Preview Extract
This document contains Chapters 8 to 11 CHAPTER 8 - CRITICAL THINKING APPLICATIONS Critical Thinking Application 8-A Workplace Diversity Training You have been asked to design a diversity-training program for incoming freshmen at your school. Try to answer the questions presented above in this context: Develop a method for the training program. Do a Web search to identify online diversity programs. Using Kirkpatrick’s model, give one example of each of the four types of data for evaluation that you would use to either evaluate your own new program or a ready-made online program. The first step in defining diversity is to determine the organizational goals of why there is a need to define it. For instance, if the need is based on a reaction to a situation the definition will most likely be based on the specifics of the situation. For example, the incident at SDG & E, would clearly define diversity in context of race where the incident at either Lucky or Wal-Mart would define diversity in context of gender. An organizational analysis of what will need to be accomplished by the training and why the training should be done is probably necessary even prior to the defining of diversity. Question 2 is more important to answer before the definition can be addressed. The success of a workplace diversity-training program depends on the leadership’s personal and organizational resource commitment to it. The answer to why it is important for the school can only be determined by interviewing the leadership of the university. If the diversity training is designed with keeping the organizational goals in mind that were specifically articulated by the leadership of the organization, the answers to both defining diversity and the importance of it should be answered. After the survey of the leadership, a needs assessment to determine the difference between the desired goal and the current situation of the school should be done. If it is found that the school is lacking diverse students, then recruitment of diverse students by the admissions and registrar offices would be the first place to address training. It may mean that the recruiters concentrate on areas of the region that one or more of the target groups reside. The question what is to be trained should be answered by the assessment of the difference between the goal of diversity as defined by the leadership and the results of the needs assessment. Once the question of what is to be trained is answered, the questions of how it will be trained and how it will be evaluated will be able to be answered. For example, the training of the recruiters in addressing more diverse students may be in role-playing exercises to facilitate the use of politically correct language. It also may mean the incorporation of addressing the financial options available to student that wish to attend the school. Training team building skills to the recruiters and the financial aid officers may be necessary to produce a united effort to the students the school is trying to attract. The success (or evaluation) of the program would be determined by the increased number of the diverse students attending the school that were directly affected by the training efforts. Since the training program could influence other diverse students indirectly, data on how or why each student decided to attend the university could be kept. This measurement would ensure the training program was meeting the needs defined by the organization. An Internet search using google.com revealed the following sites. In addition, the students could check out their own college website for its diversity training program. http://www.diversitydtg.com/ http://www.opm.gov/hrd/lead/policy/divers97.asp www.griggs.com/videos/tbl.shtml http://www.eod.uci.edu/training.html www.multicultural.net/onlinepresent.htm http://www.arl.org/diversity/ www.lsuc.on.ca/equity/program_equity.jsp Critical Thinking Application 8-B Sexual Harassment Training This training is intended to help you understand and comply with a policy prohibiting sexual harassment. Whether this is your first training or just a refresher, we hope you find it interesting and informative. After you have completed the training and received your certificate, answer the questions that follow and bring your responses to class along with the certificate. Students should have no difficulty accessing this on-line training. If you ask students to hand in their “Certificate” indicating that they have gone through the course, it is possible a quasi-experimental design will emerge where some students do not do their homework. A good exercise is to do a follow-up “learning” assessment to determine the extent to which the students who went through the training have higher test scores than those who did not. The test below can be used as a “learning” evaluative criterion in such a study. Of course, you can also randomly assign students to groups for a more definitive assessment of the training and employ and pre-test design for both groups. This will enable you to discuss experimental design along with the four criteria for evaluation. The training site can be found at: http://www.calstate.edu/gc/AntiSexualHarassmentTraining/sh-page1.shtml Answers: 1-11 all TRUE; 12 is FALSE; 13-17 are TRUE and 18 is FALSE. The answers to items 19-26 are all false because there is insufficient information and it is unclear as to whether the behavior is “unwelcome.” Good areas for discussion are student responses to #s 12 and 26. Students will be surprised to learn that it is possible that the “correct” answer to #28 is TRUE based on a 2006 state of California ruling where showing favoritism in assignments and raises to a lover was judged to constitute sexual harassment by subordinates who affected by the favoritism. Answer the following questions: * Contributed by Jennifer Collins. 1. What reactive, learning, behavioral, and results/ outcome measures do you propose to assess the effects of this training program? Write at least one specific example of each type of evaluative criteria. REACTION: Trainees are asked to assess whether they thought the training was effective. LEARNING: Trainees are tested on their knowledge of the contents of the training. BEHAVIOR: Trainees are evaluated by other employees on the extent to which sexually harassing behaviors have been exhibited or observed. RESULTS: Data on actual harassment complaints; survey data reporting rates of harassment. 2. How does this type of training compare to alternative training approaches that could have been used to comply with the law? What specific approaches would be more effective? Is this training in compliance with AB 1825? Video illustrations may have been more interesting although there is no evidence that video-based training is superior to that which was used in this training. 3. What type of evaluative measure is the test you just completed online? Is it a reactive, learning, behavioral, or results measure? What is your opinion of the quality of this measure? This was a learning measure. The items are closely linked to the training itself but may not generalize to other work situations. There is a need for a closer connection between the training and the learning measure with the sexual harassment procedures of any given organization. The precise steps to be taken to file a complaint should be provided. 4. What organizational analysis do you suppose the state of California conducted in order to justify this legislation? You may either provide some possible data or find information online to track the history of the legislation. It was reported that the number of reported sexual harassment by employees within the state was high and that surveyed data indicated the rates of formal or informal complaints were going up. 5. If you were hired as a consultant to the state of California charged with evaluating the effects of state law AB 1825 legislation, what specific evaluative criteria would you use? All criteria should be used but some type of “person” analysis should also be conducted to exempt those supervisors who require no new training. CHAPTER 9 – CRITICAL THINKING APPLICATIONS Critical Thinking Application 9-A Careers and Corporate Social Responsibility * Contributed by Joyce E.A. Russell and Lillian T. Eby Your research should attempt to identify the following: The types of behavior that are indicative of socially responsible and irresponsible actions. The real and potential difficulties faced by organizations in their attempts to manage social responsibility. Provide suggestions for how organizations can evaluate their corporate social performance. Outline a general plan for how an organization should conduct a corporate social audit. Provide an explanation for why the behavior is indicative of socially responsible or irresponsible behavior. In addition, describe the