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Summary Human Resource Management, H1-18
Human Resource Management (Vrije Universiteit Amsterdam)
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Chapter 1 – Introduction to Human Resource Management
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What is Human Resource Management and why is it important?
o What is Human Resource Management?
Organization: An organization consists of people with formally assigned roles who
work together to achieve the organization’s goals
Manager: is the person responsible for accomplishing the organization’s goals, who
does so by managing the efforts of the organization’s people
Managing involves five functions:
• 1) Planning: Establishing goals and standards; developing rules and
procedures; developing plans and forecasting
• 2) Organizing: Giving each subordinate a specific task; establishing
departments; delegating authority to subordinates; establishing channels of
authority and communication; coordinating subordinates’ work
• 3) Staffing: Determining what type of people you should hire; recruiting
prospective employees; selecting employees; training and developing
employees; setting performance standards; evaluating performance;
counseling employees; compensating employees
• 4) Leading: Getting others to get the job done; maintaining morale; motivating
subordinates
• 5) Controlling: Setting standards such as sales quotas, quality standards, or
production levels; checking to see how actual performance compares with
these standards; taking corrective action, as needed
Human Resource Management: is the process of acquiring, training, appraising,
and compensating employees, and of attending to their labor relations, health and
safety, and fairness concerns
• Definition from the lecture: The strategic and coherent approach to the
management of an organization’s most valued assets – the people working
there who individually and collectively contribute to the achievement of the
objectives of the business
Topics of the HRM job involve:
• Conducting job analysis (determining the nature of each employee’s job)
• Planning labor needs and recruiting job candidates
• Selecting job candidates
• Orienting and training new employees
• Managing wages and salaries (compensating employees)
• Providing incentives and benefits
• Appraising performance
• Communicating (interviewing, counseling, disciplining)
• Training and developing managers
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• Building employee commitment
Why is Human Resource Management important to all managers?
Avoid personal mistakes: like hiring the wrong person, experience high turnover,
have your people not doing their best, waste time with useless interviews
Improve profits and performance: Basically hiring the right people for the right
jobs and motivating, appraising, and developing them
You too may spend some time as an HR Manager: one fourth of large U.S.
business appointed managers with no human resource management experience as
their top human resource executives
HR for Entrepreneurs: Statistically speaking, most people graduating from college
in the next few years either will work for small businesses or will create new small
businesses of their own (in the US) and need to manage their human resources
Line and Staff Aspects of Human Resource Management
Authority: is the right to make decisions, to direct the work of others, and to give
orders managers usually distinguish between line authority and staff authority
Line Authority: traditionally gives managers the right to issue orders to other
managers or employees line authority therefore creates a superior (order giver)subordinate (order receiver) relationship
• Line managers are therefore crucial for the company’s survival
Staff Authority: gives a manager the right to advise other managers or employees
creates an advisory relationship
• As HR manager you usually advise others and therefore you make part of the
staff authority
• Staff managers run departments that are advisory or supportive
Line Manager’s Human Resource Duties
In a small company, line managers are still responsible for HR duties
As an organization grows, line managers need assistance, specialized knowledge,
and advice of a separate human resource staff
Human Resource Manager’s Duties
3 distinct functions of a HRM
• 1) A line function: The HRM directs the activities of the people in his own
department, and perhaps in related areas
• 2) A coordinative function: The HRM also coordinates activities functional
authority: ensures that line managers are implementing the firm’s human
resource policies and practices
• 3) Staff (assist and advise) functions: The heart of an HRM’s job
o Advising the CEO so the CEO can better understand the personnel aspects
of the company’s strategic options
o Assists in hiring, training, evaluating, rewarding, counseling, promoting,
and firing employees
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Carries out an innovator role by providing up to date information on
current trends and new methods for better utilizing the company’s
employees
Employee advocacy role by representing the interests of employees
within the framework of its primary obligation to senior management
• HRM specialties include
o 1) Recruiters: Search for qualified applicants
o 2) Equal employment opportunity (EEO) coordinators: Investigate and
resolve EEO grievances, potential violations…
o 3) Job analysts: Collect and examine information about jobs to prepare
job descriptions
o 4) Compensation managers: Develop compensation plans and handle the
employee benefits program
o 5) Training specialists: Plan, organize, and direct training activities
o 6) Labor relations specialists: Advise management on all aspects of union
management relations
• There is generally about 1 human resource employee per 100 company
employees
o New Approaches to Organizing HR
Some organize their HR services around four groups: transactional, corporate,
embedded, and centers of expertise:
• 1) The transactional HR group uses centralized call centers and outsourcing
arrangements to provide support for day-today transactional activities
• 2) The corporate HR group focuses on assisting top management in ‘top level’
big picture issues such as developing and explaining the personnel aspects of
the company’s long-term strategic plan
• 3) The embedded HR unit assigns HR generalists directly to departments like
sales and production
• 4) The centers of expertise are like specialized HR consulting firms within the
company
o Cooperative Line and Staff HR Management: An example
Because line managers and human resource managers both have HRM duties, it is
reasonable to ask, ‘Exactly which HR duties are carried out by line managers and
which by staff managers?’
The most important generalization is that the line-staff relationship should be
cooperative
Some activities HRM (mostly) do alone: pre-employment testing, college recruiting,
insurance benefits administration, interviewing
HRM = getting results through people
o Globalization and Competition Trends
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Globalization refers to the tendency of firms to extend their sales, ownership, and
manufacturing to new markets abroad Why abroad?
• Sales expansion: opening stores in other countries…
• New foreign products and services to sell
• Cut labor costs
• Forming partnerships that drives firms to do business abroad
‘The bottom line is that the growing integration of the world economy into a single,
huge marketplace is increasing the intensity competition in a wide range of
manufacturing and service industries
Globalization brings both benefits and threats for…
• Consumers: lower prices and higher quality products
• Workers: means working harder with less secure jobs, Job offshoring
• Business owners: millions of new consumers, but also new and powerful global
competitors at home
o Indebtedness (‘Leverage’) and Deregulation
Deregulation: stripping down regulations by the responsible government
For instance, the rules that prevented commercial banks from expanding into stock
brokering were relaxed
o Trends in the Nature of Work
Technology had a huge impact on how people work, and therefore on the skills and
training today’s workers need
High Tech Jobs
Service Jobs: two-thirds of the US workforce is producing and delivering services,
not products.
• With global competition, more manufacturing jobs have shifted to low-wage
countries
• Higher productivity enables manufacturers to produce more with fewer
workers
• Just-in-time manufacturing techniques link daily manufacturing schedules
more precisely to customer demand, squeezing waste out of the system and
reducing inventory needs
Knowledge work and human capital: In general, the best jobs that remain require
more education and skill
• Human Capital: refers to the knowledge, education, training, skills, and
expertise of a firm’s workers
o Workforce and Demographic Trends (Focused mostly on the states and therefore I did
not go into too much detail)
Demographic trends:
Retirees: Many human resource professionals call ‘the aging workforce’ the biggest
demographic trend affecting employers
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The basic problem is that there aren’t enough younger workers to replace the
older-worker retirees
Nontraditional Workers: At the same time, there has been a shift to nontraditional
workers include those who hold multiple jobs
Workers From Abroad: With retirements triggering projected workforce shortfalls,
many employers are hiring foreign workers for US jobs
Economic Challenges and Trends
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The New Human Resource Managers
o Human Resource Management Yesterday and today
In the earliest firms, HRM first took over hiring and firing from supervisors, ran the
payroll department, and administered benefits plans
As expertise in areas like testing began to appear, the personnel department began
to play an expanded role in employee selection and training
Then, as Congress passed new equal employment legislation in the 1960s and
1970s, employers began leaning on their human resource managers’ expertise for
avoiding and managing discrimination claims
HR managers no longer just do everyday transactional things like signing on new
employees or changing their benefits
o They Use new Ways to Provide Transactional Services
Today’s HRM must be skilled at offering transactional HR services in innovative
ways:
• Outsourcing more benefits administration and safety to outside vendors
• Company Portals that allow employees to self-administer benefits plans
• Facebookrecruiting to recruit job applicants
• Online testing to prescreen applicants
• Centralized call centers to answer HR related inquiries from supervisors
More employers are installing their own internal social networking sites (LinkedIn,
Facebook)
Some Technology applications to Support Human Resource Activities:
• Streaming desktop video: Used to facilitate distance learning and training or
provide information inexpensively over a distance
• Internet- and network-monitoring software: Used to track employees’ Internet
and e-mail activities to monitor their performance
• Data warehouses and computerized analytical programs: Help HRM monitor
their HR systems
o They Take an Integrated, ‘Talent Management Approach to Managing Human
Resources
What is talent management?
• Talent Management is the goal-oriented and integrated process of planning,
recruiting, developing, managing, and compensating employees
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o They Manage Ethics
6 of the 10 most serious workplace ethical issues are HRM related (workplace
safety, security of employee records, employee theft, affirmative action,
comparable work, and employee privacy rights
Ethics means the standards someone uses to decide what his or her conduct
should be
o They Manage Employee Engagement
The Institute for Corporate Productivity defines engaged employees ‘as those who
are mentally and emotionally invested in their work and in contributing to an
employer’s success only one-third of the employees in the US are engaged in
the jobs…
o They Measure HR Performance and Results
In today’s performance-based environment, employers expect heir HRM to take
action based on measurable performance-based criteria
o They Use Evidence-Based Human Resource Management
Basing the decisions on the evidence is the heart of evidence-based HRM
This is use of data, facts, analytics, scientific rigor, critical evaluation, and critically
evaluated research/case studies to support HRM proposals, decisions, practices,
and conclusions
o They Add value
From top management’s point of view, it’s not sufficient that HR management just
oversee activities such as recruiting and benefits
It must add value, particularly by boosting profitability and performance in
measurable ways
Putting in place a high-performance work system (discussed in later chapters) is
one way to add value
Such a system is a set of human resource management practices that together
produce superior employee performance
o They Have New Competencies
Adding value, strategizing, and using technology all require that HRM have new
competencies and broader business competencies
HRM must ‘speak the CFO’s language’ by proposing and explaining HR plans in
measurable terms (such as return on investment), and be able to measure HR’s
impact
The human resource Manager’s competencies
• Talent Managers/Organization Designers: with a mastery of traditional HRM
tasks such as acquiring, training, and compensating employees
• Culture and Change Stewards: able to create HR practices that support the
firm’s cultural values
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Strategy Architects: with the skills to help establish the company’s overall
strategic plan, and to put in place the HR practices required to support
accomplishing the plan
• Operational Executors: able to anticipate, draft, and implement the HR
practices the company needs to implement its strategy
• Business Allies: competent to apply business knowledge that enable them to
help functional and general mangers to achieve their departmental goals
• Credible Activists: with the leadership and other competencies that make the
‘both credible and active’
o HR Certifications
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The Plan of This Book
o The Basic Themes and Features
o The Topics Are Interrelated
Chapter 3 - Human Resource Management Strategy and Analysis
Learning Objectives:
1. Explain why strategic planning is important to all managers
2. Explain with examples each of the seven steps in the strategic planning process
3. List with examples the main generic types of corporate strategies and competitive
strategies
4. Define strategic human resource management and give an example of strategic
human resource management in practice
5. Briefly describe three important strategic human resource management tools
6. Explain with examples why metrics are important for human resources
Goal setting and the planning-process
Planning involves setting new objectives, making basic planning forecasts, reviewing alternative
course of action, evaluating which options are the best and then choosing and implementing
your plan.
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A plan shows the course of action from where you getting from and where you want to go, it is
always “goal-directed”
The Hierarchy of Goals:
(Figure 3-1 p 99) The CEO of a company derives goals from a plan which are subsequently
reformulated for every lower part of the company: this means that every department gets its
own subgoals to achieve the grant goal of the company
Strategic Planning (Question 1)
A strategic plan is the company’s plan for how it will match its internal strengths and
weaknesses with external opportunities and threats in order to maintain a competitive
advantage. The essence of strategic planning is to ask: “where are we now as a business, where
do we want to be, and how should we get there?”
A strategy is a course of action the company can pursue to achieve its strategic aims.
Strategic management is the process of identifying and executing the organizations strategic
plan by matching the companies capabilities with the demands of its environment
Strategic management process (Fig. 3-2 p 99):
Step1: define the current business
Step2: perform external internal audits
Step3: Formulate a new direction
Step4: Translate the mission into strategic goals
Step5: Formulate strategies to achieve the strategic goals
Step6: Implement the strategies
Step7: Evaluate the Performance
(Q1)So why is strategic planning important to all managers?
In order to achieve the companies goals. Therefore, goals are derived from the strategic plan
of the company. Executing the plan of the company means translating it into goals and
subgoals and advise and direct employees in a strategic way. Strategic management means to
estimate the current status of the company and the desired status of the company. Capabilities
of the company together with its environmental demands are crucial factors in the strategic
management process.
(Q2) Explain each of the seven steps in the strategic planning process
Step1: define the current business: what products do we sell?, where do we sell them?, and
how our products or services differ from our competitor’s? example: Rolex and casio sell
watches, but rolex focuses on expensive limited watches and casio on innovative and
inexpensive ones
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Step2:Perform external and internal audits: “Are we heading in the right direction?” Managers
need to audit the firm’s strengths and weaknesses and important environmental factors such as
economic trends, competitive and market trends, political- technological- social- and
geographic trends
Fig 3-4 SWOT matrix to analyze strengths weaknesses etc.
The aim of all this is to make a strategy that fits the companies strengths, weaknesses,
opportunities and trends
Step3: Formulate a new direction: “what should our new business be?” like what products,
where to sell and which differences with competitors
Therefore managers formulate a vision statement: it shows what the firm wants to become
(sustainable e.g.)
Mission statement: summarizes what the company’s main tasks are now (high quality product
development e.g.)
Step4: Translate the mission into strategic goals: formulate concrete objectives for every part
or department of the company (boost quality in production e.g.)
Step 5: Formulate strategies to achieve the strategic goals: choose strategies that enable the
company to achieve its goals (for quality boost in production new technological plants or train,
select personnel different e.g.)
Step 6: Implement the strategy: translating it into action (build the plants, or hire/fire (new)
personnel, submit trainings etc.)
Step 7: Evaluate Performance: Examine how the strategy worked, did the plan work? (plants
cost more than expected [profit-] or personnel is not interested in new task, EVALUATE )
(Q3) List with examples the main generic types of corporate strategies and
competitive strategies
(Fig 3-5 types of strategies at each company level p 102)
Corporate Strategy:
“How many and what kind of businesses should we be in?”
A company’s corporate-level strategy identifies the portfolio of business that, in total, comprise
the company and how these businesses relate to each other (pepsi also owns chips and oats
companies)
Concentration corporate strategy is a single business, that sells a product line or one
product, usually in one market (WD-40 spray)
A diversification corporate strategy implies that the firm will expand by adding new
product lines, PepsiCo is diversified, they used a related diversification because their
expands fit logically into their business (The Godfather: owning a company that ruins
the streets with too heavy weighted trucks but owning also the company that repairs
the streets)
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Conglomerate diversification means diversifying into products or markets that are not
related to each other
A vertical integration strategy means the firms expands by, perhaps producing its own
raw materials or selling its products directly (apple store)
Consolidation strategy means to reduce the size of the company
Geographic expansion, the company grows by entering new territorial
markets(MCdonalds)
Competetive Strategy (business level)
A competitive strategy identifies how to build and strengthen the business’s long term
competitive position in the marketplace. The goal is to endeavor competitive advantages as any
factors that allow a company to differentiate its product or service from those of its
competitors to increase market share
Cost leadership means becoming the low cost leader in an industry (Walmart)
Differentiation means to be unique in an industry, at least in some points (Volvo high
security cars)
Focusers carve out a niche(like Ferrari), competing by providing a product or service
that their customers cannot get from their generalist competitors (Toyota)
Human Resources as a competitive advantage
A competitive advantage enables a company to differentiate its product or service from those
of its competitors, but the competitive advantage needn’t to be tangible like high tech
machines or satellite systems. For some companies, the workers skills and abilities are
competitive advantages, because they produce qualitative superior work or are more
productive.
Similarly apples reputation for innovation reflect its competitive advantage in creative and
brilliant engineers
Functional strategy
The (competitive) strategy’s implications for each of the departments in the company: like
maintaining the lowest costs for manufacturing, sales and human resource management.
(For example a flight company with lowest prices on the market because they have different
restrictions or goals like limited passenger services,
Strategic Fit
Each of the company’s departments should have their own functional strategy that fit and
support the company’s collective aims
In case of the Airline example this means that in order to achieve their goal of lowering costs,
they have superior productive ground crews that need less time for departure, this is the
reason why they safe costs)
Mergers and Acquisition
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HR managers are important in mergers and acquisitions because most of the time it is the
personnel factor that plays the biggest role in success or failure in M&A
Overall the HR manager has a lot of important information for top managers and strategic
planning
Due Diligence stage: reviews that assure that both companies know what they are getting into
Integration stage: critical Human Resource issues during the first few months of a merger or
acquisition, choosing top management, communication changes effectively to employees and
retain key talents. Within the integration stage are these points important:
Manage the deal costs
Manage the messages
Secure the top team and key talent
Define and implement an effective HR service delivery strategy
Develop a workable change management plan
Design and implement the right staffing model
Aligning total rewards
Q4 Define Strategic Human Resource Management
The basic idea behind strategic human resource management is this: formulating human
resource management policies and activities, the aim must be to produce the employee
skills and behaviors that the company needs to achieve its strategic goals
Fig 3-6 and 3-7 p 107
Management formulates a strategic plan and measurable strategic goals, these plans
imply certain workforce requirements in terms of the employee skills and behaviors
required to achieve the firm’s strategic aims, according to these workforce
requirements HR formulates HR strategies to produce the desired workforce skills
competencies and behaviors
Q5 Describe Strategic Human Resource tools
Strategy Map fig 3-8 p109
Provides an overview of how each departments performance contributes to achieving the
company’s overall strategic goals. It helps the HR manager understand the role his or her
department plays in helping to execute the companys strategic plan
The HR Scorecard
Quantified strategy map’s activities(productivity, amount of testing training, customer service).
