Weeks 9 & 10 Flashcards
Performance Management Feedback Should Have
1) No Surprises
2) be done in a TIMELY manner
3) focus on the Individual’s development and goals in
line with the organizations goals
What is the TOP of Performance Mgmt?
Organizational Strategy, Organizational Goals,
Sr. Leadership Accountability
Defining Performance Expectations is the FIRST step in the Performance MGMT process. This includes 2 things
1) Individual Goal Setting
2) Competencies Review
Step _ in Performance MGMT is Providing Ongoing Feedback and Coaching
This is Step 2.
After Performance Expectations
Step 3 is Performance Review Discussions this includes
1) Documenting the progress of goals and competencies as well as development plans
2) Crowdsourcing
Performance Review Discussions lead to these discussions on these outcomes
1) Compensation and Rewards
2) Learning & Career Development
3) Promotions, Decisions and Succession Planning
4) Disciplinary or Termination Decisions
Crowd sourcing is
getting information from a large group of people / multiple sources
Appraisal Method:
The MOST COMMON form of rating performance is:
The Graphic Rating Scale
E.x. Scale: 1 (developmental), 2 (meets expectations), 3 (exceeds expectations), 4 (exceptional)
Traits and Competencies are rated on Graphic Rating Scale and then
the Average Point Score is tallied
Reliability Communication Average Point
Maya 4 3 4
Cameron 2 1 2
Erum 2 2 2
Jonathan 1 4 3
Appraisal Method: Alternation Ranking Method
Trait: Reliability: + (better than), - (worse than)
Involves comparisons with other employees
Ranking employees from best to worst on a trait or traits. • This method is used to indicate the employee who is highest on the trait being measured and also the one who is lowest, alternating between highest and lowest until all employees to be rated have been addressed
Appraisal Method: Critical Incident Technique
Manager keeps a log of desirable or undesirable examples or incidents of employee’s behavior.
Every 6 months or so, manager and employee meet to discuss.
Appraisal Method: Narrative Forms
Competencies clearly defined - asked to rate and provide an example of when the employee showed that behaviour
Performance Improvement Plan (PIP)
• Identifies measurable improvement goals, timelines and key success indicators • Lists a timetable where manager and employee will come together to review the PIP (usually frequent meetings) • Lists trainings that would be beneficial to the employee
Appraisal Method: BARS - Behaviourally Anchored Rating Scale
- Most Time consuming to develop
- Has a scale Associated with a behaviour
This is an example of:
Scale: 1 (developmental), 2 (meets expectations), 3 (exceeds expectations), 4 (exceptional)
For cashiers, the “accuracy” trait could look like this;
1: makes frequent errors in calculating and inputting the total amount
2: most of the time, accurate in calculating and inputting the total amount
3: always accurate in calculations and inputting the total amount
4: always accurate in calculations and inputting the total amount. In addition, responds to
customers’ questions accurately and positively.
BARS - Behaviourally Anchored Rating Scale
Appraisal Method: MBO - Management By Objectives
Goal Setting using SMART goals
Appraisal Method: 360 Performance Review
EVERYONE around you performs appraisal (e.g. boss, peers, customers, clients, suppliers, etc.)
