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Chapter 9 - Human Resource

Management
Getting the Right People for Managerial Success

Human resource (HR) management - planning for,


attracting, developing, and retaining an effective
workforce.
Consider how HR fits into overall company
strategy, how to evaluate current and future
employee needs, and how to recruit and select
qualified people.
Importance of orientation, training, and
development.
How to assess employee performance and give
feedback.
Human resource (HR) management consists of the
activities managers perform to plan for, attract, develop,
and retain an effective workforce.

HR as part of strategic planning


o HR decisions must be consistent with the
firms strategic mission
Who should be recruited?
How should they be trained?
What's the best way to evaluate and
reward their performance?

Human capital is the economic or productive potential of


employee knowledge and actions.

A present or future employee with the right


combination of knowledge, skills, and motivation to
excel represents human capital with the potential to
give the organization a competitive advantage

Social capital is the economic or productive potential of strong, trusting, and


cooperative relationships.

Strategic HR Planning
Strategic human resource planning consists of developing a systematic,
comprehensive strategy for
(a) understanding current employee needs and
(b) predicting future employee needs.

Understanding current employee needs


To plan for the future, you must understand the present-what today's staffing
picture looks like. This requires that you do a job analysis first and from that
write a job description and a job specification.

Job analysis.
o The purpose of job analysis is to determine, by observation and
analysis, the basic elements of a job.
o Specialists who do this interview job occupants about what they do,
observe the flow of work, and learn how results are accomplished.
Job description and job specification.
o Once the fundamentals of a job are understood, then you can write
a
job description, which summarizes what the holder of the
job does and how and why he or she does it.
o Next you can write a
job specification, which describes the minimum
qualifications a person must have to perform the job
successfully.

Predicting Future Employee Needs - means you have to become knowledgeable


about the staffing the organization might need and the likely sources for that
staffing.
The staffing the organization might need.

You could assume your organization won't change much.


o fairly easily predict that jobs will periodically become unoccupied
(because of retirement, resignations, and so on) and that you'll
need to pay the same salaries and meet the same criteria about
minority hiring to fill them.
Better, however, to assume the organization will change.
o need to understand the organization's vision and strategic plan so
that the proper people can be hired to meet the future strategies
and work.

The likely sources for staffing.

You can recruit employees from either inside or outside the organization.

In looking at those inside,


you need to consider which employees are
motivated,
trainable, and
promotable and
what kind of training your organization might have to
do.
o A device for organizing this kind of information is
a human resource inventory, a report listing
your organization's employees by name,
education, training, languages, and other
important information.
In looking outside,
you need to consider the
availability of talent in your industry's and
geographical area's labor pool, the
training of people graduating from various schools, and
such
factors as what kind of people are moving into your
area.

Four areas of human resource law any manager needs to be aware of are
1. labor relations,
a. National Labor Relations Board
i. Enforces procedures whereby employees may vote to have a
union and for collective bargaining.
ii. Collective bargaining consists of negotiations between
management and employees about disputes over
1. compensation,
2. benefits,
3. working conditions, and
4. job security.
2. compensation and benefits,
a. Fair Labor Standards Act of 1938
i. Established minimum living standards for workers engaged in
interstate commerce,
1. including provision of a
a. federal minimum wage and a
b. maximum workweek, along with
c. banning products from child labor.
2. exempt from overtime rules:
a. Salaried executive,
b. administrative, and
c. professional employees.
3. health and safety, and
a. Beginning with the Occupational Safety and Health Act (OSHA) of
1970, a body of law has grown that requires organizations to
provide employees with non-hazardous working conditions.

