Hr Test 3

Front 1

performance management

Back 1

whole process through which managers ensure that employee's activities and outputs contribute to the organizations
- specify relevant aspects of performance and design system /process for measuring performance
- performance appraisal
- providing feedback

Front 2

performance appraisal

Back 2

measurement of specified areas of a particular employee's performance

Front 3

major decisions/issues in forming a performance mgmt. system

Back 3

- identify purposes/uses of performance data
- identify role/behavioral requirements for jobs
- measures to use
- who is appraising
- how to recognize and reduce rater errors

Front 4

purposes of performance mgmt.

Back 4

- strategic
- administrative
- developmental

Front 5

performance appraisal - developmental

Back 5

purpose: improve performance

basis for comparison: absolute standard

role of manager: counseler

Front 6

performance appraisal - administrative

Back 6

purpose: info. for: pay increases, promotions, terminations

basis for comparison: relative standard

role of manager: judge

Front 7

performance measurement approaches - comparative

Back 7

simple ranking, forced distribution, paired comparison/alternation ranking

Front 8

performance measurement approaches - trait or attribute oriented

Back 8

common but not recommended; graphical rating scales

Front 9

performance measurement approaches - behavioral

Back 9

BARs (behaviorally anchored rating); BOS (behavioral observation scale)

Front 10

performance measurement approaches - goal or results oriented

Back 10

management by objective (MBO); financial goals/metrics

Front 11

performance measurement approaches - quality

Back 11

statistical quality control

Front 12

performance measurement approaches - combo. of several measures

Back 12

balance scorecard

Front 13

criteria for evaluating performance measures

Back 13

validity, reliability, acceptability

Front 14

strategic congruence

Back 14

alignment of performance system with organization's strategic goals

Front 15

job performance measure

Back 15

contamination
validity: you want to maximize this overlap
defiancy

Front 16

interrater-reliability

Back 16

two ppl. give the same or almost the same rating of target

Front 17

test-retest reliability

Back 17

consistent over time; goal:t o be able to know that chages over time are due to real changes in performance, not poor reliability

Front 18

acceptability

Back 18

categories of perceived fairness/justice:
- procedural
- interpersonal
- outcome

Front 19

specificity

Back 19

does the measure give guidance to employees about what is expected and how to meet expectations

Front 20

how do performance measures stack up?

Back 20

SEE CHART - 3/13 slideshow

Front 21

source for performance measures

Back 21

supervisors
peers
subordinates
self
customers

** sometimes multiple raters - 360 feedback

Front 22

criteria for choosing evaluation sources

Back 22

- evaluator should know the objectives of employee's job
- evaluator should have opportunity to observe peformance
- evaluator should be able to determine whether or not performance is satisfactory

Front 23

common errors

Back 23

- "similar to me": rate similar others higher
- contrast: person's rating affected by comparison with another person
- distributional errors: central tendency, lenience/strictness
- halos/horns: allow good/bad performance of one aspects in job to influence perception in other areas
- recency: recent performance given more weight in evaluation
- fundamental attribution error: actor-observer bias
- representativeness: stereotyping
- availability
- anchoring

Front 24

overcoming rater errors

Back 24

training errors; having someone else review all ratings prior to finalizing them

Front 25

pitfalls to avoid in appraisal

Back 25

- don't focus on one incident
- don't go solely on memory
- avoid halo and horn errors
- avoid bias based on personal feelings
- don't base current performance on past
- don't rush appraisal

Front 26

tips for improving performance feedback

Back 26

- give f/b frequently
- create the right context for discussion
- encourage participation during session
- praise effective performance
- focus on problem-solving
- focus on behavior and results
- minimize criticism
- set gaols and a date to review progress

Front 27

solid performance

Back 27

high ability and motivation

managers should provide developmental oppurtunites

Front 28

misdirected effort

Back 28

lack of ability but high motivation

managers should provide skill development or training

Front 29

underutilizers

Back 29

high ability but lack of motivation

managers need to consider actions that focus on interpersonal problems or incentives

Front 30

deadwood

Back 30

low ability and motivation

managerial action, outplacement, demotion, firing, etc.

