MGT 468 - Exam 3 Materials - Chapters 8, 9, 10, 11, 12, 13, 18

MGT 468 - JSU - Exam 3 Materials - Chapters 8, 9, 10, 11, 12, 13, 18

1- Specify the employer’s competitive pay policy

2- Define the purpose of the survey

3- Select relevant market competitors

4- Design the survey

5- Interpret survey results and construct the market line

6- Construct a pay policy line that reflects external pay policy

7- Balance competitiveness with internal alignment through the use of ranges, flat rates, and/or bands.

What are the steps in setting Competitive Pay and Designing a Pay Structure?

survey

A _______ is the systematic process of collecting and making judgments about the compensation paid by other employers.

(1) to adjust the pay level in response to changing rates paid by competitors, (2) to set the mix of pay forms relative to that paid by page 263competitors, (3) to establish or price a pay structure, (4) to analyze pay-related problems, or (5) to estimate the labor costs of product/service market competitors.

What is the purpose of setting up a survey?

pay mix

Base, bonus, stock and benefits make up an organizations __________.

pay level

The overall movement of pay rates caused by competition for people in the market is known as the ___________.

adjust pay structure.

When one chooses to Validate job evaluation results and Establish internal structures they are conducting measures to possibly:

Validate job evaluation results and Establish internal structures

If one was looking to adjust the pay structure, what might they do?

performance management

There is growing evidence that the way we design HR practices, specifically __________ plans, strongly affects the way employees perceive the company.

increase the likelihood that employees will engage in behaviors that help the organization achieve its strategic objectives (incentive effect) and

Our compensation decisions and practices should be designed to:

incentive effect

Increase the likelihood that employees will engage in behaviors that help the organization achieve its strategic objectives is known as the:

sorting effect

To attract and retain such employees to the organization is known as the ___________ .

organizational performance

Employers want employees to perform in ways that lead to better ___________.

devise policies and practices (and compensation falls in this mix) that lead employees to behave in ways that ultimately support corporate goals.

The job of Human Resources is to:

employee behaviors

Every organization, whether they realize it or not, has human resource practices that can either work together or conflict with each other in trying to generate positive ______ ______.

ability

Success depends on finding people with _________.

finding people with ability

What is the primary job of recruitment, selection, and training?

desired behaviors

Pay and other rewards should reinforce ____________.

the company’s culture

The informal rules and expectations that are evident in any company are known as:

minimize

HR needs to establish policies and practices that __________ the chances that outside “distractors” hinder performance.

performance

Whether we’ve developed a sound compensation package can only be determined by the impact on _______.

what constitutes good

We can’t tell if our compensation system helps recruit and select good employees if we don’t know how to measure what?

Lack of employee control translates into perceptions of lack page 311of opportunity to perform well and unfair treatment if pay is tied to these uncontrollable things.

Low

_____ incentive component is appropriate in organizations with highly variable annual performance.

Larger

______ incentive components are appropriate in companies with stable annual performance.

False

True or False:
Incentive systems are proven to be unsuccessful for getting people to do exactly what is being incentivized.

True

True or False:
Incentive systems are notorious for getting people to do exactly what is being incentivized.

job characteristics (including rewards and tasks/abilities required) and recruiter behaviors

What do studies show are key elements in the decision to join a company?

enhance job performance

The compensation challenge is to design rewards that do what?

effort; pay

In order to design a pay system that is appreciated, the link between _____ and ______ must be evident.

Money

_____, on average, is the most important reward in surveys of employees.

individual performance; the market rate

Data suggest most employees prefer pay systems that are influenced primarily by_______ ___________ and _________, with seniority also important to some

(1) what’s important to a person, and (2) offering it in exchange for some (3) desired behavior.

In the simplest sense, motivation involves three elements. What are those three elements?

Flexible compensation

_________________ is based on the idea that only the individual employee knows what package of rewards would best suit personal needs.

Flexible compensation

Based on the idea that only the individual employee knows what package of rewards would best suit personal needs.

physiological, security, self-esteem needs

People have certain needs—such as _______, ________, and __________—that influence behavior.

physiological, security, self-esteem needs

What are the three needs of people that influence behavior?

Maslow’s need hierarchy

Which motivation theory states that People are motivated by needs, Needs form a hierarchy from most lower/basic (food and shelter) to higher-order (e.g., self-esteem, love, self-actualization), Unmet needs motivate. Met needs do not, and Unmet higher-order needs become motivating after lower-order needs have been met?

