Evolution of HRM Function

• Personnel Administration• Scientific Management• Human Relations movement• Government regulation• Human Resources movement• Strategic human resource management

HRM Practices

· Human Resource Planning

· Job analysis

· Recruitment and selection

· Compensation and benefits

· Training and development

· Performance appraisal and management

In a regulatory environment

HRM Responsibility

• Company Leadership– CEO/ Executive leve– Front-line management

• Human Resources Professionals– Executives– Generalists– Specialists

Competitive Advantage

• Cost strategy• Product differentiation• Link to HR practices

Resource Based View

• Rare• Valuable• Imperfectly imitable• Non-substitutable

Competitive Challenges to HRM

• Global challenge• Satisfying stakeholders• Economy• Legal environment• Technology advances• Changing demographics

Human Resource Planning

• Organizational Planning–Organizational Mission–Scan environment–Set strategic goals–Formulate strategic plans

Sample Mission Statement

Southwest Airlines:

The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.

Human Resource Planning

• Strategic Plans include:–Technological forecasts–Economic forecasts–Organizational planning–Investment planning–Annual operating plans

HR Planning- Demand Forecasting

Statistical Analysis– Business factors– Trend analysis– Ration Analysis

Judgmental Analysis– Brainstorming– Delphi Technique– Sales force estimates

Other- Unit-demand

HR Planning- Supply Forecasting

• Internal–Assess current workforce–Skills inventory–Succession planning

HR Planning- Actions

• When labor demand exceeds labor supply (tight)– training or retraining– succession planning– promotion from within– subcontracting– use of part-time/ temporary workers– use of overtime

HR Planning- Actions

• When labor supply exceeds labor demand (loose)– pay cuts– reduced hours– work-sharing– voluntary early retirements– inducements to quit (eg. Severance pay)– layoffs

Environmental Scanning

• Economic, social, political factors• Government and legislation• Population, workforce demographics• Competition, markets• Technology

Exercise- Trend Analysis

• Aging of the labor force• Shift from manufacturing economy to

service economy• Increasing number of dual career families• Increasing diversity of workforce (more

women and minorities)

Human Resource Information Systems

• Created for administrative purposes• Used also to support decision-making• Typically a relational database• Often managed by an HR group

Data Collected by an HRIS

Employee Data• Name• Social security number• Date of birth• Gender• Race• Marital Status• Address• Telephone Number• Emergency Contact• Dependent Information

Organization/Job Data• Pre-employment test scores• Job title• Job grade• Salary• Benefit selections• Performance appraisal ratings• Promotional history• Corrective action records• Attendance history• Training records

Functional Use of Data

Functions Using Data• Compensation and

Benefits• Health and Safety• Performance Appraisal• Training and Development• EEO/AA• Recruiting and Placement• Labor Relations

Regularly Generated/Ad hoc Reports

• Payroll runs• Benefit costs• Recruiting effectiveness• Supply/demand

forecasting• Transaction histories• Training completed• Adverse impact analysis

Who can access/use the HRIS

• HR Staff• Managers• Strategic planners• Employees

Important Considerations in HRIS Implementation

• Return on investment• Off-the shelf vs. customization• Confidentiality• Legal considerations

Intranets- HR Uses

• Job posting• On-line training and scheduling• Employee manual• Employee communications and messages• Self-service file maintenance• Benefit enrollment

Intranets and Competitive Advantage

Strategic Uses:• Improve communication

effectiveness• Knowledge management• Support innovation

Intranets must have:

• Effective management• Culture that supports information sharing• User training• Employee empowerment to use• Organized content

Analyzing HRIS Data

• Data-mining• Other Statistical Analysis• Data-warehousing

Examples of Relationships in HRIS• What are some characteristics of applicants that are

eventually successful in the organization?• Is there a relationship between merit increases and improved

performance?• Do benefit selections affect turnover?• Are there common career paths in the organization?• Is there a relationship between promotional history and length

of service?• Are there any attributes that make an employee a productive

telecommuter?• Is there a relationship between absenteeism and performance?• Is there a profile of a typically successful employee?

