• Performance measures: 1.Objective” Measures Output(Units produced, items
sold, $ sales, commission earnings)Quality measures(# of errors, # of errors
detected, # complaints/grievances, # commendations, rates of scrap)Employment
data(Absences (unexcused), Lateness/tardiness, Accidents).These suffer from
unreliability, deficiency, and contamination. Also, many jobs don’t have
“objective” outcomes. 2.Personality traits(loyalty, dependability, honesty,
conscientiousness) 3.Problems(Often not jobrelated/too ambiguous, susceptible
to bias) 4.Behaviours(Behaviours that contribute to fulfilling job requirements/
Focuses on what employees do – and what they have control over)
• Common uses of performance appraisals 1.Administrative – to make
employment decisions/Promotion, termination/ Training—who to train; what to
train/Compensation—merit increases. 2.DevelopmentalProvide feedback /
coaching/ Seek to improve performance; address weaknesses /Motivation
• Ongoing performance feedback are most useful immediate and specific to
situation. All types of employee benefit from it but it must be very specific, clear,
focused on behavior not on person.
• Developing an effective appraisal program 1.Strategic relevance Individual
standards directly relate to strategic goals. 2.Criterion deficiency Standards
capture all of an individual’s contributions/ Behaviours that are important for job
performance are not assessed. 3.Criterion contamination Performance capability
is not reduced by external factors. 4.Reliability Standards are quantifiable,
measurable, and stable.
• Who should appraise performance? 1.manager(supervisor) 2.selfappraisal
3.subordinate appraisalgood for development but not administrative functions.
4.peer appraisalthe most accurate method of judging behavior of
employees/forms are added in single profile for use in performance interview.
5.team appraisal 6.customenrs 7.supliers. All together 360 degree Performance
• Common raterrelated errors 1.Error of central tendencies Occurs when
appraisers rate all employees as “average” in everything. 2.Leniency effect rating
extremely high or low. 3.Recency error overweight recent performance in
appraisal process. 4.Contrast effect Tendency for a set of performance appraisals
to be influenced upward by the presence of a very low performer or downward by
the presence of a very high performer. 5.Simillar to me error Tendency of rater to
inflate ratings when they have something in common with the target. 6.Hallo
error Occurs when appraisers rate an individual either high or low on all
characteristics because one characteristic is either high or low. Results in similar
ratings across different dimensions.
• Correcting errors – 1. Frame of Reference (FOR) TrainingRaters rate fictitious
examples of performance in writing or videotape/Then are told what the “right”
rating should be/ Participants discuss which worker behaviours represent various
performance dimensions; reasons why a certain rating is correct, etc./ Process is
repeated/ Facilitates the development of a consistent “frame of reference” for
evaluating employee performance / Is the only type of rater training that increases
accuracy of PA ratings. 2. Encourage supervisors to keep notes about worker performance – performance “diary”/ Improves accuracy of recall. 3.Build
accountability into ratings Require raters to justify / provide evidence for
ratings(E.g., describe specific behaviour; include someone who can verify).
• Performance appraisal method A. Trait methods:
1. Graphic rating scale each trait or characteristics( initiative, quality of
work) is rated by a scale(very bed….excellent) on which rater indicates
the degree to which an employee possesses. Also contains space for
2. Mixed standard scale based on comparison with(batter than, equal to, or
worse than) a standard for each behavior(+,0, ).
3. Forcedchoice method rater chooses from statements, often in pairs, that
appear equally favorable or unfavorable.
4. Essay method good for pointing out one characteristic, talent, or
skill/very timeconsuming, can be influenced by writing skills.
B. Behavioral methods( best for development and feedback).
1. Critical Incident Method occurs than employee behavior result in unusual
successful or failure in some parts of the job. Managers keep a diary of
2. Behavioral checklist the rater checks the statements on a list that he
believes are characteristics of the employee’s performance or behavior.
3. Behaviourally Anchored Rating Scale (BARS) was developed by Smith
and Kendall due to lack of standardization (and reliability) across raters/
Goal was to help the rater rate. Performance standards are concreteEach
standard consists of a number of specific, behavioural anchors on the
rating form itself, behavioral anchors cover the range of performance –
from excellent to poor behavior.
