The Challenge of Human Resources Management

Chapter 1 – The Challenge of Human Resources Management

1. What is the difference between human capital and human resources management?
Human capital: people’s actual knowledge, skills, and capabilities that have economic value to the company
Human resources: managing human capital to achieve objectives
2. Explain how globalization is influencing human resource management.
Partnerships with foreign firms & lower trade and tariff barriers
-requires knowledge of business practices of the particular countries they are working with: compensation, employee training, finding expatriates, overseas benefit packages, cultures, laws
3. Describe the challenges in managing human capital.
-Managing change, globalization, technology, (acquiring, developing, and managing human capital), responding to the market, containing costs.
1. Responding Strategically to Changes in the Marketplace—strategy, downsizing, outsourcing, offshoring
2. Competing, Recruiting, and Staffing Globally—globalization
3. Setting and Achieving Corporate Social Responsibility and Sustainability Goals
4. Advancing HRM with Technology—human resources information system
5. Containing Costs While Retaining Top Talent and Maximizing Productivity
6. Responding to the Demographic and Diversity
Challenges of the Workforce
7. Adapting to Educational and Cultural Shifts Affecting the Workforce
4. Discuss the primary social issues in managing people.
-education level, diversity, ethnicity, age, gender
-deal with employee rights, privacy, policy change, attitude towards work, and balancing family life

Chapter 2 – The Markets for Labor, Capital, and Land (Supply & Demand)
1. Demonstrate basic knowledge of the workings of a labor market by:
a. Graphing supply and demand demand curve: downward sloping, lower wage = increase quantity of labor demanded supply curve: upward sloping, higher wages = quantity of labor increases
b. Identifying and interpreting the meaning of equilibrium equilibrium: point of intersection between the supply and demand curves
-only at the equilibrium wage are both suppliers and demanders able to exchange the quantity of labor they desire
c. Identifying the difference between a shift in the curve and a movement along the curve as well as what factors cause a shift.
Shift: 1. Increase in labor productivity (technology advances) 2. Changes in output price of a good (due to increased demand)
Increases in Labor Productivity
Workers can increase productivity if:
They have more capital or land with which to work.
Technological improvements occur.
They acquire additional skills or experience.
This increase in productivity will increase the marginal product of labor and shift the demand curve for labor to the right.
However, if labor productivity falls, then marginal product will fall, and the demand curve for labor will shift to the left.
Increased Demand for Firm’s Product
The greater the demand for the firm's product, the greater the firm’s demand for labor or any other variable input.
Higher demand for the firm's product increases the firm's marginal revenue, which increases marginal revenue product.
If demand for the firm's product falls, the labor demand curve will shift to the left, as marginal revenue product falls.
Movement:
2. Identify factors that would cause the labor supply and labor demand curves to shift and how those factors affect the equilibrium level of wages and employment.
Several factors can cause the labor supply curve to shift:
Immigration and population growth
The number of hours workers are willing to work at a given wage (worker tastes or preferences)
Non-wage income
Amenities (fringe benefits)
Available Labor
If new workers enter the labor force, it will shift the labor supply curve to the right.
If there are fewer workers in the labor force, it will cause the labor supply curve to shift to the left
Worker Preferences
If people become willing to work more hours at a given wage (due to changes in worker tastes or preferences), the labor supply curve will shift to the right.
If they become willing to work fewer hours at a given wage, the labor supply curve will shift to the left.
Non-Wage Income
Increases in income from other sources than employment can cause the labor supply curve to shift to the left.
A decrease in nonwage income might push a person back into the labor force, thus shifting the labor supply curve to the right
Amenities
Amenities associated with a job, make for a more desirable work atmosphere, ceteris paribus.
These amenities would cause an increase, or rightward shift, in the supply of labor.
If job conditions deteriorate, it would lead to a reduction, or leftward shift, in the labor supply curve.

3. Describe the ways in which both government and culture can affect both the supply and demand for labor, and analyze the impact on wages and employment.

4. Locate labor supply statistics for a metropolitan area.

5. Identify the various roles that available labor supply has on firm strategies (i.e. location decisions, internal strategic planning, compensation, and benefit policies).

**6. Discuss and be able to calculate the following: marginal product (of labor)(MPL): additional output from hiring each worker, value of a worker’s contribution to production marginal revenue product (MRP): how the dollar value of the marginal product of labor is expressed, additional revenue that a firm obtains from one more unit of input
-calculation MRP = MPL * P
-P= price of the firm’s product (constant) marginal resource cost (MRC): amount that an extra input adds to the firm’s total costs
-in a competitive labor market, its MRC is the market wage optimal labor demand for a firm

7. Describe how and why the marginal product of labor diminishes with the continued addition of labor input.
This increase in productivity will increase the marginal product of labor and shift the demand curve for labor to the right.
However, if labor productivity falls, then marginal product will fall, and the demand curve for labor will shift to the left.
8. Generate a graph of labor demand using several wage/quantity combinations.

9. Describe how changes in price, technology and decisions about how to organize a firm’s human resources will influence these calculations and shift the demand for labor curve.

10. Describe the concept of “derived demand” as it applies to labor.
Labor demand is a derived demand
A derived demand is demand for an input derived from consumers’ demand for the good or service produced with that input
For example: we don’t demand actors (the input/productive factors), we demand their movies (the good/service they produce)
In other words, consumers do not demand labor to make goods and services, but rather they demand the goods and services created by that labor

Chapter 2 – The Markets for Labor, Capital, and Land (Labor Relations)
1935 – Social Security, 12.8% of income now
1. Discuss the benefits and costs of unions to employers and employees.

2. Describe trends in unions organizing in the US

3. Identify economic conditions that facilitate success of unions

4. Describe the role of collective bargaining and its implications for people and organizations.

5. List the major provisions of:
* understand differences
a. National Labor Relations Act of 1935 (Wagner Act)
Protects employee rights to organize and bargain collectively through representatives of their choice.
Created the National Labor Relations Board (NLRB) to govern labor relations in the United States.
Holds secret ballot union representation elections.
Prevents and remedies unfair labor practices.
Outlawed employer practices that deny employees their rights and benefits
b. Taft-Hartley Act of 1947 (unfiar union practices)
Balances rights and duties of labor and management in collective bargaining by defining unfair union practices.
Created the Federal Mediation and Conciliation Service (FMCS) to help resolve negotiating disputes.
c. Landrum-Griffin Act of 1959 (bill of rights of union members)
Safeguards union member rights and prevents racketeering and other unscrupulous practices by employers and union officers.
Nominate candidates for union office
Vote in union elections or referendums
Attend union meetings
Participate in union meetings and vote on union business
Examine union accounts and records
Bring suit against union officers as necessary to protect union funds

**KNOW THIS CHAPTER labor force: all civilian, non institutionalized people over 16 who are working for pay or actively seeking paid employment
1. Explain how the labor force participation rate is calculated and what it means. Identify factors that affect how individuals choose their level of labor market participation.
The labor force participation rate is calculated as the number of individuals in the labor force divided by the total civilian, working-age, non-institutionalized population
*memorize Labor Force Participation Rate = civilian labor force / total work-eligible population
-(person must be without a job, person must be willing to take a job if presented, or person has actively looked for work within the last four months)

2. Explain and differentiate the different types of unemployment.
Seasonal Unemployment:
The result of a decrease in the demand for labor due to the changing of the season
Examples include:
Agricultural jobs
Construction jobs
Holiday/Resort work
Frictional Unemployment: is the temporary unemployment that results from the search time that occurs when people are searching for suitable jobs and firms are looking for suitable workers.
People seeking work do not usually take the first job offered to them. Likewise, firms do not usually take the first person they interview.
People and firms engage in a search to match up skills and interests. While the unemployed are looking, they are frictionally unemployed.
Whether the unemployment is due to having been fired, or from having voluntarily quit, frictional unemployment is short term and results from normal turnover in the labor market, as when people change from one job to another.
Structural Unemployment:
Related to a lack of job mobility.
The result of major industrial or technological changes, it occurs when workers lack the necessary skills for jobs that are available or have particular skills that are no longer in demand
A mismatch of skills to labor needs
E.g., when a major industry is in decline and lays off many of its workers
Characteristics of structural unemployment:
Tends to be concentrated among certain groups of workers
Tends to be long-lasting
Structural unemployment, like frictional unemployment, reflects the dynamic dimension of a changing economy.
Over time, new jobs open up that require new skills, while old jobs that required different skills disappear.
Structural unemployment is more long term and serious than frictional unemployment because these workers do not have marketable skills.
Cyclical Unemployment:
In years of relatively high unemployment, some joblessness may result from short-term cyclical fluctuations in the economy
This type of unemployment is the result of movement through the business cycle; during expansions, unemployment is low, while during recessions, unemployment is high
Unemployment rates above the natural (typical 5%) level show the existence of cyclical unemployment
3. Explain how the unemployment rate is calculated, what it means, and weaknesses to the calculation.
Unemployment Rate:
The proportion of the labor force that is unemployed
The unemployment rate is calculated as the total number of unemployed individuals divided by the total number of individuals in the labor force

