performance management

series of activities designed to ensure organization gets performance it needs from its employees. to be effective- make clear what org. expects, provide performance info to employees, identify areas of success and needed development, document performance for personnel records.

performance appraisal

process of determining how well employees do their jobs relative to standard and communicating that info to them. helps administer wages and salaries giving feedback and identifying employee strengths and weaknesses.

components of performance management

identifying performance expectations, providing performance direction, encouraging employee participation, assessing job performance, conducting performance appraisal.

global cultural differences in performance management

performance management and appraisals are challenging when employees have diverse backgrounds with characteristics very different from those of american background. in some countries rating employees aren't common due to authoritative figures in countries like china and japan. in some european countries, pastries and coffee or alcoholic beverages is common before beginning discussions.

entitlement approach

adequate performance and stability dominate organization. employee rewards vary little from person to person and aren't based on individual performance differences. performance appraisal activities are seen as having few ties to performance and as being bureaucratic exercise.

performance-driven

focuses on results and contributions. performance appraisals link results to employee compensation and development. important when evaluating ceo performance because companies want to hold top leaders accountable for corporate outcomes and motivate them to improve operational and financial results.

measuring employee performance

quantity and quality of output, timeliness of output, presence/attendance on the job, efficiency and effectiveness of work completed.

trait-based information (less useful)

identifies characteristics of employee such as attitude, initiative, creativity and may or may not be job related. trait-based performance appraisals are believed to be vague because it may be ambiguous and favoritism of raters can affect how traits are viewed

ex- attitude, teamwork, initiative, effective communication, creativity, values, disposition

behavior-based information (evenly useful)

focuses on specific behaviors that lead to job success. behavioral information specifies behavioral management wants to see but problem rises when any of several behaviors can lead to successful performance and employees rely on these different behaviors to complete tasks.

ex-customer satisfaction, verbal persuasion, timeliness of response, citizenship/ethics

results-based information

considers employees' accomplishments. works well with jobs in which measurement is easy and obvious. ex- professor might receive extra compensation for securing grants or publishing papers in academic journals. may leave out equally important but difficult to measure parts of work. ex- salesperson who gets paid only for sales may be unwilling to do other work not directly to selling cars.

ex- sales volume, cost reduction, units produced, improved quality

objective measures of performance

can be observed- number of cars sold.

subjective measures of performance

require judgement on part of the evaluator and are more difficult to determine. ex- supervisor's ratings of an employee's attitude which can't be seen directly.

deficient

performance measures that leave out some important job duties. ex-measurement of employment interviewer's performance is likely to be deficient if it evaluates only number of applicants hired and not quality of those hired or how long those hired stay at company

contaminates

including irrelevant criteria in performance measures. ex-appearance might be contaminating criterion in measuring performance of telemarketing sales rep whom customers oversee.

performance standard

define expected levels of employee performance. labeled benchmarks, goals, targets. it defines what satisfactory job performance is so standards should be established before work is performed. well-defined standards ensure that everyone involved knows level of accomplishments expected.

performance standard for speaking- superior

participates fully in convo relating to needs and professional interests. discusses topics both concretely and abstractly. can deal effectively with unfamiliar speaking situations

performance standards for speaking-intermediate

can participate in simple convos on predictable topics. can satisfy simple needs to survive in language's culture. can ask and answer questions

performance standard for speaking- novice

can respond to simple questions. can convey minimal meaning by using isolated words or memorized phrases. can satisfy limited number of immediate needs

performance differences among managers

regional differences in labor costs, service agreement differences, equipment/infrastructure differences, work volume.

administrative uses of appraisals

determining pay adjustments, making job placement decisions on promotions/transfers/demotions, choosing employee disciplinary actions up to and including termination of employment

developmental uses of appraisals

primary source of info and feedback that builds future development in organization. by identifying employee strength/weakness, potentials and training needs through appraisals supervisors can inform employees about their progress.

appraisal responsibilities

hr unit- designs and maintains appraisal system, trains raters, tracks timely receipt of appraisals, reviews completed appraisals for consistency

managers- typically rate performances of employees, prepare formal appraisal documents, review them with employees, identify development areas

informal vs systematic appraisal processes

informal is conducted when necessary. day to day relationship between manager and employee offers opportunity for employee's performance to be evaluated such as conversation on the job, over coffee, on the spot. systematic is when contact between manager and employee is formal and a system is used to report managerial impressions and observations on performance.

