3 People in Organizations Business Essentials 6e Ronald J. Ebert Ricky W. Griffin 10 HUMAN RESOURCE MANAGEMENT AND LABOR RELATIONS PowerPoint Presentation by Charlie Cook The University of West Alabama The Foundations of Human Resource Management Human Resource Management is about: Acquiring the most appropriate people to work in the organization Developing them to their full potential to contribute to the organization. Maintaining the organization’s relationship with them so that they continue to be motivated to work effectively there The Foundations of Human Resource Management (cont’d) The Strategic Importance of HRM Human resources are critical for effective organizational functioning Growth in importance due to: Increased legal complexities Equal employment rights, child labor, etc Recognition of the value of HR in improving productivity Awareness of the costs associated with poor HRM 10–3 HRM and Sustainable Competitive Advantage • • An organization can succeed if it has sustainable competitive advantage. Human resources have the necessary qualities to help give organizations this advantage: – Human resources are valuable. – Human resources with needed skills and and knowledge are sometimes rare. – Human resources cannot be imitated. – Human resources have no good substitutes. • At Southwest Airlines, the company’s focus is on keeping employees loyal, motivated, trained, and compensated. In turn, there is a low turnover rate and a high rate of customer satisfaction. Acquiring Human Resources Acquiring the most appropriate people to work in the organization Human Resource Planning Job Analysis Recruiting Selection Orientation FIGURE 10.1 The HR Planning Process 10–7 HR Planning Job Analysis A systematic analysis of jobs within an organization Job Description Lists the duties and responsibilities of a job, its working conditions; and the tools, materials equipment, and information used to perform it Job Specification Lists the skills, abilities, and other credentials and qualifications needed to perform the job effectively 10–8 Human Resource Planning Forecasting HR Demand and Supply Forecasting the number and nature of people needed to work in the organization The manager starts by assessing trends in past HR usage, future organizational plans, and general economic trends. Forecasting availability of people from within Replacement chart If someone left today, who would take over? Skills inventory What skills, experience do current employees have? Employee information systems HR Planning (cont’d) Forecasting external supply (number/type of people who will be available for hiring from the labor market at large) State employment commissions Government College reports information (number of graduates etc. ) 10–10 Matching HR Supply and Demand If more people are needed Recruit and Hire appropriate new employees Retraining and transferring present employees Retaining retirees Installing more productive systems If fewer people are needed Laying off personnel Attrition (don’t replace those who leave voluntarily) Encourage early retirement Staffing the Organization Recruiting Attracting the right number of qualified applicants to apply for the jobs that are open It is done through advertising, college visits, career fairs, employment agencies, networking Internal Recruiting Considering present employees as candidates for openings – Promotion from within External Recruiting Attracting people outside of the organization to apply for jobs 10–12 Internal / External Recruiting Encouraging applications from current employees Very good for morale Employee already knows company, and vice versa Organization can become “inbred” Seeking applications from outside the organization Brings fresh perspective and ideas Less knowledge to go on about new hire More expensive, time consuming Staffing the Organization (cont’d) Selecting Human Resources Application forms—no illegal questions Tests—ability, skills, aptitude, knowledge, attitude Interviews—validity is increased by: Training interviewers to reduce individual bias Using a structured interview format with job-related questions to improve consistency, reduce bias, and eliminate illegal questioning of applicants Other Techniques Polygraph tests Physical examinations Drug tests Reference checks © 2007 Prentice Hall, Inc. All rights reserved. 10–14 Background Checks Employers take the following steps before hiring applicants: Employment Verification 86% Criminal Records Check 81% Drug Screening 78% Reference Checks 70% Education Verification 70% Motor Vehicle Records 56% Orientation Acquainting (introducing) new employees with the organization Helps them to “fit in” an be comfortable Makes them more productive sooner First impressions are important! For the new employee and for the organization Training and Development Enhancing employees’ ability to contribute to the organization Employee training Teaching people how to be effective and efficient Management Development Preparing people for increased responsibility Training & Development Methods On-the-job training learning by doing Vestibule training Simulating on-the-job training in a non-work location Classroom teaching Conferences and seminars Role playing Relates to the Case Method Developing the Workforce (cont’d) Performance Appraisal Defining performance standards Observing performance Writing up the assessment Discussing the appraisal Performance Appraisal Evaluating job performance © 2007 Prentice Hall, Inc. All rights reserved. 10–19 Measuring Performance: Rating Individuals - Attributes Graphic Rating Scale Lists traits and provides a rating scale for each trait. The employer uses the scale to indicate the extent to which an employee displays each trait. Figure 8.3: Example of a Graphic Rating Scale Sources of Performance Information 360-Degree Performance Appraisal: performance measurement that combines information from the employees’: Managers Peers Subordinates Self Customers Types of Performance Measurement Rating Errors Contrast errors: the rater compares an individual, not against an objective standard, but against other employees. Distributional errors: the rater tends to use only one part of a rating scale. Leniency: the reviewer rates everyone near the top Strictness: the rater favors lower rankings Central tendency: the rater puts everyone near the middle of the scale Compensation and Benefits Compensation System The total package of rewards that a company offers employees in return for their labor Wages—money paid for time worked Salary—money paid to perform a job Factors affecting compensation Competitors’ wage offerings Internal wage and salary structure—job value, performance, and longevity Union contracts © 2007 Prentice Hall, Inc. All rights reserved. 10–24 Compensation and Benefits (cont’d) Incentive programs Special pay programs designed to motivate high performance Individual incentives: Bonuses Merit salary systems Pay for performance (variable pay) Company-wide incentives: Profit-sharing plans Gainsharing plans Pay-for-knowledge plans © 2007 Prentice Hall, Inc. All rights reserved. 10–25 Compensation and Benefits (cont’d) Benefits Programs Mandatory (required by law) Social Security retirement benefits Workers’ compensation insurance Discretionary (optional) Health, life, and disability insurance Vacations and holidays Employee assistance programs Retirement (pension) plans Contain the costs of benefits Cafeteria benefits plans © 2007 Prentice Hall, Inc. All rights reserved. 10–26 New Challenges in the Changing Workplace Managing Workforce Diversity Workforce diversity: The range of workers’ attitudes, values, beliefs, and behaviors that differ by gender, race, age, ethnicity, physical ability, and other relevant characteristics Organizations are recognizing that diversity can be a competitive advantage © 2007 Prentice Hall, Inc. All rights reserved. 10–27 FIGURE 10.3 Changing Composition of the U.S. Workforce *Projection © 2007 Prentice Hall, Inc. All rights reserved. 10–28
