1 / 26

A Human Resource Management Approach

STRATEGIC COMPENSATION. A Human Resource Management Approach. Chapter 4 Traditional Bases for Pay: Seniority and Merit. Prepared by David Oakes. Collective Bargaining. Designed to: Negotiate labor contracts Provide grievance procedures Led to: Job control unionism

chibale
Download Presentation

A Human Resource Management Approach

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. STRATEGIC COMPENSATION A Human Resource Management Approach Chapter 4 Traditional Bases for Pay: Seniority and Merit Prepared by David Oakes

  2. Collective Bargaining • Designed to: • Negotiate labor contracts • Provide grievance procedures • Led to: • Job control unionism • Collective bargaining units • Union shops

  3. Seniority Pay • Designed to award job tenure • Set base pay with time- designated increases • Facilitates administration of pay • Avoids perception of favoritism • Poor fit with most competitive strategies

  4. Longevity Pay • Designed to • Pay grade maximum for length of service • To reduce employee turnover • Used for most government employees • General Schedule System for federal employees

  5. General Schedule • Divided into 15 Steps • Based on skills, education, & experience levels • Employees eligible for 10 within-grade pay increases • Step waiting periods of 1-3 years

  6. Merit Pay Plans • Pay increases based on performance • Reward excellent effort or results • Motivate future performance • Helps retain valued employees • In 2004, raises averaged 3.5%

  7. Elements of Merit Pay • Based on objective & subjective indicators of job performance • Periodic performance reviews • Realistic & attainable standards • Pay increases reflect performance

  8. Performance Appraisal Plans • Trait systems • Comparison systems • Behavioral systems • Goal - oriented systems

  9. Trait System Characteristics Work quality Appearance Dependability Cooperation Initiative Judgment Leadership responsibility Decision-making ability Creativity

  10. Comparison Systems • Rates & ranks performance • Pay raises based on ranking • Types • Forced distribution • Paired comparisons

  11. Behavioral Systems • Critical-incident technique (CIT) • Behaviorally-anchored rating scales (BARS) • Behavioral observation scales (BOS)

  12. Critical Incident Technique • Employees & supervisors identify & label job behaviors & results • Supervisors observe & record • Requires extensive documentation

  13. Behaviorally-Anchored Rating Scales • Based on 8 - 10 expected job behaviors • Employees rated on ability to perform each behavior • Ratings highly defensible

  14. Behavioral Observation Scales • Documents positive performance behaviors on job dimensions • Employees rated on exhibited behaviors • Ratings averaged for over-all rating

  15. Goal - Oriented System Management- by-Objectives • Supervisors & employees set objectives • Highly effective technique • Rated on how well objectives are met • Mainly for professionals & managers

  16. Performance Appraisal Practices • Conduct a job analysis • Incorporate results into ratings • Trains supervisors on use • Implement Formal appeals process

  17. Sources of Performance Appraisal Information • Employee • Supervisor • Coworkers • Subordinates • Customers/clients

  18. 360 Degree Performance Appraisal • Uses more than one appraisal source • Reduces recruiting & hiring costs • Appropriate for work team evaluations

  19. Common Raters’ Errors • Bias errors • Contrast errors • Errors of central tendency • Errors of leniency or strictness

  20. Bias Errors • First-impression effect • Positive halo effect • Negative halo effect • Similar-to-me effect • Illegal discriminatory biases

  21. Contrast Errors • Supervisor compares employees’ performances to other employees, not to explicit performance standards • What if the best employee is average?

  22. Errors of Central Tendency • Supervisors rate all employees as average • Usually occurs when only extreme behaviorsrequire documentation

  23. Errors of Leniency • Leniency errors-managers rate employees’ performances more highly than they would rate them using objective criteria • Causes employees to believe they are going to receive larger pay raises than they deserve

  24. Pay For Performance Link • Link appraisals to business goals • Analyze jobs • Communicate • Establish effective appraisals • Empower employees • Differentiate among performers

  25. Limitations of Merit Pay Programs Failure to differentiate Poor measures Supervisor biases Poor communication Undesirable social structures Using non-merit factors Undesirable competition Motivational value small

  26. Competitive Strategies • Lowest-Cost • Reduce output costs per employee • Merit pay works if tied to long - term productivity • Differentiation • Make product or service unique • Merit pay can promote creativity and risk-taking

More Related