HRM Lecture 7 2024 PDF

 HRMG 262 Management & Management Development Eva Aileen Jungwirth-Edelmann, MA, 262 HRMG Lecture 7 Contact Details Eva Aileen JUNGWIRTH-EDELMANN, MA E-Mail: [email protected] Phone: +43-(0)-69916613399...

 HRMG 262 Management & Management Development Eva Aileen Jungwirth-Edelmann, MA, 262 HRMG Lecture 7 Contact Details Eva Aileen JUNGWIRTH-EDELMANN, MA E-Mail: [email protected] Phone: +43-(0)-69916613399 (during weekdays; 9:00 – 17:00 – no WhatsApp) E-Mails will be answered during working hours! E-Mails that are resent will be answered last! Modul University Vienna ‹#›  Time schedule 14 Lectures – Room 109/110 Lectures are Wednesday: 9:00 – 10:30 every week! 7 Seminars – Room 108 Group 1 (Week A) Wednesday: 10:45 – 12:15 Group 2 (Week B) Wednesday: 10:45 – 12:15 L1/ L2/ L3/ L4/ L5/ L6/ L7/ L8/ L9/ L10/ L11/ L12/ L13/ L14/ S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 Dates 25.09 2.10 9.10 16.10 23.10 30.10 6.11 13.11 20.11 27.11 4.12 11.12 18.12 8.01 GROUP 1 Seminar GROUP 2 Seminar Dead Quiz 1 Quiz 2 lines Lecture Dead Feed- PAPER Feed- Feed- Presen Presen Presen Present lines back DEAD- back back tations tations tations ations Seminar Papers LINE Presen Presen tations tations Modul University Vienna ‹#› Course Outline Compensation and benefits Performance appraisal Modul University Vienna ‹#› Why are managing compensation and benefits important activities for any organization? What happens if employers pay too much/too little? Modul University Vienna ‹#›  Employee compensation = direct financial payments + indirect payments Modul University Vienna ‹#›  Introduction to compensation & benefits (1) Compensation = set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within an organization Benefits = various rewards, incentives, and other things of value that an organization provides to its employees – not money Internal vs. external equity: o Internal equity = refers to comparisons made by employees to other employees within the same organization o External equity = refers to comparisons made by employees to others employed by different organizations performing similar jobs Modul University Vienna ‹#›  Introduction to compensation & benefits (2) Pay surveys = surveys of compensation paid to employees by other employers in a particular area or industry Wages vs. salaries: oWages = hourly compensation paid to operating employees; the basis for wages is time oSalary = income paid to an individual on the basis of performance, not on the basis of time Modul University Vienna ‹#› Strategic options for compensation Pay above – market rate Anticipation of Determination Pay market rate setting pay level of market pay Pay below – market rate Modul University Vienna ‹#› Determining what to pay (1) Five steps: 1. conduct salary survey 2. evaluate jobs 3. develop pay grades 4. use wage curves 5. develop pay ranges Job evaluation =method for determining the relative value/worth of a job to the organization so that individuals who perform that job can be compensated adequately and appropriately o Classification system – clustering groups of jobs together, often called grades o Point system – requires to quantify the value of various elements of a job o Factor comparison method – assesses jobs using a factor comparison scale Modul University Vienna ‹#›  Determining what to pay (2) Pay-for-knowledge = involves compensating employees for learning specific information Skill-based pay = rewards employees for acquiring new skills Pay secrecy vs. pay compression Pay secrecy: refers to the extent the compensation of any individual in an organization is secret or the extent to which it is formally made available to others Pay compression: occurs when individuals with different levels of experience and/or performance levels are being paid relatively equal salaries/ wages Modul University Vienna ‹#›  Why do companies offer benefits packages to their employees? Modul University Vienna ‹#›  Basic considerations in benefits programs(1) “Fringe benefits” – indirect compensation or benefits Competitive benefits packages attract better applicants and help the company retain the employees they have already hired Efficiency wage theory – suggests that companies can save money and become more productive if they pay more because they attract individuals who are willing and want to work hard Impact on job satisfaction and turnover Employee expectations = driving force in determining what benefits a firm must offer Modul University Vienna ‹#› Basic considerations in benefits programs(2) The kinds of benefits that are attractive/appropriate to employees around the world Mandated benefits: unemployment insurance, social security, workers’ compensation, … Nonmandated benefits: insurance coverage, private pension plans, paid time off, other benefits (e.g. childcare, eldercare), cafeteria-style benefits plans, … Modul University Vienna ‹#›  Things to keep in mind … Compensation = much more than just a weekly/monthly paycheck Indirect compensation and benefits represent a significant portion of the total compensation paid to employees The rise in the cost of benefits is the result of: oAttempts to attract high-quality employees during times of low unemployment oBelief that employees might respond to the provision of more attractive benefits by working harder oEmployee expectations about