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Chapter
12© 2007 Prentice Hall, Inc.
All rights reserved.
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The Importance of Human
Resource Management(HRM)As a necessary part of the organizing function of
management
Selecting, training, and evaluating the or! forceAs an important strategic tool
HRM helps esta"lish an organization#s sustaina"lecompetitive advantage$
Adds value to the %rmHigh performance or! practices lead to "oth
high individual and high organizationalperformance$
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&'hi"it * &'amples of High+erformance -or! ractices
Self+managed teams
.ecentralized decision ma!ing
Training programs to develop !noledge,s!ills, and a"ilities
/le'i"le 0o" assignments1pen communication
erformance+"ased compensation
Sta2ng "ased on person*0o" and person*organization %t
© 2007 Prentice Hall, Inc. All rights reserved. 12–3
Source: Based on W. R. vans and W. !. !avis, "High#Per$or%ance Wor&
'(ste%s and )rgani*ational Per$or%ance+ he -ediating Role o$ Internal
'ocial 'trctre,/ Journal of Management, )ctoer 200, . 70.
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The HRM rocess/unctions of the HRM rocess
&nsuring that competent employees areidenti%ed and selected$
roviding employees ith up+to+date !noledgeand s!ills to do their 0o"s$
&nsuring that the organization retainscompetent and high+performing employees hoare capa"le of high performance$
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&nvironmental /actors
A3ecting HRM&mployee 4a"or 5nions1rganizations that represent or!ers and see! to
protect their interests through collective "argaining$
6ollective "argaining agreement A contractual agreement "eteen a %rm and a union
elected to represent a "argaining unit of employees of the%rm in "argaining for age, hours, and or!ingconditions$
7overnmental 4as and Regulations4imit managerial discretion in hiring, promoting, and
discharging employees$ A2rmative Action8 the re9uirement that organizations ta!e
proactive steps to ensure the full participation of protectedgroups in its or!force$
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153153 6al Pa( Act6al Pa( Act
154154 ivil Rights Act, itle 8II 9a%ended in 1572:ivil Rights Act, itle 8II 9a%ended in 1572:
157157 Age !iscri%ination in %lo(%ent Act Age !iscri%ination in %lo(%ent Act
15731573 8ocational Rehailitation Act8ocational Rehailitation Act
15741574 Privac( ActPrivac( Act
157;157; -andator( Retire%ent Act-andator( Retire%ent Act15;15; I%%igration Re$or% and ontrol ActI%%igration Re$or% and ontrol Act
15;;15;; Wor&er Adith !isailities Act
15511551 ivil Rights Act o$ 1551ivil Rights Act o$ 1551
15531553 ?a%il( and -edical @eave Act o$ 1553?a%il( and -edical @eave Act o$ 1553
155155 Health Insrance Portailit( and Accontailit( Act o$ 155Health Insrance Portailit( and Accontailit( Act o$ 155
20032003 ?air and Accrate redit ransactions Act?air and Accrate redit ransactions Act
20042004 ?airPa( )verti%e Initiative?airPa( )verti%e Initiative
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+4a"or 6ode of the hilippines
+1ccupational Safety and Health Standards
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Managing HumanResourcesHuman Resource (HR) lanning
The process "y hich managers ensure that theyhave the right num"er and !inds of people in the
right places, and at the right times, ho are capa"leof e3ectively and e2ciently performing their tas!s$
Helps avoid sudden talent shortages and surpluses$
Steps in HR planning8
Assessing current human resources Assessing future needs for human resources
.eveloping a program to meet those future needs
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6urrent AssessmentHuman Resource Inventory
A revie of the current ma!e+up of the
organization#s current resource status :o" Analysis
An assessment that de%nes a 0o" and the "ehaviorsnecessary to perform the 0o"
;noledge, s!ills, and a"ilities (;SAs)
Re9uires conducting intervies, engaging in directo"servation, and collecting the self+reports ofemployees and their managers$
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6urrent Assessment(cont#d) :o" .escription
A ritten statement of hat the 0o" holderdoes, ho it is done, and hy it is done$
:o" Speci%cation
