8-1 Learning Objectives LO 1 Discuss how companies use human resources management to gain...
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Transcript of 8-1 Learning Objectives LO 1 Discuss how companies use human resources management to gain...
Chapter Eight
Managing Human
Resources
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Human Resource Management
Human resources management (HRM) system of organizational activities to attract,
develop, and motivate an effective and qualified workforce. Also known as talent, human capital, or personnel management.
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Human Resources Management
People and management policies, like other resources, become a competitive advantage for a company when they:• create value• are rare• are difficult to imitate• are organized
Because employee skills, knowledge, and abilities are among the most distinctive and renewable resources upon which a company can draw, their strategic management is more important than ever.
Human capital is often used today to describe the strategic value of employee skills and knowledge.
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HR Planning InvolvesThree Stages
Planning ensures that the right number and types of people are available, where the company is headed, in what businesses it plans to be, what future growth is expected, and so forth.
Programming of specific human resources activities such as recruitment, training, or layoffs. The company’s plans are implemented.
Evaluating determines whether they are producing the results needed to contribute to the organization’s business plans.
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The HR Planning Process
Demand forecasts determining how many
and what type of people are needed
Demand forecasts for people needs are derived from organizational plans.
The number of labor-hours required operating a plant, selling the product, distributing it, and service customers can be calculated.
Supply of labor Estimates of how many
and what types of employees the organization actually will have.
In performing a supply analysis, the organization estimates the number and quality of its current employees as well as the available external supply of workers.
Forecasts of a diverse workforce have become fact.
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Forecast Methods
DirectManagerial
Input
DirectManagerial
Input
BestGuess
BestGuess
Statistical/Historical Ratios
Statistical/Historical Ratios
Based on projections of cash flows,expenses, or financial measures
Based on projections of cash flows,expenses, or financial measures
Based on managers’ assessment of current head count, plus a guess onrelevant internal/external factors
Based on managers’ assessment of current head count, plus a guess onrelevant internal/external factors
Based on statistical methods, such asmultiple regression, in combinationwith historical data
Based on statistical methods, such asmultiple regression, in combinationwith historical data
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The Planning Process
Reconciling supply and demand Once managers have a good idea of both the
supply and demand for various types of employees, they can start developing approaches for reconciling the two.
Organizations may find that they need more people than they currently have.
Organizations may find that they have more people than they need.
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The Planning Process
Job analysis It tells the HR manager about the job itself: the
essential tasks, duties, and responsibilities involved in performing the job.
It describes the skills, knowledge, ability and other characteristics needed to perform the job.
It provides the information that virtually every human resources activity requires.
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Job Analysis
JobDescription
JobDescription
written description of the basic tasks, duties, and responsibilities requiredof an employee holding a particular job
written description of the basic tasks, duties, and responsibilities requiredof an employee holding a particular job
JobSpecification
JobSpecification
a written summary of the qualificationsneeded to successfully perform a job
a written summary of the qualificationsneeded to successfully perform a job
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Job Analysis and HR
Job DescriptionJob DescriptionJob DescriptionJob Description Job Job SpecificationSpecification
Job Job SpecificationSpecification
HR SubsystemsHR SubsystemsHR SubsystemsHR Subsystems
RecruitingRecruitingRecruitingRecruiting SelectionSelectionSelectionSelection TrainingTrainingTrainingTraining PerformancePerformanceAppraisalAppraisal
PerformancePerformanceAppraisalAppraisal SeparationSeparationSeparationSeparation
Job AnalysisJob AnalysisJob AnalysisJob Analysis
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Staffing the Organization
Recruitment The development of a
pool of applicants for jobs in an organization
Internal, external
Selection Choosing from among
qualified applicants to hire into an organization
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Methods for External Recruiting
• Advertising• Employee referrals• Walk-ins• Outside organizations• Employment services• Special events• Internet job sites
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Internal Recruiting
• A pool of applicants who already work for the company
• “Promotion from within”• Improves employee morale and
motivation• Reduces employer time and cost• Job posting is the procedure for
internal advertising• Career path is a planned sequence of
jobs
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Selection Methods
InterviewsInterviews
Background Background ChecksChecks
Personality Personality TestsTests
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Selection Methods Applications and resumes provide basic information to prospective
employers. Typically include information about the applicant’s name, educational background, citizenship, work experience, certifications, and the like.
Interviews are the most popular selection tool. Structured interviews conduct the same interview with each applicant.
