question

comparisons between the pay (and benefits) of one company and the companies with which it competes *ensures "external equity" in pay

answer

Market-Competitive Pay Systems

question

-used to assess competitors' compensation practices (mix and level): base pay, incentives and rewards, and benefits *integrate internal job structures (ex. JE points) with external market pay rates

answer

Compensation Surveys

question

the percentage of ER compensation costs applied to compensation and benefits (ex. health insurance coverage accounts for 40% of total dollars spent on EE benefits)

answer

Mix

question

actual dollar value paid to EEs

answer

Level

question

-can be tailored to specific needs of firm -quality can be monitored by ER -can be done "in-house" if expertise resides in HR staff disadvantages: 1. competitors may not fully "cooperate" with data collection 2. can be expensive, especially if hiring a consultant (if you don't have in-house expertise)

answer

Custom Designed Compensation Surveys (advantages and disadvantages)

question

1. professional associations 2. industry associations 3. consulting firms 4. bureau of labor statistics (BLS)

answer

Published Survey Sources

question

1. national compensation survey 2. employment cost index 3. employer costs for EE compensation

answer

BLS Surveys

question

national compensation survey

answer

Which BLS survey is used for wages and benefits?

question

1. employment cost index 2. employer costs for EE compensation

answer

What BLS survey is used for compensation cost trends?

question

1. who is the relevant labor market? 2. which benchmark jobs should be included

answer

Questions to consider for compensation surveys?

question

-represents the fields of potentially qualified candidates for a particular job 1. occupational classification (professionals, managers, clerical, service area worker, etc) 2. geography 3. market competitors

answer

Relevant Labor Market

question

-established, well-known, stable -common across employers -entire range of jobs -accepted for setting pay rates

answer

Benchmark Jobs

question

1. job evaluations 2. compensation surveys

answer

What two things are benchmark jobs used for?

question

true

answer

Compensation survey data is always outdated due to lag time (T/F).

question

-used to adjust survey data due to time lag between data collection and time survey data is being used *indexes monthly price changes in goods and services

answer

Consumer Price Index (CPI)

question

false; mean

answer

The median of the survey data represents typical market salaries (T/F).

question

if there is wide variation in salaries

answer

When should you use the midpoint?

question

can distort the mean, should be removed from salary data before computing means

answer

Outliers

question

1. standard deviation 2. quartile 3. percentile (% of figures below a point)

answer

Variation

question

-dispersion by % below a set value Quartile 1= 25% of salaries are less than top salary in Q1 Q2= 50% are less than top salary in Q2 Q3= 75% are less than top salary in Q3 Q4= 100% ex. 20 salaries/4 quartiles = 5 salaries per quartile

answer

Quartile

question

regression analysis -X is JE points for benchmark job determined by internal job structure, Y is the market salaries (means or medians) based on survey data for benchmark jobs

answer

How do you determine the Market Pay Line?

question

Y=a+bX y=predicted salary a=Y-intercept (constant) b=the slope X=job evaluation points

answer

Regression Analysis

question

every 1 point increase in X (JE points), Y (salary) increases by [b (slope) +a (Y intercept)]

answer

What does it mean if X (JE points) is increased?

question

the change in Y for every one unit change in X (JE points) *dollar value of each JE point

answer

What does the slope represent?

question

tells you how well internal job structure (job evaluation points) explains variations in market pay rates. {how well X explains Y} -ranges between 0 and 1, we want it as close to 1 as possible

answer

R-squared

question

1. market lead 2. market lag 3. market match

answer

Pay-Level Policies

question

market lead

answer

Which pay policy is best for differentiation strategies?

question

market lag; can be used if you have really good benefits

answer

Which pay policy is best for lowest-cost strategies? When might you use this policy?

question

yes

answer

Is market match pay policy appropriate for differentiation strategy?

question

1. motivate EEs to perform well 2. reward EEs who do perform well 3. coach EEs who do not perform well

answer

Strategic Reward Systems:

question

1. identifying of performance of individuals and teams 2. measuring of performance of individuals and teams 3. developing of performance of individuals and tams 4. aligning performance with the strategic goals of the org

answer

Performance Management System is the...

