1. Organizational Behavior, 8e Schermerhorn, Hunt, and Osborn
Prepared by
Michael K. McCuddy
Valparaiso University
John Wiley & Sons, Inc.

2. Organizational Behavior: Chapter 7
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Organizational Behavior: Chapter 7

3. Chapter 7 Human Resource Management Systems
Study questions.
What are the essentials of human resource strategy and practice?
What is training and career planning and development?
What is performance appraisal?
What are rewards and reward systems?
Organizational Behavior: Chapter 7

4. What are the essentials of human resource strategy and practice?
Human resource (HR) strategic planning.
The process of providing capable and motivated people to carry out the organization’s mission and strategy.
A key element is the staffing function, which consists of:
Recruitment.
Selection.
Socialization.
Organizational Behavior: Chapter 7

5. What are the essentials of human resource strategy and practice?
Job analysis.
Staffing begins with job analysis.
The process and procedures used to collect and classify information about tasks the organization needs to complete.
Identifies the worker characteristics needed to perform the job.
Forms the basis for a job description and job specifications.
Organizational Behavior: Chapter 7

6. What are the essentials of human resource strategy and practice?
Recruitment.
The process of attracting the best qualified individuals to apply for a given job.
Typical recruitment steps.
Advertisement of a position vacancy.
Preliminary contact with potential job candidates.
Preliminary screening to obtain a pool of candidates.
Organizational Behavior: Chapter 7

7. What are the essentials of human resource strategy and practice?
Recruitment approaches.
External recruitment.
Internal recruitment.
Realistic job previews.
Organizational Behavior: Chapter 7

8. What are the essentials of human resource strategy and practice?
Selection.
A series of steps from initial applicant screening to final hiring of the new employee.
Selection process.
Completing application materials.
Conducting an interview.
Completing any necessary tests.
Doing a background investigation.
Deciding to hire or not to hire.
Organizational Behavior: Chapter 7

9. What are the essentials of human resource strategy and practice?
Completing application materials.
Gathering information regarding an applicant’s background and experiences.
Typical application materials.
Traditional application forms.
Résumés.
Sometimes tests may be included with application materials.
Organizational Behavior: Chapter 7

10. What are the essentials of human resource strategy and practice?
Conducting an interview.
Typically used though they are subject to perceptual distortions.
Interviews can provide rough ideas concerning the person’s fit with the job and the organization.
Organizational Behavior: Chapter 7

11. What are the essentials of human resource strategy and practice?
Completing any necessary tests.
Administered before or after the interview.
Common examples of employment tests.
Cognitive, clerical, or mechanical aptitudes or abilities.
Personality.
Drug use.
Performance.
Assessment centers.
Organizational Behavior: Chapter 7

12. What are the essentials of human resource strategy and practice?
Doing a background investigation.
Can be used early or late in selection process.
Background investigations include:
Basic level checks.
Reference checks.
Organizational Behavior: Chapter 7

13. What are the essentials of human resource strategy and practice?
Deciding to hire or not to hire.
Draws on information produced in preceding selection steps.
A job offer is made.
A physical examination may be required if it is relevant to job performance.
Negotiation of salary and/or benefits for some jobs.
Organizational Behavior: Chapter 7

14. What are the essentials of human resource strategy and practice?
Socialization.
The final step in the staffing process.
Involves orienting new employees to:
The firm.
The work units in which they will be working.
The firm’s policies and procedures.
The firm’s organizational culture.
Organizational Behavior: Chapter 7

15. What is training and career planning and development?
A set of activities that provides the opportunity to acquire and improve job-related skills.
Types of training.
On-the-job training.
Apprenticeships.
Job rotation.
Off-the-job training.
Organizational Behavior: Chapter 7

16. What is training and career planning and development?
Focus is on the long term.
Individuals work with their managers and/or HR experts on career issues.
Organizational Behavior: Chapter 7

