Total Rewards and Performance Management

1
Total Rewards and Performance Management
2
The Total Reward Principles

• Create a positive and natural reward experience.
• Align rewards with business goals to create a
  win-win partnership.
• Extend peoples line of sight.
• Integrate rewards.
• Reward individual ongoing value with base pay
• Reward results with variable pay.

3
Four Components of Total Rewards
Total Reward Components The Better Workforce Deal

• Individual Growth

Compelling Future
Total Pay
Positive Workplace
4
Four Components of Total Rewards
Total Reward Components The Better Workforce Deal

• Individual Growth
• Investment in people
• Development and training
• Performance management
• Career enhancement

• Compelling Future
• Vision and values
• Company growth and success
• Company image and reputation
• Stakeholdership
• Win-win over time

• Total Pay
• Base pay
• Variable pay, including stock
• Benefits or indirect pay
• Recognition and celebration

• Positive Workplace
• People focus
• Leadership
• Colleagues
• Work itself
• Involvement
• Trust and commitment
• Open communications

5
Traditional Compensation System

• Payment based on tasks
• Assumes stability of employment
• Rewards individual contributions
• Primarily wages, salaries, benefits, some bonuses
• Rigid, resistant to change

6
Equity Issues

• Individual equity
• Compare my outcome/input ratio with some others
  outcome/input ratio
• Internal equity
• Relative worth of job within org
• Job evaluations
• External equity
• Market forces
• Supply/demand
• Conduct salary surveys

7
Traditional Compensation Paying Jobs (A)

• Job analysis
• Job descriptions
• Job related information only
• Job specifications
• Person related information only
• KSAs, education, experience, certifications
• Job evaluation
• Identifies the relative worth of the job to the
  organization
• Not performance appraisal

8
Traditional Compensation Paying Jobs (B)

• Paying jobs
• Job evaluation for pay range (hourly, weekly,
  monthly, yearly)
• Individual salary determination
• Seniority
• Cost of living adjustments
• Merit/performance
• Bonuses (all types)
• Some group plans
• Secrecy/managerial discretion
• Relatively static model

9
Traditional Compensation Paying Jobs (C)

• Job evaluation
• Assumes pay jobs, not pay people
• Systematic method of comparing jobs
• Creates pay range for job, not person
• Tie to job description
• Legal, practical support
• May break job into components, or job factors
• Skill, effort, responsibility, working conditions
  (from EPA (1963)/FLSA (1938)
• External salary surveys
• Identify market rates
• Supply and demand for skills

10
Job Evaluation Systems

• Type of
  Comparison

Part of Job
11
(No Transcript)
12
Job Evaluation Systems

• Compares which part of job
• Whole job
• Ranking
• Classification
• Specific job factors
• Factor comparison
• Point factor

• Type of comparison made
• Job vs. Job
• Ranking
• Factor comparison
• Job vs. Standards
• Classification
• Point factor

13
What is Job Analysis

• Job analysis is a set of procedures which collect
  information describing the
• Job Behaviors
• Job Activities
• Personal Characteristics
• Knowledge, Skills and Abilities (KSAs)
• needed to perform a job.

14
Uses of Job Analysis

• Applicant Recruitment
• Applicant Selection
• Creating Job Descriptions
• Compensation Decisions
• Performance Appraisals
• Training

15
Legal Reasons For Job Analysis

• Uniform Guidelines state that companies should
  have a job analysis of the position completed to
  show the appropriateness of the employment
  decision
• In adverse impact and disparate treatment cases,
  courts immediately look to job analyses for
  evidence of decision validity

16
Two Types of Job Analysis

• Interviews either individual or group
• Advantages
• Questions can be adapted to fit answers
• Ensures deep understanding of the position
• Disadvantages
• Personal biases, Time consuming, One person in
  group can dominate discussion

17
Two Types of Job Analysis

• Questionnaires
• Advantages
• Useful when there are a large number of
  participants
• Less time consuming than interviews
• Disadvantages
• Costly to develop, can have problems with
  response rate

18
Common Job Analysis Techniques

• Task/KSA Analysis
• Used for
• Creating job descriptions
• Recruitment/Selection
• Performance Appraisal
• Training
• Some compensation decisions

• Position Analysis Questionnaire (PAQ)
• Used for
• Comparisons across jobs
• Some compensation decisions

19
Task/KSA Analysis

• A method of collecting information about a
  position by talking with experts (e.g.,
  incumbents, managers, etc.)
• Information is job-specific cannot be
  generalized to other positions
• Typically consists of interviews and several
  surveys

20
Task/KSA Advantages and Disadvantages

• Advantages
• Gives an in depth understanding of a specific job
• Can be easily used for employment decisions,
  performance management, and training

• Disadvantages
• Very time consuming
• Problems of expert biases
• Cannot apply information to other jobs

21
Task/KSA Methods

• Step 1 Collect information on the position
  being analyzed.
• Interviews, observation, participation, previous
  job analyses, Dictionary of Occupational Titles,
  or ONet (a website maintained by the Dept. of
  Labor)
• Step 2 Create a preliminary list of the tasks
  and KSAs needed in that position.
• Step 3 Accuracy and completeness check.
• Send list to subject matter experts (SME) to
  check for accuracy or any missing job components
• Step 4 Criticality survey.
• Construct a survey to give to SMEs where they
  rate the importance of each task and KSAs
• Also good to ask how often tasks are done and
  when employees should have important KSAs.
• Step 5 Statistical analysis
• Drop tasks/KSAs with low means or high standard
  deviations.
• Step 6 Linkage survey
• Create survey asking SMEs to link tasks with the
  KSAs needed to complete them.
• What to do with unlinked KSAs? Drop them

22
Task/KSA Analysis for
Selection/Recruitment

• Allows companies to determine the most important
  hiring qualifications
• Helps companies create accurate job descriptions
  for future and current employees.
• Helps make selection processes legally
  defensible.