consequences of the behavior for the employee workforce and for any clients or customers or the general public. Consider the extent to which you would weigh corporate social responsibility in your career planning and job choice. Which of the socially responsible actions identified do you think would be most resisted by management? Why? How could this resistance be addressed? There is a plethora of companies that have published their corporate responsibility statement on their website. The following information will get you started: OECD (Organization for Economic Cooperation and Development) has published Guidelines for Multinational Enterprises, a set of non-binding recommendations from governments to corporations. The Guidelines provide voluntary principles and standards for responsible business conduct in a variety of areas including human rights, environment, employment and industrial relations, tax, and science and technology. Source: http://www.oecd.org/home/0,2987,en_2649_201185_1_1_1_1_1,00.html Fortunes List of the Best & Worst In Social Responsibility 2009: The Best Anheuser-Busch Marriott International Integrys Energy Group Walt Disney Herman Miller Edison Starbucks Steelcase Union Pacific Fortune Brands The Worst Circuit City (out of business) Family Dollar Stores Dillard’s Sears Holdings Tribune (in bankruptcy) Hon Hai Precision Industry Fiat PEMEX Surgutneftegas Huawei Technologies Source: http://money.cnn.com/magazines/fortune/mostadmired/2009/best_worst/best4.html The Business Ethics 100 Best Corporate Citizens list was developed and first published in 2000. The 100 Best Corporate Citizens list ranks firms based on how well they perform in eight categories: shareholders, community, governance, diversity, employees, environment, human rights, and product. The scores draw on both financial information and measures of corporate social performance. The financial component is based upon annualized 3-year shareholder return. Environmental, social and governance (ESG) performance ratings are based upon KLD’s SOCRATES database of US company analysis 2007 Top 10 Best Corporate Citizens: Green Mountain Coffee Roasters Advanced Micro Devices NIKE, Inc Motorola Intel Corp. International Business Machines, Inc Agilent Technologies Timerberland Company Starbucks Corporation General Mills Inc. Source: http://www.business-ethics.com/BE100_all Global Reporting Initiative/ Sustainability Reporting Guidelines: The G3 Guidelines is a standardized approach to reporting and benchmarking organizational performance with respect to laws, norms, codes, performance standards and voluntary initiatives; demonstrate organizational commitment to sustainable development; and compare organizational performance over time. Source: http://www.globalreporting.org/AboutGRI/WhatWeDo/ Company Highlight: Starbucks Starbucks has repeatedly been ranked amongst the Top 10 Corporate Social Responsible corporations: ranked 7th in 2009 Fortunes Best Socially Responsible Corporations and ranked 9th in Business Ethics 100 Best Corporate Citizens. Starbucks is clearly a leader is CSR as evidenced by the numerous awards it receives each year. Only purchases fair-trade coffee: better relationships with farmers that yield a better product. Environmental commitments (i.e. energy efficient lighting/ reusable cups): reduced the impact on the environment and increases brand loyalty. Employee commitments (i.e. training & development, health benefits): high tenure Ethical sourcing of products: ensures the producers are sustainably producing coffee; thereby, ensuring the availability of its products. Independent committees overseeing audit and compliance, compensation, and corporate governance: leading the way in CSR instead of being pushed in that direction. Clearly defined “Stands of Business Conduct,” dedicated CSR group, other programs: clearly show that CSR at the forefront of the companies passion and mission and not a fleeting program. Uses the Global Reporting Initiative (GRI) G3 Guidelines, a set of internationally recognized sustainability reporting standards, to develop its annual CSR report. 2007 Starbucks self-declared the report to GRI Application Level B+. Critical Thinking Application 9-B O*Net Skills Search Some organizations have taken advantage of O*NET for career guidance. O*NET is the Occupational Information Network and is available as a vocational tool free of charge. O*NET is the primary source of occupational information for the U.S. It provides the essential foundation for facilitating career counseling, education, employment, and training activities. The database contains information about knowledge, skills, abilities (KSA), interests, general work activities (GWA), and work context. O*NET data and structure also links related occupational, educational, and labor market information databases to the system. Among many other things, O*NET can accomplish the following: 1. Facilitate employee training and development initiatives; 2. Develop and supplement assessment tools to identify worker attributes; 3 Create skills-match profiles; 4. Explore career options that capitalize on individual Knowledge, skill and ability profiles; and 5. Improve vocational and career counseling efforts. The Skills Search function is designed to help people use their skill set to identify occupations for exploration. You select a set of skills from six broad groups of skills to create a customized skill list. You begin by selecting skills from one or more of the six skill groups identified: Basic Skills, Complex Problem Solving Skills, Resource Management Skills, Social Skills, Systems Skills, and Technical Skills. Figure 9-6 presents the Skills Search Inventory. Students selected skills which are then compared to skill ratings for each occupation. If a selected skill is rated "Very Important" for a particular occupation, it is considered a match. "Very Important" includes skills rated 69 or above on the standardized scale (3.75 or above on the original importance scale). Occupations matching all selected skills are shown first, followed by those matching all but one of the selected skills, and so on. Assignment: What is an O*NET-SOC code? Explain what a standard occupational classification is. O*Net-SOC code is a numerical code used to identify and classify workers of the same occupation in the same way; in other words it is standard skill set that defines an occupation. It was originally developed by the Bureau of Labor Statistics as part of their SOC Manual to ensure that all users of occupational data classify workers the same way. Although developed for SOC, the basic principles also apply to the O*NET-SOC system. Explain the process that was used to match your skills to a particular job? (how does the system do the match?) The information used to match skills with an occupation was gathered from surveys from people working in many different areas. 1. Job Analysis: The first step is to conduct a thorough analysis of the job requirements. This involves identifying the essential skills, qualifications, experience, and other attributes necessary for success in the role. Job descriptions are often created or updated based on this analysis. 2. Resume Parsing: When applicants submit their resumes or applications, the system parses the documents to extract relevant information such as education, work experience, skills, certifications, and achievements. This information is then stored in a structured format within the ATS. 3. Keyword Matching: The system compares the skills and qualifications listed in the job description with the information extracted from the resumes. Keywords and phrases relevant to the job requirements are identified and used as criteria for matching. 4. Weighting and Scoring: Some ATSs assign weights or scores to different criteria based on their importance to the job. For example, certain skills or qualifications may be considered more critical than others. The system calculates an overall score or ranking for each applicant based on how well their qualifications align with the job requirements. 