Human Resources Management

Chapter 11
Human Resources Management
Chapter 11, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Eighth Canadian Edition. Copyright 2005 Pearson Education Canada Inc.
LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter.
Why Human Resources Is Important

Explain how an organizations human resources can be a significant source of competitive advantage. List the eight activities necessary for staffing the organization and sustaining high employee performance.
The Human Resources Management Process

Discuss the environmental factors that most directly affect the HRM process.
LEARNING OUTLINE (contd)

Human Resources Planning

Contrast job analysis, job description, and job specification.
Staffing the Organization

Discuss the major sources of potential job candidates.
Describe the different selection devices and discuss which ones work best for different jobs. Explain what a realistic job preview is and why its important.

Orientation and Skill Development

Describe the different types of training and how that training can be provided.
Managing and Rewarding Performance

Describe the different performance appraisal methods.
Compensation and Benefits

Discuss the factors that influence employee compensation and benefits.
Describe skill-based pay systems.

Career Development
Describe career development for todays employees.
Current Issues in Human Resources Management

Explain how managers can manage downsizing. Discuss how managers can manage workforce diversity. Explain what sexual harassment is and what managers need to know about it.
Describe how organizations are dealing with work-life balances.
The Importance of Human Resources Management (HRM)

Necessary part of the organizing function of management
Selecting, training, and evaluating the workforce
An important strategic tool

HRM helps establish an organizations sustainable competitive advantage.
Adds value to the firm

High performance work practices lead to both high individual and high organizational performance.
Exhibit 11.1 Examples of HighPerformance Work Practices

Self-directed work teams Job rotation High levels of skills training Problem-solving groups Total quality management procedures and processes Encouragement of innovative and creative behaviour Extensive employee involvement and training
Sources: Based on M. Huselid, The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance, Academy of Management Journal, June 1995, p. 635; and B. Becker and B. Gerhart, The Impact of Human Resource Management on Organizational Performance: Progress and Prospects, Academy of Management Journal, August 1996, p. 785.
Implementation of employee suggestions Contingent pay based on performance Coaching and mentoring Significant amounts of information sharing Use of employee attitude surveys Cross-functional integration Comprehensive employee recruitment and selection procedures
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Human Resources for Non-HR Managers

Small vs. large organizations
Large organizations have HR function. Smaller organizations may rely on managers to handle HR issues.
All managers need to be aware of federal and provincial legislation and company policies.
The HRM Process

Functions of the HRM Process
Identifying and selecting competent employees Providing employees with up-to-date knowledge and skills to do their jobs Ensuring that the organization retains competent and high-performing employees
Exhibit 11.2 The Human Resources Management Process

Environment Human Resource Planning Recruitment Selection Identification and Selection of Competent Employees
Decruitment
Orientation
Training
Adapted and competent employees with up-to-date skills and knowledge
Performance Management
Career Development
Competent and high-performing employees who are capable of sustaining high performance over the long term
Environment
10
Environmental Factors Affecting HRM

Labour Union
An organization that represents workers and seeks to protect their interests through collective bargaining
Collective Bargaining Agreement

A contractual agreement between an organization and a union, covering:
Wage, hours, and working conditions
11
Environmental Factors Affecting HRM (contd)

Legislation Affecting Workplace Conditions
Canada Labour Code Occupational Health and Safety Act Workplace Hazardous Materials Information System (WHMIS) Employment standards legislation
Antidiscrimination Legislation
The Charter of Rights and Freedoms and the Canadian Human Rights Act The Employment Equity Act
12
Managing Human Resources

Human Resources (HR) Planning
The process by which managers ensure that they have the right number and kinds of people in the right places, and at the right times, who are capable of effectively and efficiently performing their tasks Helps avoid sudden talent shortages and surpluses Steps in HR planning:
Assessing current human resources Assessing future needs for human resources and developing a program to meet those future needs
13
Current Assessment
Human Resources Inventory
A review of the current makeup of the organizations resources status HR Management Information Systems (HRMIS)
Tracks employee information for policy and strategic needs
Job analysis
An assessment that defines a job and the behaviours necessary to perform the job:
Knowledge, skills, and abilities
Requires conducting interviews, engaging in direct observation, and collecting the self-reports of employees and their managers
14
Current Assessment (contd)