i. 2010 health care reform legislation requires employees with


more than 50 employees to provide health insurance.
4. equal employment opportunity.
a. The effort to reduce discrimination in employment based on racial,
ethnic, and religious bigotry and gender stereotypes - Title VII of
the Civil Rights Act of 1964.
b. This established the Equal Employment Opportunity (EEO)
Commission, whose job it is to enforce antidiscrimination and
other employment-related laws.
i. Title VII applies to all organizations or their agents engaged in
an industry affecting interstate commerce that employs 15 or
more employees.
1. Contractors who wish to do business with the U.S.
government must be in compliance with various
executive orders issued by the president covering
antidiscrimination. Later laws prevented discrimination
against older workers and people with physical and
mental disabilities.
c. Discrimination
i. Discrimination occurs when people are
1. hired or promoted-or denied hiring or promotion2. for reasons not relevant to the job,
a. such as skin colour or eye shape, gender,
religion, national origin, etc.
d. Affirmative Action
i. Affirmative action focuses on achieving equality of
opportunity within an organization
1. It tries to make up for past discrimination in
employment by actively finding, hiring, and
developing the talents of people from groups
traditionally discriminated against
a. Affirmative action plans are more successful
when employees view them as being fair and
equitable and when whites are not prejudiced
against people of colour
b. women and minorities hired on the basis of
affirmative action felt stigmatized as unqualified
and incompetent and experienced lower job
satisfaction and more stress than employees
supposedly selected on the basis of merit.
e. Sexual Harassment
i. Sexual harassment consists of unwanted sexual attention
that creates an adverse work environment.
1. Quid pro quo - tangible economic injury
a. In the quid pro quo type, the person to whom
the unwanted sexual attention is directed is put
in the position of jeopardizing being hired for a
job or obtaining job benefits or opportunities
unless he or she implicitly or explicitly agrees
2. Hostile environment - offensive work environment

a. In the hostile environment type, the person


being sexually harassed doesn't risk economic
harm but experiences an offensive or
intimidating work environment.
i. Sexual innuendo, wisecracks, taunts

Recruitment: How to Attract Qualified Applicants


Recruiting is the process of locating and attracting qualified applicants for jobs
open in the organization

Internal Recruiting: Hiring from the Inside


o Internal recruiting means making people already employed by the
organization aware of job openings.
Most vacant positions in organizations are filled through
internal recruitment, mainly through job posting, placing
information about job vacancies and qualifications on bulletin
boards, in newsletters, and on the organization's intranet.
o Companies looking to make strategic changes do better hiring CEOs
from within the ranks rather than from outside.
External Recruiting: Hiring from the Outside
o External recruiting means attracting job applicants from outside the
organization.
Notices of job vacancies are placed through newspapers,
employment agencies, executive recruiting firms, union hiring
halls, college job-placement offices, technical training
schools, and word of mouth through professional
associations.
o Many organizations-and not just high-technology companies-are
advertising job openings on the Internet.

Which External Recruiting Methods Work Best?


Most effective sources are employee referrals, because to protect their
reputation, employees are careful about whom they recommend, and know the
qualifications of both the job and the prospective employee.

Often an organization will put on


its best face to try to attract the
best outside candidates, and then
wonder why the new hires leave
when the job doesn't turn out to
be as rosy as promised

A better approach is to present


what's known as a realistic job
preview, which gives a candidate
a picture of both positive and
negative features of the job and
the organization before he or she
is hired.

The recruitment process turns up a handful of job applicants and now you turn to
the selection process, the screening of job applicants to hire the best
candidate.
Selection
Tools
Backgroun
d
Informatio
n:
Application
Forms,
Resumes, &
Reference
Checks

Description

However, resumes may be fake, puffery


Applicants lie about their education
Increasing use of video resumes, which could expose the
organization to a possible failure-to-hire claim on grounds of
discrimination if the applicant belongs to a "protected class"-a
minority individual or older person, for example
Many employers don't give honest assessments of former
employees, for two reasons:
o They fear that if they say anything negative, they can be
sued by the former employee.

