Human Resource Management: An International Perspective Fachhochschule Ludwigshafen am Rhein Dr....

Human Resource Management:

An International Perspective

Fachhochschule Ludwigshafen am Rhein

Dr. Yvonne Stedham

Course Materials available on

http://www.scsr.nevada.edu/~ystedham/

IntroductionsInstructorStudents – Table Tents

Name Expected graduation Work Experience Traveling and LanguagesInterest in HRAspirations

Relevance of this CourseWhat is HRM? HRM Functions?

What is the relationship between HR and organizational performance?

Why would HR practices differ from country to country? HR trends and practices in the U.S.

Course OverviewThis course was designed to introduce students to the issues that emerge from performing the human resource management function in an international context.

The focus of the course is on the relevance of the human resource management function to the performance of an organization.

The relationship between the external environment of an organization and human resource management (HRM) will be explored with a particular emphasis on the effect of cultural differences on management processes.

Current HRM trends and practices in the U.S. will be reviewed. Relevant legal conditions, as well as trends and developments in Employee Staffing and Selection and Compensation will addressed.

HR and Organizational Performance

What is an organization?

What is organizational effectiveness?

How does HR contribute?

HR and Organizational Performance

What is an organization? Why do organizations exist?

Organizations = People

Mission, goals, objectives --- concerted effort; efficiency; effectiveness.

When is an organization effective?

Distinguish between efficiency and effectiveness. Distinguish effectiveness measures for the short, intermediate, and long run.

Measurement of organizational effectiveness

Long run?

Intermediate run?

Short run?

A contingency approach

The OrganizationThe External Environment

EconomySocial

EnvironmentTechnologicalEnvironment

PoliticalEnvironment

The Internal Environment

People

Processes Structure

BusinessStrategy

Culture

Effectiveness

Strategic PlanningScanning the environment: SWOTVisionMissionGoalsObjectivesStrategies and TacticsPerformance Indicators

The International Organization

The External Environment

Culture

MultipleEconomy

Multiple SocialEnvironment

TechnologicalEnvironment

PoliticalEnvironment

The Internal Environment

People

Processes Structure

BusinessStrategy

Culture

Effectiveness

HR and Org. Performance

Individual effectiveness is the foundation for organizational effectiveness.

Individual effectiveness depends on ….

HR and Org. Performance

Individual effectiveness = f(Ability,Motivation)

Individual effectiveness = Ability * Motivation

HR and Org. PerformanceMatch

Individuals (Knowledge, Skills, Abilities and Needs)

with

Jobs (Requirements and Rewards)

The HRM FrameworkThe External Environment

EconomySocial

EnvironmentLabor Market

LegalEnvironment

Match

Individual*KSA’s*Needs

HR Activities:Recruitment,Selection,Training,Compensation,Labor relations Job

*KSA Requirements*Rewards

HR Outcomes:Job SatisfactionOrg.commitmentAttractionRetentionAttendancePerformance

Course FormatSyllabus

HR and Org. PerformanceStrategic HRM

Political Development and the Role of HRReading: September 11

Economic Development and the Role of HRAgriculture/Land–Industrial/Capital-Information/Knowledge

Jeffrey PfefferWhat CEOs want from HRHR LeadersCase: Sun Micro Systems

Globalization

Reasons for becoming internationalGroups of four

Why do companies internationalize?

List specific reasons and purposes.

At least three

Reasons for becoming international

Profit = Revenue – Cost = (Volume*Price) – Cost1. A desire for continued growth.

2. Domestic market saturation

3. The potential to now exploit a new technological advantage

4. Preferable suppliers (quality, cost)

5. Labor market (supply, quality, cost)

6. Government involvement/restrictions

7. Reducing distance to customers (cost)

8. Tariff barriers

9. Increased foreign competition in home country

10. Reduce general business risk by diversifying into other countries

Types of "international" organizationsInternational organization:Any organization that exports to/imports from organizations in other countries with primarily domestic production -Multidomestic.

Multinational organization: An organization with operations in different countries but each is viewed as a relatively separate enterprise.

Global organization: An enterprise structured so that national boundaries become blurred. The best people are hired irrespective of national origin. Transnational

GlobalizationEuropean Training and Development Journal Article – Engle/Stedham et al.

HR and Org. PerformanceStrategic HRM

HR Management RolesAdministrative – record keeping, processing, ST, Examples?Operational – support, IT, Examples?Strategic – org-wide, LT, Examples?

HR as a strategic partner: Involvement in strategic planning, decision-making on mergers, acquisitions, and downsizing, redesigning organizations and work processes, ensuring financial accountability for HR results, attracting and retaining human resources, developing human resource capabilities and competencies, identifying and rewarding performance

HR PlanningKSA’s requirements vs KSA availabilitiesFilling the gap

International Issues Staffing and Compensation

Country Specific External Conditions for HRList external conditions and trends that affect the HR function. Specify which function is affected.

