Hrm

01/2005 Thomas H. Jäkel 1

Human Resource ManagementHuman Resource Human Resource ManagementManagement

IPM 213IPM 213IPM 213

Thomas H. JäkelThomas H. JThomas H. Jääkelkel

Phone 0-2729-6305E-Mail [email protected] 00--27292729--63056305EE--MailMail [email protected]@siricon.com


Recommended TextRecommended TextTitle:Human Resource ManagementNinth Edition

Author:John M. Ivancevich

Publisher:McGraw-HillISBN: 007-123248-6


RoadmapRoadmapWhat is Human Resource Management?Strategic Management Approach to Human Resource ManagementHuman Resource PlanningJob Analysis and Competency ModelRecruitmentSelectionMid-Term Examination

Performance Evaluation and ManagementCompensation: An OverviewCompensation: Methods and PoliciesEmployee Benefits and ServicesTraining and DevelopmentCareer Planning and DevelopmentOrganizational DevelopmentReviewFinal Examination


What isHuman Resource Management?

What isWhat isHuman Resource Human Resource Management?Management?

ChapterChapter

1


Human Resource ManagementHuman Resource Management

Human Resource Management is the function performed in organizations that facilitates the most effective use of people (employees) to achieve organizational and individual goals.

Equal employment opportunity complianceJob analysisHuman resource planningEmployee recruitment, selection, motivation, and orientationPerformance evaluation and compensationTraining and developmentLabor relationsSafety, health, and wellness

It is action-orientedIt is people-orientedIt is globally-orientedIt is future-oriented


Strategic Importance of HRMStrategic Importance of HRM

The increased strategic importance of HRM means that:

Human resource specialists must show that they contribute to the goals and mission of the firm

The actions, language, and performance of the HRM function must be:

MeasuredPrecisely communicatedEvaluated


NoteNote

The new strategic The new strategic positioning of HRM positioning of HRM means that means that accountability must accountability must be taken seriouslybe taken seriously


Key Strategic HRM ConceptsKey Strategic HRM Concepts

Analyzing and solving problems from a profit-oriented, not just a service-oriented, point of view

Assessing and interpreting costs or benefits of such HRM issues as productivity, salaries and benefits, recruitment, training, absenteeism, overseas relocation, layoffs, meetings, and attitude surveys

Using planning models that include realistic, challenging, specific, and meaningful goals

Preparing reports on HRM solutions to problems encountered by the firm

Training the human resources staff and emphasizing the strategic importance of HRM and the importance of contributing to the firm’s profits


NoteNote

If the HRM function is If the HRM function is to be successful, to be successful, managers in other managers in other functions must be functions must be knowledgeable and knowledgeable and involvedinvolved


HRM and Organizational EffectivenessHRM and Organizational Effectiveness

Criteria and ComponentsPerformanceLegal complianceEmployee satisfactionAbsenteeismTurnoverTraining effectivenessTraining return on investmentGrievance ratesAccident rates

In order for a firm to survive and prosper and earn a profit, reasonable goals in each of these components must be achieved. In most organizations, effectiveness is measured by the balance of such complementary characteristics as reaching goals, employing the skills and abilities of employees efficiently, and ensuring the influx and retention of well-trained and motivated employees.


Objectives of the HRM FunctionObjectives of the HRM Function

Helping the organization reach its goalsEmploying the skills and abilities of the workforce efficientlyProviding the organization with well-trained and well-motivated employeesIncreasing to the fullest the employee’s job satisfaction and self-actualizationDeveloping and maintaining a quality of work life that makes employment in the organization desirableCommunicating HRM policies to all employeesHelping to maintain ethical policies and socially responsible behaviorManaging change to the mutual advantage of the organization’s stakeholdersManaging increased urgency and faster cycle time


Who Performs HRM ActivitiesWho Performs HRM Activities

In most organizations two groups perform HRM activities:HR manager-specialists (staff)Operating managers (line)

Competencies neededCommunication skillsProblem solvingLeadershipRecruiting/staffingEmployment lawTraining and developmentTechnologyForecastingCompensation designBenefits design and administrationAccounting and financeRecord keeping


NoteNote

The HR department has a responsibility to be a proactive, integral component of management and the strategic planning process


HRMHRM’’s Place in Managements Place in Management

HRM must:ascertain specific organizational needs for the use of its competenceevaluate the use and satisfaction among other departmentseducate management and employees about the availability and use of HRM services


