Objective 1.

understand and explain the concept of organizational justice and how it relates to all aspects of relationship building with employees 2. understand how action taken at organizational entry help to build the employment relationship 3. know the major laws and legal doctrine governing the employment relationship 4. show familiarity with the complexities of employee handbooks, some current issues, and ways to avoid lawsuits 5. understand policies and procedures associated with discipline and grievances 6. show familiarity with the various ways that an employee can exit an organization , and measures organizations can take to make this parting of ways a more positives experience for all involved. Introduction HR professional are managers by virtue of the fact that they direct many critical projects and ongoing efforts in organization. Yet, perhaps one of the most important things an HR professional helps to manage is the relationship the organization has with each employee. While many of the elements of this relationship are established through policies, procedures, and processes common to every employee, contingencies also must be established to accommodate each unique relationship developed with the organization. Organizational justice Justice, or fairness, is thought to exist when people receive those things they believe they deserve to receive based upon their contribution. Research has shown that perception of justice impact organizational outcomes such as productivity, absences, and turnover, accident rates and health costs and theft from the organization. Two types of organizational justice are considered here, both of which are relevant when considering the employment relationship. Distributive justice deals with perception of equity in the allocation of reward or penalties given by the organization. Procedural justice is a perception of fair rules, laws, or policies that allocate valued reward and punishment. This type of justice would refer to the manner in which policy was established and its fair execution. In sum, employees evaluate their working relationship on the basis of fairness. Employees look for fairness in the distribution of valued rewards, as well as in the process by which they are distributed. Ethics programs

An interesting twist on the notion of justice and fairness is formalized ethics programs. As a complement to an employers specific attempts to be fair, formalized ethics programs are designed primarily to ensure honest, fair, and responsible action on the part employees. Ethical thinking programs usually emphasize four elements : 1. respect the custom / rituals of others 2. think of yourself and the organization as a part of the larger society 3. try to evaluate a situation objectively and evaluate the anticipated and unintended consequences of each possible action 4. consider the welfare of others as much as is feasible in sum, justice , fairness, and ethics, on the part of both the organization and the employee, are fundamental to the employment relationship. Organizational entry The employment relationship likely begins when an individual begins the selection process for a position or contract with an organization. Employment status The distinction between an employee and an independent contractor is not always clear, while the implication may be crucial to the establishment of a healthy employment relationship. Organization can avoid large tax liabilities by classifying workers as contractor rather than employees, and many costly benefits of employment (e.g., health insurance, retirement plans, stock options) are made available only to employees of the organization. Flexible work arrangements These program designed to help employment balance their work and nonwork lives by allowing workers to adopt more flexible work schedule, some of the more popular programs include : flextime, permanent part-time work, job sharing, compressed workweeks.

Realistic Job Previews Which are presentations of relevant, balanced, and unbiased information about the organization, the job, and the conditions under which the job candidate will work. Socialization and Orientation Socialization is the process by which an individual comes to appreciate the values, abilities, expected behaviors, and social knowledge essential for assuming an organization member. Orientation is a term used for the organizationally sponsored, formalized activities associated with an employees socialization into the organization.

Employment Law The external forces governing the employment relationship are employment laws. There are 4 types of legal doctrine and legislation are particularly relevant to the established employment relationship Employment at will public policy : termination that violate a states public policy are prohibited implied contract : it is unlawful to terminate an individual if an implied contract of employment exists covenant of good faith and fair dealing : it is unlawful to terminate an employee without just cause or for malicious reasons whistle blowing reporting misconduct to person who have the power to take action. By definition, whistle blowing can be internal (to the supervisor or HR department) or external ( to the media, legislator, or professional organization) reporting of wrongdoing. Privacy Antiterrorism efforts aside, methods by which the information is gathered, stored, utilized, and distributed, should be in a manner considerate of employee privacy. Current isues There are two major internal forces that also must be considered. 1. the influences of the employees themselves (employee surveys) organization involve their employees in actual decision making to varying degree: many use such tactics as quality circle, autonomous work team, and high involvement initiatives to engage employees and include them in decision making. Employee surveys also may be used to facilitate planned organization change and team building based on feedback and discussion of the survey data 2. Employee handbooks the purpose of policies and procedures is to establish the guidelines by which the organization and the employee contribute to the mutual relationship. Handbooks reflects the conditions of employment for particular state or countries. Two specific policies f some importance are considered : sexual harassment policies technology usage policies Disciplined and Grievances Disciplined is more future oriented. Its goal is to point the way to more positive and productive behavior rather than to penalize the person for his mistakes. If employees continue to violate policy, disciplined should become more and more severe, a practice often called progressive disciplined. For example : verbal warning written warning copied to supervisors file written warning copied to HR file suspension and demotion termination a grievances can be defined in many ways as such an organization establishing a grievance policy should define the term succinctly. Some organization limit