Front 31

interrater-reliability

Back 31

two ppl. give the same or almost the same rating of target

Front 32

test-retest reliability

Back 32

consistent over time; goal:t o be able to know that chages over time are due to real changes in performance, not poor reliability

Front 33

acceptability

Back 33

categories of perceived fairness/justice:
- procedural
- interpersonal
- outcome

Front 34

specificity

Back 34

does the measure give guidance to employees about what is expected and how to meet expectations

Front 35

how do performance measures stack up?

Back 35

SEE CHART - 3/13 slideshow

Front 36

source for performance measures

Back 36

supervisors
peers
subordinates
self
customers

** sometimes multiple raters - 360 feedback

Front 37

criteria for choosing evaluation sources

Back 37

- evaluator should know the objectives of employee's job
- evaluator should have opportunity to observe peformance
- evaluator should be able to determine whether or not performance is satisfactory

Front 38

common errors

Back 38

- "similar to me": rate similar others higher
- contrast: person's rating affected by comparison with another person
- distributional errors: central tendency, lenience/strictness
- halos/horns: allow good/bad performance of one aspects in job to influence perception in other areas
- recency: recent performance given more weight in evaluation
- fundamental attribution error: actor-observer bias
- representativeness: stereotyping
- availability
- anchoring

Front 39

overcoming rater errors

Back 39

training errors; having someone else review all ratings prior to finalizing them

Front 40

pitfalls to avoid in appraisal

Back 40

- don't focus on one incident
- don't go solely on memory
- avoid halo and horn errors
- avoid bias based on personal feelings
- don't base current performance on past
- don't rush appraisal

Front 41

tips for improving performance feedback

Back 41

- give f/b frequently
- create the right context for discussion
- encourage participation during session
- praise effective performance
- focus on problem-solving
- focus on behavior and results
- minimize criticism
- set gaols and a date to review progress

Front 42

solid performance

Back 42

high ability and motivation

managers should provide developmental oppurtunites

Front 43

misdirected effort

Back 43

lack of ability but high motivation

managers should provide skill development or training

Front 44

underutilizers

Back 44

high ability but lack of motivation

managers need to consider actions that focus on interpersonal problems or incentives

Front 45

deadwood

Back 45

low ability and motivation

managerial action, outplacement, demotion, firing, etc.

Front 46

involuntary employee seperation

Back 46

- reductions in force (RIF) or layoffs (ex: shut downs)
- elimination of jobs
- temp. layoffs
- discipline related termination

Front 47

voluntary employee seperation

Back 47

- RIF done with early retirement or other voluntary packages
- other reasons (ex: staying home w/ family, going back to school, etc.)

undesirable if leavers are good workers

Front 48

legal issues in downsizing

Back 48

with RIF:
- can't be based on gender, race, disability, age, or another protected class
- OK if job related or based on objective criteria

employer should articulate legitimate business reason

clear and consistent communication to avoid perception of bias

written procedures

mgmt. training

independent review of decisions by legal counsel prior to implementing RIF

incentives often offered for vol. RIFs
- potential legal issues with ADEA b/c it can affect older workers
- safe harbors exist such that employers following very specific guidelines are not deemed to violate ADEA

employees sometimes give up right to sue over employment disputes if waivers are signed

Front 49

WARN act

Back 49

notifications requires for mass layoffs and plant shut downs

applies to all employers except governments and small employers; 60 days advance notice when event occurs;
- plant closing: perm. or temp. shutdown if employment loss for at least 50 employees for any 30 day period
- mass layoff: employment loss at a single site during any 30 day period for at least 50 employees who represent 33% or more active employees or at least 500 employees

Front 50

ways to create more positive outcomes during downsizing and layoffs

Back 50

advanced notice of downsizing
outplacement assistance
consideration given to layoff alternatives prior to layoff:
- worksharing programs
- hiring freeze
- early retirement packages

Front 51

managing involuntary turnover due to discipline issues

Back 51

an effective discipline and discharge policy includes:
- attention to perceptions of justice (3 forms)
- progressive discipline
- process for appeals
- employee assistance programs
- outplacement counseling