The unemployment rate may be understated due to…
Discouraged workers those that quit looking for a job in periods of prolonged recession, thinking that the chances of landing a job are very bleak. Individuals who have not actively sought work for four weeks are not counted as unemployed; instead, they fall out of the labor force.
People looking for fulltime work who grudgingly settle for part-time jobs are counted as “fully” employed, even though they are only “partly” employed.
The unemployment rate may be overstated due to… jobs in the underground economy (drug dealing, prostitution, gambling) are not reported. many people may claim they are seeking work when they may just be going through the motions so they can collect unemployment compensation or other government benefits.
4. Explain education, age, sex, race, and unions as factors of unemployment.
Unemployment tends to be greater among the very young, among blacks and other minorities, and among workers with few skills.
The unemployment rate for adult females tends to be higher than that for adult males.
Considering the great variations in unemployment for different groups in the population, we calculate separate unemployment rates for groups classified by sex, age, race, family status, and type of occupation.
Some would regard teenage unemployment a lesser evil than unemployment among adults, because most teenagers have parents or guardians on whom they can rely for subsistence.
5. Describe discouraged workers, categories of unemployed workers, and underemployment.
Discouraged workers: quit looking for a job, thinking that the chances of landing a job are very bleak. Individuals who have not actively sought work for four weeks are not counted as unemployed; instead, they fall out of the labor force.
Underemployment: you have more skills than the job you are in requires
6. Discuss the effect of changes in the minimum wage on unemployment.
At the minimum wage, the quantity of labor supplied grows because more people are willing to work at a higher wage.
However, the quantity of labor demanded falls because some employers would find it unprofitable to hire low-skilled workers at the higher wage.
Since minimum wage earners, a majority of whom are 25 years or younger, are a small portion of the labor force, most economists believe the effect of minimum wage on unemployment is small.
7. Describe the efficiency wage model’s effect on unemployment. efficiency wage model: based on the belief that higher wages lead to greater productivity. employers pay their employees more than the equilibrium wage to be more efficient.
Proponents of this theory suggest that it may lead to attracting the most productive workers, fewer job turnovers, and higher morale, which in turn can lead to lower hiring and training costs.
Since the efficiency wage rate is greater than the equilibrium wage rate, the quantity of labor supplied is greater than the quantity of labor demanded, resulting in greater amounts of unemployment.
If enough firms resort to paying the efficiency wage rate it leads to a surplus of workers who want jobs and cannot find them.
This, like a binding minimum wage, leads to unemployment.

*ratebuster
7.8% unemployment

Chapter 4 – Equal Employment Opportunity and Human Resources Management
1. independent contractors: occur when persons or companies are hired to perform work but who are not legal employees temporary workers: employed by a temp agency that the employer has contracted with, not a legal employee of the organization but can be determined to be an employee if they have been under direct control of the organization for some time employees: legal workers of the organization from whom the organization must withhold taxes
2. employment at will: provisions state that either party in the employment relationship can terminate that relationship at any time, regardless of cause exceptions: contracts, federal & state law, violations of public policy, implied contract, good faith & fair dealing
3. psychological contract: person’s perceptions about what each party owes the other in a relationship (perceived promises) transactional contract: parties have a brief and narrowly defined relationship that is primarily economic in focus relational contract: parties have a long term and widely defined relationship with a vast focus relevance to the management of human capital: when they are breached or violated, employees react very negatively
4. Discuss the likely effects on employees when they believe their psychological contracts have been breached.
Negative outcomes:
Attitudinal: decreased commitment, job satisfaction, trust, justice perceptions, and increased cynicism.
Behavioral: enhanced likelihood of turnover and deviant behavior, decreased job performance
5. Describe the different types of discrimination including guidelines on employee selection: define discrimination as use of any selection procedure which has an adverse impact on the hiring, promotion, or other employment or membership opportunities of members of any race, sex, or ethnic group will be considered to be discriminatory and inconsistent with these guidelines, unless the procedure has been validated in accordance with these guidelines (or, certain other provisions are satisfied). disparate treatment (restricted policy): An employer’s intentional unequal treatment or evaluation by different standards of protected-class members, situation in which protected class members receive unequal treatment or are evaluated by different standards adverse/disparate impact: According to the Uniform Guidelines, a selection program has an adverse impact when the selection rate for any racial, ethnic, or sex class is less than four-fifths (or 80 percent) of the rate of the class with the highest selection rate.
6. Calculate adverse/disparate impact. (4/5ths Rule)
-all about selection rates
1. Calculate the selection rates (S.R.) of each of the two employee groups you are interested in
-For example, men vs. women
-S.R. = Total # hired / Total # applied (for each group)
2. Compare the selection rates of two groups by calculating the “impact ratio” (I.R.):
S.R. of group with lower S.R.
I.R. = _____________________________
S.R. of group with higher S. R.
3. Determine if S.R.’s are substantially different
Occurs when the I.R. is less than .80, meaning that the S.R. of the group with the lower S.R. is less than 80% (4/5ths) that of the group with the higher S. R.
7. Discuss legal defenses to adverse impact and disparate treatment business necessity: work related practice necessary to the safe and efficient operation of an organization
Bona Fide Occupational Qualification (BFOQ): suitable defense against a discrimination charge only where age, religion, sex, or national origin is an actual qualification for performing the job
8. Understand EEOC recordkeeping and posting requirements and the process for filing a claim.
-Employees who believe they have been discriminated against may file a discrimination complaint, or charge form, with the EEOC.
-If a case is found, it is generally settled out of court. If it cannot be settled, the EEOC has the power to prosecute the organization in court.
-If no case is found, the EEOC may dismiss the charge. Here the claimant is issued a right-to-sue letter which permits the employee to file a private charge with the courts.
9. affirmative action: policy that goes beyond equal employment opportunity by requiring organizations to comply with the law and correct past discriminatory practices by increasing the numbers of minorities and women in specific positions basic steps in developing an affirmative action program:
1. issue a written EEO policy and an affirmative action commitment statement
2. publicize the policy and the organization’s affirmative action commitment
3. appoint a top official within the organization to direct and implement the program
4. survey minority and female employment by department and job classification
5. develop goals & timetables to improve utilization of minorities and women in each area in which under utilization has been identified
6. develop and implement specific programs to achieve goals
7. establish an internal audit and reporting system to monitor and evaluate progress in each aspect of the program
8. develop supportive in house and community programs
10. Discuss the legal definitions of sexual harassment quid pro quo: “submission to or rejection of sexual conduct is used as a basis for employment decisions”, involves a tangible or economic consequence, such as demotion or loss of pay hostile work environment: when unwelcome sexual conduct “has the purpose or effect of unreasonably interfering with job performance or creating an intimidating, hostile, or offensive working environment”
-Dirty jokes, vulgar slang, nude pictures, swearing, and personal ridicule and insult constitute sexual harassment when an employee finds them offensive.
-Courts use a “reasonable person” test for hostile environment.
11. List the major provisions of:
a. Title VII of the Civil Rights Act of 1964 and 1991: prohibits employment discrimination on the basis of race, color, religion, sex, or national origin, established the Equal Employment Opportunity Commission (EEOC) to enforce its provisions, applies to employers with 15 or more employees for twenty or more weeks per year
b. Executive Order 11246: extended Title VII to include government contractors with contracts exceeding $10,000, requires federal contractors to develop affirmative action plans to hire and promote disabled peopled
c. Age Discrimination in Employment Act of 1967: prohibits private and public employers from discriminating against those 40 & older in employment decisions because of age, only exception is when age is a BFOQ
d. Americans with Disabilities Act of 1990: defines a disability as a physical/mental impairment that substantially limits one or more of the major life activities, record of such impairment, being regarded as having such an impairment, requires employers to make a reasonable accommodation for disabled people
e. Fair Labor Standards Act of 1938: set a minimum wage, requires overtime pay (1.5 time) for hours worked over 40 hours/ week, established child labor provisions, jobs covered by the act are called non exempt and include most hourly non supervisory employees
f. Equal Pay Act of 1963: outlaws discrimination in pay, benefits, & pensions based on the employee’s gender, employers prohibited from paying employees of one gender at a rate lower than that paid to members of the other gender for doing equal work, equal work means they require substantially the same skill, effort, & responsibility under similar working conditions and in the same establishment, excludes seniority, merit, quantity/quality of production
g. Family and Medical Leave Act of 1993: require employers to provide employees up to 12 weeks of unpaid leave (job protection)
h. Occupational Safety and Health Act of 1973: created the Occupational Safety and Health Administration, develops and enforces mandatory job safety and health standards
-main provision of OSHA: each employer has a general duty to furnish each employee a place of employment free from recognized hazards that cause or are likely to cause death or serious physical harm (general duty clause)
Employees have the right to:
1. Request an inspection
2. Have a representative present at an inspection
3. Have dangerous substances identified
4. Be promptly informed about exposure to hazards and be given access to accurate records regarding exposures
5. Have employer violations posted at the work site

