2. ethical lapses. Some of these cases have involved violations of
company
policies and/or business laws, while others have been linked to
poor
decision-making and improper behaviors. What's particularly
troubling
about many of the more high-profile ethical scandals is that the
leaders
were considered by many to be at the top of their game. Mark
Hurd,
who had an improper relationship with a contractor while he
was CEO
of Hewlett-Packard, Scott Thomson, the previous CEO of Yahoo
who
faked having a computer science degree, and Kathryn Abbate,
the
previous CEO who stole $7 million from a heath center located
in
Miami, are all examples of individuals who ignored their ethical
compasses.
But why do these ethical failures occur? Evidence suggests
that there
are more opportunities for ethical transgressions as leaders get
promoted up through the ranks of business. For instance, leaders
often
have more autonomy and more access to information, which can
encourage them to do the wrong thing. Work–life imbalance can
also be
an issue for some executives, which can increase their stress
levels.
Greed, arrogance, and an entitlement mentality can be concerns.
Finally, the culture of an organization, assuming it is unethical,
can
prompt leaders to behave in a risky manner.
So what can companies do to prevent the ethical lapses of
business
5. 2 Executive Bonuses and Incentives
Performance Management Benefits; Compensation Strategies
and Practices
Customer satisfaction, employee satisfaction, market share,
learning
and development, productivity, and quality are other areas that
can be
measured to determine executive performance rewards.
Measurement of executive performance varies from one
company to
another. Some executive compensation packages use a short-
term focus
of one year, which may lead to large rewards for executive
performance
in a given year even though corporate performance over a
multiyear
period is mediocre, especially if the yearly measures are not
carefully
chosen. Executives may manipulate earnings per share by
selling assets,
liquidating inventories, or reducing research and development
expenditures.66 All of these actions may make organizational
performance look better in the short run but impair the long-
term
growth of the organization.
Other executive compensation issues and concerns exist.
Figure 12-13
highlights some of the criticisms and counterarguments related
9. Unfairness in evaluation becomes evident when employees
move from one supervisor to another. An
employee’s work and performance remain the same, but
evaluation points differ because of errors of
severity or lenience.
It is human to be biased. Bias of liking occurs when we prefer a
good-natured employee, a hard worker, or
a single mother. In these cases, the judgment and evaluation
may be influenced by feelings.
HRM tries to minimize problems by providing specific training
for evaluators. HRM should also provide
the same training to all evaluators in the organization to ensure
consistency across all departments.
The appraisal interview presents both an opportunity and a
challenge. It can be an emotional experience for
the manager and the employee. The manager must communicate
both praise and constructive criticism. A
major concern for managers is emphasizing the positive aspects
of the employee's performance while still
discussing ways to improve. If the interview is handled poorly,
the employee may feel resentment, which
could lead to future performance problems. (Mathis et al.,
2017). Read the following hints for a successful
performance appraisal interview.
2 Appraisal Interview Hints
Drawbacks of Performance Appraisal Tools
10. Performance management is essential because it:
• Enables employment, promotion, compensation decisions
• Motivates goal setting
• Provides feedback for improvement
• Enables career planning sessions
• Facilitates retention and internal hiring
• Provides legal protection for employers
Performance management systems have a few drawbacks such
as:
• They requires extensive cost, time and effort.
• Employees tend to compare evaluation results, finding fault
with the process.
• Can be demotivating to some employees.
• There’s a tendency for rater errors.
• Confidentiality breaches may occur when employees share
results of evaluations with
colleagues.
• Online storing systems are vulnerable to unauthorized access.
Compensation Strategies and Practices
Some enjoy their work and rewards of a great job, but most
people work to pay bills and save for
retirement.
15. Performance Management and Appraisal
implications of this forced ranking. The 10% of
employees that she
ranked as D workers are issued warnings and
asked to improve their
performance within 60 days or face termination.
