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97 Cards in this Set
- Front
- Back
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Explain the difference between a bonus and a raise
Bonus |
Incentive payment that is supplemental for the base wage for cost reduction, quality, improvement, or other performance criteria
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Spot Bonus
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unplanned bonus given for employee effort unrelated to an established performance measures.
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Merit pay program (Merit Raise)
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LInes an increase in base pay to how successfully an employee achieved some objective performance standard.
Merit Guidelines: -guidelines for awarding merit raises that are tied to performance objectives |
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Describe the pros and cons of specific individual incentive plans:
a. Contrast the differences between straight piecework, differential piece rate, and standard hour plans. Straight Piecework |
an incentive plan under which employees receive a certain rate for each unit produced
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Differential piece rate
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a compensation rate under which employees whose production exceeds the standard amount of output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard amount
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standard hour plans
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-An incentive plan the sets pay rates based on the completion of a job in a predetermined "standard time"
- if employees finish the work in less than the expected time, their pay is still based on the standard time for the job multiplied by their hourly rate |
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B) Differentiate between merit raises and lump sum merit pay and explain the common problems with merit pay programs.
merit raises/problems |
-links an increase in base pay to how successfully an employee achieved some objective performance standard
Problems: -Money for merit increases may be inadequate to satisfactory raise all employees base pay -Managers may have no guidance in how to define and measure performance; there may be vagueness regarding merit award criteria -Employees may not believe that their compensation is tied to effort and performance, they may be unable to differentiate between merit pay and other types of pay increases -employees and their managers may hold different views of the factors that contribute to job success. -Merit pay plans may create feelings of pay inequity |
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Lump sum merit pay
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C) Describe the different types of sale incentive plans (straight salary, straight commission, and combined salary and commission).
Straight Salary |
Compensation plan that permits salespeople to be paid for performing various duties that are not reflected immediately in their sales volume
Advantages: -encourages building customer relationships -provides compensation during periods of poor sales disadvantages: -may not provide sufficient motivation for maximizing sales volume |
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Straight commission
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-compensation plan based upon a percentage of sales
-Draw is a cash advance that must be paid back as commissions are earned. Disadvantages: -Salespeople will stress high-priced products. -customer service after the sale is likely to be neglected. -earnings tend to fluctuate widely between good and poor periods of business, and turnover of trained sales employees tends to increase in poor periods. -salespeople are tempted to grant price concessions |
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Combined salary and commission plan
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-A compensation plan that includes a straight salary and a commission component (leverage)
Advantages : -combines the advantages of straight salary and straight commission forms of compensation -offers greater design flexibility -can be used to develop the most favorable ratio of selling expense to sales -Motivates sales force to achieve specific company marketing objectives in addition to sales volume |
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Describe the pros and cons group incentive plans:
Differentiate between team compensation and individual incentive plans Team Incentive plans |
Compensation plans where all team members receive an incentive bonus payment when production or service standards are met or exceeded.
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Understand gainsharing – Differentiate how gains may be shared with employees
under the Scanlon and Improshare gainsharing systems. Scanlon plan |
rewards come from employee participation in improving productivity and reducing costs
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Gainsharing
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Programs under which both employees and the organization share the financial gains according to a predetermined formula that reflects improved productivity and profitability
Increase in productivity is gained when: -greater output is obtained with less or equal input. -Equal production output is obtained with less input |
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Describe the pros and cons of enterprise incentive plans:
Differentiate between profit sharing plans and explain advantages and disadvantages of these programs. Profit sharing |
Any procedure by which an employer pays, or makes available to all regular employees, in addition to their base pay, current or deferred sums based upon the profits of the enterprise
Challenges: -Agreement over the percentages of shared of profits and the forms of distribution(cash or deferred) of profits between company and employees -Annual variations and possibility of no payout due to financial condition of the company -Maintaining motivational connection of profit-sahring to performance of employees |
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stock options
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Granting employees the right to purchase a specific number of shares of the companies stock at a guaranteed price( the option price) during a designated time period
-the value of an option is subject to stock market conditions at the time that option is exercised |
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Employee stock ownership plans(ESOP's)
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-stock plans in which an organization contributes shares of its stock to an established trust for the purpose of stock purchases by its employees
-the employer establishes an ESOP trust that qualifies as a tax-exempt employe trust under section 401(a) of the internal revenue code. -stock bonus plans are funded by direct employer contributions of its stock or cash to purchase its stock -leveraged plans are funded by employer borrowing to purchase its stock for the ESOP |
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Describe the main types of ESOP plans and discuss the advantages of ESOP to employers and employees.
