Performance Appraisals, Employee Compensation, and Labor Relations: A Comprehensive Guide , Study notes of Introduction to Business Management

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BUSN 201 BUSINESS ESSENTIALS EXAM 3 REVIEW Chapter 8 Managing Human Resources  Job Analysis (Job description and Job specification) o How does job analysis help an organization to improve its other HRM programs  Human Resource Planning and Forecasting o HR demand forecast and internal supply forecast o HR Surplus: (Actions: reassign, layoff, terminate, retire) o HR shortage: (Actions: hire, pay overtime, subcontract) o Succession Planning Contingent Workers  Employee Recruitment o Internal  Job posting-posting positions available within organization  Supervisor referral  Skills inventory-count of skills for each employee o What are the benefits to the organization of internal recruitment?  Reduced costs, employees know job structure, employee already known to produce, and no time wasted on orientation training o External methods of recruiting  Newspaper Listing, specialized journals, internet job sites, college campus recruiting, job fairs, employment agencies  Employment agencies-public, private, and headhunters  Employee Selection o What is it and what are various steps in a selection process  Determines which candidates in the recruitment pool have the necessary requirements for the job  Initial screening*  Employment testing  Selection interviews*  Background and reference checks*  A job offer may then be made conditional on a clear medical  Hiring decision is made by the new employee’s manager not by the HR manager *checks before hiring o What is the difference between Recruitment and Selection?  Recruitment-attracting qualified applicants to apply  Selection-choosing the most qualified candidate for the job  Employee Training and Development o Orientation – Training for new employees  Formal-Classroom instruction about policies, salary, benefits, and parking  Informal-Specific job training concerning rules, equipment, and performance expectations o On-the-job training: (job rotation, apprenticeship, mentoring)  Job Rotation-reassignment of workers to several different jobs over time  Ex. McDonald’s  Apprenticeship-usually combines specific on-the-job instruction with classroom training  Mentoring-form of on-the-job training in which a senior manager or experienced employee provides job and career-related information to the mentee o Off-the-job training: (classroom instruction, vestibule training, computer based training, Trade association workshops and courses, college and university courses) Busn 201 Exam 3 Review 2 of 8  Classroom instruction-education  Vestibule training/simulation-mockup or scaled down version of equipment or work environment  Computer based training/programmed instruction-computer assisted, self-paced, and highly structured training method that presents trainees with concepts and problems  Trade Association workshops and courses  College and university courses-certified programs and degrees  Performance Appraisal (evaluation) o Evaluation vs Development,  Evaluation-determining performance during a certain period of time  Development-training in areas needing improvement based on evaluations o Steps in the appraisal process 1. Establish performance standards (by manager) 2. Employee works to meet standards and expectations 3. Employee’s supervisor evaluates the employee’s work in terms or quality and quantity of output 4. After evaluation, reward and job change decisions and can be made 5. Rewards are positive feedback and provide reinforcement for employee to work harder in the future o What can a well-implemented performance appraisal program do for a company?  Identify training needs  Promotional tool  Recognize worker’s achievements  Evaluate hiring process  Judge orientation  Provide basis for termination  Employee Compensation (includes both pay and benefits) o Types of Pay:  Base Pay-hourly wages, salaries  Incentive Pay-piecework, commission (straight, accelerated with or without base), bonus, profit sharing o Benefits:  Required by law  Unemployment insurance, social security, worker’s compensation  Not required by law  Paid vacation, sick leave, pensions, health benefits o Cafeteria Plans-pick and choose from menu of benefits  Unions o Craft vs. Industrial  Craft-made up of skilled workers  Industrial-skilled, semi-skilled, and unskilled workers o Collective Bargaining-union and employer negotiating an employment contract o Labor Contract (collective agreement)-agreement reached between union and employer through collective bargaining o Shop Steward-elected union official that represents union office to management when workers have complaints o Union security clauses (closed, union, agency, open)  Closed shop (outlawed)-must be union member to be hired by company  Union shop-must join union within prescribed period and pay dues  Agency shop-nonunion members may be hired and not have to join union, but must pay dues Busn 201 Exam 3 Review 5 of 8  Job Characteristics (By Hackman and Oldham, broadly accepted experts in this field) o skill variety-amount of different skills needed for job o task identity-degree to which employee can see results o task significance –degree to which your job has an impact on others o autonomy –degree to which your job has an impact on others o feedback-degree to which an employee gives feedback on how well they’re doing  Job Enlargement - increasing number of tasks an employee does to increase task identity and task significance  Job Rotation-works with 1st 3 characteristics, employee does different tasks each day. o 1st day-task 1. 2nd day-task 2, 3rd day-task 3.  Job Enrichment-focuses on autonomy and feedback o Ex. Giving a group a task and let them complete it however they want  Work Scheduling Options o Flextime-employees decide when they come and go, as long as they work the required hours.  Used by majority of companies, employees love it. o Compressed work week-employees work required hours but in shorter time span (4 10-hour days)  Good for commuters, employees miss rush hour o Job Sharing-two employees share one position and hours  Companies benefit by not having to pay benefits o Telecommuting-working from home and the office alternately  Saves on company overhead costs because employees can share offices  Recognition, Empowerment and Economic Incentives o Non-monetary – praise, recognition, time off, empowerment o Monetary – piece rate, profit-sharing, Gain-sharing, Stock options, Bonus. Marketing Notes – (sections of Chapters 11 and 12)  The Marketing Concept : identifying consumer needs and then producing the goods or services that will satisfy them while making a profit for the organization  The Functions of a Marketing Department : o A 2-way bridge, continually seeking information from the environment and sending o Information to the environment, keeping all constituencies in touch with changes.  