Z370 Management Final Study Guide
Z370 Management Final Study Guide BUS-Z 37
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This 28 page Study Guide was uploaded by Elizabeth Frabotta on Friday November 13, 2015. The Study Guide belongs to BUS-Z 37 at Indiana University taught by Gonzalez-Mule E in Fall 2015. Since its upload, it has received 188 views. For similar materials see I-CORE - LEADERSHIP COMPONENT in Business at Indiana University.
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Date Created: 11/13/15
Z370 Final Compensation Compensation Systems manage 2 employee benefits o Direct Pay given directly to the employee in the form of money o Indirect Employer pays for something employee receives (either legally required or optional) Compensation System o Direct Base Pay To determine: o External Consideration Strategic level of compensation in comparison to similar employers in industry 3 Company Strategies Lead – pay above industry avg, attracts new employees, retains current employees, enhances employee satisfaction Meet – pay at industry avg, avg at attracting new employees, retaining employees, and enhancing satisfaction Lag – pay below industry avg, poor at attracting new employees, retaining employees, good at controlling labor costs, and poor at enhancing satisfaction o Internal Considerations Ways they determine how to pay people consistently w/ their contribution Either through: Job Structure Pay based on job’s value to company Focus on “Compensable Factors” of job Skill or Competency Structure Pay based on employee’s individual contribution Focus on personal growth and development Salary – set amount of money received for time worked Job Pay Structure: Salary Bands o Pay Policy Line – allows a company to adjust compensation for all jobs to Lead, Meet, or Lag based on Strategic Considerations o Pay Banding Pros: allows rewards for good performance without promotion, allows for higher salaries & flexibility with new hires Cons: Ceiling on rewards that can be given w/out promotion Can increase labor costs Equity concerns with individuals in same job Incentive Pay Additional money based on their individual performance Bonus, Commission, Profit Sharing, Gainsharing, Stock Options o Indirect Legally Required Social security, Unemployment compensation, workers' compensation, family and medical leave, some health insurance Optional Paid time off (holidays, sick leave, vacation), additional health insurance, Disability insurance, life insurance, tuition reimbursement, dependent care, flexible work schedules Linking Pay and Performance o Merit Raises Increases in base pay o Lump Sum Bonuses o Commission o Executive Stock Options o Employee Stock Options Employee-Based Pay: Skills, Knowledge, and Competencies Group Incentives o When to: workers are dependent on one another to achieve company goals, or product has to pass through various stages of a production line to reach completion o Provide incentives for people to cooperate w/ one another & think about their portion of the task’s overall impact o When companies need workers to band together o 2 Types Profit Sharing Company determines how much profit a work unit made in a year, shares some of the profits with the workers in the form of a bonus Every member receives the same amount of bonus—all are perceived to share equally in the work Gainsharing Short-term and specific Workers face a particular problem costing the company money, pre-set amount of time to solve it Workers given a bonus consisting of % of savings to company Employee Benefits o About 40% of base salary o Health Care o Retirement o Paid Time Off o Reimbursement for Training or Education o Child Care o Legally Require Social Security, Workers’ Compensation Motivation Core Rules o Money matters…but it is not enough o Everyone’s motivations are unique o Punishment does not motivate beyond minimum effort o Low performance may not be due to low motivation o Lack of motivation is not about laziness or apathy; depends on situation Expectancy Theory o Motivation = 3 Employee Beliefs Expectancy Do they think they can actually do what you want? Goal-Setting o Let workers participate in goal setting to enhance acceptance o Publicly monitor progress and celebrate success o Keep time frames relatively short o If goals aren’t met, work with individual to develop plan o SMART Goals Specific (behaviors clearly identified) Measurable (finite amount required, know when goal is met) Attainable & Acceptable (“stretch goals are difficult but doable, people “buy in” and commit to goal) Relevant (know why completing goal is important) Time bound (clear deadlines to give urgency) Instrumentality If they do it, will it lead to an outcome? Reinforcement Theory o Consistency in rewards and punishment is important o Behavior that is rewarded is repeated o Behavior that is punished is not repeated Positive Reinforcement Consequence = reward person will do behavior more often Extinction Consequence = reward remove the consequence, Person will do the behavior less often Punishment Consequence = punishment, Person