Chapter Ten
Attracting and
Retaining the Best
Employees
Learning Objectives
1. Describe the major components of
human resources management.
2. Identify the steps in human resources
planning.
3. Describe cultural diversity and
understand some of the challenges
and opportunities associated with it.
4. Explain the objectives and uses of job
analysis.
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Learning Objectives
5. Describe the processes of recruiting,
employee selection, and orientation.
6. Discuss the primary elements of
employee compensation and benefits.
7. Explain the purposes and techniques
of employee training, development,
and performance appraisal.
8. Outline the major legislation affecting
human resources management.
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HRM: An Overview
• All the activities involved in acquiring,
maintaining, and developing an organization’s
human resources
• Acquisition
– Human resources planning
• Determining the firm’s human resource needs
– Job analysis
• Determining the exact nature of the positions to be filled
– Recruiting
• Attracting people to apply for positions in the firm
– Selection
• Choosing and hiring the most qualified applicants
– Orientation
• Acquainting new employees with the firm
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HRM: An Overview (cont’d)
• Maintaining
– Employee relations
• Increasing employee job satisfaction through satisfaction
surveys, communication programs, exit interviews, and
fair treatment
– Compensation
• Rewarding employee effort through monetary payments
– Benefits
• Providing rewards to ensure employee well-being
• Development
– Training and development
• Teaching employees new skills, new jobs, and more
effective ways of doing their present jobs
– Performance appraisal
• Assessing employees’ current and potential performance
levels
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HRM: An Overview (cont’d)
• Responsibility for HRM
– Shared responsibility of line managers and
staff HRM specialists
– Staff specialists develop specific HR
activities (e.g., training and development)
and deliver them with the assistance and
input of line managers
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Human Resources Planning
• The development of strategies to meet
a firm’s future human resources needs
• Forecasting Human Resources Demand
– Factors affecting HR demand
•
•
•
•
•
The firm’s overall strategic plan
The firm’s past history of staffing levels
Evolving technologies
Industry staffing practices
Projected economic trends
– HR staff determine both the number of
employees needed and their qualifications
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Human Resources Planning (cont’d)
• Forecasting Human Resources Supply
– Factors affecting HR supply
• The firm’s present work force and any internal changes
or movements
• Evolving technologies
• Projected economic trends
• Supply Forecasting Techniques
– Replacement chart
• List of key personnel and their possible replacements
within the firm
– Skills inventory
• Computerized data bank containing information on the
skills and experience of all present employees
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Human Resources Planning (cont’d)
• Matching Supply with Demand
– If demand is greater than supply, then the firm
must recruit and select new employees
– If supply is greater than demand, then the firm
must prepare plans to reduce the work force
through
• Layoffs: dismissing employees from the work force until
they are needed again
• Attrition: normal reduction of the work force that occurs
when employees leave the firm
• Early retirement: allowing or encouraging persons to
retire early with full benefits
• Firing may be necessary to remove excess employees
from the work force
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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
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Job
Description
and Job
Specification
Source: Used with permission of
Houghton Mifflin Company.
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Recruiting
• The process of attracting qualified job
applicants
• Goal is to attract the “right” number of
applicants
• External recruiting
– Sources
• Websites, newspaper ads, employment agencies,
college campuses, union hiring halls, employee referrals,
open houses, job fairs, walk-in applicants
– Advantages
• Fresh perspectives and varied backgrounds of new hires
• Attracting applicants with the required skills and
knowledge
– Disadvantages
• Expense
• May cause resentment among existing employees
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Recruiting (cont’d)
• Internal recruiting
– Promotion or transfer
– Job posting may be required by policy or union
contract
– Advantages
• Provides motivation for current employees
• Helps retain quality personnel
– Disadvantages
• Cost of filling the newly vacant position
• Cost of training another employee
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Selection
• The process of gathering information about
applicants and then using that information to
choose the most appropriate applicant
• Employment Applications
– Provide useful factual information about the
applicant
– Information gathered is used for
• Identifying applicants worthy of further consideration
• Familiarizing interviewers with applicant backgrounds
– Often include résumés
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Typical
Employment
Application
Source: Courtesy 3M.