question

1. strategic business considerations 2. ongoing feedback 3. so EE can improve performance 4. driven by line manager

answer

Performance Management (compared to performance appraisal):

question

1. assesses EE strengths & weaknesses 2. once a year 3. lacks ongoing feedback 4. driven by HR

answer

Performance Appraisal (compared to performance mgmt):

question

engage in desirable behaviors

answer

Reward Systems encourage EEs to:

question

-cash compensation -benefits (insurance/retirement protection, pay for time not worked)

answer

Tangible Rewards

question

-recognition/status -employment security -challenging work *relational returns

answer

Intangible Rewards

question

1. LT incentives 2. ST incentives 3. merit pay

answer

What 3 rewards have the highest dependence on performance?

question

1. cost of living adjustment 2. seniority pay 3. insurance protection

answer

What 3 rewards have the lowest degree of dependence on performance?

question

align individual and organizational goals

answer

Strategic purpose of PM systems:

question

salary, promotion, termination decisions

answer

Administrative purpose of PM systems:

question

-definitions of job and success are clarified -motivation to perform is increased -self esteem is increased -self insight and development are enhanced

answer

Benefits of PM for EEs:

question

-supervisors' views of performance are communicated more clearly -managers gain insight ab subordinates -EE becomes more competent

answer

Benefits of PM for Managers:

question

-org goals made clear -org change is facilitated (ppl will do what they are rewarded to do) -better protection from lawsuits

answer

Benefits of PM for Org:

question

1. strategic congruence 2. thoroughness 3. practicality (not too expensive, time consuming or complex) 4. meaningful 5. specificity 6. differentiates effective & ineffective performance 7. reliable and valid 8. acceptable and fair 9. inclusive (include ppl from all levels of org) 10. open (no secrets) 11. correctability 12. standardized (w/ job families) 13. ethical

answer

Characteristics of an Ideal Performance Mgmt System

question

-all EEs are evaluated -all major job responsibilities are evaluated -evaluations cover performance for entire review period -feedback given is both positive and negative

answer

Thoroughness

question

-minimize subjectability -mechanism to correct perceived errors -establish appeals process

answer

Correctability

question

the measures of performance produce consistent results across supervisors and time *difficult to achieve

answer

Reliable

question

performance criteria is: 1. relevant to the job 2. not deficient to job (all job aspects are evaluated) 3. not contaminated by factors outside of EE's control

answer

Validity

question

1. Distributive Justice 2. Procedural Justice

answer

Acceptability & Fairness

question

is the reward fair?

answer

Distributive Justice

question

was the way they evaluated your ratings fair?

answer

Procedural Justice

question

distributive justice

answer

(Distributive/Procedural) justice must link work performance to evaluation to reward.

question

1. prerequisites 2. performance planning 3. performance execution 4. performance assessment 5. performance review 6. performance renewal and recontracting

answer

PM Process (6 steps)

question

1. knowledge of the job in question (job analysis/job description) 2. knowledge of the org's mission and strategic goals

answer

Step 1: Prerequisites

question

is the outcome of a job analysis, includes: 1. list of all job duties and tasks 2. KSAs required to perform the duties 3. working conditions

answer

Job Description

question

corporate/unit vision and mission

answer

Job description should be linked to ______.

question

setting goals and standards of performance with the EE -desired competencies to do the job

answer

Step 2: Performance Planning

question

-appraisal meeting or discussion -review past behavior and develop future goals and plans

answer

Step 5: Performance Review

question

manager's discomfort w/ giving feedback

answer

What is the biggest impediment to effective performance reviews?

question

-helps define the org's identity (mission statement) -helps org prepare for the future (vision statement) -enhance ability to adapt to environmental change (SWOT analysis) -goals & strategies *directs EE's daily activities

answer

Purpose of Strategic Planning:

question

opportunity + strength *directions the org should pursue

answer

Leverage

question

opportunity + weakness *identifies internal areas that need to be improved in order to take advantage of external opportunities

answer

Constraint

question

threat + strength *org should be able to deal w/ a potential threat

answer

Vulnerability

question

threat + weakness *org is in trouble and turn-around strategy is needed

answer

Problem

question

-why does the org exist? -who does it serve? -what is it's product/service? -what are org values and beliefs?

