Chapter Eleven
Human Resource Management:
Finding and Keeping the Best
Employees
McGraw-Hill/Irwin
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
HUMAN RESOURCE
MANAGEMENT (HRM)
• Human Resource Management -- The process
of determining human resource needs and then
recruiting, selecting, developing, motivating,
evaluating, compensating and scheduling employees
to achieve organizational goals.
• HRM’s role has grown because:
1. Increased recognition of employees as a
resource.
2. Changes in law that rewrote old workplace
practices.
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HUMAN RESOURCE MANAGEMENT
11-3
HR & Legal Issues
11-6
CIVIL RIGHTS ACT of 1964
• Title VII prohibits discrimination in hiring, firing,
compensation, apprenticeships, training, terms,
conditions or privileges of employment based on:
-
Race
Religion
Creed
Sex
Age
National Origin
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1972 EQUAL EMPLOYMENT
OPPORTUNITY ACT (EEOA)
• Strengthened the Equal Employment Opportunity
Commission (EEOC).
• Gave EEOC the right to issue workplace
guidelines for acceptable employer conduct.
• EEOC could mandate specific recordkeeping
procedures.
• EEOC was vested with the power of
enforcement.
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CONTROVERSIAL PROCEDURES
of the EEOC
• Affirmative Action -- Policy designed to “right past
wrongs” by increasing opportunities for minorities and
women in the workplace.
• Reverse Discrimination -- Discrimination against
whites or males in hiring or promoting.
• This policy has been at the center of many
debates and lawsuits.
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CIVIL RIGHTS ACT of 1991
and OFCCP
• Civil Rights Act of 1991
- Amended Title VII and gave victims of discrimination
the right to a jury trial and possible damages.
• Office of Federal Contract Compliance Programs
(OFCCP)
- Ensures that employers doing business with the
federal government comply with the
nondiscrimination and affirmative action laws.
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LAWS PROTECTING
EMPLOYEES with DISABILITIES
• Americans with Disabilities Act of 1990 (ADA)
- Requires employers to give applicants with physical or
mental disabilities the same consideration for employment as
people without disabilities.
- Passage in 2008 of Americans with
Disabilities Amendments Act
expanded protection.
- 2011 saw new regulations that widen
the range of disabilities covered by
the ADA and shift the burden of proof
of disability from employees to
employers.
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AGE DISCRIMINATION in
EMPLOYMENT ACT (ADEA)
• Age Discrimination in Employment Act (ADEA)
- Protects workers 40 and
over from employment
and workplace
discrimination in hiring,
firing, promotion, layoff,
compensation, benefits,
job assignments and
training.
11-12
MINDING the LAW in HRM
• Employers must know the law
and act accordingly.
• Legislation affects all areas of
HRM.
• Court cases highlight that
sometimes it’s proper to go
beyond providing equal rights.
• Changes in law and legislation
occur regularly.
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HUMAN RESOURCE MANAGEMENT
HR MUST PLAN FOR THE FUTURE
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5 STEPS in the
HUMAN RESOURCE
PLANNING PROCESS
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STEPS in the HUMAN RESOURCE
PLANNING PROCESS
1. Preparing a human resource
inventory of employees.
2. Preparing a job analysis.
3. Assessing future human
resource demand.
4. Assessing future labor
supply.
5. Establishing a strategic plan.
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5 STEPS in the HUMAN RESOURCE
PLANNING PROCESS
1. Preparing a human resource
inventory of employees.
2. Preparing a job analysis.
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WHAT’S a JOB ANALYSIS?
• Job Analysis -- A study of what employees
who holds various job titles do.
• Job Description -- Specifies the objectives of the
job, the type of work, the responsibilities and duties,
working conditions and relationship to other jobs.
• Job Specifications -- A summary of the minimal
education and skills needed to do a particular job.
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STEPS in the HUMAN RESOURCE
PLANNING PROCESS
1. Preparing a human resource
inventory of employees.
2. Preparing a job analysis.
3. Assessing future human
resource demand.
4. Assessing future labor
supply.
5. Establishing a strategic plan.
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HUMAN RESOURCE
MANAGEMENT (HRM)
The process of determining human resource needs
and then recruiting, selecting, developing,
motivating, evaluating, compensating and
scheduling employees to achieve organizational
goals.
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THE HIRING PROCESS:
RECRUITMENT
11-21
RECRUITING EMPLOYEES
• Recruitment -- The set of activities for obtaining the
right number of qualified people at the right time.
• Human resource managers use both internal and
external sources to recruit employees.
• Small businesses often make use of web
sources like CareerBuilder and Monster to
recruit employees.
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RECRUITING EMPLOYEES
•Recruiting
•Internal
•Less expensive
•Maintains morale
•External
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EMPLOYEE SOURCES
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THE HIRING PROCESS:
SELECTION
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SELECTION
• Selection -- The process of gathering information
and deciding who should be hired, under legal
guidelines, to fit the needs of the organization and
individuals.
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STEPS in the
SELECTION PROCESS
1. Obtaining complete application forms
2. Conducting initial and follow-up interviews
3. Giving employment tests
4. Conducting background investigations
5. Obtaining results from physical exams
6. Establishing trial (probationary) work
periods
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CONTINGENT WORKERS
11-29
HIRING CONTINGENT WORKERS
• Contingent Workers -- Workers who do not have
an expectation of regular, full-time employment.
• Include part-time and temporary workers, seasonal
workers, independent contractors, interns and co-op
students.
• There are about 5.7 million contingent workers in
the U.S.
