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MGT420 Spring 2018 Exam #4 Study Guide
Exploring Management - #6 & #10
Organizational Behavior - #6, #15, & #16
Exploring Management chapters:
Chapter 6: a, a, d, b, b, c, c, d, a, b, c, a, a, b, c
Chapter 10: a, b, c, b, b, d, a, b, b, a, d, d, a, a, b
Make Note of for Exam: *
Employee value proposition (EVP) | is an exchange of value in which the organization offers
the employee in return for his or her work contributions.
The integrated model of individual motivation at work |
- Reinforcement | immediately rewarding positive behaviors with valued outcomes.
- Equity | assuring fairness in type and distribution of rewards.
- Content | acknowledging individual differences in motivational value
- Expectancy | creating a linkage among ‘effort → performance → reward’
Intrinsic vs. Extrinsic Rewards |
- Intrinsic | Positively valued work outcomes that an individual receives directly as a
result of task performance.
- Extrinsic | Positively valued work outcomes that are given to an individual or group by
some other person or source in the work setting.
Pay for performance |
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MGT420 Spring 2018 Exam #4 Study Guide
- When pay functions well it can help organizations attract and retain highly capable
workers.
- Pay can also help satisfy and motivate workers to work hard to achieve high
performance.
- When something goes wrong with pay, negative effects on motivation performance may
occur.
Merit pay |
- Compensation system that directly ties an individual’s salary or wage increase to
measures of performance accomplishments during a specific time period.
- Seeks to create a belief among employees that the way to achieve high pay is to perform
at high levels.
- Bonus – extra pay for performance that meets certain benchmarks or is above
expectations.
Gain sharing | Gives workers the opportunity to earn more by receiving shares of any
productivity gains that they help to create. (Someone finds a way to save $100,000 and then the
boss gives that person $20,000 and everyone else gets the $80,000 spread out. This is done
because the money has already been budgeted for so it is used in the company rather than
pocketing).
Profit sharing | Reward employees for increased organizational profits.
- Criticism: organizational profit increases and decreases are not always a direct result of
employees’ efforts.
Stock options | Provide employees with an opportunity to buy shares of stock at a future date at
a fixed price.
Employee stock ownership plans (ESOPs) | Companies may give stock to employees or allow
stock to be purchased by them at a price below market value.
Skill-based pay | Rewards people for acquiring and developing job relevant skills.
Two purposes of performance management: |
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MGT420 Spring 2018 Exam #4 Study Guide
1. Evaluation | It serves an evaluation purpose when it lets people know where their actual
performance stands relative to objectives and standards.
2. Development | It serves a developmental purpose when it provides insights into
individual strengths and weaknesses.
Performance measurement |
- Output Measures | Assess actual work results.
- Activity Measures | Assess work inputs in respect to activities
Measurement Errors |
- Halo Error | Everyone gets a similar rating. “Meets expectation”.
- Leniency Error | You want people to like you. You’re very lenient. (First time managers)
- Central Tendency Error | Lump everyone in the middle.
- Recency Error | (One of most common) Something big happens (good or bad) very
recently (end of year) and that makes up the measurement, rather than the performance in
whole.
- Personal Bias Error | (One of most common) “I just don’t like you.” (Not much else to
say.)
Performance appraisal | Formal procedure for measuring and documenting a person’s work
performance.
Comparative Methods of Performance Appraisal |
- Ranking | Raters rank order individuals from best to worst on overall performance.
- Paired Comparisons | Raters compare each person with every other person.
- Forced Distribution | Raters place a specific proportion of employees into each
performance standard
o Ex. When a team leader must rate 10% of team mem-bers as “superior,” 80% as
“good,” and 10% as “unacceptable,”
Rating scales |
- Graphic | Lists a variety of performance dimensions that an individual is expected to
exhibit.
- Behavioral | Adds more sophistication by linking ratings to specific and observable job-
related behaviors.