will do the behavior less often Negative Reinforcement Consequence = punishment, remove the consequence, Person will do the behavior more often o Reinforcing with Compensation Clearly tie pay to performance Ensure pay isn’t rewarding the wrong things Don’t make it too difficult for employees to get rewards Valence Is the outcome desirable (or avoiding it undesirable?) Equity Theory o Believe you’re being treated unfairly or “Someone else is getting more for doing less” I either lower my work level (inputs) or find a way to get more reward (outputs). o Outcome Are others working as hard as me, am I getting same rewards for same amount of work? o Process Are rewards determined fairly? Do I have say in how they’re determined? o Interpersonal Treatment Am I treated the same as others? Am I treated with respect/dignity? Maslow’s Hierarchy o Bottom to Top of Pyramid o Physiological Needs – basic needs o Safety Needs o Social Needs – allow time for employee socialization o Self-Actualization & Esteem Needs – consider life-balance programs Understand what needs you need to be meeting at any given time Job Characteristics Model o People are motivated by particular kinds of work Want to increase Enrichment, decrease Enlargement 5 core job dimensions – vital characteristics of work Proposes a link between dimensions and psychological states of worker o Enrichment Skill Variety Range in number of skills needed for job Task Identity Degree to which a job requires completion of a whole or identifiable piece of work (ex. Artists enjoy high task identity) Task Significance Degree to which the job has a direct effect on work or lives of others Autonomy Freedom to select how and when particular tasks are performed Feedback Degree to which individuals receive knowledge of their results from job itself o Enlargement More of the same kind of work Decrease this o 5 dimensions that influence beneficial work outcomes through critical states (states are explanation of why characteristics influence outcomes) o Experience meaningfulness is most important one, really relates to all outcomes o Job-based theory - ignores the people in jobs o Strength of employee growth need tries to get at employee/person McClelland’s Learned Needs o Need for Achievement (NAch) Challenging projects Work w/ other NAch people Fair & balanced feedback o Need for Affiliation (NAff) Work in group setting with other NAffs Avoid uncertainty, risk, & competition Build rapport before feedback o Need for Power (NP) Use competition as motivator Give direct feedback & guidance toward goals When you can, let them be in charge Herzberg’s Two-Factor Theory o Two factors needed in order to motivate employees into higher performance o Two sets of factors are independent and not just two ends of one scale o Can be satisfied at work with hygiene factors and not be motivated, or can be motivated but unsatisfied with hygiene factors o Hygiene Factors Working conditions, quality of supervision, salary, security, interpersonal relations o Motivation Factors Achievement, recognition, advancement, growth on the job Theory of Purposeful Work Behavior o Considers person and environment o Individuals have different needs Achievement, affiliation, power, autonomy o Job characteristic that is motivating for one might not be for another o Combination of Five Factor Model & JCM o People’s personality determines what is motivating** Current Thinking o Recognize individual differences o Strive for equity, not equality Don’t pay everyone the same, have pay reflect input to organization o Do all you can to make work more interesting o Link goal attainment and behaviors to rewards and punishments How do Managers Appear Equitable? o Be transparent about how rewards given o Be clear about what inputs are valued o Give everyone same opportunities o Allow people to have a say in performance systems o Manage “shirkers” so others don’t think they can get away with “shirking” (slacking off) o Employee Engagement Competitive Advantage Engaged Employees Create Value Through: o Higher productivity o Better customer service o Lower turnover rates o More creative ideas Components of Employee Engagement o Job Satisfaction Positive attitudes about your job Consistent with values Meets expectations of what a good job is Like the job Want to do well at job Ways to Improve Job Satisfaction Let people be themselves Share information freely Focus on and develop employees’ strengths Make sure organization has and adheres to values Show employees how their work contributes to company’s outcomes Have rules people believe in Job Enrichment Minimize Bureaucracy Meet Maslow’s Social Needs New Ideas from Research Ways to Measure Job Satisfaction Exit Interview o Initial Interview Departing employees meet w/ HR o Data Analysis Responses analyzed for trends o Corrective Measures Toxic people dealt with Negative work practices corrected o Physical and Mental Health Rationale Clear link between work performance and physical and mental health Wellness at work increases normative and continuance commitment Benefits