HRM StrategyHRM Strategy

The HRM strategy will help aggregate and allocate a firm’s resources into a unique entity on the basis of:

Its internal strengths and weaknessesChanges in the environmentThe anticipated actions of competitors


Strategy, Objectives, Policies, RulesStrategy, Objectives, Policies, Rules

Strategy – The plan that integrates major objectivesStrategy – The plan that

integrates major objectives

Objectives – Goals that are specific and measurable

Objectives – Goals that are specific and measurable

Policies – Guides to decision making

Policies – Guides to decision making

Procedures/Rules – Specific directions for decision making

Procedures/Rules – Specific directions for decision making


Levels of PerformanceLevels of Performance

Shareholders

Market

Function A Function B Function C

Shareholders

Market


Shareholders

Market


Process1

Process2

Process3

Process1

Process2

Process3

The OrganizationLevel

The ProcessLevel

The Job/Performer Level


SummarySummary

HRM is action-oriented, individual-oriented, globally-oriented, and future oriented - It focuses on satisfying the needs of individuals at work

HRM is a necessary function - Effectively performed, it can make the crucial difference between successful and unsuccessful organizations

One of the challenges faced in HRM is that many decisions require input from both operating managers and HR specialists

This dual role can lead to conflict, or it can result in more effective HRM decisions


A Strategic Management Approach to Human Resource Management

A Strategic Management A Strategic Management Approach to Human Approach to Human Resource ManagementResource Management

chapterchapter

2


A Diagnostic HRM FrameworkA Diagnostic HRM Framework

The diagnostic approach

Can help operating managers focus on a set of relevant factors

Offers a map that aids a person in seeing the whole picture or parts of the picture


1. Diagnosis 2. Prescription

4. Evaluation 3. Implementation

Diagnostic Approach to HRMDiagnostic Approach to HRM


Diagnostic Model for HRMDiagnostic Model for HRM

Diagnose Prescribe Implement Evaluate


Human Resource ProcessesHuman Resource Processes

Focus of each process is on people and resultsFocus of each process is on people and results

Acquiring Human Resources

Rewarding Human Resources

Developing Human Resources

Maintaining and Protecting Human

Resources

External External Environmental Environmental

InfluencesInfluences

Internal Internal Environmental Environmental


Sociallyresponsible andethical practices


Competitive, highquality products


Competitive, highquality services


Desirable End Results


Internal & External EnvironmentInternal & External Environment

Human ResourceCore Functions

Corporate Environment

Corporate Environment

Geographical Location

Educational Factors

Unions

Experience

Productivity

Laws & Regulations

Minorities

Nature of Task

Economy

Leadership

Work Group

Strategy, Goals

Shareholders

Culture

Older Employees

Competitiveness

Labor Force


Key Job FactorsKey Job Factors

Degree of knowledge and ability to use information technologyDegree of empowermentDegree of physical exertion requiredDegree of environmental unpleasantnessPhysical location of workTime dimension of workHuman interaction on the jobDegree of variety in the taskTask identityTask differences and job design


Enhance & Sustain Competitive AdvantageEnhance & Sustain Competitive Advantage

Employment securitySelectivity in recruitingHigh wagesIncentive payEmployee ownershipInformation sharingParticipation and empowermentTeams and job redesignTraining as skill developmentCross-utilization and cross trainingSymbolic egalitarianism Wage compressionPromotion from withinLong-term perspectiveMeasurement of practicesOverarching philosophy


Three Levels of StrategyThree Levels of Strategy

Strategic(long term)

Managerial(medium term)

Operational(short term)


HR Activities by Level of StrategyHR Activities by Level of Strategy (1)(1)

LEVEL Employee Selection and

Placement

Rewards (Pay and Benefits)

Appraisal Development

Strategic(long term)

Specify the character-istics of people needed to run business over long term

Establish reward program that will be competitive with domestic and inter-national competitors

Determine the level type of perform-ance crucial for the growth of the firm

Plan development experiences for staff

Examine labor force trends

Establish reward system that is linked to strategic goals

Develop equitable performance criteria

Plan development program with flexibil-ity necessary to adjust to change

Analyze immigration flows into the country

Link appraisal to accomplishment of long-term objectives


HR Activities by Level of StrategyHR Activities by Level of Strategy (2)(2)


Placement



Managerial(medium term)