– Situational interview focuses on hypothetical situations.– Behavioral description interview explores what candidates have actually done in the past.
Reference checks are another commonly used screening device. Background checks provide a higher level of scrutiny. Personality tests are less popular for employee selection, largely because
they are hard to defend in court. Drug testing is done by 80% of U.S. Firms Genetic testing is among the most controversial screening instruments. Cognitive ability tests measure a range of intellectual abilities, including
verbal comprehension and numerical aptitude. (See Figure 10.3) Performance tests are procedures in which the test taker performs a sample
of the job. Integrity tests are used to assess job candidate’s honesty. Two forms are
polygraphs and paper-and-pencil honesty tests.8-20
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Reliability and Validity
Reliability refers to the consistency of test scores over time and across alternative measurements.
Validity moves beyond reliability to assess the accuracy of the selection test. The criterion-related validity refers to the degree to which a test actually predicts or correlates with job performance. Content validity concerns the degree to which selection tests measure a representative sample of the knowledge, skills, and abilities required for the job.
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© 2010 South-Western, a part of Cengage Learning. All rights reserved. 6–22
Reliability as Stability over TimeHIGH RELIABILITY TEST RETEST APPLICANT SCORE SCORESmith 90 93Perez 65 62Riley 110 105Chan 80 78
VERY LOW RELIABILITY TEST RETESTAPPLICANT SCORE SCORESmith 90 72Perez 65 88Riley 110 67Chan 80 111
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© 2010 South-Western, a part of Cengage Learning. All rights reserved. 6–23
Reliability as Consistency(Interrater Reliability)
HIGH RELIABILITY
APPLICANT Rater #1 Rater #2 Rater #3Smith 9 8 8Perez 5 6 5Riley 4 5 5Chan 8 8 8
VERY LOW RELIABILITY
APPLICANT Rater #1 Rater #2 Rater #3Smith 9 5 6Perez 5 9 4Riley 4 2 7Chan 8 4 2
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© 2010 South-Western, a part of Cengage Learning. All rights reserved. 6–24
Valid and Invalid Tests
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© 2010 South-Western, a part of Cengage Learning. All rights reserved. 6–25
Approaches to ValidationCriterion-related Validity
The extent to which a selection tool predicts, or significantly correlates with, important elements of work behavior.
Performance on a test is compared with actual production records, supervisor ratings, training outcomes, and other measures of success that are appropriate to each type of job.
In a sales job, it is common to use sales figures as a basis for comparison.
In production jobs, quantity and quality of output may provide the best criteria for job success.• A high score indicates high job performance potential; a low
score is predictive of low job performance.
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Criterion-Related Validity
Types of Criterion-Related Validity Concurrent Validity
• The extent to which test scores (or other predictor information) match criterion data obtained at about the same time from current employees.
– High or low test scores for employees match their respective job performance.
Predictive Validity• The extent to which applicants’ test scores match criterion
data obtained from those applicants/ employees after they have been on the job for some indefinite period.
– A high or low test score at hiring predicts high or low job performance at a point in time after hiring.
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 6–26
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Interviews
Structured interview Selection technique that
involves asking all applicants the same questions and comparing their responses to a standardized set of answers.
Unstructured interview Free-flow of questions
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Performance Tests
Assessment center A managerial performance test in which
candidates participate in a variety of exercises and situations.
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Sometimes EmployeesMust Be Let Go
Layoffs a result of the massive restructuring of American
industry brought about by mergers and acquisitions, divestiture, and increased competition.
Outplacement The process of helping people who have been
dismissed from the company regain employment elsewhere.
Termination interview the manager discusses the company’s position with
the employee, is a stressful situation for both parties.
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Termination
Employment-at-will The legal concept that
an employee may be terminated for any reason.
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Advice on Termination
Do give as much warning as possible for mass layoffs.
Do sit down one on one with the individual, in a private office.
Do complete a termination session within 15 minutes.
Don’t allow time for debate during a termination session.
Don’t make personal comments when firing someone.
Fair Labor Standards Act
• Nonexempt EmployeesNonexempt Employees Employees covered by the overtime provisions of the
Fair Labor Standards Act.
They must be paid time and one-half their regular pay for all work performed after forty regular hours of work in a workweek.
• Exempt EmployeesExempt Employees Employees who not covered in the overtime provisions
of the Fair Labor Standards Act.