4. Behavioural Observation Scales(BOS) – measures frequency of
observable behavior. Ex:
Provides employees with information about organizational change
Almost never 1 2 3 4 5 Almost always
Compensation • Strategic compensation of an employee in ways that enhance motivation and
growth while at the same time aligning their effort with the objectives,
philosophies, and culture of an organization. Goals: To reward employees’ past
performance/To remain competitive in the labor market/To maintain salary equity
among employees/To mesh employees’ future performance with organizational
goals/To control the compensation budget/To attract new employees/To reduce
• Expectancy theory predicts that the level of motivation depends on the
attractiveness of the rewards and the probability of obtaining it. Expecting valued
rewards, result in greater work effort.
• Internal and external factors Internal:
1. Employer’s Compensation Strategy sets organization compensation policy to
lead, lag, or match competitors’ pay.
2. Worth of a Job influenced by labor market, rely on job analysis.
3. Employee’s Relative Worth.
4. Employer’s AbilitytoPay/
1) Labor Market Conditionssupply and demand of qualifies labor influence
wage rates required to recruit or retain employee.
2) Area Wage Rates depends on area, city.
3) Cost of Living inflation/ Consumer price indexA measure of the average
change in prices over time in a fixed “market basket” of goods and
services./Escalator clausesClauses in collective agreements that provide
for quarterly costofliving adjustments in wages, basing the adjustments
on changes in the consumer price index.
4) Collective Bargaining unions goal is to increase real wages.
• Job evaluation methods:
1. Job ranking system Orders jobs from least valued to most valued/More
appropriate for small organizations and those with small numbers of jobs
(Advantages Simple, Quick and inexpensive/ Disadvantages Entirely subjective,
No explicit rationale or documentation for results).
2. Level description (job classification system) Places jobs in a preexisting
hierarchy/ Compares jobs to descriptions of job grades(AdvantagesInexpensive,
Readily available/ Disadvantages Cumbersome).
3. Points system(Most popular method) Establishes job values by assigning points
to each job based on “compensable factors”, such as skills, efforts,
responsibilities key job characteristics that differentiate the value of various jobs.
Factors are weighted/Jobs are rated points assigned/ The point totals are used to
create the job worth hierarchy.
4. Work Valuation A job evaluation system that seeks to measure a job’s worth
through its value to the organization. / Jobs are to be valued relative to financial,
operational, or customer service objectives of the organization.
• Compensation and collective bargaining unions goal is to increase real wages
wage increase large than rise the customer price index. • Competencybased pay (also skillbased pay or knowledgebased pay) pay
based on an employee’s skill level, variety of skills possessed, or increased job
• Pay range The minimum and maximum pay rates for jobs in a particular pay
grade. Typically we see ranges around 80% of midpoint for minimum to 125%
• Pay equity Fair employment practices applied to members of designated groups,
• Fixed and variable pay
• Types of performance pay plans: Piecework/ Differential piece work/ Standard
hour plan/ Bonuses/ Spot bonuses/ Merit pay/ Lumpsum Merit pay provides
clear link between pay and performance/ For professional employees –1. Stock
(aktsii) options long term incentives. 2. prerequisites special nonmonetary
Safety and Health
• Difference between occupational illnesses and injuries 1Any abnormal condition
or disorder, other than one resulting from an occupational injury, caused
by exposure to environmental factors associated with employment. 2 Any cut,
fracture, sprain, or amputation resulting from a workplace accident or from an
exposure involving an accident in the work environment
• Duties of employersprimary to ensure employee safety/Provide a hazard free
workplace./Comply with statutes and regulations./Inform employees about OH&S
regulations./Keep records and summaries./Ensure supervisors and employees are
familiar with hazards./Report any accidents that cause injury and death.
• Duties of joint health and safety committees Provide a forum where management
and labour can work together/One manager and one worker certified in
safety/Involved in inspections, work refusals/Investigate accidents/Respond to
• Promoting a safe work environment Creating a culture of safety(the most
important role of a safety awareness program is motivating managers, supervisors,
and subordinates to be champions of safety considerations)/ Interviewing for
safety( encourage supervisors to incorporate safe into their interweaves with job
candidates)/The key role of the supervisor(to communicate to the employee the
need to work safe)/ Proactive safety training program(First aid, safety driving,
accident prevention techniques)/ Enforcing safety rules(specific rules spread
through supervisors,, bulletin board notices, employee handbooks)/Investigating
and recording accidents(every accident should be investigated by supervisor and a
member of safety committee)
• Creating a safe work environme