short question

Chapter 8: Training and Developing Employees

1. What four things should a successful orientation program accomplish? (moderate)

Answer: New employees should feel welcome and at ease. New employees should understand the organization in a broad sense including its past, present, culture, and vision for the future. They should be clear about what is expected in terms of work and behavior. They should have begun the socialization process into the firm’s way of doing things.

2. Training is not useful if the trainee lacks the motivation to benefit from it. The more meaningful the material, the more motivated an employee should be to learn. How can a manager make training material more meaningful for employees? (easy)

Answer: There are five suggestions for making training material more meaningful for employees. First, an overall picture of the training material that will be presented should be provided at the start of training. Second, familiar examples should be used. Third, the information should be logically organized and presented. Fourth, the vocabulary used during training should be familiar to the trainees. Fifth, many visual aids should be used.

3. There are several sources of information an employer can use to identify a current employee’s training needs. List five of these sources of information. (moderate)

Answer: The possible sources of information include performance reviews (supervisor, peer, self, and 360 degree); job-related performance data such as productivity, absenteeism and tardiness, accidents, short-term sickness, grievances, waste, late deliveries, product quality, downtime, repairs equipment utilization, and customer complaints; observation by supervisors or other specialists; interviews with the employee or the supervisor; skill tests; attitude surveys; employee task diaries; and assessment center results.

4. Trainers often try to solve employee performance deficiencies with training, but some deficiencies can’t be overcome with training. What other causes might exist for performance deficiency from an employee? (easy)

Answer: Training is appropriate if the problem is caused by the employee failing to understand how to do, what to do, or what the standards for performance are. However, if employees are not provided with the proper resources for doing a job well then training cannot solve this problem. Likewise, if employees have the necessary knowledge and resources, then the may not be motivated to improve performance.

5. There are several types of on-the-job training. Identify and describe three types. Which one is used most often? Why? (moderate)

Answer: The types of on-the-job training include the coaching or understudy method, the job rotation method, and the special assignments method. Using the understudy method, an experienced worker or the trainee’s supervisor trains the employee. At lower levels, the trainee might observe the supervisor,

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but it is also used at higher levels. Job rotation means that an employee moves from job to job at planned intervals. This is common in management training programs. Special assignments give employees firsthand experience in working on actual problems. The coaching or understudy method is used most often. It is the simplest to execute and still offers the advantages of OTJ training.

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6. What advantages are associated with on-the-job training? (moderate

Answer: OJT is relatively inexpensive. Trainees learn while producing and there is no need for expensive training facilities like classrooms or programmed learning devices. OJT also facilitates learning because trainees learn by doing and get prompt feedback on their performance.

7. On-the-job training can be enhanced if trainers know the four-step job instruction technique. What are the four steps in job instruction? Explain what happens in each step. (moderate)

Answer: The four steps in job instruction are to 1) prepare the learner, 2) present the operation, 3) do a tryout, 4) follow up. In the first step, the trainer should try to put the learner at ease and relieve tension. The trainer should explain why the trainee is being taught. The trainer should create interest in the training by encouraging questions and finding out what the learner already knows. The job should be explained to the trainee along with making sure the trainee is familiar with the equipment, materials, tools, and terminology of the trade. In the second step, the trainer should explain the quantity and quality requirements of the job. The job should be gone through at a normal pace and then at a slower pace several times while explaining each step. After the steps have been covered, the learner should explain the steps to the trainer while the trainer goes through the job at a slow pace. In the third step, the learner should go through the job several times slowly while explaining each step. Mistakes should be corrected. Then the learner should do the job at a normal pace. This should continue while the learner builds up skill and speed. Once the learner has demonstrated ability to do the job, the work should begin, but the trainer should stay close by. In the final step, the trainer should designate a contact person the learner can reach for help. Supervision should be gradually decreased but work should still be checked periodically for quality and quantity standards. Any faulty work patterns should be corrected. Finally good work should be complimented and the worker encouraged until able to performance standards.

