BUSI 433. Review & Discussion Questions: Answer Guide 9. Lesson 9: Managing Employees: Motivation and Labour Relations

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1 BUSI 433 Review & Discussion Questions: Answer Guide 9 Lesson 9: Managing Employees: Motivation and Labour Relations 1. See course discussion forum. 2. Maslow s hierarchy can be helpful in determining what motivates employees. For instance, a person early in their career might be more motivated by physiological needs, including stable income and security needs, whereas an employee who is in a later stage of the career might be motivated by more advanced needs. Further, Maslow s hierarchy can help managers understand how to create a motivating environment. For example, they can establish a workplace that encourages interpersonal relations, involves employees in decision-making, and celebrates employee accomplishments to help satisfy employee needs. However, one commonly cited shortcoming of Maslow s convenient classification of human needs is that it must not be viewed as a one-step-at-a-time procedure: most people are motivated by a combination of needs shaped by their personality and situation. In practice, the levels are flexible and can shift, depending on the person. 3. a. Research has found that enriched jobs are generally more satisfying to workers and thereby result in less absenteeism, less job turnover, and higher quality work. Workers on flextime suffer less from the kinds of stress associated with a fixed work schedule, feel a greater sense of freedom, and are able to work when they feel most effective. The 4/40 workweek can cut overhead for the company and increase worker satisfaction, which reduces absenteeism and tardiness. b. Companies are finding that when employees are not worried about dependent care, productivity and costs decrease while loyalty increases. The presence of two-earner families and single-parent families create a need for childcare, maternity leave, and more options for health care, while some families also need elder care assistance. 4. Answers will vary, and both yes and no options can be correct. Some arguments for yes : If the employees that hold the job title have similar experience and levels of expertise, and they are all essentially doing the same tasks, it could make sense to compensate them in the same way. Offering a single level of compensation can be perceived as a fair way to allocate resources. If one employee is better than another has more experience, has been there longer, etc. it might make more sense to promote them to a new position with more responsibility, rather than to increase their pay relative to others in the same position. Some arguments for no : Employees with the same job title might still have different levels of experience, education, expertise, etc., which should be reflected in their compensation. Consider costs of living and locational differences in a national company, should an employee in Vancouver be paid the same as an employee with the same title in a rural town in PEI? If an employee feels that they work harder or better than another employee with the same title, they might think it is unfair that they do not receive higher compensation, which could discourage them or even drive them to leave the company.

2 Guide 9 Page 2 of 5 Ultimately, a manager must be able to defend the compensation system that he or she chooses. This is best done by having (and following) clear policies, being transparent, communicating these policies to employees, and applying resources fairly in a way that works for the organization, given the type of work, the work environment, the people within it, etc. 5. a. Job analysis: A job analysis is a study of the tasks required to do a particular job well. It examines what tasks need to be done to accomplish the employee s and the enterprise s goals. Job description: A job description lists the tasks and responsibilities of a job. It provides employees with accurate expectations. Job specification: A job specification is a list of the skills, knowledge, and abilities a person must have to fill a job. It provides an understanding of what is needed to accomplish the employee s defined tasks. b. The job analysis provides a formal and objective method of evaluating job requirements. The information-gathering techniques used include interviewing employees, monitoring or observing employee activities, and having employees keep diaries of work activities. 6. Some of the arguments against performance reviews include: Market forces, rather than performance, largely determine pay. Performance reviews are often based on subjective information, and even objective information is subject to bias. A one-size-fits-all review approach does not fit a world where all employees are different. Performance reviews undermine teamwork by giving the boss or manager all of the power. This lesson discussed several performance appraisal methods that were deemed to be ineffective. Unfortunately, many enterprises continue to use them despite this fact. Most opponents to performance reviews aren t against the idea of ensuring that employees are performing efficiently and effectively they are opposed to the ineffective methods used to convey this information. This lesson also identified some more effective methods of performance appraisal, many of which address some of the shortcomings of the ineffective techniques. Some specific ways of addressing the shortcomings include: Using a proactive, not reactive, approach to performance management. For example, working with employees to prevent problems rather than having to deal with problems after they occur. Understanding how different people and different roles need to be assessed on an individual basis. Using an approach that is cooperative, rather than confrontational. Identifying performance appraisal factors that are as objective as possible. 7. It is important for the organization to plan the selection process from start to finish before implementing it. The benefits include better selection, more chance of employee success, and less expense in the long run. The costs of not properly planning include hiring people who are not suited to the position, decreased productivity, and the costs (financial and/or otherwise) of going through the process again. 8. Equity theory refers to employees perception of fairness in the way they are treated and the rewards they earn. Managers can use equity theory to improve worker satisfaction. Managers can make an effort to understand an employee s perception of fairness and take steps to reduce concerns about inequity.