It refers to a process for assigning financial and nonfinancial goals or metrics to the HR
management- related chain of activities required for achieving the company’s strategic aims
and for monitoring results
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Digital Dashboards
Presents desktop graphs and charts of how the company is doing on all the metrics from the HR
Scorecard process
HR metrics and benchmarking
The bottom line is that measuring “how we’re doing and why” is important for managing one’s
resources, there are several applications that provide the HR manager with information about
the company’s departments and costs, trends-, productivity of each
But also quality of new hires or which recruitment sources provide the most new hires
This metric measurement is always done in relation to something, like how we are doing in
relation to the competitors
Q6 explain why Strategy and Strategy-Based Metrics is Important
Strategy based metrics are metrics that focus on measuring the activities that contribute to
achieving a company’s strategic aims
Like measurement of customer service, guest returns and guest compliments of employees at a
restaurant or hotel
HR can focus on training on the factors that need to be improved
Workforce/Talent Analytics and Data Mining
Some software applications help during the selection process and also have some data to
predict the likeliness that a employee decides to leave
Information derived from these applications enable companies to predict employee actions and
take corrective actions
Thanks to data mining, the manager can discover patterns that he or she can use to make
predictions
What are HR audits?
“an analysis by which an organization measures where it currently stands and determines what
it has to accomplish to improve its HR function” or “a process of examining policies procedures
documentation systems and practices with respect to an organizations HR functions
It generally involves (1) reviewing the functioning of most aspects of the companys human
resource function (recruiting, testing, training usw) usually using a checklist as well as (2)
ensuring that the employer is adhering to government regulations and company policies
This is done by using benchmark data analysis, involving head count: how many employees are
currently on staff, how many of those are currently: regular, probationary, temporary, full time,
part time, exempt, non exempt.
Evidence based HR and the Scientific way of doing things
Managers need to think more like scientists
Involving experiments
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Better prediction of success and failure
Make better decisions
High performance work systems
Is a set of human resource management policies and practices that together produce superior
employee performance, needing superior recruitment and selection processes and training
High performance human resource policies and practices
Human resource metric, hours of training per employee or qualified applicants per position
Hire based on validated selection tests, extensively train employees
Aspire to help workers to manage themselves, foster an empowered self motivated and flexible
worker during selection
Measurable different between HR management systems in high performance and low
performance companies, high performance companies have more than four times number of
qualified applicants per job than do low performers
Chapter 4 – Job Analysis and the Talent Management Process
The talent management process
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The traditional way to view staffing, training, appraisal, development, and
compensation is as a series of steps:
1. Decide what positions to fill, through job analysis, personnel planning, and
forecasting
2. Build a pool of job candidates, by recruiting internal or external candidates
3. Have candidates complete application forms and perhaps undergo initial
screening interviews
4. Use selection tools like tests, interviews, background checks, and physical exams
to identify viable candidates
5. Decide to whom to make an offer
6. Orient, train, and develop employees to provide them with the competencies
they need to do their jobs
7. Appraise employees to assess how they’re doing
8. Reward and compensate employees to maintain their motivation
Talent management = The goal-oriented and integrated process of planning, recruiting,
developing, managing, and compensating employees (all above mentioned steps
combined)
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When a manager takes a talent management perspective, he or she:
1. Understands that the talent management tasks are part of a single interrelated
talent management process
2. Makes sure talent management decisions such as staffing, training, and pay are
goal-directed
3. Consistently uses the same ‘profile’ of competencies, traits, knowledge, and
experience for formulating recruitment plans for a job as for making selection,
training, appraisal, and payment decisions for it
4. Actively segments and proactively manages employees
5. Integrates/coordinates all the talent management functions
Two ways to achieve such integration:
• For HR managers to meet as a team to visualize and discus show
to coordinate activities like testing, appraising, and training
• By using information technology (e.g. e-recruitment software,
employee intranet support)
The basics of job analysis
•
Job analysis = The procedure through which you determine the duties of the positions
and the characteristics of the people to hire for them. The following types of
information are collected via the job analysis:
o Work activities
o Human behaviors
o Machines, tools, equipment, and work aids
o Performance standards
o Job context
o Human requirements
• Job analysis produces information for writing job descriptions (a list of what the job
entails) and job (or person) specifications (what kind of people to hire for the job)
• Job analysis is important because managers use it to support just about all their human
resource management activities:
• Recruitment and selection: Information about what duties the job entails and
what human characteristics are required to perform these activities helps
managers decide what sort of people to recruit and hire
• Performance appraisal: A performance appraisal compares each employee’s
actual performance with his or her duties and performance standards. Managers
use job analysis to learn what these duties and standards are
• Compensation: Compensation (such as salary and bonus) usually depends on the
job’s required skill and education level, safety hazards, degree of responsibility,
and so on – all factors you assess through job analysis
• Training: The job description lists the job’s specific duties and requisite skills –
and therefore the training – that the job requires
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Six steps in doing a job analysis:
1. Decide how you’ll use the information; for instance to write job descriptions or
to compare jobs for compensation purposes
2. Review relevant background information such as organization charts, process
charts, and job desciptions
An organization chart shows the organization-wide division of work, and
where the job fits in the overall organization. The chart should show the
title of each position and, by means of interconnecting lines, who reports
to whom and with whom the job incumbent communicates
A process chart provides a more detailed picture of the work flow. In its
simplest form a proces chart shows the flow of inputs to and outputs
from the job you’re analyzing
Workflow analysis is a detailed study of the flow of work from job to job
in a work process. In conducting a workflow analysis, the manager may
use a flow proces chart; this lists in order each step of the process
Business process reengineering = redesigning business processes, usually
by combining steps, so that small multifunction teams using information
technology do the jobs formerly done by a sequence of departments. The
basic approach is to:
1. Identify a business process to be redesigned
2. Measure the performance of the existing processes
3. Identify opportunities to improve these processes
4. Assign ownership of sets of formerly separate tasks to an
individual or a team that use new computerized systems to
support the new arrangement
Job enlargement = Assigning workers additional same-level activities
Job rotation = Systematically moving workers from one job to another
Job enrichment = Redesigning jobs in a way that increases the
opportunities for the worker to experience feelings of responsibility,
achievement, growth, and recognition
3. Select representative positions
For example, it is usually unnecessary to analyze the jobs of 200 assembly
workers when a sample of 10 jobs will do
4. Actually analyze the job – by collecting data on job activities, working conditions,
and human traits and abilities needed to perform the job
5. Verify the job analysis information with the worker performing the job and with
his or her immediate supervisor
6. Develop a job description and job specification
The job description describes the activities and responsibilities of the job,
as well as its important features, such as working conditions
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The job specification summarizes the personal qualities, traits, skills, and
background required for getting the job done
• Important things when analyzing a job:
• Make the job analysis a joint effort by a human resources manager, the worker, and
the worker’s supervisor
• Make sure the questions and the process are both clear to the employees
• Use several different job analysis tools
Methods for collecting job analysis information
•
•
Interviews
o Structured interviews: include questions regarding matters like the general
purpose of the job; supervisory responsibilities; job duties; and education,
experience, and skills required
o Pros and cons:
Simple and quick way to collect information, including information that
might not appear on a written form
Distortion of information is the main problem. Employees may tend to
exaggerate certain repsonsibilities while minimizing others, because they
view the interview as a sort of efficiency evaluation that may affect their
pay. Employees will even puff up their job titles to make their jobs seem
more important
o Interviewing guidelines:
Quickly establish rapport with the interviewee. Know the person’s name,
speak understandably, briefly review the interview’s purpose, and explain
how the person was chosen for the interview
Use a structured guide that lists questions and provides space for
answers
When duties are not performed in a regular manner ask the worker to list
his or her duties in order of importance and frequency of occurrence
After completing the interview, review the information with the worker’s
immediate supervisor and with the interviewee
Questionnaires
o Very structured checklists versus questionnaires that simply ask ‘describe the
major duties of your job’. In practice, the best questionnaire often falls between
these two extremes
o Pros and cons:
Quick and efficient way to obtain information from a large number of
employees
Lest costly than interviewing hundreds of workers, for instance
Developing the questionnaire and testing it can be time-consuming
As with interviews, employees may distort their answers
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•
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Observation
o Especially useful when jobs consist mainly of observable physical activities
o Pros and cons:
It is usually not appropriate when the job entails a lot of mental activity
(lawyer, design engineer)
Nor is it useful if the employee only occasionally engages in important
activities, such as a nurse who handles emergencies
Reactivity – the worker’s changing what he or she normally does because
you are watching – also can be a problem
o Managers often use direct observation and interviewing together
o One approach is to observe the worker on the job during a complete work cycle.
Here you take notes of all the job activities. Then, ask the person to clarify points
not understood and to explain what other activities he or she performs that you
didn’t observe
Participant diary/logs
o For every activity engaged in, the employee records the activity along with the
time in a log
o Pros and cons:
This approach can avoid relying on workers to remember what they did
hours earlier when they complete their logs at the end of the day
Quantitative job analysis techniques
o If your aim is to compare jobs for pay purposes, interviews and questionnaires
may not suffice. To do this, it helps to have quantitative ratings for each job
o Example: The position analysis questionnaire (PAQ)
Consists of a questionnaire containing 194 items, that each represent a
basic element that may play a role in the job
The items each belong to one of five PAQ basic activities:
1. Having decision-making/communication/social responsibilities
2. Performing skilled activities
3. Being physically active
4. Operating vehicles/equipment
5. Processing information
The final PAQ score shows the job’s rating on each of these five activities
The job analyst decides if each of the 194 items plays a role and, if so, to
what extent
With ratings for each job’s decision-making, skilled activity, physical
activity, vehicle/equipment operation, and information-processing
characteristics, you can quantitatively compare jobs relative to one
another, and then classify jobs for pay purposes (PAQ’s strength)
Internet-based job analysis
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o Solution to the problems of methods such as questionnaires and interviews (can
be time-consuming and collecting the information from geographically dispersed
employees can be challenging) is conducting the job analysis through the
internet
o Pros and cons:
Instructions should be clear
It’s best to test the process first
Without a job analyst actually sitting there with the employee or
supervisor, there’s always a chance that the employees won’t cover
important points or that misunderstandings will cloud the results
Writing job descriptions
•
Most descriptions contain sections that cover:
o Job identification
Job title
The date the job description was actually approved
Indicate who approved the description (optional)
A space showing the location of the job (optional)
Immediate supervisor’s title (optional)
Information regarding salary and/or pay scale (optional)
Grade/level of the job (optional)
o Job summary
Should summarize the essence of the job, and include only its major
functions or activities
Make it clear in the summary that the employer expects the employee to
carry out his or her duties efficiently, attentively, and conscientiously
o Relationships (optional)
Shows the jobholder’s relationships with others inside and outside the
organization
E.g. reports to / supervises / works with / outside the company
o Responsibilities and duties
List each of the job’s major duties separately, and describe it in a few
sentences
May also define the limits of the jobholder’s authority
o Authority of incumbent
o Standards of performance
Lists the standards the company expects the employee to achieve for
each of the job description’s main duties and responsibilities
o Working conditions
These might include things like noise level, hazardous conditions, or heat
o Job specification
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•
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Writing job specifications
Specifications for trained versus untrained personnel
o Trained employees: relatively straightforward. Job specifications might focus
mostly on traits like length of previous service, quality of relevant training, and
previous job performance
o Untrained employees: more complex. Job specifications must specify qualities
such as as physical traits, personality, interests, or sensory skills that imply some
potential for performing or for being trained to do the job
Specifications based on judgment
o Several ways to get these educated guesses:
Review the job’s duties, and deduce from those what human traits and
skills the job requires
Choose them from the competencies listed in web-based job descriptions
like those at www.jobdescription.com
The following work behaviors are important to all jobs:
o Industriousness
o Thoroughness
o Schedule flexibility
o Attendance
o Off-task behavior (reverse)
o Unruliness (reverse)
o Theft (reverse)
o Drug misuse (reverse)
Job specifications based on statistical analysis
o More defensible approach, but also more difficult. In practice, most employers
probably rely more on judgmental approaches
o The aim is to determine statistically the relationship between:
Some predictor (human trait, such as height, intelligence, or finger
dexterity)
Some indicator or criterion of job effectiveness, such as performance as
rated by the supervisor
o The procedure has five steps:
1. Analyze the job and decide how to measure job performance
2. Select personal traits like finger dexterity that you believe should predict
successful performance
3. Test candidates for these traits
4. Measure these candidates’ subsequent job performance
5. Statistically analyze the relationship between the human trait (finger
dexterity) and job performance. Your objective is to determine whether
the former predicts the latter
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Task statements = Shows what the worker does on one particular job task, how the
worker does it, and for what purpose
o Are increasingly popular
o Different steps in the process:
1. Writing task statements for each of the job’s tasks
2. For each task identify the knowledge, skills, abilities, and other
characteristics (KSAOs) needed to do each task
3. The job analyst takes the resulting 12 or 15 task statements for a job’s
tasks and groups them into four or five main job duties
4. The job analyst complies all this information in a ‘job requirements
matrix’ for this job. This matrix lists in
• Column 1: Each of the four or five main job duties
• Column 2: The task statements associated with each job duty
• Column 3: The relative importance of each job duty
• Column 4: The time spent on each job duty
• Column 5: The knowledge, skills, ability, and other characteristics
or competencies related to each job duty
o The task statement matrix provides a more comprehensive picture of what the
worker does and how and why he or she does it than does a conventional job
description
Profiles in talent management
•
•
Job profiles = List the competencies, traits, knowledge, and experience that employees
in these multi-skilled jobs must be able to exhibit to get the multiple jobs done
o Then the manager can recruit, hire, train, appraise, and reward employees
based on these profiles, rather than on a list of static job duties
o The aim of writing job profiles is to create detailed descriptions of what is
required for exceptional performance in a given role or job, in terms of required
Competencies (necessary behaviors), Personal Attributes (traits, personality,
etc.), Knowledge (technical and/or professional), and Experience (necessary
educational and work achievements)
Competency-based job analysis = Describing the job in terms of measurable,
observable, behavioral competencies (knowledge, skills, and/or behaviors) that an
employee doing that job must exhibit
o Managers sometimes group competencies into various clusters, such as:
General competencies (reading and writing)
Leadership competencies (leadership, and strategic thinking)
Technical competencies (e.g. design complex software applications)
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Chapter 5 – Personnel Planning and Recruiting
•
Introduction
o Recruitment and Selection
1) Decide what positions to fill, through workforce/personnel planning and
forecasting
2) Build a pool of candidates for these jobs, by recruiting internal or external
candidates
3) Have candidates complete application forms and perhaps undergo initial
screening interviews
4) Use selection tools like tests, background investigations and physical exams to
identify viable candidates
5) Decide who to make an offer to, by having the supervisor and perhaps others
interview the candidates
•
Workforce Planning and Forecasting
o Recruitment and selection ideally starts with workforce planning
--> the process of deciding what positions the firm will have to fill, and how to fill
them
o Strategy and Workforce Planning
Employment planning should reflect the firm’s strategic plans
Figure 5.1 (164) summarizes the link between strategic and personnel planning
Like all plans, personnel plans require some forecasts or estimates, in this case, of
three things: personnel needs, supply of inside candidates, and the likely supply of
outside candidates
o Forecasting Personnel Needs (Labor demand)
How many people will we need?