Chapter 5 – Personality, Perception, and Attribution
1. Define individual differences and identify the general categories of individual differences that are important in work organizations (including KSA’s and personality traits).
No two people are completely alike: knowledge, skills, abilities, personalities, perceptions, attitudes, emotions, ethics
-cognitive abilities are the single best test of abilities to perform
2. Describe the determinants of personality (heredity, environment, and situation) and identify the Big Five personality traits.
Situation: personality is generally stable, but thoughts, feelings, and behaviors may be influenced by situations
Strong situation: if there are strict norms, then personality is unlikely to manifest itself in behavior (cues to act)
Weak situation: personality is more likely to determine your behaviors (natural personality shows)
Heredity: increasing scientific evidence of genetic component to personality, 50%
Environment: influenced by life experiences (nurture- 50%)
Big Five:
Openness to experience: creative, curious, cultured, more likely to benefit from training
Conscientiousness: hardworking, organized, dependable, detail oriented *most strongly associated with overall job performance
Extraversion: gregarious, assertive, sociable, representing the way you prefer to interact with your environment
Agreeableness: cooperative, warm, too much is not good, good predictor of ability to work in a group
Neuroticism: (emotional stability), calm, self confident, cool
3. Describe how these influence individual behavior in organizations. core self-evaluations: broad set of personality traits that refers to self concept, broad evaluation of self, tells whether or not you will be happy & successful—locus of control: an individual’s generalized belief about internal versus external control (who controls your fate), self efficacy: person’s overall view of their ability to be successful at tasks, self esteem: person’s general feeling of self worth, emotional stability self-monitoring: extent to which people base their behavior on cues from other people and situations, ability to blend w/ situation, chameleon positive/negative affect: extent to which individuals focus on the positive or negative aspects of everything
4. Summarize the general nature of the perception process and explain how characteristics of the perceiver, the target, and the situation affect it. Ppt chart perception process: process of interpreting information about another person characteristics of the perceiver: familiarity with target, attitudes, mood, self-concept, cognitive structure characteristics of the target: physical appearance, verbal communication, nonverbal cues, intentions characteristics of the situation: context of the interaction, strength of situational cues
5. Describe strong and weak situations and how the type of situation interacts with personality to determine behavior.
Strong Situations: if situations are strong (i.e., there are strict norms for appropriate ways of thinking, feeling, or behaving), then personality is unlikely to manifest itself in behavior
Ex. A talkative person is more likely to be exhibit this characteristic in interactions with friends than when at church)
Weak Situations: in weak situations (i.e., no strict norms guiding your thoughts, feelings, behaviors), personality is more likely to determine your behaviors—WHO THEY ACTUALLY ARE
6. Identify the barriers to social perceptions.
Primacy effect: heavy weight given to first info
Recency effect: heavy weight given to most recent info
Stereotyping: all members of specific group share similar traits
Halo/horns effect: 1st impressions affecting objective evaluations
Projection: view others as having thoughts or feelings that we actually have
Selective perception: focus on some aspects of your environment while ignoring others
Expectancy effect: perceive stimuli mostly in ways that will confirm your expectations (self-fulfilling prophecy)
7. Explain the attribution process:
Attribution theory explains how we pinpoint the causes of our own behaviors and those of other people
Internal attributions are made to something within the individual’s control
“I failed/succeeded at this task because of something about me”
External attributions are made to sources beyond the individual’s control
“I failed/succeeded at this task because of someone or something other than me”
c. Explain how the attribution process might influence the management of human resource and the biases in the attribution process.
Fundamental attribution error
The tendency to attribute others’ actions to internal causes (e.g., their traits) while largely ignoring external factors that also may have influenced their behavior. Simultaneously, the tendency to attribute your own actions to external causes (e.g., your environment) while largely ignoring internal factors that also may have influenced your behavior
Self-serving bias
The tendency to make internal attributions for your successes and external attributions for your failures. This is a self-protective mechanism

Chapter 6 – Organizational Culture
1. Define the term organizational culture and identify the levels of culture.
Organizational culture: pattern of basic assumptions that are considered valid and that are taught to new members as the way to perceive, think, and feel in the organization

2. Explain the four functions of organizational culture within an organization.
-provides a sense of identity to members & increases commitment
-provides a way for employees to interpret the meaning of events
-reinforces the values in the organization
-serves as a control mechanism for shaping behavior
3. Describe the relationship between organizational culture and performance
Strong culture: a culture with a consensus on the values that drive the company and with an intensity that is recognizable even to outsiders
Strong cultures outperform other organizations: Goal alignment, High level of motivation, Control without bureaucracy
Fit Perspective:
-A culture is good only if it fits the industry or the firm’s strategy
-Useful in explaining short-term performance but not long-term performance
-Fails to explain how firms can adapt to environmental change adaptation perspective:
-Encourages confidence and risk taking
-Has leadership that produces change
-Focuses on the changing needs of customers
-Facilitates change to meet the needs of stockholders, customers, and employees
4. Explain the leader’s role in shaping and reinforcing culture.
-what leaders pay attention to
-how leaders react to crises
-how leaders behave
-how leaders allocate rewards
-how leaders hire and fire
5. organizational socialization: process by which newcomers are transformed from outsiders to effective members of the organization
-how new members learn the organization’s culture
Describe the three stages of the socialization process.
Anticipatory socialization: takes place prior to the 1st day of work, prior expectations realism and congruence
Encounter: newcomers learn tasks, clarify roles, establish relationships, interpersonal demands
Change & acquisition: begin to master demands of the job

6. Describe the individual and organization outcomes of successful socialization. good performance, high job satisfaction, intent to stay with organization, low levels of distress symptoms, high levels of organizational commitment, adoption of values and norms
7. Describe the two basic approaches to changing the existing organizational culture.
1. remove employees who are perpetuating the current culture and don’t hire any more who fit with current culture
2. seek employees who exemplify new culture & hire
8. Explain how an organization’s culture can impact the ethical behavior of organizational members.
Model ethical behavior, discuss ethical issues openly, establish trust, communicate boundaries of ethical conduct, select employees who support an ethical culture, reward ethical behavior, punish unethical behavior

Socialization and Training (Slides & Handout Only)
1. Discuss the relationship between HRM strategy and training.
Training: effort initiated by an organization to foster learning among its members, tends to be narrowly focused & oriented toward short term performance concerns
2. “firm-specific” skills: valuable only in particular organization, specific knowledge, employers assume cost “general” skills: could be used in multiple organizations, basic verbal, math & computer skills, employees assume cost
3. Discuss the advantages and disadvantages of firm-specific and general skills for employers and employees.
Employers often assume the cost of firm-specific skills training.
Employees often assume the cost of general skills training. Firms would prefer to hire general skills than train for them.
4. Explain the connection between the firm-specific skill/general skill typology and the two types of socialization/training (i.e. for KSAs, for Cultural Enrichment). For example, is KSA training more likely to involve firm-specific or general skills?
Training for KSA’s training directly related to job performance (firm specific) & more general skills training (grad school) employees motivated to engage in KSA training b/c it increases their external marketability and allows them to see a direct relationship between training and successful job performance
Training for Cultural Enrichment helps employees fit with the organizational culture employees less willing & motivated to engage in this type of training b/c they may perceive it as brainwashing and doesn’t increase their external marketability works best with highly committed & identified employees
5. List and discuss the four different forms of training evaluation.
Evaluate Training Programs Based On:
Participant Reactions simplest & most common approach questions for training participants include:
“What were your goals for this training?”, “Did you achieve them?”, “Would you recommend this program to others?”
Participant Learning check to see if participants have learned anything from the training pre-test to determine a baseline, also test those who do not attend for comparison purposes
Participant Behavior are trainees able to apply what they’ve learned to the job?
Training Results (ROI) calculate training benefits (quality improvements, profit & productivity increases

Chapter 7 –Creating High-Performance Work Systems (& Strategy & HR Planning Slides)
1. Describe and discuss Porter’s Strategy typology.
Cost Leadership: Attempts to achieve high performance through reducing costs associated with production or delivery of product or service (Wal-Mart)
Differentiation: Attempts to achieve high performance through differentiating products or services from those of competitors
Focus: Firm focuses on a smaller part of the market- a niche; can either be a cost leader or a differentiator
2. Describe the concept of “core capabilities.”
Capabilities: people as a strategic resource
Core Capabilities
Integrated knowledge sets in an organization that distinguish it from its competitors and deliver value to customers.

