Human Resource Management: Performance, Pay, and Employee Relations

Performance Management

the process by which managers ensure that employees' activities and outputs contribute to the organization's goals → tells top performers they're valued, encourages communication between managers and their employees → establishes consistent standards for evaluating employees, helps the organization identify strongest + weakest employees → Steps: First: identify what the company is trying to accomplish. Then: provide organizational support. After: evaluate performance. Finally: provide consequences for performance results and identify improvements needed

Total Quality Management (TQM)

assesses both individual performance and the overall work system to continually improve customer satisfaction → combines subjective feedback (from managers, peers, customers) with objective feedback on the work process using statistical quality control (charts detecting problems)

Development Purpose

Basis for developing employees' knowledge + skills

Strategic Purpose

helps organization achieve business objectives → measurements must be linked to the organization's goals

Management By Objectives (MBO)

a collaborative system where managers and employees work together to set specific, difficult and objective goals that flow from TOP to BOTTOM through the organization

BARS - Behaviorally Anchored Scale

Method of performance measurement that rates behavior in terms of a scale showing specific statements of behavior that describe different levels of performance.

360 Degree Performance Appraisal

when organizations combine information from most or all of the possible sources → includes managers, peers, subordinates, self, customer

Halos Error

A positive impression in ONE area leads to favorable ratings across all areas ★ overrating based on ONE good quality

Horns Error

A minor negative trait (like occasional tardiness) that leads to poor ratings across all areas, often causing employee frustration + defensiveness ★ underrating based on ONE poor quality

Similar-to-Me Error

giving higher evaluations to people who share similar characteristics, backgrounds, or traits with the rater → if based on race or sex, this can result in discrimination

Contrast Error

comparing an employee against other co-workers rather than against an objective performance standard

Involuntary Turnover

when the organization initiates the departure (firing for discipline issues or laying them off during a downturn) → most companies reserve the term "termination" specifically for discharges caused by performance or conduct problems

Voluntary Turnover

when the employee chooses to leave (retiring or taking job elsewhere) - often includes an organization's worst performers quitting before being fired BUT also includes top performers who leave for better opportunities

Wrongful Discharge

violating employment laws/agreements → implied agreements: termination cannot violate promises of job security made in employee handbooks/oral statements and cannot contradict established company policies → public policy: employers cannot fire workers for refusing to do something illegal, unsafe, or immoral * OR for doing what the law requires

Discrimination

disciplinary policies must be applied consistently w/o regard to race, sex, age, or other protected statutes ★ consistent procedure and careful documentation help protect against this

Progressive Discipline

identifies and communicates unacceptable behaviors and responds to a series of offenses w/ verbal warning, written warning, 2nd written warning + threat of temp. suspension, temp. suspension + last written notice, TERMINATION

Hot Stove Rule

organizations should model their discipline policies after a hot stove ★ Discipline should be: warned in advance, consistent, impersonal, immediate

Open-Door Policy

employees can bring complaints to higher levels of management if their immediate superior cannot resolve their issue

Employee Assistance Program (EAP)

referral service that employees can use to seek professional treatment for mental health, substance abuse or other personal issues ★ included in employee health benefit plan

Quiet Quitting

individuals performing tasks associated with their jobs but NOT going above & beyond their specified duties

Job Withdrawal

prevent broad negative condition, or a set of behaviors with which employees try to avoid the work situation physically, mentally, or emotionally

Job Satisfaction

pleasant feeling resulting from the perception that one's job fulfills/allows for the fulfillment of one's important job values → 1) Person's values 2) Different levels of job satisfaction 3) Perceive things differently

Fair Labor Standard Act (FLSA)

established a minimum wage by law - $7.25/hour. also permits a lower "training wage" (for people under 20 years old for a max time of 90 days). more than half of the states have laws specifying their particular min. wage

Minimum Wage

rate of pay per hour of work ($7.25)

Exempt Employees

executive, professional, administrative, outside sales, and highly compensated white-collar employees → means employers need NOT pay them one and a half times their regular pay for working for more than 40 hr/wk.

Non-Exempt Employees

any employee who is not in one of the exempt categories

Benchmarking

a procedure in which an organization compares its own practices against those of successful competitors

Job Evaluation

An administrative procedure for measuring the relative internal worth of the organization's jobs

Piecework Rate

a rate of pay for each unit produced

Pay Range

The organization establishes a minimum, maximum, and midpoint of pay for employees holding a particular job or a job within a particular pay grade

Pay Policy Line

vertical axis shows a range of possible pay rates, horizontal axis measures the points from the job evaluation → The analyst plots points according to the job eval + pay rate for each job → The analyst fits a LINE (pay policy line) to the points plotted

Pay Grades

sets of jobs having similar worth or content, grouped together to establish rates of pay

Pay Differential

Making adjustments in pay due to less desirable hours, expensive living expenses, or competition for talent is more intense

Procedural Justice

judgement of fair methods were used to determine the consequences an employee receives → procedures should be... consistent, avoid bias, have accurate information, ways to correct mistakes, representation of all interests, ethical standards

Outcome Fairness

judgement that the consequences of a decision to employees are just → consistent outcomes, knowledge of outcomes, outcomes in proportion to behaviors

Alternative Dispute Resolution

(ADR): methods of solving a problem by bringing in an impartial outsider but NOT using the court system ★ Open-door policy (making managers available to hear complaints), Peer review (people in a conflict take their conflict to a panel composed of representatives from the organization at the same level as the people in the dispute), Mediation, Arbitration

Arbitration

hears case from OUTSIDE the organization (neutral) and resolves it by making a decision. The employee + employer both have to accept this person's (arbitrator's) decision

Mediation

a neutral party from outside the organization hears the case and tries to help the people in conflict arrive at a settlement. NOT binding, mediator cannot force a decision

Job Involvement

the degree to which people identify themselves w/ their jobs → high level = consider their work an important part of their life

Stay Interview

employees are asked the reasons why they remain w/ the company and what would motivate them to leave

Exit Interview

a meeting to discuss a departing employee's reasons for leaving

Job Structure

consists of the relative pay for different jobs within the organization

Pay Transparency

the practice of openly communicating information about wages or salary to employees and job candidates