pay, careers, and changing employment relationships chapter 8 sixth edition jennifer m. george &...
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Pay, Careers, and Changing Employment Relationships
Understanding and Managing
Organizational Behavior
Chapter 8
Sixth EditionJennifer M. George & Gareth R. Jones
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8-1
Learning 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
8-2Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
Learning 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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Changing Employment in Tough Economic Times
How do tough economic times change the
nature of the employment relation?
Employees reluctant to change jobs
Employees acquire more workload
Employees scared of losing job
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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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Determinants of Psychological Contracts
DirectCommunication
ObservationWritten
Documents
Psychological Contract
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Exhibit 8.1
Types of Psychological Contracts
Transactional Contracts: Short term
Narrow and specific Limited promises
and obligations
Relational Contracts: Long term
General and evolving Extensive and broad promisesand obligations
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Exhibit 8.2
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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Level of contributionAccuracy of tasks and direction
Performance appraisals give employees feedback that contributes tointrinsic motivation!
Information Provided to Employees
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Information Functions
Developmental purposes
Evaluative,
decision-making purposes
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Developing a Performance Appraisal System
Choice 1: The mix of
formal and informal appraisals
Choice 2: What factors to evaluate
Choice 3: Methods of appraisal
Choice 4: Who appraises performance
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Exhibit 8.3
Factors to Evaluate
Traits
BehaviorsResults
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Methods of Appraisal
Objective:
Numerical counts
based on fact
Subjective:
Perceptionsbased on traits,behaviors, and
results
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Graphic Rating Scale
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Exhibit 8.4a
Behaviorally Anchored Rating Scale
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Exhibit 8.4b
Behavioral Observation Scale
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Exhibit 8.4c
Who Appraises Performance?
SupervisorsSelf-appraisalsPeer appraisals
Subordinate appraisals
Customer/client appraisals
Multiple raters
360-degree appraisal
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Problems and Biases
Harshness, leniency, and average tendency biases
Knowledge-of-predictor bias
StereotypesPrimacy effectContrast effectHalo effectSimilar-to-me effect
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8-20
OB Today: Acknowledging High Performers During a Recession
• Giving gift cards for high performers shows
them that they are appreciated.
• Sending Thank You e-mails to show graditute.
• Giving employees more flexible working
conditions.
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 21
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
Commission
pay
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Gain-Sharing Plans
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
OrganizationalEntry
Early Career Mid-Career
Late Career
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Exhibit 8.6
Contemporary Career Challenges
• Ethical career management
• Career management that supports
diversity
• Career management in an era of dual-
career couples
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