answer

Mission Statement

question

-future aspirations -focuses attention on what is important

answer

Vision Statement

question

develop the vision.

answer

Goals are established to _____.

question

1. org's strategic plan; must link to 2. unit's strategic plan; must link to 3. job description (KSAs, tasks); must link to 4. individual/team performance (results, behaviors, developmental plan)

answer

Alignment of Strategic Plan with Performance:

question

vision statement

answer

What provides context for evaluating opportunities and threats?

question

1. basic EE information 2. accountabilities, objectives & standards 3. competencies & behavioral indicators 4. developmental needs, plans and goals 5. stakeholder input 6. employee comments 7. signatures

answer

Major Components of an Appraisal Form

question

1. judgmental strategy 2. mechanical strategy

answer

2 ways of determining overall rating:

question

-holistic approach (just add up total points) -relies on the ability of the rater -more susceptible to rater biases

answer

Judgmental Strategy

question

-weight each performance dimension and then multiply person's score x weighting -more objective assessment of performance

answer

Mechanical Strategy

question

1. EEs anniversary date 2. end of fiscal year

answer

Options for when review is completed:

question

-less administrative burden on supervisor -but can't tie rewards to fiscal year or use a comparative system

answer

Reviewing EEs on anniversary date:

question

-rewards more easily tied to fiscal year -can use comparative system -may be burden to supervisor (depending on implementation and number of EEs) *better for a merit-based system

answer

Reviewing EEs at end of fiscal year:

question

+best position to evaluate performance vs. strategic goals +make decisions ab rewards -supervisor ay not be able to directly observe performance -evaluations may be biased

answer

Supervisor providing performance ratings (advantages and disadvantages)

question

+assess teamwork -possible friendship bias -may be less discriminating

answer

*Peers providing performance ratings (advantages and disadvantages)

question

+accurate when used for developmental purposes +good position to assess some competencies -inflation when used for administrative purposes -may fear retaliation (confidentiality is key)

answer

Subordinates providing performance ratings (+/-)

question

+EEs become more focused on meeting customer expectations -time -money -external customers may not be motivated to cooperate

answer

Customers providing performance ratings (+/-)

question

true

answer

when there is disagreement across sources, make sure that employee receives feedback by source (T/F)

question

1. maximize EE's merit raise/rewards 2. encourage/motivate EEs 3. avoid creating written record of a low rating 4. avoid confrontation with EEs 5. promote undesired EEs out of unit 6. make manager look good to his/her supervisor

answer

Motivations for Rating Inflation

question

1. shock EE to improve 2. teach EE a lesson 3. send a message to EE that she should consider leaving 4. build a written record of poor performance 5. prevent a "good" EE from being promoted so that manager can keep him/her in work unit

answer

Motivations for Rating Deflation

question

-hold managers accountable for their ratings of subordinate's performance -improve communication about importance of performance appraisals between top mgmt and EEs -train managers on performance mgmt and rating process

answer

How can organizations decrease politics in performance appraisal?

question

1. leniency (inflation) 2. severity (deflation) 3. central tendency (rate all EEs as "average")

answer

Type of Intentional Rating Errors

question

1. similar to me 2. halo/horn 3. primacy 4. first impression 5. contrast 6. stereotype 7. negativity 8. recency 9. spillover

answer

Types of Unintentional Rating Errors

question

rate EE high on everything bc they rate high on a certain dimension of performance *opposite of horn

answer

Halo

question

supervisors compare EEs with one another instead of against predetermined standards

answer

Contrast

question

raters place more weight on negative information than on positive information

answer

Negativity

question

1. Rater Error Training 2. Frame-of-Reference Training 3. Behavioral Observation Training 4. Self-Leadership Training

answer

4 types of Training Programs:

question

makes raters aware of what rating errors they are likely to make and to help them develop strategies to minimize those errors

answer

Rater Error Training (RET)

question

1. make raters aware of types of rating errors they are likely to make (both intentional and unintentional) 2. help raters minimize errors 3. increase rating accuracy

answer

Goals of Rater Error Training (RET)

question

false

answer

Empirical evidence shows that raters are more accurate after RET training (T/F)

