the requirement that employees do their assigned jobs dependably in terms of acceptable quantity and quality performance.
behaviors that are important for organizational effectiveness but are not typically considered part of an employee's formal job description, such as performing cooperative acts, making creative suggestions and protecting the company.
Arranging employees along a scale from best to lowest performer.
classifying employees into set categories, such as "outstanding," "excellent," "good," "average," "fair," and "poor."
Graphic rating scales
a performance evaluation method that identifies various job dimensions and contains scales that are used to rate each employee on each dimension.
Behaviorally anchored rating scales
a performance evaluation method that uses scales that are anchored by observable behavior to reduce the subjectivity and bias associated with ordinary graphic rating scales.
a method of evaluating employee performance that requires evaluators to write free-form essays describing the employee's performance.
Management by objectives (MBO)
philosophy of management that reflects a positive, proactive way of managing. It requires all employees to establish written, measurable objectives that can later be used to evaluate performance.
a measure of how clearly defined and measurable the goals are.
a measure of the amount of effort required to achieve the goal.
the degree to which individuals accept a specific goal as a realistic target.
the degree to which individuals are dedicated to reach the goals they have adopted.
360 degree appraisals
a method of evaluating employees that involves gathering performance feedback from people above them, below them, and beside them on an organizational chart.
evaluating the performance of supervisors and managers by asking subordinates to evaluate their supervisor's performance.
a performance appraisal that focuses on what the person has contributed to the organization. This information is used for deciding pay increases and promotions.
Personal development appraisal
a performance evaluation that focuses on helping employees develop their skills and abilities and involves a collaborative discussion.
a format for a performance evaluation interview in which negative comments are sandwiched between positive comments at the beginning and end of the interview.
an ethical principle regarding compensation that can be examined whether it is morally right or wrong.
how much does one company pay relative to other companies for the same jobs?
how much does one job pay relative to other jobs within the same company? How does a company justify paying some jobs more than others?
how much money should people who all perform the same job receive? What criteria, such as seniority and performance, should be used to pay one person more than another?
increases in an employee's basic wage level based on performance levels.
an incentive system that pays employees a specific amount of money for each unit of work they produce.
a pay system in which an employee's pay level is partially determined by the employee's skills as a means of motivating them to acquire greater skills.
Pay for knowledge
a pay system in which an employee's pay level is determined in part by how many knowledge tests the employee has successfully completed.
a program that allows employees to share in the profits of a company based on the profitability of the company and an allocation formula determining each employee's share.
Cash versus deferred plans
profit sharing money can be distributed as cash at the end of each period or placed in a deferred fund that grows tax-free until retirement.
a company-wide incentive plan that distributes money to employees based on a fixed ratio of labor costs to revenue. As revenue increases through higher productivity and employee suggestions, the amount of money given to the employees increases proportional to the fixed ratio.
a pay-for-performance plan that shares some of the economic gains with employees according to improvements in specific performance measures.
balancing the relative percentages of base pay, individual incentives, group incentives, and company-wide incentives to create a balance between motivation and security for employees.