Create such a list first for Germany and then for the U.S.

Groups of four

Appoint a spokesperson and share with the class.

External EnvironmentCulture and Ethics – International HRM

Why different answers for different countries?


Cultural differencesWhat is culture?Cultural characteristics

Social stratification, religion, education, language, political system, economic system

Where do cultural differences come from?Kluckhohn and Strodbeck

Six Values Orientation Dimensions

Cultural dimensionsAll peoples have common life problems (?) – choose different solutions

Six basic dimensions describe the cultural orientations of societies

What is the nature of people?

What is a person's relationship to nature?

What is a person's relationship to other people?

What is the primary mode of activity?

What is the conception of space?

What is the temporal orientation?


Self-AssessmentGlobal Readiness Index and Personal Values

Understanding your own valuesIf you understand others you are learned, if you understand yourself you are wise!


Measuring Culture

Geert Hofstede – IBM

Culture’s Consequences

Survey

Hofstede Publications

Hofstede, Geert (1980): Culture’s Consequences

Hofstede, Geert (1991): Cultures and Organizations

Hofstede, Geert (1984): Culture’s Consequences: International Differences in Work-Related Values

Hofstede, Geert and Michael Harris Bond (1984): The Confucius Connection: from cultural roots to economic growth. Organizational Dynamics, 16, 4, 4-21

Hofstede Publications

Hofstede, Geert (2001): Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations. Hofstede, Geert (1994): VSM94: Values Survey Module 1994 Manual. Tilberg, Netherlands: IRIC.Hofstede, Geert and Bond, M.H. (1984): “Hofstede’s Culture Dimensions: An Independent Validation Using Rokeach’s Value Survey.” Journal of Cross-Cultural Psychology 15(4): 417-433.

___

Hofstede’s Cultural Dimensions

Individualism/CollectivismIndividualistic society – self and immediate familyCollectivistic – group; give up freedom for security

Masculinity/FemininityMasculine: aggressive; achievement; materialisticFeminine: emphasis is on relationships and quality of life

Uncertainty AvoidanceAcceptance of ambiguity and uncertainty; need for strict rules and regulations

Power DistanceAcceptance of unequal distribution of power and other attributes

Confucian Dynamism or LT/STST – instant gratificationLT – discipline and perseverance

Compare Germany, the U.S. and Japan

Ind – hi, mod, low?Masc vs Fem?Uncertainty A – hi, mod, low?Power distance - hi, mod, low?LT vs ST?

Cultural Differences and HR ManagementJapan has the following cultural characteristics ….Japan is known for the following management approaches ….

The U.S. has the following cultural characteristics ….The U.S. is known for the following management approaches ….

Germany has the following cultural characteristics ….Germany is known for the following management approaches ….

U.S. Japan Germany

Individualism: 91 46 67

Power distance: 40 54 35

Uncertainty

avoidance: 46 92 65

Masculinity: 62 95 66

ST/LT: 29 80 25

Cultural Differences and HR ManagementJapan hi UNC, hi POW, Coll, MAS, LT

Consensus, group based, long dm, lack of risk taking and creativity, life time employment

U.S. low UNC, low POW, Ind, MAS, ST ….Delegation, participative management, emphasis on individual performance, creativity and risk taking

Germany moderately hi UNC, low POW, Ind, STExpert based, need for education and certification, delegation, participative management, extensive employee protection, somewhat risk averse

André Laurent’s Research“Main reason for a hierarchical structure is so that everybody knows who has authority over whom.”

“In order to have efficient work relationships, it is often necessary to bypass the hierarchical line.”

“It is important for managers to have at hand the precise answers to most questions their subordinates may raise about their work.”

Laurent’s Research“Main reason for a hierarchical structure is so that everybody knows who has authority over whom.”

Germany 26% agreeUS 17% agreeJapan 50% agreeFrance, Italy, Spain – 43%, 42%, 34%

“In order to have efficient work relationships, it is often necessary to bypass the hierarchical line.”

Germany 45% disagreeUS 32% disagreeFrance, Italy, Spain – 43%, 56%, 74%

“It is important for managers to have at hand the precise answers to most questions their subordinates may raise about their work.”

Germany 46% agreeUS 18% agreeJapan 78% agreeFrance, Italy, Spain – 53%, 66%, 77%


Ethics Questionnaire


What is “ethics”?

Relevance?

Different across cultures?

Beekun/Stedham/Yamamura Papers

Nike’s Voice

Personnel demands attention overseas


Ethics Philosophies

Consequentialist vs Non-consequentialist

Consequentialist: Utilitarianism, Egoism

Non-consequentialist: Justice, Inherent Morality

International HRM The Expatriate Assignment

Numbers37,000 MNC’s worldwideControl 200,000 foreign affiliates73 million employeesIn the U.S., MNC’s employ 3 mill Americans, 10% of the U.S. manufacturing workforce80% of mid- and large-size U.S. companies send managers abroad300,000 U.S. expatriates are on assignment at any given timeOptimal level of internationalization?


