Managing Human Resources
Chapter 13
1. Explain the strategic importance of managing
human resources effectively
2. Describe several important laws and government
regulations that affect how organizations manage
their human resources
3. Explain the objective of human resources
planning and describe how organizations respond
to the unpredictability of future business needs
(continued)
4. Describe the hiring process
5. Describe several types of training and development
programs
6. Describe several principles for improving the
accuracy of managers’ appraisals of employee
performance
7. Describe the basic elements of a monetary
compensation package
Strategic Importance
 Human resources management (HRM): the
philosophies, policies, and practices that an
organization uses to affect the behaviors of
people who work for the organization
 Strategic use of HRM activities can improve
organizational effectiveness
Line Managers
HR Professionals
 Include HR
 Stay informed of
professionals in
the latest
the formulation
technical
and implementation
principles for
of business strategy
managing human
and discussions of
resources
its HR implications
Employees
 Accept
responsibility for
managing their
own behavior
and careers in
organizations
Line Managers
HR Professionals
 Help disseminate
 Develop a
information about
recruiting plan to
open positions to all
guarantee a
potentially qualified
diverse pool of
internal applicants
applicants
 Understand and
abide by all legal
regulations
Employees
 Participate in
recruiting by
making referrals
and answering
questions about
the organization
Line Managers
 Work with employees
to identify their
training and
development needs
 Provide on-the-job
socialization and
training
HR Professionals
Employees
 Develop and
administer training
and development
programs
 Inform employees of
opportunities for
training and
development
 Identify own training
and development
needs
 Actively seek out and
participate in
activities that help
build own
competencies
 Assist in socialization
and training of other
employees
Line Managers
HR Professionals
Employees
 Develop
 Candidly appraise
 Help develop
performance
the performance of
performance
appraisal tools and
others when asked
measures
to participate in
 Conduct performance train managers to
use them
360-degree
appraisals
appraisals
 Train managers in
how to conduct
performance review
sessions
(cont’d)
Line Managers
HR Professionals
Employees
 Monitor managers’  Seek and use
 Use performance
decisions to be sure
honest feedback to
information to make
they are
improve own
decisions about pay
performance-based
performance
raises, promotions,
firing etc
 Provide feedback to
employees to help
them improve future
performance
Line Managers
 Assist in developing
incentive and bonus
plans
HR Professionals
Employees
 Establish appropriate  Develop an accurate
rates of base pay in
understanding of all
compliance with legal
elements of the
requirements
organization’s pay
 Work with managers
practices
to design and develop  Be alert to
incentives and bonus
dysfunctional and
plans
possible unethical
 Work with accounting
attempts to “game”
and financial staff to
performance-based
monitor compensation pay practices
costs
Competitors must not be able to easily copy the
company’s approach to HRM
Employees must be “rare” or unique
in some way
Employees must
be a source of
added value
 Recruiting more managers from outside the
company
 Hiring more employees from the countries where
GE sells its products and services
 Setting goals for managers to develop creative new
business ideas and tying compensation to meeting
these goals
 Rewarding managers for revenue growth and
customer satisfaction
 Urging people to stay in their jobs longer so they
can develop deeper knowledge of their industry
Social Consequences of HRM: Snapshot
“Our aim is to treat our job
candidates as well as we treat our customers,
to do something memorable for them. You can’t
treat people shabbily, especially in a world where
there are far more open jobs than there is available
talent to fill them. We strive to put the humanity
back into the recruiting experience.”
Jason S. Warner, Director of North American Recruiting,
Starbucks Corporation
Legal and Regulatory Environment:
Equal Employment Opportunity [EEO]
 Job applicants and employees should be:
1. Judged on characteristics that are related to
the work that they are being hired to do
2. Judged on their job performance after being
hired
3. Protected from discrimination based on their
personal background characteristics, such as
gender, race, ethnicity, religion, and so forth
 Prohibits discrimination by employers, employment agencies,
and unions with 15 or more employees on the basis of:
 Race
Color
Religion
Sex
National origin
Pregnancy (Pregnancy Discrimination Act, 1978)
 Identifies pregnancy as a disability and entitles the woman to
the same benefits as any other disability
 1991 Amendment clarifies how cases brought under the act
should proceed
Makes rules to
implement and
interpret EEO laws
Imposes
sanctions
Conducts investigations
and may file lawsuits in
federal courts
Equal Employment
Opportunity
Commission (EEOC)
Makes
judgments about
guilt, which may be
appealed to federal
courts
EEO in the Global Arena: Who’s
Protected Where by Legislation?
Country
Race or Color
Sex
Religion
Age
United States




India



No
Canada




China



No
United Kingdom



No
Mexico




(continued)
EEO in the Global Arena: Who’s
Protected Where by Legislation?
Country
Disability
Sexual
Political National Marital or
Orientation Ideology Origin
Family
Status
United States

