Traditional Bases for Pay

Chapter #4

Seniority and Longevity Pay

Length of serviceHuman capital

Merit Pay #81

Rewards differences in performanceWhat does it take to

◦make merit pay ◦systems be effective?

◦Meaningful increases◦Clear Performance standards◦Performance appraisals

Historical Overview #77

What do you think?

Effectiveness of Seniority Pay Systems

12% US workforce (declining)There is no research that demonstrates

the effectiveness of seniority pay systems Does it reduce turnover?

Design of longevity pay systems

Federal Employees General ScheduleRewards ees who have reached pay

grade limits. (GS)Look #80What are advantages toSeniority based pay?But what about incentives?Motivation?Competition?

Performance Appraisals

Types of Appraisal Plans

Trait System Look #84 Advantages

Easy to quantify

Disadvantages◦Subjectivity

Comparison Systems

Comparison Systems Forced Distribution Paired comparisons

Behavioral Systems Critical incident techniques Behaviorally anchored rating scales (BARS) Behavioral observations scale (BOS) Management By Objective (MBO)

Four Activities to Promote Nondiscriminatory Appraisal Practices

1. Job Analysis2. Structure Rating instrument3. Train supervisors adequately4. Formal appeals mechanism

360 Degree Performance Appraisals

(Class Demonstration)

Rating Errors in the Performance Process

Bias errorsFirst impression effectHalo effectSimilar to me effectContrast errorsCentral tendency errorsLeniency errorsStrict errors

Class Exercise

Using Yahoo: go to federal government’s General Schedule by clicking on the advance search link. Type in “general schedule”

Using Yahoo: Type IOMA Institute of Management and Administration. www.ioma.coma Do you think this site may be helpful to you? How?