5. Filtering and Ranking: Based on the match score or ranking, the system filters out applicants who do not meet a certain threshold of qualifications. Applicants who meet the minimum criteria are ranked or sorted based on their match score, with those having the highest scores typically considered the best fit for the job. 6. Manual Review (Optional): In some cases, recruiters or hiring managers may manually review the matched candidates to ensure that the system's assessments align with the specific needs of the organization and the nuances of the job. 7. Candidate Selection and Communication: Finally, recruiters or hiring managers use the system to select candidates for further consideration, schedule interviews, and communicate with applicants regarding their status in the hiring process. Overall, the system matches skills to a particular job by systematically comparing the qualifications of applicants with the requirements of the job description, using keyword matching, weighting, scoring, and filtering mechanisms to identify the most suitable candidates for consideration. What is an SVP rating? SVP stands for Specific Vocational Preparation, which is the amount of time required for someone to learn the information and abilities to perform the job in an average manner. What is a job zone? A JOB ZONE is a group of occupations that are similar in many ways, such as: how people enter the field, the experience needed for the job, the education necessary, and the on-the-job training needed. Could an employer use the skills match to make hiring decisions or develop hiring criteria? For example, should an employer require all applicants to do the skills match and then determine whether the job the employer is trying to fill appears in the skills match feedback? Yes. An employer could use O*NET to identify key items to be used for training, as well as useful for matching job needs with applicants’ credentials. Were the jobs identified for you as compatible with your skills search really compatible with your interests and aspirations? Explain your answer. Many students will report that the jobs listed do not seem very appealing to them. However, I can understand that while a job may be compatible with someone's skills, it may not necessarily align with their interests and aspirations. For example, a person may have the technical skills required for a job in finance, but if their passion lies in creative writing, they may not find fulfillment in that role. Therefore, it's essential for individuals to consider both their skills and their personal interests and aspirations when exploring career opportunities. Finding a balance between skills, interests, and aspirations can lead to a more satisfying and fulfilling career path. Are there any other options in the O*Net website that could provide useful vocational advice? Could you use the “find occupations” option at http://online.onetcenter.org/? Yes; there are more esoteric searches within the O*NET data base that focus on more specific KASOCs. In addition, other instruments with long research trails (discussed in Chapter 9) could also be used. O*NET is free. The Strong Vocational Interest Blank is one of the most popular of the instruments (about 60$). Try: http://www.mycareerassessments.com/stronginterestinventory Critical Thinking Application 10-A Defending Corporate Executive Pay * Contributed by Harry Schwartz and John Bernardin. 1. Should the government put more regulatory constraints on executive pay? Explain your answer. Do a search to determine if there is any new or pending legislation or regulation that would regulate executive pay. There will probably be considerable regulatory activity in 2009 and forward. Top executives in the United States saw the average dollar amount of their 2007 Total Compensation Package increase by 16.5% compared to May 2006 levels. Base compensation remained fairly steady, with an increase of 0.85% compared to the same period one year ago. However, the average company annual executive cash bonus increased by 23.63% compared to a year ago, according to the May 2007 Executive Compensation Index. This compensation preceded the economic disaster of 2008 and 2009. While 2008 was (obviously) not as favorable, there is an indication that executive was heading upward in 2009. 2. Do you agree with the argument that executive pay is based on an external market analysis (the principle of external equity) and is thus fair? Many experts argue that the market is rigged to benefit the executives, corporate boards and compensation consulting firms. The so-called external market is restricted to a small number of mainly male executives. Compensation consultants, who work for companies that often have other contracts with the company, are eager to please the boss with lavish pay packages and lucrative “golden parachutes.” 3. Do you think “clawbacks” should be mandatory and, if so, what should they stipulate? Conduct an on-line search to get an idea of how many companies are requiring “clawbacks” in their proxy statements. There is a public backlash against excessive pay and taxpayer lifelines extended to troubles companies. Legislation to recoup compensation, known as “clawbacks,” has been proposed. Some companies have “clawback” provisions in their executive employment contracts. Equilar, a compensation research firm, conducted the analysis of executive pay for the New York Times. Executives at seven companies received almost $500 million in performance pay from 2005 to 2007. Those companies were AIG, Bear Stearns, Lehman Brothers, Merrill Lynch and Washington Mutual. As of March,2009, there was no legal mandate to force the recovery of past pay that was gained through risky investment that exploded later. Clawbacks are also a hot issue at recent shareholder meetings. “There is a line that separates fair compensation from stealing from shareholders,” said Frederick E. Rowe, a money manager in Dallas and a founder of Investors for Director Accountability, a nonprofit group. “When managements ignore that line or can’t see it, then hell, yes, they should be required to give the money back.” Corporate boards that awarded lush executive pay packages almost always justified them by saying they encouraged superior performance and were directly tied to benchmarks like profitability. 4. Should “say on pay” be mandatory for all executive pay packages? Should corporate boards alone continue to make decisions with respect to executive pay packages or should consent of a majority of shareholders be required? Suggest one or two advantage and disadvantages. President Obama has endorsed “Say on Pay,” a hot governance issue that would allow shareholders to approve pay packages for the most senior executives. There may already be legislation. At least 100 public companies will face shareholder proposals on executive compensation this spring, according to a shareholder advocacy group. The Social Investment Forum posted a list of the 100 companies as of February, 2009 (e.g, Comcast, DuPont, Boeing, Johnson & Johnson, Lockheed Martin, Merck, Wachovia/Wells Fargo, Bank of America and Citigroup).. "Say-on-pay" vote supporters want: a management-sponsored, non-binding advisory vote on executive compensation presented in the annual proxy statement. Investors who back "say-on-pay" resolutions include labor 5. Do you agree with the recommendation to require full disclosure regarding pay consultants? Explain your answer. Compensation consultants, who work for companies that often have other contracts with the company, are eager to please the boss with lavish pay packages and lucrative “golden parachutes.” John England, head of the financial services compensation practice at Towers Perrin, was the consultant on Merrill’s pay practices. Towers Perrin devised the compensation packages for Angelo R. Mozilo, the former chief of Countrywide, and for Kerry K. Killinger, the former chief at Washington Mutual. According to New York Times article, Countrywide had losses of $3.9 billion in 2007 before it was acquired by Bank of America. The losses erased the company’s entire earnings in 2006 and over 50% of its profit for the 2005. But Mr. Mozilo received $82.4 million in performance pay between 2005 and 2008, anf half of it was in cash. Washington Mutual had mortgage-related losses of $8 billion in 2007 and 2008 which wiped out all of its earnings in 2006 and 2005. Mr. Killinger received $38.2 million in performance pay between 2005 and 2008 until the company was sold. See MORGENSON, G. (2009, February 22). After Huge Losses, a Move to Reclaim Executives’ Pay. NYTimes on-line. 6. What about the argument that CEO pay is no more out of line than the compensation of movie stars or star athletes? The pay of athletes and movie stars is much more directly related to their own personal performance (a record of outcomes). While CEOs tend to claim personal credit for the successes of their corporations during their tenure, athletes, through statistics, and movie stars, through box office, have more valid claims to causation. In addition, there are a finite number of great athletes. The notion that a very small number of mainly men can do executive-level work certainly helps elevate their reputations and their pay. There is no evidence to support this claim. One “high performance work characteristic” is growing your own talent. The most successful top management teams, including the CEO, thus emerge from lower ranks from within the same company. Athletes are largely paid based on their personal accomplishments as athletes. Tiger Woods is clearly the greatest golfer and his earnings derive from this greatness. While CEOs love to claim personal responsibility for the success of their companies, the connection between exactly what CEO do (or did) and corporate success is far more tenuous. Movie stars are largely paid based on the success of their past movies with incentives for the latest. 