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MGT420 Spring 2018 Exam #4 Study Guide
Exploring Management - #6 & #10
Organizational Behavior - #6, #15, & #16
Exploring Management chapters:
Chapter 6: a, a, d, b, b, c, c, d, a, b, c, a, a, b, c
Chapter 10: a, b, c, b, b, d, a, b, b, a, d, d, a, a, b
Make Note of for Exam: *
Employee value proposition (EVP) | is an exchange of value in which the organization offers
the employee in return for his or her work contributions.
The integrated model of individual motivation at work |
- Reinforcement | immediately rewarding positive behaviors with valued outcomes.
- Equity | assuring fairness in type and distribution of rewards.
- Content | acknowledging individual differences in motivational value
- Expectancy | creating a linkage among ‘effort → performance → reward’
Intrinsic vs. Extrinsic Rewards |
- Intrinsic | Positively valued work outcomes that an individual receives directly as a
result of task performance.
- Extrinsic | Positively valued work outcomes that are given to an individual or group by
some other person or source in the work setting.
Pay for performance |
1
,2
MGT420 Spring 2018 Exam #4 Study Guide
- When pay functions well it can help organizations attract and retain highly capable
workers.
- Pay can also help satisfy and motivate workers to work hard to achieve high
performance.
- When something goes wrong with pay, negative effects on motivation performance may
occur.
Merit pay |
- Compensation system that directly ties an individual’s salary or wage increase to
measures of performance accomplishments during a specific time period.
- Seeks to create a belief among employees that the way to achieve high pay is to perform
at high levels.
- Bonus – extra pay for performance that meets certain benchmarks or is above
expectations.
Gain sharing | Gives workers the opportunity to earn more by receiving shares of any
productivity gains that they help to create. (Someone finds a way to save $100,000 and then the
boss gives that person $20,000 and everyone else gets the $80,000 spread out. This is done
because the money has already been budgeted for so it is used in the company rather than
pocketing).
Profit sharing | Reward employees for increased organizational profits.
- Criticism: organizational profit increases and decreases are not always a direct result of
employees’ efforts.
Stock options | Provide employees with an opportunity to buy shares of stock at a future date at
a fixed price.
Employee stock ownership plans (ESOPs) | Companies may give stock to employees or allow
stock to be purchased by them at a price below market value.
Skill-based pay | Rewards people for acquiring and developing job relevant skills.
Two purposes of performance management: |
2
, 3
MGT420 Spring 2018 Exam #4 Study Guide
1. Evaluation | It serves an evaluation purpose when it lets people know where their actual
performance stands relative to objectives and standards.
2. Development | It serves a developmental purpose when it provides insights into
individual strengths and weaknesses.
Performance measurement |
- Output Measures | Assess actual work results.
- Activity Measures | Assess work inputs in respect to activities
Measurement Errors |
- Halo Error | Everyone gets a similar rating. “Meets expectation”.
- Leniency Error | You want people to like you. You’re very lenient. (First time managers)
- Central Tendency Error | Lump everyone in the middle.
- Recency Error | (One of most common) Something big happens (good or bad) very
recently (end of year) and that makes up the measurement, rather than the performance in
whole.
- Personal Bias Error | (One of most common) “I just don’t like you.” (Not much else to
say.)
Performance appraisal | Formal procedure for measuring and documenting a person’s work
performance.
Comparative Methods of Performance Appraisal |
- Ranking | Raters rank order individuals from best to worst on overall performance.
- Paired Comparisons | Raters compare each person with every other person.
- Forced Distribution | Raters place a specific proportion of employees into each
performance standard
o Ex. When a team leader must rate 10% of team mem-bers as “superior,” 80% as
“good,” and 10% as “unacceptable,”
Rating scales |
- Graphic | Lists a variety of performance dimensions that an individual is expected to
exhibit.
- Behavioral | Adds more sophistication by linking ratings to specific and observable job-
related behaviors.
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