Human Resource Employment Systems
HR Management
MBAO 6030
MBAO 6030 Human Resource
Management

Human Resource Employment Systems
Human Resource Employment Systems control:
 HR inflows
 HR internal flows
 HR outflows
In terms of the quantity, quality and speed of deploying Human Resources where they are needed.
MBAO 6030 Human Resource Management

Human Resource Employment Systems
In and Out System
Entry Level
MBAO 6030 Human Resource Management

Human Resource Employment Systems
Up and Out System
Entry Level
MBAO 6030 Human Resource Management

Human Resource Employment Systems
Lifelong System
Entry Level
MBAO 6030 Human Resource Management

HR Employment Systems
Work Configuration Choices: Job or Work?
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Full-time Job
Contingent Job – part-time, temp, or intern
Work – independent contractor or outsource service
MBAO 6030 Human Resource Management

HR Employment Systems
Employment-At-Will
 Legal principle that assumes either party in employment relationship enters it voluntarily and can terminate it or any reason or no reason
 U.S. courts accept with some exceptions
 Outside U.S. it is not widely accepted
MBAO 6030 Human Resource Management

HR Employment Systems
Employment-At-Will Exceptions (based on case law)
1.
Implied Contract
Example: promise of job security in job interview or explicit guarantee of “just cause” standard of evidence for termination in employee handbook.
2.
“Good faith and fair dealing”
Employer cannot act in bad faith or malice when discharging employee
3.
Public policy exception
Employees enjoy statutory rights that cannot be denied, such as filing workers’ compensation claims, jury duty, or whistleblower disclosures (some state laws).
MBAO 6030 Human Resource Management

HR Employment Systems
Legal Restrictions on Employee Activity in
Labor Market
 Non-compete
 Non-disclosure
 Non-solicitation
MBAO 6030 Human Resource Management

HR Employment Systems
Transaction costs to Changing Jobs:
Why employees need a Minimum Wage
Premium to change jobs
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Social capital
Firm Specific Knowledge
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Seniority Privileges
Re-location costs
MBAO 6030 Human Resource Management

HR Employment Systems
Critical Thinking Questions:
1.
Lifelong employment systems have many benefits. Yet why are many U.S. firms that have previously adopted these policies, now deciding to abandon them or greatly restrict their scope to employees? (Ex. IBM, HP,
AT&T, etc).
2.
What type of employees are most vulnerable to an employer’s use of Employment-At-Will in the market?
Which employees are least vulnerable? What remedy do these differences suggest?
MBAO 6030 Human Resource Management

HR Employment Systems
What is an “Efficient” Employment
Relationship?
 Lack of barriers to the re-deployment of labor – implying a flexible labor force
 Incentives for the firm to invest in human capital
 Employees willing to make tradeoffs between their own self-interest and for the common good of the firm – random acts of “merit”
MBAO 6030 Human Resource Management

HR Employment Systems
Costs and Benefits of Long-term Employment
Benefits
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Amortize recruiting costs
Amortize training costs
Accurate assessment of  employee abilities/perf.
Accurate view of employee fit & motivation
Employee loyalty is cultivated
Costs
 Less flexible for cutting labor costs
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Greater difficulty in getting rid of poor fit or poor performing employees
Takes more effort to learn from the external market
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Flexible employee responses to change
Maintains strong cultures
MBAO 6030 Human Resource Management

HR Employment Systems
Critical Thinking Questions
1.
Under what kinds of circumstances may an employer find it rational to exploit its employees? Can you give an example of this?
MBAO 6030 Human Resource Management

HR Employment Systems: Justice
Being treated fairly is important to all employees and is a way to evaluate the quality of the implementation of effective HR policies.
Distributive Justice – fairness of the outcomes that are experienced by employees (pay, resources, etc.)
Basis of distributive Justice:
1.
Equity – outcomes in proportion to the inputs
2.
Equality – everybody receives equal outcomes
3.
Need - outcomes in proportion to need
MBAO 6030 Human Resource Management

HR Employment Systems: Justice
Procedural Justice – fair procedures can influence the perception of fair outcomes. Unattractive outcomes will be more readily accepted when they are reached by applying procedural justice. This is a critical element of all HR policies. Examples:
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Valid criteria used to evaluate performance
Give prior notification for change of a policy
Avoid conflicts of interest (e.g., nepotism)
Competent decision makers or judges
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Employee input is sought out and utilized
Opportunity to appeal unfavorable decisions
MBAO 6030 Human Resource Management

HR Employment Systems: Justice
Critical Thinking Question:
1.
What aspects of fair procedures would you be concerned about when applying discipline to an employee?
MBAO 6030 Human Resource Management

HR Employment Systems: Employee Voice
Possible employee reactions to a dissatisfying outcome are:
1.
Exit
2.
Voice
3.
Loyalty
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If the outcome is unfair, loyalty is not likely, and voice allows you to retain a good employee.
Individual voice vs. Collective voice:
Employees are more likely to to voice their opinions when they feel secure as being a member of an organization that protects the rights of employees such as a union.
MBAO 6030 Human Resource Management

HR Employment Systems: Employee Voice
Why Do Employees Join Unions?
 Formal means to have voice in firm governance
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To improve their economic welfare
Employee advocate for justice and fairness
What do Employees give up when they join a union?
 Individuality – “free agent” or market solution
 Union dues
 Requirement to share the burden of collective disputes, such as strikes and picket activity
MBAO 6030 Human Resource Management

HR Employment Systems: Union Impacts
Union Impact on Management
 Higher wages and benefits for union employees
 Seniority used to determine work assignments, promotions, transfers, shifts, layoffs, rewards)
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More formalized work rules in labor contract
Lower employee turnover rates
Formal grievance procedure ending in arbitration
Increased propensity for strikes
Loss of management power
Mixed impact on productivity and profits
MBAO 6030 Human Resource Management

HR Employment Systems: Union Impacts
Critical Thinking Question
1.
How does the union act as a stimulus to improve employee productivity? Explain how this can be possible, despite the fact that unions use their bargaining power to pressure the employer to improve the economic benefits to the employees.
MBAO 6030 Human Resource Management

High Commitment Human Resource
Management System characteristics:
 Employees work for best interests of the organization based on understanding those interests
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Employees are flexible in how they are deployed
Employees are fully engaged – both physically and mentally and their ideas and opinions are solicited and used.
MBAO 6030 Human Resource Management

Means to Achieve High Commitment HR System
 Emphasis on teamwork
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Information sharing and open communication
Egalitarian approach with few status distinctions
Employees share rewards in firm’s financial success
Significant employee contributions are recognized and celebrated
Extensive screening of prospective employees
Employment security is provided to employees
Broadly defined job roles
MBAO 6030 Human Resource Management