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OB/HR > Week 4 Exam 2 > Flashcards

Week 4 Exam 2 Flashcards

1
Q

Performance Management (PM)

A

the process of ensuring that employee’s activities contribute to the organization’s goals; includes defining, monitoring, measuring, evaluating, and providing consequences for performance

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2
Q

PM Steps

A
  1. define performance outcomes for the company
  2. develop employee goals to achieve outcomes
  3. provide support
  4. evaluate performance
  5. identify improvements needed
  6. provide consequences for performance results
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3
Q

PM Limitations

A

-Manager Bias
-Lack of feedback & feedback clarity
-Negative reactions
-PM not taken seriously

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4
Q

To improve PM effectiveness…

A

Organizations must create accountability, continually coach, and establish clear expectations

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5
Q

PM Purposes

A

-Strategic (link employee behavior to organization goals)
-Administrative (provide decisions about salary, bonuses, hiring, or firing)
-Developmental (basis for developing employees knowledge and skills)

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6
Q

PM Benefits for Employees

A

Identifies their strengths and weaknesses and establishes a plan to develop skills

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7
Q

PM Benefits for Managers

A

Helps build strong relationships with employees

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8
Q

Criteria for effective PM

A

-Fit with Strategy, Acceptability, Specific Feedback, Reliability, Validity
-Only Information, NOT an Evaluation
-Given regularly not just annually
-Links goal setting & feedback

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9
Q

Reliability PM

A

consistency of the results performance measure will deliver

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10
Q

Interrater reliability

A

consistency of results when more than one person measures performance

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11
Q

Test-Restest reliability

A

consistency of results over time

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12
Q

Validity PM

A

-whether the appraisal measures all relevant aspects of performance
-minimize deficiency (information that is not gathered but is relevant) and contamination (information that is gathered but irrelevant)

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13
Q

Performance Evaluation Approaches

A

Making Comparisons, Rating Individuals, Measuring Results

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14
Q

Making Comparisons- Performance Evaluation

A

Ex. Simple Ranking, Forced Distribution, and Paired Comparison

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15
Q

Benefits of Making Comparisons

A

Counteracts leniency (rating everyone positively) and central tendency (rating everyone as average)
Easy to use
Helps make decisions about raises and layoffs

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16
Q

Simple Ranking

A

-Requires managers to rank employees in their group from the highest performer to the poorest performer
-Problem: Validity; best and worst do not define what is good and bad about performance nor does it provide actual feedback

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17
Q

Forced Distribution

A

-Assigns a % of employees to each category in a set of categories (i.e. exceptional, above average, average, etc.)
-Problem: could be incorrect; people who are actually good may be in the lower category)

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18
Q

Paired-Comparison

A

-Compares each employee with another employee to establish rankings
Problem: time-consuming for a manager

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19
Q

Rating Attributes- Performance Evaluation

A

-Lists traits and provides a rating scale for each trait; the employer uses a scale to indicate to which extent the employee displays each trait
-Problems: low reliability, rarely linked to the organization’s strategy, doesn’t generate feedback

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20
Q

Rating Behaviors (BARS)

A

-Rates behavior in terms of a scale showing specific statements of behavior that describe different levels of performance
-Problem: can be biased, time-consuming, and costly

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21
Q

Rating Behaviors (BOS)

A

-A variation of BARS that uses all behaviors necessary for effective performance to rate performance at a task; better for being objective and generating feedback, and it is easy to use
-Problem: time-consuming and requires a lot of information

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22
Q

Management by Objectives (MBO): - Performance Evaluation

A

Managers and employees work together to set specific objectives that are tied to the overall business goals; these goals become the standards for evaluating each employee’s performance

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23
Q

Manager’s role in performance evaluation

A

-Provide frequent feedback throughout the year both formally and informally
-Take the atmosphere/context in consideration for the actual review discussion
-Encourage the individual to actively participate in the discussion, professionally
-Provide a balance of positive and constructive feedback
-Recognize mistakes but make it a learning experience; focus on solving problems for the future
-Focus the feedback on behaviors and NOT personal characteristics
-!!! Accurately rate performance/potential !!!

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24
Q

Errors in Performance Measurement

A

“Similar to Me” error, Contrast error, Distributional errors, and Raters let their opinion of one quality alter their opinion of others

25
Q

“Similar to Me” error

A

You may give higher ratings to someone similar to you

26
Q

Contrast error

A

Occurs when candidates are compared to each other rather than on a standardized rating scale (i.e. NBA player sucks but only comparing to people in the NBA)

27
Q

Distributional errors

A

-Leniency (rating everyone near the top)
-Strictness (rating majority near the bottom)
-Central Tendency (put everyone near the middle of the scale)
-Makes comparisons difficult among employees rated by the same person or among different raters

28
Q

Halo effect error & Negative halo effect error

A

Halo: when the bias is in a favorable direction
Neg: when the bias is negative

29
Q

Feedback

A

information about an individual or collective performance that is shared with those in a position to improve

30
Q

Feedback functions

A

Instructional: when it clarifies roles or teaches new behavior
Motivational: when it serves as a reward or promises a reward (i.e. information that builds self-efficacy)

31
Q

Why is feedback important?