8. Describe the programmed learning training method and explain the three parts of this form of instruction. (moderate)

Answer: Programmed learning is a step-by-step self-learning method using a medium such as a textbook, computer, or the Internet. The three parts of the method include presenting questions, facts, and problems to the learner, allowing the person to respond, and then providing feedback on the accuracy of answers.

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9. What is the goal of succession planning? What steps are involved in the process? (moderate)

Answer: Succession planning refers to the process through which a company plans for and fills senior-level openings. The typical succession planning process involves several steps. First, anticipate management needs based on factors like planned expansion. Next, review the firm’s management skills inventory to assess current talent. Then, create replacement charts that summarize potential candidates and each person’s development needs.

10. Changing employee attitudes, skills, and behaviors can be difficult. Explain how Lewin’s Change Process proposes how change should be implemented. (moderate)

Answer: To Lewin, all behavior in organizations is a product of two kinds of forces – those striving to maintain the status quo and those pushing for change. Implementing change means either weakening the status quo forces or building up the forces for change. Lewin’s change process consists of three steps:1) unfreezing the forces that seek to maintain the status quo, 2) moving to develop new behaviors and attitudes, 3) refreezing the organization into its new system to prevent it from reverting to its old ways.

Chapter 09

11. There are several components important for an effective performance management process. Name and explain five of these components. (moderate)

Answer: There are eleven components identified in Figure 9-1 for an effective performance management process. They are listed and explained below:

Direction sharing means communicating the organization’s higher level goals throughout the organization and translating these into doable departmental goals.

Role clarification means clarifying each employee’s role in terms of his or her day-to-day work.

Goal setting and planning means translating organizational and departmental goals into specific goals for each employee.

Goal alignment means having a process in place that allows any manager to see the link between an employee’s goals and those of the department and organization.

Developmental goal setting involves ensuring that each employee understands what must be done to accomplish the goals.

Ongoing performance monitoring means using computer-based systems to measure and report on employee progress toward meeting performance goals.

Ongoing feedback includes face-to-face and computer-based feedback regarding progress toward goals.

Coaching and support should be an integral part of the feedback process.

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Performance appraisals should focus on planning and focusing employee performance to improve company results.

Rewards, recognition, and compensation provide the consequences necessary to keep employee performance on target.

Workflow and process control and return on investment management means making sure that the employee’s performance is linked a meaningful way via goal setting to the company’s overall measurable performance.

12. Explain what the SMART acronym tells us about goal setting. (easy)

Answer: SMART stands for specific, measurable, attainable, relevant, and timely. Goals should be specific and the desired result should be clearly stated. The goals should be measurable and answer the question “how much.” The goals should be attainable and not too difficult or too easy. The goals should be relevant and clearly derive from what the manager and the company want to achieve. The goals should be timely and reflect deadlines and milestones.

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13. Why is it important for managers to appraise subordinates’ performance? Provide three reasons for performance appraisals. (moderate)

Answer: There are four reasons for conducting performance appraisals. First, appraisals play an integral role in the performance management process. Second, it lets the manager and subordinate develop a plan for correcting any deficiencies that might exist and to reinforce and support things that are done well. Third, appraisals can serve a useful career planning purpose by providing the opportunity to review the employee’s career plans in light of his or her strengths and weaknesses. Finally, the appraisal usually plays a part in salary and promotion decisions.

14. Explain the three steps in the performance appraisal process. (easy)

Answer: The performance appraisal process itself contains three steps: 1) define the job, 2) appraise performance, and 3) provide feedback. Defining the job means making sure that the manager and employee agree on his or her duties and job standards. Appraising performance means comparing the employee’s actual performance to the standards that have been set. Finally, the performance appraisal process requires one or more feedback sessions. In these sessions, the manager and employee discuss the employee’s performance and progress and make plans for any development required.

15. What are the four types of performance that performance appraisals can measure? Explain each one. (moderate)

Answer: The employer may measure generic dimensions of performance such as quantity or quality of work. The performance appraisal may focus on the job’s actual duties and assess how well the employee did in exercising his or her specific job duties. Competency-based appraisals focus on the extent to which the employee exhibits the competencies that the employer values. The employer could also appraise the employee based on the extent to which he or she is achieving his or her objectives.