Front 52

progressive discipline examples

Back 52

unofficial verbal warning
official written warning, possible second warning with suspension threat
suspension
termination

Front 53

tips for termination

Back 53

- don't let it get personal
- keep interview brief
- meet in nuetral and private place
- have someone else in the room
- friday vs. monday debate: reasons why mon. is not always such a good day to terminate
- get terminated employee out of the workplace fast and make arrangements to deal with belongings
- have a plan in place to deal with violent employees

Front 54

voluntary turnover

Back 54

can happen for many reasons: another job, staying with family, retirement, etc.

if employee leaves voluntarily, try to learn reasons for leaving

document and use info. to spot patterns

Front 55

retirees

Back 55

many workers are actively trying to keep older workers on the job longer to address impact of labor shortages

older works often want to work longer than traditional retirement age

-- most plan to work part-time after retirement or don't plan to

Front 56

ways to keep older workers

Back 56

health benefits, wellness programs, health screenings
training opportunities
flex. schedules
phased retirement
401(k) catch up and additional time off
adaption to physical requirements of job

Front 57

compensation strategies

Back 57

base pay
pay continent on performance

** "cash compensation"

Front 58

benefit strategies

Back 58

benefits

** "fringe compensation"

Front 59

minimum wage act

Back 59

5. 85 as of 7/24/07; as off 7/24/08 7.25

overtime

restricts child labor

Front 60

prevailing wage laws

Back 60

davis-beacon
walsh-healey
services contract act

Front 61

base pay systems

Back 61

internal pay equity: how should jobs w/in firm be paid relative to eachother

external pay equity: how should jobs be priced to be competitive in ext. mkt.

Front 62

performance-contingent incentive systems

Back 62

individual pay: how do we differentiate between workers for performance, seniority, job skills, etc.

Front 63

internal pay structure

Back 63

focus of comparison: different jobs in the same company

consequences of fairness/unfairness perceptions: internal moves (promotion, transfer); cooperation among workers; employee attitudes

admin. tools: job evaluation

Front 64

external pay level

Back 64

focus of comparison: same job in other organizations

consequences of fairness/unfairness perceptions: ext. moves (attraction/retention of employees), labor costs, employee attitudes

admin tool: mkt. surveys

Front 65

job structure

Back 65

ordering of jobs based on content or relative value

Front 66

developing internally consistent structure

Back 66

- begins with job analysis
- main tool: job evaluation
ranking
classification
point factor

Front 67

point factor system

Back 67

- compensable factors (what job characteristics are valued and important enough to pay for)
universal factors: skill, effort, responsibility, working conditions
company specific factors: customer focus, prob. solving, innovation (job related, should support business strategy)

Front 68

product-mkt. competition

Back 68

upper bound on labor cost (staffing level, ave. cost per employee)
companies are constrained in how much they pay by how much their product mkt. competitors are paying (affects profitability)

Front 69

labor-mkt. competition

Back 69

lower bound on pay levels
companies also contrained to not pay to little, otherwise they will not attract workers

Front 70

ext. competitiveness

Back 70

pay level: ave. rates of pay by employer
can consider this at an overall compensation level (total base + bonuses + options)/(# employees)
or just considering one factor

employer can choose to lag, lead, or match competition

Front 71

probably relations b/t ext. pay level and policies and objectives

Back 71

SEE SLIDES 4/1

Front 72

salary surveys

Back 72

"make" - create your own
"buy" - purchase data from existing surveys

need to define:
benchmark jobs (What you are comparing)
relevant labor mkt. competitors (what companies you're comparing to)

Front 73

combining int. and ext. info

Back 73

note: some companies only use ext. salary info. (ignoring internal structure) -- "mkt. pricing"

other companies combine int. and ext. info. -- "pay policy"; when combining int. and ext. info., how much weight is given to each

"pay grades": simplify things for admin. - every job in grade is treated similarly

Front 74

tools for monitoring pay levels

Back 74

1. look at the distribution of pay within the pay grade
2. compa-ratios are used to evaluate ind.empployees vs. the pay grade midpoint (useful for monitoring whether pay is really staying within limits)

