ADMS 3490 Chapter Notes - Chapter 9-13: Performance Appraisal, Merit System, Design Issues

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mag0sea

4 Jan 2018

School

York University

Department

Administrative Studies

Course

ADMS 3490

Professor

Parbudyal Singh

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Document Summary

This chapter has explained how to evaluate the "market rate" for a given set of jobs. It has discussed forces affecting market rates and various sources of compensation data, including third party and in-house surveys. It has also presented the 4 main steps for conducting a compensation survey. And has presented ways analyze, interpret and apply compensation survey data shut up. The next chapter completes our discussion of how compensation values are determined by describing the process for evaluating individual employees, known as performance appraisal. This chapter focused on the 3rd element in determining compensation values. It explained how to develop processes for evaluating the performance level of individual employees so that they can be compressed accordingly, and emphasized that accurate evaluation of individual performance is essential for successful merit pay system. You have learned how creating a reliable and valid performance appraisal system is fraught with difficulties and that many firms are dissatisfied with their current appraisal processes.

Related Questions

Supervisors often avoid conducting counseling sessions with employees because the supervisors anticipate, sometimes correctly, that the session will be personally unpleasant. Most individuals simply do not enjoy confronting other individuals with judgments about performance. As is true of most people, supervisors have a need to be liked by members of the social groups with which they are associated. Counseling can disrupt the personal relationships which such groups represent. The supervisor often anticipates that this will occur, imagining that the subordinate will react to the session with hostility, or withdraw during the interview into a shell and thereafter ignore the supervisor's presence except when given direct orders. Such reactions by subordinates are not uncommon, and, in fear of that, the supervisor may avoid the discussion altogether.

Avoiding the discussion, however, will only result in the problem and the potential confrontation becoming worse. Counseling is an indispensable aspect of a supervisor's job which, if accomplished effectively, can resolve problems in a positive manner and ultimately help to strengthen the relationship between the supervisor and the subordinate.

It would be dishonest to assure any supervisor that there are techniques which will avoid the unpleasant aspects of counseling in every case. Like any aspect of supervision, counseling involves authority over and responsibility for the actions of other employees. It is precisely this authority over others' behavior that produces the potential conflict; however, such conflict can be minimized.

The written assignment for week six of the BU 461 course is a written counseling session in which students must demonstrate their knowledge and understanding of the skills, techniques, resources, and other information taught within the class and apply this knowledge to an employee counseling session (must be fictitious). To ensure maximum points, please adhere to the guidelines set forth below.

Your written counseling session must include the following:

(Please address in paragraph form)

I. A written analysis of the problem presented:

Why is the situation a problem?

What steps should have been taken to remediate the situation before reaching this level?

Does the employee know what is supposed to be done and by when?

Does the employee have:

the information needed to do the job?

the skills needed to do the job?

the resources needed to do the job?

Have I adequately defined the job performance expectations?

Does the problem have an adverse effect on:

the employee?

the co-workers/team?

the unit?

the agency?

myself as a supervisor?

Are any obstacles beyond the employeeâs control getting in the way?

Have I been inadvertently rewarding poor performance by my silence or behavior?

Is anyone else exhibiting the same problem?

Is there a pattern with this employee?

After addressing the above issues, it is then necessary for you to include:

II. A follow-up counseling memo that would be given to the employee after the counseling session.

Generally, a memo is both appropriate and necessary when: 1) previous counseling has failed to result in improvement; 2) you do not have confidence that the employee will correct the improper behavior without further encouragement; 3) the seriousness of the situation requires documentation that the session was held; and/or, 4) a multi-part plan for improvement was discussed during the session and the memo serves as written confirmation and a reminder of the plan.

When writing the counseling memo, the following guidelines should be followed:

Write the memo to the employee.

Be concise and clear.

The memo is a summary of your counseling session. Do not include other matters in the memo which were not discussed during the session.

Include the following sections:

A statement of the reason for and the date, time and place of the meeting. (Be as complete as possible in describing the problem.)

The employee's response to your concerns. This is important as it demonstrates to the employee that you were actually listening during the counseling session.