3 Guide 9 Page 3 of 5 9. Four principal management trends indicate the direction that companies are taking in choosing to invest in their human resources: Education and training, particularly with respects to new technology and upgrading employee knowledge and skills. Employee ownership, often in the form of employee stock ownership plans (ESOPs), where employees receive compensation in the form of company stock. Work-life benefits, including telecommuting, offering part-time positions, job sharing, subsidized childcare, eldercare referral, and on-site fitness centres. Nurturing knowledge workers, a non-homogeneous group of employees. This involves finding ways to make knowledge workers feel motivated to share their expertise and to cooperate in such a way as to advance the frontiers of their knowledge for the benefit of the shareholders and society in general. 10. If a physical or mental health condition has the potential to affect an employee s ability to perform his or her job properly, he or she has an obligation to inform the employer. In fact, most job applications ask whether employees have any such conditions. It is debatable whether or not an employee has an obligation to notify an employer of a health condition that will not affect his or her ability to do his or her job, but that may lead to significant claims against a company-sponsored health insurance policy. However, such conditions must usually be made known to the employer s insurance provider before a policy is granted. 11. There are at least four rules for properly administering rewards. First, rewards should be tied directly to the behaviour that the manager wants repeated. Second, employees should know which rewards are available to them and how they can go about obtaining them. Third, desired behaviour should be rewarded as soon as it occurs. And, fourth, people should be rewarded only for what they themselves have done. 12. i. False Theory X is based on a pessimistic view and assumes that the average person dislikes work, will avoid it if possible, and needs to be controlled, directed, or threatened with punishment to get them to make an effort. In contrast, Theory Y assumes that people want to and can be self-directed and self-controlled and will try to achieve organizational goals they believe in. ii. False Mentoring is a form of on-the-job training in which a senior manager or other experienced employee provides job- and career-related information to a protégé. iii. True Administrative purposes of a performance appraisal include matters pertaining to compensation, promotion, demotion, transfer, layoff, and termination. Developmental purposes include providing feedback on job performance, helping reinforce desirable job behaviours, and indicating where improvement is required. iv. True Equity theory is a theory of motivation that holds that worker satisfaction is influenced by employees perceptions about how fairly they are treated compared to their coworkers. Knowing that every employee seeks equitable and fair treatment, managers can make an effort to understand an employee s perceptions of fairness and take steps to reduce concerns about inequity. v. False Job enlargement is the horizontal expansion of a job based on an increase in the number and variety of tasks that a person performs. Job enrichment is the vertical expansion of a job based on an increase in the employee s autonomy, responsibility, and decision-making authority. vi. False The recency bias is when a manager focuses on the employee s most recent results or behavior, instead of his or her performance throughout the entire evaluation period. The personal bias is when a manager allows his or her personal opinion of the employee to spill over into the professional realm.