Front 75

compa-ratio

Back 75

employee's pay rate divided by pay grade -- midpoint

Front 76

"across the board" pay increases

Back 76

cost of living increases

may be caused by union or contract or law or voluntary

mkt. adjustments:
if done for everyone in the position

Front 77

seniority pay

Back 77

based on time with the company
- may be mandated by union
- govt jobs often tie raises to seniority

Front 78

tools for monitoring pay levels

Back 78

1. look for distribution within the pay grade
2. compa-ratios are used to evaluate individual employee pay vs. the midpoint

Front 79

compa-ratio

Back 79

pay rate/midpoint of pay grade

Front 80

red circle rate

Back 80

outlier -- above pay grade

Front 81

green circle rate

Back 81

outlier -- below pay grade

Front 82

cash compensation

Back 82

base pay

pay contingent on performance

Front 83

individual performance measurement

Back 83

short term:
merit pay
icentive plans
lump-sum bonuses
spot awards

Front 84

group performance measurement

Back 84

(for team, plant business unit, company as a whole)

short term:
- gain sharing
- profit sharing
- team-based incentives

long term:
- ESOP
- stock options
- stock awards
- performance share plans

Front 85

merit pay programs

Back 85

base pay increase/bonus granted to an employee

identifies individual performance differences

supervisor provides most info. on performance

pay is usually linked to performance appraisal results

usually annual

usually a raise

Front 86

typical range of merit raises

Back 86

see chart for 4/8 slides

Front 87

incentive pay

Back 87

can be annual, quarterly, or monthly

bonus of one-time payout

performance measure: units produced, sales, cost savings, profit, etc.

can be given to individuals, a group, or whole company

examples: piecework, sales commission, management incentive plans, behavioral encouragement plans (reduction in error, increase in quality, safety), referral bonuses

Front 88

considerations in identifying incentive systems

Back 88

controllability
alignment (narrow behavior vs. value creation)
interdependency (individual vs. team vs. business unit vs. company)

Front 89

why incentive plans are not universally appropriate

Back 89

- most jobs do not have measurable output that can attributed the effort of one person
- administrative costs to track individual pay
- does not always fit with team approach
- does not reward the obtaining of multiple skills
- can be at the expense of quality or service )if you aren't careful in design)

Front 90

possible disadvantages of team incentive plans

Back 90

- free riding
- can lead to increased turnover among top individual performers
- hard to set equitable targets for all teams
- can create inter-team competition
- not all workers belong to teams
- administrative issues

Front 91

examples of gain sharing plans

Back 91

SEE 4/8 slides!!!

Front 92

profit-sharing plans

Back 92

annual bonuses or company shares are paid from corporate plans (often contingent on profitability and some other goal)

current and/or deferred to retirement payouts

Front 93

advantages of profit sharing

Back 93

employees share in profits -- increase in productivity

gives employers flexibility to adjust payouts to economic ups and downs

Front 94

disadvantages of profit sharing

Back 94

if it is large portion of pay, employee pay may fluctuate a lot

poor line-of-sight in company

Front 95

equity ownership - company-wide

Back 95

ESOP: employee stock option plans

company stock owned through other retirement plans (401k)

stock purchase plans

stock option plans

restricted stock plans

Front 96

ESOP

Back 96

employee stock ownership plan (stock -- not options)

defined contribution retirement plan

tax and financing advantages for company

Front 97

stock purchase plan

Back 97

all f/t employees are usually eligible

able to purchase equal $ amts. of the % of salary

can purchase at a discount from mkt. price (usually up to 15%)

Front 98

stock vs. ESOP

Back 98

stock is outright ownership of company

employee stock options represent right but the not obligation to purchase stock at a certain price
- usually subject to vesting requirements
- options are nontradable, but usually can be traded among employees

Front 99

vest

Back 99

elibable to exercise

Front 100

advantages of group/company incentives plans

Back 100

easier to develop performance measures than for individual plans

signals that cooperation is a desired behavior

may increase participation of employees in decision making process

Front 101

disadvantages

Back 101

line of sight may be lessened

may lead to increased turnover among top individual performers who must share in lesser contributions

increases competition risk to employees because of lower income stability

Front 102

legally required benefits

Back 102

unemployment insurance
social security
medicare
state compulsory disability insurance
family and medical leave act (FMLA)
military leave (USERRA)

Front 103

discretionary benefits

Back 103

retirement -- defined benefit, desired contribution (401k, ESOP), profit-sharing, stock plans, etc.
life, health, disability insurance
paid rest breaks, lunch, travel
time not worked: vacation, sick leave, holidays

Front 104

trends in employee benefits

Back 104

see 4/17 slides!!

