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Learning Objectives
After studying this chapter, you should be able to:
1. Discuss the role of ethics in human resource
decision making
2. Describe the concept of rightsizing and
organizational strategies for rightsizing
3. Describe how to manage termination and retention
4. Describe the elements of voluntary turnover
5. Discuss key human resource issues during mergers
and acquisitions
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–2
Ethics and
Human Resource Management
• Ethics
 Are an individual’s beliefs about what is right
and wrong, and good and bad.
 Are formed by the societal context in which
people and organizations function.
• Ethical Behavior versus Legal Behavior
 Codes of conduct and ethical statements
 Ethical training and orientation
 Social responsibility versus profits
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–3
Rightsizing the Organization
The process of monitoring and
adjusting the composition of the
organization’s workforce to its
optimal size.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–4
Temporary Solutions for Dealing
with Increased Demand for
Employees
Meeting the Demand
for Employees
Offer
overtime
Employee
leasing
Part-time
workers
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–5
Dealing with a Decrease in
the Demand for Employees
Adjusting for Fewer
Employees
Reduce contingent
workforce
Retain core of
permanent workers
Utilize strategic
layoffs
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–6
Justice in Organizations
Types of Justice
Distributive
justice
Procedural
justice
Interactional
justice
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–7
Critical Dimensions of Procedural Justice
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–8
Legal Issues in Layoffs
• Protecting Employee Rights
 If layoffs result in disparate impact for
protected groups, legal actions can become
problematic.
 Decisions to layoff more senior employees
can result in age discrimination suits.
 Layoff decisions related to performance must
be based on a defensible performance
appraisal process.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–9
Is Downsizing Effective?
• Stable Employers
 Have changes in employment between plus
and minus 5%.
• Employment Downsizers
 Have employment declines of more than 5%;
plant and equipment declines of less than 5%
 Have the lowest levels of return on assets and
did poorly on stock price.
• Asset Downsizers
 Have employment declines of less than 5% but
plant and assets declines were at least 5%
greater than declines in unemployment.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–10
Beyond the Book:
Should Firms Use Downsizing When
Employees Are No Longer Needed?
• YES
 It leads to quicker
decision making, more
precise accountability,
and harder-working
employees.
 It can significantly
reduce a firm’s salary
expense when
unneeded employees
are terminated.
• NO
 Employees are needed
or they wouldn’t have
been hired in the first
place.
 It is expensive
because firms must
make severance
payments and fund
retirement plans.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–11
Managing Terminations and Retention
• Involuntary Turnover
 Is terminating employees whose services
are no longer desired.
• Punishment
 Is following unacceptable behavior with
some type of negative consequences.
• Discipline
 Is a system of rules and procedures for
how and when punishment is administered
and how severe the punishment.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–12
Typical Disciplinary Problems
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–13
Progressive
Disciplinary
Plans
Verbal
warning
Written
warning
Suspension
Termination
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–14
Employment-at-Will Doctrine
An employer can terminate any
employee at any time, for any
reason (good or bad), or for no
reason at all.
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–15
Exceptions to Employment-at-Will
• The termination would violate a specific law.
• The employee has a contractual right to his or
her job.
• The employee’s rights of due process have been
violated.
• Termination for refusing to commit a crime or for
reporting a crime or unethical or unsafe behavior
on the part of the organization.
• The employee’s termination involves an
employer’s breach-of-good-faith (promise).
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–16
Exceptions to the Doctrine of Employment-at-Will
1. The termination would
violate a specific law.
Various laws forbid termination for a specific reason. Some of the most
common reasons are termination based on gender or race (violates the
Civil Rights Act) or termination because of union activity (violates the
Taft-Hartley Act).
2. The employee has a
contractual right to
his or her job.
The contract might be a formal contract or an implied contract
guaranteeing or implying a guarantee of employment.
3. The employee’s rights of
due process have been
violated.
For example, if an employee is accused of theft, the employee has the
right to know of the charges and to refute those charges—in a court of
law if necessary.
4. Public–policy exception.
This exception has been less common but involves cases in which an
employee is discharged for refusing to commit a crime or for reporting
a crime or unethical or unsafe behavior on the part of the organization.
Thus, whistle-blowers are protected under this exception.
5. Breach-of-good-faith
exception.
This is the most difficult exception to establish because it involves a
breach of promise. In one of the best-known cases, an employee
claimed that he was terminated after 25 years of employment so that
the company could avoid paying him his sales commission.
Note: These exceptions have been cited in various court cases, but there is no guarantee that any specific state will recognize any one
of these exceptions in its jurisdiction.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–17
Beyond the Book:
Preventing Employment-at-Will Problems
 Make explicit statements that
employment is at-will.
 Write contracts specifying
termination procedures.
 Document performance or behavior
problems that may lead to discharge.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–18
Managing Voluntary Turnover
• Job Dissatisfaction
 Is the feeling of being unhappy with one’s job.
 Is a major cause of voluntary turnover.
• Job Embeddedness
 Refers to the fact that people will stay on their
jobs, even when they are unhappy and should
leave.
 Community ties or obligations keep the
employee on the job.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–19
Beyond the Book:
A Traditional Model of Quitting
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–20
A Model of
the Turnover
Process
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–21
Causes of Job
Dissatisfaction
Nature of
the work
Pay and
benefits
Supervisors and
co-workers
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–22
The Effects of Job Dissatisfaction
• Organizational Commitment
 Is the degree to which an employee identifies
with an organization and is willing to exert
effort on behalf of the organization.
• Organizational Citizenship Behaviors
(OCBs)
 Are behaviors that are beneficial to the
organization but are not formally required as
part of an employee’s job.
 Also known as contextual performance.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–23
Measuring and Monitoring
Job Satisfaction
• Primarily done through attitude surveys
distributed to employees
• Responses are used to track changes in
employees’ attitudes
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–24
Retention Strategies
• Realistic job previews (RJPs)
 Are pre-employment previews that provide
accurate and realistic information to the job
applicant.
 Can be used to socialize new employees into
their new job roles.
 Are effective in reducing turnover.
• Stock Options
 Are rights, given to employees, to purchase a
certain number of shares at a given price.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–25
Managing Human Resources
During Mergers and Acquisitions
• HR manager plays a key role as
communicator because:
 Employees are concerned about their jobs.
 Speculation and rumors begin circulating.
 An atmosphere of distrust emerges.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6–26