grievance to treatment by a supervisor, while others state that a grievance may be field against the administration or interpretation of a company policy but not against the policy itself. Organizational Exit Organizational Exit is the dissolution of the employment relationship. Termination Is the dissolution of the employment relationship that is originated by the organization. Resignation/voluntary turnover When employees do leave, organizations often conduct exit interviews or distribute post employment surveys in order to asses the reason for voluntary turnover. Downsizing and Layoffs Layoff refers to the tactical, physical action of eliminating redundant skills in the organization . Downsizing is the name given to the overall organizational strategy to which the layoff may contribute. The term layoff typically is reserved for manufacturing employees, but is formally defined as above, which would pertain to an employee at any level. Retirement Retirement has been defined as an exit from an organizational position or career path of considerable duration taken by individuals after middle age and taken with the intention of reduced psychological commitment to work thereafter. PAY FOR PERFORMANCE Pendahuluan The term pay for performance is a little misleading since many incentive system now award something other than pay for desired performance. In general, these PFP system put more employee pay at risk and do indeed loosen the relationship between assignments and pay levels. Controlling labor costs and increasing productivity through the establishment of clearer linkages between pay and performance are considered to be a key human resource management component of competitive advantage. In addition, increased concern over productivity and meeting customer requirements have prompted renewed interest in methods designed to motivate employees to be more focused on meeting (or exceeding )customer requirements and increasing productivity. Research has found characteristic of PFP system to be major elements of highperformance work system (HPWS) and linked PFP to firm performance , particularly when the PFP system is closely aligned with the companys strategic objectives and a high percentage of employees participate in the plan. The most common type of PFP is to tie pay to individual performance in a merit pay system. However, in an effort to promote teamwork, a growing number of companies now tie pay to unit or group performance, and others tie pay to organizational or company performance.

Expectancy / instrumentality theory, particularly when combined with goal setting, has a great of predictive power in understanding the value of PFP system The determine of effective PFP system Expectancy/ instrumentality theory explains why more pay leads to higher performance and why the connection is often not all that strong. Motivation is function of the perception a worker has about the likelihood that more effort will lead the higher performance and that higher performance will lead to higher performance and that higher performance will lead to valued outcomes like more money. Of course, performance is also a function of a workers knowledge, skills, and abilities. Determinants of effective PFP systems : 1. worker values outcomes 2. outcome is valued relative to other rewards 3. desired performance must be measurable 4. worker must be able to control rate of output 5. worker must be capable of increasing output 6. worker must believe that capability to increase exist 7. worker must believe that increased output will result in receiving a reward 8. size of reward must be sufficient to stimulate increased effort 9. performance measures must be compatible with strategic goals for short and long term

Main problems with PFP programs pfp can be expensive to develop and maintain. In addition to the initial cost of establishing standards and rate, changes in procedures , equipment, and product may require revision of any existing standards and reward structure. Worker dont feel that their rewards are closely linked to their performance, a critical component of expectancy theory. An insufficient amount of money is available for meritorious performance.

Reason for the failures of PFP system 1. poor perceived connection between performance and pay 2. the level of performance based pay is too low relative to base pay. The cost more highly motivating programs may be prohibitive

3. lack of objective, countable results for most jobs, requiring the use of performance rating 4. faulty performance appraisal system, with poor cooperation from managers, leniency bias in the appraisal, and resistance to change 5. union resistance to such system and to change in general 6. poor connection between PFP outcomes and corporate performance measures.

Select a PFP system In designing a pfp system, three major question should be asked : Who should be included in the PFP system ? The PFP system should be developed with specific groups and condition in mind. The devil in the details of PFP system, so production worker, middle management, salespeople, engineers, professional, or senior executive and top management should be probably have different system. Many company use very different PFP system for different jobs. For example McDonnalds has eight different PFP system for various classes of employees. How will performance be measured ? In general, PFP system are more effective when specific worker contributions can be clearly measured. If individual contributions cannot be measured reliably, then the smallest number of workers whose performance is determined to be important, of course, measurable would constitute the incentive groups An organization may choose to use a group plan even when it is possible to measure output on an individuals basis. Individual PFP plans can increase competition between workers and may reduce cooperation and teamwork. If teamwork and cooperation are important, but team members are competing for a set number of awards, a group or unit based system is preferable. For example, at the GM Saturn plant in Tennessee, while individual measurement was possible on a number of important outcome measures, and individual PFP system was thought to be contrary to the companys team oriented approach to production. Team-Based PFP be Used Team based PFP is a better approach particularly when it is part of a comprehensive team based model oh HRM and compensation. For example, the job evaluation process would place more emphasis on the work products of the team with less emphasis on individual job

description. The focus of the pay structure in general is on objectives and results of the team.

Which incentives will be used? The most common rewards for performance are cash payments, percentages increase in base pay, and numerous noncash prizes while these incentives are flexible and well suited to short run objectives, stock option are an approach for meeting long run objectives. Stock options becoming more common for lower level employees and are a bigger percentage of the raise for lower level manager. In addition to quarterly bonuses based on mystery shopper data, Wendys also awards stock to employees for performance and time on the job.

Individuals PFP plans Merit pay plans Merit pay plans are the most common and perhaps the most troublesome of PFP system because performance is typically measured by ratings done by supervisors. Merit pay plans call for a distribution of pay based on an appraisal of a workers performance. The merit pay is usually folded into the base pay of the recipient and is usually granted as a percentages of a workers base pay. Recommendation for merit pay Plans 1. use a bonus system in which merit pay is not tied to base salary