Staffing PhilosophiesEthnocentric – Key positions are filled with PCN’s (parent country nationals), e.g., Procter & Gamble – Associate with higher incidence of IHRM problems Polycentric – Key positions are filled with HCN’sGeocentric or global – Best managers are recruited from within or outside the company regardless of nationality, TCN’s – used by European MNC’s, transpatriates, some U.S. companies (Philips, Heinz, Unilever, IBM)Regiocentric – Recruiting on a regional basis


Expatriate SelectionRelevant KSA’s?

Technical, ManagerialAdaptiveness

MeasurementSMILE: Speciality; management ability; international flexibility; language facility; endeavor (Matsushita)

Spouse and FamilyFailure rates

40% on average; lower for European and JapaneseRosalie Tung:


Expatriate SelectionFailure rates

40% on average; lower for European and JapaneseRosalie Tung: ReasonsSelection is based on headquarter criteriaLack of training, preparation, orientationAlienation/lack of support from headquartersInability to adapt to local culture/work enviroProblems with spouse,familyCompensationPoor programs fro career support/repatriation


TrainingCultural toughness – China, Brazil, India, Japan, Russia, Mexico, Saudi Arabia, South Korea, FranceLess than 1/3 of expatriates receive trainingPre-departure training, postarrival training, reentry training Culture, language, everyday mattersCross-cultural training to ease the adjustment to the new environment by reducing “culture shock”: a state of disorientation and anxiety about not knowing how to behave in an unfamiliar culture


TrainingFour stages of culture shock:

HoneymoonIrritation and hostilityGradual adjustmentBiculturalism

Training techniques and Rigor of trainingArea studiesCulture assimilatorsLanguage trainingSensitivity trainingField experiences

Colgate – In-country training


Training – ExamplesABB (Asea Brown Bovari) rotates 500 managers around the world .. Every two to three years

PesiCo orientation program for foreign managers … one year at U.S. bottling division plants

Honda of America Japanese language, culture, lifestyle training .. Tokyo up to 3 years

GE engineers and managers must have global perspective .. Regular language and cross-cultural training


Compensation$100,000 manager in U.S. -> $300,000 in London, $1mill in Tokyo or StockholmEquity and goodwillPurchasing power and standard of livingTax differentials and tax equalizationBalance sheet approachAllowances – Cost of living, housing, education, home leave, shipping and storage

Repatriation


You have been assigned the mentor to an employee, John Smith, from the U.S. who will be working with you in your department for the next three years. His family, wife who is a computer programmer and two sons (13 and 15 years old), is coming with him.You are writing to John telling him about what to expect – on the job and in the community. Tell him about some of the cross-cultural conflicts he may run into with his co-workers and how he should handle them. You also want to give advice to each family member.Groups of four – make a list of relevant issues.


Nancy Adler Paper – Female Expatriates

Asia Pacific Journal of Human Resource Management – Stedham/Nechita paper – Comparing Theory and Practice of Expatriate Assignments

HR Trends and Practices in the U.S.

The Legal Environment

Staffing and Selection

Compensation and Benefits


The Legal EnvironmentThe employment relationship

Discrimination legislation

Legal Conditions in the U.S.The Employment Relationship – Equitable ExchangePsychological ContractEmployment Contract Formal agreement, voluntary: Defines and

governs the terms and conditions of the employment relationship; promises and expectations … change with time

Written or oral, both are legally enforceable

Sources of Laws and RegulationsCommon Law: England; Court-made Law;

Case-by-case decisions Precedence (Germany and other country code-based law); States – develop and administer own common law.

Constitutional Law: Supersedes; Prohibits deprivation of employment right without due process.

Employment at WillRight of both parties to terminate the employment relationship at any time, for any reason

(Tennessee Court in late 1900’s)

If “set-term” contract …Termination for Just cause Failure to perform

If “indeterminate-term” contract --- employment at will (common law); most are “at-will”

Workplace TortsBreaches of legal duty by ER when establishing or

modifying the initial relationship (common law)Tort

Civil wrong = violation of a duty by the ER that leads to

harm or damages suffered by others - Examples:1. Fraud or misrepresentation: lie/mislead applicant when

communicating conditions and terms -> ER violates a duty to be truthful in the presentation of information

2. Negligent hiring: ER violates duty to protect Ees and customers against unreasonable and foreseeable risk of harm

Fair Labor Standards Act 1938

Minimum Wage $5.75Lower for tipped employees

Child LaborAge 16 – no restrictions

Age 18 – harzardous occupations

Age 14-15 – limitations on hours

Fair Labor Standards Act 1938Exempt vs Non-exempt Employees

Exempt – executive, administrative, professional, outside sales; ER does not have to pay overtime

Non-exempt – must be paid overtime

OvertimeHours worked in excess of 40 hours must be compensated 1.5 the regular rate of pay

Compensatory time offIllegal in private sector unless given at 1.5 rate

Statutory LawsDerived from written statutes that are passed by

legislative bodies such as Federal – Congress; State – Legislature/Assemblies; Local – Municipal/Councils

Agencies: Interpret, administer, enforce law and publish rules and regulatory guidelines that are given “great deference” by courts.