Increased/consistent productivity and attendance Decreased health insurance premiums Determining Return on Wellness Programs Find Baseline Numbers o Insurance premiums/increases related to particular conditions o Costs of absenteeism and lost productivity related to particular conditions Implement the Program o Determine cost of program and its management o Track change in related expenses Calculate Return on Investment o What did we spend? o What cost savings did we incur? Employee Assistance Programs/Rehabilitation Company pays a pear employee fee to enroll in or start EAP o Incident prompts employee referral to EAP and/or employee contacts EAP EAP advises employee on services available and insurance coverage Average ROI in the US: $4/$1 o Organizational Commitment Affective Commitment Normative Commitment Continuance Commitment Coaching Coaching o Focused on specific skills or behaviors o Providing both instruction and feedback on an ongoing basis o One part of Mentoring o Goal: Correct behavior o Focus on immediate behavioral change o Usually done in a boss/subordinate relationship o Relies on skill of person giving feedback Sequence of Feedback State observed behavior as specifically as possible Describe the impact of behavior on self and others Provide suggestions for improvement o Describe, don’t judge o Balance positive and negative feedback o Two or three points, beware feedback overload o Praise: be specific, gratitude & encouragement, timely, don’t do it too often Mentoring o General relationship fulfilling one or more of these: Signaling/Sponsorship Protection or “buffering” Challenges and stretch opportunities Exposure and visibility Coaching All about growth Goal: Supporting protégé’s personal and professional growth Focus on long-term personal and career development Mentor is seldom the protégé’s boss Relies on strength of relationship Best Practices o Be specific o Talk about behaviors rather than traits o Be timely o Focus on future o Provide multiple sources of information for improvement o Coaching always has multiple sources and can be used in a relative sense (compare employee to someone else who knows how to do that) o Feedback should be absolute Preferences for Work Feedback o Work Attitudes Those who are more committed tend to want more feedback, want to stay with company People who are more satisfied want to know how they’re doing at work 3 Needs: Achievement, Power, Affiliation Achievement oriented like consistent feedback as to how they’re progressing towards goal Conscientious Need for Achievement Set more difficult goals Prefer more feedback o Individual Differences Across Generations When (and where) you were born Beliefs about how the world works (Worldview) Generationally Based Work Tendencies About Generational Differences Psychological Stages of Human Development (Massey) o Imprinting (1-7) Listen to everything our parents tell us and believe it to be true o Modeling (7-13) More in-tune with the world and our experiences o Socialization (14-20) Influenced by peers and media o Worldview is shaped between Imprinting and Modeling Defining Events o Shape worldview o We believe experiences, not stories US Educational System o Standardized testing o Parental involvement Generational Groups in US Workforce Traditionalists o 1900-1945 o Military influence o Loyal, family-focused, patriotic, hierarchical, top-down, live-to-work mentality o Learning Style: Read, concentrate, watch, listen o Feedback: subtle, private recognition preferred Baby Boomers o 1945-1964 o Social justice, Cold War o Fairness, inclusion, social change, optimism, competition o Learning Style: Face-to-face, listen, read o Feedback: like praise, recognition, and things to display to others, enjoy public recognition Generation X o 1965-1980 o Corruption, social ills o Self sufficient, distrustful, skeptical, self- focused o Learning Style: Skim, trial and error, watch o Feedback: do not enjoy public recognition, feedback on results not themselves Millennials/Gen Y o 1989-1998 o Technology o Parental involvement, technologically dependent, narcissistic, impatient o Learning Style: Real-time, visual o Puzzling Qualities: Parental involvement Expectations of quick promotion Entitlement Relaxed views of professionalism Inability to solve problems o Things that puzzle them: “Live to Work” mentality Unwillingness to give answers Need to answer ringing phone o Feedback: like feedback, will as for it often, want recognition tied to heroes Power Power o Potential of an individual or group to influence the behavior of another o Political currency o Ability to get someone to do what you want them to do o Central part of every manager’s job Powerful Managers… o Manage their teams o Manage the context for their team Get items on and off agendas Have advance knowledge of new initiatives Obtain desired resources Get fast access to decision-makers Model of Power and Influence o Power comes from personal (charisma, etc.) and positional power o More powerful people use different strategies o More powerful individuals can develop more