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Managing Human Resource

Strategic Human Resources Management (HRM)

Human Resources Management (HRM) formal systems for the management of people within the organization

human resources have a strategic impact create value are rare are difficult to imitate are organized

human capital - the knowledge, skills, and abilities of employees that have economic value

the emphasis on different HR activities depends on whether the organization is growing, declining, or standing skill

Strategic HRM (cont.)

The HR planning process a three-stage activity with a strategic purpose

derived from the organization‘s plans 1. planning - determine the organization‘s plans

2. programming - create specific HR activities

3. evaluating - determine whether HR programs are producing the results needed to contribute to the organization

Demand forecasts - determine how many and what type of people are needed

derived from organizational plans

based on current sales and projected future sales growth

determine the demand for different types of workers

An Overview Of The HR Planning Process

1. Labor markets 2. Technology 3. Legislation 4. Competition 5. Economy

1. Demand forecast 2. Internal labor supply 3. External labor supply 4. Job analysis

HRM environmental

scanning

Human resources planning

Organizational strategic planning

Planning

1. Employee recruitment 2. Employee selection 3. Outplacement 4. Training and development 5. Performance appraisal 6. Reward systems 7. Labor relations

Human resources activities

Programming

1. Productivity 2. Quality 3. Innovation 4. Satisfaction 5. Turnover 6. Absenteeism 7. Health

Results

Evaluation


The HR planning process (cont.) Labor supply forecasts - estimates of how many and what types of employees the organization actually will have evaluate current employees and the available external supply of workers

forecasts of a diverse workforce have become fact

Reconciling supply and demand labor deficit - hire new employees, promote current employees to new positions, or train other employees to move in from other areas in the organization

labor surplus - lay off employees or transfer them to other areas


The HR planning process (cont.)

Job analysis - a tool for determining what is done on a given job and what should be done on that job

1. job description - tells about the job itself

2. job specification - describes the employee characteristics needed to perform the job

provides the information that virtually every HR activity requires

Human Resource Management

Attracting, developing, and maintaining an effective workforce

A critical, bottom-line function!

The Nature of Human Resources Management (HRM)

HRM:

All activities involved in determining an organization‘s human resource needs, as well as acquiring, training, and compensating people to fill those needs

Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

Forecasting Labor Supply

1. Internal Forecasting: a. Replacement Charts

b. Skills Inventories

2. External Forecasting: a. State Employment

Commissions

b. Government Reports

c. College Information

Managing a Projected Shortfall

1. Hire new employees

2. Consider hiring temporary workers

3. Retrain and transfer current employees into understaffed areas

4. Convince older workers not to retire

The creative solution:

Develop and install productivity

enhancing systems

Planning for Human Resources Needs

Typical HR Issues:

How many employees?

What skills are needed to satisfy plans?

Availability of people in the workforce?

What qualifications must employees have? (proficiency level)

Cost of staffing?


Recruiting: Attracting Qualified Candidates to Apply for a Job

Internal Recruiting

Considering current employees for new positions

External Recruiting

Attracting outside candidates to apply for jobs

What are the strengths and

weaknesses of each

approach?

Staffing The Organization

Recruitment the development of a pool of applicants for jobs in

the organization

1. Internal recruiting advantages - employers know their employees

employees know their organization

provides opportunity to move up within the organization

drawbacks - yields limited applicant pool can inhibit a company that wants to change

job posting - a mechanism for advertising open positions

Staffing The Organization (cont.)

Recruitment (cont.) 2. External recruiting - brings new blood into the

organization a. newspaper advertisements - popular recruiting source

that is inexpensive and generates a large number of responses

b. employee referrals - some companies offer rewards for referrals

c. campus recruiting - large pool of people 1) applicants have up-to-date training 2) source of innovative ideas

d. Internet - becoming more common to advertise job openings and to gather applicant information

3.84

3.81

3.71

3.08

3.05

2.86

2.78

1.92

1.64

Employee referrals

Executive search firms

Want ads

Private employment agencies

Unions

College recruiting

Professional associations

Direct applications

Public employment agencies

Effectiveness Of Recruitment Sources

Scale: 1 = not good, 3 = average, 5 = extremely good


Selection choosing from among qualified applicants to hire 1. Application and résumés - provide basic

information to prospective employers tend not to be useful for making final selection decisions

2. Interviews - most popular selection tool questions that are not job related are prohibited unstructured (nondirective) - interviewer asks different

interviewees different questions structured - interviewer asks all applicants the same

questions situational interview - focuses on hypothetical situations behavioral description interview - explores applicant‘s past

behavior


Selection (cont.) 3. Reference checks - reference information is becoming

increasingly difficult to obtain

4. Personality tests -may be difficult to defend in court • nonetheless, regaining popularity

5. Drug testing • Drug-Free Workplace Act of 1988

• genetic testing - identifies the likelihood of contracting a disease

6. Cognitive ability tests - measure intellectual abilities

7. Performance tests - require performing a sample of the job

have been developed for almost every occupation


Selection (cont.) 8. Assessment center - managerial performance

test in which candidates participate in a variety of exercises and situations

• taps a number of critical managerial dimensions • assessors generally are line managers from the

organization

9. Integrity tests - assess a job candidate‘s honesty

polygraphs (lie detector tests) - banned for most employment purposes

paper-and-pencil tests - more recent tests of integrity evidence of validity


Selection (cont.) 10.Reliability - the consistency of test scores over

time and across alternative measurements 11.Validity

criterion-related validity - degree to which a test actually predicts or correlates with job performance reliance on scatterplots to depict the relationship between test

scores and job performance

content validity - degree to which selection tests measure a representative sample of the knowledge, skills, and abilities required for the job more subjective (less statistical) than criterion-related validity not less important than criterion-related validity