Managers, supervisors, and white-collar professional employees are exempted on the basis of their exercise of independent judgment and other criteria.
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Federal Employment Laws
Equal Pay Act of 1963Equal Pay Act of 1963
Civil Rights Act of 1964Civil Rights Act of 1964
Age Discrimination inEmployment Act of 1967
Age Discrimination inEmployment Act of 1967
Pregnancy DiscriminationAct of 1978
Pregnancy DiscriminationAct of 1978
prohibits unequal pay for males and females doing similar work
prohibits unequal pay for males and females doing similar work
prohibits discrimination on basis ofrace, color, religion, gender, origin
prohibits discrimination on basis ofrace, color, religion, gender, origin
prohibits discrimination against persons age 40 and over
prohibits discrimination against persons age 40 and over
prohibits discrimination in employmentagainst pregnant women
prohibits discrimination in employmentagainst pregnant women
1.11.1
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Federal Employment Laws (cont.)
Americans with Disabilities Act of 1990
Americans with Disabilities Act of 1990
Civil Rights Act of 1991Civil Rights Act of 1991
Family & Medical LeaveAct of 1993
Family & Medical LeaveAct of 1993
prohibits discrimination on the basis ofphysical or mental disabilities
prohibits discrimination on the basis ofphysical or mental disabilities
strengthened the Civil Rights Act of 1964strengthened the Civil Rights Act of 1964
permits workers to take up to 12 weeksof unpaid leave for pregnancy, etc.
permits workers to take up to 12 weeksof unpaid leave for pregnancy, etc.
Adapted from Exhibit 11.2Uniformed Services Employment & Reemployment Rights Act
Uniformed Services Employment & Reemployment Rights Act
prohibits discrimination against those serving in the Armed Forces
prohibits discrimination against those serving in the Armed Forces
1.11.1
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Equal Employment Opportunity Commission
The EEOC has investigatory, enforcement, and informational responsibilities.
It investigates charges of discrimination, enforces the provisions of these laws in federal court, and publishes guidelines (Uniform Guidelines on Employee Selection Procedures)that organizations can use to ensure they are in compliance with the law.
These guidelines define two important criteria that are used to determine whether companies have engaged in discriminatory practices: Disparate treatment Adverse Impact
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Adverse Impact and Employment Discrimination
Four-FifthsFour-FifthsRuleRule
Four-FifthsFour-FifthsRuleRule
AdverseAdverseImpactImpact
AdverseAdverseImpactImpact
DisparateDisparateTreatmentTreatment
DisparateDisparateTreatmentTreatment
Intentional discrimination that results in equally qualified people being treated differently
Unintentional discrimination that works to the disadvantage of member of protected groups
Comparison of selection rates of a protected to a nonprotected group, to determine if adverse impact has occurred
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Determining Adverse Impact:The Four-fifths Rule
Source: Adoption of Questions and Answers to Clarify and Provide a Common Interpretation of the Uniform Guidelines on Employee Selection Procedures, Federal Register 44, no. 43 (March 2, 1979): 11998.
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Exemptions From Antidiscrimination Regulations
Bona Fide Occupational Qualification (BFOQ) Suitable defense against a discrimination
charge only where age, religion, sex, or national origin is an actual qualification for performing the job.
Business Necessity Work-related practice that is necessary to the
safe and efficient operation of an organization.
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Training and Development
Annual spending by employers on formal training is over $55 billion.
Adding informal educational and development experiences to that and the number balloons to $200 billion.
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Training and Development
Training usually refers to teaching lower-level employees how to perform their present jobs.
Development involves teaching managers and professional employees broader skills needed for their present and future jobs.
– Phase one of the training process should include needs assessment
– Phase two involves the design of training programs– Phase three involves decisions about the training methods to be
used.– Phase four should evaluate the program’s effectiveness in terms
of employee reactions, learning, behavior transferred to the job, and bottom-line results.
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Training and Development
Needs assessment An analysis identifying
the jobs, people, and departments for which training is necessary.
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Types of Training
Orientation training Training designed to introduce new employees to
the company and familiarize them with policies, procedures, culture, and the like
Team training Training that provides employees with the skills
and perspectives they need to collaborate with others.
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Types of Training
Diversity training Programs that focus on identifying and reducing
hidden biases against people with differences and developing the skills needed to manage a diversified workforce.
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Performance Appraisal
Performance appraisal (PA) Assessment of an
employee’s job performance.