A ritten statement of the minimum9uali%cations that a person must possess to
perform a given 0o" successfully$
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Supply of Employees Demand for Employees
Factors Affecting Staffing
Strategic Goals
Forecast demand for products and services
Availability of knowledge, skills, and abilities
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Recruitment and.ecruitmentRecruitment
The process of locating, identifying, andattracting capa"le applicants to an organization
.ecruitment
The process of reducing a surplus of employeesin the or!force of an organization
&+recruitingRecruitment of employees through the Internet1rganizational e" sites
1nline recruiters
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SelectionSelection rocess
The process of screening 0o" applicants to ensurethat the most appropriate candidates are hired$
-hat is Selection<
An e'ercise in predicting hich applicants, if hired,ill "e (or ill not "e) successful in performingell on the criteria the organization uses to
evaluate performance$Selection errors8 Re0ect errors for potentially successful applicants
Accept errors for ultimately poor performers
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=alidity and Relia"ility=alidity (of rediction)
A proven relationship "eteen the selectiondevice used and some relevant criterion forsuccessful performance in an organization$High tests scores e9uate to high 0o" performance>
lo scores to poor performance$
Relia"ility (of rediction)
The degree of consistency ith hich aselection device measures the same thing$ Individual test scores o"tained ith a selection
device are consistent over multiple testing instances$
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Alication ?or%s Alication ?or%s Written estsWritten ests
Per$or%ance 'i%lationsPer$or%ance 'i%lations
Intervie>sIntervie>s
Bac&grond InvestigationsBac&grond Investigations
Ph(sical ea%inationsPh(sical ea%inations
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-ritten Tests Types of Tests
Intelligence8 ho smart are you<
Aptitude8 can you learn to do it<
Attitude8 ho do you feel a"out it<
A"ility8 can you do it no<
Interest8 do you ant to do it<
4egal 6hallenges to Tests
4ac! of 0o"+relatedness of test items or intervie9uestions to 0o" re9uirements
.iscrimination in e9ual employment opportunityagainst mem"ers of protected classes
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erformance Simulation Tests Testing an applicant#s a"ility to perform actual 0o" "ehaviors, use re9uired s!ills, anddemonstrate speci%c !noledge of the 0o"$
-or! sampling
Re9uiring applicants to actually perform a tas! or setof tas!s that are central to successful 0o"performance$
Assessment centers
.edicated facilities in hich 0o" candidates undergoa series of performance simulation tests to evaluatetheir managerial potential$
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1ther SelectionApproachesIntervies
Although used almost universally, managers needto approach intervies carefully$
?ac!ground Investigations
=eri%cation of application data
Reference chec!s8 4ac! validity "ecause self+selection of references ensures
only positive outcomes$
hysical &'aminations
5seful for physical re9uirements and for insurancepurposes related to pre+e'isting conditions$
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1.1. Structure aStructure a fixed set of questionsfixed set of questions for all applicants.for all applicants.
.. !ave!ave detailed informationdetailed information about the jobabout the job for w"ic" applicantsfor w"ic" applicants
are interviewing.are interviewing.
3.3. Minimize any prior knowledgeMinimize any prior knowledge of applicants# background,of applicants# background,
e$perience, interests, test scores, or ot"er c"aracteristics.e$perience, interests, test scores, or ot"er c"aracteristics.
4.4. Ask behavioral questions Ask behavioral questions t"at re%uire applicants to givet"at re%uire applicants to give
detailed accounts of actual &ob be"aviors.detailed accounts of actual &ob be"aviors.
'.'. (se a(se a standardized evaluation formstandardized evaluation form..
.. !ake notes!ake notes during t"e interview.during t"e interview.
".". Avoid short interviews Avoid short interviews t"at encourage premature decisiont"at encourage premature decision
making.making.