Workforce reductions 1. Layoffs (downsizing) - laying off large numbers of

employees as a result of restructuring in the industry victims - lose self-esteem, suffer demoralizing job

searches, and are stigmatized by being out of work

outplacement - process of helping people who have been dismissed to regain employment elsewhere

survivors - suffer disenchantment, distrust, and lethargy a good performance appraisal process helps survivors avoid

feeling that they retained their jobs due to arbitrary decision making


Workforce reductions (cont.) 2. Termination - ―firing‖ an at-will employee

if the employee can quit for any reason, employer should be able to fire for any reason

courts in most states have made exceptions to this doctrine public policy exceptions

progressive discipline - graduated steps used to correct workplace behavior

termination interview - stressful situation for all parties used to discuss the company‘s position with the employee often good to have a third party present conduct the interview in a neutral location

Job Analysis: Systematic Review of Jobs Within a Firm

Job Description

Responsibilities and working conditions, plus tools, materials and equipment to perform the job

Job Specification

Skills, abilities, and credentials needed to perform the job

Processes of Job Analysis

1. Job Analysis: The determination through observation and study, of

pertinent information about a job, including specific tasks and necessary abilities, knowledge, and skills

2. Job Description: The formal, written description of a specific job, such

as the job title, tasks to be performed, physical and mental skills required, duties, and responsibilities

3. Job Specification: The written description of the qualifications necessary

for a specific job, such as education, experience, personal characteristics, and physical characteristics


Recruiting New Employees

Internal The organization‘s current employees

External Advertisements in newspapers and professional

journals Employment agencies Colleges, vocational schools Recommendations from current employees Competing firms Unsolicited applications Online

Did You Know? Several years ago, 21% of companies

said they recruited online. Experts say it

over 80% today.


The Selection Process

JOB

Application

Interview

Testing

Reference Checking


Selecting Human Resources

Application Forms

Tests

Interviews

Validity

The predictive value of a selection technique

Interviewing Tips

Top 10 Interview Questions

Myers-Briggs Type Indicator Categories

Source: Christopher Caggiano, “Psycho Path,” Inc., July 1998, p. 81. Reprinted with permission of

Inc. Magazine, Goldhirsh Group, Inc. Reproduced by permission of the publisher via Copyright

Clearance Center, Inc.

Affirmative Action

Legally mandated plans that try to increase job opportunities for minority groups by:

Analyzing the current pool of workers

Identifying areas where women and minorities are underrepresented

Establishing specific hiring and promotion goals, with target dates, for addressing discrepancy


Developing the Workforce

Training

On-the-job training

Off-the-job training

Vestibule training

Performance Appraisal

Evaluating job performance


Employee orientation Familiarizes the newly hired employees with fellow

workers, company procedures, and the physical properties of the company.

Employee training and development On-the-job

Classroom

Assessing employee performance Performance appraisals

Did You Know?

Internet-based training is expected to grow

to be a $14.5 billion market by 2004.


Developing The Workforce

Training and development Training - teaching lower-level employees how to perform their

present jobs

Developing - teaching managers and professional employees broad skills needed for their present and future jobs

Overview of the training process phase one - needs assessment

identify the jobs, people, and departments which need training

phase two - design the training to meet training goals

phase three - decide what training methods to use

phase four - evaluate the training‘s effectiveness

Developing The Workforce (cont)

Types of training Orientation - training designed to introduce new

employees to the company and familiarize them with policies, procedures, culture, and the like benefits may include lower turnover, increased morale, higher productivity, and lower recruiting and training costs

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 effectively manage a diversified workforce


Performance appraisal the assessment of an employee‘s job performance two basic purposes

administrative - provides information for making salary, promotion, and layoff decisions

developmental - diagnoses training needs and enables career planning

What do you appraise? 1. Trait appraisals - subjective judgments about

employee performance often leads to personal bias may not be suitable for obtaining useful feedback

Performance Appraisal (cont.)

What do you appraise? (cont.) 2. Behavioral appraisals - focus on more observable

aspects of performance helps ensure that all parties understand what the ratings are

really measuring

3. Results appraisals - tend to be more objective focus on production data Management By Objectives (MBO) - subordinate and

supervisor agree on specific performance goals develop a plan for attaining the goals identify criteria for determining whether goals have been reached useful when managers want to empower employees may focus on short-term achievement and ignore long-term goals

Example Of BARS Used For Evaluating Quality

Uses measures of quality and well-defined

processes to achieve project goals.

Defines quality from the client’s perspective.

Look for/identifies ways to continually improve the process.

Clearly communicates quality management to others.

Develops a plan that defines how the team will participate in quality.

Appreciates TQM as an investment.

Has measures of quality that define tolerance levels.

Views quality as costly.

Legislates quality.

Focuses her/his concerns only on outputs and

deliverables, ignoring the underlying process.

Blames others for absence of quality.

Gives lip service only to quality concerns.