The manner in which the employee will seek to improve performance.

Provisions for follow-up consultations.

Do not characterize the memo as discipline or as a penalty.

The tone of the memo should be supportive and factual. Do not write it in a punitive or derogatory manner.

Show on the memo the names of those persons who will receive a copy of the memo. Include personal history folder.

The memo should be correct memo form

Your written counseling session will be graded on the following:

Clarity (have you addressed all required parts of section I)?

Completeness (have you addresses all required parts of section II)?

Conciseness (has your memo addressed the following)?

Did you clearly explain to the employee the facts of the situation?

Did you CLEARLY explain the gap between current performance and "expected performance"?

Did the employee indicate they understood the gap?

Did you get the employee to agree that a performance problem exists?

Did the employee ask enough questions to get employee to identify the cause of the problem and agree that change is necessary?

Did you identify good business reasons why the change must be made?

Did you list the consequences that could occur if the change is not made?

Did you get the employeeâs agreement to take specific actions to improve his/her performance?

Please select any one of the following scenarios as the situation for your written counseling session.

A written counseling session on any other scenario will not be graded. It must be from either one of the following:

Looking at pornography on the Internet during company time. Your employee was recently promoted to a new position without having been properly trained. As a result, your employee cannot keep up with fellow coworkers in the same position.

Preaching to coworkers their beliefs in Christianity and why other coworkers should go to church and Bible study. Your employee is an associate Pastor at his church and tries to recruit new members to his congregation while at work. He is an average level employee working on an assembly line.

Can't read, trying to hide it. Your employee is a safety inspector at an auto plant. She is an outstanding employee, but constantly seeks other workers to help finish her reports.

Falls asleep on the job. Your employee is a student attending college at night with 3 kids and a wife at home. He is a production assistant responsible for layout and print copy for the local newspaper.

Bad breath & body odor. Your employee is an aging man who is the assistant manager in the customer service department. He has been with the organization for over 25 years.

Wonâu t wear company uniforms because of religious reasons. Your employee is an atheist who has problems wearing the truck driver uniform for his job because a cross is part of the company logo. He also has a problem with wearing a uniform in general because he feels it represents him to others as being a member of an inferior social class.

Coming down with memory loss. Your employee is 37 years old who has recently undergone radiation therapy for breast cancer. She is responsible for medical records and tracking pharmaceutical prescriptions at the local hospital.

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Question:

Identify the ethical dilemma in this scenario:

Comment 1:

Sarah Potterman- Accepting a grant to research the company to which you are evaluating is a conflict of interest. It is difficult to be impartial toward the company that is paying the bills.

Jim Hopler- Changing the rules and omitting the facts to fit the desired outcome is essentially lying no matter how unintentional.

What are the undesirable consequences?

Sarah Potterman- Sarah may feel compelled to do less rigorous research, spin the results to look better for the software company, or just not publish the results if they reflected poorly on the software company. Even if her research was impeccable, she may be accused of partiality by the software company's competitors.

Jim Hopler- If Jim's leaders or customers found that he had skewed the data to improve his results, he could lose face, lose the company customers, or he could lose his job. Additionally, the company would not be making the necessary improvements to reach the goals they set.

Propose an ethical solution that considers the welfare of all the stakeholders.

Sarah Potterman- Ideally, her research would be funded by a non-benefiting party. She could also request the backing of all areas of intervention to see if there would be a way for the funding to be made across the different interventions so as to give the same advantage to all. This would have to be an all or none though.

Jim Hopler- Though the findings that Jim presented to his corporate office were not accurate, they were not using the same criteria to make the evaluation, and they did not meet the goals set by the company, they were still positive findings. Jim would have demonstrated better judgment and integrity by presenting the whole truth. Though the percent of "outstanding" did go down, the rating of "poor" had a significant improvement from 20% down to just 5%. Presenting that the "outstanding" percent went down but overall customer service rating went up would have been honest and potentially impressive enough.