Front 105

why offer benefits?

Back 105

attract and retain employees
cost advantage
regulatory compliance
tax advanatages
collective bargaining
"right thing to do"

Front 106

cost effectiveness of benefits

Back 106

employer-provided plans can often benefit from favorable group rates (ex: life and health insurance)

even if employees have to pay for some of it, it is usually still cheaper and easier to get some coverage through an employer

Front 107

regulatory compliacnce

Back 107

legally required benefits must be provided by almost all employers -- very small companies are exempt from some regulations

federal: employer's portion of FICA, FMLA, USERRA, etc.

state: worker's comp., unemployment comp., state family leave laws, etc.

Front 108

U.S. tax policy on benefits

Back 108

many employee benefits are not taxable to employee but are deductable by employer

tax-preferred treatment of retirement funds allows tax-free accumulation

Front 109

collective bargaining

Back 109

during WWII and Korean way, govt. created wage and price controls

starting in 1940s, unions tried to increase and improve benefits

over time most workers have begun to see benefits as entitlement

common benefits in union contracts: supplementary unemployment (SUB), extended vacation, pension

Front 110

who pays for benefits?

Back 110

employers: it appears they pay, but they often pass the costs to others

employees: if they take benefits in lieu of pay, or contribute toward part or all of the cost of benefits

consumers: if cost is paid by employers, it is likely pased through to consumers

taxpayers: govt. may end up providing these (ex: medicaid) which means that taxpayers ultimately end up paying

Front 111

changing demorgraphics -- changing benefits

Back 111

42% of workers are unmarried
more cohabitating couples
more same sex couples -- some have kids
- CA: first state to offer domestic partner benefits
- 1/2 of fortune 500 companies offer domestic partner benefits

Front 112

trends to watch with employee benefits

Back 112

cost shifting to employees
stricter rules for employee's health habits
broader definitions of family for purposes of coverages
"consumer driven plans" - greater employee choice to customize benefits
retirement plans: shifting to defined contribution plans

Front 113

global employees

Back 113

expatriates
parent country nationals (PCN)
host country nationals (HCN)
third country nationals (TCN)

Front 114

ethnocentric

Back 114

decisions made at HQ, subsidiaries managed by PCNs

Front 115

polycetric

Back 115

each subsidiary is a distinct national entity managed by HCNs

Front 116

geocentric

Back 116

worldwide approach, PCNs, HCNs, TCNs in all positions

Front 117

regiocentric

Back 117

like geographic but personnel only move within geographic regions

Front 118

issues with expatriates

Back 118

ineffectiveness in overseas assignments -- about 1/3 perform below expectations
expatriate failure/premmature return -- 10-2% of managers return early
reprtiation problems -- repatriation can sometimes be even more stressful then overseas assignments

biggest problem: retention of expats -- about 25% leave company within 1 yr. of return

Front 119

managing expatriates more successfully

Back 119

HR levers:
selection
training
compensation
repatriation process

Front 120

identifying the right people to be expatriates

Back 120

things to consider:
motivation
language ability
family considerations
resourcefulness and initiative
adaptability
career planning

biggest mistake: choose foreign assignee based on tech. abilities only, ignoring interpersonal skills and cultural awareness

Front 121

cross-cultural training programs

Back 121

expatriates must be clear about their own cultural background

expatriates must understand the particular aspects of the culture and the new working environment

expatriates must learn to communicate accurately in the new culture

(also smart to train spouses and other family members)

Front 122

compensation of expatriates

Back 122

base salary
foreign service premiums (5-40% of base pay)
allowances and benefits: cost-of-living, housing, education, relocation, spousal assistance