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-stock plans in which an organization contributes shares of its stock to an established trust for the purpose of stock purchases by its employees
-the employer establishes an ESOP trust that qualifies as a tax-exempt employe trust under section 401(a) of the internal revenue code. -stock bonus plans are funded by direct employer contributions of its stock or cash to purchase its stock -leveraged plans are funded by employer borrowing to purchase its stock for the ESOP |
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Advantages/ disadvantages of ESOP
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-Advantages:
-Retirement Benefits -Pride of Ownership -Deferred Taxes -Disadvantages: -Liquidity and Value -Single Funding Basis -Not Insured |
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Describe executive compensation components, and explain how stock options work.
Executive pay package |
-base salary
-short term incentives or bonuses -longe term incentives or stock plans -benefits -perquisites ( perks) |
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stock options
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-Granting employees the right to purchase a specific number of shares of the company’s stock at a guaranteed price (the option price) during a designated time period
-The value of an option is subject to stock market conditions at the time that option is exercised |
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Define “job design.”
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-the formal and informal specification of task-related activities assigned to and carried out by a worker.
-intended to increase worker productivity and satisfaction -an outgrowth of job analysis that improves jobs through technological and human considerations in order to enhance organization efficiency and employee job satisfaction |
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Compare and contrast “job” and “work.”
Work |
mental or physical activity that produces some result
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JOB
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Pieces of work are combined to form jobs
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Identify the classical approaches to job design and explain each (including craft
approach, the classical approach (scientific management), job enlargement, job rotation, and job enrichment. Craft approach |
-primary approach pre-industrialized revolution
-Single, skilled worker designed and built products one at a time from beginning to end |
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the classical approach (scientific management)
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-Divided the work into a small number of simple, repetitive tasks and called them jobs
-specialization, standardization, and simplification -enhances productivity, efficiency, and control -critics say it leads to withdrawal and resistance |
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Job enlargement
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the process of adding a greater variety of tasks to a job
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job rotation
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a process whereby employees rotate in and out of different jobs
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job enrichment
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enhancing a job by adding more meaningful tasks and duties to make the work more rewarding or satisfying
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Explain the basic principles of the Job Characteristics Theory, including the five core job
characteristics, critical psychological states, and personal and work outcomes. Describe the role of the motivating potential score and growth need strength in this theory. The job characteristics model |
- Assumes that internal (intrinsic) motivation can be achieved through the design of jobs.
-there are five "core characteristics" that are the levers through which jobs influence motivation -these core job characteristics influence internal motivation through psychological processes -the psychological processes combine to influence personal and work outcomes |
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1. Skill Variety
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the degree to which a job requires a verity of different activities in carrying out the work and involves the use of a number of different skills and talents of the person
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2. Task identity
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the degree to which a job requires completion of a whole and identifiable piece of work, that is, doing a job from beginning to end
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3. task significance
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the degree to which the job has a substantial impact on the lives of other people, whether those people are in the immediate organization or in the world at large
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4. Autonomy
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the degree to which a job provides substantial freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out
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5.Feedback from the job
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the degree to which carrying out the work activities required by the job provides the individual with direct and clear information about the effectiveness of this or her performance
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JCM
critical psychological states |
-experienced meaningfulness of the work
----determined by the skill variety, task identity, and task significance -experienced responsibility for outcomes of the work ----determined by task autonomy -knowledge of the actual results of the work activities ----determined by feedback |
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personal and work outcomes of JCM
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-high levels of work motivation
-high levels of job satisfaction -high-qulatiy work performance -low levels of absenteeism, tardiness, and turnover |
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role of growth need strength (GNS) in JCM
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-intensity of an employees motivation to satisfy their growth ends within the work context
-People with high GNS are seen as more sensitive to the level of the core job characteristics -people with high GNS should react more favorably to high levels of psychological states |
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Motivating potential score JCM
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a mathematical index describing the degree to which a job is designed so as to motivate people, as suggested by the job characteristics model. It is computed on the basis of a questionnaire know as the job diagnostic survey (JDS)
-the lower the MPS the more the job may stand to benefit from redesign |
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Differentiate between groups and work teams. Identify the fundamental characteristics of an effective group.
