Organizational Behavior, 9/E Schermerhorn, Hunt, and Osborn Prepared by Michael K. McCuddy Valparaiso University John Wiley & Sons, Inc.

Chapter 8 Study Questions What is goal setting? What is performance appraisal? What are compensation and rewards? What are human resource development and person-job fit? Organizational Behavior: Chapter 8

Study Question 1: What is goal setting? Organizational Behavior: Chapter 8

Study Question 1: What is goal setting? Goal setting guidelines. Difficult goals are more likely to lead to higher performance than are less difficult ones. Specific goals are more likely to lead to higher performance than are no goals or vague or general ones. Task feedback, or knowledge of results, is likely to motivate people toward higher performance by encouraging the setting of higher performance goals. Organizational Behavior: Chapter 8

Study Question 1: What is goal setting? Goal setting guidelines (cont.). Goals are most likely to lead to higher performance when the people have the abilities and the feeling of self-efficacy required to accomplish them. Goals are most likely to motivate people toward higher performance when they are accepted and there is commitment to them. Organizational Behavior: Chapter 8

Study Question 1: What is goal setting? Goal setting and MBO. Management by objectives (MBO) is a process of joint goal setting between a supervisor and a subordinate. MBO is consistent with the goal setting guidelines derived from the Locke and Latham model. MBO establishes performance goals consistent with higher level work unit and organizational objectives. Organizational Behavior: Chapter 8

Study Question 1: What is goal setting? Organizational Behavior: Chapter 8

Study Question 1: What is goal setting? Potential problems with MBO. Too much paperwork. in documenting goals and accomplishments. Too much emphasis on: Goal-oriented rewards and punishments. Top-down goals. Goals that are easily stated in objective terms. Individual goals instead of group goals. MBO may need to be implemented organization-wide. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Helps both the manager and subordinate maintain the organization-job-employee characteristics match The process of systematically evaluating performance and providing feedback upon which performance adjustments can be made. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Functions of performance appraisal. Define the specific job criteria against which performance will be measured. Measure past job performance accurately. Justify rewards, thereby differentiating between high and low performance. Define ratee’s needed development experiences. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Two general purposes of good performance appraisal. Evaluation. Concerned with such issues as promotions, transfers, terminations, and salary increases. Feedback and development. Let workers know their status relative to firm’s expectations and performance objectives. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Who does the performance appraisal? Traditionally done by ratee’s immediate superior. People other than immediate superior may have better information on certain aspects of ratee’s performance. 360-degree evaluation provides appraisal information from multiple perspectives. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Performance appraisal dimensions and standards. Output measures. Quantity of work output. Quality of work output. Activity measures. Behavioral measures that are typically obtained from the evaluator’s observation and rating. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Comparative methods of performance appraisal. Ranking. Raters rank order people from best to worst. Paired comparisons. Raters compare each person with every other person. Forced distribution. Raters place a specific proportion of employees into each performance category. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Absolute methods of performance appraisal. Graphic rating scales. Raters assign scores on a list of dimensions related to high performance outcomes in a given job. Critical incident diary records. Rater records incidents of unusual success or failure in a given performance aspect. Behaviorally anchored rating scales (BARS). Rater identifies observable job behaviors. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Absolute methods of performance appraisal (cont.). Behavioral observation scale (BOS). Rater rates each observable job behavior on a five-point frequency scale. Management by objectives. Jointly established goals used as standards against which the subordinate’s performance is evaluated. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? To be meaningful, an appraisal system must be: Reliable — provide consistent results across time. Valid — actually measure people on relevant job content. Measurement errors can threaten the reliability or validity of performance appraisals. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Measurement errors in performance appraisal. Halo errors. Raters evaluate on several different dimensions and give a similar rating for each dimension. Leniency errors. Raters tend to give everyone relatively high ratings. Strictness errors. Raters tend to give everyone relatively low ratings. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Measurement errors in performance appraisal (cont.). Central tendency errors. Raters lump everyone together around the average or middle. Low differentiation errors. Raters restrict themselves to a small part of the rating scale. Examples include leniency, strictness, and central tendency errors. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Measurement errors in performance appraisal (cont.). Recency errors. Raters allow recent events to exercise undue influence on ratings. Personal bias errors. Raters let personal biases, such as stereotypes, unduly influence the ratings. Cultural bias errors. Raters allow cultural differences of employees to influence the performance appraisal. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Ways to reduce rating errors in performance appraisals. Training raters to understand the evaluation process and recognize errors. Ensuring that raters observe ratees on an ongoing basis. Not having the rater evaluate too many ratees. Ensuring the clarity and adequacy of performance dimensions and standards. Avoiding terms that have different meanings for different raters. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Guidelines for ensuring the legality of performance appraisal systems. Base appraisal on job requirements as reflected in performance standards. Ensure that employees clearly understand the performance standards. Use clearly defined dimensions. Use behaviorally-based dimensions supported by observable evidence. Organizational Behavior: Chapter 8

