Question 1: Purposes of Performance Management Programs and Systems’ Fail
Performance management programs have many benefits to the organization. The key major purposes of these employee management programs include motivation and appraisal. To ensure productivity in an organization, the management uses performance management programs that increase the level of productivity. They are designed to spur the level of performance of the employees. The second purpose of these programs is to motivate personnel. Every organization requires retaining its work force and keeping it in a motivated state for enhanced performance.
The human resource department is tasked with developing motivation programs that increase the high performance energy. These performance management systems fail for several reasons which are directly related to the failure in planning. One key failure is the lack of set standards. When there are no standards set, the programs lack the structure of operation. The second reason for the failure is unrealistic standards. When the standards are not realistic, they are not achievable because they may be too high. The third cause of failure is the poor measurement mechanisms. If the standards are not measurable, the management will not be able to determine the effectiveness of their implementation.
Question 2: Types of Rating Errors in Performance Evaluation
There are several errors made by the management during performance appraisal. The first one is the sampling error. This occurs when the evaluator observes a small portion of the sample and uses the result to give a general evaluation. Such sample may be not full representation of the overall population. The second sample is the similar to mentality. The supervisor would give higher ratings to the employees considered to be similar to him or her own personality or with shared interest.
Error of bias is the other common impediment to effective evaluation. The supervisors, in this case, would use race, gender, religion or sex to perform the evaluation. As a result, the rating would depend on the prejudice for or against certain sexes, religions, genders or races. Contrast is the error that occurs when the supervisor evaluates an employee based on the performance of a colleague in the same department. Regency error occurs when the management rates a worker based on the recent level of performance and not considering the cumulative performances over a period of time. The other common error is the hallo effect whereby the supervisor would award high rating based on competencies in specific areas without conducting overall performance.
Question 5: The Motivating Value of Pay Equity
Pay has a direct impact on the standards of livings for the employees. It also determines the status of the individual both in the work place and at home. Pay equity is thus vital for the staff. The business definition of equity is that it is anything with value that is earned as a result of investing in another thing of value.
According to the business definition, fairness is achieved only when the return of the equity or benefits from the valuable item investment is equivalent to the value of the investment. For the case of the employees, when the compensation offered by the employer is equal in value to the work performed, equity is achieved. Therefore, the payment system must be equitable according to the perception of the workers for them to appreciate it. According to research done on the employees’ motivation, the perception of pay inequality or equity has a profound effect on the level of productivity and motivation among the personnel.
Question 6: Common Goals of Strategic Compensation Policy
The objectives of a compensation policy are to facilitate an effective management and use of the human resource with the view of contributing to organization’s overall objective. A policy must thus be formulated with the needs of the workers and the company in mind. The major common goals of a compensation policy include reward for the past performance, helping the organization to remain competitive in the labor market, to ensure equity in pay for all the workers, to act as motivation for the staff for the sake of future performance, to help manage the budget for the total number of workers in a firm, to act as attraction for highly experienced and motivated personnel who would bring value to the organization, to promote retention of the staff by preventing employee turnover. Compensation and good working conditions are some of the policies used by many companies to retain their staff and to attract new workers from the labor market. Pay has a direct effect on the level of motivation of the personnel because of its influence on the standards of life and status in the society.
Question 7: Problems Identified with Merit Raises
Merit raises are bonuses awarded to the employees for having attained some goal in the performance standard or for having displayed impeccable performance. Merit pay increase is, however, different from the increase in the basic pay since it is only tied to the set standard. This payment is given annually afer review of the performance. Merit raises are not restricted to this time period and can be awarded at any time. Some organizations give it as a lump-sum bonus whenever they have no intention of increasing the basic pay. The first problem with this system is the employees’ increased expectation in the rise in basic pay.
If the merit pay increases at constant rate, the personnel may want the basic pay to increase, too. The other problem is that this pay may be perpetuated annually even after the individual performance has fallen. This may cause the employees to stop relating it to performance thus not working hard to earn it. Workers in many organizations have lots trust in the merit pay because they associate it with favoritism and bias. Management may choose to award undeserving individuals and refuse to recognize the deserving employees. The other problem is lack of proper performance measurement mechanisms by the management that would lead to wrong evaluation of workers’ performance. As a result, the deserving employees may be wrongly identified.
Question 9: The Cons and Pros of High Executive Pay
One key advantage of high executive pay for the organization is that it increases the company’s level of competitiveness in the market. When a firm offers high salary scale, it is bound to attract the highest caliber of managers who would add immense value to the organization. The second advantage of high executive pay is the motivation for the top management. Salary is a motivating factor since it determines the standards of living and social status. When remunerations are set high, the management would be highly motivated to deliver quality results.
One major disadvantage of high executive pay is the increased expenses in remunerations and salaries. This burden is shouldered by the shareholders, especially when the managers are not producing favorable results. The other disadvantage is the lack of harmonization of salary between the top management and the other employees who would feel that their efforts are not appreciated accordingly.
Question 10: The Advantages of Incentive Pay Programs
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The foremost advantage of incentive pay programs is the increase in the level of motivation for the employees. The programs make the workers feel that their efforts are being recognized. The second advantage is the increased productivity. Since the organization identifies and rewards the exceptional performance, the personnel would double their efforts and, in return, their level of productivity will increase. The incentive programs create loyalty to the company among the workers. As they are appreciated and their earnings increase, they would continue working at the organization. This helps to reduce turnover by increasing retention. The other advantage is the enhancement of collaborative efforts. The incentives given based on team performance encourage team building, cohesiveness and cooperation.