16. What is a behaviorally anchored rating scale (BARS)? How would one go about developing a BARS? (difficult)

Answer: A behaviorally anchored rating scale is a rating scale that is anchored with specific behavioral examples of good or poor performance. Because of the anchors, which are based on the dimensions of performance illustrated by critical incidents, a BARS combines the benefits of narratives, critical incident, and quantified scales. There are five steps required for developing a BARS. Each step is explained below.

Step 1: Generate critical incidents. In this step, people who know the job are asked to describe specific illustrations of effective and ineffective performance.

Step 2: Develop performance dimensions. The people who know the job are then asked to cluster the incidents into a smaller set of performance dimensions and to define each dimension with a name.

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Step 3: Reallocate incidents. Another group of people, who also know the job, should reallocate the original critical incidents. They will receive the cluster definitions and the list of critical incidents. They will then reassign each incident into the cluster they think it fits best. If the assignments made by the first group and second group match well, then that critical incident is retained.

Step 4: Scale the incidents. The second group then rates the behavior described by the incident as to how effectively or ineffectively it represents performance on the dimension.

Step 5: Develop a final instrument. Six or seven of the incidents as the dimension’s behavioral anchors.

17. Explain how an MBO program works and describe the six steps involved in this type of program. (moderate)

Answer: MBO programs basically require managers to set specific and measurable goals with each employee and then to periodically discuss the employee’s progress toward these goals. It is usually a comprehensive, organization-wide goal setting and appraisal program. The six steps it consists of are listed below.

Step 1: Set the organization’s goals. The first step involves the establishment of an organization-wide plan for the coming year and to set company goals.

Step 2: Set departmental goals. Next, department heads will take these company goals and, in conjunction with their superiors, set goals for their departments.

Step 3: Discuss departmental goals. Department heads will discuss the departmental goals with all subordinates and ask employees to set their own preliminary individual goals. These individual goals should show how each employee can contribute to the department’s goals.

Step 4: Define expected results. Department heads and their employees set short-term individual performance targets.

Step 5: Performance reviews. Department heads compare each employee’s actual and targeted performance.

Step 6: Provide feedback. Department heads and employees discuss and evaluate the employee’s progress.

18. Describe the four basic types of appraisal interviews. (moderate)

Answer: The first type of appraisal interview is the satisfactory-promotable appraisal interview. This occurs when the person’s performance is satisfactory and there is a promotion ahead. The objective is to discuss the person’s career plans and to develop a specific action plan for the educational and professional development the person needs to move to the next job.

The second type of interview is the satisfactory-not promotable appraisal interview. This is for employees whose performance is satisfactory but for whom promotion is not possible. The objective is to maintain satisfactory performance. The best option is to find incentives that are important to the person.

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The third type of interview is the unsatisfactory but correctable interview. In this situation, the objective is to develop an action plan for correcting the unsatisfactory performance.

The final type of interview is the unsatisfactory-uncorrectable interview. In this situation, the interview may even be skipped. The person’s poor performance is tolerated or the person is dismissed.

19. What four techniques can help to avoid and/or minimize appraisal problems like bias, leniency, and central tendency? (moderate)

Answer: The first technique is to learn and understand the potential problem and possible solutions. Simply understanding the potential for the problem can help to avoid it. Second, using the right appraisal tool for each situation is important. Third, supervisors should be trained to reduce rating errors such as halo, leniency, and central tendency. Finally, supervisors can keep a diary of critical incidents to file and use for later reference for subordinate’s appraisals. This technique helps to ensure that both negative and positive incidents are recorded.