GROUP |
two or more people with common interests, objectives, and continuing interaction
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Work team
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a group of people with complementary skills who are committed to a common mission, performance goals, and approach for which they hold themselves mutually accountable
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Characteristics of an effective group
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-the atmosphere tends to be relaxes, comfortable, and informal
-the groups task in well-understood and accepted by the members -the members listen to one another; most members participate in a good deal of task-relavent discussion -people express both their feelings and their ideas -conflict and disagreement are present and centered around ideas or methods, not personalities or people -the group is aware and conscious of its own operation and function -decisions are usually based on consensus, not a majority vote -when actions are decided, clear assignments are made and accepted by members of the group |
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Define and explain the concepts of norms, group cohesion, social loafing, groupthink, and loss of individuality as they relate to group behavior.
Norms |
the standards that a work group uses to evaluate the behavior of its members
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Group Cohesion
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the "interpersonal glue" that makes members of a group stick together
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SOCIAL LOAFING
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the failure of a group member to contribute personal time, effort, thoughts, or other resources to the group
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Groupthink
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phenomenon that occurs due to conflict aversion and need for cohesion within groups-- group members begin to think alike losing individuality and preventing the necessary evaluation of viable decision alternatives
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Loss of individuality
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a social process in which individual group members lost self-awareness and its accompanying sense of accountability, inhibition, and responsibility for individual behavior
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formal groups
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are official or assigned and gather to perform various tasks
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informal groups
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are unofficial and evolve to gratify member needs not met by formal groups
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Explain the importance of diversity in work groups.
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-diversity is a key issue in formal group formation
-ethnic -gender -cultural -interpersonal |
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Identify the characteristics of a mature group/team.
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- a clear purpose and mission
-well understood norms and standards of conduct -a high level of group cohesion -a flexible status structure |
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Describe the task and maintenance functions in groups and teams.
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-task functions: those activities directly related to the effective completion of the teams work
-Maintenance functions: those activities essential to the effective, satisfying interpersonal relationships within a group or team |
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Discuss the role of diversity and creativity in work teams.
diversity |
dissimilarity influences
-absenteeism -commitment -turnover intentions -work group relationships -self-esteem -organizational citizenship behavior -team performance - dissimilarity may have positive or negative effects in teams on on team members |
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Creativity
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team creaticity and divergent thinking can be enhance by
-increasing diversity in teams -brain writing -training of facilitators -changing membership in teams -electronic brainstorming -building a playground |
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Define “leadership” and explain how being a leader is different from being a manager.
Leadership |
the process of guiding and directing the behavior of people in the work environment
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Formal leadership
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officially sanctioned leadership based on the authority of a formal position
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informal leadership
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unofficial leadership accorded to a person by other members of the organization
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difference between leadership and management
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management
-planning and budgeting -organizing and staffing -controlling and problem solving Leadership -setting direction -aligning people through communication -motivating people |
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Describe the two basic leadership styles identified by the Ohio State studies, and
Michigan studies. OSU |
initiating structure and consideration dimensions of leader behavior
Initiating structure -leader behavior aimed at defining and organizing work relationships and roles -establishes clear patterns of organization, communication, and ways of getting things done Consideration -leader behavior aimed at nurturing friendly, warm working relationships -encouraging mutual trust and interpersonal respect |
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UM
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production oriented and employee oriented leadership styles
Production oriented -focus is getting the work done -constant influence attempts through direct, close supervision, or through rules and regulations Employee oriented -focus in relationships -less direct, close supervision with fewer rules and regulations |
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Describe the leadership styles identified by the Leadership Grid and explain why team
manager (9,9) is the “best style of managerial behavior.” COUNTRY CLUB MANAGEMENT |
-Country Club Management (1, 9)
-Thoughtful attention to the needs of the people for satisfying relationships leads to a comfortable, friendly organization atmosphere and work temp |
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TEAM MANAGEMENT
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-Team Management (9, 9)
-Work accomplishment is from committed people; interdependence through a “common stake” in organization purpose leads to relationships of trust and respect -“Best style of managerial behavior” because it has the highest concern for results and the highest concern for people |
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MIDDLE OF THE ROAD MANAGEMENT
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-Middle-of-the-Road Management (5, 5)
-Adequate organization performance is possible through balancing the necessity to get work out while maintaining morale of people at a satisfactory level |
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IMPOVERISHED MANAGEMENT
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-Impoverished Management (1, 1)
-Exertion of minimum effort to get required work done is appropriate to sustain organization membership |
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AUTHORITY COMPLIANCE MANAGEMENT
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-Authority-Compliance Management (9, 1)
-Efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree |
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Discuss the “right situations” for low and high LPC leaders according to Fiedler’s
Contingency theory. |
least preferred coworker scale (LPC)
-positive terms=relationship-oriented -negative terms=task-oriented -situational favorableness -task structure -postion power -leader-member relations |
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Explain how followers and the work environment influence the appropriate leader
behavior style in the Path Goal Theory. |
figure 12.3
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Identify the personal and organizational outcomes of in-group members vs. out-group
members in the Leader Member Exchange Theory. in group |
-similar to leader, greater responsibilities, more rewards, more attention
-more likely to engage in organizational citizenship behavior |
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outgroups
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-outside the circle, less attention, fewer rewards, managed by formal rules and policies.
