Managing Human ResourcesManaging Human ResourcesManaging Human ResourcesManaging Human Resources

Chapter 9

Chapter 9 Learning GoalsChapter 9 Learning Goals

1.1. WWhat is the human resource management process?

2.2. HHow are human resource needs determined?

3.3. HHow do human resource managers find good people to fill the jobs?

4.4. WWhat is the employee selection process?5.5. WWhat types of training and development

do organizations offer their employees?

Chapter 9 Learning Goals Chapter 9 Learning Goals (cont’d.)(cont’d.)

6.6. WWhat is a performance appraisal?

7.7. HHow are employees compensated?

8.8. WWhat is organizational career management?

9.9. WWhat are the key laws and federal agencies affecting human resource management?

10.10. WWhat trends are affecting human resource management?

Learning Goal 1Learning Goal 1

• WWhat is the human resource management process?

JJob analysis and HR planning EEmployee recruitment and selection EEmployee training, performance appraisal,

and compensation EEnds when employee leaves organization

Human Resource ManagementHuman Resource ManagementThe process of hiring, developing, motivating, and evaluating employees to achieve organizational goals

Human Resource Management Human Resource Management ProcessProcessStrategies &

objectives of the organization

Training & development

Performance planning & evaluation

Compensation & benefits

Organizational career management

Job analysis & design

HR planning & forecasting

Employee recruitment

Employee selection

Learning Goal 2Learning Goal 2

• HHow are human resource needs determined?– Job analysis

• Studying a job to determine its tasks and duties for – Setting pay– Determining employee job performance– Specifying hiring requirements– Designing training programs

– Job description• Lists the tasks and responsibilities of the job

– Job specification• Describes skills, knowledge, and abilities needed to fill the job

described in the job description

JobJob Analysis:Analysis:A study of the tasks required to do a particular job well

• job descriptionjob description

• job specificationjob specification

Job analysis & design

HR planning & forecasting

Employee recruitment

Employee selection

Demand forecast:Demand forecast:Determining the number of employees needed by some future time

Supply forecast (internal):Supply forecast (internal):Estimating the number of current employees who will be available to fill various jobs at some future time

Job analysis & design

HR planning & forecasting

Employee recruitment

Employee selection

Labor Supply & DemandLabor Supply & Demand

Labor shortageshortage in the 1990s has turned the tables for employers

• some individuals seeking work advertise themselves as free agentsfree agents

• employers bid for interviews with free agents

• US Department of Labor estimates there are 10 million free agents

Source: Entrepreneur, Jan. 2000, p. 16.

Learning Goal 3Learning Goal 3

• HHow do human resource managers find good people to fill the jobs?– Most firms begin by trying to fill the job from within– If internal candidates are not available, an external search

begins• Local media is used to find workers who are

– Nontechnical– Unskilled– Nonsupervisory

• Highly trained recruits are found by using– College recruiters– Executive search firms– Job fairs– Company Web sites

Recruitment:Recruitment:Attempt to find and attract qualified applicants in the external labor market

• job fairjob fair

Job analysis & design

HR planning & forecasting

Employee recruitment

Employee selection

Employee TalentEmployee Talent

Ratings made by Fortune magazine:Most admired Most admired employee talent:

– Microsoft– Cisco Systems– Coca-Cola

LeastLeast admired admired employee talent::– MedPartners– Shoney’s– Trump Hotels & Casinos

Source: Fortune, Mar. 1, 1999, p. 70.

Learning Goal 4Learning Goal 4

• WWhat is the employee selection process?– Applicant submits an application or résumé– Receives a short, structured interview– Applicant may be asked to take an aptitude, personality, or

skills test– Selection interview

• In-depth discussion of applicant’s– Work experience, skills, and abilities– Education and career interests

• Applicants seeking professional or managerial positions may be interviewed by several people

– Successful applicants may be asked to undergo a physical exam

Selection:Selection:The process of determining which people in the applicant pool possess the qualifications necessary to be successful on the job

Job analysis & design

HR planning & forecasting

Employee recruitment

Employee selection

Steps of the Selection ProcessSteps of the Selection Process

Initial screening

Employment testing

Selection interview

Background and reference checks

Physical examination

Decision to hire

Learning Goal 5Learning Goal 5

• WWhat types of training and development do organizations offer their employees?– Training and development programs are

designed to increase employees’ knowledge, skills, and abilities to foster job improvement• Formal training• Development programs