7

6

5

4

3

2

1

Outstanding

Average

Poor

Guidelines For Choosing An Appraisal System

Evaluate on

specific

behaviors

Document

the process

carefully

Attend to

legal

considerations

Appraisal

System

Use job analysis

for performance

standards

Develop a formal

appeal process

Use more than

one rater where

possible

Communicate

performance

standards


Who should do the appraisal? 1. managers and supervisors - traditional source of appraisal

information 2. peers and team members - best at identifying leadership

potential and interpersonal skills 3. subordinates - provide feedback to supervisors 4. internal and external customers

internal customers include anyone inside the organization who depends upon an employee‘s work output

5. self-appraisals - increases worker‘s involvement in appraisal

6. 360 degree appraisal - uses multiple sources to gain comprehensive perspective of one‘s performance


How do you give employees feedback? performance feedback is a stressful task for all parties most difficult interviews are with employees who are performing poorly

no ―one best way‖ to perform the appraisal interview

follow-up meetings may be necessary

Employee Turnover

1. Promotion

2. Transfer

3. Separation

a. Resignation

b. Retirement

c. Termination

d. Layoffs


Compensating the Work Force

1. Time Wages

Financial award based on number of hours worked

2. Piece Wages

Financial award based on the output attained by the employee

3. Commission

Payment to an employee of a fixed amount or a percentage of the employee‘s sales


Compensating the Workforce

Salary Financial award calculated on a weekly, monthly, or annual

basis

Bonus An addition to regular compensation for exceptional

performance or in appreciation for good work

Profit sharing Distribution of percentage of company profit to employees;

sometimes distribution is in the form of company stock (ESOP Employee Stock Ownership Program)


Hourly Wages: U.S. vs. India

U.S. Occupation India

$12.57 Telephone Operator Under $1.00

$13.17 Medical (Health Record) Technologists/Transcriptionists

$1.50-2.00

$15.17 Payroll Clerk $1.50-2.00

$17.86 Legal Assistant/Paralegal $6.00-8.00

$23.35 Accountant $6.00-15.00

$33.00-35.00 Financial Researcher/Analyst $6.00-15.00

Matthew Grimm (2004) “Profits vs. Jobs”. American Demographics, June 1,

www.demographics.com.microsites.magazineartcle.asp? …accessed August 2, 2004.

Retention Methods

Source: Kemba J. Dunham, “The Jungle,” The Wall Street Journal, May 15, 2001, p. B12. Copyright ©

2001 by Dow Jones & Co., Inc. Reprinted with permission of Dow Jones & Co., Inc. via Copyright

Clearance Center. 60% Flexible hours and schedules 53% Mentoring programs 25% Profit-sharing

22%

Benefits

Nonfinancial forms of compensation provided to employees such as:

Pension plans for retirement

Health, disability, and life insurance

Holidays and paid days off for vacation or illness

Credit union membership

Health programs

Child care

Elder care

Assistance with adoption


Designing Reward Systems

Pay decisions effective reward systems attract, motivate, and retain people

three types of decisions are crucial pay level - choice of whether to be a high-, average-, or low-paying company

pay structure - choice of how to price different jobs within the organization

jobs similar in worth are grouped into families

individual pay decisions - concern different pay rates for jobs of similar worth within the same family

decisions based on: seniority performance

Factors Affecting The Wage Mix

Wage

Mix

Internal factors External factors

Compensation policy

of organization

Employer’s ability to pay

Employee’s

relative worth

Worth of job

Conditions of the

labor market

Area wage rates

Cost of living

Collective bargaining

Legal requirements

Pay Structure

Range

150 500 450 400 350 300 250 200

Job worth (total points)

Range overlap

Range steps

Midpoint 4.50

8.00

7.50

7.00

6.50

6.00

5.50

5.00

Wage

rate

s

Maximum rate

Wage curve

Minimum rate

Designing Reward Systems (cont.)

Incentive systems and variable pay individual incentive plans - most common type

consists of an objective standard against which a worker‘s performance is compared

group incentive plans gainsharing - concentrate on saving money

profit-sharing - incentives based on unit, department, plant, or company productivity

each group has a production standard

pay is based on the amount of production over the standard

merit pay system - used in the absence of an objective standard

bonuses based on supervisor‘s judgment of employee‘s merit


Employee benefits benefits required by law

workers’ compensation - provides financial support to employees suffering from a work-related injury or illness

social security - provides financial support to retirees also covers disabled employees

unemployment insurance - provides financial support to employees who are laid off for reasons beyond their control

benefits not required by law cafeteria benefit plan - employees choose from a menu of options to create a benefit package tailored to their needs

flexible benefit plan - employees are given credits to spend on benefits that fit their unique needs

Increasing Employee Satisfaction

Source: “Hewitt Study Shows Work/Life Benefits Continue to Grow Despite Slowing Economy,” Hewitt

Associates LLC press release, April 23, 2001.

Benefits: % Offering

Child care assistance 91

Elder care programs 49

Flexible schedules 73

Adoption benefits 32

Personal/professional growth 78

Financial security programs 41

Group/discounted purchases 39

On-site personal services 57

Casual dress 66

Managing Unionized Employees

Labor Unions:

Employee organizations formed to deal with employers to achieve better pay, hours, and working conditions


Managing Unionized Labor

Collective Bargaining:

The negotiation process through which management and unions reach agreement about compensation, working hours, and working conditions for a bargaining unit

Labor Contract:

The formal, written document that spells out the relationship between the union and management for a specified period of time – usually two or three years


Resolving Disputes

Labor‘s Tactics

Strikes

Picketing

Boycott

Management‘s Tactics

Lockout

Strikebreakers/hiring replacements


Outside Resolution

Conciliation The conciliator‘s goal is to get both parties to

focus on the issues and to prevent negotiations from breaking down

Mediation The mediator‘s role is to suggest or propose a

solution to the problem

Arbitration The arbitrator‘s solution is legally binding and

enforceable


Determinants Of Union Voting Behavior

Union image •Corrupt?