Outline of Legal Considerations

• Regulatory Model• Equal Employment Opportunity• Workplace Justice Laws• Pay and Benefit Legislation• Labor Unions• Health and Safety

EEO Legislation

• 1964: Title Vll Civil Rights Act• 1967: Age Discrimination in Employment Act• 1978: Pregnancy Discrimination Act• 1986: Immigration Reform & Control Act• 1990: Americans with Disabilities Act• 1991: Civil Rights Act

Regulatory Model

Concerns

• Fairness issues• Economic disparity• Changing material

values• Interest group

agendas• Political party

mandates• Loop-holes in

current legislation

State Court System

Federal Court System

• Passed by congress• Passed by state

legislature• Presidential executive

orders

• Federal agencies • State agencies• Independent• commissions

• Rulings• Written

regulations• Complaint

investigations• Technical

assistance• Lawsuits

• Planning compliance strategies

• Formulating appropriate HR policies

• Briefing and training employees and managers

• Defending lawsuits• Working with

government agencies lobbying for policy changes

Opinions and Decisions

Laws AgenciesManagementResponses

RegulatoryAction

Challenges to Laws

Types of Discrimination

• Disparate TreatmentDifferential treatment of protected class

individuals

• Disparate ImpactIdentical treatment of protected class individuals,

but differential outcomes

Defenses Against Discrimination

• Job relatedness• Business necessity• Bona Fide Occupational Qualification• Bona Fide Seniority System• Voluntary Affirmative Action Program• Demonstrate no adverse impact

Proving Adverse Impact

• 4/5 Rule - comparison of minority/majority selection ratio

• If selection ratio is below 4/5 or 80%- then there is adverse impact

Adverse Impact- Examples#hired/ #applied- compute for each group

Female: 30/100= 30%;

Male: 60/100= 60%

minority % / majority % (compare with 4/5) 30% / 60% = .30/.60 = 0.5 (5/10 or 50%)

#hired/ #applied- compute for each groupFemale: 50/100= 50%;

Male: 60/100= 60%

minority % / majority % (compare with 4/5) 50% / 60% = .50/.60 = 0.83 (5/6 or 83%)

Affirmative Action Plans

• Required for Federal Contractors by Executive Order 11246

• Can also be voluntary• Never use quota system- unless directed by

courts• Components:

– Utilization analysis– Written plan

Employment-at-Will Exceptions

• Violates a law• Public policy• Implied contract• Good faith and fair dealing

Avoiding Wrongful Termination

• Employment-at-Will statement in:– applications– offer letters– employee handbook

• Train managers:– avoid making commitments or promises– avoid certain terminology

Employee Handbook

• Employment policies or procedures• Orientation information for new

employees• Legal obligations of employer and

employee• Responsibilities of employer and

employee to each other

Sexual Harassment

• Quid pro quo• Hostile environment

Tips to avoid:• Have a written policy• Provide training• Formal investigation process• Be aware

Family Medical Leave Act

• Companies with 50 or more employees• 12 weeks of unpaid leave for

– birth or adoption– own illness or family member illness

• Continued health coverage• Can be intermittent• Reinstated to same or similar position

Surveillance and Monitoring

• Business reasons• Have a written policy• Use in moderation• Treat all employees equally

The Process of Job Analysis

Sources of Data

Job Description

Human Resources Functions

Job Specification

Methods of Collecting

Data

Job Data

Sources of Data

• Job Analyst• Employee• Supervisor• Customer

Methods of Collection

• Interviews• Questionnaires• Observations• Records or Critical Incidents

Data Collected

• Job Content• Job Context• Worker Requirements:–Knowledge–Skills–Abilities

Results of Job Analysis• Job Description

–Tasks–Duties –Responsibilities– Job Specifications

• Knowledge requirements• Skill requirements• Abilities needed (including physical

demands)

Using Job Analysis Results

• Recruiting and Selection• Training and Development• Performance Appraisal• Compensation• Productivity improvement• Employee discipline• Safety• Organizational Efficiency

Problems with Job Descriptions

• Not useful if not well-written• Often not updated• Could violate law• Can limit scope of job holder

Recruiting

• Purpose- create pool• Specifically:

– Minimize cost– Increase success– Improve retention– EEO issues– Public image

Strategic Issues

• Large number or highly qualified?• Quick or quality?• Cost?• Fill vacancy or start career?• Public relations?