20. There are several guidelines for developing an appraisal process that is legally defensible. Identify four of these guidelines. (moderate)

Answer: Fourteen guidelines are suggested in the text. Conduct a job analysis to establish criteria and standards for successful

performance. Incorporate these criteria and standards into a rating system. Use clearly defined job performance dimensions rather than global

measures of performance. Communicate performance standards to employees and supervisors in

writing. Avoid abstract trait names when using graphic rating scales. Use subjective supervisory ratings for no more than one part of the

overall appraisal process. Allow appraisers substantial daily contact with the employees they are

evaluating Base appraisals on separate ratings for each job performance

dimension. Have more than one appraiser conduct the appraisal. Give employees the opportunity to review the appraisal, make

comments, and appeal the decision. Document all information and reasons bearing on any personnel

decision. Provide corrective guidance to assist poor performers in improving

performance.

Of these fourteen guidelines, research of court decisions suggests that the important guidelines are to perform a job analysis, provide raters with written instructions, permit employees to review the results, and obtain agreement among multiple raters.

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Chapter 11

21. What benefits accrue to an organization that works with its employees to develop their careers? (moderate)

Answer: When employers provide the tools, environment, and skill development opportunities for employees and then employees are better equipped to serve the company and build it to its potential. Career development may also cultivate employee commitment.

22. What roles and responsibilities should a manager have in an employee’s career development? (easy)

Answer: The manager should provide timely performance feedback, developmental assignments and support. The manager should participate in career development discussions. The manager should support employee development plans.

23. Name five examples of career management practices employers can engage in to support the growth of its employees. (easy)

Answer: Some examples are posting job openings, supporting a formal education, providing career-oriented performance appraisals, counseling by managers, offering lateral, developmental moves, counseling by HR, providing retirement preparation, and succession planning.

24. How can an employer best prevent reality shock? (moderate)

Answer: Reality shock occurs when a new employee has high expectations for a new job but then finds that the job is boring and/or unchallenging. Employers can prevent this by providing realistic job previews and challenging first jobs. A realistic job preview can help prospective employees more accurately gauge whether the job is really for them and whether the job’s demands are a good fit with a candidate’s skills and interests.

25. You are considering a position as an entry-level management trainee, but you want to know what the company has to offer in the way of career development initiatives. Name three innovative career development initiatives that you would like to see at the company. (moderate)

Answer: Several initiatives may be named here. Individual budgets for employee development Onsite or online career centers with materials and workshops Opportunities for working in a variety of positions Opportunity to take courses with nearby colleges or through

consultants

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Career success teams for networking and support Career coaches Career planning workshops

26. What is the role of a career coach in a career development program? (moderate)

Answer: Coaches can help employees identify development needs, obtain training, and obtain professional development and networking opportunities. Career coaches usually focus on career counseling and development advice. They might work one-on-one with individual employees to help them use career assessment tools and identify training and development options. For very high level managers, coaches may double as therapists. The executive coaches may provide assessment and advice concerning how a person’s personal life is influencing his or her career. Career coaches also help employees create 1-5 year plans showing where their careers with the firms may lead.

27. What is a career planning workshop? Identify the three main activities that take place in a career planning workshop. (moderate)

Answer: A career planning workshop is a planned learning event in which participants are expected to be actively involved in completing career planning exercises and inventories and participating in career skills practice sessions. A typical workshop includes three main activities: 1) self-assessment, 2) environmental assessment, and 3) goal-setting and action planning.

28. What are the four decisions that affect a firm’s promotion process? Explain the effect each decision could have on promotional decisions. (difficult)

Answer: The first decision is whether to base promotions on seniority or competence or some combination of the two. A focus on competitiveness and motivation favors promotion based on competence. But when union or civil service regulations are involved, seniority may be favored.

The second decision occurs if the firm chooses to base the promotional process on competence. If it does, the firm must then decide how to define and measure competence. Past performance is based on defining the job, setting standards, and appraising performance. For promotional purposes, the organization must decide whether this past performance is also predictive of a candidate’s future performance.

The third decision is whether the process is formal or informal. If the process is informal, employees may feel like one’s personal network is more important than performance. Formal procedures include formal promotion policies that are distributed to all employees. They may also include a job-posting policy and the use of employee qualification briefs.

The fourth decision is whether the promotion will be vertical or horizontal or something else. This may be an issue if a company is downsizing. Promotions can involve different types of positions aside from supervisory positions.