•Too powerful?

•Unnecessary given

•current legislation

Job attitudes •Job dissatisfaction

•Unfair supervision

•Poor communication

Union vote:

Yes

or

No

Beliefs in union power

•Wages

•Power

•Working conditions

Economic needs •Wages

•Hours

Labor Relations (cont.)

Collective bargaining to reach an agreement, workers may conduct an economic strike

arbitration - use of a neutral third party to resolve a labor dispute used to deal with disagreements about interpretation of the contract

avoids wildcat strikes in which workers walk off the job in violation of the contract

union shop - union security clause specifying that workers must join the union after a set period of time on the job

right to work - state legislation that prohibits the negotiation of union shop clauses

Workforce Diversity

Understanding diversity means recognizing and accepting differences as well as valuing the unique perspectives such differences can bring to the workplace


Characteristics of Diversity

Source: Marilyn Loden and Judy B. Rosener, Workforce America! Managing Employee Diversity as a Vital Resource,

1991, p. 20. Used with permission. Copyright © 1991 Richard D. Irwin, a Times Mirror Higher Education Group, Inc.,

company.

The Benefits of Workforce Diversity

1. More productive use of a company‘s human resources

2. Reduced conflict among employees of different backgrounds as they learn to respect each other‘s differences

3. More productive working relationships 4. Increased commitment to and sharing of

organizational goals among diverse employees at all organizational levels

5. Increased innovation and creativity 6. Increased ability to serve the needs of an

increasingly diverse customer base


High Low Test score High

Low

Test score

High

Low

Per

form

an

ce

High

Low

Per

form

an

ce

Coefficient of correlation = .00 Coefficient of correlation = .75

Correlation Scatterplots

100

80

60

40

20

0

Perc

en

tage u

sin

g

Overall 10,000

or more

2,500-9,999 1,000-2,499 500-999 100-499

Number of employees

Classroom programs -

live

Videotapes

Videoconferencing

(individual desktops)

Outdoor experiential

programs

Satellite/

Broadcast TV

Videoconferencing

(to group)

Games/Simulations

(computer-based)

Internet/WWW

Selected Instructional Methods And Media

Incentive Programs

Money linked specifically to high performance

Bonuses

Incentives

Compensation and Benefits

Wages

Money paid for time worked

Salary

Money paid for accomplishing a specific job

Benefits: Compensation Other Than Wages and Salaries

Optional Benefits

Retirement plans

Health, life, and disability insurance

Vacations and holidays

Counseling services

Mandatory Benefits

Social security

Workers’ compensation

Equal Opportunity: Unfair Discrimination Is Illegal

Equal Opportunity Laws

Protect workers from discrimination based on prejudice

Protected Class

People with common characteristics as indicated by law

EEOC

Federal agency that enforces discrimination-related laws

Affirmative Action

Plan to hire and develop members of protected classes

Contemporary Legal Issues in Human Resource Management

Employee safety and health

AIDs in the workplace

Sexual harassment

Quid pro quo

Hostile work environment

Employment-at-will

Managing Knowledge Workers

Knowledge workers add value because of what they know.

Computer Scientists

Physical Scientists

Engineers

Hiring and retaining knowledge workers is a

critical HR challenge

Developing a Management Strategy

Assessing True Costs

Understanding Pros and Cons

Contingent Workers: A Rapidly Growing Trend

Management challenges: Careful Planning

Labor Relations

Managing unionized employees

Managing Organized Labor

Labor Union

People working together to achieve shared job-related goals

Trends in Organized Labor

Union-Management

Relations Bargaining

Perspectives

Future Outlook

Contract Issues

Compensation

Benefits

Job Security

Other Union Issues

Management Rights

When Bargaining Fails…

Union Tactics:

Strike

Picketing

Boycott

Work slowdown

Management Tactics:

Lockouts

Strikebreakers

Mediation

Voluntary Arbitration

Compulsory Arbitration

Resolving Disputes

Dua Thank you

Rujukan lain

Chapter Twelve

Managing Human Resources

Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

The Nature of Human Resources Management (HRM)

HRM:

All activities involved in determining an organization‘s human resource needs, as well as acquiring, training, and compensating people to fill those needs


Planning for Human Resources Needs

Typical HR Issues:

How many employees?

What skills are needed to satisfy plans?

Availability of people in the workforce?

What qualifications must employees have?

Cost of staffing?


Processes of Job Analysis

Job Analysis: The determination through observation and study,

of pertinent information about a job, including specific tasks and necessary abilities, knowledge, and skills

Job Description: The formal, written description of a specific job,

such as the job title, tasks to be performed, physical and mental skills required, duties, and responsibilities

Job Specification: The written description of the qualifications

necessary for a specific job, such as education, experience, personal characteristics, and physical characteristics


Recruiting New Employees

Internal The organization‘s current employees

External Advertisements in newspapers and professional

journals Employment agencies Colleges, vocational schools Recommendations from current employees Competing firms Unsolicited applications Online

Did You Know? Several years ago, 21% of companies

said they recruited online. Experts say

it over 80% today.