Comment 2:

For the Sarah Potterman case and questions, the ethical dilemma is that Sarah's results may be biased because one firm is giving funds for her to compare it with other firms. The pay, whether or not it could be seen as a gift or not, is still a benefit to Sarah, and could be viewed as bias if she reviews RSPT Inc. more favorably than the other companies. Even if Sarah attempts to not be bias, she may still, unconsciously, choose RSPT Inc. over their competitor. The undesired consequences may be that RSPT Inc. receives an unfair advantage over the competitors and/or the competitors argue that Sarah's review is bias and cause her research to become rejected. Sarah should deny the gift/offer of funding and or request the same amount of funding from the competitors to make sure that the review is fair across the board.

For the Jim Hopler case and questions, the ethical dilemma lies with the changing of facts and numbers. If the company wanted to reduce the number of options, then it would have to reevaluate the initial score keeping procedure, or start from the beginning and scrap the old evaluations. By shrinking the chart, it skewed the information in the favor of the company, but it did not improve overall performance. The inaccuracy that the new numbers negate the reason for creating the survey in the first place. The undesirable effects are that the survey is not compatible with the previous surveys, which should have been kept consistent or re-evaluated accurately. Since it is difficult to go back and re-evaluate accurately, it would be highly recommended to stay with the original survey. By staying with the original survey, the company will be able to change and improve their customer relationships. If the company has decided that they do not want to change any further, than a survey will not make a difference.

Comment 3:

Sarah is researching the effectiveness of various intervention methods, one of which is the interactive system from RSPT. However, different from her sources for the other methods she is researching, RSPT is offering to fund her entire research as well as offering her an unsolicited grant for her data collection expenses. This creates an ethical dilemma as none of her sources for her research should receive any âdifferentâ treatment from the others. All sources should feel that they are being treated equally. Even though Sarah might have good intentions and use the money without warranting any favors to RSPT, the credibility of her results might be questionable. Also, if she uses the funds from RSPT Sarah might find herself being biased in her approach and this might affect her results. A suggested ethical approach could be that Sarah does not accept any funding from all of her sources for her research, or she requires each source to contribute the same amount towards her research. At least either way no one source seems to be getting any preferential treatment and Sarahâs research is convincingly transparent to all parties involved.

Part 2

The ethical dilemma that is presented in Jimâs case is that Jimâs team decided to select the statistical analysis that gave them their âexpectedâ results. Submitting the results to corporate portrays success of the changes implemented by Jim and his team, however it is not an accurate representation of the achievement of the goal the team had initially set out to attain. Ignoring the initially computed results prevents Jimâs team from further analyzing their data to obtain a clearer representation of the situation at hand and the problem to be solved. A suggested more ethical approach would be for Jimâs team to adjust their goal so that they aim to improve the ratings of each category, that is, decrease ratings in less favorable categories and increase ratings in more favorable categories. Since the number of ratings for each of the categories are dependent on each other, decreasing the less favorable categories would inherently increase ratings in the more favorable categories.

Comment 4:

In the first scenario the ethical dilemma is that RSPT is going to fund the expenses Sarahâs research. Since RSPT is funding the research project, the consequences could be that there is some bias when it comes to the data that is revealed. Another consequence could be possible manipulation being that they are funding the research. This consequence creates the question of RSPT being allowed to manipulate the data in favor of their product and strategy. My proposal for an ethical solution would be to accept the free software, which Sarah was originally requesting and deny the offer for the funding for the research. That way any possible negative consequences are removed regarding possible bias coming from Sarah or misreporting of the data and if RSPTâs software is the best strategy.

In the second scenario the ethical dilemma scenario is that Jim changed the way the data was calculated in order to make it more favorable for his officeâs stats. The consequences are that if the company sees the raw data and how Jim manipulated the data for his benefit, he could be fired. Another consequence could be if there is a problem area that the original data is showing, then that problem will not get solved to increase the numbers, instead Jim will have to continue to figure out ways to manipulate the numbers.