question

improves rater accuracy by thoroughly familiarizing raters with the various performance dimensions to be assessed -for each job dimension, develop low/avg/high performance behaviors (CIs)

answer

*Frame of Reference Training (FOR)

question

1. raters develop common frame of reference (to provide more accurate ratings) -observing & evaluating performance 2. raters help EEs design effective development plans (better feedback) *Phillip secretary video (possible exam question)

answer

*Goals of Frame of Reference Training (FOR)

question

*best at minimizing biases -urges raters to keep "diaries" (lists of CIs for EE throughout the year) -helps overcome memory-related biases

answer

*Behavioral Observation Training (BO)

question

1. minimize unintentional rating errors 2. improve rater skills by focusing on how raters: a. observe performance b. store/recall/use info about performance

answer

*Goals of Behavioral Observation Training (BO)

question

1. improve rater confidence in ability to manage performance (positive self-talk, mental imagery and beliefs) 2. enhance mental processes 3. increase self-efficacy (increased accuracy) *emphasizes doing things for intrinsic value -moreso encouragement than training

answer

Goals of Self-Leadership Training (SL)

question

-how to communicate new performance appraisal plan to EEs answers: 1. what is PM? 2. how does PM fit in our strategy? 3. what's in it for me? 4. how does it work? 5. what are our roles/responsibilities? 6. how does PM relate to other initiatives? -training, promotion and succession planning

answer

Communication Plan (what does it answer)

question

1. selective exposure- we expose our minds only to ideas with which we already agree 2. selective perception- we perceive info as meaning what we want it to mean 3. selective retention- we remember only pieces of info with which we already agree

answer

Cognitive Biases that affect communication plan's effectiveness:

question

1. consider employees -involve EEs in system design (people support what they help create) -show how EE needs are met 2. emphasize the positive -use credible communicators -strike first - create positive attitude towards the new performance system before negative attitudes are created -provide facts and conclusions 3. repeat it, document it, be consistent -put it in writing -use multiple channels of communication -sa it and then say it again

answer

How to minimize cognitive biases affecting the communication plan:

question

-helps ensure EE acceptance of PM system -EE can question two types of issues: 1. judgement (rating itself => validity of evaluation) 2. administrative (or procedural) -whether policies and procedures were followed

answer

Appeals Process

question

appeal sent to HR, they either suggest corrective action to the supervisor or informs the EE that the decision or procedures were correct

answer

Level 1 Appeal

question

arbitrator (panel of peers/managers) and/or high-level manager make the final decision *only occurs if supervisor doesn't believe corrective action should be taken or if the EE doesn't accept the HR decision

answer

Level 2 Appeal

question

-roll out test version of the appraisal to a sample group *appraisal scores aren't recorded, participants keep record of issues encountered

answer

Pilot Test

question

groups jobs based on simliar compensable factors and value for pay policy application -larger pay grade = less hierarchy

answer

Pay Grade

question

represent vertical dimension (pay rates) of pay structures -include midpoint, minimum and maximum pay rates

answer

Pay Range

question

representative of typical market pay rates relative to a company's job structure

answer

Market Pay Line

question

below minimum pay rate for their pay range, should be brought within the normal pay range ASAP

answer

Green Circle Rate

question

EE paid greater than maximum rates for their pay ranges

answer

Red Circle Rate

question

create job structure that compares jobs based on value compared to other jobs and paying more for jobs valued more highly

answer

Internal Consistency in Pay System

question

1. job analysis 2. job evaluation

answer

Base job structure on:

question

1. job content (tasks and duties) 2. worker performance reqiurements (KSAs) 3. job context (working conditions) *ab the job, not the person

answer

Components of Job Analysis

question

job descriptions

answer

Job analysis is used to determine _________.

question

1. determine job analysis program 2. select and train analysts 3. orient job analysts on existing information 4. conduct the study: collect new data on job 5. summarize the results & write the job descriptions

answer

Steps in conducting job analysis:

question

1. questionnaires 2. interviews 3. observation (job must be physically active) 4. participant diaries (actual role inbumnants report what they do every day)

answer

Step 4 of JA: Data Gathering Methods:

question

1. job incumbents 2. supervisors of job incumbents 3. job analysts (HR experts)

answer

Step 4: Data Collection Sources

question

by using multiple sources to collect data

answer

How can you ensure that job analysis is reliable and valid?