Make longitudinal validation of selection criteria

Set up five-year compensation pro-gression plan for individuals

Validate systems that relate current conditions and future needs

Establish general management devel-opment program

Develop recruitment marketing plan

Set up cafeteria-type benefits menu

Establish assessment centers for development

Provide for organiza-tional development

Develop approach to build labor resource pool

Set up retirement packages

Encourage self-development


HR Activities by Level of Strategy HR Activities by Level of Strategy (3)(3)


Placement



Operational(short term)

Prepare staffing plans Administer wage and salary program

Use annual or more frequent appraisal system

Use specific job-skill training

Prepare recruitment plans

Administer benefits packages

Use day-to-day performance review systems

Use on-the-job training

Review performance of workers daily

Use Web-based training on a 24/7 basis


Strategic Challenges Facing HRMStrategic Challenges Facing HRM

Caliber of theWorkforce

OrganizationalRestructuring

andDownsizing

ContingentWorkers

Technology

Diversity:Building A

CompetitiveWorkforce


Abilities ofEmployees

Employees’Attitudes andPreferences

Motivation ofEmployees

Personality ofEmployees

People and the Diagnostic FrameworkPeople and the Diagnostic Framework


Desirable End ResultsDesirable End Results

Organizational effectiveness is critically influenced by human resource (HR) management practices

Changes in staffing, training, and compensation form an integral part of a coordinated change effort

HR management systems must be in alignment with other management systems


SummarySummary

A sound HRM program can contribute to organizational end results.Before choosing an HRM program, the diagnostic approach suggestsexamining:the nature of employeesthe external environmental influencesthe internal environmental influencesorganizational factors

HRM has become a strategic area now recognized as important in creating and implementing the overall strategies of a firm.

Organizational factors must be taken into account to maximize the effectiveness of HRM.

The work sector in which the organization operates is a key factor on management systems and the HRM function


Human Resource PlanningHuman Resource PlanningHuman Resource Planning

chapterchapter

5


Human Resource PlanningHuman Resource Planning

Both a process and a set of plansHow organizations assess the future supply of and demand for human resourcesProvides mechanisms to eliminate any gaps between supply and demandDetermines the number and types of employees to be recruited into the organization or phased out of it











Resources













Human Resource Planning ProcessHuman Resource Planning Process

Technological forecastsEconomic forecastsMarket forecastsOrganizational planningInvestment planningAnnual operating plans

Technological forecastsEconomic forecastsMarket forecastsOrganizational planningInvestment planningAnnual operating plans

Annual employment requirementsNumbersSkillsOccupation categories

Annual employment requirementsNumbersSkillsOccupation categories

Existing employment inventoryAfter application of expected lossand attrition rates

Existing employment inventoryAfter application of expected lossand attrition rates

Decisions-Layoffs

- Retirement- etc

Decisions-Layoffs

- Retirement- etc

EndEndEndEnd

If surplusIf surplus If ShortageIf Shortage

EndEndVariancesVariances

Decisions-Overtime

-Recruitment-etc

Decisions-Overtime

-Recruitment-etc

Strategic Planning HR Demand HR Supply

If none

ActionDecisions



Shareholders

Market


Shareholders

Market


Shareholders

Market


Process1

Process2

Process3

Process1

Process2

Process3


The ProcessLevel



Factors Affecting PlanningFactors Affecting Planning

Goals of the controlling interests in the organizationGovernment policiesChanging demographics and the future composition of the workforce


Strategic and Human Resource PlanningStrategic and Human Resource Planning

Strategic Planning –an organization’s decision about:

What it wants to accomplish (its mission)How it wants to go about accomplishing it

HR planning is important for developing a strategic planHR planning is critical to the implementation of the strategic plan


Strategic Human Resource ManagementStrategic Human Resource Management

The acknowledgement that HR policies and practices have critical linkages with an organization’s overall strategyCentral premise is that HR policies will have direct effects on an organization’s profitabilityHR must “fit” strategically with the mission of the organization


Four Stages of HR PlanningFour Stages of HR Planning

Situation analysis or environmental scanningForecasting demand for human resourcesAnalysis of the supply of human resourcesDevelopment of plans for action


Analysis and ScanningAnalysis and Scanning

Strategic plan must adapt to environmental circumstancesHRM is a primary mechanism to be used during the adaptation process

e.g., rapid technological changes in the environment demand employees with new skillsan effective HR plan that supports recruitment and selection allows the firm to move quickly to remain competitive

Analyzing the Current Supply of EmployeesSkills Inventory

Data summarizing the employee’s pastData summarizing status of present skillsData that focus on the future