23
Example Task Statements for a Police Officer

• Talks with community members
• Drives patrol vehicles
• Restrains suspects
• Explains laws to citizens
• Writes daily reports
• Completes parking tickets and other forms

24
Example KSA list for Police Officer

• Communication Be able to effectively inform
  others either written or orally.
• Physically fit Must be in good health and be
  able to perform rigorous activity if needed.
• Safe driving Able to safely operate patrol
  vehicles on residential streets and highways at
  normal and high speeds

25
Task/KSA analysis for Training

• Identifies KSAs necessary for a position, which
  helps with training design
• Can help to decide what skills are most important
  to help create training strategy
• Can identify which skills can be trained and
  which need to be present at hiring

26
Task/KSA Analysis for
Performance Appraisal

• Identifies job relevant behaviors to include on
  performance management tools.
• Helps to ensure that rating systems for
  performance management, pay decisions, and
  employment decisions are valid.

27
Position Analysis Questionnaire (PAQ)

• The PAQ is a generic, off-the-shelf survey
• Consists of 195 items
• Worker-oriented items describe general worker
  characteristics
• PAQ is filled out by trained observers who are
  experts on the position

28
PAQ Example Items

• Importance to this job
• 0) Does Not Apply
• Very Minor
• Low
• Intermediate
• High
• Extreme

• Rate how important each of the below is to the
  position
• Long-handled tools (e.g., hoes, rakes, shovels,
  picks, axes, brooms or mops)
• Applicators (e.g., brushes, rags, or paint
  rollers which are hand-held and used in applying
  solutions or materials)

29
PAQ Advantages/Disadvantages

• Advantages
• Allows for comparison across jobs
• No development cost
• Smaller samples can be used
• Less time consuming than Task/KSA analysis

• Disadvantages
• Costly to administer?
• Does not tell you detailed information about
  specific jobs
• Doesnt do well at distinguishing between jobs
• Requires a college reading level

30
Job Analysis for Compensation
Decisions

• Task/KSA analysis establishes valid job
  components to base performance appraisals and pay
  changes on.
• PAQ allows for comparisons of jobs with other
  generally similar jobs
• Benchmarking

31
Tips for Job Analysis

• Job analyses should be updated regularly or when
  the responsibilities of the position change
• For increased legal defensibility, document the
  job analysis process

32
Questions?
33
In Class Activity

• Task/KSA analysis
• Position Police Officer
• SMEs You

• Directions
• Split into groups of 3-5 people
• In your group, take 10- 15 minutes to create two
  lists -
• The tasks associated with being a police officer
• The KSAs needed to be a police officer

34
Performance Management Defined

• This is an ongoing communication process,
  undertaken in partnership, between an employee
  and his or her immediate supervisor that involves
  establishing clear expectations and understanding
  about the jobs to be done. It is a system.

35
Performance Appraisal and Employee Productivity

• Capital
• Technology
• Human Resources

36
What people do!?
37
Systems

• Staffing
• Training
• Motivation
• Appraisal

38
Adverse Impact
39
The Process
40
So?
41
Performance Appraisal and The Law

• Test?

42
CRA, 1964

• Title VII
• EEOC
• OFCC/OFCCP

43
Job Related
44
JA
45
Defensible Criteria
46
Business Necessity
47
CSRA, 1978
48
Preventive Measures
49
So?
50
System Development Validation
51
Do people know what they are supposed to do?
52
Traits
53
Cost-Related Outcomes
54
MBO
55
Goal Setting
56
Behaviorally-Based
57
Appraisal Instruments
58
Forced-Choice Scales
59
BARS/BES and BOS
60
Behaviorally Anchored Rating Scales/Behavioral
Expectation Scales

• Behavioral anchors
• Each has a discrete meaning
• Critical incidents
• Expectations only
• One scale per dimension/ criterion
• Many behaviors on each scale
• Requires internal consistency between behaviors
• Allows for feedback

61
BARS (Behaviorally Anchored Rating Scales)
very poor
very good

• Self-Management 1 2 3 4 5
• Communication 1 2 3 4 5
• Attitude 1 2 3 4 5
• ? 1 2 3 4 5

62
Behavioral Expectation Scale (Employee example
Work Habits)

• Could be expected to come to work 5 days/week
• 6
• 5 Could be expected to inform supervisor in event
  of an absenteeism or late arrival
• 4
• 3 Could be expected to miss 2-3 days of work per
  month
• 2
• 1 Could be expected to come to work on what
  appears to be a random schedule

63
BOS (Behavioral Observation Scales)

• Numerical anchors
• Almost never, almost always
• Critical incidents
• Observations
• Many scales per dimension/ criterion
• One scale per behavior
• Allows for feedback
• Allows for comparisons between employees

64
Behavioral Observation Scales (Manager example
Overcoming Resistance to Change)
Almost 1 2 3 4 5
Almost Never
Always

• Describes the details of the change to
• subordinates. ___ ___ ___ ___
  ___ ___ ___
• Explains why the change is necessary.
  ___ ___ ___ ___ ___ ___ ___
• Discusses how the change will affect
• the employee. ___ ___ ___ ___
  ___ ___ ___
• Listens to the employees concerns. ___
  ___ ___ ___ ___ ___ ___
• Asks the employee for help in making
• the change work. ___ ___ ___ ___
  ___ ___ ___
• If necessary, specifies the date for a
• follow-up meeting to respond to the
• employees concerns. ___ ___ ___
  ___ ___ ___ ___
• Total _____

Below Adequate 6-10 Adequate 11-15 Full
16-20 Excellent 21-25 Superior 26-30
65
So?