Marketing Research : o Primary Data – Door to Door, telephone, Mall-intercept, Internet, Mail Interviews o Secondary Data – Government, Commercial, Trade  Customer Value o Customer Satisfaction-ratio of benefits to the sacrifice necessary to obtain those benefits, as detained by the customer; reflects the willingness or customers to actually buy a product o Relationship Marketing-a strategy that focuses on forging long-term partnerships with customers by offering value and providing customer satisfaction o Competitive Advantage  Cost-A firm’s ability to produce a product or service at a lower cost than its competitors Busn 201 Exam 3 Review 6 of 8  Product/service differentiation-A firm’s ability to provide a unique product or service that offers something of value besides a lower price  Niche-A firm’s ability to target and effectively serve a single segment of the market within a limited geographic area o Target Market-the specific group of consumers toward which a firm directs its marketing efforts o Niche Market-a localized single segment of the market  Market Segmentation : o Demographic-differentiation of markets through the use of categories such as age, education, gender, income, and household size o Geographic-the differentiation of markets by region of the country, city, or country size, market density, or climate o Psychographic-the differentiation of markets by personality or lifestyle o Benefit-the differentiation of markets based on what a product will do rather than on customer characteristics o Volume-the differentiation of markets based on the amount of the product purchased  The Marketing Mix – 4 P’s of marketing o Product/Service-taking the good or service and selecting a brand name, packaging, colors, a warranty, accessories, and a service program o Price-set based upon the demand for and cost of a good or service  Price skimming-high introductory price of product, lowering over time  Penetration pricing-offering new products at a low initial cost in hopes of achieving a high sales volume  Odd-even pricing-setting a price at an odd number to connote a bargain  Prestige pricing-higher pricing to perceive higher quality  Bundling pricing-grouping of two or more related products together and pricing them as a single product  Leader Pricing-pricing below or at cost to attract customers to a store where they would not otherwise shop  Loss leader-product priced below or at cost o Promotion (not the 4 P’s)  Advertising - Any paid form of nonpersonal selling, advertising, or promotion to stimulate the target market to a buy a product  Personal selling – a face-to-face presentation to a prospective buyer  Sales promotion – marketing activities that stimulate consumer buying  Ex. Coupons, samples, displays, shows  Public relations – Linking of organizational goals with the key aspects of the public interest and development of programs designed to earn public understanding and acceptance o Place/Distribution– where and how is product or service made available to the customer  SWOT Analysis o Strengths: attributes of the company that are helpful in achieving the objective o Weaknesses: attributes of the company that are harmful in achieving the objective o Opportunities: external conditions that are helpful in achieving the objective o Threats: external conditions which could be harmful to achieving the objective Chapter 14 - Using Financial Reports and The Financial Planning Process Busn 201 Exam 3 Review 7 of 8  Uses and influences of financial reports o Managers – to pinpoint problems/opportunities o Government – assists in calculation and collection of taxes o Investors, Suppliers, creditors – as a means to analyze business  Managerial Accounting - produces reports specifically for internal use  Financial Accounting - produces the financial statements that are used by external users as well as internal users (Balance Sheet, Income Statement, Statement of Cash Flows)  Accounting Regulations o GAAP - Generally Accepted Accounting Principles, followed by accountants in the US o FASB - Financial Accounting Standards Board, private organization responsible for establishing financial accounting standards in the US o IASB – international accounting standards board, develops global accounting standards that make it easier to compare financial statements of foreign based companies o Sarbanes-Oxley Act (2002)  Attempt to improve trust in Corporate America  Redefined public corporation – auditor relationship  Restricts services auditors can provide  Prohibits loans to executives  Establishment of PCAOB  Tightening of many existing standards  Types of Accountants o CPA-Certified Public Accountant  Accounting firms, income taxes, auditing, consulting o CMA-Certified Management Accountant  Employed within a company, usually within Financial Department.  The Accounting Cycle - process of generating financial statements o Transaction takes place and generates a document (sales slip, purchase order, invoice etc) o Journal entries are made and posted to ledger o Adjusting and closing entries made at end of accounting period and posted to ledger o Trial balance is completed o Financial reports prepared from the ledger accounts  Balance Sheet Assets = Liability + Owner’s equity  Assets – buildings, equipment, anything that can be easily liquidated  Owner’s Equity – Stock and retained earnings  Liabilities – Debts of the business  The Income Statement - revenue, cost of goods sold, expenses and net income/loss  Statement of Cash Flows o Reports the cash flows (receipts and disbursements) related to operations, investment, and financing. o Assesses the sources and uses of cash during a certain period  Analyzing Financial Statements - Financial Ratios o Liquidity ratios-measure a firms ability to pay its short-term debts as they come due  Current test-total current assets to total current liabilities  Acid test-total current assets excluding inventory to total current liabilities o Net Working Capital-amount obtained after Current Test o Profitability (Performance) Ratios  Measure how well a firm is using its resources to generate profit and how efficiently it is being managed