Front 123

benefits for US expatriates

Back 123

standard: social security, FMLA, pay for time not worked
- NOT included: worker's comp.

enhanced benefits: relocation assistance, education reimbursements for children, home leave benefits and travel reimbursement, rest and relaxation leave benefits

Front 124

repatriation process

Back 124

- preparation
- physical relocation
- transition
- readjustment

Front 125

H1-B visa

Back 125

amt. issued capped at ~65,000/yr. + 20,000 more for people with master for PhD from US university

for professional jobs including: IT/computer pros., college professors and teachers, engineers, healthcare workers, accountants, lawyers, nurses, physicians, scientists, journalists, psychologists, mkt. research analysts, etc.

employer must agree to apply for visa for employee; if granted worker plus family can live in US for up to 6 yrs.; during this time, person can apply for permanent residency -- "green card"

Front 126

green card -- permanent resident

Back 126

can obtain through employment

140,000 max. available each yr. and employer must sponsor it; 50,000 available through lottery each year, also available through family member/marraige

Front 127

trends in union activity

Back 127

overall decline in union membership and strike activity

however there are growth trends:
- increase in unionization in public sector (largest = american federation of state, county, and municipal employees)
- greater organization of service workers
- organization of professionals

many companies still have a large amt. of union workers, esp. in certain industries

Front 128

host country nationals (HCN)

Back 128

general hiring needs in any foreign country: concerns with language, education, transportation, employment laws, cultural differences, and competition with other workers

competition is fierce in high-growth/high competition countries (ex: India and China)

companies compete for top talent by: providing training opps., building ties with employee's families, starting early and building ties with college students, providing housing and transportation, opps. for fast advancement and global travel

Front 129

national labor relations act/ wagner act (1935)

Back 129

set rights for private sector employees to form unions, collectively bargain, and strike

created national labor relations board to investigate claims of unfair labor practices and conduct union elections

Front 130

taft-hartly act of 1947

Back 130

defined unfair labor practices ON THE PART OF UNION

established right to work laws: allows states to enact laws where workers cannot be required to join union or pay union dies, even if they join a company where the job is unionized

Front 131

landrum-griffin act of 1959

Back 131

regulates union activities

establishes and protects rights of union members

Front 132

how unions impact worker wages and benefits

Back 132

impact on general compensation levels

impact on structure of wages and benefits

impact on non-union firms (spillover and threat effects)

union workers can earn between 8.9-124%, but sometimes even 50% more depending on industry

size of gap varies from year to year: during periods of higher unempoyment and slow economy, impact of unions is larger; during strong economies, union-nonunion gap is smaller

Front 133

structure of wage and benefit packages

Back 133

the presence of a union adds 20-30% or more to employee benefits

unionized workers have a greater percentage of their total wage bill allocated to employee benefits
- higher costs are from higher pension expenditures and higher insurance benefits

Front 134

two-tier wage structures

Back 134

more unions are accepting these -- nearly 30% of contracts use them

ex: new hires may make half what old hires made

Front 135

unions and alternative reward systems

Back 135

unions have become receptive in recent years to alt. reward ssytems that link and to performance

20% of collective bargaining agreements permit some alternative reward system
- ex: lump sums, piece rate, gain-sharing, profit-sharing, skill-based pay, ESOP

Front 136

union impact on nonunion workers -- spillover/threat effect

Back 136

employers seek to avoid unionization by offering workers the wages, benefits, and working conditions that rival unionized firms

nonunion mgmt. continues to enjoy freedom from union interference in decision making

nonunion workers receive spillover of rewards obtained by their unionized counterparts

Front 137

reasons for decline in union membership

Back 137

companies that offer employee-friendly HRM practices -- less need for unions

replaced by govt. regulation, laws -- EEO, OSHA, and other regulations offer protection

union actions can have a bad public image

structural changes in economy -- service sector growth

increased employer resistance -- global competition, shifting production to states with low union membership or overseas

Front 138

states with highest union memberships

Back 138

hawaii
NY
alaska
NJ

Front 139

states with lowest union membership

Back 139

NC
SC
virginia
georgia
texas