17. What is training and career planning and development?
Framework for formal career planning.
Personal assessment.
Analysis of opportunities.
Selection of career objectives.
Selection and implementation of plan.
Evaluation of results and revision of plan as necessary.
Organizational Behavior: Chapter 7

18. What is training and career planning and development?
Career planning and development implications.
The nature of work is changing and continuous learning is required.
People must take charge of their own careers and build a portfolio of skills.
Organizational Behavior: Chapter 7

19. What is training and career planning and development?
When considering a new job or possible job change, a person should ask and answer two questions.
What are my potential gains and losses?
What are the potential gains and losses for significant others?
Organizational Behavior: Chapter 7

20. What is training and career planning and development?
Traditional career paths.
Entry and establishment.
Involves on-the-job development of relevant skills and abilities.
Advancement.
The individual seeks growth and increased responsibility.
Maintenance, withdrawal, and retirement.
Individuals may experience continued growth of accomplishments or may encounter career stability.
At some point, individuals consider withdrawal and ultimate retirement.
Organizational Behavior: Chapter 7

21. What is performance appraisal?
A process of systematically evaluating performance and providing feedback upon which performance adjustments can be made.
Performance appraisal should be based on job analysis, job description, and job specifications.
Organizational Behavior: Chapter 7

22. What is performance appraisal?
Functions of performance appraisal.
Define the specific job criteria against which performance will be measured.
Measure past job performance accurately.
Justify rewards, thereby differentiating between high and low performance.
Define ratee’s needed development experiences.
Organizational Behavior: Chapter 7

23. What is performance appraisal?
Purposes of performance appraisal.
The four functions describe two general purposes of good performance appraisal.
Evaluation.
Feedback and development.
Organizational Behavior: Chapter 7

24. What is performance appraisal?
Evaluative decisions.
Concerned with issues regarding:
Promotions
Transfers.
Terminations.
Salary increases.
When these issues are decided on the basis of performance, a performance appraisal system is needed.
Organizational Behavior: Chapter 7

25. What is performance appraisal?
Feedback and development decisions.
Letting ratees know where they stand in terms of expectations and performance objectives.
Feedback should involve a detailed discussion of the ratee’s strengths and weaknesses.
Feedback can be used as a basis for coaching and training by the manager.
Organizational Behavior: Chapter 7

26. What is performance appraisal?
Who does the performance appraisal?
Ratee’s immediate superior.
Ratee’s peers.
Ratee’s subordinates.
360-degree evaluation.
Organizational Behavior: Chapter 7

27. What is performance appraisal?
Dimensions and standards of performance appraisal.
Output measures.
Quantity of work output.
Quality of work output.
Activity measures.
Behavioral measures that are typically obtained from the evaluator’s observation and rating.
Organizational Behavior: Chapter 7

28. What is performance appraisal?
Performance appraisal methods.
Comparative methods.
Seek to identify a person’s relative standing among those people being rated.
Absolute methods.
Specify precise measurement standards.
Collectivist-oriented cultures are less likely to use comparative methods and more likely to use absolute methods.
Organizational Behavior: Chapter 7

29. What is performance appraisal?
Comparative methods of performance appraisal.
Ranking.
Paired comparison.
Forced distribution.
Organizational Behavior: Chapter 7

30. What is performance appraisal?
Ranking.
Consists of rank ordering individuals from best to worst on each performance dimension.
Relatively simple to use.
Can be burdensome when evaluating a large number of people.
Organizational Behavior: Chapter 7

31. What is performance appraisal?
Paired comparison.
Each person is directly compared with every other person being rated.
Final performance ranking reflects the frequency of endorsement across all pairs.
Can be very tedious when many people must be compared.
Organizational Behavior: Chapter 7

32. What is performance appraisal?
Forced distribution.
Uses a small number of performance categories, and rater assigns a specific proportion of employees to each category.
Forces rater to use all categories.
Can be problematic if most of the employees perform similarly.
Organizational Behavior: Chapter 7