4 Guide 9 Page 4 of 5 vii. True In scientific management, a system of management developed by Frederick W. Taylor, improved performance is based on economic incentives. It involves developing a scientific approach for each element of a job to determine exactly how each job should be done, how much time it should take, and what motions and tools should be used. viii. False Goal-setting theory is a theory of motivation based on the premise that an individual s intention to work toward a goal is a primary source of motivation. One of the main components of the theory is that more difficult goals lead to better performance than do easy goals, provided the individual accepts the goal. ix. False - Knowledge involves a familiarity pertaining to facts, truths, and principles of a particular subject. What is being described in this statement are skills, which refer to the ability to do certain things associated with the job, such as financial calculation skills or analytical skills. x. False The first two stages in the employee selection process are initial screening (an application form and/or short interview) and employment testing. xi. False A company with a demographic employee profile that looks like its customers may be in a position to gain a competitive advantage. Employee diversity can produce more effective problem solving, a stronger reputation for the organization, quicker adaptation to change, and more robust product solutions. xii. False - An advantage of hiring internally is that the employee already has valuable firm-specific skills. xiii. True Maslow s hierarchy of needs is a theory of motivation that holds that humans have five levels of needs and act to satisfy their unmet needs. xiv. True A job specification is, by definition, a list of the skills, knowledge, and abilities a person must have to fill a job. xv. True Online employee training programs can be very cost effective since they minimize the worker s time away from work and eliminate travel expenses. xvi. True By definition, human resource management (HRM) is the process of hiring, developing, motivating, and evaluating employees to achieve organizational goals. The HRM process involves job analysis and design, human resource planning and forecasting, employee recruitment, employee selection, training and development, performance planning and evaluation, and compensation and benefits. xvii. True The Hawthorne effect is the phenomenon where employees perform better when they feel singled out for attention or feel that management is concerned about their welfare. xviii. True Management by objectives is the most common method of appraising the performance of management and professional staff. It focuses on what an individual accomplishes or achieves on the job using objective indices to assess job performance. xix. False - Expectancy theory is a theory of motivation that focuses on the link between motivation and organizational culture. Equity theory is a theory of motivation that holds that worker satisfaction is influenced by employees perceptions about how fairly they are treated compared to their coworkers. xx. True Job rotation, also called cross-training, is the shifting of workers from one job to another. xxi. True By definition, incentive pay plans base pay increases on objective measures such as sales volume, productivity, or profitability of the organization. They specify in advance the magnitude of monetary rewards related to different levels of performance. xxii. False Employee ownership is based on the belief that employees who think like owners are more motivated to take care of customers needs, reduce unnecessary expenses, make operations smoother, and stay with the company longer. xxiii. True Sales incentive plans, or commissions, are paid to salespeople selling products or services. xxiv. True Feedback is particularly important in goal-setting theory because it helps the individual identify the gap between the actual performance and the desired outcome defined by the goal.

5 Guide 9 Page 5 of 5 xxv. xxvi. xxvii. xxviii. xxix. xxx. True Training and employee development are essential for ensuring that work is performed properly (which improves customer satisfaction), for improving internal functioning of the enterprise, for strengthening the employer s brand, and in the retention of employees. True The selection interview is an in-depth discussion of an applicant s work experience, skills and abilities, education, and career interests. It is designed to determine an application s communication abilities and motivation, and is also a means for gathering additional factual information from the applicant. False The satisfaction derived from a job well done is an example of an internal motivator. True Hygiene factors, also called job dissatisfiers, are extrinsic elements of the work environment in Herzberg s Motivator-Hygiene Theory. False The simple ranking method involves ordering jobs in an organization from least valued to most valued. Managers study job descriptions and rank jobs according to their overall value to the organization using predetermined criteria. The classification method establishes classes of jobs, such as managerial, professional, technical, or clerical, and creates a series of job grades within each class. Different job grades represent different degrees of compensable factors. False Effective feedback in a performance appraisal interview focused on behavior (which the employee can change) rather than on personal characteristics (which are usually unchangeable).