3. Identify and differentiate the criteria for a core capability (or resource) to become a source of sustained competitive advantage for an organization.
-Are valuable.
-Are rare and unavailable to competitors.
-Are difficult to imitate.
-Are organized for teamwork and cooperation.

4. Identify the two dimensions along which human capital differs in the human capital architecture.
Strategic value & uniqueness
-Some human resources can be a source of competitive advantage, while others are not
Knowledge Workers are a greater source of competitive advantage
-Different groups of employees have different value to the execution of business strategy and for competitive advantage
Different groups of employees should be managed differently
One work system is not sufficient throughout the organization

5. Identify the four types of workers based on the human capital architecture model.
Strategic Knowledge Workers
Employees who have unique skills that are directly linked to the company’s strategy.
Example: R&D scientists
Core Employees
Employees with skills to perform a predefined job that are quite valuable to a company, but not particularly unique or difficult to replace.
Example: salespeople
Supporting Labor
Employees whose skills are of less strategic value and generally available in the labor market.
Example: clerical workers
Alliance Partners
Individuals and groups with unique skills, but those skills are not directly related to a company’s core strategy.
Example: consultants
6. Identify the two generic HR strategies outlined in class
High Performance Work System (HWPS)
Is a specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill, commitment, and flexibility.
Is composed of many interrelated parts that complement one another to reach the goals of an organization, large or small.
Control-Oriented Work System
Is a specific combination of HR practices, work structures, and processes that minimizes employee knowledge and skill requirements, and seeks to limit the variability of performance across people.
7. Identify the components that make up a high performance work system, and those that make up a control-oriented system.
High Performance Work Systems
Egalitarianism and Engagement
Egalitarian work environments eliminate status and power differences and, in the process, increase collaboration and teamwork.
When this happens, productivity can improve if people who once worked in isolation from (or opposition to) one another begin to work together.
Shared Information
A shift away from the mentality of command and control toward one more focused on employee commitment.
Creating a culture of information sharing where employees are more willing (and able) to work toward the goals for the organization.
Knowledge Development
Employees in high-performance work systems need to learn in “real time,” on the job, using innovative new approaches to solve novel problems
The number of jobs requiring little knowledge and skill is declining while the number of jobs requiring greater knowledge and skill is growing rapidly.
Performance-Reward Linkage
It is important to align employee and organizational goals. When rewards are connected to performance, employees will naturally pursue outcomes that are mutually beneficial to themselves and the organization.

CONTROL ORIENTED
Egalitarianism and Engagement
Very little employee influence over “management” decisions
No formal employee complaint/ grievance mechanisms
Intense supervision/control
Shared Information
Little communication/socialization efforts
Very little performance information shared
Very little strategic information shared
Knowledge Development
Low skill requirements
Limited training efforts
Job tasks narrowly defined/standardized
Performance-Reward Linkage
Limited benefits
Relatively low wages
May have Incentive-based Individual Rewards
8. Describe how the components of a high performance work system, and other HR systems fit together (internal fit) to support (or not) business strategy (external fit).
The HR Scorecard
Assessing Internal fit
Do all internal elements of the HR system complement and reinforce one another?
Assessing HR Practices
Do HR practices significantly enable key workforce deliverables such as employment stability and teamwork?
Assessing External Fit
Are workforce deliverables connected with key strategic performance drivers?

Chapter 8 – Expanding the Talent Pool: Recruitment and Careers
1. Explain the overall goals of the recruitment process from the organization’s perspective.
Generate a large applicant pool: the larger the applicant pool, the more selective the organization can be
Generate a qualified applicant pool: Organizations try to generate a large applicant pool, but one that has many individuals who have the necessary KSAOs to perform the job. The more qualified the applicant pool, the better the chances are that a new hire will be successful.
2. Discuss the factors that influence the choice of recruiting method.
Labor Market conditions
Type of job and job requirements
Availability of sources
Past experience with recruiting
Budget constraints
Unionization
3. List and describe several recruiting methods an organization could use.
Direct applications
Word of mouth
Employee referrals
Job postings
Advertisements in newspapers and periodicals
Colleges and Universities
Public and private employment agencies
Internet
4. Discuss several pros and cons of both external and internal recruiting.
Pros: People with new ideas, Opportunity to buy talent (KSAs) on the market if it cannot be developed in-house, Possible reduced training expenses by hiring people with the appropriate KSAs, May still have to provide cultural/firm specific training, Enable the organization to more easily meet EEO goals
Cons: Organizations will make mistakes in hiring even when they use the best selection devices, Increased recruitment costs, It will take longer for organizations to fill the open positions, Possible resentment from current employees – due to perceived inequity
5. Explain how employment law influences recruiting.
Any advertisement should be screened to make sure it doesn’t contain references to any protected classification (e.g., age, race, religion, gender)
For example, avoid terms like: “recent college graduate”, ”young”
Organizations with affirmative action plans are likely to seek out recruitment sources that produce the most diverse applicant pool
Place ads (and search) in places where under-utilized minorities are likely to see them
6. Discuss the key features of a realistic job preview.
Portrays a realistic picture of the job
Positives and negatives
Videotape, on-site visit, presentation, description
Helps applicants select-out prior to starting.
Weeds out people who would not have been happy on the job
Makes applicants who accept more committed to their choice
They feel they knew what they were getting into
Helps new employees adjust, by giving them more information about the job before they begin
They already know about the negative aspects
Reduces turnover in the first few months
This turnover usually includes people who might not have taken the job had they had complete information
7. Identify why a realistic job preview might be useful for an organization.
Often used during the selection process so that applicants may opt out if they feel the job is not right for them

Chapter 9 – Employee Selection
1. Describe the overall goal of a selection system.
Maximize “hits”

2. Describe the two general employee selection models.
Person-job fit: job analysis identifies required individual competencies (KSAs) for job success.
Person-organization fit: the degree to which individuals are matched to the culture and values of the organization
3. Compare and contrast the different selection devices available to organizations.
Education, experience, physical characteristics, personal characteristics
Resumes & Applications
Quick, systematic way to obtain variety of info such as education, experience, convictions, references, etc
Applicants more likely to “stretch the truth” on resumes than applications
Biographical Information Blanks (BIB)
Reveal how applicant’s life experiences may have shaped behavior
Ask questions such as “at what age did you leave home” and “did you play sports as a child”
Valid/useful in predicting future performance, turnover, & theft
Background/Reference Checks
Prevent negligent hiring but do pose privacy concerns
Only somewhat valid sources of info on applicants (applicants only list individuals who will provide a positive reference)
Polygraph Tests
Measure changes in breathing, blood pressure, pulse. Have raised many objections. Questionable validity
Used by military & law enforcement agencies
Honesty & Integrity Tests
Valid predictors of counterproductive work behaviors. Uncorrelated with intelligence
Most valid for high complexity jobs
Graphology
Very low validity
Interviews
Extremely valid if used correctly, Often used incorrectly. (Discussed in more detail later in slideshow)
4. Describe the characteristics of different types of selection interviews.
Nondirective Interview
The applicant determines the course of the discussion, while the interviewer refrains from influencing the applicant’s remarks.
Structured Interview
An interview in which a set of standardized questions having an established set of answers is used.
Situational Interview
An interview in which an applicant is given a hypothetical incident and asked how he or she would respond to it.
Behavioral Description Interview (BDI)
An interview in which an applicant is asked questions about what he or she actually did in a given situation.
Panel and Sequential Interview
An interview in which a board of interviewers questions and observes a single candidate.
5. Define and describe what is meant by “reliability” and “validity” in the context of selection devices.
Reliability: degree to which interviews, tests, and other selection procedures yield comparable data over time and alternative measures.
Validity: Degree to which a test or selection procedure measures a person’s attributes.
6. Describe and differentiate the two criterion-related validation strategies.
Predictive Validity: correlates pre-employment test scores and eventual job performance
Concurrent Validity: correlates employment tests with current job performance
7. Identify the four types of outcomes that result in the use of a selection device
True positives: those thought to succeed on the job as a result of having passed the selection test and who have performed satisfactorily
True negatives: those who were correctly rejected based on the measure because they would not be successful
False negative: when people are rejected as a result of selection test failure, but would have performed well on the job
False positive: individuals who are selected for having passed the selection measure but do not make successful employees
**8. Compare the relative merits of different methods of combining information from different selection devices to make selection decisions (compensatory, noncompensatory, etc.)
Used together, the tools more accurately predict the applicant’s performance than either tool used alone. The amount of predictive validity one tool adds relative to another is incremental validity of the tool. Incremental validity is important to know because if an assessment has low validity by itself, it has the potential to add significantly to the prediction of job performance when joined with another measure.
9. Identify the methods of combining information during selection as either compensatory or non-compensatory.
Compensatory Approach
Permits a high score in one area to make up for a low score in another area
Key issue is how to weight each predictor
Non-Compensatory Approach
Minimum score must be obtained on each predictor
Key issue is when to collect predictor information:
Multiple Cutoff Model
Collect info on all predictors at one time.
Multiple Hurdle Model
Only applicants with sufficiently high scores at each selection stage go on to subsequent stages in the selection process.