The basic process of forecasting personnel needs is to forecast revenues first
Then estimate the size of the staff required to support this sales volume
However, managers also consider other, strategic factors:
• Projected turnover, decisions to up/downgrade products or services,
productivity changes, and financial resources
There are several tools for projecting personnel needs, such as:
Trend analysis: means studying variations in the firm’s employment levels over the
last few years
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•
Trend analysis can provide an initial estimate of future staffing needs, but
employment levels rarely depend just on the passage of time
• Carefully studying the firm’s historical and current workforce demographics
and voluntary withdrawls
Ratio analysis: means making forecasts based on the historical ratio between 1)
some causal factor (like sales volume and 2) the number of employees required
(such as number of salespeople)
• Ratio analysis assumes that productivity remains about the same
The Scatter Plot: show graphically how two variables – such as sales and your
firm’s staffing levels – are related
• If you can forecast the business activity (like sales), you should also be able to
estimate your personnel needs
• Drawbacks of Scatter Plots:
o 1) They assume that the firm’s existing activities will continue as is
o 2) Tend to support compensation plans that reward managers for
managing ever-larger staffs, irrespective of the company’s strategic needs
o 3) Tend to institutionalize existing ways of doing things, even in the face of
change
Markov Analysis: involves creating a matrix that shows the probabilities that
employees in the chain of feeder positions for a key job will move from position
and therefore be available to fill the key position
o Improving Productivity Through HRIS
Computerized forecasts enable mangers to build more variables into their
personnel projections
Those systems rely on variables/goals such as reducing inventory on hand, direct
labor hours required to produce one unit of product, and minimum, maximum, and
probable sales projections
Based on such input, a typical program generates average staff level required to
meet product demands, as well as separate forecasts for direct labor, indirect staff,
and exempt staff
o Forecasting the Supply of Inside Candidates
Most firms start with hiring inside candidates
The main task here is determining which current employees might be qualified for
projected openings
Here, managers turn to qualifications (or skills) inventories contain data on
employees’ performance records, educational background, and promotability
Manual Systems and Replacement Charts
• Personnel replacement charts: show the present performance and
promotability for each position’s potential replacement
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o
o
o
o
•
Position replacement card: for this you create a card for each position,
showing possible replacements as well as their present performance,
promotion potential, and training
Computerized Skills Inventories
• Play a role for larger employers
• Such programs anticipate human resource shortages, and facilitate making
employment recruitment and training plans
• When a manager needs a person for a position, he uses key words to describe
the position’s specifications (like work experience codes, product knowledge,
level of familiarity with the employer’s products or services, industry
experience, and formal education)
• The computerize system then produces a list of qualified candidates
• Figure 5-5 (170) summarizes some guidelines for keeping employee data safe
Forecasting the Supply of Outside Candidates
If there won’t be enough inside candidates to fill the anticipated openings, you will
turn to outside candidates
Talent Management and Predictive Workforce Monitoring
Applying a talent management philosophy to workforce planning requires being
more proactive paying continuous attention to workforce planning issues
Developing an Action Plan to Match Projected Supply and Labor Demand
Workforce planning should logically culminate in a workforce action plan
This lays out the employer’s projected workforce demand-supply gaps, as well as
staffing plans for filling the necessary positions
The staffing plan should identifiy the positions to be filled, potential internal and
external sources for these positions, the required training, development, and
promotional activities moving people into the positions will entail, and the
resources that implementing the staffing plan will require
Resource might include advertising costs, recruiter fees, relocation costs, and
travel and interview expenses
The Recruiting Yield Pyramid (p. 171): The historical arithmetic relationships between
recruitment leads and invitees (6 to 1), invitees and interviews (4 to 3), interviews and
offers made (3 to 2), and offer made and offers accepted (2 to 1)
The manager should recognize that filling a relative handful of positions might
require recruiting dozens or hundreds of candidates
The Need for Effective Recruiting
o Employee reruiting: means finding and/or attracting applicants for the employer’s
open positions
o What Makes recruiting a challenge?
1) some recruiting methods are superior to others, depending on the type of job
for which you are recruiting
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2) the success you have recruiting depends on nonrecruitment issues and policies
3) employment law prescribes what you can and cannot do when recruiting
o Organizing How You Recruit
For many firms, it’s simply much easier to recruit centrally now that so much
recruiting is on the internet
The Supervisor’s Role
• The HRM charged with filling an open position is seldom very familiar with the
job itself the supervisor hast to tell the HRm what the position really entails,
and what key things to look or watch out for
•
Internal Sources of Candidates
o Recruiting typically brings to mind LinkedIn, employment agencies, and classified ads,
but internal sources (current employees or ‘hiring from within) are often the best
source of candidates
o Using Internal Source: Pros and Cons
Pros:
• 1) There is really no substitute for knowing a candidate’s strengths and
weaknesses, as you should after working with them for some time
• 2) current employees may also be more committed to the company
• 3) Morale may rise
• 4) Needs less orientation because he knows the company alreads
Cons:
• Employees who apply for jobs and don’t get them may become discontented
• Too often internal recruiting is a waste of time because the mangers already
made a decision whom he wants to hire
• Inbreeding is another potential drawback
• When all managers come up through the ranks, they may have a tendency to
maintain the status quo
o Finding Internal Candidates
Hiring from within ideally relies on job posting and the firm’s skills inventories
Job posting: means publicizing the open job to employees
These postings list the job’s attributes, like qualifications, supervisor, work
schedule, and pay rate
o Rehiring
Should you rehire someone who left your employ? It depends
Former employees are known quantities and are already familiar with how you do
things
On the other hand, employees who you let go may return with negative attitudes
o Succession Planning
Hiring from within is particularly important when it involves filling the employer’s
top positions
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Doing so requires succession planning: the ongoing process of systematically
identifying, assessing, and developing organizational leadership to enhance
performance
Succession planning entails three steps
• 1) Identify Key Needs: based on the company’s strategic and business plans,
top management and the HR director identify what the company’s future key
position needs will be
• 2) Develop Inside Candidates: Creating candidates for the jobs that means
providing the inside or outside candidates you identify with the developmental
experiences they require to be viable candidates
o Employers develop high-potential employees through internal training and
cross-functional experiences, job rotation, external training, and
global/regional assignments.
• 3) Assess and Choose: Finally, succession planning requires assessing these
candidates and selecting those who will actually fill the key positions
o Improving Productivity Through HRIS
Succession and Talent Planning Systems
• More large employers use software to facilitate succession planning and talent
management
• These systems ‘capture and search information about employee
competencies, skills, certifications, and experience and assess employees on
key areas of leadership potential, job performance, and risk of leaving; target
the employees future roles
•
Outside Sources of Candidates
o Recruiting via the Internet
For most employers and for most jobs, Internet-based recruiting is by far the
recruiting source of choice
Recruiting for professionals and managers is shifting from online job boards to
social networking sites such as Facebook and LinkedIn
Other online Recruiting Practices
• Other firms use Twitter to announce job openings to jobseekers who subscribe
to their Twitter Feeds
• ResumePal is an online standard universal job application
Texting
• Some employers use text messaging to build an applicant pool texting the
corporation’s name to a specific number in order to become part of a ‘mobile
recruiting network’
The Dot-Jobs Domain
• Gives job seekers a one-click conduit for finding jobs at the employers who
register at a website
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Virtual Job Fairs
• At a virtual job fair, online visitors see a very similar setup to a regular job fair
• They can listen to presentations, visit booths, leave resumes and business
cards, participate in live chats, and get contact information recruiters HR
managers, and even hiring managers
Pros and Cons of Web-based recruiting
• Pro: generates more response quicker and for a longer time at less cost than
any other method
• Cons:
o 1) Fewer older people and some minorities use the Internet, so they are
excluded
o 2) The Internet Overload: Employers end up deluged with resumes
Using Applicant Tracking
• Web-based ads tend to generate so many applicants that most firms use
applicant tracking systems to support their on- and offline recruiting efforts
• Applicant Tracking System: Online systems that help employers attract gather,
screen, compile, and manage applicants
Improving online recruiting effectiveness
• Planning is crucial so you don’t turn off possible candidates in advance. Some
critiques were:
o Job openings lacked relevant information
o Often difficult to format resumes and post them in the form required
o Concerns about the privacy of the information
o Poor graphics often made it difficult to use the Web Site
o Slow feedback from the employers was annoying
• Effective Web ad uses compelling keywords, provides good reasons to work for
this company and starts with an attention-grabbing heading and uses the extra
space to provide more specific job information (entire job description)
• Finally, online recruiting requires caution for applicants because many job
boards don’t check the legitimacy of the ‘recruiters’ who place ads
o Advertising
The Media
• For specialized employees, you can advertise in trade and professional journals
like American Psychologist and such
• Technology lets companies be more creative about the media they use
o Employement Agencies
There are three main types of employment agencies: 1) public agencies operated
by federal, state, or local governments, 2) agencies associated with nonprofit
organizations, and 3) privately owned agencies
Public and Nonprofit Agencies
• Some employers have mixed experiences with public agencies
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•
For one thing, applicants for unemployment insurance are required to register
and to make themselves available for job interviews
• Yet these agencies are actually quite useful. Beyond just filling jobs, counselors
will visit an employer’s work site, review the employer’s job requirements, and
even assist the employer in writing job descriptions
Private Agencies
• Private employment agencies are important sources of clerical, white-collar,
and managerial personnel
Temp Agencies and Alternative Staffing
• Employers increasingly supplement their permanent workforces by hiring
contingent or temporary workers, often through temporary help employment
agencies also known as part-time or just-in-time workers
• Flexibility is another concern, with more employers wanting to quickly reduce
employment levels if the economic turnaround proves short-lived
• Employers can hire temp workers either through direct hires or through
temporary staff agencies
• Here agency handles all the recruiting, screening, and payroll administration
What supervisors should know about temporary employees
• To make temporary relationships successful, managers supervising temps
should understand these employees’ main concerns five key concerns
emerged Temporary workers said they were:
o 1) Treated by employers in a dehumanizing and ultimately discouraging
way
o 2) Insecure about their employment and pessimistic about the future
o 3) Worried about their lack of insurance and pension benefit
o 4) Misled about their job assignments and in particular about whether
temporary assignments were likely to become full-time.
o 5) ‘Underemployed’
Alternative Staffing
• Temporary employees are examples of alternative staffing: basically, the use
of nontraditional recruitment sources
• Other alternative staffing arrangements include:
o In-house temporary employees: people employed directly by the company,
but on an explicit short-term basis
o Contract technical employees: Highly skilled workers like engineers, who
are supplied for long-term projects under contract from an outside
technical services firm
o Offshoring and Outsourcing Jobs
Outsourcing and offshoring are perhaps the most extreme examples of alternative
staffing offshoring and outsourcing send jobs out
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Outsourcing: means having outside vendors supply services that the company’s
own employees previously did in-house
Offshoring: means having outside vendors or employees abroad supply services
that the company’s own employees previously did in-house
o Executive Recruiters
Executive recruiters (Headhunters) are special employment agencies employers
retain to seek out top-management talent for their clients
There are two types of executive recruiters: retained and contingent:
• Retained executive search: focus on executive positions paying 150.000 or
more
• Contingency-based tend to hand junior- to middle-leven management job
searches in the 50.000 to 150.000 range
Pros and Cons
• Recruiters have many contact, are good at finding qualified employed
candidates who aren’t actively looking to change jobs, keep your firm’s name
confidential, save top management’s time
• The big issue is ensuring that the recruiter really understands your needs and
then delivers properly vetted candidates who fill the bill
o On-Demand Recruiting Services
ODSR: provide short-term specialized recruiting assistance to support specific
projects without the expense of retaining traditional search firms
o College Recruiting
Sending an employer’s representatives to college campuses to prescreen
applicants and create an applicant pool from the graduating class
Is an important source of management trainees and professional and technical
employees
The problem is that on-campus recruiting is expensive and time-consuming
On-Campus Recruiting Goals two main goals
• 1) to determine if a candidate is worthy of further consideration
• 2) attract good candidate
• Employers who send effective recruiters to campus and build relationships
with opinion leaders such as career counselors and professors have better
recruiting results
The On-site visit
• Emloyers generally invite good candidates to the office or plant for an on-site
visit
• There are several ways to make this visit fruitful
• The invitation should be warm and friendly but businesslike, and should give
the person a choice of dates to visit
• Have someone meet the applicant, preferably at the airport or at his or her
hotel, and act as host
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o
o
o
o
Further, do basically everything in order to make the applicant’s stay as
pleasant as possible…
Interships
• For students, it may mean being able to hone business skills, learn more about
potential employers, and discover their career likes
• Employers can use the interns to make useful contributions while evaluating
them as possible full-time employees
• About 60% of internships turned into job offers
Referrals and Walk-Ins
Here the employer posts announcements of openings and requests for referrals on
its Web site, bulletin, and/or wallboards
It often offers prizes or cash awards for referrals that lead to hiring
Pros and Cons
• The big advantage here is that referrals tend to generate ‘more applicants,
more hires, and a higher yield ration (hires/applicants)
• Disadvantages: If morale is low, you probably should address that prior to
asking for referrals. And if you don’t hire someone, explain to your
employee/referrer why you did not hire his or her candidate
Walk-Ins
• Particularly for hourly workers, walk-ins – direct applications made at your
office – are big source of applicants
• Treat walk-ins courteously and diplomatically, for both the employer’s
community reputation and the applicant’s self-esteem
Recruiting Source Use and Effectiveness
Guidelines employers can use to improve their recruiting are presented in table 5.1
Evidenced-Based HR: Measuring Recruiting Effectiveness
In terms of what to measure possible recruiting metrics include new hire job
performance, new hire failure rate, new hire turnover, training success, and
manager’s satisfaction
The problem is that more applicants is not always better The employers needs
qualified, hirable applicant, not just applicants
Improving Productivity through HRIS
An employer’s computerized recruitment system should include several elements
• 1) A requisition management system: which facilitates requisition, routing,
approval, and posting of job openings
• 2) A recruiting solution: including job advertisement, recruitment marketing,
applicant tracking, and online recruitment vendor management to increase
and improve applicant pool quality
• 3) screening services: such as skills and behavioral assessment services
• 4) Hiring management software to capture and manage candidate information
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•
Recruiting a more diverse workforce
o Given the rapid increase in minority, older worker, and women candidates, it is a
necessity
o Single Parents
The first step in attracting (and keeping) single parents is to make the workplace as
user friendly for them as practical flextime programs
For instance, CNN even offered a ‘Work/Life Balance Calcualtor’ to assess how far
out of balance one’s life may be
o Older workers
It makes sense for employers to encourage older workers to stay or to come to the
company (given the demographic changes)
Doing so involve several things: The big one is to provide opportunities for flexible
(and often abbreviated) work schedules
o Recruiting Minorities
The same prescriptions that apply to recruiting older workers apply to recruiting
minorities
In practice, this requires a three-part effort: Understand the recruitment barriers,
formulate the required recruitment plans, and institute the specific day-to-day
programs
• 1) Understand: many minority applicants don’t meet the educational or
experience standard for the job need training
• 2) Plan: After recognizing the potential impediments, you can turn to
formulating plans for attracting and retaining minorities and women
• 3) Implement: Translate the personnel plans into recruitment programs
o Many jobs seekers check with friends or relatives as a strategy for looking
for job, so encouraging your minority employees to assist in your minority
employees to assist in your recruitment effort makes sense
o Welfare-to-Work
The key to a welfare-to-work program’s success seems to be the employer’s
pretraining program Here, participants get counseling and basic skills training
over several weeks
o The Disabled
The EEOC estimates that nearly 70% of the disabled are jobless, but it certainly
doesn’t have to be that way
Can do several things: link disabled college undergraduates who are looking for
summer internships with potential employers
Provide placement services and other recruitment and training tools and
information for employers seeking to hire the disabled
•
Developing and Using Application Forms
o Purpose of Application Forms
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o
o
o
Is usually the first step of the prescreening process
A filled-in application provides four types of information
• 1) The applicants education
• 2) Draw conclusions about the applicant’s previous progress and growth
• 3) Applicant’s stability based on previous work record
• 4) Predict which candidates will succeed on the job
Application Guidelines
Managers should keep several practical guidelines in mind
‘Employment History’ section, request detailed information on each prior
employer, including the name of the supervisor and his or her e-mail address and
telephone number
Applicant exaggeration
• Job applicants often exaggerate their qualifactions. Estimates of how many
applicants exaggerate range from 40% to 70%
• Always ensure applicants complete the form and sign a statement on it
indicating that the information is true
Application Forms and the EEOW Law (only US)
Using Application Forms to Predict Job Performance
Finally, employers can use analyses of application information (biodata) to predict
employee tenure and performance
Choose biodata items with three things in mind:
• 1) Equal employment law limits the items you’ll want to use
• 2) Noninvasive items are best
• 3) Consider that some applicants will fake biodata answers in an effort to
impress the employer
Mandatory Arbitration (only US)
Many employers, aware of the high costs of employment litigation, require
applicants to agree in writing to mandatory arbitration should a dispute arise
turns some candidates off
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Chapter 6 – Employee Testing and Selection
Learning Objectives:
1. Explain what is meant by reliability and validity
Reliability(=test consistency) means if a test measures the same repeatedly , reliability is
high if a test always measures the same (f.e. personality traits FFM) reliability is low if
the same test not measures the same factors (f.e. projective tests) thus a reliable test
always measures the same factors, independent of who examines the test (if they are
trained)
Reliability coefficient 0.0 – 1.-0
Internal consistency &
Test-retest reliability estimates is a possibility to examine reliability
Validity means if a test measures what it intends to measure, a valid test measures a
construct like intelligence in order to predict something(predictive validity), but if the
test not actually measures IQ but f.e. just verbal ability it is not valid because verbal
ability is just one part of general IQ, A valid test needs to be reliable, if a test is not
reliable, it can’t be valid. Therefore, the validity of a test is high when it actually
measures what it intends to measure
There are some inferences that can be made on the bases of a valid (IQ) test, f.e. if D.
scores higher than A., it generally refers to a higher (mental) ability of D.
If a test wants to examine IQ, then the underlying construct of IQ needs to be
important(theoretical background) this is meant with construct validity, is the theory
behind the test really applicable to measure intelligence?
Criterion Validity(predictive validity) is the statistic relationship between the test and a
criterion (f.e. performance) implying that better test scores refer to better performance
(on the job), thus low test scores will usually mean that this person performs bad on the
job
Content validity is a demonstration that the content of a selection procedure is
representative of important aspects of performance on the job
Why Careful Selection is Important?