Job Description
A written statement of what the jobholder does, how it is done, and why it is done
Job Specification
A written statement of the minimum qualifications that a person must possess to perform a given job successfully
15
Exhibit 11.3 Meeting Future Human Resources Needs

Supply of Employees Demand for Employees
Factors Affecting Staffing

Strategic Goals
Forecast demand for products and services

Availability of knowledge, skills, and abilities
16
Staffing the Organization

Recruitment
The process of locating, identifying, and attracting capable applicants to an organization
E-recruiting
Recruitment of employees through the Internet
Organizational web sites Online recruiters
Decruitment
The process of reducing a surplus of employees in the workforce of an organization
17
Exhibit 11.4 Major Sources of Potential Job Candidates
18
Exhibit 11.5 Decruitment Options
19
Selection
Selection Process
The process of screening job applicants to ensure that the most appropriate candidates are hired
Selection
An exercise in predicting which applicants, if hired, will be (or will not be) successful in performing well on the criteria the organization uses to evaluate performance Selection errors:
Reject errors for potentially successful applicants Accept errors for ultimately poor performers
20
Exhibit 11.6 Selection Decision Outcomes

Selection Decision Accept Successful Reject
Later Job Performance
Correct decision
Reject error
Unsuccessful
Accept error
Correct decision
21
Validity and Reliability

Validity (of Prediction)
A proven relationship between the selection device used and some relevant criterion for successful performance in an organization
High test scores equate to high job performance; low scores to poor performance
Reliability (of Prediction)

The degree of consistency with which a selection device measures the same thing
Individual test scores obtained with a selection device are consistent over multiple testing instances
22
Types of Selection Devices

Application Forms Written Tests Performance Simulations Interviews Background Investigations Physical Examinations
23
Exhibit 11.7 Selection Devices
24
Written Tests
Types of Tests
Intelligence: how smart are you? Aptitude: can you learn to do it? Ability: can you do it? Interest: do you want to do it?
Legal Challenges to Tests

Lack of job-relatedness of test to job requirements Discrimination against members of areas protected by the Employment Equity Act
25
Performance Simulation Tests

Testing an applicants ability to perform actual job behaviours, use required skills, and demonstrate specific knowledge of the job
Work sampling
Requiring applicants to actually perform a task or set of tasks that are central to successful job performance
Assessment centres
Dedicated facilities in which job candidates undergo a series of performance simulation tests to evaluate their managerial potential
26
Other Selection Approaches

Situational Interviews
Interviews in which candidates are evaluated on how well they handle role play in mock scenarios
Background Investigations
Verification of application data Reference checks:
Lack validity because self-selection of references ensures only positive outcomes
Physical Examinations
Useful for physical requirements
27
Questions Not to Ask Job Candidates

About name changes; maiden name For birth certificate, baptismal records, or about age in general About pregnancy, child bearing plans, or child care arrangements Whether applicant is single, married, divorced, engaged, separated, widowed, or living common-law About birthplace, nationality of ancestors, spouse, or other relatives Whether born in Canada For photo to be attached to application or sent to interviewer before interview About religious affiliation, church membership, frequency of church attendance Whether the applicant drinks or uses drugs Whether the applicant has ever been convicted Whether the applicant has ever been arrested Whether the applicant has a criminal record About the applicants sexual orientation
Sample Questions Taken from Exhibit 11.8

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Tips for Managers: Some Suggestions for Interviewing
Structure a fixed set of questions for all applicants.