– Job rotation– Executive education programs– Mentoring– Special project assignments

Training and Development:Training and Development:Activities that provide learning situations in which an employee acquires additional knowledge or skills to increase job performance

Training & development

Performance planning & evaluation

Compensation & benefits

•on-the-job trainingon-the-job training•off-the-job trainingoff-the-job training

Training and DevelopmentTraining and Development

Forecasting International predicts that the need for life-long learninglife-long learning will characterize business in the future

Implications:Implications:– need for higher training budgets

– need for constant retraining due to turnover

– use of technology for just-in-time training

– training as a motivational & retention tool

Source: HR News, Dec. 1999, pp. 18-20.

Learning Goal 6Learning Goal 6

• WWhat is a performance appraisal– Compares an employee’s actual

performance with the expected performance

– Typically used to determine an employee’s• Compensation• Training needs• Advancement opportunities

Training & development

Performance planning & evaluation

Compensation & benefits

Performance planning & evaluation Performance planning & evaluation process:process:Performance planning:

Setting standards & expectations

Employee job task behavior

Performance evaluation

Rewards & job changes

Performance EvaluationPerformance Evaluation

360° Evaluation360° Evaluation: performance feedback that combines self-appraisal with ratings made by coworkers at the same level, above, and below the target person in the managerial hierarchy

Advantages:Advantages:provides a well-rounded view

avoids individual bias

can have more impact than a single source

can establish consensus

Learning Goal 7Learning Goal 7

• HHow are employees compensated?– Direct pay

• Hourly wage or monthly salary paid to an employee• May include bonuses and profit shares

– Indirect pay• Various benefits and services

– Required by law: unemployment and worker’s compensation, Social Security

– Optional: paid vacations and holidays, pensions, health and other insurance products, employee wellness programs, college tuition reimbursement

Types of Compensation or Pay:Types of Compensation or Pay:• hourly wages• salaries• piecework and commission• accelerated commission schedule• bonus• profit sharing• fringe benefits

Training & development

Performance planning & evaluation

Compensation & benefits

Learning Goal 8Learning Goal 8

• WWhat is organizational career management?– Facilitation of employee job changes including

• PromotionsPromotions– Upward move with more authority, responsibility and pay

• TransfersTransfers– Horizontal move in the organization

• Layoffs Layoffs – Temporary separation arranged by the employer, usually

when business is slow

• RetirementsRetirements– Permanent separation that ends one’s career

Types of Career Change:Types of Career Change:

1.1. Job change within the organization– transfer– promotion– demotion

2.2. Separation from the organization– layoff– termination– resignation– retirement

Organizational career management

Learning Goal 9Learning Goal 9

• WWhat are the key laws and federal agencies affecting human resource management?– Federal law prohibits age, race, gender, color, national origin,

religion or disability discrimination– Americans with Disabilities Act bans discrimination against

disabled workers– Family and Medical Leave Act requires employers to provide

employees up to 12 weeks of unpaid leave a year– Other Federal agencies dealing with HR administration:

• Equal Employment Opportunity Commission (EEOC)• Occupational Safety and Health Administration (OSHA)• Office of Federal Contract Compliance Programs (OFCCP)• Wage and Hour Division of the Department of Labor

Laws Affecting Human ResourcesLaws Affecting Human Resources

1.1. Fair Labor Standards Act (1938)

2.2. Equal Pay Act (1963)

3. 3. Occupational Health & Safety Act (1970)

4. 4. Americans with Disabilities Act (1990)

Learning Goal 10Learning Goal 10

• WWhat trends are affecting human resource management?– Women comprise 45% of the American workforce

• Growing numbers of dual-career couples• Companies are facing issues like sexual harassment and

nonwork issues such as child and elder care

– Workers change jobs 3 to 5 times during their career• Lessens loyalty between employer and employee

– American workforce is becoming more diverse• Companies are offering diversity training and mentoring of

minorities

Trends in Human Resources Trends in Human Resources

1. Social changeSocial change More women in the work force More people changing jobs

2. DemographicsDemographics More diverse work force

3. Advancing TechnologyAdvancing Technology enables more outsourcing enables more telecommuting

4. Global CompetitionGlobal Competition– adaptable employees, need for language training &

cultural orientation

People Changing Jobs People Changing Jobs

Amount of Time MBAsExpect to Stay in Their First Job

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

5 or more years

Source: Fortune, Mar. 16, 1998.