. DOL Department of Labor; OFCCP Office for Contract Compliance Programs; EEOC Equal Employment Opportunity Commission;

Discrimination Legislation EEO Framework - Specific Laws U.S. Constitution

5th Amendment: Due Process of law --- Prohibition upon federal government; no person shall be deprived of life, liberty, or property; does not speak directly to specific subjects such as employment Courts prefer to defer to existing statutory laws because it they are more specific!!

14th Amendment: Prohibition for States to enacts any law that does not “guarantee” equal protection for all.

Statutory LawsCivil Rights Act 1866

Right to make and enforce contracts for employment … for all citizens as enjoyed by white citizens.

Civil Rights Act of 1871

Right to sue if deprived of any rights or privileges guaranteed by the Constitution and laws for ALL citizens. Must show intention.

Equal Pay Act 1963

Equal pay for equal work regardless of SEX (female employees only); amendment to FLSA .

Equal Pay Act“Equal” Work

Substantially similar in terms of skill, effort, responsibilities, working conditions.

Exceptions

Seniority; Merit; Quantity of production;

Note: If in violation of EPA, ER may not LOWER wages.

Title VII of CRA 1964 Coverage: ERs with 15 or more employees; Federal,

State, Local governments; Educational Institutions; Employment Agencies; Labor Unions

Not covered: Until recently “Congress”; Private Clubs; Religious Organizations.

CRA 1964: Several Titles each focusing on discrimination in a different “sectors” of society (education, right to vote,… ) Title VII focuses on discrimination in employment.

Title VII703 (a)

Employer may not discriminate on the basis of race, color, national origin, sex, and religion in any employment decision.

Title VII Color: White, black, yellow, brown, red. Race: Local geographic or global human population

distinguished by genetically transmitted physical characteristics … Caucasian; Negro; Hispanic; Oriental; Indian.

National Origin: Citizenship; Heritage; Any country, nation.

Religion: All kinds; not associated with any of the other characteristics; Christian, Hindu, Muslim, Buddhist.

Title VII703 (b) …. Nondiscriminatory apprenticeship program

704 (a) …. Unlawful to discriminate … if opposed unlawful employment practice … assisted in TVII investigation.

704 (b) …. Prohibits ads concerning employment indicating preference for any of the prohibited factors.

1978 Amendment: Pregnancy Discrimination Act --- prohibits discrimination on the basis of pregnancy, childbirth, or related condition. Reinstatement right for similar position; no loss of seniority; coverage of disability insurance.

Title VIIExemptions: that are written into the lawDiscrimination on the basis of the “protected factors” is

permissible when such qualification is a bona-fide occupational qualification (BFOQ) = reasonably necessary to the operation of that particular business or enterprise; burden of proof is with ER; very narrowly interpreted --- preferences of ER, coworkers, clients are irrelevant.

Seniority Systems: Bona fide seniority or merit systems are lawful if no intention to discriminate; job or departmental systems are not seen as “bona fide”, plant or company-wide systems are seen as “bona fide”.

Exemptions to TVIITesting: Employer may give and act upon

professionally developed ability tests if they are not used to discriminate on the basis of the protected factors.

Preferential Treatment: It is unlawful to interpret TVII as requiring preferential treatment of individuals of protected groups - reverse discrimination

National Security: Discrimination is permitted

Further TVII Issues

Fetal Protection -- Johnson Controls 1991: An employer’s exclusion of fertile women, but not fertile men, could not be justified on grounds that the rule protected the woman’s reproductive capacity and the physical welfare of the fetus. The safety qualification is limited to those instances where sex or pregnancy presents danger to customers or third parties. A fetus is not a “third party” whose safety is essential to the operation of the employer’s business, and thus cannot be the basis of a BFOQ.

Sexual HarassmentQuid pro quoHostile work environment sexual harassment.Unwelcome sexual advances in exchange for a favorable employment condition. Employer is liable. ER liable even if the employer had no knowledge of the harassment. Pattern of behavior. Reasonable person standard.Training, Policy, and Complaint and Investigation Process.

Sexual HarassmentExamples

Office Romance

Stedham/Mitchell paper

Executive Order 11246Contractors doing business with federal

government ($ amount of contract specified). Same provisions as TVII AND requires

contractors to develop affirmative action plans: Formal, specific personnel programs that are designed to increase the participation of protected groups.