The Selection Process

JOB

Application

Interview

Testing

Reference Checking


Interviewing Tips

Top 10 Interview Questions

Myers-Briggs Type Indicator Categories

Source: Christopher Caggiano, “Psycho Path,” Inc., July 1998, p. 81. Reprinted with permission of

Inc. Magazine, Goldhirsh Group, Inc. Reproduced by permission of the publisher via Copyright

Clearance Center, Inc.

Legal Issues in Recruiting and Selecting New Employees

Fair Labor Standards Act (1938) Sets minimum wages and overtime rates (for any time over 40

hours per week).

Equal Pay Act (1963) Requires that men and women who do equal work be paid

equally.

Title VII of the Civil rights Act (1964) Created the Equal Employment Opportunity Commission

Mandates affirmative action programs

Outlaws discrimination on the basis of sex, race, color, or national origin Did You Know?

40+ years after the Civil Rights Act was passed,

corporate officers are only 8.2% African

American,5% Hispanic, and 12.5% women.


Legislation Regulating Hiring and Compensation Practices

Age Discrimination in Employment Act (1967)

Outlaws employment practices that discriminate on the basis of age

Americans with Disabilities Act

Prevents discrimination against disabled persons

Source: Annie Finnigan, “Different Strokes,” Working Woman, April 2001, p. 42.

Affirmative Action

Legally mandated plans that try to increase job opportunities for minority groups by:

Analyzing the current pool of workers

Identifying areas where women and minorities are underrepresented

Establishing specific hiring and promotion goals, with target dates, for addressing discrepancy


Developing the Workforce Employee orientation

Familiarizes the newly hired employees with fellow workers, company procedures, and the physical properties of the company.

Employee training and development On-the-job

Classroom

Assessing employee performance Performance appraisals

Did You Know?

Internet-based training is expected to grow

to be a $14.5 billion market by 2004.


Employee Turnover

Promotion

Transfer

Separation

Resignation

Retirement

Termination

Layoffs


Compensating the Work Force

Time Wages Financial award based on number of hours

worked

Piece Wages Financial award based on the output

attained by the employee

Commission Payment to an employee of a fixed amount

or a percentage of the employee‘s sales


Compensating the Workforce

Salary

Financial award calculated on a weekly, monthly, or annual basis

Bonus

An addition to regular compensation for exceptional performance or in appreciation for good work

Profit sharing

Distribution of percentage of company profit to employees; sometimes distribution is in the form of company stock


Hourly Wages: U.S. vs. India U.S. Occupation India

$12.57 Telephone Operator Under $1.00

$13.17 Medical (Health Record) Technologists/Transcriptionists

$1.50-2.00

$15.17 Payroll Clerk $1.50-2.00

$17.86 Legal Assistant/Paralegal $6.00-8.00

$23.35 Accountant $6.00-15.00

$33.00-35.00 Financial Researcher/Analyst $6.00-15.00

Matthew Grimm (2004) “Profits vs. Jobs”. American Demographics, June 1,

www.demographics.com.microsites.magazineartcle.asp? …accessed August 2, 2004.

Retention Methods

Source: Kemba J. Dunham, “The Jungle,” The Wall Street Journal, May 15, 2001, p. B12. Copyright ©

2001 by Dow Jones & Co., Inc. Reprinted with permission of Dow Jones & Co., Inc. via Copyright

Clearance Center. 60% Flexible hours and schedules 53% Mentoring programs 25% Profit-sharing

22%

Benefits Nonfinancial forms of compensation

provided to employees such as:

Pension plans for retirement

Health, disability, and life insurance

Holidays and paid days off for vacation or illness

Credit union membership

Health programs

Child care

Elder care

Assistance with adoption


Increasing Employee Satisfaction

Source: “Hewitt Study Shows Work/Life Benefits Continue to Grow Despite Slowing Economy,” Hewitt

Associates LLC press release, April 23, 2001.

Benefits: % Offering

Child care assistance 91

Elder care programs 49

Flexible schedules 73

Adoption benefits 32

Personal/professional growth 78

Financial security programs 41

Group/discounted purchases 39

On-site personal services 57

Casual dress 66

Managing Unionized Employees

Labor Unions:

Employee organizations formed to deal with employers to achieve better pay, hours, and working conditions


Managing Unionized Labor

Collective Bargaining: The negotiation process through which

management and unions reach agreement about compensation, working hours, and working conditions for a bargaining unit

Labor Contract: The formal, written document that spells

out the relationship between the union and management for a specified period of time – usually two or three years


Resolving Disputes

Labor‘s Tactics

Strikes

Picketing

Boycott

Management‘s Tactics

Lockout

Strikebreakers/hiring replacements


Outside Resolution

Conciliation

The conciliator‘s goal is to get both parties to focus on the issues and to prevent negotiations from breaking down

Mediation

The mediator‘s role is to suggest or propose a solution to the problem

Arbitration

The arbitrator‘s solution is legally binding and enforceable


Workforce Diversity

Understanding diversity means recognizing and accepting differences as well as valuing the unique perspectives such differences can bring to the workplace


Characteristics of Diversity

Source: Marilyn Loden and Judy B. Rosener, Workforce America! Managing Employee Diversity as a Vital Resource,

1991, p. 20. Used with permission. Copyright © 1991 Richard D. Irwin, a Times Mirror Higher Education Group, Inc.,

company.