who conducts appraisals?

supervisors rating employees, employees rating their supervisors, team members rating each other, employees rating themselves, outside sources rating employees, variety of parties providing multisource or 360 degree feedback

category scaling methods

simplest method of appraising performance. requires manager to mark employee's level of performance on specific form divided into categories of performance. ex- a checklist

graphic rating scales

allows rater to mark employee's performance on continuum indicating low and high levels of particular characteristics. commonly used in performance evaluations. rates quantity of work, attendance, dependability, job duties, decision making, employee development, communication effectiveness.

behavioral rating scales

assess individual actions instead of personal attributes and characteristics. behaviorally anchored rating scale (bars) identifies job dimensions. short statements describe both desirable and undesirable behaviors (anchors).

ranking

performance appraisals method in which all employees are listed from highest to lowest in performance. disadvantage is that sizes of performance differences between employees are not fully investigated or clearly indicated.

forced distribution

a method of appraisal where ratings of employee performance are distributed along a bell shaped curve. advantage in rater inflation but supervisor may resist placing a worker in the lowest or highest group to avoid having to explain the placements.

management by objectives (mbo)

performance appraisal method that specifies performance goals that individual and manager identifies together.

process- job review and agreement, development of performance standards, setting of objectives, and continuing performance discussions.

appraisal training topics

appraisal process and timing, performance criteria and job standards that should be considered, how to communicate positive and negative feedback, when and how to discuss training and development goals, conducting and discussing comp reviews, and how to avoid common rating errors.

recency effect

occurs when rater gives greater weight to recent events when appraising individual's performance

primary effect

occurs when rater gives greater weight to info received first when appraising individual's performance

central tendency error

occurs when rater gives all employees a score within narrow range in the middle of scale

leniency error

occurs when ratings of all employees fall at high end of scale

strictness error

occurs when ratings of all employees fall at low end of scale

halo effect

occurs when a rater scores employee high on all job criteria because of performance in one area

rater bias

occurs when rater's values or prejudices distort rating

contrast error

tendency to rate people relative to others rather than against performance standards

effective performance management

consistent with strategic mission of org, beneficial as development tool, useful as administrative tool, legal and job related, viewed generally fair by employees, effective in documenting employee performance

decisions made for total rewards

legal compliance with appropriate laws and regulations. cost effectiveness for org. internal, external, and individual equity for employees. performance enhancement for org. performance recognition and talent management for employees. enhanced recruitment. involvement, and retention of employees

compensation

base pay (wages and salary), variable pay (bonuses, incentives, stock options)

benefits

health/medical insurance, life/disability insurance, paid time off, retirement/pension, educational assistance, work life support

performance and talent management

performance appraisals, goal setting, training, hr development, career and succession planning

base pay

basic comp that employee receives usually as wage or salary

wages

payments calculated directly from amount of time worked

salaries

consistent payments made each period regardless of number of hours worked

variable pay

comp linked directly to individual, team, or organizational performance

benefit

indirect reward given to employee or group of employees as part of membership in org.

entitlement philosophy

assumes that individuals who have worked another year are entitled to pay increases with little regard for performance differences

pay for performance philosophy

requires that comp changes reflect performance differences

typical division of comp responsibilities in hr

hr unit- develop and administer pay system, evaluate jobs and analyze pay surveys, develop pay structures and policies

managers- identify job descriptions and concerns, recommend pay rates and increases, evaluate employees' pay perceptions

equity

perceived fairness between what person does and what person receives

internal equity in compensation

employees receive comp in relation to knowledge, skills, and abilities they use in their jobs as well as their responsibilities and accomplishments

procedural justice

perceived fairness of process and procedures used to make decisions about employees

distributive justice

perceived fairness in distribution of outcomes

meet the market strategy (middle market)

employer positions pay scales so that 50% of other firms pay above and 50 % pay below. it balances employer cost pressures and need to attract and retain employees by providing mid level comp scales that meet the market for employer's job.

lag the market strategy (below market strategy)

employer positions pay scales so that 75% of other firms pay above and 25% pay below. strategy is used when employer is short on funds, have abundance of workers with lower skills (illegal immigrants). increases likelihood of higher worker turnover.

lead the market strategy (above market)

employer positions pay scales so that 25% of other firms pay above and 75% pays below. enable company to attract and retain sufficient workers with required capabilities and to be more selective when hiring.