Age Discrimination in Employment Act 1967

Amended 1986. Protects EEs and applicants who are 40 years old and above (no upper limit).

No mandatory retirement age (except law enforcement officers, firefighters, tenured professors, executive under certain conditions, top policy makers).

No reverse discrimination.

Americans with Disabilities Act 1990Since 1994 covers ERs with 15 or more EEs.

43 mill. disabled Americans.Protects

Physical or mental impairment that substantially limits one or more life activities (walk, see, ..)Record of impairmentRegarded as having impairment

… about 1,000 disabilities incl. affective disorders, biochemically based disorders - AIDS, Cancer, Anxiety Disorders, Eating Disorders, Infertility, EpilepsyDisability evaluated with adjustive equipment (glasses)

Americans with Disabilities Act How it protects

.Punitive damages

.Essential job functions

.Reasonable accommodations

.Restructuring of physical facilities

.Perceptual restructuring

… 1994 5,500 complaints (25% more than were expected)Sample Job Description

Family and Medical Leave Act 1993 Employers with more than 50 employees have to provide

12 weeks of unpaid leave for family or medical emergencies.

Employer must guarantee the employee the same or a comparable job. The employer must also pay the health-care coverage for the EE --- which the EE has to be back if he/she fails to return to work. ERs are allowed to exempt “key” employees – defined as the highest paid 10% of their work force whose leave would cause substantial economic harm to the employer. Also exempt are EEs who have not worked at least 1,250 hours (25 hrs a week) in the previous 12 months.

Enforcement of Laws and Court Process

Filing a Discrimination ComplaintLocal EEO Agency

NERC (Nevada Civil Rights Commission)

EEOC

Investigation

Right to sue letter

Evidence of DiscriminationIntentional Discrimination

Disparate Treatment: different standards applied to various groups

Adverse or Disparate Impact: same standards are applied but disproportionately less minority applicants are selected

Federal Court ProcessPresentation of evidence in TVII

Burden of Proof shiftsPlaintiff Defendant Plaintiff

Prima Facie Evidence1. Disparate Treatment 1. Job-based/legitimate 1. Defendant explanation

pretext; true McDonnell Rule: 4 conditionsreason was

rejection for prejudice

2. Adverse Impact 2. Business Necessity, 2. Other

method 80% or 4/5 Rule BFOQ, Validation

Disparate Treatment: 4 Conditions- McDonnel Rule

Plaintiff must showbelongs to protected class

applied and was qualified for the job

despite the qualifications - was rejected

position remained open and the employer continued to seek applications from persons with the complainant’s qualifications

->Applied also in ADEA cases

Adverse Impact: 80% or 4/5 Rule

Selection RatiosNumber of nonminority applicants selected

DIVIDED BY

Number of nonminority applicants appliedTHIS IS

= Nonminority selection ratio= Nonminority selection ratioNumber of minority applicants selected

DIVIDED BY

Number of minority applicants appliedTHIS IS

= Minority selection ratio= Minority selection ratio

Adverse ImpactCompare the two selection ratios

If the ratio for nonminorities is smaller there may be evidence of discrimination

If the ratio is less than 80% or 4/5 of the nonminority ratio, then there is evidence of adverse impact (because the difference in the ratios is statistically significant)

Adverse Impact - Example

100 White applicants100 African American applicants20 of the White applicants are selected5 of the African Americans are selected20:100 = .2 Nonminority Selection Ratio 5:100 = .05 Minority Selection Ratio

.05 : .2 = .25 This does not meet the 80% rule!

Adverse Impact - Example

100 White applicants

100 African American applicants

20 of the White applicants are selected

16 of the African Americans are selected20:100 = .2 Non-minority ratio

16:100 = .16 Minority ratio

.16 : .2 = .80 meets the 80% rule


Staffing and SelectionMeasurement Principles

Reliability and Validity

Selection MethodsApplication forms and resumes

Interview

Assessment Centers

Staffing and SelectionThe most important HR function

DefinitionsRecruitment: Creating a pool of qualified applicants

Staffing

Mutual process by which

the individual and the organization become matched to

form the employment relationship.

Mutual Process: Series of interrelated activities - R, S, DM, job offers, hiring.

SelectionSelection

The process of obtaining

and using information

about job applicants

to determine who should be hired.

Focus here is on how to collect relevant info on applicants’ KSA’s.

RecruitmentHow can we mess up?

Recruitment PlanningRelevant market

Number of contacts

Yield ratios

RecruitmentRecruitment Sources and Channels - Effectiveness

Internal vs external recruitmentPeter Principle

Walk-insReferralsCollegeEmployment Agencies and Professional SocietiesAdvertisingTemporary EmployeesInternet

Realistic Job Previews

Measurement in Selection

Selection decisions are based on what information? Purpose is to ……..

