MHR Lecture 7
Ratio Scale Problems
Unclear Performance standards
Halo affect similar-to-me bias
Central Tendency: A tendency to rate all employees in the middle pf the
Leniency or strictness bias: The problem that occurs when a supervisor
tends to rate all employees either low or high.
Appraisal Bias: The tendency to allow individual differences, such as age,
race, sex, to affect the appraisal ratings that these employees receive.
Recent effect: Based on the employee’s most recent performance only.
Solutions to Rater Errors
1. Understand the potential problems
2. Train supervisors to minimize rater errors and reduce outside factors, such
as union pressure and time constraints.
3. Chose or improve right appraisal tool
4. Use multiple raters
Who Should Do the Appraising
Self (always complete a self-appraisal form)
STRATEGIC PAY PLANS (Chapter 11)
Strategic Importance of Total Employment Rewards
It includes all forms of pay going to employees and arising from their
Direct Financial Payments:Wages,salries, incentives
Indirect financial payments: like employer-paid insurance and vacations
Aligning total Rewards with strategy: It means creating a compensation
package such wages, incentives, and benefits) which produces the employee
behaviours the firm needs to achieve its competitive strategy. Employment Awards
Objectives of Compensation Management
1. To attract the best and the brightest (Acquire)
2. To hold on to the employees (Retain)
3. To ensure that my people are fairly paid (Equity-internal and external,
Wage and Salaries-Establishing Pay Rates
Stage 1: Job Evaluation (internal)
Stage 2: Conduct Wage/Salary Survey (external)
Stage 3: Combine Job Evaluation and Salary Survey to determine pay
Job Analysis: The systematic study of a job to disover its specifications and skill
Stage 1: Job Evaluation
Conduct a systematic comparison to find the relative worth of jobs within a firm.
The procedure is to compare the content of jobs in relation to one another,
for example, in terms of their effort, responsibilit