The 40% that she
ranked as C performers, including the 5% of
employees that she
forced into the C group despite the fact that
they were B performers,
are notified in writing that they may be categorized
as D workers
during the next evaluation cycle and therefore
may face dismissal. B
performers are informed that they are currently secure,
but if the D
category were to cease to exist, someB
workers may be dropped to C,
somemay be upgraded to A, and others may
continue to be
categorized as B workers.
In this case the only safe category of workers is
the 10% who made it
to the A group. Employees in this group
will attend a management
training program. So the top and bottom 10% will
likely leave the
department, which means that the remaining B
and C workers will be
redistributed in the ranking in the next performance
evaluation cycle.
This is only an example of how forced ranking
may work.
Organizations may use and manage forced ranking
16. differently.
Performance Management and Appraisal
HRM needs to monitor and measure employee performance.
HRM uses standardized forms and
processes to measure performance and customizes them to
organizational needs. These include:
Annual, half-yearly, and quarterly appraisals
360-degree appraisal
Management by objectives
Forced ranking
Most common is the annual performance appraisal. The
employee and supervisor complete a
standardized form and performance review with goal setting,
discussing resources to achieve goals.
Organizations may evaluate employees every six or three
months. Frequent evaluations enable
employees to focus on goals and take corrective actions early.
Organization can promptly reward good
performers, which motivates employees to perform better.
Drawbacks to quarterly appraisals are the extensive time and
17. effort to complete forms and conduct
interviews.
Organizations save time using 360-degree appraisals. In a 360-
degree appraisal the employee
conducts a self-evaluation, accompanied by feedback from
peers, teammates, subordinates, and
supervisors. This provides extensive feedback and enables
employees to interact with other
employees at regular intervals instead of only with supervisors.
In reality an employee may rarely meet
with the supervisor.
Management by objectives is another effective appraisal
technique. Together, the supervisor and
employee choose goals, a timeline, and resources to achieve
goals. The employee must report progress
in achieving speci�ed goals. This can be highly motivating for
employees, and reduces the supervisor's
responsibility and time commitment. Highly measurable
outcomes result and are used to determine
incentives for employees.
In the forced ranking method a group of employees is evaluated
using a forced ranking system based
on individual or team performance. Grades are limited; only a
certain number of employees can be in a
18. particular category. For example, when supervising a team of 50
people, 25 are worthy of an A grade.
You are only allowed to give an A to 5 members and are forced
to give the remaining members a B
grade.
The supplemental materials provide an example of how forced
ranking may work, although
organizations may use and manage forced ranking differently.
Additional Materials
Forced Ranking (media/week4/SUO_MGT3045_W4%20L2.pdf?
_&d2lSessionVal=Npd2ZTVMmXiNwfIfAzevFsqUR&ou=92916
)
https://myclasses.southuniversity.edu/content/enforced/92916-
17109821/media/week4/SUO_MGT3045_W4%20L2.pdf?_&d2lS
essionVal=Npd2ZTVMmXiNwfIfAzevFsqUR&ou=92916
SUO Discussion Rubric (80 Points) - Version 1.2
Course: MGT3045-Human Resource Management SU01
Response
No Submission
19. 0 points
Emerging (F-D: 1-27)
27 points
Satisfactory (C: 28-31)
31 points
Proficient (B: 32-35)
35 points
Exemplary (A: 36-40)
40 points
Criterion Score
Quality of Initial
Posting
/ 40No initial posting exists to
evaluate.
The information provided is
inaccurate, not focused on
the assignment’s topic,
and/or does not answer the
question(s) fully. Response
demonstrates incomplete
20. understanding of the topic
and/or inadequate
preparation.
The information provided is
accurate, giving a basic
understanding of the topic(s)
covered. A basic
understanding is when you
are able to describe the terms
and concepts covered.
Despite this basic
understanding, initial posting
may not include complete
development of all aspects of
the assignment.
The information provided is
accurate, displaying a good
understanding of the topic(s)
21. covered. A good
understanding is when you
are able to explain the terms
and topics covered. Initial
posting demonstrates sincere
reflection and addresses most
aspects of the assignment,
although all concepts may
not be fully developed.
