Answer to Question 1
The similar-to-me effect occurs when perceivers see targets that are similar to themselves more positively than targets that are dissimilar. In a workforce that includes many women, members of minority groups, and increasing numbers of the disabled, managers and subordinates have more frequent contact with people unlike themselves. When evaluating others who are different, people must try to be as objective as possible to avoid the similar-to-me trap. Members of an organization also have to be on the lookout for the similar-to-me bias when interacting with people from other cultures.
Answer to Question 2
One of the most important choices managers face in designing an effective merit pay plan is whether to base merit pay on individual, group, or organizational performance. The following guidelines can be used to make this choice:
When individual performance can be accurately assessed, the maximum motivational impact is obtained from basing pay on individual performance.
When workers are highly interdependent so that what one worker does affects the work of the others and individual performance levels cannot be accurately assessed, an individual-based pay-for-performance plan is not a viable option. In this case, managers can implement a group or organization-level pay plan.
When organizational effectiveness depends on members' cooperating with and helping each other, group-based or organization-based pay-for-performance plans may be more appropriate than individual-based plans.
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