-more likely to retaliate against the organization |
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Discuss how follower maturity is an important determinant of leadership style according
to the Situational Leadership Model |
figure 12.5
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Identify neutralizers of and substitutes for leadership. Explain why some situations do
not require leadership behaviors. substitutes for leadership |
-satisfying task
-performance feedback -high skill -team cohesiveness -formal controls -customers |
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Compare and contrast transformational, visionary, and charismatic leadership.
transformational |
-Charisma
-individualized consideration -inspirational motivation -intellectual stimulation |
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visionary leadership?
authentic leadership |
-includes transformational, charismatic, or transactional leadership as the situation demands
-act in ways that are consistent with their value system -build a high performance workforce characterized by high levels of hope, optimism, resiliency, and self-efficacy |
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charismatic leadership
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- a leader uses the force of personal abilities and talents to have profound and extraordinary effects on followers
-the leaders gifts (charisma) are the source of his or her great influence with followers -relies heavily on referent power |
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Discuss some of the emerging issues in leadership.
Emotional intelligence |
the ability to recognize and manage emotions in oneself and others
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trust
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the willingness to be vulnerable to actions of another
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servant leadership
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the philosophy that leaders lead by serving others
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Know the two dimensions on which the four types of followers differ.
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see figure 12.6
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types of followers
effective |
recognize interdependence with leaders and learn to challenge them as they respect them
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alienated
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think independently and critically, yet are passive
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sheep
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do not think independently or critically and are passive
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"yes people'
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do not think independently or critically but are active
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survivor
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moves around between passive and active, critical and uncritical
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Improshare
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gainsharing based on increases in productivity of the standard hour output of work teams
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stages of group development
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mutual acceptance....
decision making motivation and commitment control and sanctions |
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Compare and contrast the Tuckman’s model of group formation with the punctuated
equilibrium model (5) 1) forming |
-little agreement
-unclear purpose, guidance, and direction |
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2. storming
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-conflict
-increased clarity of purpose -power struggles -coaching |
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3.norming
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-agreement and consensus
-clear roles and responsibilities -facilitation |
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4. performing
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-clear vision and purpose
-focus on goal achievement -delegation |
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5. adjourning
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-task completion
- good feeling about achievements -recognition |
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behavioral norms
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-well understood standards of behavior within a group that evolve over a period of time
-benchmarks against which team members are evaluated and judged by other team members -some behavioral norms become written rules, while others remain informal |
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group cohesion
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enables a group to exercise effective control over its members in relation to its behavioral norms and standards
influence by -time -size -the prestige of the team -external pressure -internal competition |
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task functions list
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-initiating activities
-seeking information -giving information -elaborating concepts -coordinating activities -summarizing ideas -testing ideas -evaluating effectiveness -diagnosing problems |
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maintenance functions list
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-supporting others
-following others leads -gatekeeping communication -setting standards -expressing members feelings -testing group decisions -consensus testing -harmonizing conflict -reducing tension |
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management vs leaders
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-leaders agitate for change and new approaches
---create uncertainty and change -managers advocate stability and the status quo ---reduce uncertainty and stabilize -Strategic leaders embody both the stability of managers and the visionary abilities of leaders |
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team incentive plans
advantages |
-Team incentives support group planning and problem solving, thereby building a team culture.
-The contributions of individual employees depend on group cooperation. -Team incentives can broaden the scope of the contribution that employees are motivated to make. -Team bonuses tend to reduce employee jealousies and complaints over “tight” or “loose” individual standards. -Team incentives encourage cross-training and the acquiring of new interpersonal competencies. |
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team incentive plans
disadvantages |
-Individual team members may perceive that “their” efforts contribute little to team success or to the attainment of the incentive bonus.
-Intergroup social problems—pressure to limit performance and the “free-ride” effect may arise. -Complex payout formulas can be difficult for team members to understand |