Steps in Recruiting Process

• Identify opening• How to fill opening• Identify targeted population• Source candidates• Selection process

Internal Recruitment

• Advantages– Capitalize on investment– Increase moral– Improve retention

• Disadvantages– Insufficient supply– “Ripple effect”– Lack new ideas

Internal Recruiting Process

• Skills database• Supervisor recommendations• Career progression system• Job posting

– Available to all– Timeliness– Can de-moralize if not done well– Confidentiality

External Recruiting• Employee referrals• “Walk-ins”• Recruitment advertising• Direct recruiting• Search research• Contingency search (include temp-to-perm)• Retained search • College recruiting• Non-fee agencies

External Recruiting

• Job Fairs• Professional Associations• Internet

–Company website–Online boards–Banner advertising–Using e-mail

Choosing the Right Method• Depends on:

– Type of job – Timeframe– Geographic area– Cost– Mix of candidates

• Need to look at:– Define target market– What’s worked before?

Doing it Well

• Realistic Job Preview• Train organizational recruiters• Convey organizational information• Timing of process• Offer flexibility• Evaluate your efforts

Evaluate your Efforts• Operating Costs• Cost per hire• Yield ratios

– Number of resumes to interviews– Interviews to offers– Offers to hires– Overall

• Retention rates• Performance rating

Importance of Effective Selection

• Retention• Productivity• Reduce training costs• Legal compliance

Steps in Selection

• Understand organization and job• Select evaluation process• Implement selection process• Make decision• Background check• Offer

Legal Considerations• Equal Employment Opportunity

Commission (EEOC)– Uniform Guidelines on Employee Selection

Procedures– National Origin– Pregnancy discrimination– Age discrimination– Religious discrimination– Disability

Legal Considerations

• Constitutional– Privacy

• Tort law– Negligent hiring– Defamation

• Other– Fair Credit Reporting Act

Selection Strategy

• Decide what selection devices to use for each position. (Utility Analysis)

• What order?• Multiple hurdle or same treatment?

– Example- everyone must pass cognitive ability test to get to interview OR

– Everyone takes cognitive ability test and gets interview

Selection Strategy

• Compensatory: all applicants get all “tests” (*costly!)(1) applications 200

(2) paper & pencil tests 200

(3) work sample test 200

(4) interview 200

(5) offers 10

*Note: courts don’t accept “bottom line” defense- look for adverse impact at each step of the process

• Multiple Hurdle: weed out applicants at each step of the hiring process based on whether pass/fail each “test” (*greater potential for adverse impact!)(1) applications 200

(2) paper & pencil tests 120

(3) work sample test 40

(4) interview 20

(5) offers 10

20

(5) offers 10

Reliability

• Consistent/stable• Over time• Across different samples• Across different judges

Validity

• Face validity• Content validity• Construct validity• Criterion related validity• Validation approaches

– Predictive validation study– Concurrent validation study– Validity generalization

Utility Analysis Considerations

• Validity coefficient• Selection ratio• Job performance differential• Cost of test

Utility Analysis Example

Expected gain ($) =(# applicants selected) x (validity) x

(standard deviation of performance) x

(average standardized test score) -

(# applicants tested)(cost of test)

Selection Methods

• Application• Biodata inventory• Background investigation

– Drug test– Reference checks

• Written or Computer-based Tests• Interviews

Examples of Written or Computer-based Tests

• Job sample performance tests– Assessment centers

• Cognitive ability tests• Psychomotor ability tests• Personality inventories • Polygraph or honesty tests

Interview Process

• Phone screening• Human resources- organization fit• Hiring manager• Peers/customers• “round robin” style• Lunch, dinner or reception

Types of Interviews

• Pre-screening• Resume-based• Structured • Patterned• Stress• Case• Behavioral

Interviewers Should:

• Be prepared• Listen• Take notes• Avoid common errors:

– similar-to-me– halo/horn effect– recency effect

Selection Process-other

• Candidate communications– Standard/timely– One person responsible

• Extending offers– Contingent– Salary negotiable– Verbal followed by written

Compensation- Why important?