Herzberg’s two-factor theory

Which motivation theory states that Hygiene/maintenance factors (e.g., pay) prevent dissatisfaction, but do not motivate or cause satisfaction. Hygiene factors, which include pay, help with basic living needs, security, and fair treatment, and satisfiers/motivators, such as recognition, promotion, and achievement, motivate performance.

Expectancy Theory

Which motivation theory states Motivation is the product of the following three perceptions: Expectancy is employees’ assessment of their ability to perform required job tasks, Instrumentality is employees’ beliefs that higher job performance will be rewarded by the organization, Valence is the value employees attach to the organization rewards received for job performance, and Motivational force to choose high performance is higher to the degree expectancy, instrumentality, and valence are high for that choice.

Equity Theory

Which motivation theory states Employees experience equity and will be motivated to perform when the ratio of their perceived outputs (e.g., pay) to perceived inputs (e.g., effort, performance) is equal to the perceived outputs/inputs of a comparison person.

If the two ratios above are not equal, perceived inequity results and the person is motivated to take action to restore equity.

Some actions employees take (e.g., lower effort) to restore perceived equity are not helpful to organizations

Reinforcement Theory

Which motivation theory states that Rewards reinforce (motivate and sustain) performance.

Rewards are most effective when they follow directly after behaviors to be reinforced.

Behaviors that are not rewarded will be discontinued (extinction).

Goal Setting Theory

Which motivation theory states that Challenging and specific performance goals generate the most employee effort.

Goals serve as feedback standards to which employees can evaluate their performance.

Employees must be motivated to choose and persevere in (be committed to) pursuing performance goals.

Agency Theory

Which motivation theory states that Pay directs and motivates employee performance.

Employees are risk-averse. They prefer certain/fixed income flows (wage, salary) to variable income flows (e.g., performance-based pay).

If performance can be accurately monitored without undue cost or if risk due to variability in outcomes (e.g., profits) is large (increasing risk-bearing concerns among employees), payments should be based upon behaviors (satisfactory completion of work duties).

If monitoring of behaviors is difficult or costly and if risk due to variability in outcomes is not large, pay should be based on outcomes (e.g., profits).

Intrinsic Motivation

Enjoyment or satisfaction that comes from performing the work itself and produces a sense of autonomy.

extrinsic motivation

During _______ motivation, employees are motivated by monetary rewards

International Society for Performance Improvement

The ____________ has web information on performance journals, strategies for improving performance, and conferences covering the latest research on performance improvement techniques.

“Do these things.” with much emphasis

Different from the past practices, now compensation people talk about pay in terms of:

that money (and the sense of achievement and recognition that go with it) is very important.

Compensation people will tell you, that money isn’t everything. But they will also tell you:

the sense of achievement and recognition that go with the money

Besides money, what else is an important factor or factors that compensation people tell you should be focused on?

empowerment, recognition, and opportunities for advancement.

Surveys of workers in general (not as useful as a survey of your own workforce, but still of some use) report that workers generally also highly value other job rewards such as:

False

True or False:
Surveys of workers in general (not as useful as a survey of your own workforce, but still of some use) report that workers generally care more about money rather than other job rewards such as empowerment, recognition, and opportunities for advancement.

Pay

_________ is one of the more visible rewards in the whole recruitment process.

variable pay plans

Well-designed ___________ have a proven track record in motivating better performance and helping cut costs.

merit

A ______ pay system links increases in base pay to how highly employees are rated on a performance evaluation.

individual incentive

Although _______ _______ plans receive much attention (probably because they carry risks—see below), it turns out that they are not widely used, at least in the pure form(s) described above.

pay-for-performance

A key element in ___________ plans is the choice of one or more measures of performance.

Performance Ratings

__________ are the things we enter into an employees permanent record.

Performance Ratings

_______________ are influenced by a host of factors besides the employee behaviors observed by raters.

Such things as organization values (e.g., valuing technical skills or interpersonal skills more highly), competition among departments, differences in status between departments, and economic conditions (labor shortages which make for less willingness to terminate employees for poor performance)—all influence the way raters rate employees.

What factors influence the way raters rate performance ratings?

appraisal

Employees unhappy with the ________ process were less satisfied with their firms, less satisfied with their pay, less committed, and more likely to turn over.