#our$e% Based on !.A. !een*o and '.P. Roins, Human
Resource Management, 7th ed. 9=e> Cor& Wile(+ 2002, . 200:
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)an#t Ask)an#t Ask
*"at#s your birt" date+*"at#s your birt" date+
or !ow old are you+or !ow old are you+
*"at#s your marital*"at#s your marital
status+ or Do you planstatus+ or Do you planto "ave a family+to "ave a family+
*"at#s your native*"at#s your native
language+language+
!ave you ever been!ave you ever been
arrested+arrested+
)an Ask)an Ask
Are you over 1+Are you over 1+
*ould you relocate+*ould you relocate+
Are you aut"ori-ed toAre you aut"ori-ed to
work in t"e (nitedwork in t"e (nited
States+States+
!ave you ever been!ave you ever been
convicted of fill in t"econvicted of fill in t"e
blank/+0"e crime mustblank/+0"e crime must
be reasonably related tobe reasonably related to
t"e performance of t"et"e performance of t"e
&ob. &ob.2 3ote4 5anagers s"ould be aware t"at t"ere are numerous
ot"er 6can and can#t ask7 %uestions. 8e sure to always
c"eck wit" your !9 department for specific guidance.
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1ther SelectionApproaches (cont#d)Realistic :o" revie (R:)
The process of relating to an applicant "oth thepositive and the negative aspects of the 0o"$ &ncourages mismatched applicants to ithdra$
Aligns successful applicants# e'pectations ithactual 0o" conditions> reducing turnover$
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1rientation Transitioning a ne employee into the
organization$
-or!+unit orientation
/amiliarizes ne employee ith or!+unit goals
6lari%es ho his or her 0o" contri"utes to unit goals
Introduces he or she to his or her coor!ers
1rganization orientation Informs ne employee a"out the organization#s
o"0ectives, history, philosophy, procedures, and rules$
Includes a tour of the entire facility
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© 2007 Prentice Hall, Inc. All rights reserved. 12–2;
ypeype :ncludes:ncludesDeneralDeneral o%%nication s&ills, co%ter s(ste%s alicationo%%nication s&ills, co%ter s(ste%s alication
and rogra%%ing, csto%er service, eectiveand rogra%%ing, csto%er service, eective
develo%ent, %anage%ent s&ills and develo%ent,develo%ent, %anage%ent s&ills and develo%ent,
ersonal gro>th, sales, servisor( s&ills, andersonal gro>th, sales, servisor( s&ills, and
technological s&ills and &no>ledgetechnological s&ills and &no>ledge
'eci$ic'eci$ic Basic li$eE>or& s&ills, creativit(, csto%er edcation,Basic li$eE>or& s&ills, creativit(, csto%er edcation,
diversit(Ecltral a>areness, re%edial >riting, %anagingdiversit(Ecltral a>areness, re%edial >riting, %anaging
change, leadershi, rodct &no>ledge, licchange, leadershi, rodct &no>ledge, lic
sea&ingEresentation s&ills, sa$et(, ethics, sealsea&ingEresentation s&ills, sa$et(, ethics, seal
harass%ent, tea% ilding, >ellness, and othersharass%ent, tea% ilding, >ellness, and others
Source: Based on "200 Indstr( ReortF(es o$ raining,/ Training, !ece%er 200, . 22.
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raditionalraditionalraining 5et"odsraining 5et"ods
;nmanuals
)lassroom lectures)lassroom lectures
ec"nology
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&mployee erformanceManagementerformance Management System
A process of esta"lishing performancestandards and appraising employeeperformance in order to arrive at o"0ective HRdecisions and to provide documentation insupport of those decisions$
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5et"od5et"od AdvantageAdvantage DisadvantageDisadvantage
*ritten*rittenessaysessays
'i%le to se'i%le to se -ore a %easre o$ evalatorGs >riting-ore a %easre o$ evalatorGs >ritingailit( than o$ e%lo(eeGs actalailit( than o$ e%lo(eeGs actaler$or%anceer$or%ance
)ritical)riticalincidentsincidents
Rich ea%les ehaviorall(Rich ea%les ehaviorall(asedased
i%e#cons%ing lac& 6anti$icationi%e#cons%ing lac& 6anti$ication
Grap"icGrap"icrating scalesrating scales
Provide 6antitative dataProvide 6antitative dataless ti%e#cons%ing thanless ti%e#cons%ing thanothersothers
!o not rovide deth o$ ith large n%er o$n>ield( >ith large n%er o$
e%lo(ees legal concernse%lo(ees legal concerns
58;58; ?ocses on end goals?ocses on end goalsreslts orientedreslts oriented
i%e#cons%ingi%e#cons%ing