Measurement in Selection

How can we mess up?

Measure irrelevant KSA’s

Measure KSA’s inaccurately

Definition of Measurement

Application of rules for assigning numbers to objects to represent quantities of attributes.

Differences between applicant scores are due to actual differences in KSA’s.

RulesSpecified algorithms to assign numbers (She is a 10) – same results by different users

Quality of Measures: ReliabilityHow good a measure is my test? To what extent does the measure accurately capture the KSA we are interested in?

The scores obtained on a measure are X obtained = X true + X errorIf there was no error in the measure, every time we apply the measure to the same person we should get the same score.A reliable measure is a consistent measure.The reliability of a measure reflects the measures consistency.

ReliabilityThree methods to evaluate the reliability of a measure Each method focuses on a different source of measurement error. Measurement error are those factors that impact the obtained score but are not at all related to the attribute that is being measured.The methods:

Test-Retest ReliabilityParallel or Equivalent Forms ReliabilityInternal Consistency Reliability

Split-Half and Odd-Even; Cronbach AlphaSpearman-Brown Adjustment

Spearman-Brown Formula to Correct a Split-Half Reliability Coefficient

measureselection theof 2 and 1 Partsbetween n correlatio ther

lengthin increased test was the timesofnumber nmeasureselection totalfor thet coefficien yreliabilit half-split corrected ther

:

1)r-(n1

nrr

12

ttc

12

12ttc

Where

Reliability

The conclusion that a measure is reliable can only be drawn if, and only if, the reliability coefficient (a correlation coefficient) is statistically significant (as determined by a t-test.

Standard Error of Measurement

X measure ofy reliabilit ther

X measureon score obtained ofdeviation standard the

X measurefor t measuremen oferror standard the

:Where

xxxmeas

xx

x

meas

r-1

ReliabilityImportant

The difference in the score between two applicants is only significant if it is at least

two times the standard error of measurement.

Example: The standard error of measurement for a test is 1.5. Candidate A scores 18, candidate B scores 24 - does candidate B really have more of the attribute that is being measured?

Quality of Measures:Validity

Validity in Selection concerns the following question: How appropriate is it to make inferences from the scores on a measure to performance?Is the score a good predictor of performance? Is the score actually related to future performance?Relationship between reliability and validity

ValidityThree methods to evaluate the validity of a measure.

Content Validity

Criterion-Related (Empirical) Validity – Validity Coefficient

Predictive Validity

Concurrent Validity

Content versus Face Validity

Content Validity deals with the representative sampling of the content domain of a job by a selection measure

Face Validity concerns the appearance of whether a measure is measuring what is intended

Utility AnalysisUsing dollar-and-cents terms as well as other measures

such as percentage increase in output,

it shows the degree to which the use of a selection measure improves the quality of individuals selected

over what would have happened if the measure had not been used.

An Equation for Calculating the Utility of a Selection Program

Expected Dollar Gain from Selection=

NsrxySDyZx-NT(C)

Expected Dollar Gain from Selection=return in dollars to the organization for having a valid selection program

Utility

Ns=number of job applicants selected

rxy=validity coefficient of the selection procedure

SDy=standard deviation of job performance in dollars

Zx=average score on the selection procedure of those hired expressed in z or standardized score form as compared to the applicant pool

NT=number of applicants assessed with the selection procedure

C=cost of assessing each job applicant with the selection procedure

Strategies for Selection Decision-Making

Compensatory Model

Multiple Hurdles

Combination

Profile Matching

Application Forms and ResumesInformation about the applicant’s background and

present status -- brief and general OR long and detailed??

Based on .. Past behavior is a good predictor of future behaviorTo determine … minimum qualifications and general suitability for job; permanent record;Determine relative strengths and weaknessesIt is assumed that all data collected are used

Training and Experience RequirementsJob-related training - formal and informalType of training; length; quality

Application Form Specific job-related experience and accomplishments

Minimum qualifications Maintained Filing System: YES NO

Used computer and Microsoft Word for Windows 2000 word processor to type letters and reports

Used a Dictaphone to transcribe correspondence

TE Evaluation FormSpecific tasks are listed – indicate YES NO

For YES, describe experience

Application Likely candidate for Adverse Impact -- Why?Current forms -- 100% had at least 1 inappropriate question; on average 7 inappropriate questions.Are these questions acceptable? What do you really want to know?

What was your maiden name?What is your date of birth? What is your age?What is your height and weight?What language do you commonly use?What is your religious faith?List the number and ages of your children?Do you have any physical or mental disabilities?List your birthplace.Have you ever been arrested?Do you own your car/residence?

Application Forms ...