• Majority of contingent workers are under 25.
11-30
WHY HIRE
CONTINGENT WORKERS?
• Companies hire contingent workers:
- When full-time workers are on leave
- During periods of peak demand
- In uncertain economic times
- To save on employee benefits
- To screen candidates for future employment
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TRAINING and DEVELOPING
EMPLOYEES
11-33
TRAINING and DEVELOPING
EMPLOYEES
Training and Development -- All attempts to
improve productivity by increasing an employee’s
ability to perform.
• Training – short-term skill oriented.
• Development – long-term career oriented.
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MOST COMMONLY USED TRAINING
and DEVELOPMENT ACTIVITIES
• Orientation
• On-the-Job Training
• Apprenticeships
• Off-the-Job Training
• Online Training
• Vestibule Training
• Job Simulation
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DEVELOPING EFFECTIVE
MANAGERS
• Management Development -- The process of
training and educating employees to become good
managers and tracking the progress of their skills
over time.
• Management training includes:
- On-the-job coaching
- Job rotation
- Off-the-job courses and training
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USING NETWORKS and
MENTORING
• Networking -- Establishing and maintaining
contacts with key managers in and out of the
organization and using those contacts to develop
relationships.
• Mentors -- Managers who supervise, coach and
guide selected lower-level employees by acting as
corporate sponsors.
• Networking and mentoring go beyond the work
environment.
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APPRAISING PERFORMANCE
ON THE JOB
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APPRAISING PERFORMANCE
on the JOB
• Performance Appraisal -- An evaluation that
measures employee performance against established
standards in order to make decisions about
promotions, compensation, training or termination.
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APPRAISING PERFORMANCE
on the JOB
A 360-degree review gives
managers opinions from
people at different levels
to get a more accurate
idea of the worker’s ability.
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SIX STEPS of PERFORMANCE APPRAISALS
1. Establish Standards
Understandable
Measurable
Reasonable
2. Communicate
Standards
4. Discuss Results
5. Take Corrective/Reward
Action – if necessary
6. Use Results to Make
Decisions
3. Evaluate
Performance
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MAJOR USES of
PERFORMANCE APPRAISALS
• Identify training needs
• Use as a promotion tool
• Recognize worker’s achievements
• Evaluate the firm’s hiring process
• Judge the effectiveness of the firm’s orientation
process
• Use as a basis for possible termination of a
worker
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COMPENSATION
11-44
COMPENSATION PROGRAMS
• A managed and competitive compensation
program helps:
- Attract the kinds of employees the business needs.
- Build employee incentive to work efficiently and
productively.
- Keep valued employees from going to competitors or
starting their own firm.
- Provide employee financial security through wages and
fringe benefits.
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TYPES of PAY SYSTEMS
• Salary
• Hourly Wage/Day Work
• Piecework System
• Commission Plans
• Bonus Plans
• Profit Sharing Plans
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COMPENSATING TEAMS
• Team-based pay programs are more challenging
than individual pay systems.
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FRINGE BENEFITS on the JOB
• Fringe Benefits -- Sick leave, vacation pay,
pension and health plans that provide additional
compensation to employees beyond base wages.
• In 1929, Fringe benefits accounted for less than
2% of payroll cost. Today it’s about 30%.
• Healthcare has been the
most significant increase
in fringe benefit cost.
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The RANGE of
FRINGE BENEFITS
• Fringe benefits include incentives like:
- Company cars
- Country club memberships
- Recreation facilities
- Special home mortgage rates
- Paid and unpaid sabbaticals
- Day-care and elder care services
- Dental and eye care
- Legal counseling
- Short or compressed work weeks
11-49
SPECIAL PERKS at
DREAMWORKS
• Free DVDs and screenings of
current films.
• Free breakfast and lunch plus
dinner when working late.
• Free snack rooms on every
floor.
• Profit sharing.
• Ping-Pong and poker
tournaments during work
hours.
11-50
CAFETERIA-STYLE and
SOFT BENEFITS
• Cafeteria-Style Fringe Benefits -- Allow
employees to choose the benefits they want (up to a
certain dollar amount).
• Soft Benefits include:
- Onsite haircuts and shoe repair
- Concierge services
- Free meals at work
- Doggie daycare
- Onsite farmer’s markets
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FLEXIBLE SCHEDULING PLANS
11-52
USING FLEXTIME PLANS
• Flextime Plan -- Gives employees some freedom to
choose which hours to work as long as they work the
required number of hours.
• Most flextime plans require Core Time -- When all
employees are expected to be at their job stations.
• Flextime is hard to incorporate into shift work and
managers have to work longer hours.
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COMPRESSED WORK WEEKS
• Employees enjoy long
weekends after working long
days.
• Productivity is a concern.
• Nurses and firefighters often
work compressed work
weeks.
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JOB SHARING
• Job Sharing -- Lets two or more part-time
employees share on a full-time job.
• Provides employment opportunities for many
people who cannot work full time.
• Workers tend to be enthusiastic and productive.
• Absenteeism and tardiness are reduced.
• Employers can schedule part-time workers in
peak demand periods.
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MOVEMENT of EMPLOYEES
• Employees are promoted
• Employees are reassigned.
• Employees are terminated
due to performance or
economic situations.
• Employees resign
• Employees retire.
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TERMINATING EMPLOYEES
• As the economic crisis grew, more and more
employers have had to lay off employees.
• Even when the economy is booming, employers
are hesitant to hire full-time workers because of
the cost of termination.
• Firing employees is more
difficult for employers
because of laws preventing
termination for certain acts.
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