Chapter 10– Motivation at Work
Define the principal, the agent, and the relationship between them.
Principals (an organization, person or group of persons)
The individual(s) attempting to influence the agent into engaging in specific behavior
Usually the owner(s) of the business (can apply to upper management, but they are also agents)
Agents
The employee whose behavior is needed to make the good or provide the service
Discuss how agent’s and principal’s interests may differ in attempts to maximize utility. Explain how these interests affect motivation and employer profits.
Principals and Agents are self-interested
They want to maximize their own utility
Principal and Agent interests are not inherently consistent
The objective of the Principals is to align the interests of the agent with their own
There are usually costs involved in aligning the interests (Agency Costs)
Agents decide how much effort to put forth on the job
This is a function of their utility functions and opportunity costs
General utility function
Utility = U(e,w(e), po(e)) e – effort w – wages (total compensation) po – psychological outcomes
Identify the factors that the employer is able to control as well as the constraints he or she faces when trying to motivate employee effort.
Motivation
The process of arousing and sustaining goal directed behavior.
Performance = f(ability x motivation)
Individual performance
Theories of motivation
Attempt to explain and predict observable behavior
3 theories of motivation classification
Internal
Process
External
Motivation concerns creating a psychological state and is one of the more complex topics in organizational behavior
Internal=primary consideration to variables within the individual that impact motivation and behavior (Maslow’s Hierarchy of Needs Theory)
Process = emphasize the nature of the interaction between the individual and the environment (Expectancy Theory)
External= Focus on the elements in the environment including consequences of behavior as the basis for understanding and explaining peoples behavior at work
Max Webber- Meaning of work lay not in the work it’s self but in it’s deeper potential for contributing to a person’s ultimate salvation
Calvinistic Perspective-Protestant ethic was the fuel for human industrious.
Freud- A person’s organizational life was founded on the compulsion to work and the power of love
Much of human motivation is unconscious by nature
Peoples deeper feelings may transcend culture
Internal needs and external incentives play an important role in motivation
Calvinistic-People should work hard because those who prospered at work were more likely to find a place in heaven
Freud – psychoanalysis to delve into a person’s mind to better understand a person’s motives and needs.
Psychodynamic Theory- offers explanation for irrational and destructive behavior ( suicide, workplace Violence) = their unconscious needs and motives and work place deviant behavior (WDB) = negative impact on business performance External Incentives- People are motivated by self interest for economic gain to provide the necessities and convenience of life Thus employees are most motivated by self interest (What is in the best interest and benefit to an individual)
Modern management practices such as flexible benefit packages and stock ownership plans emphasis external incentives= Employee Recognition and Ownership
Four Intrinsic Drivers or needs underlie employee motivation, To : acquire, bond, comprehend, and defend
Intrinsic work motivation is linked to to spill over effects from work to home
1. Describe Maslow’s Hierarchy of Needs and how it may influence employee behavior.
Maslow suggested we work to satisfy lower level needs before the higher level needs become motivating to us
Needs (high to low)
Self-actualization (self-fulfillment)
Esteem (achievement, self-worth, respect)
Social/Affiliation (friendship, love, belonging)
Safety (security, stability, absence of pain)
Physiological (food, water, air)
2. Compare and contrast Theory X and Theory Y.
Theory x: (physiological needs, safety & security needs), people lack ambition, dislike responsibility
Theory Y: (love/social, esteem, self actualization), capacity for assuming responsibility is within people
3. Describe the three needs of McClelland’s Needs Theory (achievement, power and affiliation).
Achievement: excellence, competition, challenging goals, persistence, overcoming difficulties, high need for achievement leads to better overall performance
Power: make an impact, influence others, change people, make a difference
Affiliation: establishing warm, close, intimate relationships with others
4. Explain the difference between motivation factors and hygiene factors according to
Herzberg’s Motivator-Hygiene Theory and how these factor influence employee behavior.
Motivation factors: work conditions related to satisfaction of the need for psychological growth
-work itself, recognition, advancement, responsibility
Hygiene factors: work conditions related to dissatisfaction caused by discomfort or pain
-salary, working conditions, interpersonal relations
5. Explain the basic principles of Equity theory.
Equity theory: a social exchange process theory of motivation that focuses on individual-environment interaction
Focus is on an individual’s feelings of how fairly he or she is treated in comparison with others based on demands and contributions
Key ratio
Individual inputs
Individual outcomes
Comparison/referent other
Inequity exists when a person’s inputs are more/less or outcomes are more/less than the referent other
6. Compare and contrast distributive justice and procedural justice.
Distributive justice: the extent to which individuals believe that the outcomes they receive are just/fair, this is what equity theory focuses on
Procedural justice: the degree to which processes used to reach a distribution are perceived as fair
Procedural Justice is influenced by
Consistency
Are procedures consistent across people?
Bias suppression
Are decisions influenced by decision-maker’s self-interest?
Accuracy
Are decisions based on accurate information?
Correctability
Are there opportunities to modify bad decisions (grievance systems)?
Representativeness
Are the interests and concerns of all represented?
Ethicality
Are decisions/practices consistent with moral and ethical standards?
7. Identify and explain factors that influence procedural justice perceptions
1. Consistency: Whether procedures are consistent across people and over time
2. Accuracy: Whether decisions are based on good information
3. Bias suppression: Whether decision makers are influenced by self-interest
4. Representativeness: Whether processes represent the concerns of all important subgroups
5. Ethicality: Whether processes are compatible with prevailing moral and ethical standards
6. Correctability: Are there opportunities to modify bad decisions? (a grievance system)
8. Explain why Expectancy Theory is the most comprehensive of motivation theories and how other theories can be incorporated within Expectancy Theory.
Expectancy and instrumentality concern a person’s beliefs about how effort, performance, and rewards are related
. People are motivated to work when they believe they can get what they want from their job
Maximize individual utility function
Three main components
Valence
E – P Expectancy (E1)
P – O Expectancy (E2)
Focuses on predicting the level of effort
Peoples beliefs vary on the impact of the components
Focus is on personal perception of the performance process
People desire certain outcomes of behavior and performance (rewards and consequences)
People believe that there are relationships among the effort they put forth, the performance they receive, and the outcomes the receive

Chapter 11 – Learning & Performance Management
1. Define and distinguish between different types of reinforcement (positive reinforcement, negative reinforcement, punishment, extinction).
Positive: pleasant consequence follows desired behavior
Negative: unpleasant consequence is removed following desired behavior
Extinction: attempt to weaken a behavior by attaching no positive or negative consequences to it

2. Explain how goal-setting can be an effective tool for managers.
-Increase work motivation & task performance
-Gives purpose, responsibility, goals must be attainable, worked on by individual and group, reflects goals of company, challenges workers, gives them purpose.

Chapter 12 – Performance Management and the Employee Appraisal Process
1. List and differentiate the three main purposes for performance appraisal.
1. Strategic
Developing measures and feedback systems that push employees to engage in behaviors and produce results
2. Administrative
Used in personnel decisions (pay raises, layoffs, etc.)
3. Developmental
Provide feedback, improve communication, evaluate goal achievement
2. Describe and differentiate the standards by which to judge performance measures.
Strategic Relevance: individual standards directly relate to strategic goals
-performance standards linked to organizational goals & competencies
Criterion Deficiency: occurs when standards don’t capture all of an individual’s contributions. Focus on minimizing this.
-aspects of actual performance that are not measured
Criterion Contamination: occurs when performance capability is reduced by external factors. Focus on minimizing this.
-elements that affect the appraisal measures that are not part of the actual performance
Reliability (Consistency): standards are quantifiable, measurable, and stable
-measures that are consistent across raters and over time

3. Discuss in general the idea of assessing behavior and/or results
Performance Appraisal
A process, typically performed annually by a supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success.
Trait-Based Methods
Graphic Rating Scale-rated according to a scale of characteristics
Mixed Standard Scale
Essay Method- Compose Statements
4. Discuss several factors (e.g. structure of job, cost, and fairness) that influence a firm’s choice of a behavior or results-based assessment.
Results Based Methods
Productivity Measures
Appraisals based on quantitative measures
(e.g., sales volume) that directly link what employees accomplish to results beneficial to the organization.
Criterion contamination
Focus on short-term results
Management by Objectives (MBO)
A philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager.
Behavior Based Methods
Critical Incident Method
Critical incident
An unusual event that denotes superior or inferior employee performance in some part of the job
The manager keeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to how well they perform.
Behaviorally Anchored Rating Scale (BARS)
Consists of a series of vertical scales, one for each dimension of job performance; typically developed by a committee that includes both subordinates and managers.
Behavior Observation Scale (BOS)
A performance appraisal that measures the frequency of observed behavior (critical incidents).
Preferred over BARS for maintaining objectivity, distinguishing good performers from poor performers, providing feedback, and identifying training needs.