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29. What steps can organizations take to enhance the promotional and career prospects for their female employees? (moderate)

Answer: There are several steps companies can take to enhance the prospects for women. First, organizations should take the career interests of women employees seriously. They should identify institutional barriers and eliminate them. For instance, requiring late evening meetings disproportionately affects women. Companies should improve the opportunities for networking and mentoring. They should eliminate the glass ceiling; though this is a difficult challenge. Finally, companies can institute flexible schedules to provide women the opportunity to meet their obligations at home and at work successfully. Likewise, instituting career tracks can enable women to periodically reduce their time at work while still remaining on a career track.

30. How has the psychological contract changed over time? (moderate)

Answer: The psychological contract in years past likely involved hard work and loyalty on the part of the employee in exchange for a secure position from the organization. Today, the psychological contract is temporary in nature with both parties recognizing the indefinite nature of the contract. Now, employees are expected to work hard and be loyal while employed and in exchange the company will provide developmental opportunities necessary for the employee to move on at some point in the future.

Chapter 11

31. Describe the various approaches that an employer could take to address the cost-of-living differences associated with transferring an employee to a location with a higher cost-of-living. (moderate)

Answer: Employers have different ways of handling cost-of-living differentials. One is to give the transferred person a nonrecurring payment in a lump sum amount. Another is to pay a differential for ongoing costs in addition to a one time allocation. Others simply raise the employee’s base salary.

32. List and explain the two basic international compensation policies that companies use when compensating expatriate employees. (moderate)

Answer: The two basic international compensation policies include home-based and host-based plans. With a home-based salary plan, an international transferee’s base salary reflects his or her home country’s salary. The employer then adds allowances for cost-of-living differences such as housing and schooling costs. This is a good approach for short-term assignments and avoids the problem of changing an employee’s base salary. In the host-based plan, the firm ties the international transferee’s base salary to the host country’s salary structure. A manager sent to a specific, international location would have his or her base salary changed to the prevailing base salary for that

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position in that location. The firm usually tacks on cost-of-living, housing, schooling, and other allowances.

33. Explain the implications suggested by the equity theory of motivation. What are the four forms of equity? (moderate)

Answer: Equity theory states that people are strongly motivated to maintain a balance between what they perceive as their inputs or contributions and their rewards. If a person perceives an inequity, a tension or drive will develop in the person’s mind and the person will be motivated to reduce or eliminate the tension and perceived inequity. The four forms are external, internal, individual, and procedural. External equity refers to how a job’s pay rate in one company compares the job’s pay rate in other companies. Internal equity refers to how fair the job’s pay rate is, when compared to other jobs within the same company. Individual equity refers to the fairness of an individual’s pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each individual’s performance. Procedural equity refers to the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay.

34. How can managers assess and address each equity issue? (moderate)

Answer: Managers can use various methods to address each of these equity issues. They can use salary surveys to monitor and maintain external equity. They can use job analysis and job evaluation to maintain internal equity. They can use performance appraisal and various types of incentive pay to maintain individual equity. They can use communication, grievance mechanisms, and employee participation in developing the company pay plan to help ensure that employees view the pay process as transparent and fair. Managers can also use surveys to assess employee attitudes regarding the pay plan.

35. List the steps used to establish pay rates while ensuring external, internal, and procedural equity. (moderate)

Answer: The five steps are as follows: Conduct a salary survey of what other employers are paying for

comparable jobs. Determine the worth of each job in your organization through job

evaluation. Group similar jobs into pay grades. Price each pay grade by using wave curves. Fine-tune pay rates.

36. List the steps used in the job ranking method of job evaluation. (moderate)

Answer: The steps in the job ranking method are as follows. Obtain job information Select jobs Select compensable factors Rank jobs Combine ratings and average the rankings

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37. What are the steps for pricing jobs with a wage curve? (difficult)

Answer: First, find the average pay for each pay grade, since each of the pay grades consists of several jobs. Next, plot the pay rates for each pay grade. Then fit a line, called a wage line, through the points. Finally, price the jobs. Wages along the wage line are the target wages or salary rats for the jobs in each pay grade.