1Crystal, G. (1991). In search of excess. New York: Norton, p. 3. 2Data from The Corporate Library is based on 211 proxy statements filed through April 9, 2008. Critical thinking Application 10-B Illegal Pay Discrimination, Bad Pay Policy or Both? Is this a violation of the EPA? Although this situation seems to constitute bad pay policy, and could very well cause the Counseling Center to lose a very important member of their staff, there does not appear to be a violation of the EPA or Title VII. See Figure 10-8. The Equal Pay Act requires that men and women be given equal pay for equal work in the same establishment. The jobs need not be identical, but they must be substantially equal. It is job content, not job titles, that determines whether jobs are substantially equal. Specifically, the EPA provides: Employers may not pay unequal wages to men and women who perform jobs that require substantially equal skill, effort and responsibility, and that are performed under similar working conditions within the same establishment. Each of these factors is summarized below: Skill - Measured by factors such as the experience, ability, education, and training required to perform the job. The key issue is what skills are required for the job, not what skills the individual employees may have. Effort - The amount of physical or mental exertion needed to perform the job. Responsibility - The degree of accountability required in performing the job. Working Conditions - This encompasses two factors: (1) physical surroundings like temperature, fumes, and ventilation; and (2) hazards. Establishment - The prohibition against compensation discrimination under the EPA applies only to jobs within an establishment. An establishment is a distinct physical place of business rather than an entire business or enterprise consisting of several places of business. Pay differentials are permitted when they are based on seniority, merit, quantity or quality of production, or a factor other than sex. These are known as "affirmative defenses" and it is the employer's burden to prove that they apply. In correcting a pay differential, no employee's pay may be reduced. Instead, the pay of the lower paid employee(s) must be increased. Would there be a violation of the “Paycheck Fairness Act” if this legislation has amended the FLSA? The Act tightens the affirmative defense so that it can excuse a pay differential for men and women only where the employer can show that the differential is truly caused by something other than sex and is related to job performance and consistent with business necessity. The Counseling Center can claim the external market for MSWs relative to Ph.Ds in clinical psychology as a “factor other than sex.” As of 2006, the average starting salary for a doctoral-level counselor for a university/college counseling center was $54,500 while the starting salary for Master’s level individuals was $39, 365. So the Counseling Center maybe able to clearly claim an affirmative defense. What about Title VII? Title VII, the ADEA, and the ADA prohibit compensation discrimination on the basis of race, color, religion, sex, national origin, age, or disability. Unlike the EPA, there is no requirement under Title VII, the ADEA, or the ADA that the claimant's job be substantially equal to that of a higher paid person outside the claimant's protected class, nor do these statutes require the claimant to work in the same establishment as a comparator. Pay compression can also be used to explain a Title VII claim. No evidence is presented showing gender was necessarily a factor in the pay differences. Does Ms Kate have a case? As the legislation stands today, Ms Kate likely does not have an EPA or Title VII case. If Dr. Boseman feels Ms Kate has an EPA case, can he reduce the pay of the newly hired Ph.D. to match Ms Kate’s salary to erase the problem? Dr Boseman could reduce the Ph.D. salary; however, this is not recommended. It would be recommended to increase Ms Kate’s salary if Ms Kate hd an EPA case. Reducing the newly hired Ph.D. salary could open another host of legal issues, such as breach of contract, and it may also cause the Ph.D. to leave the position. Does it matter that the Counseling Center hired the male Ph.D. eight months ago? If so, how is this relevant in a Title VII claim? Yes, based on the 2009 Lilly Ledbetter Act, you must file a Title VII claim with 180-days after the last allegedly unlawful pay decision was made. So Ms. Kate would not be able to file a Title VII claim. The legal implications aside, what should Dr. Boseman do? Legal implications aside, Dr. Boseman should strive for more internal equity within the Center. There is a lot more to compensation than just complying with the law (or barely complying). CRITICAL THINKING APPLICATION 10-C Legal or Illegal Compensation Plan? * Contributed By Karen Preston Can the older workers use “disparate impact” theory in their age discrimination claim? Yes; in the Supreme Court case in Smith v. City of Jackson, Miss. 544 U.S. (2005) The Court held that the ADEA does authorize recovery in "disparate-impact" cases comparable to Griggs v. Duke Power. Workers over age 39 can sue under the ADEA for a more subtle form of age discrimination "disparate impact" - which involves employment policies or practices that on the surface are age-neutral, in that age is not specifically mentioned, but in fact fall more harshly on older workers Based on the facts above, is the city of Tampa guilty of unlawful discrimination against older workers? Explain your answer. No, the Supreme Court also found that petitioners did not set forth a valid disparate-impact claim. The Court held that the defense to a disparate impact case is less burdensome than under Title VII. Under Title VII, an employer must establish "business necessity" for the policy or practice that results in the disparate impact. Under the ADEA, employers need only establish that the policy or practice is "reasonable." If ‘disparate impact’ theory is allowed in ADEA cases, who has the burden of proof once ‘prima facie’ evidence is presented and what is that burden? What case law backs up your position? Once the prima facie case has been established based on the evidence by the plaintiff, the defendant must then present evidence that ‘reasonable factors’ other than age were the basis of the personnel decision. The 2008 Supreme Court decision in Meacham et al. v. Knolls Atomic Power Laboratory (2008, April 23) SC 06-1505 Places the burden on the employer to show that a “reasonable factor other than age” was the reason for the decision. Mastie v. Great Lakes Steel Corp – the controlling issue is whether age was a determinative factor in the personnel decision. Smith v. Jackson – employers must show age-neutral ‘business necessity’ for their actions. The Courts thus shifted the burden to the employer once evidence is presented, usually statistical showing the prima facie discrimination. What is your view of the methods they used to adjust pay rates? The city had a particular problem (difficulty in attracting applicants and retaining personnel) and attempted to solve these problems in an efficient manner. To the extent the pay adjustments helped solve that problem, the adjustments were effective. Of course, the cost of the litigation should be considered. The negotiation of an mediation/ ADR program that could deal settle the pay dispute could have avoided the cost of the protracted litigation. Additional information: The ADEA applies to private employers, to state, local, and federal government organizations with 20 or more employees, and labor unions with 25 or more members. Examples of ADEA “disparate impact”: Denying all older workers promotions because they were near retirement age. Denying training opportunities to all older workers because they are "fixed in their ways." A school district with a policy that it will not hire any new teachers with more than 10 years of teaching experience. An employer's job requirement that focuses on computer literacy for a position that does not require computer use. A layoff policy that targets high-salaried workers or those eligible for retirement. CHAPTER 11- CRITICAL THINKING APPLICATIONS Critical Thinking Application 11-A The Case For and Against Pay-for-Performance Systems * Contributed by Lauren J. Lispi Do you agree with Kohn or Cummings? Are there situations in which the opposing position would ever apply? What does the latest research indicate regarding this question? Think of a real-life example to supsport the position you have taken. Kohn says employees will abandon risk taking with