9
chapter
Human Resource
Management
Better Business
3rd Edition
Solomon (Contributing Editor) ·
Poatsy · Martin
© 2014 Pearson Education, Inc.
9-1
What is HRM?
 Human Resource Management (HRM)
• All the activities involved in acquiring, developing and maintaining an
organization’s human resources
 HRM Activities
• Acquiring Human Resources
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Planning labor needs
Job Analysis
Recruiting
Selection
Orientation
• Developing Human Resources
– Training and Development
– Performance Evals (Appraisals)
• Maintaining Human Resources
– Financial Compensation
– Benefits
 Legal Issues Impacting HRM
© 2011 Pearson Education, Inc.
2
Human Resource Management
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Planning Staffing Needs
• Determining the optimal number of employees
• Clearly identifying job positions and their
requirements
Workforce Profile:
Personnel inventory
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Age
Education
Training
Experience
Specialized skills
Current position
Previous positions
Forecasting:
Based on
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Predicted sales
Current workforce skills
Technology changes
Use of temporary workers
Turnover
Retirement
Planned reassignments
© 2014 Pearson Education, Inc.
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Planning Labor Needs
Demand > Supply
Hire – Bring in new employees
Promote – Put existing employees in new, “better” positions
Transfer – Moving an existing employee to a different position
Supply > Demand
Laid Off – termination for economic or business reason
Fire – terminating the employee for performance reasons
Attrition – normal reduction of the work force that occurs when
employees leave the firm on their own accord
(retire, find another job)
Early Retirement – letting employees within a few years of retirement
retire early and allowing them to receive their full benefits
© 2011 Pearson Education, Inc.
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Job Analysis
A systematic procedure for studying jobs
to determine their various elements and
requirements
Job description
•A list of the elements that make up
a particular job
–Duties to be performed,
working conditions, the
jobholder’s responsibilities, the
tools and equipment used on
the job
Job specification
•A list of the qualifications required
to perform a particular job
–Skills, abilities, education, and
experience
Used for recruiting, selecting, evaluation,
and compensation decisions
© 2011 Pearson Education, Inc.
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Job Descriptions & Job Specifications
© 2014 Pearson Education, Inc.
9-7
Internal Recruiting
• Internal Recruiting
– Filling job vacancies from
within the organization
• Methods
- Company intranet
- Staff notice
boards
- In-house
newsletters
- Staff meetings
Advantages
• Morale booster
• Less risk
• Faster and less costly
Disadvantages
• Limited pool of
candidates
• Creates cascading
internal vacancies
• May increase resistance
to change
© 2014 Pearson Education, Inc.
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External Recruiting:
Finding Candidates from Outside the Organization
© 2014 Pearson Education, Inc.
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Hiring: Making The Right
Choice
The Hiring Process
© 2014 Pearson Education, Inc.
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Orientation
 Effective orientations are the first
step in the development process
 Introduce employees to the
company culture
 Strong orientation programs
reduce employee turnover
 Formal or Informal, Long or Short
© 2011 Pearson Education, Inc.
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Training and Development
• Training
– The process of teaching employees new skills
– Training Programs
• On-the-job training
• Job simulation
• Off-the-job training
• Role Playing
• Classroom teaching and lectures
• Developing Labor
– The process of enhancing or augmenting
employees’ current skills
– Development Programs
• Conferences / Seminars
• Classroom teaching and lectures
• Role Playing
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Employee Training
Benefits include:
• Increased job satisfaction, motivation, and morale
among employees
• Greater efficiency in work, resulting in financial gain
• More effective use of new technologies and methods
• Development of new strategies and products
• Lower employee turnover
• Fewer interpersonal conflicts and better
communication
© 2014 Pearson Education, Inc.
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Performance Evaluation (Appraisal)
Process
 Performance Evaluation
• The evaluation of an employee’s performance
that gives feedback about how well the
employee is doing, as well as where changes
and improvements are needed.
 Uses of performance appraisal
• Let workers know how they are doing and
how
they can do better
Three main aspects:
• Determines standards
• Evaluates
performance
• Provides feedback
• Provide the basis for distributing rewards
• Help the organization monitor employee
selection, training, and development activities
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Problems with
Performance Appraisals
• Discomfort with negative feedback
• Difficulty quantifying performance
• Lack of follow-up
© 2014 Pearson Education, Inc.
9-15
Performance Management
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Compensation
 2 Basic Ways to Compensate Employees
 1) Financial Compensation
– The payment employees receive in return for their labor
 2) Benefits
– Rewards in addition to regular compensation that are provided
indirectly to the employee
 Effective employee reward systems must:
• Enable employees to satisfy their basic needs
• Provide rewards comparable to those offered
by other firms
• Be distributed fairly in the organization
• Recognize that different people have different needs
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Compensation: Show Me
The Money
Compensation – Payment for Work Performed, including
applicable benefits
Hourly
Wages – pay
in exchange for
the number of
hours or days that
an employee
works
Salary – the pay
that employees
receive over a
fixed period,
regardless of
hours worked
© 2011 Pearson Education, Inc.
Benefits –
noncash
compensation like
health care and
vacation
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Financial Compensation Methods
Commission
Bonuses
Profit Sharing
Stock Options
Pay for Knowledge
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Employee Benefits: From Birthday
Cakes to Death Benefits
Optional Benefits
Legally Mandated Benefits
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Social Security
Medicare Contributions
Unemployment Payments
Workers’ Compensation
Federal Family and Medical
Leave
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Paid Vacation & Holidays
Paid Sick Days
Health Insurance
Retirement Programs (401k)
Product Discounts
Tuition Reimbursement
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Flexible Work Arrangements
• Alternative scheduling
plans (flextime)
• Permanent part-time
• Job sharing
• Compressed
workweek
• Telecommuting
© 2014 Pearson Education, Inc.
9-21
Legal Issues Impacting HRM
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Civil Rights Act (1964, 1991), Title •
VII
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Prohibits discrimination based on sex,
race, color, religion, or national origin
Enforced by EEOC (Equal Employment
Opportunity Commission), 1972
Disparate Treatment – intentional
discrimination
Disparate Impact – unintentional
discrimination
Affirmative Action – plan that increases
minorities and women in workforce
Reverse Discrimination
Sexual Harassment
• Quid Pro Quo
• Hostile Work Environment
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Age Discrimination Act (1967)
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Americans with Disabilities Act (1990)
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Prevents discrimination against qualified
individuals with disabilities, and requires
employers to make reasonable
accommodations
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Fair Labor Standards Act (1938)
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Prevents discrimination against individuals
aged 40 or above
Establishes a minimum wage and overtime for
employees working over 40 hours per week
Most managers and other professionals are
exempt
Unemployment Compensation
(1930’s)
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Requires employers to maintain insurance to
protect workers when laid off
20 weeks in SC (most other states: 26 weeks)
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Affirmative Action
• Affirmative Action (a series of executive orders)
– Applies to all employers with 50 or more employees holding
federal contracts in excess of $50,000
– Such employers must actively encourage job applications
from members of minority groups and hire qualified
employees from minority groups not fully represented in the
organization
• Valid Affirmative Action Program
1) Identify racial/gender imbalance
2) Plan doesn’t unnecessarily trammel rights of majority
3) No bar is created (no quotas)
4) Must be temporary
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Managing Workforce Diversity
Why is the workforce becoming more diverse?
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Advancements in technology
Outsourcing and offshoring
Hiring patterns
More women
Increased number of older workers
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Impact of Diversity
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Cultural diversity
Religion
Gender
Age
© 2014 Pearson Education, Inc.
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