33. What is performance appraisal?
Absolute methods of performance appraisal.
Graphic rating scales.
Critical incident diary.
Behaviorally anchored rating scales.
Management by objectives.
Organizational Behavior: Chapter 7

34. What is performance appraisal?
Graphic rating scales.
List of dimensions related to high performance, and the rater assigns an individual score on each dimension.
Easy and efficient to use.
Conundrum of job relevance and generality across jobs.
Organizational Behavior: Chapter 7

35. What is performance appraisal?
Critical incident diary.
Record of incidents of each subordinate’s behavior that led to unusual success or failure in a give performance aspect.
Excellent for development and feedback due to qualitative emphasis.
Difficult to use for evaluation due to lack of quantitative emphasis.
Organizational Behavior: Chapter 7

36. What is performance appraisal?
Behaviorally anchored rating scales (BARS).
Developed through the careful collection of observable job behaviors that describe both superior and inferior performance.
A rating scale is developed that anchors specific critical behaviors, each of which reflects a different degree of performance effectiveness.
Organizational Behavior: Chapter 7

37. What is performance appraisal?
Behaviorally anchored rating scales (BARS) — cont.
Provides specific behaviors that are useful for counseling and feedback.
May not be as superior as once thought.
The Behavioral Observation Scale (BOS) is a simpler variation of BARS.
Organizational Behavior: Chapter 7

38. What is performance appraisal?
Management by objectives (MBO).
Subordinates work with their supervisor to establish specific task-related objectives.
MBO is the most individualized appraisal method .
MBO works well with counseling, provided the goals focus on important activities.
MBO is not highly subjective to rating errors.
Organizational Behavior: Chapter 7

39. What is performance appraisal?
To be meaningful, an appraisal system must be:
Reliable — provide consistent results across time.
Valid — actually measure people on relevant job content.
Measurement errors can threaten the reliability or validity of performance appraisals.
Organizational Behavior: Chapter 7

40. What is performance appraisal?
Measurement errors in performance appraisal.
Halo errors.
The rater evaluates the ratee on several different dimensions and gives a similar rating for each dimension.
Leniency errors.
Raters tend to give everyone relatively high ratings.
Organizational Behavior: Chapter 7

41. What is performance appraisal?
Measurement errors in performance appraisal — cont.
Strictness errors.
Raters tend to give everyone relatively low ratings.
Central tendency errors.
Raters lump everyone together around the average or middle.
Organizational Behavior: Chapter 7

42. What is performance appraisal?
Measurement errors in performance appraisal — cont.
Low differentiation errors.
Raters restrict themselves to a small part of the rating scale.
Examples include leniency, strictness, and central tendency errors.
Recency errors.
Raters allow recent events to exercise undue influence on ratings.
Organizational Behavior: Chapter 7

43. What is performance appraisal?
Measurement errors in performance appraisal — cont.
Personal bias errors.
Raters let personal biases, such as stereotypes, unduly influence the ratings.
Organizational Behavior: Chapter 7

44. What is performance appraisal?
Rating errors can be reduced and performance appraisals improved by:
Training raters to understand the evaluation process and recognize errors.
Ensuring that raters observe ratees on an ongoing basis.
Not having the rater evaluate too many ratees.
Ensuring the clarity and adequacy of performance dimensions and standards.
Avoiding terms that have different meanings for different rates.
Organizational Behavior: Chapter 7

45. What is performance appraisal?
Guidelines for ensuring the legality of performance appraisal systems.
Base appraisal on job requirements as reflected in performance standards.
Ensure that employees clearly understand the performance standards.
Use clearly defined dimensions.
Use behaviorally-based dimensions supported by observable evidence.
Organizational Behavior: Chapter 7