benefits Modul University Vienna ‹#› Things to keep in mind … For compensation programs to be effective, they must account for both external and internal equity, and the organization must decide what it is willing to pay for It is difficult to assess the effectiveness of indirect compensation plans, but it is critical that the organization communicates clearly to employees what benefits those employees are receiving Modul University Vienna ‹#› What would be the primary purpose for conducting performance appraisals? Effective management of performance may be the difference between success and failure! Modul University Vienna ‹#› Introduction to performance appraisal and management Performance appraisal = specific and formal evaluation of an employee conducted to determine the degree to which the employee is performing his/her job effectively Performance management = general set of activities carried out by the organization to change (improve) employee performance Performance appraisals can focus on behaviors, traits, or outcomes (goals) Modul University Vienna ‹#›  Introduction to performance appraisal and management Performance appraisals are important because they: oProvide a benchmark for assessing the extent to which recruiting, and selection processes are adequate oAre linked to an organization´s compensation system oAre also important for legal reasons oPlay an important role in employee motivation and development oProvide valuable and useful information to the organization´s HR planning process Modul University Vienna ‹#›  Performance Management Process Establish job duties Has performance NO Establish & improving? Transfer; communicate demote; performance standards terminate Inspect/ observe employee performance Implement Yes improvement plans Document performance Rate performance Performance managed NO Develop Set up meeting Reward further Is Provide feedback/ performance Yes coaching/ counseling improving? Modul University Vienna ‹#›  The performance appraisal process The role of the organization: o Developing the general performance appraisal process o Determining the timing of the performance appraisals o Ensuring that everyone rates performance using the same set of standards and that employees know what is expected of them The role of the rater: o Compares the ratee´s performance information with the standards o Collects information about the day-to-day behaviors and translates it into the ratings o Communicates the results and consequences of the appraisal to the ratee The role of the ratee: o Should have a clear and unbiased view of his/her performance Modul University Vienna ‹#› Sources of information for performance appraisal Supervisor Peers Self-appraisal The Ratee Customers Subordinates Modul University Vienna ‹#› Methods for appraising performance (1) Simple ranking : ranking all employees from best to worst Paired comparison: comparing two individuals Forced distribution: grouping employees into predefined frequencies of performance ratings Graphic rating scale Modul University Vienna ‹#›  Methods for appraising performance (2) Critical incident : relies on instances of especially good or poor performance on the part of the employee Behaviorally Anchored Rating Scale (BARS): combination of rating scale and critical incident Behavioral Observation Scale (BOS): uses a large amount of critical incidents Goal-based or management-by-objectives (MBO): based on the extent to which individuals meet their own objectives Modul University Vienna ‹#›  General issues in performance appraisal Contextual performance = tasks an employee does on the job that are not required as part of the job but that still benefit the organization in some way Deficiencies in appraisal methods: oProjection – we see characteristics of our own in someone else oContrast error – compare people to one another; not standards oDistributional error – using only one part of a rating scale oHalo error – when one positive aspect, over shines all other aspects oHorns error – when one negative aspect is used to make all others look bad as well Follow-up to appraisals Modul University Vienna ‹#›  Things to keep in mind … The rater in the appraisal process has the ultimate responsibility for how well an appraisal system works, and raters can and do distort appraisals Raters must be convinced that it is in their best interests to be fair and accurate in appraisals. No type of system can replace rater motivation to do a good job Although 360-degree appraisals are popular, evidence does not support their effectiveness relative to other, less expensive methods, and it is problematic to use 360-degree appraisals for decision making Regardless of the appraisal system used, performance management is critical to achieve the most important goal for the process - the improvement of performance, and this process begins with providing feedback to the employee Modul University Vienna ‹#› References DeNisi, A.S., & Griffin, R.W. (2008). Human resource management. (3rd edition). Boston: Houghton Mifflin Company. Dessler, G. (2009). A framework for human resource management. (5th edition). Upper Saddle River, NJ: Pearson Education, Inc. Thank you for your attention! Modul University Vienna ‹#›  Thank you for joining us! Contact: Modul University Vienna GmbH [email protected] Am Kahlenberg 1, 1190 Vienna www.modul.ac.at