Chapter Learning Objectives
After studying this chapter you should be able to:
1. Describe the environmental context of human resource
management, including its strategic importance and its
relationship with legal and social factors.
2. Discuss how organizations attract human resources,
including human resource planning, recruiting, and
selecting.
3. Describe how organizations develop human resources,
including training and development, performance
appraisal, and performance feedback.
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8–2
Chapter Learning Objectives (cont’d)
After studying this chapter you should be able to:
4. Discuss how organizations maintain human resources,
including the determination of compensation and
benefits and career planning.
5. Discuss labor relations, including how employees form
unions and the mechanics of collective bargaining.
6. Describe the issues associated with managing
knowledge and contingent and temporary 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.
8–3
The Environmental Context of
Human Resource Management
• Human Resource Management (HRM)
–The set of organizational activities directed at
attracting, developing, and maintaining an effective
work force.
• The Strategic Importance of HRM
–Human capital reflects the organization’s investment
in attracting, retaining, and motivating an effective
workforce critical for effective organizational
functioning.
–HR decisions should be linked to strategy
• Walmart ( cost leadership): higher than average wages?
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8–4
Strategic Human Resource Management
Company Strategy
Attract an Effective Workforce
HRM planning
Job analysis
Forecasting
Recruiting
Selecting
Maintain an Effective Workforce
Wage and salary
Benefits
Labor relations
Terminations
Develop an Effective Workforce
Training
Development
Appraisal
8-5
The Legal Environment of HRM
Equal Employment
Opportunity
Compensation
and Benefits
Labor
Relations
Health
and Safety
Title VII of Civil
Rights Act of 1964
Fair Labor
Standards Act of
1938 (FLSA)
National Labor
Relations Act of
1935 (Wagner Act)
Occupational
Safety and Health
Act of 1970 (OSHA)
Equal Pay Act
of 1963
Labor Management
Relations Act
of 1947
(Taft-Hartley Act)
Pregnancy
Discrimination Act
Age Discrimination
in Employment Act
Americans with
Disabilities Act
Civil Rights Act
of 1991
Employee
Retirement Income
Security Act of
1974 (ERISA)
We will cover EEO law in next class.
Family and Medical
Leave Act of 1993
(FMLA)
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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.
8–6
8–7
7-8
What is HRM? A Case Study
• Example: College Hunks Hauling Junk
• http://www.youtube.com/watch?v=sRwfctYPnY8
What HUMAN RESOURCE issues do owners Omar and
Nick have to be concerned with?
What happens to the company if they consistently fail to
hire the right people?
• http://www.youtube.com/watch?v=3_HpuUCFjg&feature=relmfu
7-9
FIGURE 8.1
Human Resource Planning – the first step of Attracting a Workforce
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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.
8–10
Attracting Human Resources
Job
Analysis
A systematic analysis of jobs within
an organization.
Job
Description
A listing of the job’s duties; its working
conditions; and the tools, materials, and
equipment use to perform the job.
Job
Specification
A listing of the knowledge, skills, abilities,
and other credentials the incumbent
jobholder will need to do a job.
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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.
8–11
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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.
8–12
Managers Challenge: What are the
responsibilities of Truck Captains and Wingmen?
What are the job specification requirements?
7-13
Recruiting Human Resources
• Recruiting
–The process of attracting qualified persons to apply
for jobs that are open.
• Internal Recruiting (Promotion from Within)
–Involves considering present employees as
candidates for openings.
–Can help build morale and reduce turnover of highquality employees.
–Can create a “ripple effect”—the disadvantage of
having to successively fill vacated positions.
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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.
8–14
Recruiting Human Resources (cont’d)
Advertising
Campus interviews
Executive search firms
Sources of
External Recruits
Union halls
Employee referrals
Employment agencies
Walk-ins
• Realistic Job Preview (RJP)
–Is a successful method to ensure person-job fit.
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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.
8–15
The Selection Process
Pool of candidates complete application blanks
Initial screening
Remaining candidates complete test battery
Test scoring
Remaining candidates are interviewed by managers
References checked, final decisions made
Final candidates receive job offers
Physical exams may be required for employment
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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.
8–16
Selecting Human Resources
• Validation
–The process of determining the predictive value of
information gained from a selection device.
• Application Blanks
–Gather information about work history, educational
background, and other job-related demographic data.
–Must not ask for information unrelated to the job.
–Are used to decide if a candidate merits further
evaluation.
–Provide interviewers with candidate information.
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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.
8–17
Selecting Human Resources (cont’d)
• Tests
–Ability, skill, aptitude, or knowledge tests are
usually the best predictors of job success.
–Must be validated, administered, and scored
consistently.
–The testing process must be the same
for all candidates.
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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.
8–18
Selecting Human Resources (cont’d)
• Interviews
–Interviewer biases can be overcome and interview
consistency and validity can be improved by training
interviewers and using structured interviews.
• Assessment Centers
–Are used to select managers from current employees
for promotion.
• Other Techniques
–Polygraph testing, physical exams, drug tests, and
credit checks to screen prospective employees.
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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.
8–19
College Hunks Hauling Junk
Interviews
7-20
Interview Questions
http://www.job-applications.com/interview-questions/
7-21
Developing Human Resources
• Training
–Teaching operational or technical employees
how to do the job for which they were hired.
• Development
–Teaching managers and
professionals the skills needed
for both present and future jobs.
• Assessing Training Needs
–Determining training needs is
the first step in developing a
training plan.