38. Explain the four key differences between competency-based pay (CBP) and traditional job-based pay (JBP). (difficult)

Answer: With JBP, the employee receives the pay attached to the job regardless of whether the employee has the necessary competence for performing the job. With CBP, the supervisor certifies employee competence prior to any pay increases. With JBP, pay changes when one switches jobs. With CBP, one must demonstrate proficiency prior to getting a raise. Also, one could do a lower-paying job but still receive a higher pay based on skill. JBP systems may tie pay to grade or seniority. CBP pays for competencies, not seniority. There is more advancement possible with CBP plans than with JBP. CBP enhances organizational flexibility because workers’ skills are applicable to more jobs and therefore more portable.

39. What are the four main components of a competency-based pay (CBP) plan? (moderate)

Answer: CBP plans usually contain a: (1) system that defines specific skills and a process for tying a person’s pay to his or her skill, (2) training system that lets employees seek and acquire skills, (3) formal competency testing system, and (4) work design that lets employees move among jobs to permit work assignment flexibility.

Chapter 1240. Explain the value of financial incentives as it relates to Herzberg’s Hygiene-

Motivator theory of motivation. (difficult)

Answer: According to Herzberg, financial incentives are hygiene factors. Hygiene factors are necessary to prevent dissatisfaction. However, they do not motivate employees or lead to a state of satisfaction. It is necessary to provide sufficient hygiene factors to prevent dissatisfaction but employers should not rely upon financial incentives for motivational purposes. Rather, employers should try to build in motivator factors.

41. Briefly describe Vroom’s theory and its three components. What implications exist for managers? (moderate)

Answer: Vroom states that a person’s motivation to exert some level of effort or specific behavior is a function of three things: valence, instrumentality, and expectancy. Valence is the perceived value the person attaches to the reward. Instrumentality is the perceived relationship between successful performance

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and obtaining the reward. Expectancy is the probability that performance of the behavior or exertion of the effort will result in achieving the desired reward. Motivation is equal to E * I * V. The first managerial implication is that employees will not be motivated to pursue a reward that is not valuable to them. Employees do not necessarily value the same things. The second implication is that employers must communicate how certain behaviors and effort is important for achieving the desired reward. If employees do not see the connection between the behavior and the reward, they will not be motivated. Finally, employees must reasonably expect that if the perform the desired behavior that they can expect to receive the reward.

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42. Explain the advantages and disadvantages of using piecework as a pay plan? (moderate)

Answer: Piecework plans appear equitable in principle and can be powerful as an incentive, because rewards are proportionate to performance. Employees may resist attempts to revise production standards even if the change is justified. Employees could focus on output and be less willing to focus on quality standards or switching tasks since both could result in lower output. Attempts to introduce new technology could be resisted for the same reason.

43. Employers may award merit pay as traditional merit increases that increase an employee’s base pay or as a lump sum merit raise. Explain the pros and cons of these two choices. (moderate)

Answer: Traditional merit increases are cumulative but most lump sum merit raises are not. For employees receiving traditional merit increases, raises in subsequent years are based on the new higher amount. With lump sum merit raises, payroll expenses can be minimized over time while still offering an incentive. Further, the lump sum amount may seem more impressive to employees because it is a large amount paid at one time. First instance, a lump sum merit payment of $1500 may seem more desirable than a traditional weekly merit payout of $29 for 52 weeks.

44. What do members receive when incentives are based on a group incentive plan and tied to work standards for the whole team? Name five formulas for determining what each team member is paid. (easy)

Answer: Members may receive the pay earned by the highest producer on the team. They may receive the pay earned by the lowest producer on the team. They may receive pay equal to the average pay earned by the group. They may receive the same pay based on the piece rate for the group’s job. A final option is to tie rewards to goals based on some overall standard of group performance, such as total labor hours per final product.