Management InventoryMaintaining the Skills Inventory

InterviewQuestionnaireData storage and maintenance


Action Decisions: Shortage of EmployeesAction Decisions: Shortage of Employees

OvertimeTraining and promotions of present employeesRecruitment and training of less-skilled employeesRecall of employees previously laid offUse of part-time workersUse of contingent workers


4. Demotions 5. Layoffs 6. Terminations

2. Earlyretirements

3. Creation ofwork

1. Attrition

Action Decisions: Surplus of EmployeesAction Decisions: Surplus of Employees


Human Resource Information SystemsHuman Resource Information Systems

Integrated approach to acquiring, storing, analyzing, and controlling the flow of information about an organization

Useful in nearly all HRM functionsCan increase efficiency and response times of labor/time intensive human resource activities

Specialized HRIS applicationsIntegrated HRIS for use by all employeesExecutive information system (EIS)Succession planning


Safeguarding Privacy in an HRISSafeguarding Privacy in an HRIS

Review information-gathering practices to determine the best way to collect dataLimit the information collected to what is relevant to a specific business decisionInform employees about the types of information kept on file and how that information is usedLet employees inspect and (if necessary) correct the informationmaintained on themKeep sensitive information separate from other recordsLimit the internal use of personal information to those activities where it is necessaryDisclose personal information about an employee to outsiders only after the employee consents


SummarySummaryThere is no one best method for conducting HR planning

Methods and techniques all differ from organization to organization

Many companies do not devote enough time and energy to the HR planning process

An effective HR plan should work in partnership with a strategic plan

Human resource planning can be an integral part of the HRM program

It is directly related to: recruitment, selection, training, and promotion

By matching supply and demand, the organization can know:how many people of what type it needs to fill positions from within (by promotion and training)how many people it must acquire from outside (by recruiting and selection)


Job Analysis and Competency ModelingJob Analysis and Job Analysis and Competency ModelingCompetency Modeling

chapterchapter

6


IntroductionIntroduction

Organizations must have a systematic way to determine which employees are expected to perform a particular function or task that must be accomplishedThe cornerstone of the organization is the set of jobsperformed by its employees

The jobs provide the mechanism for coordinating and linking the various activities of the organization that are necessary for success


NoteNote

Studying and under-standing jobs through the process known as job analysis is a vital part of any HRM program.


Job analysis provides answers to Job analysis provides answers to ……

How much time is taken to complete important tasks?Which tasks are grouped together and considered a job?How can a job be designed or structured so that the employee’s performance can be enhanced?What kinds of behaviors are needed to perform the job?What kind of person (i.e., traits and experience) is best suited for the job?How can the information acquired by a job analysis be used in the development of HRM programs?


The Vocabulary of Job AnalysisThe Vocabulary of Job Analysis

Job analysis – A purposeful, systematic process for collecting information on the important work-related aspects of a jobJob description – The principal product of a job analysis

Represents a written summary of the job as an identifiable organizational unit

Job specification – A written explanation of the knowledge, skills, abilities, traits, and other characteristics necessary for effective performance on a given jobTasks – Coordinated and aggregated series of work elements used to produce an output

e.g., a unit of production or service to a clientPosition – Consists of the responsibilities and duties performed by an individual

There are as many positions in an organization as there are employeesJob – Group of positions that are similar in their duties

e.g., computer programmer or compensation specialistJob family – Group of two or more jobs that have similar duties


The Steps in Job AnalysisThe Steps in Job Analysis

Examine the total organization and the fit of each jobDetermine how job analysis information will be usedSelect jobs to be analyzedCollect data by using acceptable job analysis techniquesPrepare job descriptionPrepare job specification



Shareholders

Market


Shareholders

Market


Shareholders

Market


Process1

Process2

Process3

Process1

Process2

Process3


The ProcessLevel



The Uses of Job AnalysisThe Uses of Job Analysis

Job designPlanningRecruitmentSelection & trainingStrategic planningPerformance evaluationCompensation & benefitsEEO complianceFollow-up evaluation


Who Should Conduct the Job Analysis?Who Should Conduct the Job Analysis?