Performance appraisal has two basic purposes: • a. Administrative
purposes • b. Developmental
purposes.
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What Do You Appraise?
Trait appraisals involve subjective judgments about employee performance. They contain dimensions such as initiative, leadership, and attitude, and ask raters to indicate how much of each trait the employee possesses.
Behavioral appraisals focus more on observable aspects of performance. They focus on specific, prescribed behaviors, which can help ensure that all parties understand what the ratings are really measuring.
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Performance Appraisal
Results appraisals focus on production data such as sales volume, units produced, or profits. Management by objectives (MBO) involves a subordinate and a supervisor agreeing on specific performance goals.
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Performance Appraisal
360-degree appraisal Process of using multiple sources of appraisal to
gain a comprehensive perspective on one’s performance
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Performance Appraisal
In choosing an appraisal method, the following guidelines may prove helpful:
• Base performance standards on job analysis.• Communicate performance standards to employees.• Evaluate employees on specific performance-related
behaviors rather then on a single global or overall measure.
• Document the PA process carefully.• If possible, use more than one rater.• Develop a formal appeal process.• Always take legal considerations into account.
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Performance Appraisal
Who should do the appraisal? • Managers and supervisors are the traditional source
of appraisal information since they are often in the best position to observe an employee’s performance.
• Internal and external customers are also used as sources of performance appraisal information.
• Self-appraisals help increase the employee’s involvement in the review process, and are a starting point for establishing future goals.
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How do you give employees feedback?
Providing growth and development requires understanding and support; however, the manager must be impersonal and be able to make tough decisions.
• A useful interview format to use when an employee is performing below acceptable standards is as follows:
– Summarize the employee’s specific performance.– Describe the expectations and standards, and be specific.– Determine the causes for the low performance; get the
employee’s input.– Discuss solutions to the problem, and have the employee play a
major role in the process.– Agree to a solution.– Agree to a timetable for improvement.– Document the meeting. 8-57
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How do you give employees feedback?
Follow-up meetings may be needed. Guidelines for giving feedback to an average employee:
– Summarize the employee’s performance, and be specific– Explain why the employee’s work is important to the
organization.– Thank the employee for doing the job.– Raise any relevant issues, such as areas for improvement.– Express confidence in the employee’s future good
performance.
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Designing reward systems
Pay decisions consider the company, position and the individual Pay level refers to the choice of whether to be a
high-, average-, or low-paying company. Pay structure decision is the choice of how to price
different jobs within the organization. Individual pay decisions concern different pay rates
for jobs of similar worth within the same family.
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Incentive Pay
Individual incentive plans consist of an objective standard against which a worker’s performance is compared.
Gainsharing plans concentrate on saving money.Profit-sharing plans give employee incentives
based on unit, department, plant, or company productivity.
Merit pay systems are used when objective performance measures are not available but the company still wants to base pay on performance.
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The Wage Mix
Internal and external factors combine to influence what jobs will be paid.
The combination of these factors is called the “wage mix.”
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 9–61
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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Factors Affecting the Wage Mix
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Pay and Benefits MustMeet Legal Requirements
Comparable worth principle of equal pay for different jobs of equal
worth
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Employee Benefits
Three basic required benefits are:• Workers’ compensation• Social security• Unemployment insurance
A large number of benefits are not required but employer provided:
• Pension plans• Medical and hospital insurance• Dental insurance• Life insurance• Vacation time 8-65
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Employee Benefits
Cafeteria benefit program An employee benefit
program in which employees choose from a menu of options to create a benefit package tailored to their needs.
Flexible benefit programs Benefit programs in
which employees are given credits to spend on benefits that fit their unique needs.
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© 2010 South-Western, a part of Cengage Learning. All rights reserved. 12–67
Safety and Health: It’s the Law
In 2006 there were 4.1 million injuries/illnesses among private-sector firms.
Back problems cost employers $50 billion yearly in workers’ compensation costs and $50 billion in indirect costs
Each year the cost of occupational injuries and illness totals more than $156 billion.
In any year, approximately 75 million working days are lost because of on-the-job injuries.
In 2006, 5,840 employees died from work accidents.
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Employee Health
The Occupational Safety and Health Act (OSHA) of 1970 requires employers to pursue workplace safety.
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Collective Bargaining
Union shop An organization with a
union and a union security clause specifying that workers must join the union after a set period of time.
Right-to-work Legislation that allows
employees to work without having to join a union.