developed by a committee that includes both subordinates and managers.
Behaviorally Anchored Rating Scale (BARS)
- An unusual event that denotes superior or inferior employee performance in some part of the job
- The manager keeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to how well they perform.
critical incident method
- Appraisals based on quantitative measures (e.g., sales volume) that directly link what employees accomplish to results beneficial to the organization.
- Criterion contamination
- Focus on short-term results
productivity measures
A philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager.
management by objectives (MBO)
Links the compensation of employees to the mission, objectives, philosophies, and culture of the organization.
strategic compensation
The standard by which managers tie compensation to employee effort and performance.
pay for performance standard
An employee’s perception that compensation received is equal to the value of the work performed.
pay equity
– fairness of your pay relative to others in the labor market
External pay equity
fairness of your pay relative to others in the organization
Internal pay equity
A motivation theory that explains how people respond to situations in which they feel they have received less (or more) than they deserve.
equity theory
A theory of motivation that holds that employees should exert greater work effort if they have reason to expect that it will result in a reward that they value.
expectancy theory
An organizational policy prohibiting employees from revealing their compensation information to anyone.
Creates misperceptions and distrust of compensation fairness and pay-for-performance standards.
pay secrecy
Work paid on an hourly basis.
hourly work
Work paid according to the number of units produced.
piecework
Employees whose compensation is computed on the basis of weekly, biweekly, or monthly pay periods.
salary workers
- Employees who not covered in the overtime provisions of the Fair Labor Standards Act.
- Managers, supervisors, and white-collar professional employees are exempted on the basis of their exercise of independent judgment and other criteria.
exempt employees
- Employees covered by the overtime provisions of the Fair Labor Standards Act.
- They must be paid time and one-half their regular pay for all work performed after forty regular hours of work in a workweek.
nonexempt employees
Having the resources and profits to pay employees.
employers ability to pay
Rewarding individual employee performance
employees relative worth
Establishing the internal wage relationship among jobs and skill levels
worth of a job
- Establishes the internal wage relationship among jobs and skill levels
- Sets organization compensation policy to lead, lag, or match competitors’ pay.
- Rewards employee performance
employers compensation strategy
Availability and quality of potential employees is affected by economic conditions, government regulations and policies, and the presence of unions.
labor market conditions
A firm’s formal wage structure of rates is influenced by those being paid by other area employers for comparable jobs.
area wage rates
- Local housing and environmental conditions can cause wide variations in the cost of living for employees.
- Inflation can require that compensation rates be adjusted upward periodically to help employees maintain their purchasing power.
cost of living
- Escalator clauses in labor agreements provide for quarterly upward cost-of-living (COLA) wage adjustments for inflation to protect employees’ purchasing power.
- Unions bargain for real wage increases that raise the standard of living for their members.
collective bargaining
The systematic process of determining the relative worth of jobs in order to establish which jobs should be paid more than others within an organization.
job evaluation
Oldest system of job evaluation by which jobs are arrayed on the basis of their relative worth.
job ranking system
A system of job evaluation in which jobs are classified and grouped according to a series of predetermined wage grades.
Job Classification system
A quantitative job evaluation procedure that determines the relative value of a job by the total points assigned to it.
point system
A handbook that contains a description of the compensable factors and the degrees to which these factors may exist within the jobs.
the point manual
A survey of the wages paid to employees of other employers in the surveying organization’s relevant labor market.
wage and salary survey
The area from which employers obtain certain types of workers.
labor market
Compression of pay between new and experienced employees caused by the higher starting salaries of new employees; also the differential between hourly workers and their Managers.
wage rate compression
There is evidence of a relationship between incentive plans and improved organizational performance.
incentive plan effectiveness
An incentive plan under which employees receive a certain rate for each unit produced.
straight piecework
A compensation rate under which employees whose production exceeds the standard amount of output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard amount.
differential piece rate
- An incentive plan that sets pay rates based on the completion of a job in a predetermined “standard time.”
- If employees finish the work in less than the expected time, their pay is still based on the standard time for the job multiplied by their hourly rate.
standard hour plan
Incentive payment that is supplemental to the base wage for cost reduction, quality improvement, or other performance criteria.
bonus
Links an increase in base pay to how successfully an employee achieved some objective performance standard.
merit pay program
Compensation plan that permits salespeople to be paid for performing various duties that are not reflected immediately in their sales volume.
straight salary plan
Compensation plan based upon a percentage of sales.
straight commission plan
A compensation plan that includes a straight salary and a commission component (“leverage”).
Most common
combined salary commission plan
Compensation plans where all team members receive an incentive bonus payment when production or service standards are met or exceeded.
team incentive plans
Programs under which both employees and the organization share the financial gains according to a predetermined formula that reflects improved productivity and profitability.
gainsharing plans
Rewards come from employee participation in improving productivity and reducing costs.
scanlon plan
Gainsharing based on increases in productivity of the standard hour output of work teams.
improshare
Any procedure by which an employer pays, or makes available to all regular employees, in addition to their base pay, current or deferred sums based upon the profits of the enterprise.
profit sharing
- Granting employees the right to purchase a specific number of shares of the company’s stock at a guaranteed price (the option price) during a designated time period.
- The value of an option is subject to stock market conditions at the time that option is exercised.
stock options
Stock plans in which an organization contributes shares of its stock to an established trust for the purpose of stock purchases by its employees.
Employee Stock Ownership Plans (ESOPs)
mental or physical activity that produces some result
work
Pieces of work are combined to form Jobs
job
The process of formally specifying the task-related activities assigned to and carried out by a worker
job design
The degree to which a job requires a variety of different activities in carrying out the work and involves the use of a number of different skills and talents of the person
skill variety
The degree to which a job requires completion of a “whole” and identifiable piece of work, that is, doing a job from beginning to end
task identity
The degree to which the job has a substantial impact on the lives of other people, whether those people are in the immediate organization or in the world at large
task significance
The degree to which the job provides substantial freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out.
autonomy
The degree to which carrying out the work activities required by the job provides the individual with direct and clear information about the effectiveness of his or her performance.
feedback from the job
A mathematical index describing the degree to which a job is designed so as to motivate people, as suggested by the job characteristics model. It is computed on the basis of a questionnaire known as the Job Diagnostic Survey (JDS).
motivating potential source
Working hours that permit employees the option of choosing daily starting and quitting times, provided that they work a set number of hours per day or week.
flextime
Shortening the number of days in the workweek by lengthening the number of hours worked per day.
compressed workweek
The arrangement whereby two part-time employees perform a job that otherwise would be held by one full-time employee.
job sharing
The use of personal computers, networks, and other communications technology such as fax machines to do work in the home that is traditionally done in the workplace.
telecommuting