trusting relationships Positional Power – comes from job w/in organization o Formal Authority Position in hierarchy Ability to reward or punish o Relevance Involvement in things that are strategically relevant to organization o Centrality Exposure to key individuals Working with many different people o Autonomy Discretion in decision-making o Visibility Public nature of work Personal Power o Expertise Relevant knowledge and skills o Track Record Positive past experiences o Attractiveness Power of personal appearance o Affection Likability Strength of relationships o Personal Magnetism Charisma Communication skills o Coercion Threats, immediacy, “In Your Face” Power Should Enhance Trust o Trust = “willingness to be vulnerable” to someone Type 1: Calculus Based Trust Logical decision to trust based on: o Past performance o System protections o Commerce relationships Type 2: Identity-Based Trust Emotional decision to trust based on: o Shared values o All relationships have both trust and distrust o Mental Bar Code = shortcut/inventory, or “What trust/distrust is in this person for me?” Distrust o Definition: Actively protecting yourself, avoiding vulnerability o What Prompts Distrust? Reputation Disconnected words and actions Break of promise Behaviors resulting in harm o Impact Makes relationships difficult to maintain Takes significant time and energy Repairing Trust o Ultimately leads to better outcome in long-run o Steps: Apology is necessary Explanation of how/why break occurred Provide a “safety net” to protect in future Allow for monitoring and follow-up Influence What Do I Want? o Need clear purpose o Define your interest first, then your positions Who am I influencing? o Align how your interests are similar to theirs o Define their goals o Define their pressures and constraints What do they need? o Make it easy for them to agree Influences Strategies o Retribution “If you don’t do X, you’ll regret it.” A threat Use When: You don’t need ongoing commitment Can monitor other person’s behavior Quality and/or innovation don’t matter to the outcome No other alternatives exist Need immediate compliance, do it sparingly o Reciprocity “If you do X, you’ll get Y.” Use When: Clear rules govern transaction Have actual control over something the other person wants Can specify levels of quality needed for the reward Can give reward again if you need the behavior in the future o Reason “You should do X because…” Use When: Ample time and evidence for attitude change Need this person to convince others Need person to engage in behavior long-term Can involve others in problem solving or decision making Logical argument for why someone should do something Appeals to cognition, weighing costs & benefits o Personal Appeal “Do X because you like me.” Use When: Personal relationship is well established Regularly exchange favors w/ person Relationship will not be compromised by request Have ample capital in relationship bank account o Ingratiation Using praise or flattery to put someone in a good mood prior to making request o Coalition Seeking the help of other people to get someone to do what you want, or using support of others to get someone to agree with you o Legitimizing Establishing legitimacy of request by appealing to authority or pointing out consistency with existing values or norms o Consultation Seeking someone’s participation in planning or developing something he/she will ultimately need to buy into o Inspirational Appeal Arousing an individual’s enthusiasm by appealing to values, ideals, and aspirations Research on Managers and Influence o Most CEOs think they get power from personality & leadership skills o Straightforward communication is the most effective form of influence o Managers THINK they use Reason or Personal Appeal when often using implied Retribution o Training improves managers’ influence Upward Influence: Managing Your Boss o Understand Your Boss Priorities Mindset How your job helps boss succeed o Communicate in your Boss’ Preferred Style Written, face-to-face, text, etc. Learn preferred style from how they communicate with you o Solve Your Own Problems Answer questions from other sources before Never bring problem w/out proposed solution Conflict 2 Types of Conflict o Relationship Conflict Between people o Task Conflict Between ideas Effects of Conflict on Organizations o Positive: Highlights problems Motivations understanding Encourages people to voice new ideas Challenges status quo o Negative: Cause stress Reduces communication Causes people to resist collaboration Results in negative stereotyping and group distinctions Some conflict is necessary Sources of Conflict o Competition over scarce resources o Ambiguity or uncertainty o Faulty communication or perceptions o Competing roles o Personality clashes o Stress Responses to Conflict o Competition High concern for issue, low concern for relationship Use When: Issue is really the most important in the dispute Someone has to be in charge Safety is an issue Clear directions need to be issued To Use: Be direct Explain rationale later Don’t use the