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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.
8–22
7-23
Developing Human Resources (cont’d)
Common Training Methods
Lectures
Role play and
case studies
On-the-job
and vestibule
training
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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.
Web-based
and electronic
training
8–24
Training and Development Evaluation
• Training and development programs should
always be evaluated.
–Approaches include measuring relevant job
performance criteria before and after the training to
determine the effect of training.
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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.
8–25
Performance Appraisal
• Performance Appraisal
–A formal assessment of how well employees
do their jobs.
• Reasons for Performance Appraisal
–Appraisal validates the selection process and
the effects of training.
–Appraisal aids in making decisions about pay raises,
promotions, and training. And terminations.
–Appraisal provides feedback to employees to improve
their performance and plan future careers.
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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.
8–26
7-27
7-28
Judgmental Appraisal Methods
• Ranking Method
–Compares employees directly with each other.
–Difficult to do with large numbers of employees.
–Difficult to make comparisons across work groups.
–Employees are ranked only on overall performance.
–Do not provide useful information for employee
feedback.
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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.
8–29
Judgmental Appraisal Methods (cont’d)
• Rating Method
–Compares each employee with a fixed standard.
–Uses graphic rating scales of job performance
dimensions to be rated on a standard scale.
• Behaviorally-Anchored Rating Scale (BARS)
–Is a rating scale where each point on the scale is
associated with behavioral anchors.
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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.
8–30
FIGURE 8.2
Graphic Rating Scales for a Bank Teller
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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.
8–31
FIGURE 8.3
Behaviorally Anchored Rating Scale
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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.
8–32
Errors in Performance Appraisal
• Recency Error
–The tendency of the evaluator to base judgments on
the subordinate’s most recent performance because it
is the most easily recalled.
• Errors of Leniency and Strictness
–Being too lenient, too strict, or tending to rate all
employees as “average.”
• Halo Error
–Allowing the assessment of the employee on one
dimension to spread to that employee’s ratings
on other dimensions.
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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.
8–33
“360 degree” Performance Appraisal
• “360 degree” Feedback
–A process in which employees and managers are
evaluated by everyone around them.
–Provides a richer array of performance information on
which to base an appraisal.
How could College Hunk’s use
360 degree Feedback?
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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.
8–34
Performance Appraisal Feedback
• Performance Feedback
–Is best given in a private meeting between
the employee and immediate supervisor.
–Is more effective if managers are properly
trained to conduct feedback interviews.
• Focus of Appraisal Discussion:
–Assessed level of performance
–How and why the assessment was made
–How the employee’s performance can be
improved in the future.
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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.
8–35
College Hunks Feedback
Employee ……
• Tracks mud in customer
residence;
• Lets customer’s dog out;
• Sits in truck in front of
customer’s house and
talks on phone for 45
minutes;
Manager says……
• ____________________
• ____________________
• ____________________
What happens when an employee exhibits poor
performance and the manager provides NO
FEEDBACK? Does timing matter?
36
Keeping Employees: Direct Compensation
• Forms of Compensation
–Wages are hourly compensation paid to operating
employees.
–Salary is paid for the total contribution of an employee
and is not based on total hours worked.
–Incentives are special compensation opportunities that
are usually tied to performance.
• Purposes of compensation
–Provide a reasonable standard of living.
–Provide a tangible measure of an individual’s value to
the organization.
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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.
8–37
Steps in Determining Compensation
Wage-level decisions:
• Organization strategy
• Availability of resources
• Wage survey data
• Unemployment rates
Wage-structure decisions:
• Internal equity
• Job rankings
• Job evaluations
Individual wage decisions:
• Experience
• Performance
• Seniority
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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.
8–38
Indirect Compensation:
Determining Benefits
Types of Employee
Benefits
Pay for time
not worked
Life, health, and
other insurance
Service
benefits
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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.
Cafeteria benefit
plans
8–39
Managing Labor Relations
• Labor Relations
–The process of dealing with employees when they are
represented by a union.
–Organizations prefer that employees remain nonunion
because unions limit management’s freedom.
–The best way to avoid unionization is to practice good
employee relations by:
• Providing fair treatment with clear standards in pay,
promotions, layoffs, and discipline.
• Providing a complaint and appeal system and
avoiding favoritism.
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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.
8–40
FIGURE 8.9
The Union-Organizing 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.
8–41
New Challenges in
the Changing Workplace
• Managing Knowledge Workers
–Knowledge workers’ contributions to an organization
are based on what they know (as experts).
• Computer scientists, engineers, and physical scientists
–Knowledge Worker Management and Labor Markets
• Offering competitive starting salaries and sign-on bonuses.
• Regular upward compensation adjustments to stay
competitive with external labor market rates.
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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.
8–42
Managing the Changing Workplace
• Contingent and Temporary Workers
–Are not permanent or full-time employees
• Independent contractors, on-call workers, temporary
employees, contract and leased employees, and part-time
workers.
• Represent about 10 percent of the U.S. workforce.
–The increasing use of this type of workers is driven by
the strategic need for organizations to maintain
flexibility in staffing levels and to control labor costs.
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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.
8–43
So why does HR matter?
1. What is strategic HR?
2. Why do companies need strategic HR?
3. What is HR planning?
4. What is the general purpose of Recruitment
and Selection practices?
5. What is the general goal of Performance
Appraisal and Feedback?
6. What is the general goal of Compensation?
7. Everything about HR is in a heavily
_________________ environment. Why?
7-44