• Cost efficiency• Legal compliance• Enhance recruiting• Improve retention

Equity Theory

• Inputs vs. Outputs• Variance?

– Decrease inputs– Request raise– Change mindset– Different comparison point– Escape

• Internal consistency vs. external competitiveness

Developing a Compensation System

• Job analysis• Job evaluation • Market pricing• Choose compensation method• Develop pay structure• Individual adjustments

Job Evaluation- Methods

• Job ranking system• Job classification system• Point system• Factor comparison system• Hay profile method

Market Pricing

• Focus on external• Salary surveys• Pay policy–Lead–Match–Lag

Final steps• Choose compensation method

– Flat-rate– Skill-based– Incentive pay

• Develop pay structure– Job grades– Market point

• Individual adjustments

Legal Constraints• Fair Labor Standards Act

– Exempt vs. non-exempt• Administrative• Executive• Professional • Sales

– Minimum wage– Overtime

• Equal Pay Act– Comparable worth

Designing Benefit Plans

Need to Consider: • Long-term strategic plans• Characteristics of workforce• Legal requirements• Competitiveness• Cost-effectiveness

Mandatory Benefits• Worker’s Compensation

– On the job (includes stress)– Medical expenses/lost wages– Avoid injuries

• Unemployment Compensation- may be denied:

– Quit for no good reason– Discharged for misconduct– Refusing suitable work

• Social Security

Retirement Benefits

• Defined benefit pension plan• Defined contribution pension plan• 401(k) plans• Employee Retirement Income

Security Act (ERISA)

Other Benefits• Insurance

– Health/dental– Life, death or dismemberment– Disability

• Paid time-off– Vacation– Personal days– Holidays– Sick days

Other Benefits• Employee service or “perqs”

– Day/elder care– Tuition reimbursement– Company car/other equipment– Service/other rewards– Stock purchase plans– Fitness/wellness programs– Employee Assistance Program– Discounted services– Social activities/holiday bonus

Benefit Administration

• “Vanilla” packages• Flexible or Cafeteria plans• Communication

Legal Issues

• Consolidated Omnibus Budget Reconciliation Act (COBRA)–continuation of benefits

• Health Insurance Portability Protection Act (HIPPA)–eliminates “pre-existing condition”

New Hire Orientation

• Retain/motivate• Increase productivity• Reduce anxiety• Set expectations

Orientation “Do’s”• Provide materials in advance• Provide information on:

– Company– Social– Technical– Physical

• Be efficient• Spread out

Orientation “Don’ts”

• Emphasize paperwork• Cause information overload• Consider “HR’s job”• Hold hostage

Training Department

• Faculty Model• Customer Model• Corporate University• Virtual Training

Instructional Design Model

1. Conduct needs assessment

2. Design training

3. Select training methods

5. Ensure transfer of training

6. Evaluate training programs

Needs Assessment

Levels of analysis:• Organizational• Task• Competency• Person

Designing the Program• Instructional objectives• Assess readiness and motivation• Select appropriate instructors• Understand adult learners

– meaningful examples– individual differences– practice– whole vs. parts– distributive vs. massed– feedback and reinforcement

Select Training Method• On-the-job• Job instruction method• Apprenticeship training• Lecture• Case studies• Role playing • Behavior modeling• Computer-based instruction• Interactive video

Transfer of Training

• Over-learning• Action plan• Tie to job• Follow-up

Evaluating Training

• Employee reactions- “happy sheets”• Testing• Performance appraisal• Organizational performance• Return on investment

Management Development

• Succession planning• Development opportunities• Specific training

Career Stages

• Exploration/establishment• Advancement• Maintenance• Strategic planning or

Disengagement

Career Development Initiatives

• Career pathing• Career Planning Workbooks• Career counseling or workshops• Mentoring• Self-selected training opportunities

Performance Appraisal- Goals

• Improve performance• Support employment decisions• Ensure legal compliance• Increase employee satisfaction

Types of Rating Instruments• Individual performance against common standards

–Graphic Rating Scales–Behaviorally Anchored Rating Scale (BARS)–Behavior Observation Scale (BOS)

• Individual performance against individual standards

–Management by Objectives (MBO)• Compare employees to one another

–Ranking–Paired Comparison–Forced Distribution

Who should evaluate?

