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Human Resource Decision Making In Organizations

6

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LEARNING OUTCOMES

2Copyright ©2016 Cengage Learning. Al l Rights Reserved. May not be scanned, copied or dupl icated, or posted to a publ icly acce ssible website, in whole or in part. HRM3 | CH3

1 Discuss the role of ethics in human resource decision making

2 Describe the concept of rightsizing and identify organizational strategies for rightsizing

3 Describe how to manage termination and retention

4 Describe the elements of voluntary turnover

5 Discuss the key human resource issues during mergers and acquisitions


Ethics and Human Resource Management

• Ethics: Individual’s beliefs about what is right and wrong and what is good and bad• Formed by the societal context in which people

and organizations function

• Different countries and different cultures have different values and norms


Rightsizing the Organizations

• Process of monitoring and adjusting the composition of the organization’s workforce to its optimal size

• Managing the size of the workforce involves:• Layoffs or early retirement programs to reduce

the size of workforce

• Retention programs to maintain the size of the workforce

• Using temporary workers as a bridge between the current state of affairs


Dealing with Increased Demand for

Employees

• Easiest way to deal with a temporary increase in demand for employees is to offer overtime opportunities• Overtime: Hours worked above the normal 40-

hour workweek, for which there is usually a pay premium

• Other alternatives are employee leasing and part-time workers


Dealing with a Declining Need for Employees

• Cut back on the contingent workforce and retain only permanent members

• Early retirement and natural attrition • Provide incentives for other employees to retire

early

• Not replacing workers who leave voluntarily


Strategies for Layoffs

• When notified of a layoff, some employees decide to sue the organization for wrongful termination

• Critical determinant of an employee’s reaction to being laid off is his or her perceptions of the justice involved in the layoff process


Types of Justice

• Perceptions that the outcomes a person faces are fair when compared to the outcomes faced by others

Distributive

• Perceptions used to determine the outcomes were fair

Procedural

• Quality of the interpersonal treatment people receive when a decision is implemented

Interactional

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Table

HRM3 | CH3

6.1 Critical Dimensions of Procedural Justice


Managing Terminations and Retention

• Managing involuntary turnover• Involuntary turnover: Terminating employees

whose services are no longer desired

• Before terminating an employee, managers should always start with an effort to rectify the problem

• Employee assistance program (EAP) help employees and reduce the costs associated with lost workdays and poor productivity



• Progressive discipline• Designed to try to improve performance through

the use of punishment

• Progressive disciplinary plans

• Verbal warning

• Written warnings

• Suspension

• Termination



• Employment at will• Employer can terminate any employee, at any

time, for any reason

• Employee retention• Ways of reducing the voluntary turnover of

desired employees

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Figure

HRM3 | CH3

6.1 A Model of the Turnover Process


Managing Voluntary Turnover

• Causes of job dissatisfaction• Nature of the work

• Pay and benefits

• Supervisors and co-workers

• The effects of job dissatisfaction• Organizational commitment

• Organizational citizenship behaviors (OCBs)


Managing Voluntary Turnover

• Measuring and monitoring job satisfaction• Through attitude surveys

- Job descriptive index (JDI) - Assesses satisfaction with specific job aspects

• Retention strategies• Job enrichment - Making work more meaningful

and granting more autonomy and opportunity to use skills

• Realistic job previews: Pre-employment previews that provide accurate and realistic information to the job applicant


Managing Human Resources During Mergers

and Acquisitions

• Employees in merged firms are concerned about the jobs

• Important to build employee identification with the new corporate identity

SUMMARY


• Ethics refers to an individual’s beliefs about what is right and wrong and what is good and bad

• Number of an organization’s employees must be adjusted to fit the changing needs of the business

• Mergers and acquisitions cost most stress to employees due to imminent layoffs

KEY TERMS


• Discipline (p. 128)• Distributive justice (p. 123)• Employee leasing (p. 122)• Employment at will (p.128)• Ethics (p. 118)• Interactional justice (p. 124)• Involuntary turnover (p.127)• Job dissatisfaction (p. 130)• Job embeddedness (p. 131)• Organizational citizenship

behaviors (OCBs [p. 133])

• Organizational commitment

(p. 132)

• Overtime (p. 121)

• Part-time workers (p. 122)

• Procedural justice (p. 124)

• Progressive disciplinary

plans (p. 128)

• Punishment (p. 127)

KEY TERMS


• Realistic job previews (RJPs [p. 134])

• Rightsizing (p. 120)

• Stock Options (p. 134)

• Suspension (p. 128)

• Termination (p. 128)

• Verbal warnings (p. 128)

• Written warnings (p.128)

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