The Benefits of Workforce Diversity

1. More productive use of a company‘s human resources

2. Reduced conflict among employees of different backgrounds as they learn to respect each other‘s differences

3. More productive working relationships

4. Increased commitment to and sharing of organizational goals among diverse employees at all organizational levels

5. Increased innovation and creativity

6. Increased ability to serve the needs of an increasingly diverse customer base


Bateman Snell

Management

5th Edition

Competing in the New Era

Part Three Chapter 10 - Human Resources Management

Chapter Outline

Strategic Human Resources Management

Staffing the Organization



Designing Reward Systems

Labor Relations

Learning Objectives

After studying Chapter 10, you will know:

how companies use human resources management to gain competitive advantage

why companies recruit both internally and externally for new hires

the various methods available for selecting new employees

why companies spend so much on training and development

how to determine who should appraise an employee‘s performance

how to analyze the fundamental aspects of a reward system

Learning Objectives

After studying Chapter 10, you will know:

how unions influence human resources management

how the legal system influences human resources management

Strategic Human Resources Management (HRM)

Human Resources Management (HRM)

formal systems for the management of people within the organization

human resources have a strategic impact

create value

are rare

are difficult to imitate

are organized

human capital - the knowledge, skills, and abilities of employees that have economic value

the emphasis on different HR activities depends on whether the organization is growing, declining, or standing skill

Strategic HRM (cont.) The HR planning process

a three-stage activity with a strategic purpose derived from the organization‘s plans

planning - determine the organization‘s plans

programming - create specific HR activities

evaluating - determine whether HR programs are producing the results needed to contribute to the organization

Demand forecasts - determine how many and what type of people are needed

derived from organizational plans

based on current sales and projected future sales growth

determine the demand for different types of workers

An Overview Of The HR Planning Process

•Labor markets

•Technology

•Legislation

•Competition

•Economy

•Demand forecast

•Internal labor supply

•External labor supply

•Job analysis

HRM

environmental

scanning

Human

resources

planning

Organizational

strategic

planning

Planning

•Employee recruitment

•Employee selection

•Outplacement

•Training and

development

•Performance appraisal

•Reward systems

•Labor relations

Human

resources

activities

Programming

•Productivity

•Quality

•Innovation

•Satisfaction

•Turnover

•Absenteeism

•Health

Results

Evaluation



Labor supply forecasts - estimates of how many and what types of employees the organization actually will have

evaluate current employees and the available external supply of workers

forecasts of a diverse workforce have become fact

Reconciling supply and demand

labor deficit - hire new employees, promote current employees to new positions, or train other employees to move in from other areas in the organization

labor surplus - lay off employees or transfer them to other areas



Job analysis - a tool for determining what is done on a given job and what should be done on that job

job description - tells about the job itself

job specification - describes the employee characteristics needed to perform the job

provides the information that virtually every HR activity requires

Staffing The Organization

Recruitment

the development of a pool of applicants for jobs in the organization

Internal recruiting

advantages - employers know their employees

employees know their organization

provides opportunity to move up within the organization

drawbacks - yields limited applicant pool

can inhibit a company that wants to change

job posting - a mechanism for advertising open positions


Recruitment (cont.)

External recruiting - brings new blood into the organization

newspaper advertisements - popular recruiting source that is inexpensive and generates a large number of responses

employee referrals - some companies offer rewards for referrals

campus recruiting - large pool of people

applicants have up-to-date training

source of innovative ideas

Internet - becoming more common to advertise job openings and to gather applicant information

3.84

3.81

3.71

3.08

3.05

2.86

2.78

1.92

1.64

Employee referrals

Executive search firms

Want ads

Private employment agencies

Unions

College recruiting

Professional associations

Direct applications

Public employment agencies

Effectiveness Of Recruitment Sources

Scale: 1 = not good, 3 = average, 5 = extremely good


Selection

choosing from among qualified applicants to hire

Application and résumés - provide basic information to prospective employers

tend not to be useful for making final selection decisions

Interviews - most popular selection tool

questions that are not job related are prohibited

unstructured (nondirective) - interviewer asks different interviewees different questions

structured - interviewer asks all applicants the same questions

situational interview - focuses on hypothetical situations

behavioral description interview - explores applicant‘s past behavior


Selection (cont.)

Reference checks - reference information is becoming increasingly difficult to obtain

Personality tests -may be difficult to defend in court

nonetheless, regaining popularity

Drug testing

Drug-Free Workplace Act of 1988

genetic testing - identifies the likelihood of contracting a disease

Cognitive ability tests - measure intellectual abilities

Performance tests - require performing a sample of the job

have been developed for almost every occupation


Selection (cont.)

Assessment center - managerial performance test in which candidates participate in a variety of exercises and situations

taps a number of critical managerial dimensions

assessors generally are line managers from the organization

Integrity tests - assess a job candidate‘s honesty

polygraphs (lie detector tests) - banned for most employment purposes

paper-and-pencil tests - more recent tests of integrity

evidence of validity


Selection (cont.)