They fear if they say anything positive, and the job candidate
doesn't pan out, they can be sued by the new employer
Unstructured interview.
o Like an ordinary conversation, an unstructured interview
involves asking probing questions to find out what the
applicant is like.
has been criticized as being overly subjective and apt
to be influenced by the biases of the interviewer.
susceptible to legal attack, because some questions
may infringe on non-job-related matters such as
privacy, diversity, or disability
o compared with the structured interview method, the
unstructured interview has been found to provide a more
accurate assessment of an applicant's job-related personality
traits
Structured interview
o type 1-the situational interview.
The structured interview involves asking each
applicant the same questions and comparing their
responses to a standardized set of answers.
In one type of structured interview, the situational
interview, the interviewer focuses on hypothetical
situations.
Example: "What would you do if you saw two of
your people arguing loudly in the work area?"
The idea here is to find out if the applicant can
handle difficult situations that may arise on the
job.
o type 2-the behavioral-description interview
The interviewer explores what applicants have
actually done in the past
Question is designed to assess the applicant's ability
to influence others.
Example: "What was the best idea you ever sold
to a supervisor, teacher, peer, or subordinate?"
Employment tests are legally considered to consist of any
procedure used in the employment selection decision process
o Ability tests
Ability tests measure physical abilities, strength and
stamina, mechanical ability, mental abilities, and
clerical abilities.
o Performance tests
Performance tests or skills tests measure performance
on actual job tasks
Some companies have an assessment centre, in
which management candidates participate in
activities for a few days while being assessed
by evaluators.
o

Interviewin
g:
Unstructure
d,
Situational,
&
BehavioralDescription

Employme
nt Tests:
Ability,
Personality,
Performance
, & Others

Personality tests
Personality tests measure such personality traits as
adjustment, energy, sociability, independence, and
need for achievement.
Career-assessment tests that help workers
identify suitable jobs
Myers-Briggs Type Indicator
Other Tests
drug testing, polygraph (lie detectors), genetic
screening, and even (a questionable technique)
handwriting analysis
an important legal consideration is the test's
reliability-the degree to which a test measures
the same thing consistently so that an
individual's score remains about the same over
time, assuming the characteristics being
measured also remain the same.
validity-the test measures what it purports to
measure and is free of bias. If a test is supposed
to predict performance, then the individual's
actual performance should reflect his or her
score on the test . Using an invalid test to hire
people can lead to poor selection decisions.

Myers-Briggs Type Indicator

Orientation: Helping Newcomers Learn the Ropes


Orientation - helping the newcomer fit smoothly into the job and the
organization

Helping New Employees Get Comfortable: The First 6 Months


Depending on the job, a new hire can accomplish only 60% as much in the first 3
months as an experienced worker, according to MCI Communications.
Employers have discovered that it's far better to give newcomers a helping hand
than to let them learn possibly inappropriate behavior that will be hard to undo
later.

The Desirable Characteristics of Orientation


Orientation is designed to give new employees the information they need to be
effective.

The job routine.


o At minimum, the new employee needs to have learned
what is required in the job for which he or she was hired,
how the work will be evaluated, and
who the immediate co-workers and managers are.
The organization's mission and operations.
o All managers need to know what the organization is about its purpose,
products or services,
operations, and
history.
o low-level employees perform better if they have this knowledge.
The organization's work rules and employee benefits.
o A public utility's HR department may have a brochure explaining
formalized work rules,
overtime requirements,
grievance procedures, and elaborate
employee benefits.
o A technology start-up may be so fluid that many of these matters
will have not been established yet.
Even so, there are matters of law (such as those pertaining to
sexual harassment) affecting work operations that every
employee should be made aware of.

Which business strategy offers the highest returns: (1) downsizing; (2) total
quality management, which focuses on work methods and process control; or (3)
employee involvement, which focuses on upgrading workers' skills and
knowledge?
The answer is employee involvement.

In hiring, you always try to get people whose qualifications match the
requirements of the job. Quite often, however, there are gaps in what new
employees need to know. These gaps are filled by training. The training process
involves five steps, as shown below.