• Immediate supervisor• Peers • Subordinates• Self-appraisal• Customers served• Multi-rater or 360 degree feedback

Appraisal Meeting

• Ask for self-assessment• Express appreciation/share

developmental opportunities• Focus on behavior- not the person• Be supportive

Effective PA Systems

• Good standards• Train raters• Timely- follow policy• Well documented performance• Opportunity to respond• Action plan

Rater Errors

• Recency effect• First impression error• Similar-to-me effect• Halo/horn effect• Central tendency

The Difficult Employee• Unsatisfactory quality or quantity of work

– Lack of skills or motivation– May need to identify and offer correction– Examine environment– Disciplinary action

• Personal problems affect job– Drug or alcohol?– EAP– Disciplinary action

The Difficult Employee

• Violate laws– Investigative process– Pursue with authorities– Disciplinary action

• Violate policies– Educate employees– Disciplinary action

Disciplinary Process

• Warning system• Act promptly• Consistency• Handle professionally

Progressive Discipline• Stepped process

– Verbal warning– Written warning– Final written warning or suspension– Termination

• Identify behavior and why it is a problem• Clear warning and explain consequences• Document!

Positive Discipline

• Stepped process• Counseling & motivation replace

threats & punishment• Collaborative problem solving• Must train supervisors

Disciplinary Meetings

• Keep private• Criticize selectively• Opportunity to respond• Attack problem, not person

Alternative Dispute Resolution

• Advantages:– Less time consuming– Less expensive– Private

• Components– Mandatory– Not binding on employee– Binding on company

Disputes• Covered

– Involuntary terminations– Claims of harassment or discrimination– Constructive discharge– Additional disputes

• Not covered– Benefit or pension claims– Worker’s compensation– Unemployment– Establishment or modification of a policy

ADR Format

• Mediation• Arbitration• Summary jury trial• Mini-trial• Peer review process

Successful ADR

• Procedures in place• Arbitrators with expertise• Employees right to representation

and discovery• Written opinion

Productivity Improvement Programs

• Types of rewards–Extrinsic-Pay for Performance–Intrinsic- Employee

Empowerment

Expectancy Theory

Effort

Performance

Rewards

Expectancy

Instrumentality

Valence

MOTIVATION

X

X

Pay for Performance must have:

• Effort-performance link• Performance-reward link• Valued rewards• Timeliness of rewards• Performance- organizational goals link• Cost-efficient

Types of Plans

• Merit pay• Gainsharing plans• Profit sharing plans• Employee Stock Ownership Plans (ESOP)• Variable pay plans

Variable Pay Plans

• Piece rate• Standard hour• Bonus• Sales incentives

– Straight commission– Combined salary/commission– Draw

Employee Empowerment Plans

• Informal participative decision-making• Job enrichment

– Skill variety, task identity, task significance, autonomy, feedback

• Quality circles• Continuous improvement programs• Self-managed work-teams

Employee Relations

• Must base initiatives on:–Organizational size–Company culture–Strategic goals

Responsibilities of Employee Relations Function

• Policies• Employee retention• Work/family balance• EEO Compliance• Diversity

Policy Development

• Monitor, develop and implement• Manage performance appraisal

system• Manage disciplinary action system

Employee Retention Strategy

• Benchmarking• Attitude surveys• Union-avoidance• Wellness programs• Employee Assistance Program• Performance counseling• Service/recognition programs• Exit interviews

Work/Family Balance

• Flexible work schedules• Telecommuting

– Who– Financial support– Communication– Social issues

• Day/elder care

EEO Compliance

• Reporting• Affirmative action plans• Responds to employees• Management training• Legal issues

Diversity Initiatives

• Develops awareness• Culture building• Management training• Employee training

Labor Relations History

• 1700’s craft guilds• American Federation of Labor (AFL) 1886• Congress of Industrial Organizations (CIO)

1936 - 1935 35% of workforce• World War II- growth, AFL-CIO merger• Drop to currently 14% 1997

Why join a union?

