Take Home Exam #2
Due Sunday night in week #7
1. (11 points) Why is it necessary for an organization to appraise performance formally?
Performance appraisals are necessary for an organization to understand each employee’s skills, abilities, and competencies. Performance appraisals are used to rate the employee’s performance. Formal performance appraisals are important to organizations because they clarify the employee’s roles and responsibilities, and helps align individual goals with organizational goals. Formal performance appraisals also allows for evaluation of the employee’s performance and contribution towards organizational goals. Formal performance ...view middle of the document...
Knowledge resided in the interaction between the capacity to learn and the ability to learn. Knowledge is the understanding of theories and concepts, such as problem solving, and includes knowledge gained for experiences, tacit knowledge. Competencies are the basic units of knowledge and skills employees must acquire or demonstrate in order to perform work assignments successfully.
4. (10 points) Describe the difference between trait-oriented and results oriented performance appraisal instruments.
A trait-oriented performance appraisal is based on the employee’s personal traits and less on actual performance. Trait-oriented performance appraisals tend to be more dependent on office politics. Results-oriented performance appraisals are focused on benchmarks, setting individual goals, measuring performance, and then measuring success based on the accomplishment of goals and objectives.
5. (10 points) What are the principal differences between defined benefits plans and defined contribution plans?
A defined benefits plan includes a formula that defines the benefits an employee is to receive. An employer with a defined benefits retirement plan must make annual contributions to the plan based upon actuarial computations to pay the vested retirement benefits. A defined contribution plan involves the payment of a specified annual amount to the account of each participant. The amount may be based on (1) a flat dollar amount, (2) a formula, or (3) an amount equal to a percentage of the participant’s base pay.
6. (10 points) What is reverse discrimination and how does it influence the design of an executive compensation plan?
Reverse discrimination is a form of discrimination that occurs against members of a dominant or majority group, or in favor of members of a minority or disadvantaged group. Highly paid employees, like executives, experience reverse discrimination because of laws and legislation meant to help minorities. Executives face discrimination in: pension plans, receiving a much less percentage of tax-free benefit in the pension payment than lower-paid employees; long-term disability, only receiving 16 percent of their base pay. ...