@B
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6ompensation and?ene%ts?ene%ts of a /air, &3ective, and Appropriate
6ompensation System
Helps attract and retain high+performance employees
Impacts on the strategic performance of the %rm
Types of 6ompensation
?ase age or salary
-age and salary add+onsIncentive payments
S!ill+"ased pay
=aria"le pay
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Sources4 Based on R.I. Henderson, o%ensation -anage%ent, th ed. 9er 'addle River, =J+ Prentice Hall,
1554:, . 3–24 and A. -rra(, "-o%, Ale Pie, and '%all Bsiness,/ Wall 'treet Jornal, Agst 1, 1554, . A1
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6areer .evelopment6areer .e%ned The se9uence of positions held "y a person during his
or her lifetime$
The -ay It -as 6areer .evelopment
rovided for information, assessment, and trainingHelped attract and retain highly talented people
@o
Individualsnot the organizationare responsi"le fordesigning, guiding, and developing their on careers$
?oundaryless 6areer A career in hich individuals, not organizations, de%ne
career progression and organizational loyalty
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&'hi"it *B -hat 6ollege 7raduates -ant /rom :o"s
Top /actors for 5$S$Students
-or!*life "alance
Annual "ase salary
:o" sta"ility and security
Recognition for a 0o"done ell
Increasingly challengingtas!s
Rotational programs
Top /actors for 5$;$Students International career
opportunities
/le'i"le or!ing hours
=ariety of assignmentsaid overtime
© 2007 Prentice Hall, Inc. All rights reserved. 12–3
Sources: Based on '. 'hellenarger, "Avoiding the =et nron+ oda(Gs ro o$ 'oon#to#Be Drads 'ee&s Jo 'ecrit(,/
Wall Street Journal Online, ?erar( 1, 200 "-BAs (e ?inancial 'ervices and -anage%ent onslting,/
HRMarketer.com, Jne 7, 200 and J. Boone, "'tdents 'et ighter er%s $or Wor&,/ FinancialTimes.com, -a( 21, 200.
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6urrent Issues in HRMManaging .onsizing
The planned elimination of 0o"s in anorganization rovide open and honest communication$
rovide assistance to employees "eing donsized$
Reassure and counseling to surviving employees$
Managing -or! /orce .iversity
-iden the recruitment net for diversity
&nsure selection ithout discrimination
rovide orientation and training that is e3ective
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6urrent Issues in HRM
(cont#d)Se'ual HarassmentAn unanted activity of a se'ual nature that a3ects
an individual#s employment$
5nanted se'ual advances, re9uests for se'ual favors,and other ver"al or physical conduct of a se'ual naturehen su"mission or re0ection of this conduct e'plicitly orimplicitly a3ects an individual#s employment$
An o3ensive or hostile environment An environment in hich a person is a3ected "y
elements of a se'ual nature$
-or!place Romances
otential lia"ility for harassment
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6urrent Issues in HRM
(cont#d)-or!+4ife ?alance&mployees have personal lives that they don#t
leave "ehind hen they come to or!$
1rganizations have "ecome more attuned to theiremployees "y o3ering family-friendly benets81n+site child care
Summer day camps
/le'time :o" sharing
4eave for personal matters
/le'i"le 0o" hours
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6urrent Issues in HRM
(cont#d)6ontrolling HR 6osts&mployee health+care &ncouraging healthy lifestyles
/inancial incentives
-ellness programs
6harging employees ith poor health ha"its more for"ene%ts
&mployee pension plans Reducing pension "ene%ts
@o longer providing pension plans
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Terms to ;no
high+performance or!
practiceshuman resource
management process
la"or union
a2rmative actionhuman resource
planning
0o" analysis
0o" description 0o" speci%cation
recruitment
decruitment
selection
validityrelia"ility
or! sampling
assessment centers
realistic 0o" previe(R:)
orientation
performance
management systemritten essay
critical incidents
graphic rating scales
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Terms to ;no (cont#d)
"ehaviorally anchored
rating scales (?ARS)multiperson
comparisons
CDE degree feed"ac!
s!ill+"ased pay
varia"le pay
career
donsizing
se'ual harassment
family+friendly"ene%ts