Adverse Impact: High

Validity: On average .1 -- corrected for attenuation .13

Select content Job-related - Job-related language

Usefulness

Fairness -- Face Validity

ResuméU.S. Short and concise; dates; job related; achievements

Groups

Compare to German resumé

References and RecommendationsTo verify information

Assess applicant’s job experience

Assess applicant’s effectiveness in those jobs -- what done and how well??

ReferencesSources of and methods to collect Reference Data

Methods: In-person; Mail ; Letter of R; PhoneSources: Former ER; Personal; Investigative agencies; Public record;

Usefulness of reference dataReliability: .4 or lessValidity: .16-.26Reference giver-better if immediate supervisorOld and new jobs are very similar?Adverse Impact ??

References ..Validity -- not much evidence -- favorable info -- job related

better if content of the new and old job are very similar

low validity because low reliability and restricted range

Defamation of character

Recommendations

don’t use subjective info

written consent by applicant

ask only specific job-related info

development of reference checking system

Employment InterviewKSA’s to be measured

Validity

Adverse Impact

Employment InterviewResearch

Interview does not add to selecting the most qualified candidate … because…..

InterviewSources of problems

impression formation

human perception

Improve the Validity of the Interview1. Decide on location and seating

2. More than one interviewer – Panel

3. KSA’s to be measured: Measure interpersonal, communication skills

4. Job-related questions only - Multiple Questions (Behavioral Interview Questions)

5. Limit pre-interview info

6. Use a rating format

7. Train the interviewer

Interview SimulationRole Play


Staffing and Selection - Selection MethodsAssessment Centers

Managerial positions

Battery of tests

Management, interpersonal, soft skills

Physical Attractiveness

Notion of Fit

Emotional Intelligence

Judge and Ferris (1992): The Elusive Criterion of Fit in HR Staffing

The practice of selection strongly emphasizes a less tangible notion of fit between job applicant and the organization. How could “fit” be measured?Definition of “fit”: The degree to which the goals and values of anapplicant or employee match those of employees considered successful inthe organization. The notion of “liking” an applicant Why “fit”: control mechanism, homogeneity, job-related , predictability of public behavior The employment interview and “fit”; Impression Management

Emotional IntelligenceDaniel GolemanDeveloping emotional intelligenceFive dimensions:

Self-awareness: Realistic self assessment-how does this fir with my values; analyze gut feelingManaging emotions: anger, anxiety, sadness – controlling one’s impulses; manage stress; effect on ability to pay attentionMotivating other: what moves us to action is emotion; optimismShowing empathy: read emotions in others; prevents acting in self interest Staying connected: emotions are not only contagious, they spread from the top down


Compensation and BenefitsTheory

Techniques

Benefits

Compensation and BenefitsExchange relationship

Equity

Internal Equity

External Equity

Individual Equity

Internal EquityWorth of a job?

Internal EquityWorth of a job?

Input .. KSA’s

Ouput

Attributes … Complexity

Internal EquityDevelop of job hierarchyJob EvaluationJob Evaluation Methods

Compensable FactorsRankingClassificationPoint Factor Method

The Hay’s System – Know-How, Problem Solving, Accountability

External EquityMyth of a market pay ratePublished dataSurvey design

Benchmark jobsRelevant marketLevel and rangeAdministrationBenefitsPhilosophyLeveling

Integrating Internal and External Equity

Scatterplot

Regression Analysis – JE points and Market pay

Market Pay Line

Follow, lead, lag

Pay grades – Height and Width; Overlap

Compa Ratio, Red and green circle employees

Pay Compression

Individual EquityMoney as a motivator?

Individual EquityMotivation Theories

Variable Pay SystemsIndividual: Piece rate, sales commission, bonuses, special recognitions, safety awards, attendance bonus

Group (Team): Gainsharing, quality improvement awards, labor cost reduction payout

Organization: Profit sharing, employee stock ownership options, executive stock options, deferred compensation

Merit Pay Systems - Design

Individual Equity

Performance measurement?

Size of reward – Purchasing power and recognition

Type of reward

Linkage to performance

Pay Secrecy

Example: Compensation at IBM

Individual EquityAnnual Pay Raises Exercise

Attached

Individually make decisions

Groups decide

Employee BenefitsCompensation Package

Direct vs IndirectDirect: Base Pay and Variable PayIndirect: Benefits

Composition20% of direct pay in benefitsFor each $1.00 in pay additional 20 cents in benefits

Employee BenefitsTypes of Benefits

Government MandatedSecurity: Workers’ Compensation, Unemployment Compensation

Retirement Security: Social Security

Health Care: COBRA and HIPPA provisions

Family Oriented: Family Medical Leave Act

Time off: Military reserve, Jury, Election

Employer Voluntary

Employee BenefitsEmployer Voluntary

Security: Supplemental UE benefits, Severance payRetirement Security: Early retirement options, Pension plans, IRAs, 401 (k) plansHealth Care: Medical, Dental, Vision, Prescription Drugs, EAP’s, Wellness Programs, HMO’sFinancial, Insurance: Life, Disability, Educational assistanceFamily Oriented: Dependent Care, Child Care, Alternative work arrangementsTime off: Lunch and rest breaks, holidays and vacations, funeral and bereavement leavesSocial and recreational

Employee BenefitsPackage design?