Employees are less satisfied with their firms, less satisfied with their pay, less committed, and more likely to turn over.

What are some of the ramifications and/or consequences due to employees who are unhappy with the appraisal process?

fair to employees and reflect value for the organization.

Critics of subjective measures want performance measures (metrics) that are:

balanced scorecard

A ___________ approach is a way to look at what contributes value in an organization.

Customer satisfaction, Employee internal growth and commitment, Operational efficiency in internal processes, and Financial measures

What are the four dimensions that a balanced scorecard focuses on?

balanced scorecard

Data suggest that implementation of a ___________ can have positive impacts on the bottom line and on rating accuracy.

the bottom line and on rating accuracy.

Data suggest that implementation of a balanced scorecard can have positive impacts on:

shareholder, customer, and employee objectives, as well as strategic imperatives

The choice of performance measures can be guided by a desire to balance what?

operational efficiency in internal processes

What are strategic imperatives related to?

colleague metrics

Which indicators tell the company how its financial results will be in the future?

customer and employee metrics

Colleague metrics consist of what?

Ranking format

One of two types of evaluation formats that require that the rater compare employees against each other to determine the relative ordering of the group on some performance measure (usually some measure of overall performance).

Straight Ranking Procedure, Alternation Ranking,

What are the three types of ranking methods?

Straight Ranking Procedure

Method where employees are ranked relative to each other.

Alternation Ranking

Method that recognizes that raters are better at ranking people at extreme ends of the distribution therefore, Raters are asked to indicate the best employee and then the worst employee.

ratings

What appraisal format is the most popular?

Paired Comparison Ranking

A method that simplifies the ranking process by forcing raters to make ranking judgments about discrete pairs of people.

Rating formats

___________ require raters to evaluate employees on some absolute standard rather than relative to other employees.

They require raters to evaluate employees on some absolute standard rather than relative to other employees and each performance standard is measured on a scale whereby appraisers can check the point that best represents the employee’s performance.

What are the two elements used in rating formats?

adjectives, behaviors, or outcomes

There are certain descriptors that showcase the difference in rating and ranking. What are these descriptors?

standard rating scale

When adjectives are used as anchors, the format is called ____________________.

adjective

If the rating scale scales from well above average to well below average, which descriptor/anchor was used?

Behaviorally anchored rating scales (BARS)

______________ seem to be the most common format using behaviors as descriptors.

True

True or False:
Behaviorally anchored rating scales (BARS) seem to be the most common format using behaviors as descriptors. By anchoring scales with concrete behaviors, firms adopting a BARS format hope to make evaluations less subjective.

less subjective.

By anchoring scales with concrete behaviors, firms adopting a BARS format hope to make evaluations:

standard rating scale or the BARS method

If an employees performance is weighted by the importance the organization attaches to each dimension, the organization is choosing to use a _____________ method of performance ratings.

An overall average that is attached to the importance of each factor

How does an organization utilize the weight of importance?

objectives (or outcomes)

In a Management By Objectives (MBO) rating format, employees are rated on which descriptor?

Management By Objectives (MBO)

Which method describes ratings where Results are compared against objectives, and a performance rating is determined based on how well the objectives were met.

(1) employee development potential (amount of feedback about performance that the format offers), (2) administrative ease, (3) personnel research potential, (4) cost, and (5) validity.

What are the five (5) types of Performance Appraisal Formats?

that it is excluding key aspects of performance

If a performance measure is said to have criterion deficiency, that means what?

criterion deficiency

Just because something is quantifiable does not mean it is an objective measure of performance. This is called ___________.

Ranking formats

____________ requires comparing employees against each other to determine the relative ordering of the group on some performance measure.

ranking and rating

Two categories of evaluation formats are:

straight ranking

If employees are ranked relative to each other, this is known as:

Alternation Ranking

______________ recognizes that raters are better at ranking people at extreme ends of distribution. Best and worst performers are rated first.

paired-comparison

The ___________ ranking method simplifies ranking by comparing pairs of people. Each individual is compared separately with all others in the group.

standard rating scale

When adjectives are used as anchors, the format is called a ____________.

Behaviorally anchored rating scales (BARS)

_____________ seems to be the most common format using behaviors as descriptors.

standard rating scale, BARS

Overall employee performance is calculated as a weighted average of the ratings on all performance dimensions in both the __________ and ___________.

Management By Objectives (MBO)

_____________ uses outcomes as the standard of performance measure.