PFP. Is that necessarily true? What are some examples of high risk taking under a PFP system that was clearly not a good thing for the company in the long run? The most research evidence (Rynes et al., 2005) supports Cummings' position although, as indicated in Chapter 11, PFP systems must establish tight connections between employees' effort or motivation and desired outcomes. Also, that performance, which is rewarded, must be the performance that is most important for the organization. The most recent review of the vast literature concluded that “the evidence on PFP is generally positive. To be sure, there are some very important caveats: pay is not the only important motivator in organizations, and PFP programs can yield serious, unintended negative results. Nevertheless, it can also deliver powerful improvements in performance. There are clear guidelines to follow and failure to follow them can doom a PFP system. Please note the myriad of troubles that ill-conceived PFP systems can cause if the criterion measures that drive behavior are incompatible with mor important, long-term proformance measures. PFP systems can (and clearly do) work and they are important for attracting and keeping top talent. But there are contingency factors that research has shown can affect important outcomes related to pay and the importance attached to pay by workers. Figure 11-1 presents a summary of the some of the most important contingencies. You will note that the characteristics of the employee matter (e.g., extroverts place more value on pay than introverts; high performers are more receptive to and also more critical of PFP systems) as do the characteristics of the pay system itself . For example, changes to pay systems, particularly without employee input, can have a significant negative impact. One study found over a 100% increase in employee theft after the company cut pay by 15% with no explanation. Also, while pay will have little effect where there people receive similar pay increases despite large differences in performance , dramatic changes in performance can occur when pay is made more contingent on performance. Regarding marginal utility, there is evidence that being “under market” has a stronger motivational impact than does the positive effect of being “above market.” People often reject offers simply because of the pay. Pay is probably relatively more critical in terms of job choice than decisions to quit because pay is one of the few characteristics people can know with certainty before taking a job. Once you’ve had a job for awhile, other factors like the quality of supervision will have a strong impact. In his Harvard Business Review article, Kohn states that a "growing collection of evidence supports an opposing view" regarding pay-for-performance and "numerous studies in laboratories, workplaces, classrooms, and other settings, rewards typically undermine the very processes they are intended to enhance." Kohn supports his point of view by claiming that there are "at least two dozen studies over the last three decades have conclusively shown that people who expect to receive a reward for completing a task or for doing that task successfully simply do not perform as well as those who expect no reward at all." The problem with the Kohn point of view is that his writing is replete with such undocumented claims. Kohn does not provide a reference for any study supporting his claim. Kohn is right regarding the implications of bad incentive systems. As incentive expert Ed Lawler has argued, as the perceived connection between effort and performance and then performance and outcomes becomes less clear, any pay-for-performance system (individual or group) will lose its effectiveness. Many studies show that the poor connection between effort and assessments of performance can undermine incentive systems. However, there are no studies that support Kohn's contention that contingent rewards have a deleterious effect on subsequent performance when the rewards were defined by unambiguous goals, objectives or standards. Kohn is also correct regarding the implications of emphasizing certain elements of performance in a PFP system. He cites research by Jenkins that shows PFP systems work well when rewards are linked to quantitative outcomes but not well when measures of quality are used. However, Kohn neglects to consider the poor job done to measure work quality in this research. Research in fact shows that it is possible to measure quality in a reliable manner and that when there is better measurement of performance quality, you can increase desirable work quality. As discussed in Chapter 7, work quality is independent and oftentimes uncorrelated with work quantity. Both criteria should be measured when they are important to the organization. As to the argument that rewards discourage risk-taking, Kohn is correct if all of the incentives are directed at conservative behavior and tried and true methods. Many companies, however, encourage creativity and innovation by specifically rewarding outcomes manifesting this risk-taking. This is particularly true in high tech industries. Effective PFP systems must support the competitive strategy and values of the organization. If the strategy emphasizes entrepreneurial activity and independent effort, individual PFP systems that reward risk-taking become increasingly important and effec¬tive. Incentive systems must be compatible with orga¬nizational values. Closed, secretive cultures do not mix well with performance incentives. Openness and trust is necessary if employees are to accept the standards and believe in the equity of the rewards. Kohn ignores Lincoln Electric's much touted piece-rate system in his writing. But Lincoln's system would probably not be successful without the other elements of the Lincoln management, a system based on mutual trust and a fair distribution of the products of hard work. Organizational culture clearly affects the nature of incentives selected and, in the end, the effectiveness of the system. Individual PFP plans are preferable when individuals contribute important ideas, criteria can be clearly measured, and the process of individual performance measurement and rewards does not seriously undermine teamwork. Highly interdependent jobs or groups will dictate group or organizational-based PFP plans. As one expert on the subject has put it, "Paying for performance will not solve all of the motivational problems associated with the new workforce and strong national competition. However, it can be an important part of a total performance management system that is designed to create a highly motivating work environment." Following the measurement principles we presented in Chapter 7 for defining performance, performance is a critical step in linking the performance appraisal, performance management and pay for performance system. The bottom line remains that for any PFP system to work, rewards valued by the worker must be clearly linked to outcomes valued by internal and, most important, external customers. Virtually all of the "Best Practices" literature supports the view that proper PFP systems can help to create and sustain a competitive advantage. The evidence supports the value of carefully designed PFP systems. When the focus is on organizations, which follow academic guidelines for development and maintenance, PFP systems look like winners. Key References Rynes, S, L., Gerhart, B., & Parks, L. (2005). Personnel Psychology: Performance evaluation and pay for performance. Annual Reviews of Psychology, 56, 571-600. Rynes, S, L., Gerhart, B., & Minette, K.A. (2004). The importance of pay in employee motivation: Discrepancies between what people say and what they do. Human Resource Management, 43, 381-394. Critical Thinking Application 11-B The Prediction of Rating Error Research indicates that the people who commit leniency bias tend to commit the error across rating situations (e.g., no matter whom they are rating). In essence, some people feel relatively more discomfort in giving negative feedback than others. The Performance Appraisal Discomfort Scale (PADS) is an instrument that assesses the level of discomfort in giving performance feedback and taking performance-related action. Because of the anticipated discomfort, raters are more likely to take steps to avoid the anticipated discomfort if they can do so. Thus, as supervisors, they are more likely to rate in a lenient manner in order to avoid the discomfort that may result from giving a more accurate but more critical review. Two rating instruments are presented in this exercise, both of which are related to performance appraisal outcomes. Two forms of the PADS, one a forced-choice instrument, are presented in this exercise, both of which are related to rating ourtcomes. Scores should be interpreted as follows: 12-20 Little or no psychological