Reliability - the consistency of test scores over time and across alternative measurements

Validity

criterion-related validity - degree to which a test actually predicts or correlates with job performance

reliance on scatterplots to depict the relationship between test scores and job performance

content validity - degree to which selection tests measure a representative sample of the knowledge, skills, and abilities required for the job

more subjective (less statistical) than criterion-related validity

not less important than criterion-related validity

High Low Test score High

Low

Test score

High

Low

Per

form

an

ce

High

Low

Per

form

an

ce

Coefficient of correlation = .00 Coefficient of correlation = .75

Correlation Scatterplots


Workforce reductions

Layoffs(downsizing) - laying off large numbers of employees as a result of restructuring in the industry

victims - lose self-esteem, suffer demoralizing job searches, and are stigmatized by being out of work

outplacement - process of helping people who have been dismissed to regain employment elsewhere

survivors - suffer disenchantment, distrust, and lethargy

a good performance appraisal process helps survivors avoid feeling that they retained their jobs due to arbitrary decision making


Workforce reductions (cont.)

Termination - ―firing‖ an at-will employee

if the employee can quit for any reason, employer should be able to fire for any reason

courts in most states have made exceptions to this doctrine

public policy exceptions

progressive discipline - graduated steps used to correct workplace behavior

termination interview - stressful situation for all parties

used to discuss the company‘s position with the employee

often good to have a third party present

conduct the interview in a neutral location


Legal issues and equal employment opportunity

Civil Rights Act of 1964

Title VII forbids discrimination in employment decisions based on race, sex, color, national origin, and religion

created the Equal Employment Opportunity Commission (EEOC) - enforces Title VII

Civil Rights Act of 1991 - provides for punitive damages

Uniform Guidelines on Employee Selection Procedures - describe the development of employment practices that comply with the law

adverse impact - an apparently neutral employment practice adversely affects a protected class

Developing The Workforce Training and development

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

Developing - teaching managers and professional employees broad skills needed for their present and future jobs

Overview of the training process

phase one - needs assessment

identify the jobs, people, and departments which need training

phase two - design the training to meet training goals

phase three - decide what training methods to use

phase four - evaluate the training‘s effectiveness

Developing The Workforce (cont)

Types of training

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

benefits may include lower turnover, increased morale, higher productivity, and lower recruiting and training costs

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 effectively manage a diversified workforce

100

80

60

40

20

0

Perc

en

tage u

sin

g

Overall 10,000

or more

2,500-9,999 1,000-2,499 500-999 100-499

Number of employees

Classroom programs -

live

Videotapes

Videoconferencing

(individual desktops)

Outdoor experiential

programs

Satellite/

Broadcast TV

Videoconferencing

(to group)

Games/Simulations

(computer-based)

Internet/WWW

Selected Instructional Methods And Media

Performance Appraisal Performance appraisal

the assessment of an employee‘s job performance

two basic purposes

administrative - provides information for making salary, promotion, and layoff decisions

developmental - diagnoses training needs and enables career planning

What do you appraise?

Trait appraisals - subjective judgments about employee performance

often leads to personal bias

may not be suitable for obtaining useful feedback

Performance Appraisal (cont.) What do you appraise? (cont.)

Behavioral appraisals - focus on more observable aspects of performance

helps ensure that all parties understand what the ratings are really measuring

Results appraisals - tend to be more objective

focus on production data

Management By Objectives (MBO) - subordinate and supervisor agree on specific performance goals

develop a plan for attaining the goals

identify criteria for determining whether goals have been reached

useful when managers want to empower employees

may focus on short-term achievement and ignore long-term goals

Example Of BARS Used For Evaluating Quality

Uses measures of quality and well-defined

processes to achieve project goals.

Defines quality from the client’s perspective.

Look for/identifies ways to continually improve the process.

Clearly communicates quality management to others.

Develops a plan that defines how the team will participate in quality.

Appreciates TQM as an investment.

Has measures of quality that define tolerance levels.

Views quality as costly.

Legislates quality.

Focuses her/his concerns only on outputs and

deliverables, ignoring the underlying process.

Blames others for absence of quality.

Gives lip service only to quality concerns.

7

6

5

4

3

2

1

Outstanding

Average

Poor

Guidelines For Choosing An Appraisal System

Evaluate on

specific

behaviors

Document

the process

carefully

Attend to

legal

considerations

Appraisal

System

Use job analysis

for performance

standards

Develop a formal

appeal process

Use more than

one rater where

possible

Communicate

performance

standards

Performance Appraisal (cont.) Who should do the appraisal?

managers and supervisors - traditional source of appraisal information

peers and team members - best at identifying leadership potential and interpersonal skills

subordinates - provide feedback to supervisors

internal and external customers

internal customers include anyone inside the organization who depends upon an employee‘s work output

self-appraisals - increases worker‘s involvement in appraisal

360 degree appraisal - uses multiple sources to gain comprehensive perspective of one‘s performance


How do you give employees feedback?

performance feedback is a stressful task for all parties

most difficult interviews are with employees who are performing poorly

no ―one best way‖ to perform the appraisal interview

follow-up meetings may be necessary

Designing Reward Systems Pay decisions

effective reward systems attract, motivate, and retain people

three types of decisions are crucial

pay level - choice of whether to be a high-, average-, or low-paying company

pay structure - choice of how to price different jobs within the organization

jobs similar in worth are grouped into families

individual pay decisions - concern different pay rates for jobs of similar worth within the same family

decisions based on:

seniority

performance

Factors Affecting The Wage Mix

Wage

Mix

Internal factors External factors

Compensation policy

of organization

Employer’s ability to pay

Employee’s

relative worth

Worth of job

Conditions of the

labor market

Area wage rates

Cost of living

Collective bargaining

Legal requirements

Pay Structure

Range

150 500 450 400 350 300 250 200

Job worth (total points)