Have detailed information about the job for which applicants are interviewing. Minimize any prior knowledge of applicants background, experience, interests, test scores, or other characteristics. Ask behavioural questions that require applicants to give detailed accounts of actual job behaviours. Use a standardized evaluation form. Take notes during the interview. Avoid short interviews that encourage premature decision making.
29
Source: Based on D.A. DeCenzo and S.P. Robbins, Human Resource Management, 7th ed. (New York, Wiley: 2002, p. 200)
Exhibit 11.9 Quality of Selection Devices as Predictors
30
Other Selection Approaches (contd)

Realistic Job Preview (RJP)
The process of relating to an applicant both the positive and the negative aspects of the job
Encourages mismatched applicants to withdraw Aligns successful applicants expectations with actual job conditions, reducing turnover
31
Orientation and Skill Development

Bringing a new employee into the organization
Work-unit orientation
Familiarizes new employee with work-unit goals Clarifies how his or her job contributes to unit goals Introduces employee to his or her co-workers
Organization orientation
Informs new employee about the organizations objectives, history, philosophy, procedures, and rules Includes a tour of the entire facility
32
Exhibit 11.10 Types of Training

Interpersonal skills Technical Business Mandatory Performance management Problem solving/decision making Personal
33
Exhibit 11.11 Employee Training Methods

Traditional Training Methods
On-the-job Job rotation Mentoring and coaching Experiential exercises Workbooks/manuals Classroom lectures
Technology-based Training Methods

CD-ROM/ DVD/videotapes/ audiotapes Videoconferencing/ teleconferencing/ satellite TV
E-learning or other interactive modules.
34
Exhibit 11.12a Occupations of Employees Who Receive Training

100 90 80 70 60 50 40 30 20 10 0
Professional and managerial white collar occupations Clerical, sales, and service white collar occupations Blue collar occupations
35
Exhibit 11.12b How Employees Train Themselves

100 90
80
70 60 50 40 30 20 10 0
Sought advice from someone Used the Internet or computer software Observed someone perform a task Consulted books/manuals/other documents Taught themselves by trying different methods
36
Managing and Rewarding Performance

Performance Management System
A process establishing performance standards and appraising employee performance in order to arrive at objective HR decisions and to provide documentation in support of those decisions
37
Performance Appraisal Methods

Written Essays Critical Incidents Graphic Rating Scales Behaviourally Anchored Rating Scales (BARS) Multiperson Comparisons Management by Objectives (MBO) 360-Degree Feedback
38
Exhibit 11.13 Advantages and Disadvantages of Performance Appraisal Methods
39

Benefits of a Fair, Effective, and Appropriate Compensation System
Helps attract and retain high-performance employees Impacts on the strategic performance of the firm
Types of Compensation
Base wage or salary Wage and salary add-ons Incentive payments Skill-based pay
40
Exhibit 11.14 Factors That Influence Compensation and Benefits

How long has employee been with company and how has he or she performed? How large is the company?
Employees Tenure and Performance Size of Company
Does job require high levels of skills?
How profitable is the company?
Kind of Job Performed
What industry is job in?
Company Profitability Geographical Location

Where is organization located?
Level of Compensation and Benefits
Kind of Business
Unionization
Management Philosophy
Labour- or Capital-Intensive
Is business unionized?
What is managements philosophy toward pay?
Is business labour- or capital-intensive?
Sources: Based on R.I. Henderson, Compensation Management, 6 th ed. (Upper Saddle River, NJ: Prentice Hall, 1994), pp. 324; and A. Murray, Mom, Apple Pie, and Small Business, Wall Street Journal, August 15, 1994, p. A1
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Public Sector Vs. Private Sector

Governments pay about 9% more compared to private sector. Public sector employees: better benefit plans, likelihood of pension plans
Public sector pay rates: labour union equity initiatives Private sector pay rates: market wages
42
Career Development
Career Defined
A sequence of positions held by a person during his or her lifetime
Career Development
Provides for information, assessment, and training Helps attract and retain highly talented people
Boundaryless Career
A career in which individuals, not organizations, define career progression, organizational loyalty, important skills, and marketplace value
43
Top 10 Job Factors for College Graduates