discomfort in evaluating people and giving negative feedback 21-29 Some psychological discomfort in evaluating people and giving negative feedback; Leniency bias could be a problem 30 and higher Significant psychological discomfort in evaluating people and giving negative feedback; Leniency bias is likely (higher scores are correlated with higher rating levels) PADS scores can be a useful diagnostic tool, the scores of which could be used for some form of intervention or training. Because of its transparency, the PADS has limited practical value unless the scoring key could be hidden in a forced-choice format such as through the Job Compatibility Questionnaire (See Part B). The Part A version of the PADS should not be used for any type of personnel decision-making since it has never been validated in this type of research setting. Part A is a shortened version of the PADS used in Villanova, P., Bernardin, H.J., Dahmus, S. & Sims, R.. (1993). Rater leniency and performance appraisal discomfort. Educational and Psychological Measurement, 53, 789-799). In one study (Bernardin, H.J., Villanova, P. & Cooke, D. (2003). A measure of rater discomfort in the prediction of rating leniency and rating accuracy. Proceedings of the Southern Management Association Meetings, Atlanta, GA. Scores on the PADS were correlated (r = .41) with a measure of rating leniency and .29 with a measure of rating accuracy. Some other interesting findings regarding the PADS: Males tend to feel significantly greater discomfort in telling a female her performance must improve than do females but females apparently do not feel any greater discomfort telling males their performance must improve than do males. Women, even those with supervisory experience, have a little more difficulty recommending that someone be discharged than do male respondents. Key References: Bernardin, H. J., Villanova, P., Cooke, D. (2000). Conscientiousness and agreeableness as predictors of rating elevation. Journal of Applied Psychology, 85, 232-236. Bernardin, H. J. ,Villanova, P. & Tyler, K. (2009). Rating level and accuracy as a function of rater personality. International Journal of Selection and Assessment, xx, xxx-xxx. Villanova, P., Bernardin, H. J. & Dahmus, S. (1994). The validity of a measure of job compatibility in the prediction of job performance and voluntary termination of theater personnel. Personnel Psychology, 47, 73-90. Part B. PADS—Forced Choice The mean score for college students with little experience in conducting performance appraisal is 3.7. If your score is 6 (or higher), you are likely to feel more confident in conducting performance appraisals and therefore, are more likely to rate more accurately and with little or no leniency bias. If your score is 3 (or lower), you feel less confident doing performance appraisal and taking action based on performance appraisals. You are more likely to be a less accurate rater and are more susceptible to leniency error. Take note that this is a small part of a longer, and more reliable, forced-choice instrument designed to identify lenient raters. Using the PADS-Forced Choice instrument as one basis for selecting managers or supervisors might be helpful if rating leniency is a problem for an organization. The hiring manager could combine the PADS-FC scores with interview questions to determine whether the person can be trained to avoid this potential bias or if the bias is more dispositional in nature. The scale would work even better in a training setting, since candidates for management may not be aware of the bias. If a score on Part A is 30 or above and your score on Part B is four (or less ), there is a greater likelihood the respondent will be a lenient rater. SOURCE: Bernardin, H.J. and Villanova, P. (2005). Research streams in rater self-efficacy. Group & Organization Management, 30, 61-88. Discussion Questions 1. What other personality characteristics have been linked to rating tendencies such as leniency? A rater with a low “Conscientiousness” score (from the Five- Factor Model discussed in Chapter 6) combined with a high “Agreeableness” score will tend to inflate ratings. Recent research shows incremental validity for the prediction of rater leniency using all three rater characteristics (low rater Conscientiousness high rater Agreeableness + high rater Discomfort = highest Leniency levels). (P.376) 2. If a person scores at a high discomfort level on the PADS, does this mean he or she will be a lenient rater? Raters can be trained to reduce their levels of discomfort in giving negative information, which then reduces overall leniency. Take note that the correlation between PADS and rating level was only .41 so not all high PADS scorers will be lenient raters. There are other variables related to leniency. 3. What steps that could be taken to alleviate rating leniency in an appraisal system? More carefully defined performance criteria will reduce rating leniency. The use of forced distribution or forced choice would also work (but see below). To alleviate rating leniency in an appraisal system, organizations can take several steps: 1. Training and Awareness: Provide training to managers and raters on the importance of fair and accurate performance evaluations. Educate them about the potential biases associated with leniency and the impact it can have on employee morale and organizational performance. 2. Clear Evaluation Criteria: Establish clear and objective evaluation criteria that align with organizational goals and job expectations. Provide guidelines or rubrics to help managers assess performance consistently across all employees. 3. Calibration Sessions: Conduct calibration sessions where managers come together to review and discuss performance ratings. This allows for consensus-building and ensures that ratings are applied consistently across teams and departments. 4. Anonymous Feedback: Encourage employees to provide anonymous feedback on the appraisal process, including their perceptions of fairness and consistency in ratings. Use this feedback to identify areas for improvement and address any concerns about leniency. 5. 360-Degree Feedback: Incorporate feedback from multiple sources, including peers, subordinates, and other stakeholders, into the appraisal process. This provides a more comprehensive and balanced perspective on an employee's performance, reducing the influence of rater leniency. 6. Performance Management Training: Offer training programs to employees on effective performance management techniques. Empower them to take ownership of their development and seek constructive feedback from their managers. 7. Regular Check-Ins: Encourage managers to conduct regular check-ins with employees to provide ongoing feedback and coaching. This helps prevent surprises during formal performance evaluations and allows for course correction as needed. 8. Use of Technology: Implement performance management software or tools that facilitate objective evaluation and tracking of performance metrics. These systems can help automate the appraisal process and reduce the potential for subjective biases. 9. Reward Fairness: Recognize and reward managers who demonstrate fairness and objectivity in their performance evaluations. This reinforces the importance of unbiased ratings and encourages adherence to best practices. 10. Continuous Improvement: Regularly review and evaluate the effectiveness of the performance appraisal system. Solicit feedback from managers, employees, and other stakeholders to identify areas for improvement and implement necessary changes. By implementing these steps, organizations can mitigate rating leniency in their appraisal systems and promote a culture of fairness, transparency, and accountability in performance management. 