5. List and describe several rating errors that might influence performance ratings
Error of Central Tendency
A rating error in which all employees are rated about average.
Leniency or Strictness Error
A rating error in which the appraiser tends to give all employees either unusually high or unusually low ratings.
Similar-to-Me Error
An error in which an appraiser inflates the evaluation of an employee because of a mutual personal connection.
Recency Error
A rating error in which appraisal is based largely on an employee’s most recent behavior rather than on behavior throughout the appraisal period.
Contrast Error
A rating error in which an employee’s evaluation is biased either upward or downward because of comparison with another employee just previously evaluated.
Halo/Horns Error
A rating error in which an appraiser’s evaluation of an employee’s performance is biased/skewed because of the appraiser’s overall impression of the employee as good (halo error) or bad (horns error).
6. Discuss methods to improve subjective performance appraisals.
Establishing an Appraisal Plan
Provide an explanation of the performance appraisal system’s objectives so that raters will understand the compensation and development purposes for which the appraisal is to be used.
Explain the mechanics of the rating system
How frequently the appraisals are to be conducted
Who will conduct them
What are the standards of performance.
Alert raters to the weaknesses and problems of appraisal systems so that they can be avoided.
Rating Error Training
Observe other managers making errors
Actively participate in discovering their own errors
Practice job-related tasks to reduce the errors they tend to make
Feedback Skills Training
Communicating effectively
Diagnosing the root causes of performance problems
Setting goals and objectives

Chapter 13 – Managing Compensation
1. Explain the types of compensation (hourly/salary, nonexempt/exempt).
Hourly: work paid on an hourly basis
Salary: compensation is computed on the basis of weekly, biweekly, or monthly pay periods
Piecework: work paid according to the number of units produced
Nonexempt: employees covered by the overtime provisions of the Fair Labor Standards Act, must be paid time and a half their regular pay for all work performed after 40 regular hours
Exempt: employees not covered in the overtime provisions of the Fair Labor Standards Act, managers, supervisors, and white-collar professional employees are exempted on the basis of their exercise of independent judgment
2. List and discuss the internal and external factors that influence the wage mix.
Internal Factors
Employer’s Compensation Strategy
Establishes the internal wage relationship among jobs and skill levels
Sets organization compensation policy to lead, lag, or match competitors’ pay.
Rewards employee performance
Guides administrative decisions concerning elements of the pay system such as overtime premiums, payment periods, and short-term or long-term incentives.
Worth of a Job
Establishing the internal wage relationship among jobs and skill levels
Employee’s Relative Worth
Rewarding individual employee performance
Employer’s Ability-to-Pay
Having the resources and profits to pay employees.
External Factors
Labor Market Conditions
Availability and quality of potential employees is affected by economic conditions, government regulations and policies, and the presence of unions.
Area Wage Rates
A firm’s formal wage structure of rates is influenced by those being paid by other area employers for comparable jobs.
Cost of Living
Local housing and environmental conditions can cause wide variations in the cost of living for employees.
Inflation can require that compensation rates be adjusted upward periodically to help employees maintain their purchasing power.
Consumer Price Index (CPI)
A Bureau of Labor Statistics measure of the average change in prices over time in a fixed “market basket” of goods and services
Collective Bargaining
Escalator clauses in labor agreements provide for quarterly upward cost-of-living (COLA) wage adjustments for inflation to protect employees’ purchasing power.
Unions bargain for real wage increases that raise the standard of living for their members.
Real wages are increases larger than rises in the consumer price index; that is, the real earning power of wages

3. Compare and contrast internal and external equity.
Pay Equity (also Distributive Fairness/Justice)
An employee’s perception that compensation received is equal to the value of the work performed.
Internal pay equity – fairness of your pay relative to others in the organization
External pay equity – fairness of your pay relative to others in the labor market
4. Identify and explain methods of job evaluation
Job Evaluation
The systematic process of determining the relative worth of jobs in order to establish which jobs should be paid more than others within an organization
Job Ranking System
Oldest system of job evaluation by which jobs are arrayed on the basis of their relative worth.
Disadvantages
Does not provide a precise measure of each job’s worth.
Final job rankings indicate the relative importance of jobs, not the extent of differences between jobs.
Method can used to consider only a reasonably small number of jobs.
Job Classification system
A system of job evaluation in which jobs are classified and grouped according to a series of predetermined wage grades.
Successive grades require increasing amounts of job responsibility, skill, knowledge, ability, or other factors selected to compare jobs.
Point System
A quantitative job evaluation procedure that determines the relative value of a job by the total points assigned to it.
Permits jobs to be evaluated quantitatively on the basis of factors or elements—compensable factors—that constitute the job.
The Point Manual
A handbook that contains a description of the compensable factors and the degrees to which these factors may exist within the jobs.
5. Describe how an organization would conduct a job evaluation using the point method.
6. Describe the major issues involved in collecting market wage data.
Pay Secrecy
An organizational policy prohibiting employees from revealing their compensation information to anyone.
Creates misperceptions and distrust of compensation fairness and pay-for-performance standards.
7. Describe how and why an organization combines job evaluation and market wage data to produce a compensation system.
Employer’s Compensation Strategy
Establishes the internal wage relationship among jobs and skill levels
Sets organization compensation policy to lead, lag, or match competitors’ pay.
Rewards employee performance
Guides administrative decisions concerning elements of the pay system such as overtime premiums, payment periods, and short-term or long-term incentives.
8. Discuss the issues of broadbanding and wage compression.
Broadbanding
Collapses many traditional salary grades into a few wide salary bands.
Wage-Rate Compression
Compression of pay between new and experienced employees caused by the higher starting salaries of new employees; also the differential between hourly workers and their Managers.

Chapter 14 – Pay-for-Performance: Incentive Rewards
1. Explain the difference between a bonus and a raise.
Bonus
Incentive payment that is supplemental to the base wage for cost reduction, quality improvement, or other performance criteria.
Merit Pay Program (Merit Raise)
Links an increase in base pay to how successfully an employee achieved some objective performance standard.
2. Describe the pros and cons of specific individual incentive plans:
a. Contrast the differences between straight piecework, differential piece rate, and standard hour plans.
Straight Piecework
An incentive plan under which employees receive a certain rate for each unit produced.
Differential Piece Rate
A compensation rate under which employees whose production exceeds the standard amount of output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard amount.
Problems with piecework systems:
Are not always an effective motivator
Piecework standards can be difficult to develop.
Individual contributions can be difficult measure.
Not easily applied to work that is highly mechanized with little employee control over output.
Piecework may conflict with organizational culture (teamwork) and/or group norms (“rate busting”).
When quality is more important than quantity.
When technology changes are frequent.
Standard Hour Plan
An incentive plan that sets pay rates based on the completion of a job in a predetermined “standard time.”
If employees finish the work in less than the expected time, their pay is still based on the standard time for the job multiplied by their hourly rate.
b. Differentiate between merit raises and lump sum merit pay and explain the common problems with merit pay programs.
Lump sum merit pay: program under which employees receive year end merit payment, not added to base pay
Merit Pay Program (Merit Raise)
Links an increase in base pay to how successfully an employee achieved some objective performance standard.
Merit Guidelines
Guidelines for awarding merit raises that are tied to performance objectives.
Problems
Money for merit increases may be inadequate to satisfactorily raise all employees’ base pay.
Managers may have no guidance in how to define and measure performance; there may be vagueness regarding merit award criteria.
Employees may not believe that their compensation is tied to effort and performance; they may be unable to differentiate between merit pay and other types of pay increases.
Employees and their managers may hold different views of the factors that contribute to job success.
Merit pay plans may create feelings of pay inequity.

c. Describe the different types of sale incentive plans
Straight Salary Plan
Compensation plan that permits salespeople to be paid for performing various duties that are not reflected immediately in their sales volume.
Advantages:
Encourages building customer relationships.
Provides compensation during periods of poor sales.
Disadvantage:
May not provide sufficient motivation for maximizing sales volume.
Straight Commission Plan
Compensation plan based upon a percentage of sales.
Draw is a cash advance that must be paid back as commissions are earned.
Disadvantages:
Salespeople will stress high-priced products.
Customer service after the sale is likely to be neglected.
Earnings tend to fluctuate widely between good and poor periods of business, an turnover of trained sales employees tends to increase in poor periods.
Salespeople are tempted to grant price concessions.
Combined Salary and Commission Plan
A compensation plan that includes a straight salary and a commission component (“leverage”).
Advantages:
Combines the advantages of straight salary and straight commission forms of compensation.
Offers greater design flexibility
Can be used to develop the most favorable ratio of selling expense to sales.
Motivates sales force to achieve specific company marketing objectives in addition to sales volume.