Study Question 2: What is performance appraisal? Guidelines for ensuring the legality of performance appraisal systems (cont.). Avoid abstract trait names. Ensure that scale anchors are brief and logically consistent. Ensure that the system is valid and psychometrically sound. Provide an appeal mechanism to handle appraisal disagreements. Organizational Behavior: Chapter 8

Study Question 3: What are compensation and rewards? Pay as an extrinsic reward. Pay can help organizations attract and retain highly capable workers, and help satisfy and motivate these workers. High levels of job performance must be viewed as the path through which high pay can be achieved. Merit pay bases an individual’s salary or wage increase on the person’s performance. Organizational Behavior: Chapter 8

Study Question 3: What are compensation and rewards? Pay as an extrinsic reward (cont.). Merit pay should be based on realistic and accurate measures of individual work performance. Some people argue that merit pay plans ignore the high degree of task interdependence among employees. Organizational Behavior: Chapter 8

Study Question 3: What are compensation and rewards? Creative pay practices. Skill-based pay. Rewards people for acquiring and developing job-relevant skills. Gain-sharing plans. Give workers an opportunity to share in productivity gains through increased earnings. Profit-sharing plans. Reward employees based on the entire organization’s performance Organizational Behavior: Chapter 8

Study Question 3: What are compensation and rewards? Creative pay practices (cont.). Employee stock ownership plans (ESOPs). Give company stock to employees or allow them to purchase it at a price below market value Lump-sum pay increases. Provide wage or salary increase in one or more lump-sum payments. Flexible benefit plans. Allow workers to select benefits according to their individual needs. Organizational Behavior: Chapter 8

Organizational Behavior: Chapter 8 Study Question 4: What are human resource development and person-job fit? Human resource development (HRD) and the person-job fit. HRD and the person-job fit are key contributing activities in performance management and rewards. Human resource strategic planning provides the foundation for HRD and the person-job fit. Staffing, training, and career planning and development are important functions in HRD and achieving a person-job fit. Organizational Behavior: Chapter 8

Organizational Behavior: Chapter 8 Study Question 4: What are human resource development and person-job fit? Job analysis. The process and procedures used to collect and classify information about tasks the organization needs to complete. Identifies the worker characteristics needed to perform the job. Forms the basis for a job description and job specifications. Organizational Behavior: Chapter 8

Organizational Behavior: Chapter 8 Study Question 4: What are human resource development and person-job fit? Recruitment. The process of attracting the best qualified individuals to apply for a given job. Typical recruitment steps. Advertisement of a position vacancy. Preliminary contact with potential job candidates. Preliminary screening to obtain a pool of candidates. Recruitment approaches are external or internal. Realistic job previews. Organizational Behavior: Chapter 8

Organizational Behavior: Chapter 8 Study Question 4: What are human resource development and person-job fit? Selection. A series of steps from initial applicant screening to final hiring of the new employee. Selection process. Completing application materials. Conducting an interview. Completing any necessary tests. Doing a background investigation. Deciding to hire or not to hire. Organizational Behavior: Chapter 8

Organizational Behavior: Chapter 8 Study Question 4: What are human resource development and person-job fit? Socialization. Process that adapts employees to the organization’s culture. Occurs during and after completion of the staffing process. Phases of socialization. Anticipatory socialization. Encounter. Change and acquisition. Organizational Behavior: Chapter 8

Organizational Behavior: Chapter 8 Study Question 4: What are human resource development and person-job fit? Training. A set of activities that provides the opportunity to acquire and improve job-related skills. Types of training. On-the-job training involves job instruction while performing the job in the actual workplace. Off-the-job training commonly involves lectures, videos, and simulations, and increasingly is done through e-training. Organizational Behavior: Chapter 8

Organizational Behavior: Chapter 8 Study Question 4: What are human resource development and person-job fit? Organizational Behavior: Chapter 8

Organizational Behavior: Chapter 8 Study Question 4: What are human resource development and person-job fit? Adult life cycle and career stages. The different problems and prospects of the adult life cycle affect people’s work and careers. Career stages reflect the different responsibilities and achievements associated with people’s working lives. Life cycle and career stages. Entry and establishment or the provisional adulthood stage. Advancement or the first adulthood stage. Maintenance, withdrawal, and retirement or the second adulthood stage. . Organizational Behavior: Chapter 8

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