Question 12: Ways in which Employers Have Tried to Contain the Health Insurance Costs
For the purpose of controlling health insurance costs, the organizational management seeks to attract and retain its workforce. The employer therefore has to spend some dollars via administering an effective management of the health insurance costs. They can contain the insurance costs through granting incentives to the employees. This will motivate the personnel and prevent them from getting involved in negative behaviors that drive up the claims on insurance. A perfect example can be paying some portion of the employees’ premium because of them having maintained a healthy BMI for a certain time period.
Similarly, employers can control the health insurance costs by administering to their workforce a spousal coverage. In most instances, the spouse will have the ability to implement the coverage at the destined place of employment. The employers can impose the rule that states that if the coverage of the employee’s spouse has a comparable advantage, then such a worker is not eligible for the insurance plan. This will adequately save the premium costs and eliminate the risks involved in some potential claims that could arise.
Question 14: Why 401(k) Plans Become so Popular
The 401 (k) plans are most common among the employers since they are less expensive compared to other types of the retirement plans. It is the contributions attributable to these types of plans that form the biggest portion of expenses for employers. As for the case of 401 (k) plans, the bulk arising from the contribution is specifically administered by the employee through the process of salary reduction. A portion of the worker’s remuneration that would otherwise be received in form of cash is pumped into this retirement plan.
Similarly, the 401 (k) plans are very popular with the employees since such plans allow them to have savings upon their retirement age. At the same time, the plan assists in the reduction of the current income tax bill that is charged to workers. That means that there will be no income tax to be paid by employees on the salary deferrals until the cash is generated from the 401 (k) plan sometimes latter in future. Personnel have the privilege to make their own investment choices and access their retirement funds via loans at any desired level of frequency.
Question 15: Comparison of Two General Types of Stress
Two types of stress exist at different levels. People can experience the good stress and the bad stress. The former is called eustress or the euphoric stress. This is a healthy stress that gives an individual a feeling of satisfaction or fulfillment. Eustress, on the one hand, is the optimal state that is presumed to be most productive when an individual attains it. On the other hand, people can experience the bad stress called distress. It is a destructive stress that causes great pain, sorrow and anxiety to an individual. Distress could lead to an acute mental or physical suffering. Individuals with distress could extremely suffer a great misfortune.
Question 16: Four Main Factors Impacting on the Employee Stress
Organizational culture is a main factor that could impose stress to employees. The culture could be such that there is no management participation in the process of decision making. Poor communication patterns and lack of a managerial focus can cause stress to employees. Another main stress contributor to personnel is the interpersonal relationship at work. Conflicts with the supervisors and harassment at work impact on employees’ stress levels. Roles within the organization and the responsibility granted to the workers could impose stress if they cannot implement them within the stipulated deadlines.
Question 19: Ways Employers Can Avoid the Wrongful Termination Lawsuits
It is only justified to terminate an employee if and only if the employer has an articulated reason. The latter must have justifiable grounds that are easy to understand before administering any discharge to the worker. The reasons for termination should be coherent with the organizational rules, policies, guidelines and practices. The discharge should similarly follow the designed schedule and rules. The employers must ensure that they properly survey the handbook for the appropriate termination procedure. The procedures followed must also be in line with the stipulated rules in the employees’ handbook, the supervisory manual or the guaranteed memorandum.
Similarly, before the discharge of a worker the employer must give notice that informs the associated person about his or her unsatisfactory performance and other related improvement opportunities. This can be done by giving warnings and suspensions. All performances by the employees must be documented. There must be articulated evidence of the discharge, and the disciplinary actions granted earlier.
Question 25: The Three Sources of Overseas Managers in Staffing Foreign Operations
The local governments, in most instances, prefer the host-country nationals because they cost a lesser amount of money to place. Additionally, a small amount is required due to the familiarity with the stipulated language or for a person to have some excellent knowledge of feeling the local national environment. However, the citizens of the home country must possess the managerial capacity and the associated technical skills that are needed by the organization.
The expatriate, popularly regarded as the home-country nationals, form the common and familiar quantities inside the MNC. There is a greater control that the MNC expects to have over them since they have been provided with the relevant work experiences. The manager and the MNC offer the mobility and the desired international experience. Although the costs associated with relocation of such expatriates would be very high, their families risk not to adjust well to the new environment and fear can be imposed in them because of promotions when they return.
Third party nationals that are from one nation and work for an MNC that is located in the second. They have the tasks to bring in their vast work experience and foreign background assignments to the third country. However, this group might have the international face and can be sometimes multilingual.
Question 26: Steps in Selection for International Assignment
The initial step for selecting a candidate for an international assignment is self-selection. It demands that the employees begin an earlier procedure of thinking about their career objectives and the international interests at work. The next step is development of a pool of applicants. Organizations can create a pool of candidates for the international assignment in their databases. The database information can encompass the languages spoken, the preferred country and the skills of the applicants.
The third step is the assessment of the major skills desired for the international task. Managers can identify the candidates from the databases. Finally, the skills must be augmented with the employee’s attributes. In addition to the professional, technical and international experience, the applicants could possess some international experience like identifying easily with the intended group. Emotional maturity and stability should augment the competence skills.