Training
upgrading skills of technical and
operational employees
Electronics technicians, data
processors, computer network
administrators, and X-ray
technicians, among many
others, need to be schooled in
new knowledge as the
requirements of their fields
change.
Training refers to educating
technical and operational
employees in how to better do
their current jobs.

Development
upgrading skills of professionals
and managers
Accountants, nurses, lawyers,
and managers of all levels need
to be continually educated in
how to do their jobs better not
just today but also tomorrow.
Development refers to
educating professionals and
managers in the skills they need
to do their jobs in the future

On-the-Job Training
This training takes place in the
work setting while employees are
performing job-related tasks.

Off-the-Job Training
This training consists of classroom
programs, videotapes, workbooks, and
the like.

Four major training methods are


coaching, training positions, job
rotation, and planned work
activities.

Lots of off-the-job training consists of


computer-assisted instruction
(CAl), in which computers are used to
provide additional help or to reduce
instructional time.

Performance Appraisal
Feedback about how you're doing at work is part of performance appraisal, which
consists of
(1) assessing an employee's performance and
(2) providing him or her with feedback.

Objective Appraisal
Objective appraisals, also called
results appraisals, are based on
facts and are often numerical.
They measure results
o as it doesn't matter if
two salespeople have
completely different
personal traits if each
sells the same number
of washers and dryers
They are harder to challenge
legally
o not being as subject to
personal bias

Subjective Appraisal
Subjective appraisals are based on a
manager's perceptions of an
employee's (1) traits or (2) behaviours.
Trait appraisals are ratings of
such subjective attributes as
"attitude," "initiative," and
"leadership." Trait evaluations
may be easy to create and use,
but their validity is questionable
because the evaluator's personal
bias can affect the ratings.
Behavioural appraisals
measure specific, observable
aspects of performance-being on
time for work, for instancealthough making the evaluation
is still somewhat subjective. An
example is the behaviourally
anchored rating scale (BARS),
which rates employee gradations
in performance according to
scales of specific behaviours.

Who Should Make Performance Appraisals?


Peers and
subordinates
Co-workers,
colleagues, and
subordinates may well
see different aspects
of your performance.
Such information can
be useful for
development,
although it probably
shouldn't be used for
evaluation.
(Many managers will
resist soliciting such
information about
themselves, of course,
fearing negative

Customers and clients

Self-appraisals

Some organizations, such


as restaurants and
hotels, ask customers
and clients for their
appraisals of
employees. Publishers
ask authors to judge how
well they are doing in
handling the editing,
production, and
marketing of their books.
Automobile dealerships
may send follow-up
questionnaires to car
buyers.

How would you rate your


own performance in a
job, knowing that it would
go into your personnel
file? Probably the bias
would be toward the
favourable. Nevertheless,
self-appraisals help
employees become
involved in the whole
evaluation process
and may make them
more receptive to
feedback about areas
needing improvement.

appraisals.)

360-Degree Assessment: Appraisal by Everybody


All these may be used in a technique called 360-degree assessment in which
employees are appraised not only by their managerial superiors but also by
peers, subordinates, and sometimes clients, thus providing several perspectives.
1. An employee chooses between 6 and 12 other people to make
evaluations, who then fills out anonymous forms, the results of which are
tabulated by computer.
2. The employee then goes over the results with his or her manager and
together they put into place a long-term plan for performance goals.
3. Improvement is most likely to occur when feedback indicates that change
is necessary, recipients have a positive feedback orientation,
perceive a need to change their behaviour, react positively to
feedback, believe change is feasible, set appropriate goals to
regulate their behaviour, and take actions that lead to skill and
performance improvement.

Forced Ranking: Grading on a Curve


In forced ranking performance review systems, all employees within a
business unit are ranked against one another and grades are distributed along
some sort of bell curve.