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Typical
Employment
Application
(cont’d)
Source: Courtesy 3M.
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Selection (cont’d)
• Employment Tests
– Aptitude, skills, abilities, and knowledge relevant
to the job
– For a test to be nondiscriminatory, it must be jobrelated and validated as an accurate predictor of
job performance
• Interviews
– The most widely used selection technique
– Can probe more deeply into attitudes and
motivation
– For interviews to be nondiscriminatory, a
structured interview format is recommended
• Ask all candidates the same questions
• All questions should be job-related
• Avoid personal bias
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Selection (cont’d)
• References
– Used to verify information furnished by the
applicant about previous job responsibilities and
the reason for leaving their previous job
• Assessment Centers
– Used to select current employees for promotion to
higher-level management positions
– Employees participate in simulated management
activities and are observed and evaluated by other
senior managers
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Orientation
• The process of acquainting new
employees with an organization
• Topics
– Range from location of company cafeteria
to career paths within the firm
• May be brief and informal or long and
formal
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Class Exercise
• You are an administrative assistant to the
human resources manager for a
manufacturing firm. Your firm has 300
employees. The human resources manager
asks you to research the firm’s wage policy
regarding the 230 employees paid on an
hourly basis.
– How would you determine the firm’s wage level
when compared to other firms in your geographic
area?
– In what ways could you determine the firm’s wage
structure within the firm?
– How can you evaluate the individual wages paid to
each of the 230 workers paid on an hourly basis?
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Chapter Quiz
1. Generally, human resources management is a responsibility
shared by the line manager and
a)
b)
c)
d)
e)
top management.
unions.
foremen.
HRM specialists.
vestibule centers.
2. The reduction in the work force that normally occurs when
employees leave a company is called
a)
b)
c)
d)
e)
attrition.
retirement.
layoff.
termination.
reduction.
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Chapter Quiz (cont’d)
3. Some union agreements state that current employees must
be informed of upcoming new openings. This practice is
called job
a)
b)
c)
d)
e)
posting.
advertising.
description.
announcement.
specification.
4. Suppose your state has enacted a law that demands equal
compensation for jobs requiring about the same level of
education, training, and skills. This concept is called
a)
b)
c)
d)
e)
comparable worth.
profit sharing.
a “golden parachute.”
variable worth.
bonus sharing.
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Chapter Quiz (cont’d)
5. __________ methods use some measurable quantity as the
basis for assessing performance.
a)
b)
c)
d)
e)
Appraisal
Judgmental
MBA
Objective
Feedback
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Answers to Chapter Quiz
1. Generally, human resources management is a responsibility
shared by the line manager and
a)
b)
c)
d)
e)
top management.
unions.
foremen.
HRM specialists.
vestibule centers.
2. The reduction in the work force that normally occurs when
employees leave a company is called
a)
b)
c)
d)
e)
attrition.
retirement.
layoff.
termination.
reduction.
Copyright © Houghton Mifflin Company. All rights reserved.
10 - 24
Answers to Chapter Quiz (cont’d)
3. Some union agreements state that current employees must
be informed of upcoming new openings. This practice is
called job
a)
b)
c)
d)
e)
posting.
advertising.
description.
announcement.
specification.
4. Suppose your state has enacted a law that demands equal
compensation for jobs requiring about the same level of
education, training, and skills. This concept is called
a)
b)
c)
d)
e)
comparable worth.
profit sharing.
a “golden parachute.”
variable worth.
bonus sharing.
Copyright © Houghton Mifflin Company. All rights reserved.
10 - 25
Answers to Chapter Quiz (cont’d)
5. __________ methods use some measurable quantity as the
basis for assessing performance.
a)
b)
c)
d)
e)
Appraisal
Judgmental
MBA
Objective
Feedback
Copyright © Houghton Mifflin Company. All rights reserved.
10 - 26