ExternalJob Analysis

Expert

InternalJob Analysis

Expert

Supervisor Job Incumbent


Methods of Data CollectionMethods of Data Collection

Observation Interviews

Questionnaires Job IncumbentDiaries or Logs


Specific Quantitative TechniquesSpecific Quantitative Techniques

Functional Job Analysis

Position Analysis Questionnaire

Management Position Description Questionnaire


Position Analysis Questionnaire (PAQ)Position Analysis Questionnaire (PAQ)

Major sections of the PAQ:Information inputMental processesWork outputRelationships with other peopleJob contextOther job characteristics


Management Position DescriptionManagement Position Description

General informationDecision makingPlanning and organizingAdministeringControllingSupervisingConsulting and innovatingContactsCoordinatingRepresentingMonitoring business indicatorsOverall ratingsKnowledge, skills, and abilitiesOrganization chartComments and reactions


Job DescriptionsJob Descriptions

A primary output of a systematic job analysisA written description of what the job entailsThorough, accurate, and current job descriptions are important to an organization

restructuring and downsizingemployee motivation and rewardstechnological changes in work environmentslegal compliance with employment laws


Job Descriptions IncludeJob Descriptions Include

Equipment Environment Activities

Job Title Summary


Job SpecificationsJob Specifications

Evolve from the job descriptionAddress the question:

“What personal traits and experience are needed to perform the job effectively?”

Useful in offering guidance for recruitment and selectionAny trait or skill stated on the job specification should actually be required for performance on the job

Job specifications must differentiate between:Essential skills – those for which alternative ways of accomplishing the job are not possibleNonessential skills – can be accommodated by changing the structure or work methods of the job

Under the Americans with Disabilities Act:If disabled people could accomplish the job successfully after accommodation, then it should be done


NoteNote

Job design integrates work content, qualifications, and rewards for each job in a way that meets the needs of employees and the organization.


Personaland WorkOutcomes

Core JobDimensions

CriticalPsychological

States

Skill variety

Task identify

Task significance

Experiencedmeaningfulnessof the work

Experiencedresponsibilityfor outcomesof the work

Knowledge of theactual results ofthe work activities

Autonomy

Feedback

High internalwork motivation

High-qualitywork performance

High satisfactionwith the work

Low absenteeismand turnover

Employee GrowthNeed Strength

Job Characteristics Model of Work MotivationJob Characteristics Model of Work Motivation


Job Enlargement and Job EnrichmentJob Enlargement and Job Enrichment

Job EnlargementEmployees given a greater variety of things to doHorizontal expansion of work

Greater number of tasksResponsibility and authority not increased

Job EnrichmentJob is expanded verticallyIncreased responsibilityFocus on growth and recognition


SummarySummary

Job analysis plays a major role in HRM activities and programs

The job is the major building block of an organization

Each characteristic of each job in an organization must be clearly understood


RecruitmentRecruitmentRecruitment

chapterchapter

7


RecruitmentRecruitment

Organizational activities that influence:Number and types of applicants who apply for a jobWhether the applicants accept jobs that are offered

Directly related to HR planning and selectionRepresents the first contact between organizations and prospective employees











Resources













External Influences on RecruitmentExternal Influences on Recruitment

Union RestrictionsLabor Market

Conditions

Composition ofthe Labor Force

Location of theOrganization

GovernmentRestrictions

Competitiveness


Internal InfluencesInternal Influences

Corporate Culture Nature of the Task

Work GroupLeader’s style and

experience

Strategy Goals


Guidelines for RecruitmentGuidelines for Recruitment

Post notices regarding the availability of a jobPublish a list of qualifications necessary to fill the jobDistinguish between essential qualifications and desirable qualificationsDo not rely on word-of-mouth sources of recruitsUse recruiting sources that will reach the greatest number of potential applicants in the job marketBe wary of establishing qualifications that might directly or indirectly exclude members of protected groupsBe sure job qualifications are applied to every applicant in a consistent manner


The OrganizationThe Organization’’s View of Recruitings View of Recruiting

Recruiting Requirements

Organizational Policies and Practices

Organizational Image


Preferences of recruits for

organizations and jobs

Preferences of recruits for

organizations and jobs

Job search and finding a job: The

recruit

Job search and finding a job: The

recruit

Potential EmployeePotential Employee’’s View of Recruitings View of Recruiting

Applicants’ abilities, attitudes, and preferences are based on:Work experiencesInfluences by parents, teachers, and others

These influences affect them in two ways:How they set job preferencesHow they go about seeking a job


Responsibilities for RecruitingResponsibilities for Recruiting

In larger organizations, the HR department does the recruiting

In smaller organizations, multipurpose HR people or operating managers recruit and interview applicants