The information provided is
accurate, providing an in-
depth, well thought-out
understanding of the topic(s)
covered. An in-depth
understanding provides an
analysis of the information,
synthesizing what is learned
from the course/assigned
22. readings.
Participation
No Submission
0 points
Emerging (F-D: 1-13)
13 points
Satisfactory (C: 14-16)
16 points
Proficient (B: 17-18)
18 points
Exemplary (A: 19-20)
20 points
Criterion Score
Participation in
Discussion
/ 20No responses to other
classmates were posted in
this discussion forum.
May include one or more of
the following:
*Comments to only one other
23. student's post.
*Comments are not
substantive, such as just one
line or saying, “Good job” or
“I agree.
*Comments are off topic.
Comments to two or more
classmates’ initial posts but
only on one day of the week.
Comments are substantive,
meaning they reflect and
expand on what the other
student wrote.
Comments to two or more
classmates’ initial posts on
more than one day.
Comments are substantive,
meaning they reflect and
24. expand on what the other
student wrote.
Comments to two or more
classmates’ initial posts and
to the instructor's comment
(if applicable) on two or more
days. Responses demonstrate
an analysis of peers’
comments, building on
previous posts. Comments
extend and deepen
meaningful conversation and
may include a follow-up
question.
Writing
No Submission
0 points
Emerging (F-D: 1-13)
13 points
Satisfaction (C: 14-16)
26. (Spelling, Grammar,
Citation Style) and
Information Literacy
/ 20No postings for which to
evaluate language and
grammar exist.
Numerous issues in any of
the following: grammar,
mechanics, spelling, use of
slang, and incomplete or
missing citations and
references. If required for the
assignment, did not use
course, text, and/or outside
readings (where relevant) to
support work.
Some spelling, grammatical,
and/or structural errors are
27. present. Some errors in
formatting citations and
references are present. If
required for the assignment,
utilizes sources to support
work for initial post but not
comments to other students.
Sources include course/text
readings but outside sources
(when relevant) include non-
academic/authoritative, such
as Wikis and .com resources.
Minor errors in grammar,
mechanics, or spelling in the
initial posting are present.
Minor errors in formatting
citations and references may
exist. If required for the
28. assignment, utilizes sources
to support work for both the
initial post and some of the
comments to other students.
Sources include course and
text readings as well as
outside sources (when
relevant) that are academic
and authoritative (e.g., journal
articles, other text books,
.gov Web sites, professional
organization Web sites, cases,
statutes, or administrative
rules).
Minor to no errors exist in
grammar, mechanics, or
spelling in both the initial
post and comments to others.
29. Formatting of citations and
references is correct. If
required for the assignment,
utilizes sources to support
work for both the initial post
and the comments to other
students. Sources include
course and text readings as
well as outside sources (when
relevant) that are academic
and authoritative (e.g., journal
articles, other text books,
.gov Web sites, professional
organization Web sites, cases,
statutes, or administrative
rules).
No Submission
0 points minimum
There was no submission
30. for this assignment.
Emerging (F to D Range)
1 point minimum
Satisfactory progress has not been met on the
competencies for this assignment.
Satisfactory (C Range)
56 points minimum
Satisfactory progress has been achieved on the
competencies for this assignment.
Proficient (B Range)
64 points minimum
Proficiency has been achieved on the
competencies for this assignment.
Exemplary (A Range)
72 points minimum
The competencies for this
assignment have been mastered.
Performance Appraisal Tools
31. There are various tools used for performance appraisals, such as
the following:
Graphic Rating Scale: Shows performance on a continuum
ranging from low to medium and high
or unsatisfactory to excellent performance. This is based on a
particular trait or behavior marked
along the line.
Checklist: Shows if the skill or outcome was learned or
achieved.
Likert Scale: Shows each trait, skill, or outcome on a continuum
numbered from 1 to 5 or 1 to 7.