Employee Benefits

Employee preferences

Competition

Cost

Attraction and retention

Employee BenefitsSocial Security Act 1935Social Security – Retirement employer and employee payEmployer – payroll tax to fund UE (3.5%) of the first $6,000 earned by each workerEmployer – pays Workers’ Comp, by StateTime off benefits most expensive – 5 to 13% of total compensation

Employee Benefits

COBRA – Consolidated Omnibus Budget Reconciliation Act: require extended health care coverage for employers with 20 or more employees

HIPPAA – Health Insurance Portability and Accountability Act

HMO – Health Maintenance Organization

Employee Benefits

Flexible benefits plans – Cafeteria-Style benefits plans

Work Life Balance Reading

Flexible Spending Accounts

Benefits Communication

HR AuditInstructions for HR Audit: Case StudyTeams of three studentsYou will be provided with some background information for the company you picked.An HRM audit is a formal review of the outcomes of HRM functions. To conduct the audit, the HR department identified key functions and the key measures of business performance and customer satisfaction that would indicate each function is succeeding.

HR AuditBusiness and Customer Satisfaction Indicators:

Staffing Average days to fill open requisitions Ratio of acceptances to offers made Ratio of minority/women applicants to representation in local labor market Average years of experience/education per job family Anticipation of personnel needs Timeliness of referring qualified workers to line supervisors Treatment of applicants Skill in handling terminations Adaptability to changing labor market

HR AuditCompensation Per capita average merit increases Percentage of overtime hours to straight time Ratio of average salary offers to average salary in community Fairness of existing job evaluation system Competitiveness in local labor market Relationship between pay and performance Employee satisfaction with pay Benefits Average unemployment compensation payment Average workers’ compensation payment Benefit cost per payroll dollar Percentage of sick leave to total pay Promptness in handling claims Fairness and consistency in the application of benefit policies Communication of benefits to

HR AuditTraining Percentage of employees participating in training programs per job family Percentage of employees receiving tuition refunds Training dollars per employee Extent to which training programs meet the needs of employees and the company Communication to employees about available training opportunities Quality of introduction/orientation programs Employee Appraisal and Development Distribution of performance appraisal ratings Appropriate psychometric properties of appraisal forms Assistance in identifying management potential Organizational development opportunities provided by HRM

HR AuditOverall Effectiveness Ratio of HR staff to employee population Turnover rate Absenteeism rate Ratio of per capital revenue to per capita cost Net income per employee Unionization Accuracy and clarity of information provided to managers and employees Competence and expertise of staff Working relationship between organizational units and the HR department answer the questions that are provided with the background information in detail.

HR AuditYou need to conduct some research to gather additional information about the company. Since you do not have access to all the information required for an in-depth HR audit, you are asked to provide an analysis of the HR function in “your” company by also using the following questions:To what extent does “your” company emphasize the importance and value of the human resources of the company through the philosophy and beliefs of top management?To what extent does your company invest time and money in improving human resource procedures and practices?

HR AuditTo what extent does your company develop, monitor and evaluate human resource practices?To what extent does your company emphasize ensure uniform application of all human resource policies throughout the company?To what extent does your company include the HR director/function in the development of strategic plans for the company?Are the HR practices consistent with the company’s mission?Is this company considered an employer of choice (check “The Most Admired Companies” annual publication by Fortune Magazine)?Is this company known for progressive and novel HR practices? Describe and explain.

HR AuditSuggested (not required) structure for your report:

Company IntroductionIndustry and products – Market Share – Current StatusRevenue, Number of employeesLevel of internationalizationHistory – Positives and Setbacks

Business Strategy - MissionHR Practices and their SuccessStrategic Role of HRCode of EthicsConsistency between Strategy and HR PracticesUnique HR AspectsThe number one “thing” you should know about this company?Why we would “love” (or not) to work for this company.Recommendations

HR AuditAppendix: Answers to the questions that were provided with the background information.The report should not be between 10 and 15 pages long. It is due the last day of class.You have 20 minutes for your presentation and 10 minutes for questions and answers. Each team member must participate in the presentation.You presentation may, but does not have to, follow the structure of your report.Company List:

BP Amoco,Motorola

GMJohnson & Johnson American AirlinesSouthwest Airlines

FordArthur Anderson

Course SummaryWarren Bennis

List 10 things that you have learned in this course.

How will you be able to apply these “things”?

How will these “things” help you in your future career?

Date post:	20-Dec-2015
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Human Resource Management: An International Perspective Fachhochschule Ludwigshafen am Rhein Dr....

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