No
No

No
India

No
No
No
No
Canada


No


China
No
No
No

No
United Kingdom





Mexico





 Fair Labor Standards Act (1938)
 Establishes a minimum wage, which may be raised
by individual states
 Controls hours through premium pay for overtime
 Controls working hours for children
 Applies to most nonmanagerial employees in private
industry
 Equal Pay Act (1963)
 Requires men and women to be paid equally when
they are doing equal work (in terms of skill, effort,
responsibility, and working conditions) in the same
organization
 Some states extend the Equal
Pay Act by requiring employers
to assess the worth of all jobs and
ensure that jobs of comparable
worth are paid similarly
 Involves forecasting the organization’s human resources
needs and developing the steps to be taken to meet them
 Contingent workers: employees who are hired by companies
for specific tasks or short periods of time with the
understanding that their employment may be ended at
any time
 Layoffs: a strategy of last resort. Potential negative
effects of layoffs:
More gossip
Lower morale
More resignations
Less employee loyalty
More charges of discrimination
More workplace violence
Historical Trend in Growth
Rate of the U.S. Workforce
(adapted from Figure 13.1)
Effects of Layoffs as Reported by Human
Resource Managers in Companies That Reduce
Their Workforce
(adapted from Figure 13.2)
More profits
More gossip
Lower morale
More resignations
Less employee loyalty
More charges of discrimination
More workplace violence
-60
-40
-20
Percent reporting an increase or decrease after layoffs
0
Percent
20
40
60
Human Resource Planning (cont’d)
 Competency inventory: a detailed file maintained
for each employee that lists level of education,
training, experience, length of service, current job
title and salary, and performance history
 Purpose of competency models
To keep track of the talent in the organization so
that it can be nurtured and used effectively
Hiring Process
 Activities related to the recruitment of applicants to fill
open positions in an organization and the selection of
the best applicants for a position
 Vacancies stimulate the hiring process through:*
Vacancies Stimulate the Hiring
Process
Organizational
Growth
Internal
Movement
•Promotion
•Demotion
•Transfer
Exit from
Organization
(Turnover)
(adapted from Figure 13.3)
Vacancy
Created
Recruitment
Selection
Problems Encountered When Applying for
Jobs on the Internet
(adapted from Figure 13.4)
Difficult to navigate site
Difficult to use
Wanted more personal contact
Concerns about security of personal data
Lack of relevant information about the company
Not enough jobs listed to make it worth the effort
Slow feedback and follow-up
0
10
20
30
Percent
Percent reporting problems
40
50
60
Organization
web site
Announcements
in newspapers,
magazines,
employment
websites, etc.
Internal job positions,
paper-based and
Intranet
Common
recruitment
methods
Employee
referrals
 A process that involves deciding which of these recruits
should actually be hired and for which positions
Résumés
Tests
Reference checks
Common
information
sources
Interviews
 Competency Being Assessed: Teamwork
1. Sketch out two or three key strengths you have in
working as part of a work team. Can you illustrate
the first strength with a recent example? [repeat this
question and the following probes for each strength]:
Probes:
 When did this example take place?
 What possible negative outcomes were avoided
by the way you handled the situation?
 How often do situations like this happen?
 What happened in the next time it came up?
(continued)
(cont’d)
 Competency Being Assessed: Teamwork
2. Tell me about a time when you used your teamwork
competency to solve a problem with a customer
Probes:
 Where did this take place?
 What did the customer say?
 What did you tell your teammates?
 Did the team have any problems dealing with
the situations? Explain
 How did the customer respond?
 Training: activities that help employees overcome
limitations and improve performance in their current
jobs
Orientation
training
E-learning
Basic skills
training
Common
training
approaches
Team
training
 Development: practices that help
employees gain the competencies they
will need in the future in order to
advance in their careers
Career development
Coaching
Core
development
approaches
Mentoring
 A formal, structured system for evaluating
an employee’s job performance
 Common uses of performance appraisal
 To make decisions about who will be promoted,
demoted, transferred, or dismissed
 To make decisions about pay raises
 To improve future performance of employees
 Managers and their subordinates meet to
exchange performance information and
discuss how to improve future performance
 Performance information increasingly
includes:
 Employee’s own assessment of performance
 Assessment by teammates
 Information from customers
 Difficult for managers to accurately assess
performance of subordinates
 Two approaches to improve accuracy:
 Use appropriate rating scales that provide specific
descriptions of what each level of performance means
 Use multiple raters
One example. 360-degree appraisal—measures
performance by obtaining assessments of the employee
from a variety of sources: supervisors, subordinates,
colleagues inside the company, people outside the
organization with whom the employee does business,
and even a self-appraisal by the employee
 Some teams may have full responsibility
for constructing and conducting their own
performance appraisals of each other
 Team self-appraisal of each member is
difficult
 Manager to whom the team reports is often
responsible for collecting performance
information from the team and discussing
it with each team member privately
 Nonmonetary compensation: the many forms
of social and psychological rewards, such as
recognition and respect from others and
opportunities for self-development
 Monetary compensation: the direct payments
such as salary, wages, and bonuses, as well as
benefits such as covering the costs of insurance
plans
bonus
 What people believe they deserve to be paid in
relation to what others deserve to be paid
 However, compensation must be externally
competitive to attract qualified applicants
 Components of pay system employees consider
in evaluating fairness
 Base pay—perceived fairness increases if at or
above market average
 Incentive pay—such as commissions, bonuses,
and profit sharing
 Employee benefits—some required by law and
others are voluntary
Average Annual Monetary Benefits
and Earnings
(adapted from Figure 13.6)
7
14.5
9
68
2
Legally Required Benefits
Voluntary Payments for Private Pensions, Insurance, etc.
Paid Vacations, Breaks, and Rest Periods
Other
Pay for Actual Time Worked (w ages and salaries)
Vacationing Around the World
(adapted from Figure 13.7)
Italy
France
Germany
Brazil
Britain
Canada
South Korea
Japan
U.S.
0
5
10
Average annual vacation days
15
20
25
Days
30
35
40
45