competency based pay

rewards individuals for capabilities they demonstrate and acquire

global comp issues

variations in laws, living costs, tax policies must be considered in establishing comp for local workers. fluctuations in values of various currencies must be tracked and adjusted.

balance sheet approach

comp plan that equalizes cost differences between international assignment and same assignment at home country

global market approach

comp plan that attempts to be more comprehensive in providing base pay, incentives, benefits, and relocation expenses regardless of country which employee is assigned.

tax equilization plan

comp plan used to protect expatriates from negative tax consequences

fair labor standards act (flsa)

employers must keep accurate time records and maintain those records for 3 years. penalties for wages and hour violations often include up to 2 years of back pay. focuses on establishing min wage, discourage oppressive use of child labor, and encourage limits on number of hours employees work per week, through overtime provisions

living wage

earnings that are supposed to meet basic needs of individual working for org.

common overtime issues

compensatory time off, incentives for nonexempt employees, and training time.

garnishment

a court order that directs employer to set aside portion of employee's wages to pay debt owed to creditor.

pay equity

concept that pay for all jobs requiring comparable knowledge, skills, and abilities should be same even if actual job duties and market rates differ

point method

most widely used for job evaluation. looks at compensable factors in group of similar jobs and places weights or points on them.

compensable factor

job value commonly present throughout group of jobs within org. derived from job analysis and reflect nature of different types of work performed in org.

ranking method for job evaluation

simple system that places jobs in order from highest to lowest by value to org. entire job is considered rather than individual component. appropriate for smaller companies

classification method for job evaluation

descriptions of each job is wriiten and them each job in org is put into grade according to the class description it best matches.

factor comparison method for job evaluation

quantitative complex combination of ranking and point method. org must develop own key jobs and own factors. difficult to use and time consuming

marketing price

use of market pay data to identify relative value of jobs based on what other employers pay for similar jobs. advantage-closely ties organizational pay levels to what is actually occurring in the market. disadvantage- numerous jobs, pay survey data are limited or may not be gathered in methodologically sound ways

pay survey

collection of data on comp rates for workers performing similar jobs in other org.

benchmark jobs

jobs found in many org that can be used for purposes of comparison

pay grades

groupings of individual jobs having approx same job worth

pay ranges

once pay grades are determined, pay range for each pay grade must be established. using market line as starting point, employer can determine min and max pay levels for each pay grade by making market line midpoint of new pay structure

broadbanding

practice of using fewer pay grades with much broader ranges than in traditional comp systems

market banding

grouping jobs into pay grades based on similar market survey amounts

red circled employees

incumbent who is paid above range set for a job

green circled employee

incumbent who is paid below range set for a job

pay compression

occurs when pay differences among individuals with different levels of experience and performance become small

lump sum increase (lsi)

one time payment of all or part of yearly pay incease

benefit

indirect reward given to employee or group of employees for organizational membership

benefit strategy

competitive advantage- invest in benefit packages that are attractive to employees. workforce attraction and retention. benefits management. benefits communication

key decisions for benefits design

how much total comp including benefits can be provided? what part of total comp of individuals should benefits constitute? which employees should be provided which benefits? what expense levels are acceptable for each benefit offered? what is being received by the org. in return for each benefit? how flexible should package of benefits be?

flexible benefits plan

program that allows employees to select benefits they prefer from groups of benefits established by employer

responsibilities for benefits administrations- hr unit

develops and administers benefits system, answers employees' technical questions on benefits, monitors benefits usage by employee, suggest benefit cost control approaches

responsibilities for benefits administrations- managers

answer simple questions on benefits, maintain liaison with hr specialist on benefits, maintain good communications with employees near retirement, coordinate use of time off benefits

common benefits metrics

benefits as percentage of payroll, benefits expenditures per full time equivalent (fte) employee, benefits costs by employee group, benefits admin costs, health care benefits costs per participating employee

benefits communication

employers should develop special benefits communication systems to inform employees about monetary value of benefits they provide. any significant changes to benefits such as cuts to 401k should be communicated to top managers.

types of benefits

insurance payment(medical premiums, vision care, dental, life insurance)

paid rest period(coffee breaks, lunch periods, travel time)

payment for time not worked (leaves, vacation, holidays)

miscellaneous benefits (educational assistance, severance pay, child care)

legally required contributions (social security, unemployment, workers comp)

retirement plans (pensions, 401k)

HIPPA health insurance portability and accountability act

requires most employees be able to obtain coverage if they were previously covered in health plan and provides privacy rights to medical records.

