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Chapter 8:8:Pay, Careers, and Pay, Careers, and

Changing Changing Employment Employment

RelationshipsRelationships

UnderstandingAnd

ManagingOrganizational

Behavior 4th Edition

JENNIFER GEORGE JENNIFER GEORGE & GARETH JONES& GARETH JONES

8-2 ©2005 Prentice Hall

Chapter Objectives

Describe the determinants and types of psychological contacts and what happens when they are broken

Appreciate the two major roles of performance appraisal

Understand the different kinds and methods of performance appraisal

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Chapter Objectives

Appreciate the importance of merit pay and the choices organizations face in using pay to motivate employees

Understand the importance of careers, different kinds of careers, and effective career management

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Opening Case: Changing with the times at Briggs & Stratton

How can organizations in traditional industries remain competitive?

Relocation Goal-setting Pay linked to productivity Career development and guidance

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What is a Psychological Contract?

An employee’s perception of – his or her exchange relationship with an

organization, – outcomes the organization has promised

to provide to the employee, and – contributions the employee is obligated to

make to the organization

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Sources of Information

Direct communication from coworkers and supervisors

Observations of what actually transpires in the organization

Written documents

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Consequences of Broken Contracts

Poor motivation and performance Negative moods and emotions Job dissatisfaction Intent to quit

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Performance Appraisal

Encourage high levels of employee motivation and performance

Provide accurate information to be used in managerial decision making

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Information Provided To Employees

Level of contribution Accuracy of tasks and direction

Performance appraisals give employees feedback that contributes to intrinsic motivation!

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Developing a Performance Appraisal System

The mix of formal and informal appraisals What factors to evaluate Methods of appraisal Who appraises performance

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Factors to Evaluate

Traits Behaviors Results

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Who Appraises Performance?

Supervisors Self-appraisals Peer appraisals

Subordinate appraisals Customer/client

appraisals Multiple raters

360-degree appraisal

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Problems and Biases in Performance Appraisal

Stereotypes Primacy effect Contrast effect Halo effect

Similar-to-me effect Harshness, leniency,

and average tendency biases

Knowledge-of-predictor bias

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Merit Pay Plans

Use when – Individual performance can be accurately

assessed– Employees are highly independent

Distribute by– Salary increase– Bonuses

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Individual-Based Merit Pay Plans

Piece-rate pay– Paid for each unit

produced

Commission pay– Paid by

percentage of sales

Full Partial

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Gain-Sharing

Employees receive share of profits or saved expenses– Encourages camaraderie and team spirit– Discourages personal motivation

Types– Scanlon plan– Profit sharing

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Pay Differentials and Comparable Worth

Gender Age Race Leadership level

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Types of Careers

Steady-state Linear Spiral Transitory

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Career Stages

Preparation for Work Organizational Entry Early Career Mid-Career Late Career

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Contemporary Career Challenges

Ethical Career Management Career Management in an Era of Dual-

Career Couples