Performance: employees need the right skills in order to be able for the job and
perform good
Cost: Selection is expensive
Legal Obligations: require nondiscriminatory selection procedures; negligent
hiring means hiring someone with criminal records who commit crimes
Person and Job/Organization Fit
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Person-job fit refers to matching (1) the knowledge, skills, abilities and competencies
that are central to performing the job(job analysis) with (2) the prospective employee’s
knowledge, skills, abilities and competencies
the aim is to achieve a match
also the values of the organization should match those of the applicant
person-organization fit
Q2 Explain how you would go about validating a test
Use tests only as a tool for selection, because no test would ever predict 100%
performance
Step1 Analyze the Job: job description & job specifications =requirements become
predictors
Step2 Choose the Test: decide which test predicts best the criteria for the job
Step3 administer the test: let applicants take the test and compare their job
performance afterwards with the test score: is there any relation?
Step4 relate your test scores and criteria: expectancy chart: graphically represent the
relations between test scores and job performance
Step5 cross validate and revalidate: use different employees as samples and follow the
first three steps again
Bias
Self-fulfilling prophecies, expectancy effect (f.e. IQ tests were biased for black people in
the US for cultural issues)
Predictions may be biased on basis of a test, (f.e. over predicting male performance and
under predict female performance)
Utility Analysis
Analyzing costs and benefits of using tests, assessments or trainings as selection tools
Validity Generalization
Smaller employers sometimes don’t have validated studies for their selection tools
Therefore one must be cautious to generalize findings of not validated tools
Q4 Give Examples of some of the ethical and legal considerations in testing
Test-Takers Individual Rights and Test Security
Test takers have rights to privacy and feedback under APA guidelines:
Confidentiality of test results
Informed consent regarding the use of the results
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The right to expect that only qualified people have access to interpret the scores for
appropriate interpretation
Test fairness
No disclosing of private information
Computerized and Online testing
Online testing increasingly replacing paper&pencil tests with more valid adaptive tests
that can be scored by the computer
Q5 List eight tests you could use for employee selection, and how you use them
Tests of Cognitive Abilities:
Intelligence Tests: IQ replaced by GMA = general mental ability, ability to learn,
measures memory, verbal fluency, numerical ability, problem solving skills etc (highly
predictive)
Specific Cognitive Abilities: called aptitude tests; focus on deductive reasoning, verbal
comprehension, memory and numerical ability; focus more on one aspect that is job
relevant
Tests of motor and Physical abilities: relevant for military but also for pilots, measuring
finger dexterity or reaction time
Personality and Interest: measuring personality traits, interests and motivation
o Conscientiousness is a good predictor of work performance
o Interest inventories
Achievement Tests: measure what someone has learned, measure abilities like typing
Work samples and simulations: measure job performance directly, prof says it’s the
best predictor of job performance(face validity) (better than IQ and Conscientiousness)
Q6 Give 2 examples of work sample/simulation tests
Harder to fake answers because questions are directly related to job content
Not unfair – no bias
no privacy issues
greater predictive validity
test consists of several tasks that are important for the job, an advisor conducts the
performance of the each task and feedback
Situational Judgment Test: asks how one would decide in a crucial work situation(p217
for example question)
Management Assessment centers: 2-3 day simulation in which 10-12 candidates
perform realistic management tasks (f.e. presentations) under the observation of
experts; following tasks are included:
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The in-basket: candidates need to appropriately answer a bunch of notes,
emails, phone calls etc
Leaderless group discussion: interpersonal skills are evaluated during a group
discussion on a random topic: acceptance by the group, leadership ability and
individual influence
Management Games: participant solve realistic problems
Individual presentations: evaluation of communication skills and persuasiveness
Objective tests: IQ, personality, mental ability, interest and achievement tests
The interview: personal interview in order to
Effectivenes: Assessment centers are effective but also expensive
Situational Testing and Video-Based Situational Testing
Video based simulation includes some video material for the applicant and afterwards
some multiple choice questions
Situational Tests require examinees to respond to situations representative of the job,
like in assessment centers or work sampling tests or in video based simulations
Computerized Multimedia Candidate assessment tools
The miniature job training and evaluation approach: like work sample tests but smaller
Realistic Job previews: at Walmart most of the new workers quit after 90 days, therefore,
walmart began explicitly explaining and asking about work schedules and work preferences,
which improved turnover
Q7 Explain the key points to remember in conducting a background investigation
Reference checks, background checks, honesty testing, and substance and abusing
screening are also important
It’s cheap
Some applicants might be criminals, some overestimate or lie,
Defamation: a communication is defamatory if it is false and tends to harm the
reputation of another by lowering the person in the estimation of the community or by
deterring other persons from associating or dealing with him or her (possible risk to be
sued in USA = bullshit in europe)
Privacy: disclosing information… same as above
How to check a candidates background
Fig 6-9 on p 223
The Social Network: Checking applicants social postings
Googling applicants is usual, 31% lied about qualifications and 19% posted information
about drinking or drug use
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Using preemployment information services
Need to be used cautious, no unreasonable investigation may be authorized
There are several online providers that give information about information about
employees that are good for screening
The Polygraph and Honesty Testing
Some companies use a lie detector, but this is mostly prohibited by law
Paper &Pencil tests about honesty
Ask blunt questions:
Listen rather than talk
Do a credit check
Check all employment and personal references
Use paper-and-pencil honesty tests and psychological tests
Test for drugs
Establish a search and seizure policy and conduct searches:
Human lie detector: some trained analysts watch for signs of lying
7 – Interviewing Candidates
Basic types of interviews
•
•
•
An interview = A procedure designed to obtain information from a person through oral
responses to oral inquiries
A selection interview = A selection procedure designed to predict future job
performance based on applicant’s oral responses to oral inquiries
Structured versus unstructured interviews
o Structured interviews = The employer lists the questions ahead of time, and may
even list and score possible answers for appropriateness
Comments printed beneath the questions guide the interviewer in
evaluating the answers
Helps to avoid skipping any questions
Enables geographically disbursed interviewers to complete the form via
the web
o Unstructured (or nondirective) interviews = The manager follows no set format
A few questions might be specified in advance, but they’re usually not
Could even be described as little more than a general conversation
Most selection interviews probably fall in this category
o Pros and cons
In structured interviews, all interviewers generally ask all applicants the
same questions. Partly because of this, these interviews tend to be more
reliable and valid
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•
•
Structured interviews can also help less talented interviewers conduct
better interviews
Standardizing the interview also increases consistency across candidates,
enhance job relatedness and reduces overall subjectivity and thus the
potential for bias
o It’s important to prevent discrimination during an interview by:
Having objective/job-related questions
Standardize interview administration
Preferably use multiple interviewers
Interview content
o Situational questions = Ask the candidate what his or her behavior would be in a
given situation
o Behavioral questions = Ask applicants to describe how they reacted to actual
situations in the past
More employers today are using (or planning to use) behavioral
interviews
o Other types of questions
Job-related interview = The interviewer asks applicants questions about
relevant past experiences. The questions here don’t revolve around
hypothetical or actual situations or scenarios
Stress interview (lesser-used) = The interviewer seeks to make the
applicant uncomfortable with occasionally rude questions. The aim is to
spot sensitive applicants and those with low stress tolerance
Puzzle questions = Recruiters like to use these to see how candidates
think under pressure. These questions are popular
How should we administer the interview?
o Most selection interviews are one-on-one (two people meet alone, and one
interviews the other by seeking oral responses to oral inquiries) and sequential
(several persons interview the applicant, in sequence, one-on-one, and then
make their hiring decision)
o Unstructured sequential interview = Each interviewer generally just asks
questions as they come to mind
o Strucured sequential interview = Each interviewer rates the candidates on a
standard education form, using standardized questions. The hiring manager then
reviews and compares the evaluations before deciding whom to hire
o Panel (board) interview = Interview conducted by a team of interviewers
(usually two or three), who together interview each candidate and then combine
their ratings into a final panel score
Enables interviewers to ask follow-up questions
May elicit more meaningful responses than are normally produced by a
series of one-on-one interviews
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•
Some candidates find panel interviews more stressful, so they may
actually inhibit responses
The mass interview is even more stressfull. Here a panel interviews
several candidates simultaneously. The panel poses a problem, and then
watches to see which candidate takes the lead in formulating an answer
Structured panel interviews in which members use scoring sheets with
descriptive scoring examples for sample answers are more reliable and
valid than those that don’t
Training the panel interviewers may boost the interview’s reliability
o Serial interview = Several interviewers assess a single candidate one-on-one,
sequentially
o Phone interviews = Interviews entirely by telephone
Can be more accurate than face-to-face interviews for judging an
applicant’s conscientiousness, intelligence, and interpersonal skills
Candidates could give more spontaneous answers if call is unexpected
The interviewers came to about the same conclusions regarding the
interviewees whether the interview was face-to-face or by
videoconference
o Video/web-assisted interviews = Skype job interview
o Computerized interviews = An interview in which a job candidate’s oral and/or
computerized replies are obtained in response to computerized oral, visual, or
written questions and/or situations
Questions on computerized interviews come in rapid sequence and
require the applicant to concentrate
The typical computerized interview program measures the response time
to each question. A delay in answering certain questions such as ‘Can you
be trusted?’ flags a potential problem
o Speed dating = Some employers use a speed dating approach to interview
applicants
o Case interviews = some companies use case interviews as part of their
candidate selection process. By having candidates explain how they would
address the case ‘clients’ problems, the case interview combines elements of the
behavioral and situational questioning to provide a more realistic assessment of
the candidate’s consulting skills.
Three ways to make the interview useful:
1. Use structured situational interviews
Structure the interview. Then it is more valid, because it is more reliable
Situational interviews have a higher mean validity than job-related (or
behavioral) interviews, which in turn have a higher mean validity than
‘psychological’ interviews (which focus more on motives and interests)
2. Carefully select traits to assess
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Don’t focus (as many do) on hard-to-assess traits like conscientiousness
Limit yourself mostly to situational and job knowledge questions that
help you assess how the candidate will actually respond to typical
situations on that job
3. Beware of committing interviewing errors
Understand and avoid the various errors that can undermine any
interview’s usefulness
The errors that undermine an interview’s usefulness
•
Managers make predictable, avoidable errors:
o First impressions (snap judgments)
Interviewers tend to jump to conclusions about candidates during the
first few minutes of the interview
In 85% of the cases, interviewers had made up their minds before the
interview even began
First impressions are especially damaging when the prior information
about the candidate is negative
Interviewers are more influenced by unfavorable than favorably
information about the candidate
Their impressions are much more likely to change from favorable to
unfavorable than from unfavorable to favorable
o Not clarifying what the job requires
Interviewers who don’t have an accurate picture of what the job entails
and what sort of candidate is best suited for it usually make their
decisions based on incorrect impressions or stereotypes of what a good
applicant is
o Candidate-order (contrast) error and pressure to hire
Candidate-order (contrast) error = The order in which you see applicants
affects how you rate them
Pressure to hire = A group that is behindof their recruiting quota
evaluates the same recruits much more highly than did those ahead
o Nonverbal behavior and impression management
Nonverbal behavior is so important because interviewers infer your
personality from the way you act in the interview
o Effect of personal characteristics: Attractiveness, gender, race
People usually ascribe more favorable traits and more successful life
outcomes to attractive people
Structured interviews produce less of a difference between minority and
white interviewees than do unstructured interviews
Candidates evidencing various attributes and disabilities (such as childcare demands, HIV-positive status, and being weelchair-bound) have less
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chance of obtaining a positive decision, even when the person performs
very well in the structured interview
o Interviewer behavior
Even subtle cues like a smile or a nod can telegraph the desired answer to
a question
Some interviewers talk so much that applicants have no time to answer
questions
Some interviewers let the applicant dominate the interview, and so don’t
ask all their questions
When interviewers have favorable pre-interview impressions of the
applicant, they tend to act more positively toward that person (smiling
more, for instance)
How to design and conduct an effective interview
•
•
Steps in designing a structured situational interview:
1. Analyze the job
Write a job descriptino with a list of job duties, required knowledge,
skills, and abilities, and other worker qualifications
2. Rate the job’s main duties
Rate each job duty, say from 1 to 5, based on its importance to job
success
3. Create interview questions
4. Create benchmark answers
5. Appoint the interview panel and conduct interviews
1. First, make sure you know the job
Steps in conducting an effective interview:
1. First, make sure you know the job
2. Structure the interview
3. Get organized
4. Establish rapport
5. Ask questions
6. Take brief, unobtrusive notes during the interview
7. Close the interview
8. Review the interview
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Chapter 8 – Training and Developing Employees
•
Orienting and Onboarding New Employees
o Making sure your employees do know what to do and how to do it is the purpose of
orientation and training
o The Purposes of Employee Orientation/Onboarding
Employee orientation still provides new employees with the information the need
to function; ideally though, it should also help new employees start getting
emotionally attached to the firm
• 1) Make the new employee feel welcome and at home and part of the team
• 2) Make sure the new employee has the basic information to function
effectively
• 3) Help the new employee understand the organization in a broad sense (its
past, present, culture, vision…)
• 4) Start the person on becoming socialized into the firm’s culture, values and
ways of doing things
Getting the new employee to appreciate the company’s culture and values
distinguishes today’s onboarding programs from traditional orientation
o The Orientation Process
The human resource specialist explains basic matters like working hours, benefits,
and vacations
The supervisor usually explains the organization of the department and by
introducing the person to his or her new colleagues, familiarizing the new
employee with the workplace, and helping to reduce first-day jitters
The Employee Handbook
Orientation Technology: some employers put all or some of their orientation
media on the Web
•
Overview of the training process
o Directly after orientation, training should begin
o Training means giving new or current employees the skills that they need to perform
their jobs
o Inadequate training can also trigger negligent training liability: A situation where an
employer fails to train adequately, and the employees subsequently harms a third party
o Employers should confirm the applicant/employee’s claims of skill and experience,
provide adequate training, and evaluate the training to ensure that it’s actually
reducing risks
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o Aligning Strategy and Training
The employer’s strategic plans should ultimately govern its training goals
o Training and Performance
One survey found that ‘establishing a linkage between learning and organization
performance’ was the number-one pressing issue facing training professionals
o The ADDIE Five-Step Training Process
The goal standard here is still the basic analysis-design-develop-implementevaluate (ADDIE)
Analyze the training need
Design the overall training program
Develop the course (actually assembling/creating the training materials)
Implement training, by actually training the targeted employee group using
methods such as on-the-job or online training
Evaluate the course’s effectiveness
o Conducting the Training Needs Analysis
The training needs analysis should address the employer’s strategic/longer term
training needs and/or its current training needs
Strategic training needs analysis
• Strategic training needs analysis focuses on identifying the training that
employees will need to fill these new future jobs
Current Training Needs analysis
• As important as strategic training is, most training efforts aim to improve
current performance
• The main task in analyzing new employees’ needs is to determine what the job
entails and to break it down into subtasks, each of which you then teach to the
new employee
• Analyzing current employees’ training needs is more complex, because you
also decide whether training is the solution
• Managers use task analysis to identify new employees’ needs, and
performance analysis to identify current employees’ training needs
Task analysis: Analyzing new Employees ‘ Training needs
• Task analysis: is a detailed study of the job to determine what specific skills
the job requires
• For task analysis, job descriptions and job specifications are essential
Talent Management: Using Profiles and Competency Models
• Talent management is the goal-oriented and integrated process of planning
for, recruiting, selecting, developing, and compensating employees
• Many employers use competency models to help compile and summarize a
job’s training needs
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•
The competency model consolidates, usually in one diagram, a precise
overview of the competencies (the knowledge, skills, and behaviors) someone
would need to do a job well
• Selecting employees based on this model helps to ensure that you focus your
questions on the things that someone must be proficient at to do this job
successfully
• The same model would help you to formulate training objectives
Performance analysis: analyzing current employees’ training needs
• Performance analysis: the process of verifying that there is a performance
deficiency and determining whether the employer should correct such
deficiencies through training or some other means (like transferring the
employee)
• First step involves comparing the person’s actual performance to what it
should be
Can’t Do/ Won’t Do
• The manager’s aim is thus to distinguish between can’t-do and won’t do
problems
• First, determine whether it is a can’t do problem, if so, its specific causes
• On the other hand, it might be a won’t-do problem here employees could
do a good job if they wanted to
o Designing the Training Program
Armed with the needs analysis results, the manager next designs the overall
training program
Design means planning the overall training program including training objectives,
delivery methods, and program evaluation
Sub-steps include setting performance objectives, creating a detailed training
outline, choosing a program delivery method and verifying the overall program
design with management
Setting learning objectives
• Instructional objectives should specify in measurable terms what the trainee
should be able to accomplish after successfully completing the training
program
• The learning objectives you choose should address rectifying the performance
deficiencies that you identified with needs analysis
Creating a motivational learning environment
• Start the training not with a lecture but by making the material meaningful
• Learning requires both ability and motivation, and the training program’s
learning environment should take both into account
• 1) in terms of ability, the learner-trainee needs the required reading, writing,
and mathematic skills, and the educational level, intelligence, and knowledge
base
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•
2) Motivation: no manager should want to waste his or her time showing a
disinterested employee how to do something
• The low-hanging fruit in motivating trainees is to make sure the trainee’s peers
and supervisor support the training effort
• Top management should visibly support the program
• From behavior modification, we know that the training should provide
opportunities for positive reinforcement
• Expectancy theory shows us that the trainees need to know they have the
ability to succeed in the program, and that the value to them of completing
the program is high
• Self-efficacy is crucial – trainees must believe they have the capacity to
succeed
• Making the learning meaningful
• Making skills transfer obvious and easy
• Reinforcing the learning
• Ensuring Transfer of learning to the job