government mandated benefits

worker's comp, unemployment comp, social security, hippa provisions, military reserve time off, election and jury leaves

voluntary benefits

severance pays, early retirement options, health care, pension rates, ira, 401k, medical, life insurance, disability insurance, educational assistance, lunch and rest breaks, family leave, funeral, sick leave, holidays and vacations, paid time off

workers comp

security benefits provided to persons who are injured on the job

severance pay

security benefit offered for those whose jobs are eliminated or who leave by mutual agreement with their employers

risk management

involves responsibilities to consider physical, human, and financial factors to protect organizational and individual interests.

includes- preventing accidents and health problems, preparing for natural disaster, planning for terrorist attacks, anticipating global disease outbreaks, protecting against workplace violence, ensuring hr data are secure

osha standards

general duty- employer has to provide safe and healthy working conditions even in areas where osha standards haven't been set.

notification and posters- employers are required to inform employees of safety and health standards established by osha. osha posters must be displayed in prominent locations in workplaces.

process safety management (psm) standards

focuses on hazardous chemicals. requires manufacturers, importers, distributors, and users of hazardous chemicals to evaluate, classify, and label substances.

lockout/tagout regulations

firms must provide mechanics and tradespeople with locks and tags to use to make equipment inoperative for repair and adjustment to prevent accidental start up pf defective machinery.

work assignments and reproductive health

maintain safe workplace for all by seeking safest work methods. comply with all state and federal safety laws. inform employees of any known risks. document employee acceptance of any risks.

refusing unsafe work

conditions for refusing work because of safety concerns include:

employee's dear is objectively reasonable, employee has tried to have dangerous condition corrected, using norma; procedures to solve problem hasn't worked.

responsibilities of health, safety, and security

hr unit- coordinates health and safety programs, develops safety reporting system, provides accident investigation expertise, provides technical expertise on accident prevention, develops restricted access procedures and employee identification systems, assist with disaster and recovery planning efforts

managers- monitor health and safety of employees, coach employees to be safety conscious, investigate accidents, monitor workplace for security problems, communicate with employees to identify potential difficult employees.

phases of accident investigation

review scene, interview employees and others, prepare report, identify recommendations.

key practices for dealing with older workers

preventing slips and falls, eliminating repetitive stress and heavy lifting, using ergonomically sound workspaces, emphasizing driver safety, providing means for healthy gradual transitions back to work.

health promotion level 1- info and awareness

brochures and materials, health risks screenings, health tests and measurements, special events and classes

health promotion level 2- lifestyle wellness

wellness education program, regular health classes, employee assistance programs, support groups, health incentives

health promotion level 3- health emphasis

benefits integrated with programs, dedicated resources and facilities, continuous health promotion, health education curriculum.

rights

powers, privileges, or interests that belong by law, nature, and tradition

statutory rights

rights based on laws or statutes passed by federal, state, or local governments

contractual rights

rights based on specific contract between employer and employee

employee contract

formal agreement that outlines details of employment

noncompete agreements

agreements that prohibit individuals who leave organization from working with employer in same line of business for specified period of time.

intellectual property

right to keep trade secrets confidential, right to have employees bring business opportunities to employer first before pursuing them elsewhere, common law copyright for works and other documents prepared by employees for their employers

implied contract

idea that contract exists between individuals and their employees affects employment relationship. rights and responsibilities may be spelled out in a job description , in employment contract, hr policies, or handbook.

employment at will (eaw)

common law doctrine stating that employers have right to hire, fire, demote, promote whomever they choose unless there is a law or contract to the contrary. conversely employees can quit whenever they want to

open door policy

anyone with complaint can talk to manager or hr or executive

monitoring electronic communications

employers have right to monitor what is said and transmitted through internet and voicemail systems. should monitor only for business purposes.

recommended actions regarding electronic communication

develop electronic communications policy, communicate policy to employees, obtain signed permission from employees, monitor for business purposes only, enforce policy through disciplinary procedures

policies

general guidelines that focus organizational actions

procedures

customary methods of handling activities

rules

specific guidelines that regulate and restrict behavior of individuals

responsibilities of policies, procedures, and rules

hr unit- design formal mechanism for coordinating hr policies, assist in developing of organization wide hr policies, procedures, and rules, provide info on application of policies,procedure, and rules, train managers to administer them

managers-help in developing policies and rules, review them with all employees, apply them, explain them, give feedback on effectiveness of policies and rules

absenteeism

any failure by employee to report for work as scheduled or to stay at work when scheduled

disciplinary approach

people who are absent to work the first time gets verbal warning and subsequent absences bring written warnings, suspension, and dismissal

combination approach

uses policies and and discipline to punish offenders and uses reward programs to reward employees with outstanding attendance

no fault policy

reasons for absences don't matter and employees must manage their own attendance unless they abuse their freedom.