4. Some experts recommend the use of a forced distribution rating system to control leniency. Do you agree with this recommendation? NO; Microsoft dropped their forced-distribution system in 2008 after numerous complaints by managers who were “forced” to comply with the rating level distributions. Also, the workers reported that the system promoted unhealthy competition within work units that relied on collaboration and teamwork to function most effectively. One study conducted by Professor Ed Lawler found negative results for forced-distribution systems. Among his theories for the results was “when employees in a work area compete with each other for ratings, knowing there is always a percentage at the bottom who will be forced out, it creates fear and selfishness. People are much less likely to help each other, train each other, share information, and operate as an effective team. In today’s flatter, knowledge work–driven, more team-based organizations, excessive internal competition can take a significant toll on organizational performance.” Lawler, E. E. (2003). Reward practices and performance management system effectiveness. Organizational Dynamics, 32, 403. Critical Thinking Application 11-C Can We (and Should We) Apply the Lincoln Electric Method? Does the Lincoln system generalize to many other work situations? Think of one work setting in which you think the piece-rate method might work. Generate a list of the key contingencies that may be related to the success of a piece-rate system in that setting. Also, in addition to the piece-rate method, to what extent are the other characteristics of the Lincoln compensation and management systems critical for Lincoln’s success? (Even in 2008, a terrible year for machinery, Lincoln had still maintained its lifetime employment record). Do you think a CEO’s pay relative to that of the producers of the goods and services is critical for establishing and maintaining employee trust? Do you think trust is important? Expectancy theory says nothing about trust. Or does it? Also, is this a work setting for so-called workaholics only? Lincoln, the world's largest maker of arc welders and welding supplies, provides seminars on its PFP system at its Euclid, Ohio headquarters. Thousands of managers from other companies have taken advantage of the free seminars. One of the secrets of Lincoln's system is that they do use performance appraisals as well as the measures of quantity to determine employee pay. Appraisals of dependability, quality and degree of cooperativeness are used in addition to the measures of output. This comprehensive assessment of performance insures that all of the important elements of performance are measured and rewarded. If, as at Lincoln, the critical (and desired) elements of individual performance can be accurately measured and workers perceive a very strong connection between their level of effort and desired outcomes, then there is really no reason that other companies cannot adopt the Lincoln approach. Of course, one of the keys to Lincoln's success is the use of critical, countable results (and corrections for costly errors) as the major basis for paying employees. For this reason, most experts would argue that the Lincoln system does not generalize well to most situations. In addition to the availability of important, countable results, the great trust between workers and management at Lincoln is another requirement for the system to be effective. That trust enabled Lincoln to survive some bad decisions regarding their European ventures in 1993 and 1994 by reducing the bonus for U.S. workers although these workers had nothing to do with the trouble management had created in Europe. Most pay experts contend that the CEO's pay ratio is also critical since more evidence supports the theory that perceptions of pay equity and pay satisfaction do incorporate the relative pay levels of management and that feelings of inequity would probably drive frequent attempts to renegotiate the results-pay relationship. While people tend to focus on similarly situated co-workers when assessing their pay, recent evidence supports the notion that pay equity perceptions by non-executives do include assessments of the pay levels of management. The key contingencies: 1. Quid pro quo relationships between critical output and desired outcomes; 2. High trust between workers and management. 3. Worker input in improving work conditions and eliminating constraints on performance. 4. Accurate measurement and rewards for other important elements of performance in addition to output measures. Instructor should review expectancy/ instrumentality theory with this exercise and use the probability statements to discuss the work settings students offer as possibilities for piece-rate PFP systems. Critical Thinking Application 11-D Should Teacher Pay be tied to Student Test Scores? This is a “hot’ topic as President Obama and other prominant polititions support the concept and teacher unions have been more receptive to group-based PFP systems. Conduct research on teacher merit pay. What does research say about the subject? Ballou D (2001). Pay for performance in public and private schools ECONOMICS OF EDUCATION REVIEW 20 (1): 51-61 FEB 2001 Abstract: Previous research on teacher merit pay has concluded that its failure is due to the complexity of teachers' jobs and the need for teamwork and cooperation in schools. This research re-opens the issue by comparing the use of merit pay in public and private schools. Merit pay is used in a large number of private schools. Awards are not trivial; nor is it the case that merit pay is awarded to nearly everyone. Reasons for the failure of merit pay are not inherent in teaching, but are due to specific circumstances in public education, notably the opposition of teacher unions Dee TS & Keys BJ (2004). Does merit pay reward good teachers? Evidence from a randomized experiment. JOURNAL OF POLICY ANALYSIS AND MANAGEMENT,23 (3): 471-488. Abstract: A common criticism of merit-pay plans is that they fail to systematically target rewards to the most effective teachers. This study presents new evidence on this issue by evaluating data from Tennessee Career Ladder Evaluation System and the Project STAR class-size experiment. Because the students and teachers participating in the experiment were randomly assigned, inferences about the relative quality of teachers certified by the career ladder should be unbiased. The results indicate that Tennessee career ladder had mixed success in rewarding teachers who increased student achievement. Assignment to career-ladder teachers increased mathematics scores by roughly 3 percentile, points but generally had smaller and statistically insignificant effects on reading scores. De Fraja G & Landeras P (2006). Could do better: The effectiveness of incentives and competition in schools. JOURNAL OF PUBLIC ECONOMICS 90 (1-2): 189-213 JAN 2006. Abstract: This paper studies the effects of incentive mechanisms and of the competitive environment on the interaction between schools and students, in a set-up where the students' educational attainment depends on their peer group, on their effort, and on the quality of the school's teaching. We show that increasing the power of the incentive scheme and the effectiveness of competition may have the counterintuitive effect of lowering the students' effort. In a simple dynamic set-tip, where the reputation of the schools affects recruitment, we show that more powerful incentives and increased competition lead to segregation of pupils by ability, and may also determine lower attainment in some schools Blumenfeld, Lucinda. Weight In: Does Performance Pay Work? Scholastic Administrator Magazine. January 2009. A panel of education leaders give their gut-level reactions the specific article "Weight In: Does Performance Pay Work?" by Lucinda Blumenfeld from Scholastic Administrator Magazine, January 2009. However, I can offer a general overview of the topic based on common knowledge. The question of whether performance pay works is a topic of ongoing debate in the field of human resource management and organizational psychology. Performance pay, also known as merit pay or pay-for-performance, is a compensation strategy where employees receive financial rewards based on their individual or team performance. Proponents of performance pay argue that it can motivate employees to perform at higher levels, increase productivity, and align individual goals with organizational objectives. By tying compensation directly to performance outcomes, employers can incentivize desired behaviors and drive results. However, critics raise concerns about the effectiveness and fairness of performance pay systems. They argue that it can lead to competition and undermine collaboration among employees, create resentment or dissatisfaction if performance criteria are perceived as arbitrary or biased, and may not always accurately measure an individual's contributions to organizational success. Studies examining the impact of performance pay have yielded mixed results, with some research suggesting positive effects on employee motivation and performance, while others find little to no significant improvement or even negative consequences. Ultimately, the effectiveness of performance pay depends on various factors, including the design of the incentive system, organizational culture, employee perceptions, and the nature of the work itself. Organizations considering implementing performance pay should carefully evaluate its potential benefits and drawbacks and tailor the approach to fit their specific context and objectives. What has happened to teacher merit pay in Massachusetts since Governor Romney left office? In 2007, the nonprofit Mass Insight Education and Research Institute secured a $13.2 million grant funded primarily by ExxonMobil Corp. to recruit, train, and reward teachers for Advanced Placement classes in math, science, and English. The program