46. What is performance appraisal?
Guidelines for ensuring the legality of performance appraisal systems — cont.
Avoid abstract trait names.
Ensure that scale anchors are brief and logically consistent.
Ensure that the system is valid and psychometrically sound.
Provide an appeal mechanism to handle appraisal disagreements.
Organizational Behavior: Chapter 7

47. What is performance appraisal?
Group evaluation.
Group or team performance appraisal is consistent with:
Self-managed teams.
High performance organizations.
Frequently accompanied by a group-based compensation system.
Organizational Behavior: Chapter 7

48. What are rewards and reward systems?
Types of rewards.
Extrinsic rewards.
Positively valued work outcomes given by some person or source in the work setting.
Intrinsic rewards.
Positively valued work outcomes received directly from task performance.
Organizational Behavior: Chapter 7

49. What are rewards and reward systems?
Pay as an extrinsic reward.
Positive aspects of pay.
Helps firms attract and retain capable workers.
Helps satisfy and motivate workers.
Negative aspects of pay.
Dissatisfaction with pay can lead to strikes, grievances, absenteeism, turnover, and poor physical and mental health.
Organizational Behavior: Chapter 7

50. What are rewards and reward systems?
Pay as a source of motivation.
High job performance must be viewed as the path for achieving high pay.
Merit pay is a method for connecting performance and pay.
Merit pay makes pay contingent on job performance.
Organizational Behavior: Chapter 7

51. What are rewards and reward systems?
To be effective, merit pay should:
Use realistic and accurate performance measures.
Create a strong linkage between high performance and high pay.
Discriminate between high and low performers in amount of pay.
Not be confused with cost-of-living adjustments.
Organizational Behavior: Chapter 7

52. What are rewards and reward systems?
Creative pay practices.
Merit pay plans do not recognize employee interdependence, and are thus inconsistent with the demands of HPOs.
Pay practices should be consistent with:
The demands of HPOs.
The HR and overall organizational strategies.
Organizational Behavior: Chapter 7

53. What are rewards and reward systems?
Types of creative pay practices.
Skill-based pay.
Gain-sharing plans.
Profit-sharing plans.
Employee stock ownership plans (ESOPs).
Lump-sum pay increases.
Flexible benefit plans.
Organizational Behavior: Chapter 7

54. What are rewards and reward systems?
Skill-based pay.
Rewards people for acquiring and developing job-relevant skills.
Advantages.
Employee cross-training.
Fewer supervisors needed.
Disadvantages.
Higher pay and training costs.
Establishing appropriate monetary values for skills.
Organizational Behavior: Chapter 7

55. What are rewards and reward systems?
Gain-sharing plans.
Workers share in enhanced earnings resulting from productivity gains.
Advantages.
Increased worker motivation.
Greater sense of personal responsibility.
Encourages participation and teamwork.
Organizational Behavior: Chapter 7

56. What are rewards and reward systems?
Profit-sharing plans.
Reward employees based on entire organization’s performance.
Not connected to productivity gains.
Often fund employee retirement plans.
Considered to be a benefit rather than an incentive.
Organizational Behavior: Chapter 7

57. What are rewards and reward systems?
Employee stock ownership plans (ESOPs).
Based on total organization’s performance.
ESOP options.
Stock may be given to employees.
Employees may purchase stock at a below-market price.
Advantage.
Nontaxable to organization until redeemed by employees.
Disadvantage.
Risk of stock investments.
Organizational Behavior: Chapter 7

58. What are rewards and reward systems?
Lump-sum pay increases.
Individuals elect to receive a pay increase in one or more lump-sum distributions that increase the base salary.
Lump-sum payments — which differ from lump-sum increases — are one-time bonus payments that do not increase the base salary.
Organizational Behavior: Chapter 7

59. What are rewards and reward systems?
Flexible benefit plans.
Fringe benefits are indirect incentives.
Plans accommodate individual differences to capitalize on motivational value of benefits.
Plans allow workers to select benefits according to their needs.
Organizational Behavior: Chapter 7