3. Describe the pros and cons group incentive plans:
a. Differentiate between team compensation and individual incentive plans
Team Incentive Plans
Compensation plans where all team members receive an incentive bonus payment when production or service standards are met or exceeded.
Advantages
Team incentives support group planning and problem solving, thereby building a team culture.
The contributions of individual employees depend on group cooperation.
Team incentives can broaden the scope of the contribution that employees are motivated to make.
Team bonuses tend to reduce employee jealousies and complaints over “tight” or “loose” individual standards.
Team incentives encourage cross-training and the acquiring of new interpersonal competencies.
Disadvantages
Individual team members may perceive that “their” efforts contribute little to team success or to the attainment of the incentive bonus.
Intergroup social problems—pressure to limit performance and the “free-ride” effect may arise.
Complex payout formulas can be difficult for team members to understand.

b. Understand gainsharing – Differentiate how gains may be shared with employees under the Scanlon and Improshare gainsharing systems.
Gainsharing Plans
Programs under which both employees and the organization share the financial gains according to a predetermined formula that reflects improved productivity and profitability.
Increase in productivity is gained when:
Greater output is obtained with less or equal input.
Equal production output is obtained with less input.
Scanlon plan: rewards come from employee participation in improving productivity and reducing costs
Improshare: gainsharing based on increases in productivity of the standard hour output of work teams 4. Describe the pros and cons of enterprise incentive plans:
a. Differentiate between profit sharing plans and explain advantages and disadvantages of these programs.
Profit Sharing
Any procedure by which an employer pays, or makes available to all regular employees, in addition to their base pay, current or deferred sums based upon the profits of the enterprise.
Challenges:
Agreement over the percentages of shared of profits and the forms of distribution (cash or deferred) of profits between company and employees
Annual variations and possibility of no payout due to financial condition of company
Maintaining motivational connection of profit-sharing to performance of employees
b. Describe the main types of ESOP plans and discuss the advantages of ESOP to employers and employees.
Employee Stock Ownership Plans (ESOPs)
Stock plans in which an organization contributes shares of its stock to an established trust for the purpose of stock purchases by its employees.
The employer establishes an ESOP trust that qualifies as a tax-exempt employee trust under Section 401(a) of the Internal Revenue Code
Stock bonus plans are funded by direct employer contributions of its stock or cash to purchase its stock.
Leveraged plans are funded by employer borrowing to purchase its stock for the ESOP.
Advantages: retirement benefits, pride of ownership, deferred taxes
Disadvantages: liquidity and value, single funding basis, not insured

5. Describe executive compensation components, and explain how stock options work.
Executive compensation: CEO to employee pay ratio is 300: 1 in 2003
Stock Options
Granting employees the right to purchase a specific number of shares of the company’s stock at a guaranteed price (the option price) during a designated time period.
The value of an option is subject to stock market conditions at the time that option is exercised.

Chapter 15 – Jobs and the Design of Work
1. Define “job design.”
The formal and informal specification of task-related activities assigned to and carried out by a worker
Intended to increase worker productivity and satisfaction
An outgrowth of job analysis that improves jobs through technological and human considerations in order to enhance organization efficiency and employee job satisfaction
2. Compare and contrast “job” and “work.”
Work: mental or physical activity that produces some result
Job: pieces of work are combined to form jobs
3. Identify the classical approaches to job design and explain each
1. Craft
Primary approach pre-Industrial Revolution
Single skilled worker designed and built products one at a time from beginning to end
2. Classical (scientific management)
Divided the work into a small number of simple, repetitive tasks and called them jobs
Specialization, standardization, and simplification
Enhances productivity, efficiency, and control
Critics say it leads to withdrawal and resistance
3. Job enlargement
The process of adding a greater variety of tasks to a job.
4. Job rotation a process whereby employees rotate in and out of different jobs.
5. Job enrichment
Enhancing a job by adding more meaningful tasks and duties to make the work more rewarding or satisfying
4. Explain the basic principles of the Job Characteristics Theory.
Assumes that internal (intrinsic) motivation can be achieved through the design of jobs
There are five “core job characteristics” that are the levers through which jobs influence motivation
These core job characteristics influence internal motivation through psychological processes
The psychological processes combine to influence personal and work outcomes five core job characteristics
Skill Variety
The degree to which a job requires a variety of different activities in carrying out the work and involves the use of a number of different skills and talents of the person
Task Identity
The degree to which a job requires completion of a “whole” and identifiable piece of work, that is, doing a job from beginning to end
Task Significance
The degree to which the job has a substantial impact on the lives of other people, whether those people are in the immediate organization or in the world at large
Autonomy
The degree to which the job provides substantial freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out.
Feedback from the job
The degree to which carrying out the work activities required by the job provides the individual with direct and clear information about the effectiveness of his or her performance. critical psychological states
Experienced meaningfulness of the work
Determined by the skill variety, task identity, and task significance
Experienced responsibility for outcomes of the work
Determined by task autonomy
Knowledge of the actual results of the work activities
Determined by feedback
Personal and Work Outcomes of JCM
High levels of work motivation
High levels of job satisfaction
High-quality work performance
Low levels of absenteeism, tardiness, and turnover
Role of Growth Need Strength (GNS) in JCM
Intensity of an employee’s motivation to satisfy their growth needs within the work context
People with high GNS are seen as more sensitive to the level of the core job characteristics
People with high GNS should react more favorably to high levels of psychological states
Motivating Potential Score
A mathematical index describing the degree to which a job is designed so as to motivate people, as suggested by the job characteristics model. It is computed on the basis of a questionnaire known as the Job Diagnostic Survey (JDS).
The lower the MPS, the more the job may stand to benefit from redesign.
5. Describe how what others tell a person about a job shapes the worker’s perceptions about the job (Social Information Processing)
The way others view our jobs give us a sense of whether it’s important or not. If it appears vital we are more likely to work harder and take pride in what we do. It’s had to have the same motivation being a waiter and a CEO.

6.Discuss three contemporary issues involving work design.
Telecommuting
Working at least part of the time from a different location
Alternative work patterns
Job sharing
Flextime
Technology’s influence
Virtual office
Alternative control systems
“Technostress”
Task Revision
Skill Development

Chapter 16 – Work Teams and Groups
1. Differentiate between groups and work teams. Identify the fundamental characteristics of an effective group.
Groups: 2 or more people with common interests, objectives, and continuing interaction
Work teams: group of people with complementary skills who are committed to a common mission, performance goals, & approach for which they hold themselves mutually accountable
Characteristics: relaxed atmosphere, task is understood & accepted, members listen to each other, people express feelings & ideas, conflict centered around ideas not personalities, group is aware of operation & function, decisions based on consensus, assignments are accepted by members
2. Norms: standards that a work group uses to evaluate the behavior of its members
Group cohesion: “interpersonal glue” that makes members of a group stick together
Social loafing: failure of a group member to contribute personal time, effort, thoughts, or other resources to the group
Grouphthink: phenomenon that occurs due to conflict aversion and need for cohesion within groups—group members begin to think alike, losing individuality and preventing the necessary evaluation of viable decision alternatives
Loss of individuality: social process in which individual group members lose self awareness and its accompanying sense of accountability, inhibition, and responsibility for individual behavior
3. Explain the importance of diversity in work groups.
Diversity is a key issue in formal group formation—ethnic, gender, cultural, interpersonal
**4. Tuckman’s model of group formation:
Forming: little agreement, unclear purpose, guidance and direction
Storming: conflict, increased clarity of purpose, power struggles, coaching
Norming: agreement and consensus, clear roles and responsibilities, facilitation
Performing: clear vision and purpose, focus on goal achievement, delegation
Adjourning: task completion, good feeling about achievements, recognition

punctuated equilibrium model: groups do not progress linearly from one step to another in a predetermined sequence, alternate between periods of inertia punctuated by bursts of energy as the work group develops
5. characteristics of a mature group: clear purpose and mission, well understood norms and standards of conduct, high level of group cohesion, flexible status structure
6. Task functions: activities directly related to the effective completion of the team’s work
Maintenance functions: activities essential to the effective, satisfying interpersonal relationships within a group
7. Discuss the role of diversity and creativity in work teams.
Creativity can be enhanced by: increasing diversity in teams, brainwriting, training of facilitators, changing membership in teams, electronic brainstorming, building a playground

Chapter 17 – Leadership and Followership
1. Define “leadership” and explain how being a leader is different from being a manager.
Leadership: process of guiding and directing the behavior of people in the work environment

Leaders agitate for change and new approaches
Create uncertainty and change
Managers advocate stability and the status quo
Reduce uncertainty and stabilize
Strategic leaders embody both the stability of managers and the visionary abilities of leaders

2. Describe the two basic leadership styles identified by the Ohio State studies, and Michigan studies.
Ohio State studies
Initiating structure and consideration dimensions of leader behavior
Michigan studies
Production oriented and employee oriented leadership styles
Ohio

Michigan

3. Describe the leadership styles identified by the Leadership Grid and explain why team manager (9,9) is the “best style of managerial behavior.”

