Chapter Twelve
Human Resource
Management
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Strategic Human Resource Management
Human Resource Management (HRM)
≈ Activities that managers engage in to attract
and retain employees and to ensure that they
perform at a high level and contribute to the
accomplishment of organizational goals.
 MNGT 341, MNGT 408, MNGT 441
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Strategic Human Resource Management
 Strategic Human Resource
Management
≈ The process by which managers design the
components of a HRM system to be consistent
with each other, with other elements of
organizational architecture, and with the
organization’s strategy and goals.
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Components of a Human Resource
Management System
Figure 12.1
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“We think of work as fun, and by
that we mean thoroughly engaging,
challenging, rewarding, and
enjoyable.”
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The Legal Environment of HRM
 Equal Employment Opportunity (EEO)
≈ The equal right of all citizens to the opportunity
to obtain employment regardless of their
gender, age, race, country of origin, religion,
or disabilities.
≈ Equal Employment Opportunity Commission
(EEOC) enforces employment laws.
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The Legal Environment of HRM
 National Labor Relations Act (1935)
≈ Right to unionize, bargain, and strike
 Fair Labor Standards Act (1938)
≈ Minimum wage, overtime
 Equal Pay Act of 1963
 Civil Rights Act of 1964
≈ Disparate treatment and adverse impact (note recent S.Ct.
decision involving New Haven, CT firefighters)
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Age Discrimination in Employment Act
Occupational Safety and Health Act (1970)
Pregnancy Discrimination Act
Americans with Disabilities Act
Family and Medical Leave Act
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The Legal Environment of HRM
 Contemporary challenges for managers
≈ How to eliminate sexual harassment
≈ How to make accommodations for employees
with disabilities
≈ How to deal with employees who have
substance abuse problems
≈ How to manage HIV-positive employees and
employees with AIDs
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Recruitment and Selection
 Recruitment
≈ Activities that managers engage in to develop
a pool of candidates for open positions.
 Selection
≈ The process that managers use to determine
the relative qualifications of job applicants and
their potential for performing well in a
particular job.
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Human Resource Planning
 Human Resource Planning (HRP)
≈ Activities that managers engage in to forecast
their current and future needs for human
resources.
 Demand, supply forecast
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Human Resource Planning
 Outsourcing
≈ Using outside suppliers and manufacturers to
produce goods and services
≈ Using contract workers rather than hiring
them.
 More flexible for the firm.
 Provides human capital at a lower cost.
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Job Analysis
 Job Analysis
≈ Identifying the tasks, duties and
responsibilities that make up a job and the
knowledge, skills, and abilities needed to
perform the job.
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Recruitment
 External Recruiting
≈ Looking outside the organization for people
who have not worked at the firm previously.
 Newspapers advertisements, open houses, oncampus recruiting, employee referrals, and through
the Internet.
• Note CareerFest presentation
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Recruitment
Internal Recruiting
≈ Managers turn to existing employees to fill
open positions
≈ Benefits of internal recruiting:
 Internal applicants are already familiar with the
organization
 Managers already know candidates
 Can help boost levels of employee motivation and
morale
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Honesty in Hiring
 Realistic Job Preview
≈ Providing an honest assessment of the
advantages and disadvantages of a job and
organization.
 Can reduce the number of new hires who quit when
their jobs and organizations fail to meet their
unrealistic expectations
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The Selection Process
 Selection process
≈ Managers find out whether each applicant is
qualified for the position and likely to be a
good performer
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Selection Tools
Figure 12.3
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Interviews and Tests
 Clarification (pp. 436-37)
≈ Mngrs should not ask questions that are irrelevant to
job in question (may expose Co to legal liability and
may be invalid)
 However, employment in U.S. is “at will”
• Er decisions can be based on good reasons, bad reasons, or no
reasons whatsoever provided they are not based on reasons made
illegal by statute (race, gender, religion, etc.)
 While gender discrimination is illegal under Civil Rights Act,
questions about spouse’s background or family plans don’t
necessarily involve gender discrimination
• Note state law may go beyond federal law (E.g., in IN Er cannot
discriminate on basis of smoking, Er in MI can do so)
≈ Use of invalid paper-and-pencil test is not grounds for
lawsuit, but if test results in adverse impact then it
must be shown to be valid
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Reliability and Validity
 Reliability
≈ the degree to which the tool measures the
same thing each time it is used (consistency)
 Validity
≈ the degree to which the test measures what it
is supposed to measure (accuracy)
 Note that no test predicts perfectly, so objective
should be to use tests with greatest validity (so as
to maximize correct predictions)
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Training and Development
 Training
≈ Teaching organizational members how to
perform current jobs and helping them to
acquire the knowledge and skills they need to
be effective performers.
 Development
≈ Building the knowledge and skills of
organizational members to enable them to
take on new responsibilities and challenges.
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Training and Development
 Needs Assessment
≈ An assessment of which employees need
training or development and what type of skills
or knowledge they need to acquire.
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Training and Development
Figure 12.4
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Performance Appraisal and Feedback
 Performance Appraisal
≈ The evaluation of employees’ job performance
and contributions to their organization.
≈ Traits, behaviors, results
≈ Clarification re: lawsuit against Ford concerning
forced distribution (p. 444) – issue wasn’t simply
that system was unfair, but that it was used in
discriminatory fashion (i.e., age discrimination)
 Ford discontinued system
• Hard to validate system based on subjective appraisals
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Subjective Measures of Performance:
Graphic and Behaviorally Anchored Rating Scales
Figure 12.5
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Subjective Measures of Performance:
Behavioral Observation Scale
Figure 12.5
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Who Appraises Performance?
Figure 12.6
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Effective Feedback Tips
 Be specific and focus on behaviors or outcomes
that are correctable and within a worker’s ability
to improve.
 Approach performance appraisal as an exercise
in problem solving and solution finding, not
criticizing.
 Express confidence in a subordinate’s ability to
improve.
 Provide performance feedback both formally and
informally.
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Pay and Benefits
 Pay
≈ Includes employees’ base salaries, pay raises,
and bonuses
≈ Determined by characteristics of the
organization and the job and levels of
performance
≈ Benefits are based on membership in an
organization (although vacation days often
linked to seniority)
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Pay and Benefits
 Pay level
≈ The relative position of an organization’s
incentives in comparison with those of other
firms in the same industry employing similar
kinds of workers
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Pay and Benefits
 Pay Structure
≈ The arrangement of jobs into categories based on
their relative importance to the organization and its
goals, level of skills, and other characteristics.
 Pay grades and pay ranges
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Pay and Benefits
 Benefits
≈ Legally required: social security, workers’
compensation, unemployment insurance (and
FMLA leave)
≈ Voluntary (discretionary): health insurance,
pension plans, vacations and holidays, etc.
≈ Cafeteria-style benefit plans allow employees
to choose the best mix of benefits for them;
can be hard to manage.
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Labor Relations
 Labor Relations
≈ The activities managers engage in to ensure
they have effective working relationships with
the labor unions that represent their
employees’ interests.
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Unions
 Unions
≈ Represent worker’s interests to management
in organizations.
≈ The power that a manager has over an
individual worker causes workers to join
together in unions to try to restrict this.
≈ Correction (p. 451): several unions
(constituting ~1/3 of membership) withdrew
from AFL-CIO in 2005 to form the Change-toWin coalition
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Unions
 Collective bargaining
≈ Negotiation between labor and management
to resolve conflicts and disputes about issues
such as working hours, wages, benefits,
working conditions, and job security.
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