o Prior to training: get trainee and supervisor input in designing the program,
institute a training attendance policy, and encourage employees to participate
o During training: provide trainees with training experiences and conditions that
resemble the actual work environment
o After training: reinforce what trainees learned, for instance, by appraising and
rewarding materials they need to use their new skills
o Developing the Program
Program development means actually assembling/creating the program’s training
content and materials
It means choosing the actual content, designing /choosing the specific instructional
methods and training equipment
•
Implementing Training Programs
o We’ll start with simpler, low-tech methods and proceed to computer-based ones
o On-the Job Training: means having a person learn a job by actually doing it
Types of on-the-job training
• Coaching or understudy method: an experienced worker or the trainee’s
supervisor trains the employee
• Job rotation: in which an employer moves from job to job at planned intervals
• Special assignments: similarly give lower-level executive firsthand experience
in working on actual problems
• The employer should formally plan out and structure the OJT process and
experience train the trainers themselves
1) Prepare the learner
2) Present the operation
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o
o
o
o
o
o
o
o
3) Do a Tryout
4) Follow-Up
Apprenticeship Training: is a process by which people become skilled workers, usually
through a combination of formal learning and long-term on-the-job training
New recruits then spend about 32 months in an internal apprenticeship training
program, learning various jobs under the tutelage of experienced employees
Informal Learning: 80% of what employees learn on the job they learn through
informal means, including performing their jobs on a daily basis with their colleagues
Job Instruction training: Listing each job’s basic tasks, along with key point, in order to
provide step-by-step training for employees
Lectures: Lecturing is a quick and simple way to present knowledge to large groups of
trainees, as when the sales force needs to learn new product’s features
Programmed Learning: step-by-step, self-learning method:
1) Presenting questions, facts, or problems to the learner
2) Allowing the person to respond
3) Providing feedback on the accuracy of answers, with instructions on what to do
next
Generally, programmed learning presents facts and follow-up questions frame by
frame
When the learner responds, subsequent frames provide feedback on the answer’s
accuracy
What the next question is often depends on how the learner answers the previous
question
The built-in feedback from the answers provides reinforcement
Programmed learning reduces training time + the trainees learn at their own pace
Intelligent tutoring systems programmed learning one step further. In addition to
the usual programmed learning, computerized intelligent tutoring systems learn
what questions and approaches worked and did not work for the learner, and then
adjust the instructional sequence to the trainee’s unique needs
Audiovisual-Based Training: Audiovisual-based training techniques like DVDs, films,
PowerPoint, and audiotapes are still popular
Vestibule Training: With vestibule training, trainees learn on the actual or simulated
equipment they will use on the job, but are trained off the job
Electronic Performance Support Systems (EPSS)
Are computerized tools and displays that automate training, documentation, and
phone support
Otherwise the employee would have to memorize an unrealistically large number
of solutions (Think of possible answers in a call center)
Performance support systems are modern Job aids: are sets of instructions,
diagrams, or similar methods available at the job site to guide the worker
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o Videoconferencing: involves delivering programs via compressed audio and video
signals over broadband lines, the Internet or satellite
o Computer-Based Training (CBT):
CBT refers to training methods that use interactive computer-based systems to
increase knowledge or skills
Computer-based training is increasingly interactive and realistic
Interactive multimedia training integrates the use of text, video, graphics, photos,
animation, and sound to produce a complex training environment with which the
trainee interacts
o Simulated Learning: Virtual reality: putting trainees into a simulated environment
Advantages: In general, interactive and simulated technologies reduce learning
time by an average of 50%. Other advantages include instructional consistency,
mastery of learning, increased retention, and increased trainee motivation
o Interactive Learning
Using platforms such as YouTube to let employees ‘upload and share video
snippets on job-related topics, including customer greetings and food preparation
o Internet-Based Training
There are two basic ways to offer online courses to employees
• 1) The employer can encourage and/or facilitate having its employees take
relevant online courses from either its own online (intranet) or from the
hundreds of online training vendors
• 2) Learning Portals: Is a section of an employer’s web site that offers
employees online access to many or all of the training courses they need to
succeed at their jobs
o Improving Productivity Through HRIS
Learning Management Systems (LMS)
• … are special software tools that support Internet training by helping
employers identify training needs, and in scheduling, delivering, assessing, and
managing the online training itself
• the system the automatically schedules the individual’s training
Using Internet-Based Learning
• Web-based instruction were equally effective for teaching information about
how to perform a task or action
• But of course, the need to teach large numbers of students remotely, or to
enable students to study at their leisure, often makes e-learning so much more
efficient that the small differences in Web-based versus classroom learning
become somewhat meaningless
o Mobile Learning: means delivering learning content on demand via mobile devices like
cell phones, laptops, and iPads, wherever and whenever the learner has the time and
desire to access it
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o The Virtual Classroom: Uses special collaboration software to enable multiple remote
learners, using their PCs or laptops, to participate in live audio and visual discussions,
communicate via written text, and learn via content such as PowerPoint slides
combines Web-based learning with live video and audio
o Lifelong and Literacy Training Techniques
Lifelong learning means providing employees with continuing learning experiences
over their tenure with the firm, with the aims of ensuring they have the
opportunity to learn the skills they need to do their jobs and to expand their
horizons
Literacy Training: Employers often turn to private firms like Education
management Corporation to provide the requisite education
Another simple literacy training approach is to have supervisor teach basic skills by
giving employees writing and speaking exercises
Diversity Training: aims to improve cross-cultural sensitivity, with the goal of
fostering more harmonious working relationships among a firm’s employees
o Team Training: focused on technical, interpersonal and team management issues
Technical training: Cross training: means training employees to do different tasks
or jobs than their own doing so facilitates flexibility and job rotation, as when you
expect team members to occasionally share jobs
When teamwork fails, it is often due to interpersonal problems such as intra-team
conflict, lack of agreement, guarded communications, and personal criticism
Interpersonal skills training: such as in listening, handling conflict, and negotiating
Team management training: included training in problem solving, meetings
management, consensus decision making and team leadership
•
Implementing Management Development Programs
o Management development is any attempt to improve managerial performance by
imparting knowledge, changing attitudes, or measuring skills
o Strategy and Development
Management development process consists of
• 1) Assessing the company’s strategic needs
• 2) Appraising managers’ current performance
• 3) Developing the managers
Development is usually part of the employer’s succession planning refers to the
process through which a company plans for and fills senior-level openings stem
from the employer’s strategy, vision, and personal plans
o Managerial On-the-Job Training
Managerial OTJ Training methods include, job rotation, the coaching/understudy
approach, and action learning
Job rotation means moving managers from department to department to broaden
their understanding of the business and to test their abilities
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Coaching/understudy Approach: Here the trainee works directly with a senior
manager or with the person he is to replace; the latter is responsible for the
trainee’s coaching
Action Learning: gives managers and others released time to work analyzing and
solving problems in departments other than their own – 3 phases:
• 1) Framework phase of 6 to 8 weeks: an intense planning period during which
the team defines and collects data on an issue
• 2) Action forum of 2 to 3 days: elearning center discussing the issue and
developing action-plan recommendations
• 3) Accountability session: when the teams meet with the leadership group at
30, 60, and 90 days to review their action plans
o Off-the-Job Management Training and Development Techniques
The Case Study Method: presents a trainee with a written description of an
organizational problem
• The person then analyzes the case, diagnoses the problem, and presents his or
her findings and solutions in a discussion with other trainees
• Integrated case scenarios expand the case analysis concept by creating longterm, comprehensive case situations
Management Games: enable trainees to learn by making realistic decisions in
simulated situations effective – people learn best by getting involved can
develop leadership skills and foster cooperation and teamwork
Outside Seminars
University Related Programs: Many program provide executive education and
continuing education programs in leadership, supervision, and the like
Role Playing: aim of it is to create a realistic situation and then have the trainees
assume the parts of specific persons in that situation. Each trainee gets a role such
as
Behavior Modeling:
• 1) Modeling: showing trainees how to behave effectively in a problem
situation
• 2) Role playing: practice…
• 3) Social reinforcement: praise and constructive feedback
• 4) Transfer of training: to their real jobs
Corporate Universities
• In-house development centers: Such centers typically offer a catalogue of
courses and programs aimed at supporting the employer’s management
development needs
• Characteristics of effective corporate universities include 1) alignment with
corporate strategic goals, 2) a focus on development of skills that support
business needs, 3) evaluation of learning and performance, 4) using
technology to support the learning, and 5) partnering with academia
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Executive coaches: Is an outside consultant who questions the executive’s boss,
peers, subordinates, and (sometimes) family in order to identify the executive’s
strengths and weaknesses, and to counsel the executive so he or she can capitalize
on those strengths and overcome the weaknesses
The SHRM Learning System
o Leadership Development at GE
o Leadership Management and Mission-Critical Employees: Differential Development
Assignments
Talent Management: actively managing the employees Employers need to think
through how to allocate those human resources in a way that makes the most
sense given their strategic aims
•
Managing Organizational Change Programs
o What to change? Five aspects: strategy, culture, structure, technology, or attitudes and
skills
o Lewin’s Change Process:
To Lewin, all behavior in organizations was a product of two kinds of forces: those
striving to maintain the status quo and those pushing for change
Implementing change thus means reducing the forces for the status quo or building
up the forces
• 1) Unfreezing: means reducing the forces that are striving to maintain the
status quo get people to realize the need of change
• 2) Moving: means developing new behaviors, values and attitude
organizational structure changes, training…
• 3) Refreezing: means building in the reinforcement to make sure the
organization doesn’t slide back into its former ways of doing things
o Leading Organizational Change
Nokia’s Stephen Elop created an 8-step for leading organizational change based on
Lewin’s Process
Unfreezing Stage:
• 1) Establish a sense of urgency
• 2) Mobilize commitment
Moving Stage:
• 3) Create a guiding coalition
• 4) Develop and communicate a shared vision
• 5) Help employees make the change
• 6) Consolidate ains
Refreezing Stage
• 7) Reinforce the new ways of doing things
• 8) monitor and assess progress
o Using Organizational development
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There are many ways to reduce resistance to change: imposing rewards or
sanctions that guide employee behaviors, explain why the change is needed,
negotiate with employees, give inspirational speeches, or ask employees to help
design the change
Organizational development: is a change process through which employees
formulate the change that’s required and implement it, often with the assistance
of trained consultants
• 1) It involves action research: means collecting data about a group,
department… and feeding the information back to the employees so they can
analyze it and develop hypotheses about what the problems might be
• 2) It applies science knowledge to improve the organization’s effectiveness
• 3) It changes the organization in a particular direction – toward
empowerment, improved problem solving, responsiveness, quality of work,
and effectiveness
There are four basic categories of OD applications: human process,
technostructual, human resource management, and strategic applications
Human Process Applications: The goal of human process OD techniques is to give
employees the insight and skills required to analyze their own and others’ behavior
more effectively, so they can then solve interpersonal and intergroup problems
• Sensitivity, laboratory, or t-group training’s basic aim is to increase the
participant’s insight into his own behavior by encouraging an open expression
of feelings in the trainer-guided t-group
• Team building: typically begins with the consultant interviewing each of the
group members and the leader before the meeting
o The consultant then categorizes the interview data into themes and
presents the themes to the group at the start of the meeting
• Survey research: completing attitude surveys provide comparative, graphic
illustration of the fact that the organization does have problems to solve
Technostructural interventions: For instance, in a formal structural change
program, the employees collect data on the company’s existing organizational
structure, they then jointly redesign and implement a new one
Human Resource Management Applications
Strategic OD Applications: aim to use action research to improve a company’s
strategic management
• Integrated strategic management:
o 1) Analyze the current strategy and organizational structure
o 2) Choose a desired strategy and structure
o 3) Design a strategic change plan
o 4) The team oversees implementing the strategic change and reviewing
the results
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•
Evaluating the Training Effort
o Things you can measure: Participants reactions to the program, what the trainee’s
learned from it, and to what extent their on-the-job behavior or results changed
o Two basic issues: 1) The design of the evaluation study, 2) What should be measured?
o Designing the study
Time series design: You take a series of performance measures before and after the
training program
Controlled experimentation: A controlled experiment uses both a training group,
and a control group that receives no training
• This makes it possible to determine the extent to which any change in the
training group’s performance resulted from the training, rather than from
some organization-wide change like a raise in pay
o Training Effects to measure
Reaction (interview), learning (knowledge-test), Behavior (by supervisor), Results
(increase of performance)
Chapter 9 – Performance Management and Appraisal
Performance appraisal: evaluating an employee’s current and or past performance
relative to his her performance standards
Performance appraisal process: a 3-step appraisal processing involving
1. Setting work standards
2. Assessing the employee’s actual performance relative to those standards
3. Providing feedback to the employee with the aim of helping him or her to
eliminate performance deficiencies or to continue perform above par
Continuous feedback is important
Performance management: the continuous process of identifying measuring and
developing the performance of individuals and teams and aligning their performance
with the organization’s goals
Defining the employee’s goals and performance standards:
• SMART=specific, measurable, attainable, relevant and timely
How to set effective goals:
1. Assign specific goals
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2. Assign measurable goals
3. Assign challenging but doable goals
4. Encourage participation
Talent management: Basing appraisal standards on required competencies
• Obvious from the job description
Who should do the appraisal?
• Peer appraisals: can be effective, employees seem to be motivated to meet their
colleagues expectations
• Rating committees: composed of supervisors= advantage of multiple raters
• Self ratings: self deception is the problem
• Appraisal by subordinates: anonymous, only successful if feedback is discussed
and subordinates meet manager often
• 360 degree feedback: includes every aspect from above: including external or
internal customers, more likely for developing reasons, making a selfimprovement plan
People need to be trained for giving feedback
Rating dimensions are needed “conflict management”
Feedback needs to be productive, unbiased, and development oriented
Reduce costs using a web-based system
Techniques for appraising performance:
• Graphic rating scale method: a scale that lists a number of traits and a range of
performance for each. The employee is then rated by identifying the score that
best describes his or her level of performance for each trait
Dimensions are: communications, teamwork, know-how and quantity
Competency based appraisal forms: focus on the extent to which the
employee exhibits the competencies (skills or knowledge) needed to
perform the job
Alternative rating method: ranking employees from best to worst on a particular trait,
choosing highest, then lowest until all are ranked
Paired comparison method: ranking employees by making a chart of all possible pairs of
the employees for each trait and indicating which is the better employee of the pair
Forced distribution model: similar to grading on a curve; predetermined percentages of
rates are placed in various performance categories
Critical incident method: keeping a record of uncommonly good or undesirable
examples of an employee’s work-related behavior and reviewing it with the employee at
predetermined times
Narrative forms:
o Behaviorally anchored rating scale (BARS): an appraisal method that aims at
combining the benefits of narrative critical incidents and quantified ratings by
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anchoring a quantified scale with specific narrative examples of good and poor
performance
Requires 5 steps:
1. Write critical incident
2. Develop performance dimensions
3. Reallocate incidents
4. Scale the incidents
5. Develop a final instrument
Advantages of the BARS (although it takes more time)
o A more accurate gauge
o Clearer standards
o Feedback
o Independent dimensions
o Consistency: reliable
Mixed standards scales:
o A list of a few performance dimensions (quality of work, conscientiousness, get
along with others)
Electronic performance monitoring (EPM): having supervisors electronically monitor
the amount of computerized data an employee is processing per day and thereby his or
her performance
Management by objectives (MBO)
Dealing with appraisal problems:
o Unclear standards: an appraisal that is too open to interpretation
o Halo effect: in performance appraisal the problem that occurs when a
supervisor’s rating of a subordinate on one trait biases the rating of that person
on other traits
o Central tendency: a tendency to rate all employees the same way, such as rating
them all average
o Strictness/leniency: the problem that occurs when a supervisor has a tendency
to rate all subordinates either high or low
o Recency effect: the recent performance of the employee blinds her overall year
performance
o Bias: the tendency to allow individual differences such as age, race, and sex to
affect the appraisal ratings employees receive
Guidelines for effective appraisal:
o Know the performance appraisal problems
o Use the right appraisal tool
o Keep a diary
o Get agreement on a plan
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o Ensure fairness
Appraisal interview: an interview In which the supervisor and subordinate review the
appraisal and make plans to remedy deficiencies and reinforce strengths
o Talk in terms of objective work data
o Don’t get personal
o Encourage the person to talk
o Get agreement
How to handle a defensive subordinate:
o Recognize that defensive behavior is normal
o Never attack a person’s defenses
o Postpone action
o Recognize own limitations
How to criticize a subordinate: respect dignity, give constructive feedback
Performance management vs performance appraisal
o 1. Performance management never means just meeting with a subordinate once
or twice a year to review performance, it means continuous, daily or weekly
interactions
o 2. Performance management is always goal-directed: compare with strategic
goals, is there congruence between team performance?
o 3. Performance management means continuously reevaluating and modifying
how the employee and team get their work done
Six basic elements of performance management:
o Direction sharing: means communicating the company’s goals throughout the
company, translating them into team and individual goals
o Goal alignment: means having a method that enables managers and employees
to seek the link between the employees goals and those of their department and
company
o Ongoing performance monitoring
o Ongoing feedback
o Coaching and developmental support
o Recognition and rewards: provide consequences needed to keep the employees
goal-directed performance on track
Using information technology to support performance management:
o Assign financial and nonfinancial goals to each teams activities
o Inform all employees of their goals
o Use IT-supported tools
o Take corrective action before things swing out of control
Talent management practices and employee appraisal
o Identifying the workforce profiles that the firm needs to achieve its strategic
goals
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o Consciously thinking through all the tasks required for managing the company’s
talent
o Actively managing different employees recruitment, selection, development and
rewards
o Integrating the underlying talent management activities
Chapter 10 – Employee Retention, Engagement and Careers
Learning objectives in this chapter:
- Describe a comprehensive approach to retaining employees.