Name the 7 Types of Appraisal Methods
1) Graphic Rating Scale (Most Common)
2) Alternation Ranking (comparing employees and finding best and worst)
3) Critical Incident
4) Narrative Forms
5) BARS (most difficult)
6) MBO
7) 360
Performance Appraisal Cautions:
THE HALO EFFECT
Rating an employee on one trait biases the way that person is rated on other traits
Performance Appraisal Cautions:
CENTRAL TENDANCY
All employees rated as somewhere in the middle
Performance Appraisal Cautions:
STRICTNESS / LENIENCY
Either rating too high or too low
Performance Appraisal Cautions:
APPRAISAL BIAS
Tendency to allow individual differences, such as age, race, and sex, to affect
the appraisal ratings
Performance Appraisal Cautions:
RECENCY EFFECT
Only considering the employees most recent performance
Performance Appraisal Cautions:
SIMILAR-TO-ME BIAS
Tendency to give higher performance ratings to employees who are
perceived to be similar to the rater
List 6 Performance Appraisal Cautions
1 - HALO EFFECT 2- CENTRAL TENDENCY 3- STRICT / LENIENT 4- APPRAISAL BIAS 5- RECENCY EFFECT 6- SIMILAR-TO-ME
Forced Distribution Method is
- Developed by Jack Welch (GE)
- Involves arranging employees into 3 categories: A Players (top 20%), B Players (middle 70%) and C Players (weak / bottom 10%)
Forced Distribution Pros / Cons
- Eliminates some biases: Central Tendency or Strictness/ Leniency
- Might push the organization to perform better
- Need to watch out for cultural adaptation and fit
- Might create demotivation, rivalry among employees
- Assumes majority of the employees are average or poor performers: no linkage to organizational or departmental performance
According to Maslow’s Hierarchy of Needs, Pay falls into
The bottom wrung as a basic need for safety / security and to satisfy physiological needs
Pay can lead to [blank] but not [blank]
Pay can lead to JOB DISSATISFACTION but not SATISFACTION
Frederick Herzberg’s Motivating Factors for Job DISSATISFACTION are
- quality of supervision
- pay
- company policies
- physical conditions
- relations with others
- job security
Frederick Herzberg’s Motivating Factors for Job SATISFACTION (INTRINSIC MOTIVATORS) are: PORRA
- Promotion
- Opportunities for personal growth
- Recognition
- Responsibility
- Achievement
INTRINSIC MOTIVATION comes from
within
EXPECTANCY THEORY
PEOPLE WILL BE MOTIVATED TO THE EXTENT TO WHICH THEY BELIEVE THAT THEIR EFFORTS WILL LEAD TO GOOD PERFORMANCE, THAT GOOD PERFORMANCE WILL BE REWARDED, AND THAT THEY WILL BE OFFERED ATTRACTIVE REWARDS.
EQUITY THEORY
THE EQUITY THEORY IS DEFINED AS A THEORY THAT STATES THAT PEOPLE WILL BE MOTIVATED WHEN THEY PERCEIVE THAT THEY ARE BEING TREATED FAIRLY
Motivation =
Expectancy (I worked so hard. I
should get 10%
increase.)
x
Instrumentality
(I got 10% increase
but they gave it to
everyone.)
x Valence
(With 10%
increase, I can go
on a vacation.)
Forms of Equity:
External Equity
example: What are others making OUTSIDE the company?
Forms of Equity:
Internal Equity
Ex. what are people inside my COMPANY getting?
Forms of Equity:
Individual Equity
Ex. What are my coworkers being compensated?
Forms of Equity:
Procedural Equity
Is this process Fair?
Name 2 components of Pay
Variable Pay and Base Pay
Example of COMPENSABLE FACTORS (used to determine pay)
Skill, Effort, Working Conditions, Responsibility
How do we remain objective when deciding which jobs should get paid more or less
use a JOB EVALUATION COMMITTEE
Job Categorization:
Define CLASSES
CLASSES contain similar jobs, i.e.
executive assistants
Job Categorization: Define GRADES
GRADES are jobs similar in difficultly but otherwise
different, i.e. executive assistants and mechanics
Job Evaluation Methods:
When do you uses JOB CLASSES?
Classes are used when you do not have many jobs and organization is relatively small
Job Evaluation Methods:
How do you use JOB CLASSES?
- By defining a description for each class
- By defining rules, i.e. amount of independent judgement, skill
Job Evaluation Methods:
When do you use JOB GRADES?
Job GRADES are used when you have many jobs and the organization is not small
Job Evaluation Methods:
HOW do you use JOB GRADES?
By defining compensable criteria i.e. skill, effort, responsibility, working conditions
Job Evaluation Methods:
The POINT METHOD
Determining a Point Value for each job: FACTOR SUB-FACTOR Executive Assistant Skill Education and Experience Interpersonal Skill 2 3 Effort Physical Effort Mental Effort 1 3 Responsibility Supervision of Others Planning 1 3 Working Conditions Physical Environment Travel 1 1 Total Points: 15
[blank] + [blank] determines the pay for jobs
JOB EVALUATION + SALARY SURVEY
Red Circle Pay Rate
Outlier- employee who is making more than the average pay rang
What can you do with RED CIRCLE PAY employees?