45. Sometimes managers need to reinforce positive behavior but cannot turn to a cash incentive to do so. Name at least five positive reinforcement rewards that a manager could use on a day-to-day basis to reward employees. (easy)

Answer: There is a long list possible such as to provide more challenging work assignments, autonomy, making work more fun, job rotation, encouraging learning and continuous improvement, providing encouragement, giving complements, allowing employees to set their own goals, expressing appreciation in front of others, sending a note of thanks, giving an employee of the month award, providing a bigger or nicer desk or office.

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46. List the eight basic steps in implementing a gainsharing plan. (moderate)

Answer: The steps are as follows. Establish general plan objectives Choose specific performance measures Decide on a funding formula Decide on a method for dividing and distributing the employees’ share

of the gains Choose the form of payment Decide how often to pay bonuses Develop the involvement system

47. Briefly explain how an at-risk variable pay plan works. (easy)

Answer: At-risk variable pay plans are plans that put some portion of the employee’s weekly pay at risk. If employees meet or exceed their goals, they earn incentives. If they fail to meet their goals, they forgo some of the pay they would normally have earned.

48. Why do many incentive plans fail? (moderate)

Answer: There are many possible reasons why incentive plans fail. Performance pay is supposed to motivate workers, but lack of motivation is not always the problem. Other factors may be negatively affecting performance. An incentive plan that rewards a group based on how many pieces they produce may lead to rushed production and lower quality. Herzberg says that financial rewards are hygiene factors, not motivator factors. Incentive plans have the potential for encouraging individuals to pursue financial rewards for themselves. Rewards can also have unintended consequences. Incentive plans can distract employees from achieving difficult goals. Finally, Edward Deci suggested that financial rewards that are contingent upon performance can undermine the intrinsic motivation that results in optimal performance.

Chapter 1349. What policy issues must employers address when developing benefit plans?

Name five issues. (moderate)

Answer: In developing benefit plans, employers must address numerous policy issues including 1) what benefits to offer; 2) who receives coverage; 3) whether to include retirees in the plan; 4) whether to deny benefits to employees during the initial “probationary” periods; 5) how to finance benefits; 6) the degree of employee choice in determining benefits; 7) cost-containment procedures; and 8) how to communicate benefits options to employees.

50. Explain the purpose of sick leaves and why sick leave pay causes difficulties for many employers. (easy)

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Answer: Sick leave provides pay to employees when they are out of work due to illness. Most sick leave policies grant full pay for a set number of sick days and the sick days accumulate over time. The problem with sick leave is that many employees use sick leave for reasons other than illness. Some use the days as vacation or to take care of family issues, personal needs, and stress.

51. Why do employers provide severance pay to employees who are being terminated? Offer at least three reasons. What standards guide the amount of severance pay offered? (moderate)

Answer: Severance pay is a one-time payment offered when terminating an employee. There are several reasons for a firm to offer severance pay. It shows good will to the employee. It is good public relations. It is fair since most employees expect to receive notice in advance of an employee leaving to offer the same sort of notice to the employee. It can protect the company from litigation from disgruntled former employees. The amounts vary from one to two weeks to as much as 39 weeks. The pay can be provided in one lump-sum payment or by continuing salary for a set time period. Many firms establish severance pay at the rate of one week of severance pay for each year of service.

52. Why are family-friendly benefits increasingly valuable to employees? What are some examples of family-friendly benefits? (moderate)

Answer: There are many trends that increase the value of family-friendly benefits. There are more households in which both adults work. More women are in the workforce while also struggling to fulfill familial obligations. People are working harder and longer with less time to manage life outside of work. Family-friendly benefits can vary from organization to organization. Some examples include child care, elder care, fitness facilities, and concierge services.

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53. In introducing a flexible benefit plan, what kind of preparation should a company make? (moderate)

Answer: The company should: (a) explain the purpose of the plan, (c) get views from employees, (c) advice its employees how to choose the various optional benefits, (d) explain to employees that the scheme is not an excuse to cut costs

54. The objective of a flexible benefit plan is to meet the diverse needs of employees. Explain. (moderate)

Answer: Employees have diverse needs. Some are single and need to socialize. Others are married with children. Others have to take care of aged parents. Older employees need more medical benefits.

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short question

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