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.
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.
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.
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
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.
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
including irrelevant criteria in performance measures. ex-appearance might be contaminating criterion in measuring performance of telemarketing sales rep whom customers oversee.
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.
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).
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.
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.
occurs when rater gives greater weight to recent events when appraising individual's performance
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
occurs when ratings of all employees fall at high end of scale
occurs when ratings of all employees fall at low end of scale
occurs when a rater scores employee high on all job criteria because of performance in one area
occurs when rater's values or prejudices distort rating
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
base pay (wages and salary), variable pay (bonuses, incentives, stock options)
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
basic comp that employee receives usually as wage or salary
payments calculated directly from amount of time worked
consistent payments made each period regardless of number of hours worked
comp linked directly to individual, team, or organizational performance
indirect reward given to employee or group of employees as part of membership in org.
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
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
perceived fairness of process and procedures used to make decisions about employees
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
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.
a court order that directs employer to set aside portion of employee's wages to pay debt owed to creditor.
concept that pay for all jobs requiring comparable knowledge, skills, and abilities should be same even if actual job duties and market rates differ
most widely used for job evaluation. looks at compensable factors in group of similar jobs and places weights or points on them.
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
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
collection of data on comp rates for workers performing similar jobs in other org.
jobs found in many org that can be used for purposes of comparison
groupings of individual jobs having approx same job worth
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
practice of using fewer pay grades with much broader ranges than in traditional comp systems
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
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
indirect reward given to employee or group of employees for organizational membership
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
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
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
security benefits provided to persons who are injured on the job
security benefit offered for those whose jobs are eliminated or who leave by mutual agreement with their employers
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
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.
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.
powers, privileges, or interests that belong by law, nature, and tradition
rights based on laws or statutes passed by federal, state, or local governments
rights based on specific contract between employer and employee
formal agreement that outlines details of employment
agreements that prohibit individuals who leave organization from working with employer in same line of business for specified period of time.
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
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
general guidelines that focus organizational actions
customary methods of handling activities
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
any failure by employee to report for work as scheduled or to stay at work when scheduled
people who are absent to work the first time gets verbal warning and subsequent absences bring written warnings, suspension, and dismissal
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
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
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.
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.
union whose members do one type of work often using specialized skills and training
union that includes many persons working in same industry or company regardless job held
group of autonomous unions
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
collective bargaining issues that aren't mandatory and relate to certain jobs. ex-benefits for retired employees, product prices for employees, and performance bonds.
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
a full time union official who operates union offices and assists union members. work for the union
employee elected by local members to serve as first line representative of unionized employees. works for represented company
requires that individuals join union usually 30-60 days after being hired
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
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