• Economic needs• Dissatisfaction with management• Social and status concerns

Structure of Unions

• Local Union• National Union• AFL-CIO

Labor Law• Railway Labor Act 1926• Norris-Laguardia Act 1932

– No arbitrary court injunctions– No “yellow dog” contracts

• National Labor Relations Act (Wagner Act) 1932– Employee’s right to bargain collectively– Certification/de-certification process– Right to strike, define ULP’s– Establish National Labor Relations Board (NLRB)

Labor Law, Cont.• Labor Management Relations Act (Taft-Hartley

Act) 1947– Employers right to free speech– No “closed shop”– President right to seek injunction– Established Federal Mediation and Conciliation Service

• Labor-Management Reporting and Disclosure Act (Landrum-Griffin Act) 1959– Bill of rights for union members – Unions cannot discriminate– Financial reporting requirement

How Unions Organize

• Employer Recognition–Petition phase–Election phase–Union Certification–Collective bargaining agreement

Collective Bargaining Agreement

• Preparing for bargaining• Establishing an agenda

– Illegal items– Mandatory items– Voluntary items

• Good faith bargaining

Collective Bargaining, Cont.• Union’s power:

– Strike– Boycott

• Employer’s power: – Lockout– Continue operating

• Resolving deadlocks:–Mediation–Arbitration

Unfair Labor Practices

• Employer–interfere, restrain or coerce–dominate/unlawfully support union–discriminate against those who

participate–retaliation–refuse to bargain

Unfair Labor Practices

• Union–coercive behavior–threats of economic reprisals–third-party strike/boycott–featherbedding–unfairly represent employees

Labor Relations, cont.

• Administering a contract– Grievance process

• Cooperation efforts• Union de-certification

– Petition for de-certification– Petition for a different union– Employers may petition

Health and Safety Facts

• Over 85,000 work related deaths in past 15 yrs.

• About 75 million lost work days.• Cost to employers- 1.75 billion per

year

Occupational Safety and Health Act 1970

• Established Occupational Health and Safety Administration

• Covers all employers except government• Developed and set guidelines

How OSHA is enforced:

• Workplace inspections• Citations and penalties• On-site consultations• Voluntary Protection Programs

Responsibilities and Rights

• Provide hazard-free workplace• Keep employees informed• Keep records and report incidents• “Right to know” requirements

– Material Safety Data Sheets (MSDS)

Creating a Safe Environment

• Safety awareness• Safety training• Incentives for safety• Accident prevention• Safety committee

Health Hazards• Chemical hazards

– Teratogens

• Indoor air quality• Video display terminals• Repetitive motion injuries

– carpal tunnel syndrome– ergonomics

• Substance abuse

Employee Wellness

• Wellness programs• Stress management• Employee Assistance Programs

Workplace Violence

• Employment process• Management training• Communicated policy• Security

International Human Resource Management

• Cultural differences• Recruiting and selection• Training• Compensation• Legal issues• Returning home

Managing in a Cross-cultural Organization

• Cultural sensitivity• Motivation• Ethics• Negotiations• Leadership• Perception• Communication

International Employees

• Expatriate or home-country nationals

• Host-country national• Third-country nationals

Selection

• Stress tolerance• Relationship development• Perceptual skills• Family support• Testing

Training

• Language• Cultural• Family/personal life

Compensation

• Incentive to take position• Maintain standard of living• Children education• Maintain relationships

–Balance Sheet Approach

Legal Issues

• Local laws• employment discrimination• Human rights

Repatriation

• Planning• Career Management• Transitional Support

Careers in HRM

• Generalist vs. Specialist• Large vs. small organization• Outsourced functions• Strategic vs. administrative

Specialist Functions

• Compensation• Benefits• Training• Employee Relations• Recruiting• HRIS

Management Career Paths

• Senior Generalist• Team leader• Manager• Director• Executive

Human Resource Service Providers

• Independent or with company• Organizational effectiveness consulting• Staffing• Benefits• General HR

What is needed?• HR Expertise- Law• Business Operations expertise• Strong leadership ability• Oral and written communication skills• Ability to develop relationships• Creative• Strong sense of ethics• Persuasive

Career Preparation

• Undergraduate degree• Graduate degree- MBA or HR• Certification: PHR, SPHR• Conferences