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Ch. 10 OutlineHR Management

1. Strategic HR Management

2. Staffing

3. Workforce Development

4. Performance Appraisals

5. Designing Reward Systems

6. Labor Relations

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Strategic Human Resources Management

• Human Resource Management deals with formal systems for managing people at work

• Strategic Human Resources Management– Creates Value– Is Rare – people are a source of competitive

advantage when their skills, knowledge, and abilities are not equally available to all competitors

– Is difficult to imitate– Is organized

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The HR Planning Process

• Meeting an organization’s staffing needs requires strategic human resources planning– An activity with a strategic purpose derived from the

organization’s plans

• The HR planning process occurs in three stages– Planning– Programming– Evaluating

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The HR Planning Process

• Demand Forecasts: Determining how many and what type of people are needed to achieve organizational goals is perhaps the most difficult part of HR planning

• Labor Supply Forecasts estimate how many and what types of employees the organization will actually have

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Staffing the Organization

• Once the planning phase has been completed managers will focus on staffing the organization

• Staffing consists of three activities– Recruitment– Selection– Outplacement

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Recruitment

• Recruitment activities help increase the pool of candidates that might be selected for a job– Internal Recruiting

– External Recruiting

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Selection

• Selection builds on the recruiting process and involves decisions about whom to hire

• There are a number of selection instruments to chose from

• Regardless of the method used to select employees managers must ensure that the process is reliable and valid– Reliability refers to the consistency of test scores every

time and across alternative measurements– Validity refers to the degree to which a test actually

predicts or correlates with job performance

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Selection Methods

1. Applications and resumes provide basic information to prospective employers. Typically include information about the applicant’s name, educational background, citizenship,

work experience, certifications, and the like. 2. Interviews are the most popular selection tool. Structured

interviews conduct the same interview with each applicant. 1. a.      Situational interview focuses on hypothetical situations.

2. b.      Behavioral description interview explores what candidates have actually done in the past.

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Selection Methods

3 Reference checks are another commonly used screening device.

4 Personality tests are less popular for employee selection, largely because they are hard to defend in court.

5 Drug testing is done by 80% of U.S. Firms Genetic testing is among the most controversial screening instruments.

6 Genetic testing (for diseases) is among the most controversial screening instruments.

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Selection Methods

7. Cognitive ability tests measure a range of intellectual abilities, including verbal comprehension and numerical aptitude. (See Figure 10.3)

8.  Performance tests are procedures in which the test taker performs a sample of the job.

9. Integrity tests are used to assess job candidate’s honesty. Two forms are polygraphs and paper-and-pencil honesty tests.

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Workforce Reductions: Layoffs

• Layoffs have occurred in organizations because of mergers and acquisitions, divestiture, and increased competition

• When laying off employees some firms have tried to help people find employment elsewhere through outplacement programs

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Workforce Reductions: Termination

• People sometimes ‘get fired’ for poor performance or other reasons– Employment-at-will is the legal concept that an

employee may be terminated for any reason

• To avoid pitfalls associated with dismissal employers should develop a progressive and positive disciplinary procedure

• A termination interview is a discussion between a manager and an employee about the employee’s dismissal

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Termination Advice• Do

– Give as much warning as possible for mass layoffs

– Sit down one on one with the individual, in a private office

– Complete a termination session within 15 minutes

– Provide written explanations of severance benefits

– Provide outplacement services away from company headquarters

– Be sure the employee hears about his or her termination from a manager, not a colleague

– Express appreciation for what the employee has contributed, if appropriate

• Don’t– Don’t leave room for confusion when

firing; Tell the individual in the first sentence that he or she is terminated

– Don’t allow time for debate during a termination session

– Don’t make personal comments when firing someone; keep the conversation professional.

– Don’t rush a fired employee offsite unless security is an issue

– Don’t fire people on significant dates, like the 25th anniversary of their employment or the day their mother died

– Don’t fire employees when they are on vacation or have just returned

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Training and Development

• Training usually refers to teaching lower-level employees how to perform their present jobs

• Development involves teaching managers and professional employees broader skills needed for their present and future jobs

• Training is generally a four step process– Assess the need– Design the training program based upon the need– Decide which training method should be used– Evaluate the training program’s effectiveness

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Types of Training

• Orientation training is designed to introduce new employees to the company and familiarize them with policies, procedures, culture, and the like

• Team training provides employees with the skills and perspectives they need to work in collaboration with others

• Diversity training focuses on identifying and reducing hidden biases against people with differences and developing the skills needed to manage a diversified workforce

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Designing Reward Systems

• Traditionally pay has been the primary monetary reward considered (regardless of its efficacy)

• In recent years benefits have received increased attention– Benefits currently make up a far greater percentage of

the total payroll than they did in the past– The typical employer today pays nearly 40% of

payroll costs in benefits

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Designing Reward Systems

• Reward systems serve the strategic purposes of attracting, motivating, and retaining people

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Designing Reward Systems

• Three types of decisions are crucial– Pay level refers to the choice of whether to be

a high-, average-, or low-paying company

– Pay structure is the choice of how to price different jobs within the organization

– Individual pay decisions concern different pay rates for jobs of similar worth within the same family

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Designing Reward Systems

• Individual incentive plans are the most common type of incentive plan and is based on the employee’s performance

• Gain-sharing plan concentrate on rewarding employees for increasing productivity or saving money in areas under their direct control

• Profit-sharing plans are usually implemented in the division or organization as a whole,

• Merit Pay Systems are based on the judgmental merit rating they receive from their boss

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Designing Reward Systems

• Individual Incentive plans are the most common type of incentive plan and is based on the individual employee’s performance

• Group Incentive Plans are based on group performance. They are becoming more popular

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Designing Reward SystemsTypes of Group Incentive Plans

• Gain-sharing plan concentrate on rewarding employees for increasing productivity or saving money in areas under their direct control

• Profit-sharing plans are usually implemented in the division or organization as a whole,

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Employee Benefits

• Three basic required benefits– Workers’ Compensation provides financial support to

employees suffering a work-related injury– Social Security provides financial support to retirees– Unemployment Insurance provides financial support to

employees who are laid off for reasons they cannot control

• Because of the wide variety of possible benefits and the considerable differences in employee preferences and needs companies often use cafeteria or flexible benefit programs