- Explain why employee engagement is important, and how to stimulate such engagement.
- Discuss what employers and supervisors can do to support employees’ career development
needs.
- List and discuss the four steps in effectively coaching an employee.
- List the main decisions employers should address in reaching promotion decisions.
* Turnover: de snelheid waarmee werknemers het bedrijf verlaten. Varies among industries,
high in food industry (±50% voluntarily per year), in educational services much lower (12% per
year). Turnover costs are very high, tangible (recruitment costs/training new employee) and
intangible (lost productivity of new employee, costs of rework for errors new employee makes,
supervisory costs for coaching).
Voluntary turnover: top 5 reasons to leave a firm according to
Employees
vs. Employers
1. Pay
1. Promotion opportunity
2. Promotional opportunities
2. Career development
3. Work-life balance
3. Pay
4. Career development
4. Relationship with supervisor
5. Health care benefits
5. Work-life balance
Retention strategies
Retaining employees is a talent management issue; turnovers often start with poor selection,
inadequate training, insensitive appraisals, and inequitable pay. Important to formulate a
retention strategy considering all the HR practices and identify the issues, using effectively
conducted exit interviews, attitude surveys to monitor employees’ feelings about their job,
open door policies, or anonymous ‘hotlines’ to identify morale problems before they get out of
hand.
Comprehensive approach to retaining employees
o Selection – choosing the right workers and supervisors.
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o
o
o
o
o
o
o
Professional growth – well-thought-out training and career development program can
provide a strong incentive for staying with the company (to avoid employees’
inadequate development and career prospects)
Provide career direction – periodically discuss with employees their career preferences
and prospects, help them lay out potential career plans.
Meaningful work and ownership of goals – important to make clear what your
expectations are regarding employees’ performance and responsibilities.
Recognition and rewards – employees need and appreciate recognition for a job well
done.
Culture and environment – companies that make employees feel comfortable encourage
them to stay.
Promote work-life balance – ‘flexible work arrangements’ and ‘telecommuting’
(thuiswerken) opportunities encourage employees to choose for a certain job.
Acknowledge achievements – avoid under appreciation, frequent recognition of
accomplishments is an effective reward.
* Job withdrawal: actions intended to place physical or psychological distance between
employees and their work environments (e.g. poor attendance, voluntary turnover, taking
undeserved work breaks, psychological withdrawal like daydreaming, being ‘mentally absent)
* Engagement (betrokkenheid): being psychologically involved in, connected to, and
committed to getting one’s jobs done.
Why is this important? Many employee behaviors, including turnover, reflect the degree to
which employees are engaged to their work and the company. High employee engagement
creates:
-> Better performance: Studies showed that employees with a high engagement have a
significantly much bigger chance to perform above the company median, while the
lowest engaged employees have a much smaller chance to perform above average.
-> Higher revenue per employee
-> Less turnover
-> Better customer service: engaged employees have reasons to satisfy customers and
help to support their company.
How to stimulate engagement? Make sure employees:
- Understand how their departments contribute to the company’s success
- See how their own efforts contribute to achieving the company’s goals
- Get the sense of accomplishment from working at the firm
* Career: The occupational positions a person has had over many years.
* Career management: Process for enabling employees to better understand and develop their
career skills and interests, and to use these skills and interests more effectively.
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- Employee’s role: pursue occupations, jobs, and a career that capitalize on his or her
interests, aptitudes, values and skills.
- Employer’s role: depends partly on how long employee has been with the firm:
-> Before hiring – do realistic job interviews. Is this job a good fit with candidate’s
skills and interests?
-> First job (recent graduates) – provide challenging jobs and an experienced
mentor to ‘prevent the reality shock’.
-> On the job – provide career-oriented appraisals (evaluations), and periodic job
rotation to help the employee develop a more realistic picture of his/her
strengths and weaknesses.
* Career development: The lifelong series of activities (e.g. workshops) that contribute to a
person’s career exploration, establishment, success, and fulfillment. This plays an important
role in engaging and retaining employees.
* Career planning: The deliberate process through which someone becomes aware of personal
skills, interests, knowledge, motivations, and other characteristics and establishes action plans
to attain specific goals.
* Psychological contract: Unwritten agreement that exists between employers and employees,
which identifies each party’s mutual expectations.
* Reality shock: Results of a period that may occur at the initial career entry when the new
employee’s high job expectations confront the reality of a boring or otherwise unattractive
work situation.
Career Management Systems
o Career centers – centers at worksite to crystallize their career goals and achieve them
within the company.
o Career planning workshops – planned learning event with self-assessment exercises,
assessments of important occupational trends, and goal-setting and action-planning
segments.
o Career-oriented appraisals o Lifelong learning budgets – lifelong learning accounts for employees, provided by
employers (see chapter 8).
o Career coaches – coaches that help employees identify development needs and obtain
training, professional development and networking opportunities.
o Online programs – online system to help employer analyze an employee’s training
needs.
o Career-oriented appraisals – In an evaluation, employee’s performance is discussed and
linked to his/her career interests and developmental needs into a coherent career plan.
* Coaching: Educating, instructing, and training subordinates (= ondergeschikten). Focusing on
teaching short-term job-related skills
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* Mentoring: Advising, counseling, and guiding. Focusing on helping employees navigate
longer-term career hazards.
Effectively coaching an employee – four-step process
Coaching requires both analytical (you have to know the problem to be able to teach/advice
someone about it) and interpersonal skills (ability to get person to listen or change).
1. Preparation – understanding the problem, the employee and the employee’s skills.
Formulate a hypothesis about the problem, watch the employee what he/she is doing,
observe the workflow and how interaction with coworkers is. Following, review
objective data (like performance, customer complaints, productivity, absenteeism).
2. Planning – plan the solution, and obtain someone’s enthusiastic agreement on what
change is required. You have to lay out a change plan in form of steps to take, measures
of success, and date to complete.
3. Active coaching – an effective coach offers ideas and advice in such a way that the
subordinate can hear them, respond to them, and appreciate their value.
4. Follow-up – re-observe the person’s progress periodically, to avoid reemerging bad
habits.
Effective mentors…
o Set high standards
o Are willing to invest the time and effort the mentoring relationship requires
o Actively steer protégés into important projects, teams and jobs.
Effective mentoring requires trust; this level of trust reflects the mentor’s professional
competence, consistency, ability to communicate and readiness to share control.
Benefits and disadvantages of mentoring
☺- It allows a manager to influence the career and lives of less experienced subordinates and
colleagues in a positive way.
- Because a supervisor is usually not a psychologist or trained career advisor, he has to be
extra cautious in the mentoring advice he gives, as it often touches on an employee’s
psychology (motives, needs, aptitudes, social skills, etc) and is very personal.
Main promotion decisions
1. Seniority (age, experience, years in company) vs. Competence (how well does someone
perform) – Today’s focus favors competence. What is fair?
2. How should we measure competence? – Keep the Peter’s principle in mind (companies
often promote competent employees up to their ‘level of incompetence’, where they
then sit, sometimes underperforming for years). Promoting also needs a valid procedure
for predicting the candidate’s future performance. Only using prior performance as a
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guideline is too simple, using tests or assessments might be helpful to identify
candidates with executive potential.
3. Formal vs. Informal process – Is promotion position openly posted, are the manager’s
criteria to make a promotion decision published or uncontrolled?
4. Vertical, horizontal or other? – Promotions aren’t necessarily upwards, one can also be
transferred to a similar job in a different part of the company.
* 9-box matrix – in workforce planning, this 3x3 matrix displays three levels of current job
performance (exceptional, fully performing, not yet fully performing) across the top, and also
shows three levels of likely potential (eligible (verkiesbaar) for promotion, room for growth in
current position, not likely to grow beyond current position) down the side.
* Transfer – Reassignments to similar positions in other parts of the firm.
Chapter 11 – Establishing strategic pay plans
Basic factors in determining pay rates
• Employee compensations: includes all forms of pay going to employees and arising from
their employment. It has 2 components:
o Direct financial payment (wages, salaries, incentives, commissions, bonuses)
o Indirect financial payment (financial benefits like insurance and vacations)
• 2 ways of payments
o Time based pay
o Performance based pay (e.g. amount of produced pieces)
• This chapter explains how to formulate a plan for paying employees in a time based way
+ incentives
• Aligned reward strategy: creating a compensation package including wages, incentives
and benefits that produces the behaviour of an employee needed to support the
strategy
• Equity theory of motivation: people are motivated to maintain a balance between
what they perceive as their contribution and rewards. If someone perceives inequity the
person will be motivated to reduce the perceived inequity
o External equity: refers to a job’s pay rate in one company compared to another
company (managers use salary surveys to maintain this)
o Internal equity: how fair the job’s pay rate is when compared to other job within
the same company (managers use job analysis and evaluation to maintain this)
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o Individual equity: fairness of an individual’s pay as compared to what his
coworkers earn for similar jobs, based on individual’s performance (managers
use performance appraisal and incentive pay to maintain this)
o Procedural equity: perceived fairness of the processes and procedures to make
decisions regarding the allocation of pay (managers use employees participation
or surveys to maintain this)
Job evaluation methods
• 2 approaches to setting pay rates
o Market based approaches: conducting salary surveys to determine what others
in the relevant labor markets are paying for particular jobs
o Job evaluations: A systematic comparison of jobs to determne the worth of one
job relative to another. This results in (hierarchy) salary structure (e.g. the more
responsibilities, the more payment).
Two approaches in job evaluation:
- Intuitive approach of job evaluation
- Compare the jobs by focusing on the basic factors the jobs have in
common: compensable factors
• Main steps in job evaluations:
1. Identifying the need for the program: e.g. when employees are not satisfied.
2. Getting cooperation: get employees to cooperate since they might fear cuts in their
wages. Telling them there rates will not be adversely affected might make them
cooperate in the job evaluation.
3. Choosing and evaluation committee: a committee usually consists of 5 members
(most of them employees), with usually one HR manager to provide assistance. The
committee identifies 10-15 benchmark jobs; these will be the first jobs to be evaluated
and serve as anchors against which the relative importance of other jobs is compared.
Eventually the committee will evaluate the worth of each job by using ranking, job
classification or point method.
• Ranking: ranking each job relative to other jobs based on overall factors like job
difficulty (simplest job evaluation).
1. Obtain job information: job analysis, job description.
2. Selects and group jobs: ranking jobs per department.
3. Select compensable factors: rank jobs based on just one factor e.g. job difficulty.
4. Rank jobs: give each rater a set of cards which contain job descriptions, rank each
card from lowest to highest.
5. Combine rating: making an average every individual rater’s ranking.
- Advantages: cheap and fast
- Disadvantages: tendency to rely to much on estimates and ranking doesn’t provide a
measure for quantifying the value of one job relative to another.
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•
•
Job classification/grading: raters categorize jobs into groups, all the jobs in each group
are of roughly the same value for pay purposes. The groups can be divided in classes
(similar jobs) or grades (similar in difficulty but otherwise different).
Several methods:
o Write class/grade descriptions and place the jobs into classes/grades based on
how well they fit these descriptions
o Write a set of compensable factor based rules for each class (e.g. how much
independent judgment skill and physical effort does the class of jobs require?).
The evaluation committee reviews all jobs descriptions and puts each jobs into
an appropriate predefined grade; comparing each job description to the rules in
each grade description.
Points method: determine the degree to which the jobs you’re evaluation contain
selected compensable factors. It contains identifying several compensable factors for
the jobs and the degree to which each factor is present in each job. E.g. assume there
are five degrees of the compensable factor responsibility a could have, assume you
assign a different number of points to each degree of each compensable factor. In the
end you calculate a total point value for the job. Computerized job evaluation can speed
this process
How to create a market-competitive pay plan
• In a market competitive pay plan a job’s compensation reflects both the job’s value in
the company as well as what other employers are paying for similar jobs.
• 16 steps in creating a marketing-competitive pay plan
1. Choose benchmark jobs: these are representative of the entire range of jobs the
employer needs to evaluate (e.g. accounting clerk)
2. Select compensable factors: the choice of factors depends on tradition and on
strategic/practical consideration (e.g. skill, responsibility, effort)
3. Assign weights to compensable factors: determine the relative importance each
factor
4. Convert percentages to points for each factor: converting the percentage weights
assigned to each compensable factor into point values for each factor (point method)
5. Define each factor’s degrees: split each factor into degrees and define each degree
so that raters may judgje the amount of a factor in a existing job (e.g. job complexity
you might choose to have 5 degrees)
6. Determine for each factor its factor degrees’ points: the evaluation committee must
be able to determine the number of points each job is worth. So assign points to each
degree of each compensable factor.
7. Review job descriptions & job specifications: determining the amount or degree to
which the job contains the selected compesable factors (e.g. effort) and will often
review this by using a job description and job specification. Ideally the job analysis
should include an attempt to gather info about the compensable factors.
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8. Evaluate the jobs: committee gathers job description for the benchmark jobs they
want to focus on. Then they determine the degree to which each compensable factor is
present in each job. Knowing the degrees per factor for each job, now can be
determined how many points a benchmark job should contain. Then the degree points
for each jobs are added up to determin each job’s total number of points and this in
turn enables to list a hierarchy of jobs and assigning wage rates to each job. But first you
have to make a market competitive plan (compare what the employer is currently payig
for a job with what the market is paying for a similar job) and a wage curve.
9. Draw a wage curve and plot each job’s points in the curve: You can draw a line by
just estimating a line that best fits the plotted points, or you can use regression. (page
394 for images)
10. Conduct a market analysis/salary surveys: Gather information on what others are
paying for similar jobs by gathering salary surveys. Salary surveys are used to decide on
the wages of benchmark jobs. Salary surveys can be obtained in several ways (e.g.
online employment statistics of payroll records or websites like salary.com)
11. Draw the market (external) wage curve: comparing the job’s current pay rate with
other companies.
12. Compare and adjust current and market wage rates for jobs: draw external market
wage curve and current curve in one graph. Then you will be able to see the differences
between your companies payment rate and of other companies (e.g. current pay rate is
high compared to other companies). Then you can decide what you have to do based on
these graph (move the curve up or down). Now the wage curve should be equitable
internally (value point of each job) and externally (in terms of what other firms are
paying.
13. Develop pay grades: Develop e.g. around 10-12 pay grades depending on the
complexity, magnitude and influence on the organization
14. Establish rate ranges: most employers do not pay just one rate for all jobs in a
particular grade. This can depend on beginners to people working longer in the
organisation.
15. Address remaining jobs to the structure: Jobs similar to the benchmarks can easily
be slot into the structure, but for other jobs you should undergo the same procedure
again.
16. Correct out of line rates: Some jobs which fall off the wage curve, raise the wages of
underpaid employees. For the pay rates falling above the rate range you can freeze the
rate paid to these employees or transfer/promote the employees involved to jobs for
which you can legitimately pay them their current pay rates.
Pricing managerial and professional jobs
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Compensation for top executive usually consists of 4 elements
o Base pay: fixed salary and often guaranteed bonuses
o Short term incentives: cash or stock bonuses
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o Long term incentives: e.g. give the executive the right to purchase stock at a
specific price for a specific period
o Executive benefits and perks: supplemental executive retirement pension plans,
life insurance etc.
What determines executives pay? Research shows that job complexity, employers
ability to pay and executives educational level/field of study/work experience only
account for two-third of the compensation variance. CEOs might have considerable
influence over the boards of directors who set their pay.
Managerial evaluation: classify all executive and management positions into a series of
grades each with a salary grade
Compensating professional employees: most employers use a market pricing approach.
Pricing professional jobs in the market place as best as they can, to establish the values
for benchmark jobs. Then slotting the benchmark jobs and other professional jobs into a
salary structure. Each professional discipline usually ends up having 4-6 grade levels
each with a broad salary range.
Contemporary topics in compensation
• Competency based pay: the company pays for the employee’s skills and knowledge,
rather that for the title he holds (e.g. a employee in a class 1 group who could do class II
work gets paid as a class II worker, not a class I). pay for knowledge
• Biggest difference between traditional and competency based pay:
o Traditional orientation ties the worker’s pay to the worth of the job
o Competency based pay ties the worker’s pay to his competencies
• Why use competency based pay?
o Enables the company to encourage employees to develop the competency the
company needs to reach the strategic aims.
o Paying for competencies provides a focus for the talent management process.
o Traditional pay plans can backfire if a high performance work system is your
goal.
• A competency based pay in practice has 5 main elements:
1. A system for defining skills
2. A process for tying the persons pay to his skill level
3. A training system
4. A formal skills competency testing system
5. A work design that lets employees move among jobs to permit work assignment
flexibility
• Broadbanding: means collapsing salary grades into just a few wide levels or brands,
each of which contains a relatively wide range of jobs and pay levels. The pay rate of
each broadband is relatively large since it range up to the minimum pay of the lowest
grade the firm merged into the broadband up to the maximum pay of the highest
merged grade (e.g. instead of having 10 salary grades, each of which has a salary range
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of 15.000 change it to 3 broadbands each with a set of jobs that the difference between
the lowest and the highest is 40.000). Broadbands facilitate flexibility of moving an
employee from job to job.