question

1. job title 2. job summary 3.job duties (list in order of importance) 4. worker specifications (KSAs & degree requirements)

answer

Job descriptions should include:

question

equal pay for men/women doing similar tasks

answer

Equal Pay Act

question

must give time off and OT pay to non-exempt workers

answer

Fair Labor Standards Act

question

determine essential job functions, can't discriminate vs disabled EE if they can perform these functions

answer

Americans with Disabilities Act

question

process for recognizing differences in the relative worth of jobs and establishing pay rates accordingly

answer

Job Evaluation

question

1. compensable factors 2. value to corporation's competitive strategy

answer

Job value based on:

question

1. skill 2. effort (physical v mental) 3. responsibility (managerial v financial) 4. working conditions

answer

Universal Compensable Factors

question

ways to describe jobs that the company feel is worth compensating for

answer

Compensable Factors

question

1. qualitative method 2. quasi-quantitative method 3. quantitative method

answer

Job Evaluation Techniques:

question

jobs evaluated/compared holistically based on compensable factors -ranking may be done through: simple ranking, paired comparisons or alternation ranking

answer

Qualitative Method

question

-very subjective -not legally defensible -not objective way to determine "how much" difference exists between jobs

answer

Problems with qualitative method:

question

-good for medium-sized companies -uses classification plans

answer

Quasi-Quanitative Method

question

used to place jobs into categories based on compensable factors *federal government plan is most well known -try to match your own company's job positions to the Fed Gov't classification system to determine wage structure

answer

Classification Plan

question

-AKA 'Point Method' *most widely used method -based on compensable factors -each factor broken down into degrees and given a weight (possible points) -each factor assigned a value based on the degree and weight *total job 'worth' is based on sum of all of factor values *initially done with benchmark jobs

answer

Quantitative Method

question

-contents are well known and relatively stable over time and agreed upon by EEs involved -jobs are common across a number of different ERs *represent the entire range of jobs that are being evaluated w/in a company -jobs are generally accepted in labor market for purpose of setting pay levels

answer

Characteristics of Benchmark Jobs

question

1. set benchmark jobs 2. choose and define compensable factors 3. define degree scores w/in each compensable factor 4. determine the weight of each compensable factor 5. determine point values for each factor (including points for each degree) 6. evaluate a job by allocating it a degree score on each factor (based on JD). add up total point values across all factors to get total job value 7. verify factor degrees and point values for a random sample of jobs (benchmark jobs) 8. evaluate all jobs in company 9. determine pay level based on point totals and market-based pay rate

answer

Steps of Point Method

question

(provide examples of each level, these should be defined in terms of JOB REQUIREMENTS, not person's skills)

answer

Step 3: define degree scores w/in each compensable factor

question

1. market pay rates solely determines pay 2. pay incentive (ex. commission-based salary) 3. individual rates negotiated by EE 4. collectie bargaining determines salaries

answer

Alternatives to Job Evaluation

question

1. cash compensation (base pay, seniority-based pay raises, contingent pay) 2. benefits -insurance & retirement protection -pay for time not worked -work/life services

answer

Tangible Rewards

question

pay and salary increases that are based on job performance -pay for performance -incentive pay

answer

Contingent Pay (definition)

question

1. merit-based pay raises 2. individual or team bonuses 3. commission-based pay 4. piece-rate pay 5. profit sharing plans 6. skill-based pay (or competency-based) 7. gainsharing plans 8. employee stock ownership plans

answer

Contingent Pay (examples)

question

higher paid EEs get more of the profit share *you as an EE don't necessarily have to do anything to receive this, company overall just must reach its profit goal

answer

Profit-Sharing Plans

question

-typically 'plant-wide' incentive system -rejects the premise that money is the primary motivator of improved performance *relies on EE involvement to drive improved productivity -EEs contribute ideas on how to make productivity higher and costs lower -improve EE cooperation and plant productivity

answer

Gainsharing Plans

question

Scanlon Plan -EEs get bonus as long as they reach their target ratio (payroll/sales)

answer

CHV1 – PERFORMANCE MANAGEMENT – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards