Final Review SheetMonday, December 10, 20123:44 PMChapter 10-Documentation- A record of performance appraisal process outcomes-Appraisal Process1. Establish performance standards with employees2. Communicate expectations3. Measure actual performance4. Compare actual performance with standards5. Discuss the appraisal process with the employee6. If necessary, initiate corrective action-Appraisal MethodsoAbsolute standards- Measuring an employee's performance against established standards-Critical incident appraisal- a performance evaluation that focuses on key behaviors that differentiates between doing a job effectively or ineffectively-Checklist appraisal- a performance evaluation in which a rater checks off applicable employee attributes-Graphic rating scale- a performance appraisal method that lists traits and a range of performancefor each-Forced choice appraisal- a performance evaluation in which the rater must choose between two specific statements about an employee's work behavior-Behaviorally anchored rating scales (BARS)- a performance appraisal technique that generates critical incidents and develops behavioral dimensions of performance. The evaluator appraises behaviors rather than traits. oRelative Standards Methods-Relative standards- evaluating an employee's performance by comparing the employee with another employee-Individual ranking- Ranking employee's performance from highest to lowest-Paired comparison- Ranking individuals performance by counting the times any one individual is the preferred member when compared with all other employeesoManagement by objectives (MBO)- a performance appraisal method that includes mutual objective setting and evaluation based on the attainment of the specific objectives-MBO's containSpecific goalsParticipative decision makingSpecific time periodPerformance feedback-Errors that can occur in AppraisalsoLeniency error- performance appraisal distortion caused by evaluating employees against one's own value systemoHalo error- the tendency to let our assessment of an individual on one trait influence our evaluation of that person on other specific traitsoSimilarity error- evaluating employees based on the way an evaluator perceives himself or herselfoCentral tendency- the tendency of a rater to give average ratingsoAttribution theory- a theory of performance evaluation based on the perception of who is in control of an employee's performance-How to create a better evaluationoCombine absolute and relative standardsoProvide ongoing feedbackoUse multiple ratersoPeer evaluation- by coworkers oUpward appraisal- employees provide frank and constructive feedback to their supervisorso360 degree appraisals- performance evaluations in which supervisors, peers, employees, customers, and the like evaluate the individualoRate selectivelyoTrain appraisersLearning objectives-3 purposes of performance management systems- feedback, development, and documentation-6 steps of appraising- 1. Establish performance standards with employees2. Communicate expectations3. Measure actual performance4. Compare actual performance with standards5. Discuss the appraisal process with the employee6. If necessary, initiate corrective action-3 different methods to appraisingoAbsolute standardsoRelative standardsoMBO-Describe why appraisals may be distorted-Know Ideas to improve performance management-What is 360 degree appraisal?-Criteria for Successful performance appraisal meeting- preparation, supportive environment, clear purpose, employee involvement, focus on work behaviors, specific work examples, positive and negative feedback, employee understanding, and employee development planChapter 11-Intrinsic rewards- satisfactions derived from the job itself, such as pride in ones work, a feeling of accomplishment, or being part of a team-Extrinsic rewards- benefits provided by the employer, usually money, promotion, or benefits-Job enrichment- enhancing jobs by giving employees more opportunity to plan and control their work-Performance based rewards- rewards exemplified by the use of commissions, piecework pay plans, incentive systems, group bonuses, or other forms of merit pay-Compensation administration- the process of managing a company's compensation program-Government Influence on compensation administrationoFair Labor Standards Act (FLSA)- Passed in 1938 this act established laws outlining minimum wage, over time pay, and maximum hour requirements for U.S. workersoExempt employees- employees in positions that are exempt from most employee protection outlined inFLSA, especially overtime pay oNonexempt employees- Employees who are covered by the FLSA, including over time pay and minimum wage provisions of the actoEqual Pay act of 1963- This act requires equal pay for work-Job evaluationoOrdering method- ranking job worth from highest to lowestoClassification method- evaluating jobs based on predetermined job gradesoPoint method- breaking down jobs based on identifiable criteria and the degree to which these criteria exist on the -Pay structureoCompensation surveys- used to gather factual data on pay practices among firms and companies with specific communitiesoWage structure- a pay scale showing ranges of pay within each gradeoExternal factors of pay-Geographical location-Labor supply-Competition-Cost of living-Collective bargaining -Communicating with employeesoIncentive compensation plans- motivate systems based on individual work performanceoMerit pay- an increase in pay, usually determined annuallyoGroup incentive- motivational plan provided to a group of employees based on their collective workoOrganization wide incentive- a motivation system that rewards all facility members based on how well the entire group performedoScanlon plan- an organization wide incentive program focusing on cooperation between management and employees through sharing problems, goals, and ideasoIMPROSHARE- an incentive plan that uses a specific mathematical formula for determining employeebonusesoPay for performance- rewarding employees based on performanceoCompetency based compensation- organizational pay system that rewards skills, knowledge, and behaviorsoBroad banding- paying employees at preset levels based on their level of competencyoTeam based compensation- pay based on how well the team performed-Executive compensation ProgramsoPerquisites- attractive benefits, over and above a regular salary, granted to executives, also known as perksoGolden