paid time off policy

vacation time off, holidays, personal time off and can be used to their discretion. reduces absenteeism

union

formal association of workers that promotes interests of its members through collective action. good face emphasizes fact that unions give members a voice to express dissatisfactions to management. this increases productivity and earnings. bad face emphasizes that negative effects that union wages have decreases on profit and productivity.

unions- employee and management perspectives

grew in 1950s to represent workforce. in the u.s. unions follow goals of increasing comp, improving work conditions, and influencing workplace rules. when union is present, working conditions pay and work rules are determined through bargaining and designated formal contracts.

desirability of unionization - working conditions

inadequate staffing, mandatory overtime, and poor working conditions

desirability of unionization- compensation

noncompetitive pay, inadequate benefits, and inequitable pay raises.

desirability of unionization- management style

arbitrary management decision making, use of fear and intimidation, lack of recognition

desirability of unionization- employment treatment

job insecurity, unfair discipline and policies, lack of response to complaints, harassment and abusive treatment

unions globally

union membership varies significantly from country to country. in some countries unions either exist or don't exist at all. on some other countries, unions are closely tied with politics.

codedetermination

practice whereby union or worker representatives are given positions on company's board of directors.

key focuses of unions in the u.s.

economic issues- improving bread and butter issues such as wages, benefits, job security, and working conditions.

organization by kind of job and employer- carpenters belong to carpenter union, truck drivers to teamsters, teachers to america fed of teachers etc.

collective agreements as contracts- collective bargaining contracts spells out comp, work rules, and conditions of employment for several years.

competitive relations- management and labor take role of competing adversaries who often clash to reach agreement.

reasons for u.s. union decline

deregulation, foreign competition, larger number of people looking for jobs, general perception by firms that dealing with unions is expensive compared with nonunion alternatives. management have taken a much more activist stance against unions, economic downturns have negative impacts.

craft union

union whose members do one type of work often using specialized skills and training

industrial union

union that includes many persons working in same industry or company regardless job held

federation

group of autonomous unions

mandatory issues

collective bargaining issues identified specifically by labor laws or court decisions as subject to bargaining- discharge of employees, grievances, work schedules, union security and dues checkoff, retirement and pension coverage, vacations and time off, rest and lunch break rules, safety rules, profit sharing plans, required physical exam

permissive issues

collective bargaining issues that aren't mandatory and relate to certain jobs. ex-benefits for retired employees, product prices for employees, and performance bonds.

illegal issues

collective bargaining issues that would require either party to take illegal action. ex- giving preference to union members when hiring employees or demanding closed shop provision in contract.

advantages and disadvantages of unions

advantages-   Employees can provide feedback to employers about their concerns and suggestions •  Balance the unchallenged decisionmaking power of management •  Lead to increases in job performance and employee earnings

disadvantages- •  Negatively impact the allocation of organizational resources •  Cause decreases in profitability •  Hurt productivity as a result of increased compensation

business agent

a full time union official who operates union offices and assists union members. work for the union

union stewart

employee elected by local members to serve as first line representative of unionized employees. works for represented company

union shop

requires that individuals join union usually 30-60 days after being hired

agency shop

makes workers who don't join union to make payments equal to union dues and fees to get union services

maintenance of membership shop

requires workers to remain members of union for period of labor contract

grievance arbitration

means by which third party settles dispute arising from different interpretation of labor contract

steps in grievance procedure

1) discussion of written grievance between employee, union steward, and supervisor.

2) meeting between union steward and supervisor's manager and hr manager

3) meeting between committee of union officers and company managers

4) meeting between national union rep and company executive or corporate industrial relations officer

5) arbitration by impartial third party

responsibilities of grievance management

hr unit- assists in designing grievance procedure, monitors trends in grievance rates for org, may assist in preparing grievance cases for arbitration, may have responsibility for settling grievances

management- operate within provisions of grievance procedure, attempt to resolve grievances where possible, document grievance cases for procedure, engage in grievance prevention efforts