(ranked in order of importance) 1. Enjoying what they do 2. Opportunity to use skills and abilities 3. Opportunity for personal development 4. Feeling what they do matters 5. Benefits 6. Recognition for good performance 7. Friendly co-workers 8. Job location 9. Lots of money 10. Working on teams
Source: Based on V. Frazee. Whats Important to College Grads in Their First Jobs? Personnel Journal, July 1996, p. 21.
44
Tips for Managers: Some Suggestions for a Successful Management Career
45
Contemporary HRM Issues

Managing Downsizing
The planned elimination of jobs in an organization
Provide open and honest communication Reassure survivors
46
Contemporary HRM Issues (contd)

Managing Workforce Diversity
Recruitment for diversity Selection without discrimination Orientation and training that is effective
47

Sexual Harassment
An unwanted activity of a sexual nature that affects an individuals employment
The Supreme Court of Canada definition: Unwelcome behaviour of a sexual nature in the workplace that negatively affects the work environment or leads to adverse job-related consequences for the employee There continues to be disagreement as to what specifically constitutes sexual harassment.
An offensive or hostile environment

An environment in which a person is affected by elements of a sexual nature
48

Work-Life Balance
Employees have personal lives that they dont leave behind when they come to work. Organizations have become more attuned to their employees by offering family-friendly benefits:
On-site child care Summer day camps Flextime Job sharing Leave for personal matters Flexible job hours
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Chapter 11

Human Resources Management

Why Human Resources Is Important

The Human Resources Management Process

LEARNING OUTLINE (contd)

Human Resources Planning

Staffing the Organization

LEARNING OUTLINE (contd)

Orientation and Skill Development

Managing and Rewarding Performance

Compensation and Benefits

Describe skill-based pay systems.

LEARNING OUTLINE (contd)

Current Issues in Human Resources Management

Describe how organizations are dealing with work-life balances.

The Importance of Human Resources Management (HRM)

An important strategic tool

Adds value to the firm

Exhibit 11.1 Examples of HighPerformance Work Practices

Human Resources for Non-HR Managers

The HRM Process

Exhibit 11.2 The Human Resources Management Process

Adapted and competent employees with up-to-date skills and knowledge

Compensation and Benefits

Environmental Factors Affecting HRM

Collective Bargaining Agreement

Environmental Factors Affecting HRM (contd)

Managing Human Resources

Current Assessment (contd)

Exhibit 11.3 Meeting Future Human Resources Needs

Factors Affecting Staffing

Forecast demand for products and services

Staffing the Organization

Exhibit 11.4 Major Sources of Potential Job Candidates

Exhibit 11.5 Decruitment Options

Exhibit 11.6 Selection Decision Outcomes

Later Job Performance

Validity and Reliability

Reliability (of Prediction)

Types of Selection Devices

Exhibit 11.7 Selection Devices

Legal Challenges to Tests

Performance Simulation Tests

Other Selection Approaches

Questions Not to Ask Job Candidates

Sample Questions Taken from Exhibit 11.8

Tips for Managers: Some Suggestions for Interviewing

Structure a fixed set of questions for all applicants.

Exhibit 11.9 Quality of Selection Devices as Predictors

Other Selection Approaches (contd)

Orientation and Skill Development

Exhibit 11.10 Types of Training

Exhibit 11.11 Employee Training Methods

Technology-based Training Methods

E-learning or other interactive modules.

Exhibit 11.12a Occupations of Employees Who Receive Training

Exhibit 11.12b How Employees Train Themselves

Managing and Rewarding Performance

Performance Appraisal Methods

Exhibit 11.13 Advantages and Disadvantages of Performance Appraisal Methods

Compensation and Benefits

Exhibit 11.14 Factors That Influence Compensation and Benefits