Comparable worth: refers to the requirement to pay men and women equal wages for
jobs that are of comparable value to the employer.
Every company has jobs that are strategically crucial to their futures, and others which
are supportive. Talent management oriented employers will have to identify the
strategically crucial jobs and pay them at premium levels. It’s essential for these people
to know what’s expected of them, and that they get feedback about their performance.
Employers will have to be creative about providing rewards (such as stock ownership)
and nonfinancial rewards including personal recognition.
Chapter 13 – Benefits and Services
In dit hoofdstuk gaat het vooral om benefits en verzekeringen de VS. Ik heb dus meestal alleen
de dik-gedrukte woorden overgenomen en ook die zijn eigenlijk meestal niet belangrijk.
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The Benefits Picture Today
o Benefits: indirect financial and nonfinancial payments employees receive for continuing
their employment with the company – are an important part of just about everyone’s
compensation
Include things like health and life insurance, pensions, time off with pay, and
child care assistance
o Policy Issues
There are many benefits and various ways to classify them
• 1) Pay for time not worked (vacations)
• 2) Insurance benefits
• 3) Retirement benefits
• 4) Services
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Pay For Time Not Worked
o Supplemental pay benefits: Benefits for time not worked such as unemployment
insurance, vacation and holiday pay, and sick pay
o Unemployment Insurance
Provides benefits if a person is unable to work through no fault of his or her own
o Vacation and Holidays
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Sick Leave: provides pay to employees when they’re out of work du to illness
Evidence-Based HR: Tracking Sick Leave
Parental Leave and the Family and Medical Leave Act
Severance Pay: a one-time separation payment when terminating an employee
Supplemental Unemployment Benefits: are cash payments that supplement the
employee’s unemployment compensation, to help the person maintain his or her
standard of living while out of work
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Insurance Benefits
o Workers’ Compensation: laws aim to provide sure, prompt income and medical
benefits to work-related accident victims or their dependents, regardless of fault
o Hospitalization, Health, and Disability Insurance
o HMOS: Many employers offer membership in a health maintenance organization as a
hospital/medical insurance option HMO is consisting of specialists, often operating
out of a health care center
o PPOS: Preferred provider organizations are a cross between HMOSs and the traditional
doctor-patient arrangement: groups of health care providers that contract with
employers, insurance companies, or third-party payers to provide medical care services
at a reduced fee
o Mental Health Benefits: The World Health Organization estimated that more tha 34
million people in the US between the ages of 18 and 4 suffer from mental illness.
Mental illness represent 24% of all reported disabilities
o The Legal Side Of Health Benefits
o Communication and Empowerment: Make sure employees know the costs of their
medical benefits (n.v.t. in Europa)
o Wellness Programs: Many illnesses are preventable
Health promotion and disease prevention programs include seminars and
incentives aimed at improving unhealthy behaviors
o Life Insurance: Group Life insurance plans: Provides lower rates for the employer or
employee and includes all employees, including new employees, regardless of health or
physical condition
Accidental death and dismemberment coverage provides a lump-sum benefit in
addition to life insurance benefits when death is accidental
o Benefits for Part-Time and Contingent Workers
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Retirement Benefits
o Social Security: provides income only when people are older than 62 in the US
o Pensions Plans: Plans that provide a fixed sum when employees reach a predetermined
retirement age or when they can no longer work due to disability
o Defined benefits plans: A plan that contains a formula for determining retirement
benefits
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o Defined contribution plan: A plan in which the employer’s contribution to employees’
retirement savings funds is specified
o Portability: Instituting policies that enables employees to easily take their accumulated
pension funds when they leave employer
o 401k Plan: A defined contribution plan based on section 401k of the Internal Revenue
Code
o Savings and thrift plan: Plan in which employees contribute a portion of their earnings
to a fund; the employer usually matches this contribution in whole or in part
o Deferred profit-sharing: A plan in which a certain amount of profits is credited to each
employee’s account
o Employee stock ownership plan: A qualified, tax-deductible stock bonus plan in which
employers contribute stock to a trust for eventual use by employees
o Cash balance plans: Plans under which the employer contributes a percentage of
employees’ current pay to employees’ pension plans every year, and employees earn
interest on this amount
o Early retirement window: A type of offering by which employees are encouraged to
retire early, the incentive being liberal pension benefits plus perhaps a cash payment
o Improving Productivity through HRIS
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Personal Services and Family-friendly Beneftis
o Personal Services:
Employee assistance program (EAP): A formal employer program for providing
employees with counseling and/or treatment programs for problems such as
alcoholism, gambling, or stress
o Family-Friendly (Work-Life) Benefits
Several trends have changed the benefits landscape: There are more households
where both adults work, more one-parent households, more women in the
workforce, and more worker older than age 55
Family friendly benefits: Benefits such as child care and fitness facilities that make
it easier for employees to balance their work and family responsibilities
o Elder Care: The responsibility for caring for an aging relative can affect the employee’s
performance
o Other Job-Related Benefits
o Executive Perquisites
When you reach the pinnacle of the organizational pyramid…
Perquisites can range from substantial (company planes) to relatively insignificant
(private bathrooms)
Include management loans (which typically enable senior officers to exercise their
stock options), financial counseling (to handle investments), and relocation benefits
(payment for move etc.)
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Flexible Benefits Programs
o Employees prefer choice in their benefits plans
o In one survey of working couples, 83% took advantage of flexible hours, 69% took
advantage of flexible-style benefits, and 75% said that they prefer flexible plans
o The Cafeteria Approach: Individualized plans allowed by employers to accommodate
employee preferences for benefits
o Benefits and Employee Leasing
Many businesses don’t have the resources or employee base to support the cost of
many of the benefits described earlier that’s one big reason they turn to
‘employee leasing’
Employee leasing: firm that assume all or most of the employer’s human resources
chores
The leasing firm thus becomes the employees’ legal employer, and usually handles
employee-related activities such as recruiting, hiring, and paying taxes
o Flexible Work Schedules
Flexible work schedules are increasingly popular. Single parents often find them
crucial for balancing work and family responsibilities
Flextime: is a plan whereby employees’ workdays are built around a core of
midday hours. Workers determine their own starting and stopping hours
Compressed Workweeks: Means that employees work fewer days each week but
each day they work longer hours (hospitals)
Workplace flexibility: means arming employees with the information technology
tools they need to get their jobs done wherever they are
Job sharing: allows two or more people to share a single full-time job
Work sharing: refers to a temporary reduction in work hours by a group of
employees during economic downturns as a way to prevent layoffs
Chapter 14 – Ethics and Employee Rights and Discipline
Ethics: the principles of conduct governing an individual or a group; specifically, the
standarts you use to decide what your conduct should be
Ethics is not the law!, something may be unethical but legal or the other way around
Organizational justice is defined in terms of distributive justice and procedural justice
o Distributive justice refers to the fairness and justice of the decision’s result(did I
get an equitable pay raise?)
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o Procedural justice refers to the fairness of the process (is the process my
company uses to allocate merit raise fair?)
Ethical behavior at work
o Who are the bad apples? Individual characteristics: some people are just more
inclined to make unethical choices (Integrity testing)
o Which ethical situations make for bad ethically dangerous cases or situations?:
some ethical dilemmas are more likely to prompt unethical choices (ethics
audits, shape the system in a way that unethical behavior is almost impossible)
o What are the bad barrels? What outside factors mold ethical choices?: “a strong
ethical culture that clearly communicates the range of acceptable and
unacceptable behavior – is associated with fewer unethical decisions in the
workplace” (clarifying expectations, using signs and symbols, providing physical
support(appraisal system))
Offering rewards for ethic behavior might undermine the intrinsic value of it
Organizational culture: the characteristic values, traditions and behaviors a company’s
employees share
How to influence ethics at work:
o Ethics training
o Performance appraisal
o Reward and disciplinary system
o Managing ethics compliance
o Selection
How to manage employee discipline and privacy
o Fairness in disciplining
o Bullying and victimization
Imbalance of power: people misuse their power to control or harm
people
Intent to cause harm: bullying is intended to cause harm
Repetition: bullying happens to the same person over and over again
Basics of a fair and just disciplinary process:
o Rules and regulations:
Poor performance is not acceptable
Alcohol and drugs have no place at work
o Progressive penalties
o Formal disciplinary appeals processes
o Discipline without punishment(only short term compliance gained through
punishment)
Issue an oral reminder
Should another incident arise within 6 weeks issue a formal reminder a
copy of which is placed in the employees personnel file
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Give a paid 1 day “decision making leave” – the person needs to think
about the incident
If no further incident occur in the next year or so, purge the 1 day paid
suspension from the persons file, if not – dismiss the person
Employee privacy
o Secure private information of the employee
Employee monitoring
o Electronic communications privacy act: intended in part to restrict interception
and monitoring of oral and wire communications, but with two exceptions:
employees who can show a legitimate business reason for doing so, and
employees who have employees consent to do so
Managing dismissal (involuntarily termination of an employee’s employment with the
firm)
o Termination at will (in absence of a contract either part can end the relationship
at will)
o Wrongful discharge – refers to a dismissal that violates the law
Grounds for dismissal
o Unsatisfactory performance
o Misconduct (insubordination – disobedience rebelliousness)
o Lack of qualifications
o Changed requirements for the job
Termination Interview:
o 1. Plan the interview carefully
o 2. Get to the point
o 3. Describe the situation
o 4. Listen
o 5. Review all elements of the severance package
o 6. Identify the next step
Outplacement counseling: a formal process by which a terminated person is trained
and counseled in the techniques of self-appraisal and securing a new position
Exit interviews: interviews with employees who are leaving the firm, conducted for
obtaining information about the job or related matters, to give the employer insight
about the company
Downsizing: the process of reducing usually dramatically the number of people
employed by the firm
o Identify objectives and constraints: for example decide how many positions to
eliminate at which locations and what criteria to use
o Form a downsizing team: strategy for downsizing, schedule, supervision
o Address legal issues
o Plan post-implementation actions
o Address security concerns
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o Try to remain informative
Preparing for layoff:
o Make sure appraisals are up to date
o Identify top performers and get them working on the company’s future
o Have leaders committed to the company’s turnaround
Layoff and downsizing alternatives:
o Finding volunteers using attrition
o Redeployments
o Voluntary reduction in pay plan, all employees agree to reductions in pay to keep
everyone working
o Concentrate their vacations during slow periods
o Early retirement
o Voluntarily time off
Merger guidelines:
o Avoid the appearance of power and domination
o Avoid win-lose behavior
o Remain businesslike and professional in all dealings
o Maintain as positive a feeling about the acquired company as possible
o Remember that the degree to which your organization treats the acquired group
with care and dignity will affect the confidence, productivity, and commitment of
those who remain
Chapter 16 – Employee Safety and Health
Guys, sorry it took a while, here’s the last summary for HRM! Definitions are bold with a *,
important issues are underlined and the learning objectives in the box will be explained in the
same order below (text in red is USA law, but worth reading through;).
Learning objectives in this chapter:
- Explain the supervisor’s role in safety.
- Explain the basic facts about safety law and OSHA.
- Answer the question, “What causes accidents?”
- List and explain five ways to prevent accidents.
- Minimize unsafe acts by employees.
- List five workplace health hazards and how to deal with them.
- Discuss the prerequisites for a security plan and how to set up a basic security program.
The supervisor’s role in safety
Safety always starts at the top, as managers have to be serious about safety, if they want their
employees to do so. In most cases, the supervisor has the primary responsibility for the safety
of his employees and safety inspections should always be part of a supervisor’s daily routine.
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Safety law and OSHA (USA)
Law in 1970 was set – ‘to assure so far as possible every working man and woman in the nation
safe and healthful working conditions and to preserve our human resources’. Basic statement
was to administer the act and to set and enforce the safety and health standards that apply to
almost all workers in the US (according to me, similar laws are set with the same goals for
employees in the Netherlands / elsewhere).
* Occupational illness – any abnormal condition or disorder caused by exposure to
environmental factors associated with employment. All occupational (beroepsmatige)
illnesses/injuries must be reported by employers.
What causes accidents?
1. Chance occurrences (=voorvallen)
e.g. walking past a window just as someone hits a ball through it.
2. Unsafe conditions
* Unsafe conditions – The mechanical and physical conditions that cause accidents.
- Improperly guarded equipment
- Defective equipment
- Hazardous procedures in, on, or around machines or equipment
- Unsafe storage (congestion, overloading)
- Improper illumination (glare =schittering, insufficient light)
- Improper ventilation (insufficient air change, impure air source)
Accidents are caused by a few aspects. The most serious accidents occur by high-danger zones,
like metal and woodworking machinery, as the risk of being injured is for example much higher
for a crane operator than for a supervisor. Work schedules and fatigue (vermoeidheid). Most
accidents happen after the first 5 or 6 hours of a workday, partly because of fatigue, partly
because more accidents happen during night shifts. Last important aspect is workplace ‘climate’
or psychology. Pressure to complete work as quickly as possible, poor safety climate and
employees under stress, among others, leads to accidents. High seasonal layoff rates
(ontslagrondes), hostility among employees, many garnished wages, and bad living conditions
frequently lead to more accidents too.
3. Employees’ unsafe acts
Or, what causes people to act recklessly? Some people are simply accident susceptible
(vatbaar), there are mixed results whether people with specific traits, like impulsiveness,
sensation seeking, extreme extraversion, are more accident prone than others. Next, a person
who is accident prone on one job, may not be so in another job. E.g.driving, impatience (always
in a hurry, because of high pressure at job) and aggressiveness (boss treated you unfair) will
have a negative impact on one’s driving skills.
How to prevent accidents? – 5 ways
Reducing unsafe conditions
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1. * Job hazard analysis – computerized and systematic approach to identifying and eliminating
workplace hazards before they occur. It takes the following questions into account:
- What can go wrong?
- What are the consequences?
- How could it happen?
- What are other contributing factors?
2. * Operational safety reviews – reviews conducted by agencies to ascertain whether units
under their jurisdiction are complying with all the applicable safety laws, regulations, orders
and rules. In other words, a tool to check whether companies comply with the safety rules.
3. Personal protective equipment – require employees to wear personal protective equipment
to prevent accidents, instead of doing it afterwards. It needs to be wearable protective gear, to
provide reliable protection needs to fit properly, be easy to care for, maintain and repair.
Reducing unsafe acts
4. A manager needs to identify and eliminate potential risks, such as unguarded equipment,
and reduce potential distractions, such as noise, heat and stress.
5. carefully screen, train and motivate employees.
Some solutions for eliminating unsafe conditions are obvious, like using floor mats to avoid falls
on slippery floors. Some are more subtle, like slip-resistant footwear for the same slippery
floor, or cut-resistant gloves when one’s working with sharp objects.
Minimize unsafe acts by employees
1. Selection and Placement – selecting and placing the right person on a specific function,
isolate the trait that might cause accidents on the job in question and screen candidates
for this trait.
2. Training – Safety training reduces accidents, especially for new employees. Good
instruction is very important.
3. Motivation – Motivate employees to work safely by safety posters (combined with e.g.
training), incentives (like a reward system for good behavior), and positive
reinforcement (continuously providing workers with positive feedback if safety-related
behavior was shown).
4. Behavior-based Safety – Identifying the worker behaviors that contribute to accidents
and then training workers to avoid these behaviors.
5. Employee Participation – Ask the employees about their ideas around safety and how to
solve problems. Next to good ideas, it creates awareness and commitment from the
workers in the company.
6. Conduct Safety and Health audits and Inspections – Routinely inspect for problems using
safety checklists and investigate all accidents and ‘near misses’. Set up employee safety
committees and/or set a * safety awareness program – a program that enables trained
supervisors to orient new workers arriving at a job site regarding common safety
hazards and simple prevention methods.
Workplace health hazards and how to deal with them
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- Asbestos exposure at work – major concern because a major source of occupational
respiratory diseases. Action steps: monitoring the air in rising levels of asbestos, engineering
controls like walls and filters are required to maintain asbestos level within safety level.
- Infectious diseases – Especially in international companies in which many employees travel
around the world. Action steps: provide every day medical screenings for returning employees,
tell employees to stay at home if they are sick, clean work areas regularly, etc.
- Air Quality – sealed ‘green’ buildings can produce illnesses like itchy eyes and trouble
breathing. Action steps: institute continuous monitoring air systems.
- Alcoholism and Substance Abuse – are a problem, as 2/3 of the people with an alcohol
disorder work full-time, and it has severe effects, as both quality and quantity of the work
decline. Action steps; Train supervisors to identify alcoholics or drug abusers, and set and follow
substance abuse policies.
- Stress, burnout, and Depression – These have serious consequences for both employee (e.g.
anxiety, cardiovascular disease, headaches,..) and employer (diminished performance,
increased absenteeism, and turnover). Action steps: Reduce job stress by reducing workload,
build a safe and pleasant working environment, support a healthy lifestyle, sleep and
meditation.
* Burnout – The total depletion of physical and mental resources caused by excessive striving
to reach an unrealistic work-related goal.
- Workplace Smoking – costly problem for both employers (higher health and fire insurances,
increased absenteeism,…) and employees (heart problems, cigarette costs, cancer,…). Action
steps: ban indoor smoking, have set smoking breaks.