4. Discuss the “right situations” for low and high LPC leaders according to Fiedler’s Contingency theory.
The fit between the leader’s need structure and the favorableness of the leader’s situation determines the team’s effectiveness
A leader’s need structure is either task-oriented or relationship-oriented
The favorableness of the leader’s situation is characterized according to
The leader’s position power
The structure of the team’s task
The quality of leader–follower relationships
Least Preferred Coworker (LPC) Scale
Positive terms = relationship-oriented
Negative terms = task-oriented
Situational Favorableness
Task structure- degree of clarity or ambiguity in the assigned work activities
Position power- The authority associated with the leaders formal position in the organization
Leader-member relations- The quality of interpersonal relationships among the leader and and group members

-Task oriented are gratified by accomplishing task
-Relationship oriented are gratified by developing good comfortable interpersonal relationships
Projective technique through which a leader is asked to think about the person who he/she can work the least well with using 16 8 point scales those that use positive terms to describe their LPC are relationship oriented and those who use negative terms are low lpc and are task oriented

Situational – based on the 3 the situation is either favorable or unfavorable for the leader

5. Explain how followers and the work environment influence the appropriate leader behavior style in the Path Goal Theory.

6. Identify the personal and organizational outcomes of in-group members vs. out-group members in the Leader Member Exchange Theory.
LMX: Leader Member Exchange Theory, Leaders form two groups of followers
i. In-groups
1. Similar to leader, greater responsibilities, more rewards, more attention
2. More likely to engage in organizational citizenship behavior ii. Out-groups
1. Outside the circle, less attention, fewer rewards, managed by formal rules
2. More likely to retaliate against the organization

7. Discuss how follower maturity is an important determinant of leadership style according to the Situational Leadership Model
-Suggest that the leaders behavior should be adjusted to the maturity level of the followers.
-Readiness – ability and willingness to complete a specific task

8. Identify neutralizers of and substitutes for leadership. Explain why some situations do not require leadership behaviors.
Substitutes: satisfying task, performance feedback, high skill, team cohesiveness, formal controls, customers
9. Compare and contrast transformational, visionary, and charismatic leadership. All included in authentic leadership transformational: charisma, individualized consideration, inspirational motivation, intellectual stimulation visionary: charismatic: uses the force of personal abilities and talents to have profound and extraordinary effects on followers
10. Discuss some of the emerging issues in leadership.
Emotional intelligence—the ability to recognize and manage emotions in oneself and others
Trust—the willingness to be vulnerable to actions of another
Servant leadership—the philosophy that leaders lead by serving others
11. Know the two dimensions on which the four types of followers differ.
Critical thinking and active or passive

Chapter 18 – Attitudes, Emotions, and Ethics
1. job satisfaction: a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences
2. job dissatisfaction may lead to: lower performance, tardiness, absenteeism, turnover, lower organizational commitment, fewer organizational citizenship behaviors
3. sources of job dissatisfaction factors related to the physical and social environment: Temperature extremes, Lighting requirements, Sick-building syndrome, Supervisors and co-workers, Social support, Social density personal dispositions: negative affectivity, type A personality task characteristics: task complexity: positive relationship between complexity and satisfaction, task meaningfulness, physical strain organizational role issue: role ambiguity: lack of clarity, role conflict: conflicting/incompatible demands, role scope: absolute number of expectations for the person occupying a role
4. Organizational commitment: strength of an individual’s identification with an organization affective commitment: an employee’s intention to remain in an organization because of a strong desire to do so continuance commitment: an employee’s tendency to remain in an organization because he or she cannot afford to leave normative commitment: a perceived obligation to remain with the organization organizational citizenship behaviors: voluntary behavior above and beyond the call of duty
5. Discuss the actions through which organizations can minimize dissatisfaction at work.
Learn more about the values of other peoples
Avoid prejudging the business customs of others as immoral or corrupt
Find legitimate ways to operate within others’ ethical points of view and don’t demand that they operate within your value system
Avoid rationalizing “borderline” actions
Refuse to do business when stakeholder actions violate or compromise laws or fundamental organizational values
Conduct relationships as openly and aboveboard as possible

Chapter 19 – Stress and Well-Being at Work
6. stress: unconscious preparation to fight or flee that a person experiences when faced with any demand stressor: person or event that triggers the stress response distress/strain: adverse psychological, physical, and organizational consequences that may occur as a result of stressful events
7. Explain the general adaptation model of stress.
1. alarm stage: person identifies the threat 2. Resistance stage: person becomes resilient to the pressures created by the original threat 3. Exhaustion stage: person cannot adapt to continuing stress

8. Define the term “burnout.”
Physical Exhaustion : Includes low energy levels and feeling tired much of the time, as well as symptoms of physical strain such as frequent headaches, nausea, poor sleep, and changes in eating habits
Emotional Exhaustion: Depression, feelings of helplessness, and feelings of being trapped
Depersonalization: A pattern of behavior marked by becoming cynical toward others, treating others as objects, and holding negative attitudes toward others
Feelings of Low Personal Accomplishment
9. Identify and describe the costs of stress in work organizations.
Costs of stress: psychological disorders, illnesses, behavioral problems, participation problems, performance decrements, compensation awards

Eustress: healthy, normal stress
10. Identify and describe the sources of work stress, including factors related to the physical and social environment, personal dispositions, task characteristics, and organizational role issues.
Good person-environment fit: a person’s skills and abilities match a clearly defined, consistent set of role expectations
Stress, strain, and depression occur when
Role expectations are confusing and/or conflicting
Person’s skills and abilities do not meet the demands of the social role
11. Discuss the actions through which organizations and/or employees can minimize work stress.
Primary prevention: job redesign, goal setting, role negotiation, career management
Secondary prevention: team building, social support at work
Individual: positive thinking, time management, leisure time activity, physical exercise, relaxation training, diet, opening up, professional help

Employee Turnover (Slides Only)
1. Identify several costs associated with employee turnover.
1. Separation costs
Exit interviews, payroll paperwork issues, separation pay, unemployment tax
2. Replacement costs
Communication of job availability, pre-employment administrative functions, entrance interviews, testing, staff meetings, travel/moving expenses, post-employment acquisition and dissemination of information, and employment medical examinations
3. Training costs
Informational literature, instruction in a formal training program, and instruction by employee assignment
4. Performance differences between leavers and replacements
2. List and describe the different types of turnover
Functional: loss of unproductive employees vs. Dysfunctional: loss of valued employees
Voluntary: resigning vs involuntary: permanent layoff, retirement, death
Controllable: another job, returning to school, improved salary vs. uncontrollable: death, chronic illness
3. Discuss why it is important for organizations to understand the different types of turnover.
Different types of turnover have different causes
Different types of turnover have different consequences
Therefore, different types of turnover require different organizational actions
4. Describe the economic model of voluntary turnover.
We leave a job when it maximizes our utility to do so.
5. Describe the psychological process that influences voluntary turnover.
Focus on
Job satisfaction, organizational commitment, etc.
PO factors
Wages and benefits
W factors
Available opportunities
Opportunity costs
6. List several ways that organizations can reduce voluntary and involuntary turnover rate.
Methods to Reduce Voluntary Turnover
Job redesign: Increase motivating potential and PO
Provide greater voice to employees: Allow them to voice concerns rather than exit
Provide internal advancement opportunities: Keep employees in the organization
Pay above market wages (including benefits): Economists call this an efficiency wage
Methods for Reducing Involuntary Turnover
Invest in more effective recruiting and selection activities
Could include increasing wages to increase the applicant pool
Provide more effective training
Could also decrease voluntary training by reducing role ambiguity and stress
7. Describe how an organization determines the appropriate level of turnover.
Organizations should select a level of turnover where the marginal costs of reducing turnover equal the marginal benefit of that reduction
8. Identify how an organization’s HRM strategy influences turnover and turnover costs.
Turnover is lower, but more costly when using a high commitment HR strategy
9. Calculate organizational annual turnover rates.
Divide the total # of people who have permanently left the organization by the total # of employees at the beginning of the year