My proposal is to combine poor and below average as below average and then combine above average and outstanding as above average and see the how the numbers have changed from there. If you do that youâll receive this:

1^st survey â Below Average â 25%, Average â 15%, Above Average â 60%

2^nd survey â Below Average â 10%, Average â 20%, Above Average â 70%

Now you can see from the changes that Jim has implemented that he has made improvements without unethically manipulating the data.

PLEASE GIVE YOUR VIEW ON BOTH SCENARIOS BASED ON THE COMMENT POSTED ABOVE

BOR CPAs, Inc. is a closely held corporation owned by threestockholders who used the initials of their last names to form thecorporationâs name: Cyrus Bailey, John Ogden, and Samuel Rogers.The firmâs Certified Public Accountants (CPAs) perform audits ofboth public companies and privately owned companies. BORâs CPAsalso provide tax services to both individuals and businesses.

The corporation is divided into two profit centers: the AuditDivision and the Tax Division. Each division is composed of twocost centers. The Audit Division is composed of two cost-centerdepartments: Public Company Audits and Private Company Audits. TheTax Division is composed of two cost-center departments also:Individual Tax and Business Tax.

BOR, a decentralized organization, is interested in evaluatingthe performance of the two divisions. The stockholders areresponsible for deciding on investment in the two divisions. CyrusBailey is in charge of the performance evaluation, and turns to youfor assistance. Mr. Bailey is only interested in evaluatingoperations at the profit center (division) level, and not at thecost center (department) level.

Mr. Bailey is considering temporarily using some of the stafffrom the Tax Division to assist the Audit Division during theupcoming busy audit season, and would like to evaluate the effectof this on net income. The Tax Division is estimated to have 800hours of excess capacity.

The unit for determining sales revenue in both divisions is the"engagement", which means the total agreed-upon work for a givenclient in either audit or tax for a given year. The company chargeson average a fee of $75,000 per audit engagement, and $15,750 pertax engagement.

The company has its own Payroll Office, which provides payrollservices to both divisions and will allocate its total expenses tothe two divisions as service department charges.

The following chart shows some basic data for the company:

Hourly market rate for staff (theprice the company would have to pay from an outside contractor forstaff services)	$110.00
Average hourly cost rate for staff(the average price the company pays to its staff)	$50.00
Number of paychecks issued by AuditDivision	110
Number of paychecks issued by TaxDivision	340
Total expense for PayrollOffice	$29,250
Amount of assets invested in AuditDivision by BOR CPAs, Inc.	$10,000,000
Amount of assets invested in TaxDivision by BOR CPAs, Inc.	$4,000,000

Given that Mr. Bailey is evaluating BOR CPAs, Inc., which is aninvestment center, what transfer pricing option(s) would he mostprefer that the divisions use? Check all that apply.

No transfer between divisions

Market transfer price of $110.00 per hour

Variable standard cost transfer price of $50.00 per hour

Negotiated transfer price of $80.00 per hour

2. Which transfer pricing option(s) would the manager of theAudit Division prefer? Check all that apply.

Variable standard cost transfer price of $50.00 per hour

Market transfer price of $110.00 per hour

No transfer between divisions

Negotiated transfer price of $80.00 per hour

3. Which transfer pricing option(s) would the manager of the TaxDivision prefer? Check all that apply.

Market transfer price of $110.00 per hour

Negotiated transfer price of $80.00 per hour

No transfer between divisions

Variable standard cost transfer price of $50.00 per hour

4. Given the preferences of the managers of the Audit and TaxDivisions, and also considering the preferences of BOR CPAs, Inc.,what might be the decision that provides the best outcome for alllevels and entities within the company?

The company should use the market transfer price, since itâsimportant for the divisions to operate under real marketconditions.

If the divisional managers cannot come to an agreement, itâsbest to forgo any transfers between divisions in order to reduceconflict within the company.

Use the negotiated transfer price, so that each entity is betteroff than it would be without any transfers between divisions.

The company should use the variable standard cost transferprice, because it would be unfair for the Tax Division to make aprofit in dealing with the Audit Division, since theyâre in thesame company.

ADMS 3490 Chapter Notes - Chapter 9-13: Performance Appraisal, Merit System, Design Issues

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