Human Resource Management

Chapter 8

Explain the role of human resources: the people behind the people.

Describe recruitment and selection.

Discuss orientation, training, and evaluation.

Describe compensation.

1

Learning Objectives

Discuss employee separation.

Explain the different methods for motivating employees.

Discuss labor-management relations.

2

3

4

5

6

7

Human resource management - function of attracting,

developing, and retaining employees who can perform

the activities necessary to accomplish organizational

objectives. Three main objectives:

1) Providing qualified, well-trained employees for the

organization.

2) Maximizing employee effectiveness in the

organization.

3) Satisfying individual employee needs through

monetary compensation, benefits, opportunities to

advance, and job satisfaction.

HRM: Vital to ALL Organizations

Human Resource Responsibilities

Recruitment and Selection

Recruiting techniques continue to evolve as

technology advances.

Internet recruiting is quick, efficient, and

inexpensive.

Reach a large pool of job seekers – monster.com

Use social networking sites

HR must be creative in searching for qualified

employees.

Businesses look both internally and externally.

Selecting and Hiring Employees

Must follow legal requirements.

Civil Rights Act of 1964

American with Disabilities Act

Equal Employment Opportunity

Commission programs

Civil Rights Act of 1991

Failure to follow these exposes

company to risk of litigation.

Hiring is a costly process for

employers.

Some employers require

employment tests.

Orientation and Training

Newly-hired employee often completes an orientation

program

Inform employees about company policies

Employee manuals

Describe benefits/programs

Training

Training Programs

On-the-job training

Classroom and computer-based training

Management development

Performance Appraisals

Performance appraisal - evaluation of and feedback

on an employee’s job performance.

Some firms conduct peer reviews while other firms

allow employees to review their supervisors and

managers.

May conduct a 360-degree performance review, a

process that gathers feedback from a review panel

that includes co-workers, supervisors, team members,

subordinates, and sometimes customers.

Compensation

Wages - compensation based on an hourly pay rate

or the amount of output produced.

Salary - compensation calculated on a periodic basis,

such as weekly or monthly.

Most firms base compensation decisions on five

factors:

What competing companies are paying

Government regulation

The cost of living

Company profits

Employee’s productivity

Incentive Compensation

Employee Benefits

Employee Benefits - additional compensation, such as

vacation, retirement plans, profit-sharing, health insurance,

gym memberships, child and elder care, and tuition

reimbursement, paid entirely or in part by the company.

30% of total employee compensation.

Some benefits required by law:

Social Security and Medicare contributions

State unemployment insurance and workers’ compensation

programs

Costs of health care are increasingly being shifted to

workers.

Retirement plans have become a big area of concern for

businesses.

Costs for Employee Compensation

Flexible Benefits

Employees are provided a range of options from

which they can choose.

Medical, dental, vision, life, and disability insurance

Many companies also offer flexible time off

policies instead of establishing a set number of

holidays, vacation days, and sick days.

56% of companies surveyed use paid time off

(PTO) programs.

More than ½ claim they have reduced unscheduled

absences

Flexible Work

Allow employees to adjust their working hours and places of

work to accommodate their personal needs.

Flextime allows employees to set their own work hours within

constraints specified by the firm.

A compressed workweek allows employees to work the

regular number of weekly hours in fewer than the typical five

days.

A job sharing program allows two or more employees to

divide the tasks of one job.

A home-based work program allows employees, or

telecommuters, to perform their jobs from home instead of at

the workplace.

More than 70 percent of Generation Y professionals are concerned

with balancing career with personal life

Employee Separation

Voluntary turnover: employees leave firms to start their own

businesses, take jobs with other firms, move to another city,

or retire.

Some firms ask employees who leave voluntarily to participate in

exit interviews to find out why they decided to leave.

Successful companies are clearly focused on retaining their best

workers.

Involuntary turnover: employers terminate employees

because of poor job performance, negative attitudes toward

work and co-workers, or misconduct such as dishonesty or

sexual harassment.

Necessary because poor performers lower productivity and

employee morale.

Employers must carefully document reasons when terminating

employees.

Downsizing/Outsourcing

Downsizing - process of

reducing the number of

employees within a firm by

eliminating jobs

Downsizing has negative

effects:

Anxiety, health problems,

and lost productivity

among remaining

workers

Expensive severance

packages paid to laid-off

workers

A domino effect on the

local economy

Outsourcing – transferring

jobs from inside a firm to

outside the firm

To save expenses and

remain flexible, companies

will try to outsource functions

that are not part of their core

business.

Although outsourcing might

work on paper, the reality

might be different.

Motivating Employees

Motivation starts with good employee morale, the mental

attitude of employees toward their employer and job.

High employee morale occurs in organizations where workers feel

valued, heard, and empowered to contribute what they do best.

Poor morale shows up through absenteeism, voluntary turnover,

and lack of motivation.