Ranking: Includes forced ranking and involves comparing
employees.
Narrative and essay formats: Shows strengths, weaknesses,
goals, and performance, and is not
limited to numbers or objective de�nitions.
Tools enable you to measure performance, but they also have
drawbacks.
Drawbacks of Performance Appraisal Tools:
Narrative methods require time to prepare and are hard to use
for determining promotions and raises.
The unstructured nature of these assessments makes employees
resist them as they can contain
32. personal statements and potentially discriminative commentary.
Narrative assessments give
evaluators the freedom to say what they please, with few
guidelines from the legal department or
HRM. Most HR practitioners �nd this freedom excessive and
potentially dangerous.
Objective measurement tools, such as graphic rating or the
Likert scale, minimize the risks associated
with narrative tools. Objective measurement tools are
structured, usually preapproved by the
organization's lawyer or maybe even developed by a
measurement expert. Yet these tools are not
perfect. They may result in demotivating employees who feel
that they are just numbers and resent
their comparison with other employees. Managers may have to
face questions such as: "Why am I a '5'
and why is Joe, who is lazier than me, a '6'?" Using this tool
may not promote effective teamwork.
Ethical problems occur frequently in business, and HR
professionals need to help prepare leaders for
ethical challenges impacting performance appraisals. Read the
Supplemental to learn more about what
companies can do to prevent the ethical lapses of business
leaders.
Additional Materials
35. compensation. Higher-paid employees can sometimes
misbehave, employerscan work together to limit pay,
and
compensation itselfcan prompt worker greed.
• 2. When pay decisions are viewed as
inappropriate or
unfair, lawsuits can occur. There is growing
concern about
litigation targeting the misclassification of employees,
overtime
pay, and otherwageviolations.
• 3. Identifying situations that require
employersto pay
workers for their time is a challenge.Managers should
understand the conditions that trigger payment of
wages. These
include shorter meal and rest breaks, donning
required
equipment and uniforms, and otherwork-related
activities. In
addition, proposed changes in overtime regulations
may
significantly impact employees and companies.
• 4. Setting reasonable pay to get
competentemployees is an
important component of compensation management. To
remain
fair and competitive, employershave to use different
sources of
internal and external salary information to
determine how much
36. employees should be making. Some companies
are paying
employees above the traditional minimum
amounts to attract
competentworkers; somestates are even enacting laws
that set
minimum wagelevels higher than the federal wage.
Compensation Management
Compensation is another word for pay. Compensation is
directly related to performance assessment
in many organizations.
Organizations pay employees in various ways.
The �rst of these is cash. This may be in the form of salaries,
bonuses, and commission.
Noncash: Compensation in the form of perks (access to
organizational assets such as a �tness center
or a healthcare clinic, or a free checking account in the case of
a �nancial institution). Noncash
compensation also includes bene�ts that we will discuss in
Week 5.
Incentive pay: Also called variable pay, this compensation is
earned for speci�c performance and may
37. include a commission based on the quantity sold or piecework
based on the quantity produced. In the
service sector, incentives are often paid for customer service or
meeting quality standards. For
example, banks often use shoppers who, while pretending to be
customers, rate the bank's employees
on customer service. An organization may pay incentives based
on the rating or it may pay incentives
based on the number of customers an employee services each
month.
Organizations are turning to automated systems that track
employees' time on the clock to better
manage the administration of wages. To �nd out if this is
worth the price, read the following.
Additional Materials
What’s Trending in: Total Rewards and Compensation
(media/week4/SUO_MGT3045_W4%20L1.pdf?
_&d2lSessionVal=Npd2ZTVMmXiNwfIfAzevFsqUR&ou=92916
)
Executive Bonuses and Incentives
(media/week4/SUO_MGT3045_W4%20L1%20B.pdf?
_&d2lSessionVal=Npd2ZTVMmXiNwfIfAzevFsqUR&ou=92916
)