A

-It can help employees improve their performances

32
Q

“Tell-and-Sell” method

A

The manager tells employees their ratings and the manager justifies those ratings

33
Q

“Tell-and-Listen” method

A

The manager tells employees their ratings and allow the employee to explain

34
Q

“Problem-Solving” method

A

Manager and employee work together to solve performance problems

35
Q

Performance Goal vs. Learning Goal

A

PG: targets a specific end result
LG: promotes enhancing your knowledge/skill
-must focus on LG before PG

36
Q

Total Rewards

A

-The sum of all the things in the work experience that affect (or are available to) an employee
-Can be tangible (compensation) or intangible (recognition)
-Goal is to find a set of total rewards that are meaningful to the widest possible group of employees including potential ones

37
Q

Compensation

A

-Includes all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship
-Related to individual motivation, engagement, and retention
-Must be aligned with the goals and strategy of the organization

38
Q

Incentive Pay

A

Forms of pay linked to an employee’s performance on all levels

39
Q

Ways to Pay for Individual Performance:

A

Piecework Rate, Standard Hour Plan, Merit Pay, Performance Bonuses, or Sales Commissions

40
Q

Piecework Rate

A

Pay based on the amount workers produce

41
Q

Straight Piecework Rates vs Differential Piecework Rates

A

-Straight: The employer pays the same rate per piece (no matter how much the worker produces)
-Differential: The piece rate is higher when a greater amount is produced

42
Q

Standard Hour Plan (include Pros/Cons)

A

Pays workers extra for work done in less than a standard time
-Pro: Encourages employees to work faster
-Con: Employees often neglect quality or customer service

43
Q

Merit Pay

A

Pay increases linked to ratings on performance appraisals, uses a merit increase grid

44
Q

Merit Pay Advantages & DIisadvantages

A

-Adv.: able to reward all aspects of employee’s performance that are measured
-Disadv.: expensive, may discourage teamwork and encourage self-centeredness

45
Q

Compa-ratio vs Group Compra-ratio

A

-CR: describes the individual’s position in the pay range against the pay policy reference point for the range (assesses the competitiveness of an employee’s pay level)
-GCR: compares the average salary of a group of employees to the average salary of other groups within the same organization or to competitors

46
Q

GCR Number…

A

-Close to 1 (the pay structure is well-planned to support the organization’s goals)
-Greater than 1 (paying more than anticipated for HR and may have difficulty keeping costs under control)
-Less than 1 (underpaying for HR relative to expectations)

47
Q

Performance Bonuses (include PRO)

A

-Not rolled into base pay, Employees must re-earn the bonus each period
-Pro: gives companies great flexibility in deciding what to reward

48
Q

Sales Commissions & examples

A

-Incentive pay is calculated as a percentage of sales
-Ex.:Straight commission plan (no base salary), Straight salary (no commission), Commission “in addition to” a base salary

49
Q

Ways to Pay for Group Performance:

A

Gainsharing, Group Bonuses, and Team Awards

50
Q

Gainsharing (include advantages)

A

-Measures increases in productivity and effectiveness and distributes a portion of each gain to all employees in a unity (group)
-Adv.: addresses the challenge of identifying appropriate performance measures, frees employees to determine how to improve their group’s performance

51
Q

Group Bonuses

A

Reward members of a group for achieving a specific goal; can create competition between groups

52
Q

Team Awards

A

Similar to group bonuses but more likely to use recognition as the “payment”

53
Q

Ways to Pay for Organization Performannce

A

Profit Sharing & Stock Options

54
Q

Profit Sharing

A

-Incentive pay in which payments are a percentage of the organization’s profits and do not become part of the employee’s base salary
-Pros: encourages employees to think like owners and make the organization more successful

55
Q

Stock Options

A

-Rights to buy a certain number of shares of stock at a specified price
-Pro: a sense of ownership in the company

56
Q

Employee Stock Ownership Plans (ESOPs)

A

-the organization distributes shares of stock to all its employees by placing it in a trust, employees get updates on the value of their stocks and can sell the stocks when they leave the organization

57
Q

Mandatory Benefits

A

Social Security, Unemployment, Worker’s Comp, FMLA, and Healthcare

58
Q

Retirement- Defined Benefit

A

You get paid a certain amount of money per year (i.e. pensions)

59
Q

Retirement- Defined Contribution

A

You put in a certain amount from each paycheck, the money gets invested in some way, its tax free until you withdraw it

OB/HR (10 decks)

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