Range overlap

Range steps

Midpoint 4.50

8.00

7.50

7.00

6.50

6.00

5.50

5.00

Wage

rate

s

Maximum rate

Wage curve

Minimum rate


Incentive systems and variable pay

individual incentive plans - most common type

consists of an objective standard against which a worker‘s performance is compared

group incentive plans

gainsharing - concentrate on saving money

profit-sharing - incentives based on unit, department, plant, or company productivity

each group has a production standard

pay is based on the amount of production over the standard

merit pay system - used in the absence of an objective standard

bonuses based on supervisor‘s judgment of employee‘s merit


Employee benefits

benefits required by law

workers’ compensation - provides financial support to employees suffering from a work-related injury or illness

social security - provides financial support to retirees

also covers disabled employees

unemployment insurance - provides financial support to employees who are laid off for reasons beyond their control

benefits not required by law

cafeteria benefit plan - employees choose from a menu of options to create a benefit package tailored to their needs

flexible benefit plan - employees are given credits to spend on benefits that fit their unique needs


Legal issues in compensation and benefits

Fair Labor Standards Act (FLSA) of 1938 - set minimum wages, maximum hours, child labor standards, and overtime pay provisions

nonexempt employees - entitled to premium pay for overtime

exempt employees - not subject to overtime or minimum wage provisions

Equal Pay Act (EPA) of 1963 - prohibits unequal pay for men and women who perform equal work

exceptions permitted where pay differential is based on seniority, a merit system, or an incentive system

comparable worth - principle of equal pay for different jobs of equal worth


Health and safety

Occupational Safety and Health Act (OSHA) of 1970 - requires employers to pursue workplace safety

employers must maintain records of injuries and deaths caused by workplace accidents

employers must submit to work-site inspections

Labor Relations

Labor relations

system of relations between workers and management

Labor laws

National Labor Relations Act (NLRA) - Wagner Act declared labor organizations legal

established five unfair employer labor practices

created the National Labor Relations Board

conducts certification elections

hears unfair labor practices complaints

issues injunctions against offending employers

greatly assisted the growth of unions

Labor laws (cont.)

Labor-Management Relations Act - Taft-Hartley Act intended to restore the balance of power between unions and management

protected employers‘ free-speech rights

defined unfair labor practices by unions

permitted workers to decertify unions

Labor-Management Reporting and Disclosure Act - Landrum-Griffin Act designed to curb abuses by union leadership and rid unions of corruption

declared a bill of rights for union members


Unionization

authorization cards - collected by union locals to determine whether workers want to be represented for the purpose of collective bargaining

NLRB will conduct certification elections if union has collected cards from 30 percent of the bargaining unit

simple majority of those voting required to determine a winner

if union wins, it is certified as the bargaining unit representative

union and management obliged to negotiate in good faith to obtain a collective bargain agreement


Determinants Of Union Voting Behavior

Union image •Corrupt?

•Too powerful?

•Unnecessary given

•current legislation

Job attitudes •Job dissatisfaction

•Unfair supervision

•Poor communication

Union vote:

Yes

or

No

Beliefs in union power

•Wages

•Power

•Working conditions

Economic needs •Wages

•Hours

Labor Relations (cont.) Collective bargaining

to reach an agreement, workers may conduct an economic strike

arbitration - use of a neutral third party to resolve a labor dispute

used to deal with disagreements about interpretation of the contract

avoids wildcat strikes in which workers walk off the job in violation of the contract

union shop - union security clause specifying that workers must join the union after a set period of time on the job

right to work - state legislation that prohibits the negotiation of union shop clauses

Chapter 8

Managing Human Resources and Labor Relations

―Whenever you are asked if you can do a job, tell 'em, ‗Certainly, I can!‘ Then get busy and find out how to do it.‖ —Theodore Roosevelt

Key Topics

Human resource management

Staffing, developing, and evaluating human resources

Compensation packages

Legal issues in human resources

Changes in the contemporary workplace

Unionization and collective bargaining

Human Resource Management

Attracting, developing, and maintaining an effective workforce—A critical, bottom-line function!

Job Analysis: Systematic Review of Jobs Within a Firm

Job Description

Responsibilities and working conditions, plus tools, materials and equipment to perform the job

Job Specification

Skills, abilities, and credentials needed to perform

the job

Forecasting Labor Supply

Internal Forecasting:

Replacement Charts

Skills Inventories

External Forecasting:

State Employment Commissions

Government Reports

College Information

Managing a Projected Shortfall

Hire new employees

Consider hiring temporary workers

Retrain and transfer current employees into understaffed areas

Convince older workers not to retire The creative solution:

Develop and install productivity

enhancing systems

Recruiting: Attracting Qualified Candidates to Apply for a Job

Internal Recruiting

Considering current employees for new positions

External Recruiting

Attracting outside candidates to apply for jobs

What are the strengths and

weaknesses of each

approach?

Selecting Human Resources

Application Forms

Tests

Interviews

Validity

The predictive value of a selection technique


Training

On-the-job training

Off-the-job training

Vestibule training


Evaluating job performance