strategy too often o Collaboration High concern for issue, high concern for relationship Use When: Relationship and issue both REALLY matter Have ample time for discussion Relationship has sufficient trust To Use: Define problem together Focus on interests, not positions Approach as a problem, not a conflict o Avoidance Low concern for issue, low concern for relationship Use When: Delay will help you address the issue more productively Issue is trivial and will disappear later To Use: Set time limits Set goals for time out period o Accommodation Low concern for issue, high concern for relationship Use When: The issue REALLY doesn’t matter to you You’re collecting favors for later You are outranked To Use: Acknowledge the accommodation Have a rationale Relationship Conflict o Gather Information Cite specific behaviors and outcomes o Analyze the Problem Is it the nature of the job? Work group dynamics? o Have a conversation about the behavior Focus on why and how change is needed Best Practices for Handling Conflict o Manage Self Reflect Behaviors: observe your reactions, identify your interpretations o Effects: cools you down, increases EQ Reframe Behaviors: try out alternative attributions, consider what you miss that others see (and vice versa) o Effects: Think outside current beliefs, formulate questions to generate new data o Manage Conversations Dig into divisive topics Behaviors: treat others’ concerns as legitimate, make your reactions public, ask others to help with your own “binds” o Effects: makes divisive topics OK, increases team members’ awareness, depends understanding Examine competing views Behaviors: explore competing beliefs before data, ask others what they feel and why o Effects: generates more useful data and range of options, creates more powerful solutions o Manage Relationships Build trust Behaviors: Recognize everyone’s assets and liabilities Reduces feelings of betrayal Maintain the right to make mistakes Improves decision-making Assuming responsibility for learning from mistakes Accelerates learning Negotiation “Interaction that occurs when two or more parties attempt to agree on a mutually acceptable outcome in a situation where their preferences for outcomes are negatively related.” “Use of information and power to affect other party’s behavior within a web of tension.” Making both parties feel like they won; one party wants something to a degree another party doesn’t want (negatively related) Negotiation has 2 Kinds of Issues o Tangible Things in the contract: price, delivery, quantity, other terms o Intangible Unspoken things: “winning,” reputation, being fair, the relationship Stages of Negotiation o Planning Decide how much power you have in situation, where you are on conflict management grid/ concerns Determine specific goals in negotiation, what you want, why, if you have a BATNA, want to beat your BATNA Power Stage Research Competitive vs. Collaborative Competitive: Win-Lose o Short-term relationship o Incompatible goals o Emphasizes tangible elements o Strategies: know what things are worth, when you’ll walk away, make your BATNA more attractive o Ex. Buying a car Collaborative: Win-Win o Long-term goals o Need to find interests both parties share o Emphasizes intangible elements o Relies on trust Integrative Strategy o Be nice to people but hard on problem o Uncover interests o Identify what a good decision looks like o Listen carefully, write things down as you go o Don’t forget to assert interests aggressively as you work to meet other party’s interests o Opening When you sit down and talk Affirm desire for good outcome = Set the Stage Have a rationale = Offer Opening Bid Fro both verbal and nonverbal response = Gather Information Back and forth information gathering o Bargaining Stay Objective Separate people from problem Watch Concessions Smaller as we near the target point Use Psychology Anchoring: first offer is where every discussion after starts, around that offer, provides setting to negotiate around Contrast: compare other options to less desirable options you saw earlier o Closing and Implementing Confirm and document details No celebrations Take implementation seriously Preparation Guidelines o What is my goal? o What is my walk-away point? o What will be my opening offer? Salary Negotiation o Do your homework (know market rate) o How documented reason for request o Understand their constraints/power o Expand bargaining mix beyond salary o Ask, “Is this negotiable?” o Best Practices Make it clear they can get you Help them understand your value to firm Avoid ultimatums Don’t underestimate power of likeability Don’t initiation negotiations unless you plan to take the job if they agree Work Team Effectiveness Organization’s use teams because the outcome of a team’s work will be greater than the sum of all individual’s output Effective Teams o Interdependent Know why the group exists & have shared goals o Communicate Communicate freely amongst themselves o Potency o Cohesion o Resole/Deal with Conflict Model of Team Effectiveness o Inputs Organizational context Team