provides sensible rewards to teachers for good performance. Teachers can receive bonuses of up to $3,000 based on their ability to increase participation and the number of students who achieve qualifying scores on the AP exams. In the urban schools, where AP offerings are thin, teachers can receive an additional $100 for each student who scores 3 or higher on the 5-point AP exam. But now some teachers unions, including those in Milton, Marlborough, and Northampton, are objecting to the teacher pay boost, according to Morton Orlov, who runs the AP initiative. And the Boston Teachers Union has filed a labor grievance to block the AP pay-for-performance plan at the O'Bryant School in Roxbury. Source: http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2009/03/16/merit_pay_party_poopers/ What do teacher unions say about the subject? According to a 2004 article by Robert Holland in School Reform News, unions almost always ‘resist merit pay for K-12 teachers while insisting on standard pay scales based on seniority and credits amassed in education courses.” However, the concept of major pay boosts for teachers who produce objectively measured gains in student achievement won endorsement from a 19-member commission that included the president of the nation’s second largest teacher union--Sandra Feldman of the American Federation of Teachers (AFT). Dr. Feldman supported the resolution. Chaired by former IBM chief Louis V. Gerstner, Jr., the Teaching Commission featured Democrats who were prominent in education policy during the 1990s--among them, President Bill Clinton’s Secretary of Education, Richard Riley, and former North Carolina Governor James Hunt, founding chairman of the National Board for Professional Teaching Standards (NBPTS). “[T]he public school system currently offers virtually no incentives to reward excellence, and a system that does not reward excellence is unlikely to inspire it,” said Gerstner. While endorsing improved pay for teachers, the commission report, “Teaching at Risk,” concluded painful experience demonstrates that “simply raising salaries for all teachers will not, by itself, raise student achievement.” Instead, it called for “a far-reaching break with tradition”--paying teachers more when they consistently bring about improved student achievement. Dr. Myron Lieberman writes that “teacher unions are opposed to merit pay because it places the union in an untenable position. For every teacher awarded merit pay, ten others will want the union to file a grievance alleging that they deserved merit pay more than the teachers who received it. In short, merit pay is extremely divisive within the union, and a union must avoid internal controversy as much as possible. However, from a public relations standpoint, the union cannot say that it opposes merit pay because it would be bad for the union. Consequently, the teacher unions allege other reasons for their opposition: merit pay is too subjective, it is used to reward bootlickers and intimidate critics of the administration, and so on. School administrators are generally opposed to merit pay for different reasons. The main one is that administrative evaluations will inevitably be scrutinized carefully by teachers who do not receive merit pay. This is not something administrators look forward to, especially since it's always possible to criticize the criteria or the applications of the criteria for merit pay. However, to avoid criticism, most administrators blame the teacher unions for the absence of merit pay. Their hypocrisy is easily observed; check the last time your school administration proposed merit pay in negotiations on the union contract. Even if teachers, teacher unions, and school management agreed that merit pay was a good idea in principle, the problems of implementing the idea would be difficult to resolve. To cite just one problem, how can we compare merit among teachers of different subjects and grade levels? With the best will in the world, different interests will lead to differences of opinion on this issue. Conservatives often exaggerate the extent to which merit pay is the practice in our labor force. In dozens of industries, merit pay seldom applies to employees below the supervisory level. In fact, merit pay does not affect airline pilots and several other occupations in the public and private sectors. Superior performance often leads to promotions to positions in which merit pay is operative, but this is true in education as well. It appears also that other countries reputed to have excellent educational systems, such as Japan, do not have merit pay. It should also be noted that the problems of scale frequently mitigate against merit pay; small school districts do not have the resources to formulate a merit pay plan that is not vulnerable to union or teacher criticism. At any rate, it is a fallacy to assume that the near total absence of merit pay in public education is due entirely to union intransigence on the issue. In many districts, management could adopt merit pay over union opposition; the NEA's policy recognizes this fact, even if its critics do not. It is interesting to note the widespread criticisms of teacher unions for their opposition to merit pay, while school management opposition to it is completely ignored. Source: http://www.educationpolicy.org/MLcolumn/MLcolumn-071700.htm How have teachers been paid in the past and what has been the role of classroom performance? In the past, teachers have been paid relatively low salaries. However, average teacher salaries have improved rapidly in recent years. US teachers are generally paid on graduated scales, with income depending on experience. Teachers with more experience and higher education earn more than those with a standard bachelor’s degree and certificate. Salaries vary greatly depending on state, relative cost of living, and grade taught. Salaries also vary within states where wealthy suburban school districts generally have higher salary schedules than other districts. The median salary for all primary and secondary teachers was $46,000 in 2004, with the average entry salary for a teacher with a bachelor's degree being an estimated $32,000. In the past there has been little to no salary link to the role of classroom performance. Source: http://en.wikipedia.org/wiki/Teacher Generate a list of potential problems with teacher merit pay tied to classroom performance and then possible solutions to those problems.
PROS CONS
Merit pay raises the bar of professionalism in teaching. Teachers must be held more accountable and judged in relation to their peers. Evaluation is part of being a professional. Research studies have repeatedly shown that merit pay doesn't have a positive effect on teachers' classroom work, but instead can have a divisive and damaging effect on a school or district's teaching community.
Principals must have the authority to make hiring and firing decisions, and a system that rewards quality is a means to determine who stays and who goes. Educational historians David Tyack and Larry Cuban have said "the history of performance-based salary plans has been a merry-go-round. In the main, districts that initially embraced merit pay dropped it after a brief trial."
Rewarding excellence in teaching appears to be working in North Carolina, Dallas, and Denver schools. Teachers unions in Pennsylvania and Cincinnati, as well as individual teachers around the country, have opposed merit pay plans, saying they lack fairness, validity, and practicality.
Changing the ways teachers are paid and raising the pay levels of the most effective and sought-after teachers are key parts of responding to the school-improvement challenge. Even if teachers would like larger salaries, they typically aren't money-driven. A 2000 Public Agenda survey of 900 new teachers noted that considerations other than money are "significantly more important to most teachers and would-be-teachers."
Rewarding quality work is a means to change the paradigm so that the best and the brightest are eager to teach. Rewarding teachers based on added responsibilities, team leadership, mentorship, and the like is a form of compensation that recognized teacher effort without the deleterious effects of merit pay.
Why not just tie student performance to teacher pay directly? This is a complex debate. There are many factors that must be defined for ‘student performance’ and how said performance translates to pay. For example, comparing an under-funded urban school vs. a wealthy suburban school, how do you define performance in both circumstances. Where is your state on this subject? Among the many states that have enacted statewide pay for performance policies for teachers are Texas, Minnesota, Florida, Alaska, and South Dakota. Solution Manual for Human Resource Management John H. Bernardin, Joyce E. A. Russell 9780078029165, 9780071326186