Top performers (such as the top 20%) are rewarded with bonuses and
promotions, the worst performers (such as the bottom 20%) are
rehabilitated or dismissed. For instance, every year I 0% of GE's managers
are assigned the bottom grade, and if they don't improve, they are asked
to leave the company.
However, if the system is imposed on an organization overnight without
preparation, by pitting employees against one another, it can produce
shocks to morale, productivity, and loyalty.
There may also be legal ramifications, as when employees filed classaction lawsuits alleging that the forced ranking methods had a disparate
effect on particular groups of employees

Effective Performance Feedback

Formal appraisals are conducted at specific times throughout the year


and are based on performance measures that have been established in
advance.
Informal appraisals are conducted on an unscheduled basis and consist
of less rigorous indications of employee performance.

Managing an Effective Workforce: Compensation and


Benefits
Compensation has three parts: (1) wages or salaries, (2) incentives, and (3)
benefits.
Wages or Salaries
Base pay consists of
the basic wage or
salary paid employees
in exchange for doing
their jobs.
The basic
compensation is
determined by all
kinds of economic
factors: the prevailing
pay levels in a
particular industry
and location, what
competitors are
paying, whether the
jobs are unionized, if
the jobs are
hazardous, what the
individual's level is in
the organization, and
how much experience
he or she has.

Incentives
To induce
employees to
be more
productive or
to attract
and retain
top
performers,
many
organizations
offer
incentives,
such as
commissions,
bonuses,
profit-sharing
plans, and
stock options

Benefits
Benefits, or fringe benefits, are
additional nonmonetary forms
of compensation designed to
enrich the lives of all employees
in the organization, which are
paid all or in part by the
organization. Examples are many:
health insurance, dental insurance,
life insurance, disability protection,
retirement plans, holidays off,
accumulated sick days and vacation
days, recreation options, country
club or health club memberships,
family leave, discounts on company
merchandise, counselling, credit
unions, legal advice, and education
reimbursement . For top executives,
there may be "golden parachutes,"
generous severance pay for those
who might be let go in the event the
company is taken over by another
company.

Managing Promotions, Transfers, Disciplining &


Dismissals
Promotion
Moving an employee to a higher-level position-is the most obvious way to
recognize that person's superior performance (apart from giving raises and
bonuses).

Fairness
o It's important that promotion be fair. The step upward must be
deserved. It shouldn't be for reasons of nepotism, cronyism, or other
kind of favouritism.
Non-discrimination
o The promotion cannot discriminate on the basis of race, ethnicity,
gender, age, or physical ability.

Others' Resentments
o If someone is promoted, someone else may be resentful about
being passed over.
o As a manager, you may need to counsel the people left behind
about their performance and their opportunities in the future

Transfer: Moving Sideways


Transfer is movement of an employee to a different job with similar
responsibility.
1. to solve organizational problems by using their skills at another
location;
2. to broaden their experience in being assigned to a different position;
3. to retain their interest and motivation by being presented with a new
challenge; or
4. to solve some employee problems, such as personal differences with
their bosses.

Disciplining & Demotion: The Threat of Moving Downward

Discipline: Poorly performing employees may be given a warning or a


reprimand and then disciplined.
o That is, they may be temporarily removed from their jobs, as when a
police officer is placed on suspension or administrative leave-removed
from his or her regular job in the field and perhaps given a paperwork
job or told to stay away from work .
Demotion:
o That is, have his or her current responsibilities, pay, and perquisites
taken away, as when a middle manager is demoted to a first-line
manager.

Dismissal: Moving Out of the Organization

Layoffs
o dismissed temporarily -as when a carmaker doesn't have enough
orders to justify keeping its production employees-and may be
recalled later when economic conditions improve.
Downsizings
o downsizing is a permanent dismissal - automaker discontinuing a
line of cars or on the path to bankruptcy might permanently let go
of its production employees
Firings
o dismissed permanently "for cause": absenteeism, sloppy work
habits, failure to perform satisfactorily, breaking the law, and the
like.

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