8-1©2005 Prentice Hall 8: Pay, Careers, and Changing Employment Relationships Chapter 8: Pay, Careers, and Changing Employment Relationships Understanding And Managing Organizational Behavior 4th Edition JENNIFER GEORGE & GARETH JONES

8-2 ©2005 Prentice Hall Chapter Objectives  Describe the determinants and types of psychological contacts and what happens when they are broken  Appreciate the two major roles of performance appraisal  Understand the different kinds and methods of performance appraisal

8-3 ©2005 Prentice Hall Chapter Objectives  Appreciate the importance of merit pay and the choices organizations face in using pay to motivate employees  Understand the importance of careers, different kinds of careers, and effective career management

8-4 ©2005 Prentice Hall Opening Case: Changing with the times at Briggs & Stratton  How can organizations in traditional industries remain competitive?  Relocation  Goal-setting  Pay linked to productivity  Career development and guidance

8-5 ©2005 Prentice Hall What is a Psychological Contract?  An employee’s perception of –his or her exchange relationship with an organization, –outcomes the organization has promised to provide to the employee, and –contributions the employee is obligated to make to the organization

8-6 ©2005 Prentice Hall Sources of Information  Direct communication from coworkers and supervisors  Observations of what actually transpires in the organization  Written documents

8-7 ©2005 Prentice Hall Consequences of Broken Contracts  Poor motivation and performance  Negative moods and emotions  Job dissatisfaction  Intent to quit

8-8 ©2005 Prentice Hall Performance Appraisal  Encourage high levels of employee motivation and performance  Provide accurate information to be used in managerial decision making

8-9 ©2005 Prentice Hall Information Provided To Employees  Level of contribution  Accuracy of tasks and direction Performance appraisals give employees feedback that contributes to intrinsic motivation!

8-10 ©2005 Prentice Hall Developing a Performance Appraisal System  The mix of formal and informal appraisals  What factors to evaluate  Methods of appraisal  Who appraises performance

8-11 ©2005 Prentice Hall Factors to Evaluate  Traits  Behaviors  Results

8-12 ©2005 Prentice Hall Who Appraises Performance?  Supervisors  Self-appraisals  Peer appraisals  Subordinate appraisals  Customer/client appraisals  Multiple raters 360-degree appraisal

8-13 ©2005 Prentice Hall Problems and Biases in Performance Appraisal  Stereotypes  Primacy effect  Contrast effect  Halo effect  Similar-to-me effect  Harshness, leniency, and average tendency biases  Knowledge-of-predictor bias

8-14 ©2005 Prentice Hall Merit Pay Plans  Use when –Individual performance can be accurately assessed –Employees are highly independent  Distribute by –Salary increase –Bonuses

8-15 ©2005 Prentice Hall Individual-Based Merit Pay Plans Piece-rate pay –Paid for each unit produced Commission pay –Paid by percentage of sales  Full  Partial

8-16 ©2005 Prentice Hall Gain-Sharing  Employees receive share of profits or saved expenses –Encourages camaraderie and team spirit –Discourages personal motivation  Types –Scanlon plan –Profit sharing

8-17 ©2005 Prentice Hall Pay Differentials and Comparable Worth  Gender  Age  Race  Leadership level

8-18 ©2005 Prentice Hall Types of Careers  Steady-state  Linear  Spiral  Transitory

8-19 ©2005 Prentice Hall Career Stages  Preparation for Work  Organizational Entry  Early Career  Mid-Career  Late Career

8-20 ©2005 Prentice Hall Contemporary Career Challenges  Ethical Career Management  Career Management in an Era of Dual- Career Couples