CH 07

Organizational
Behavior, 8e
Schermerhorn, Hunt, and
Osborn
Prepared by
Michael K. McCuddy
Valparaiso University
John Wiley & Sons, Inc.
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Organizational Behavior:
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?
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
organizations mission and strategy.
A key element is the staffing function, which
consists of:
Recruitment.
Selection.
Socialization.

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.

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.

Recruitment approaches.
External recruitment.
Internal recruitment.
Realistic job previews.

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.

Completing application materials.
Gathering information regarding an applicants
background and experiences.

Typical application materials.
Traditional application forms.
Rsums.
Sometimes tests may be included with application
materials.

Conducting an interview.
Typically used though they are subject to
perceptual distortions.
Interviews can provide rough ideas concerning
the persons fit with the job and the

organization.
10

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.
11

Doing a background investigation.
Can be used early or late in selection process.
Background investigations include:
Basic level checks.
Reference checks.
12

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.
13

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 firms policies and procedures.
The firms organizational culture.
14
What is training and career

planning and development?
Training.
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.
15

Career planning and development.
Focus is on the long term.
Individuals work with their managers and/or
HR experts on career issues.
16

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.
17

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.

18

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?
19

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.
20

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.
21

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 ratees needed development
experiences.
22

Purposes of performance appraisal.
The four functions describe two general
purposes of good performance appraisal.

Evaluation.
Feedback and development.
23

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.
24

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 ratees strengths and weaknesses.

Feedback can be used as a basis for coaching
and training by the manager.

25

Who does the performance appraisal?
Ratees immediate superior.
Ratees peers.
Ratees subordinates.
360-degree evaluation.
26

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 evaluators observation and rating.

27

Performance appraisal methods.
Comparative methods.
Seek to identify a persons 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.
28

Comparative methods of performance
appraisal.
Ranking.
Paired comparison.
Forced distribution.
29

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.
30

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.
31

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.
32

Absolute methods of performance
appraisal.
Graphic rating scales.
Critical incident diary.
Behaviorally anchored rating scales.
Management by objectives.
33

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.
34

Critical incident diary.
Record of incidents of each subordinates
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.
35

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.
36

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.
37

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.
38

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.

39

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.
40

appraisal cont.
Strictness errors.
Raters tend to give everyone relatively low ratings.
Central tendency errors.

Raters lump everyone together around the average
or middle.
41

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.
42

appraisal cont.
Personal bias errors.
Raters let personal biases, such as stereotypes,
unduly influence the ratings.
43

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.
44

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.
45

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.
46

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

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.

48

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.
49

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.
50

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.
51

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.
52

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.
53

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.
54

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.
55

Profit-sharing plans.
Reward employees based on entire
organizations performance.
Not connected to productivity gains.
Often fund employee retirement plans.
Considered to be a benefit rather than an incentive.
56

Employee stock ownership plans (ESOPs).
Based on total organizations 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.
57

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.
58

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.
59

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Organizational

strategy and practice?

What are the essentials of human

What are the essentials of human

What are the essentials of human

individuals to apply for a given job.

What are the essentials of human

What are the essentials of human

Completing application materials.

What are the essentials of human

background and experiences.

What are the essentials of human

the persons fit with the job and the

What are the essentials of human

What are the essentials of human

What are the essentials of human

What are the essentials of human

What is training and career

What is training and career

HR experts on career issues.

What is training and career

What is training and career

continuous learning is required.

and build a portfolio of skills.

What is training and career

job change, a person should ask and

What is training and career

Maintenance, withdrawal, and retirement.

accomplishments or may encounter career stability.

What is performance appraisal?

performance and providing feedback upon

analysis, job description, and job

What is performance appraisal?

performance will be measured.

What is performance appraisal?

purposes of good performance appraisal.

What is performance appraisal?

When these issues are decided on the basis of

performance, a performance appraisal system

What is performance appraisal?

of expectations and performance objectives.

of the ratees strengths and weaknesses.

and training by the manager.

What is performance appraisal?

What is performance appraisal?

from the evaluators observation and rating.

What is performance appraisal?

those people being rated.

use comparative methods and more likely to

What is performance appraisal?

What is performance appraisal?

best to worst on each performance dimension.

What is performance appraisal?

other person being rated.

frequency of endorsement across all pairs.

What is performance appraisal?

categories, and rater assigns a specific

What is performance appraisal?

What is performance appraisal?

performance, and the rater assigns an

What is performance appraisal?

behavior that led to unusual success or failure

What is performance appraisal?