- Violence at Work – homicide is the second biggest cause of fatal workplace injuries in the USA.
Action steps: screen out workplace aggressors by carefully check references etc, train
supervisors with a workplace violence supervisory training.
Setting up a basic security program
Initial threat assessments review these important matters
1. Access to the reception area, panic button for contacting emergency personnel.
2. Interior security, possible need for key cards, secure restrooms, better identification of
exits.
3. Authorities’ involvement, emergency procedures are developed with local law
enforcement authorities.
4. Mail handling, how do employees screen and open mail and where does it enter the
building? (OMG, sorry guys, it’s one of the learning objectives..)
5. Evacuation, including full review of evacuation procedures and training.
6. Backup systems, such as an offsite company data storage if disaster strikes.
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Chapter 17 – Managing global human resources
Adapting HR activities to intercountry differences
• Managers have to be cognizant of and generally adapt their human resource policies
and practices to countries in which they’re operating
• Cultures: the basic values citizens adhere to, and how these values manifest themselves
in the nation’s arts, social programs and ways of doing things
• Hofstede study: societies differ on five values, which he calls
power distance, individualism, masculinity, uncertainty avoidance and long-term
orientation. Power distance represents the extent to which the less powerful members
of institutions accept and expect an equal distribution of power. Acceptance of
inequality is higher in some countries (like Mexico) than in other (Sweden). Such cultural
differences influence HR practices.
• Employers going abroad must be familiar with labor law systems. A few examples:
o Work councils: employee elected groups of representatives that meet monthly
with managers to discuss certain topics and policies (common in Europe)
o Codetermination: employees have the right to a voice in setting company
policies by electing a representative on the supervisory board (Germany)
• Employers also need to make sure their employees aborad are adhering to their firm’s
ethics codes
• The EU has a few specific regulation like minimum EU wages, working hours and
termination of employment agreements.
• In China many years there were no specific regulations about minimum wages, but that
is now chaning.
Staffing the global organization
• Several types of international employees
o Locals: citizens of countries where they are working. Advantages: costs are a lot
lower than expats, local people might view the multinational as a better citizen if it
uses local management)
o Expatriates: non citizens of the countries in which they are working. Main reason for
hiring is if the employer can’t find local candidates, control of the firm’s policie and
culture. Last ten years this trend is decreasing because it’s very expensive.
o Home country nationals: citizens of the country in which the multinational company
has its headquarters (similar to expats)
o Third country nationals: are citizens of a country other than the parent of the host
country (a british working in the Tokyo branch of a US bank)
• Other solutions: short term solutions (frequent travel without formal relocation).
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Transnational teams: managing internationally may require the services of a transnational
team (composed of employees whose locations and activities span many countries). Often
these teams don’t meet face to face but work in virtual environments.
Virtual teams are groups of geographically dispersed coworkers who interact using a
combination of telecommunications and information technologies to accomplish an
organizational task.
Offshoring: having local employees abroad do jobs that the firm’s domestic employees
previously did inhouse (e.g. shifting software and sales jobs to India). HR is needed to
identify high quality low cost talent abroad.
Ethnocentric practices: the prevailing attitude is that home country attitudes, management
style are superior to anything the host country might have to offer.
Polycentric practices: conscious belief that only host country managers can really
understand the culture of the host country market, therefore, the subsidiary should be
managed by local people.
Geocentric practices: the best manager for a specific position anywhere may be in any of
the countries in which the firm operates. Seeking best people for key jobs throughout the
organization regardless of nationality
Selecting expats: processes that firms use to select managers for domestic and foreign
positions have many similarities. Important is the adaptability of the candidate.
Study about traits which are important for success in a foreign assignment: job motivation
and knowledge, relational skills, flexibility/adaptability, extra cultural openness and family
situation (positive opinion of spouse).
Overseas assignment Inventory: test which identifies the characteristics and attitudes
international assignment candidates should have.
Avoiding early expat returns: systematizing the entire expatriate management process is
the first step in avoiding an early return
Traits of successful expats: extroverted, agreeable and emotionally stable are less likely to
leav early.
Family pressures are an important factor in leaving early. 3 things that makes it easier for
spouses to adjust:
o Language fluency
o Having preschool-aged children (helps keeping a social identity as a parent)
o Strong bond of closeness between spouse and expat partner
What employers can do: provide a realistic preview of what to expect, carefully screening
expat and spouse, shorten the length of assignment, person job match, local buddy systems
(local managers function as mentor).
Training and maintaining employees abroad
• There are several trainings for employees on international assignments. Examples of topics:
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o Basics of new country’s history politics, business norms, educations systems and
dempograpchics
o Undertanding how cultural values affect perceptions values
o Examples of why mmoving to a new country can be difficult and how to manage
these challenges.
Ongoing training: in country cross-cultural training during the early tages of an overseas
assignment
Appraising managers abroad: who appraises? Local management or home office
management? Make sure the evaluation is more toward the on-site manager than the
home-site manager and when writing an appraisal look for advice in a former expatriate
from the same overseas location.
Compensating expats: pay a similar base salary company wide, and add various allowances
according to individual market conditions (e.g. Japan is more expensive to live than India).
Balance sheet approach: equalize purchasing power across countries to decide on the expat
pay. The idea is that the expat should enjoy the same living standard as home. The assignee
will get the same wage as before but with a percentage of the base salary on top serving as
foreign service premium.
Incentives in international compensation:
o Foreign service premium (10-30% of base pay)
o Hardship allowance: when the living conditions are very hard like Iraq, the allowance
is a lot higher up to 70% of base pay
o Mobility premiums: reward for employees for moving from one assignment to
another
Steps in establishing a global pay system:
1. Set strategy: for the next 5 years
2. Identify crucial executive behaviors
3. Global philosophy framework: how you want each pay component to contribute to
prompting those executives actions and achieving goals
4. Identify gaps: to what extent to our pay plans support our strategic aims
5. Systematize pay systems: create performance assessment practices worldwide
6. Adapt pay policies: review global pay policies (for setting salary levels, incentives etc)
Issues which characterize European labor relations:
o Centralization: collective bargaining tends to be industry wide instead of at the
enterprise
o Employer organization: employers tend to bargain via employer associations
o Union recognition: union recognition is less formal in US
Legally, employers have a duty of care for protecting international assignees (for e.g.
terrorism, kidnapping). There are even insurances for kidnapping and ransoms. Also the
book suggest not to wear an American flag… (extremely American paragraph ☺).
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Repatriation: around 50% of the employees sent abroad probably quit within 3 years after
returning home. Given the investment it is useful to have a repatriation program to prevent
this.
Managing HR locally: How to put a global HR system into practice
• Developing a more effective global HR system
o Form global HR networks: HR managers should feel part of a global HRM team. Treat
local HR managers as equal partners
o It’s more important to standardize ends and competencies than specific methods
(e.g. IBM uses a similar recruitment/selection process worldwide, however details
who performs the interview differs)
• Implementing the global HR system:
o You can’t communicate enough
o Dedicate adequate resources (e.g. don’t require the local HR managers to
implement certain procedures unless the head office provides accurate resources
for these activities)
Chapter 18: Managing Human Resources in Small and Entrepreneurial
firms
Why small business is important: Most people graduating from college in the next few years
will work for small businesses. It is therefore very important to understand how HR is managed
in small firms.
How small business human recourse management is different
Four main reasons:
1. SIZE
A company can only afford an HR specialist when it reaches 100-employees. In all
smaller companies it is often the owner who is taking care of HR issues (which costs a lot
of time)
2. PRIORITIES
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HR is simply not the priority of small businesses, instead they focus on finance,
production and marketing,
3. INFORMALITY
HR is more informal in smaller firms. This is not only due to a lack of expertise and
recourses, it’s also a matter of survival. Entrepreneurs need to be able to react quickly
to changes (like raises, appraisals and time off) in competitive conditions. It is therefore
necessary to be flexible.
4. THE ENTREPRENEUR
Starting a new business from scratch is always risky. Because of this, in combination
with the entrepreneurs’ unique personalities, small firms stay relatively informal.
Entrepreneurs like to impose their stamp and personal management style on their own
company.
IMPLICATIONS
1. Their undeveloped HR practices may put small business owners at a competitive
disadvantage. It can give unnecessary costs and disadvantage compare to larger
companies.
2. There is a lack of specialized HR expertise, which can lead to legal and/or other
problems.
3. Smaller companies sometimes aren’t aware of Legal implications. (example, asking a
woman if she is think of starting a family.
4. Smaller companies may not be fully complying with compensating regulations and laws
(like paying compensatory time for overtime hours worked).
5. Paperwork duplications lead to data entry errors. Small companies often don’t use HR
information systems for the employee data.
Why HRM is important to small business
Research points out that small firms that have effective HR practices do much better than those
that do not. Also HR can help for getting and keeping big costumers, since these suppliers
comply with international quality standards.
USING INTERNET AND GOVERNMENTAL TOOLS TO SUPPORT THE HR EFFORT
Complying with employment laws
There are a few examples of website where entrepreneurs can find information about the
federal law they need to follow (What can I ask a job candidate? Must I pay this person
overtime? Must I report his injury?). These are all American, so I skipped them.
Employment planning and recruiting
Internet resources can make small business owners as effective as their large competitors at
writing job descriptions and building applicant pools.
WEB BASED RECRUITING can be helpful for recruitment.
Employment selection
Some tests are particularly very good for smaller firms. Some examples:
- Wonderlic personnel test to measure general mental ability
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Predictive index to measure work related personality traits, drives and behaviors
The following are tips that can help the recruiting and screening processes in small businesses:
• Keep it in the industry, use online job boards that focus on your specific industry, to
minimize irrelevant job applicants
• Automate the process, these applicant processing systems that help with the
screening process are inexpensive enough.
• Test online, use online tests to test specific abilities of applicants (typing skills,
ability to sell over the phone)
• Poll your inner circle, use your network (friends and employees), and social
network.
• Send a recording, send interviews over e-mail and record the answers. Mangers can
review videos when they have time.
COMPLYING WITH THE LAW, there is no rational basis on which tests should be used (according
to validity) to test applicants (see chapter 2 and 5). Many test providers will assist the company
with setting up a testing procedure.
Employment training
Internet training can provide training to a small cost.
PRIVATE VENDORS, there are thons of them from self-study programs to specialized programs.
(For examples of American suppliers of training programs see page 638 and 639.)
Employment appraisal and compensation
Small employers can find these as well online to formalize the employee’s goals and asses these
goals, and to easily determine local pay rates.
Employment safety and health
The majority of workplace accidents occur in firms with less than 50 employees.
OSHA CONSULTING provides free online safety and health services for small businesses.
OSHA SHARP is a program that can give small companies certifications.
LEVERAGING SMALL SIZE: FAMILIARITY, FLEXIBILITY, FAIRNESS, INFORMALITY, AND HRM
Small businesses should capitalize their strengths when dealing with employees.
Smallness should be translated into:
- Personal familiarity, with each employee’s strength, needs and family situation
- Flexible, and
- Informal in the HRM policies and practices the company follows.
Simple, informal employee selection procedure
Just as the recruitment-tools you can find online, many low tech tools are also available.
A streamlined interview process
PREPARING FOR THE INTERVIEW by making a summary of the kind of person who would be
best for the job:
• Knowledge and experience factor: What knowledge and experience is necessary to
perform the job? Etc.
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•
•
•
Motivation: what should the person like doing to enjoy the job (or not dislike)? Are
there essential goals or aspirations a person should have? Etc.
Intellectual capacity: Are there any specific intellectual aptitudes required? What must a
person be able to demonstrate he/she can do intellectually? Etc.
Personality factor: what are critical personality qualities needed for the job? Etc.
SPECIFIC FACTOR TO PROBE IN THE INTERVIEW where you make a combination of situational
questions plus open ended questions to test the candidate suitability for the job.
• Knowledge and experience factor: Ask situational questions. For example: How would
you organize…..
• Motivation: what did a person liked or disliked from what he/she did in the past? What
is his/her aspiration of energylevel?
• Intellectual capacity: Ask questions that judge such things as complexity of tasks the
person had performed, grades, etc, and how a person organize his or her thoughts and
communicates.
• Personality factor: Probe by looking for self-defeating behavior, and by exploring
interpersonal relations. How is the persons’ behavior in the interview itself?
DONCUCTING AN INTERVIEW: Use a plan to organize the interview. John Dranke (an
interviewing experts) gives the following significant areas to touch during an interview:
- College experience
- Work experience – summer, part time
- Work experience – full time
- Goals and ambitions
- Reactions to the job
- Self-assessments
- Military experiences
- Present outside activities
FOLLOW YOU PLAN Stay aware that you are trying to ask out the four main traits mentioned
above.
MATCH THE CANDIDATE TO THE JOB compare your conclusions to the job description and the
list of requirements.
Working sample test
having the candidate perform actual samples of the job in question. These tests have face
validity.
Flexibility in training
Smaller firms are much more informal in their training and development.
FOUR-STEP TRAINING PROCESS limited sources or not, small firms also need training
procedures. A simple but effective four-step training process follows.
1. Write a job description.
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2. Develop a task analysis record form. Small companies don’t need a full form (see
chapter 8), the small business owner can use an abbreviated version Summary task
analysis record form containing four colomns:
o Specific tasks what is to be performed
o Performance standards
o Trainable skills, things the employee must know or do to perform the task
o Aptitudes required
3. Develop a job instruction sheet.
4. Prepare training program for the job.
INFORMAL TRAINING METHODS according to Stephen Covey small business can offer training
without using expensive programs:
- Offer to cover intuition
- Identify online training opportunities
- Provide a library of tapes and DVDs
- Encourage sharing of best practices among associates
- Send people to seminars and association meetings
- Create a learning ethic by having everyone teach each other what they have learned.
Flexibility in benefits and rewards
Large companies offer more extensive benefits than large companies do, but small companies
compensate this by offering more flexibility.
A CULTURE OF FLEXIBILITY. Small company owners did a better job by personally interaction
with all employees every day, by ‘understanding when work/life issues emerge’.
WORK LIFE BENEFITS, like:
- Extra time off
- Compressed workweeks
- Bonuses at critical times
- Flexibility
- Sensitivity to employees’ strengths and weaknesses
- Help them better themselves
- Feed them
- Make them feel like owners
- Make sure they have what they need to do their jobs
- Constantly recognize a job well done
RECOGNITION can be as powerful as financial rewards.
- Challenging work assignments
- Freedom to choose own work activity
- Having fun built into work
- See page 645 for more examples.
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SMALL BUSINESS BENEFITS FOR BAD TIMES. The recession hit smaller businesses’ benefits
particularly hard. What can you do to make high performance feel appreciated?
SIMPLE RETIREMENT BENEFITS. Are less prevalent in small businesses. SIMPLE IRA makes it easy
and inexpensive to offer retirement benefits, where employers make contributions to
employees.
Improved communications
within a large company one bad dissatisfied employee doesn’t make the difference, but in a
small company it can destroy business service.
NEWSLETTERS
ONLINE
THE HUDDLE (short meetings)
Fairness and the family business
Most small companies are family businesses, it can be difficult to be a non-family member in
these kind of companies. Fairness problems involves the following steps:
• Set the ground rules
• Treat people fairly
• Confront family issues
• Erase privilege
Using professional employer organization
Most small business owners outsource to vendors like professional employer organizations
(PEOs), Human Resource outsources (HROs) or sometimes employee or staff leasing firms.
How do PEOs work?
at a minimum they take over payroll tasks. But most of the time they take over most of
employer’s human resources chores. PEOs become co-employees of record for the employers’
employees. The PEO mostly handles employee related activities, as recruiting and hiring, payroll
and taxes. PEO’s focus on employers with less than 100 employees. HROs usually handle these
functions on an administrative base, they are your HR office, but your employees are still
working for you.
Why use PEOs?
LACK OF SPECIALIZED HR SUPPORT
PAPERWORK
LIABILITY preventing workplace injuries and employee lawsuits
BENEFITS a small business owner may be able to get insurance for its people that it couldn’t
otherwise.
PERFORMANCE this all will hopefully lead to better results.
Caveats
There are some potential downsites
WARN SIGNS
Some guidelines to choose and manage the PEO relationship carefully
- lax to diligence
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conduct a needs analysis
review the services
determine whether the PEO is accredited
see figure 18-6 on page 648
MANAGING HR SYSTEMS, PROCEDURES, AND PAPERWORK
Introduction
There is lots of paperwork that has to be done got HR department. As you get more employees
it becomes more difficult to keep track of everything, you will need a HR system.
Basic components of manual HR systems
BASIC FORMS covering each important aspect of HR. The numbers of these forms you need are
quite large. Often you can just use a package or kit being offered by for instance office supply
stores.
OTHER SOURCES several direct mail catalog companies offer HR material.
Automatic individual HR tasks
When the company grows companies begin to computerizing individual human resource task
management tasks.
PACKAGE SYSTEM
while the company keeps growing an integrated human resource management system is often
used.
Human resource information systems (HRIS)
is one of those integrated systems, where interrelated components work together to collect
process, store, and disseminate information to support decision making, coordination, control,
analysis, and visualization of an organization’s human resource management activities. The
reasons to install HRIS are:
- Improved transaction processing
Maintaining and updating employee records take enormous amount of time to do this
manually.
- Online self-processing
employees van be part of the HRIS
- Improved reporting capability
- HR system integration
if someone forgets to process a form, a system will remind this person.
- HRIS vendors
- HR and intranet
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