Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 10-0 Bateman Snell...

Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

10-1

Bateman Snell

Management

5thEdition

Competingin theNew Era


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Part ThreeChapter 10 - Human Resources Management

Chapter OutlineStrategic Human Resources ManagementStaffing the OrganizationDeveloping the WorkforcePerformance AppraisalDesigning Reward SystemsLabor Relations


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Learning ObjectivesLearning 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


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Learning ObjectivesLearning Objectives

After studying Chapter 10, you will know: how unions influence human resources management how the legal system influences human resources

management


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Strategic Human Resources Management (HRM)

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 valueare rareare difficult to imitateare 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


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Strategic HRM (cont.)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 plansprogramming - create specific HR activitiesevaluating - 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 plansbased on current sales and projected future sales growthdetermine the demand for different types of workers


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An Overview Of The HR Planning Process

An Overview Of The HR Planning Process

•Labor markets•Technology•Legislation•Competition•Economy

•Demand forecast•Internal labor supply•External labor supply•Job analysis

HRMenvironmental

scanning

Humanresourcesplanning

Organizationalstrategicplanning

Planning

•Employee recruitment•Employee selection•Outplacement•Training and development•Performance appraisal•Reward systems•Labor relations

Humanresourcesactivities

Programming

•Productivity•Quality•Innovation•Satisfaction•Turnover•Absenteeism•Health

Results

Evaluation


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Strategic HRM (cont.)Strategic HRM (cont.)

The HR planning process (cont.) Labor supply forecasts - estimates of how many and what

types of employees the organization actually will haveevaluate 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


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Strategic HRM (cont.)Strategic HRM (cont.)

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 job description - tells about the job itself job specification - describes the employee characteristics needed to

perform the jobprovides the information that virtually every HR activity requires


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Staffing The OrganizationStaffing 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


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Staffing The Organization (cont.)Staffing The Organization (cont.)

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 referralscampus 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


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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

Effectiveness Of Recruitment Sources

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


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Staffing The Organization (cont.)Staffing The Organization (cont.)Selection

choosing from among qualified applicants to hire Application and résumés - provide basic information to

prospective employerstend not to be useful for making final selection decisions

Interviews - most popular selection toolquestions that are not job related are prohibitedunstructured (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


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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 1988genetic 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


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Selection (cont.) Assessment center - managerial performance test in which

candidates participate in a variety of exercises and situationstaps a number of critical managerial dimensionsassessors generally are line managers from the organization

Integrity tests - assess a job candidate’s honestypolygraphs (lie detector tests) - banned for most employment purposes

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


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Staffing The Organization (cont.)Staffing The Organization (cont.)Selection (cont.)

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

Validitycriterion-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


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HighLowTest score

HighLowTest score

High

Low

Per

form

ance

High

Low

Per

form

ance

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

Correlation ScatterplotsCorrelation Scatterplots


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

employees as a result of restructuring in the industryvictims - 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


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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


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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


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Developing The WorkforceDeveloping The WorkforceTraining 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


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Developing The Workforce (cont)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


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100

80

60

40

20

0

Per

cen

tage

usi

ng

Overall 10,000or more

2,500-9,9991,000-2,499500-999100-499

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

Selected Instructional Methods And Media


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Performance AppraisalPerformance AppraisalPerformance 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

performanceoften leads to personal biasmay not be suitable for obtaining useful feedback


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Performance Appraisal (cont.)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 objectivefocus on production dataManagement 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


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Example Of BARS Used For Evaluating Quality

Example Of BARS Used For Evaluating Quality

Uses measures of quality and well-definedprocesses 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 anddeliverables, 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


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Guidelines For Choosing An Appraisal System

Guidelines For Choosing An Appraisal System

Evaluate onspecific

behaviors

Documentthe processcarefully

Attend tolegal

considerations

AppraisalSystem

Use job analysisfor performance

standards

Develop a formalappeal process

Use more thanone rater where

possible

Communicateperformance

standards


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Performance Appraisal (cont.)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


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Performance Appraisal (cont.)Performance Appraisal (cont.)

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


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Designing Reward SystemsDesigning Reward SystemsPay 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 familiesindividual pay decisions - concern different pay rates for jobs of similar worth within the same family

decisions based on: seniority performance


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Factors Affecting The Wage MixFactors Affecting The Wage Mix

WageMix

Internal factors External factors

Compensation policyof organization

Employer’s ability to pay

Employee’srelative worth

Worth of job

Conditions of thelabor market

Area wage rates

Cost of living

Collective bargaining

Legal requirements


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Pay StructurePay Structure

Range

150 500450400350300250200

Job worth (total points)

Range overlap

Range steps

Midpoint4.50

8.00

7.50

7.00

6.50

6.00

5.50

5.00

Wag

e ra

tes

Maximum rate

Wage curve

Minimum rate


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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 plansgainsharing - concentrate on saving moneyprofit-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


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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 lawcafeteria 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


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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 overtimeexempt 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


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Health and safety Occupational Safety and Health Act (OSHA) of 1970 -

requires employers to pursue workplace safetyemployers must maintain records of injuries and deaths caused by workplace accidents

employers must submit to work-site inspections


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Labor RelationsLabor Relations

Labor relations system of relations between workers and management

Labor laws National Labor Relations Act (NLRA) - Wagner Act

declared labor organizations legalestablished five unfair employer labor practicescreated the National Labor Relations Board

conducts certification elections hears unfair labor practices complaints issues injunctions against offending employers

greatly assisted the growth of unions


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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

Labor Relations (cont.)Labor Relations (cont.)


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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 winnerif 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

Labor Relations (cont.)Labor Relations (cont.)


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Determinants Of Union Voting Behavior

Determinants Of Union Voting Behavior

Union image•Corrupt?

•Too powerful?•Unnecessary given•current legislation

Job attitudes•Job dissatisfaction•Unfair supervision

•Poor communication

Union vote:YesorNo

Beliefs in union power•Wages•Power

•Working conditions

Economic needs•Wages•Hours


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Labor Relations (cont.)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

disputeused to deal with disagreements about interpretation of the contractavoids 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

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