freeze their base pay raises, transfer or promote the employee
Wage Curve is
the curve of the target wage
BANDS are
pay ranges for each job grade with a max point a mid point (on the target wage curve line) and a min point
Broadbanding
when bands overlap significantly - less need to promote - usually similar jobs are within the same broadband
INCENTIVES FOR ALL EMPLOYEES
includes:1. Merit (performance pay), 2.bonuses, 3.employee share plan / stock ownership plan, 4.profit sharing plan,5. gain sharing plan
merit pay / performance pay
continual increments in salary
bonus pay
one time payment
employee share plan / stock ownership plan
Trust established to hold shares of company stock purchased for or
issued to employees (60% of Canadian organizations)
profit sharing plan
A plan whereby most or all employees share in the company’s profits
(fewer than 15% of Canadian organizations)
gain sharing plan
plan that engages employees in a common effort to achieve
productivity objectives and share the gains
piecework plan
Incentive based on number of units produced in a given time, such as items per hour or items per day
straight piecework plans
A set payment for each piece produced or processed
guaranteed piecework plan
The minimum hourly wage plus an incentive ($) for each unit produced above a set number of units per hour
differential piecerate plan
A plan by which a worker is paid a basic hourly rate plus an extra
percentage (%) of his/her base rate for production exceeding the
standard per hour or per day
team / group incentive plan
A plan in which a production standard is set for a specific work group and its members are paid incentives if the group exceeds the production standard
INCENTIVES FOR OPERATIONS / PRODUCTION EMPLOYEES
- piecework plan 7. straight piecework plan 8. guaranteed piecework plan
- differential piece-rate plan 10. team / group incentive plan
INCENTIVES FOR EXECUTIVES & SR. MANAGERS
merit pay / performance pay, bonus, capital accumulations programs,stock options
capital accumulation programs
Opportunity to accumulate capital (in the form of company shares)
based on the firm’s long-term success (60% of Canadian private sector)
stock options
The right to purchase a specific number of shares of company stock at today’s price at some point in the future
CEO earnings are made of:
31% share units 30% cash bonus 16% base salary 15% stock options 8% other
INCENTIVES FOR SALES PEOPLE
Salary plan, commission plan, combination plan
salary plan
In a salary plan, salespeople are paid a fixed salary, although there may
be occasional incentives in the form of bonuses, sales contest prizes,
and the like. Mostly used in pharmaceutical industry
commission plan
Payment in direct proportion to sales: pay for results
and only for results
combination plan
Mix of fixed salary and commissions
legal considerations for compensation`
ESA / canadian labour labour codes, pay equity act - bill 148, workers compensation, human rights act, CPP/QPP
ESA / Canadian Labour Laws
Sets minimum standards regarding pay, including minimum wage,
maximum hours of work, overtime pay, paid vacation, termination pay,
paid statutory holidays, etc.
Pay Equity Act
Bill 148 - Equal Pay for Equal Work
Workers Comp Laws
Each jurisdiction has its own Workers Compensation Laws. Objectives of these laws are to provide a prompt, sure, and reasonable income to victims of work-related accidents and illnesses, regardless of fault.
Human Rights Act
Protect Canadians from discrimination on the basis of age, sex, colour, race, religion, marital status, and disability
CPP/QPP
All employees and employers must contribute to Canada/Quebec
Pension Plan throughout their working life. Pension benefits based
on the employee’s average earnings are paid during retirement
Levels of Employee recognition
1 - day-to-day recognition
2- departmental recognition
3- organization wide recognition (i.e. service recognition awards)
level 1. day-to-day recognition examples and purpose
Purpose: Recognize on the spot, immediate recognition
- Way of saying a “thank you” in a more structured way
- Mostly non-monetary recognition (i.e. thank you card)
level 2: departmental recognition examples and purpose
- Purpose: celebration of achievements within the
department - Criteria tied to departmental objectives and values
- Monetary recognition (i.e. gift card)
level 3: organization wide recognition examples and purpose
- Purpose: Celebration of achievements that have been critical in achieving organizational strategies and goals
- Criteria tied to organizational strategies and values
- Monetary recognition is significant
How people prefer to be rewarded:
prepaid cards