Maslow’s Hierarchy of Needs

Maslow’s Hierarchy of Needs: people have five levels of needs

that they seek to satisfy.

A satisfied need is not a motivator; only needs that remain

unsatisfied can influence behavior.

People’s needs are arranged in a hierarchy of importance; once

they satisfy one need, at least partially, another emerges and

demands satisfaction.

Physiological needs

Safety needs

Social (belongingness) needs

Esteem needs

Self-actualization needs

Herzberg’s Two-Factor Theory

Hygiene Factors –

result in satisfaction

Job Environment

Salary

Job Security

Personal Life

Working Conditions

Status

Interpersonal Relations

Supervision

Company Policies

Motivator Factors –

can produce high levels

of motivation if present

Achievement

Recognition

Advancement

The Job Itself

Growth Opportunities

Responsibility

Expectancy Theory & Equity Theory

Expectancy Theory – describes the process

people use to evaluate the

likelihood that their efforts

will yield the results they

want, along with the

degree to which they want

those results

Equity Theory –

individual’s perception of

fair and equitable

treatment

Goal-Setting Theory

Goal: target, objective,

or result that someone

tries to accomplish

Goal-setting theory --

people will be motivated

to the extent to which

they accept specific,

challenging goals and

receive feedback that

indicates their progress

toward goal

achievement

Management by Objective

Systematic and organized approach that allows managers

to focus on attainable goals and to achieve the best

results based on the organization’s resources.

MBO helps motivate individuals by aligning their

objectives with the goals of the organization, increasing

overall organization performance.

MBO principals:

A series of related organizations, goals, and objectives

Specific objectives for each individual

Participative decision making

Set time period to accomplish goals

Performance evaluation and feedback

Job Design & Motivation

Job enlargement: job design that expands an

employee’s responsibilities by increasing the number

and variety of tasks assigned to the worker

Job enrichment: involves an expansion of job duties

that empowers an employee to make decisions and

learn new skills leading toward career growth

Job rotation involves systematically moving

employees from one job to another.

Managers’ Attitudes & Motivation

Two assumptions managers make about employees,

according to psychologist Douglas McGregor:

Theory X: assumes that employees dislike work and try to avoid

it whenever possible, so management must coerce them to do

their jobs.

Theory Y: assumes that the typical person actually likes work

and will seek and accept greater responsibility.

Most people can think of creative ways to solve work-related problems.

Most people should be given the opportunity to participate in decision

making.

A third theory from management professor William Ouchi:

Theory Z: worker involvement is key to increased productivity

for the company and improved quality of work life for employees.

Labor-Management Relations

Labor union: group of workers who have banded

together to achieve common goals in the areas of

wages, hours, and working conditions.

Found at local, national, and international levels.

The organized efforts of Philadelphia printers in

1786 resulted in the first U.S. minimum wage - $1 a

day.

12% of the nation’s full-time workforce belongs to

labor unions.

1/3 of government workers, 8% of private sector

Labor Legislation

National Labor Relations Act of 1935 (Wagner Act) legalized

collective bargaining and required employers to negotiate with

elected representatives of their employees.

Fair Labor Standards Act of 1938 set the initial federal

minimum wage and maximum basic workweek for workers

employed in industries engaged in interstate commerce;

outlawed child labor.

Taft-Hartley Act of 1947 (Labor-Management Relations Act)

limited unions’ power by prohibiting a variety of unfair practices,

including coercing employees to join unions and coercing

employers to discriminate against employees who are not union

members.

Landrum-Griffin Act of 1959 (Labor-Management Reporting

and Disclosure Act) amended the Taft-Hartley Act to promote

honesty and democracy in running unions’ internal affairs.

Collective Bargaining Process

Collective bargaining: process of negotiation

between management and union representatives

Issues involved can include:

Wages

Work hours

Benefits

Union activities and responsibilities

Grievance handling and arbitration

Layoffs

Employee rights and seniority

Settling Labor-Management Disputes

Most labor-management

negotiations result in a signed

agreement without a work

stoppage.

On average, 20 or fewer

negotiations involve a work

stoppage.

Mediation is the process of

settling labor-management

disputes through

recommendations of a third party.

Arbitration adds a third party who

renders a legally binding

decision.

Competitive Tactics of Unions and Management

Union Tactics

Strikes - temporary work stoppage by employees

until a dispute has been settled or a contract signed.

Picketing - workers marching in public protest

against their employer.

Boycott - organized attempt to keep the public from

purchasing the goods and services of the firm.

Management Tactics

Lockout - a management strike to put pressure on

union members by closing the firm.

Future of Labor Unions

Membership and influence are declining, caused by

a shift from manufacturing industries to information

and service businesses.

8% of private-sector workers are union members,

but that is down from 17% in 1983.

52% of union members are government employees.

Unions need to be more flexible and adapt to a

global economy and diverse workforce.

Unions can recognize the potential for prosperity for

all—management and union workers included.