context Members o Mediators Processes How team accomplishes what it wants to do Emergent States Ideas Over time, inputs lead to these processes & team becomes more cohesive Cohesion is a function of inputs o Outcomes Cohesion drives performance & outcomes Interdependence o Pooled Low-level interdependence o Sequential Slightly higher level One person does one piece of work & passes it on to another Ex. Assembly line Person 1’s output becomes person 2’s input Higher than pooled because we have outcomes directly dependent on one another Takes more time than pooled, but has more efficient outcome (information flow) Can result in more conflict Why do we used pooled so often but not sequential for teamwork? It takes more time** Disconnected** (ex. Different questions)** o Waiting on the work of another to begin yours o Reciprocal Very similar to intensive Everyone is interacting with everyone o Intensive Very similar to reciprocal Everyone is interacting with everyone Much more difficult to solve a problem Moving information back and forth required/creativity use intensive Common Types of Teams o Functional “work team” doing similar function work together day-in and day-out usually in same physical location, semi-permanent, same team for a long time w/ similar jobs o Cross-functional Similar to functional but people w/ different functions Ex. Design person, marketing person, finance person Different roles* o Problem-solving Can be functional or cross-functional Meet for a short period of time Get together to solve one problem, once it’s solved it’s done Ex. Consulting team o Self-managed Autonomous – no leader Empower a team by letting them work on their own Motivational benefits More satisfied teammates Advantages: o Can better adapt to environment o Greater commitment/satisfaction bc of autonomy o Streamlined management Disadvantages: o Not sure what to do without manager or defined tasks o Enhanced groupthink When a team has an idea and they all just agree; no devil’s advocate; might have a dominant person where everyone agrees with their mentality o Informal norms can be coercive o Virtual Not geographically co-located Have to communicate via e-mail, Skype, phone software, etc. Virtual can also be problem-solving etc., can be a mix of things Advantages: Can take turns working Geographic dispersion can mean greater diversity Work autonomously (less groupthink) o Not co-located, so it is easier to express ideas and disagreements via e-mail or some impersonal form of communication Inexpensive infrastructure Disadvantages: Communication difficulties o Electronic communication can lead to misinterpretation Individuals must be able to work autonomously o Very flexible, persons work from home, individuals on team have to be very conscientious and make sure they’re getting the work done Less cohesion than in-person Characteristics of members on teams o Selection decisions must consider everyone in the group o Focus on Fit Supplementary – everyone is similar Ex. Agreeableness or conscientiousness Complementary – everyone is different Ex. Extraversion and introversion o Surface-level characteristics Age, race, gender o Deep-level characteristics Personality, competency Disagreeableness is okay as long as everyone on the team is disagreeable Agreeable people get offended by the disagreeable people—causing conflict Shared norms to interact with one another Stages of Team Development o Ex. Remember the Titans video Forming Stage Anxiety, everyone is trying to figure things out Early stage of team formation that emphasizes not focusing on the task yet, but feeling each other out Storming Conflict, most tumultuous part of forming Question the team’s decision People who want to be the leader start clashing w/ other members Point where a lot of teams fail or disband Norming Almost simultaneous with Storming Back and forth with Storming Performing Control structures in place that govern how they will behave Leads to performing: how well teams resolve the storming and norming phase Can still fail in this phase depending on how well they did in storming & norming Leverage that synergy they may have created in past two stages Adjourning Team Processes o Cohesion & Potency strongly related to member satisfaction and team performance o Will determine what kind of processes the team goes through o Cohesion How much group members like one another Attraction team members feel towards one another Attraction Task commitment Group pride Has very strong effects on performance o Potency Team’s collective perception if they can accomplish task Team-level analog of Expectancy Collective efficacy o Norms Informal control structure on team Team’s social ideas of rules and appropriate behavior Prescription as to how to behave Want to foster cooperative norms Mutual understanding Want to underscore shared goals as manager to get them away from competing Harmonious interpersonal relationships Norms can also have negative consequences Informal pressure to adhere to norms Violate norms punishment
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