Internal RecruitingInternal Recruiting

Job posting and bidding

Inside moonlighting

Employees’ friends


External RecruitingExternal Recruiting

Media Advertising E-recruiting

Employment Agencies

Executive Search Firms

Special Events Recruiting

College RecruitingSummer Internships


EE--Recruiting: Key Issues to Keep in MindRecruiting: Key Issues to Keep in Mind

Be careful not to inadvertently screen out diverse candidatesMake sure the job opening is communicated to large portions of the target populationRecruiters need to figure out a way to track applicants who apply for online job postingsEmail communication might be too casual


Consequences of Job Preview: Consequences of Job Preview: Traditional PreviewTraditional Preview

Sets initial job expectations too highJob is typically viewed as attractive, stimulating, and challengingHigh rate of acceptance of job offersWork experience disconfirms expectationsDissatisfaction and realization that job is not matched to needsLow job survival, dissatisfaction, frequent thoughts of quitting


Consequences of Job Preview: Consequences of Job Preview: Realistic PreviewRealistic Preview

Sets job expectations realisticallyJob may or may not be attractive, depending on individual’s needsSome accept, some reject job offerWork experience confirms expectationsSatisfaction; needs matched to jobHigh job survival, satisfaction, infrequent thoughts of quitting


Alternatives to RecruitmentAlternatives to Recruitment

Overtime

Employee Leasing

Temporary Employment


Evaluating RecruitingEvaluating Recruiting

Effectiveness of recruiters

Sources of recruits


SummarySummary

A better job of recruiting and matching employees to jobs will mean:

Lower employee turnoverGreater employee satisfaction and organizational effectiveness

The Internet is revolutionizing organizational recruitment


SelectionSelectionSelection

chapterchapter

8


NoteNote

Selection – the process by which an organization chooses from a list of applicants the person or persons who best meet the selection criteria for the position available, considering current environmental conditions











Resources













Internal Factors Influencing SelectionInternal Factors Influencing Selection

Organization characteristics that can influence the selection process:

SizeComplexityTechnological volatilityAttitude about hiring from within


External Factors Influencing SelectionExternal Factors Influencing Selection

Federal government employment laws and regulationsState-specific regulationsSize, composition, and availability of local labor marketsEconomic, social, and political pressures on a community


Selection CriteriaSelection Criteria

Formal EducationExperience and

Past Performance

PhysicalCharacteristics

PersonalCharacteristics and

Personality Type


Reliability of Selection CriteriaReliability of Selection Criteria

Reliability – how stable or repeatable a measurement is over a variety of testing conditions

How to assess reliability:Test-retest reliabilityAlternative-form reliabilityInter-rater reliability


Validity of Selection CriteriaValidity of Selection Criteria

Validity – addresses the questions of:What a selection tool measuresHow well it has measured it

It is not sufficient for a selection tool to be reliableThe selection tool must also be valid

Content Validity – degree to which a test, interview, or performance evaluation measures the skill, knowledge, or ability to perform

Construct Validity – extent to which a selection tool actually measures the unobservable trait that it claims to measure

Criterion-Related Validity – extent to which a selection technique can accurately predict one or more important elements of job behavior

Predictive ValidityConcurrent Validity


Typical Selection Decision ProcessTypical Selection Decision Process

1. Preliminaryscreening

1. Preliminaryscreening

2. Employmentinterview

2. Employmentinterview

6. Physicalexamination6. Physical

examination

5. Selectiondecision

5. Selectiondecision

3. Employmenttests

3. Employmenttests

4. Background &reference checks4. Background &reference checks

Application blank Biographical Information Blank Interview


Preliminary ScreeningPreliminary Screening

Application blanksUseful selection toolsSubject to same legal standards as any other selection method

Biographical information blank (BIB)Weighted application blank


Employment InterviewEmployment Interview

Two strategies for effective us of interviews:Structuring the interview to be reliable and validTraining managers on best interview techniques

Unstructured interviewStructured interview

Behavioral description interview (BDI)Situational interview (SI)


Employment TestsEmployment Tests

Mechanism that attempts to measure certain characteristics of individuals, e.g.,

Aptitudesmanual dexterityIntelligencepersonality

Should be validated before being used to make hiring decisionsJob sample performance testsCognitive ability tests

Wechsler Adult Intelligence ScaleWonderlinc Personnel TestCalifornia Test of Mental Maturity (adult level)

Psychomotor ability simulationsPersonality inventories and temperament testsPolygraph and honesty tests


Reference Checks and RecommendationsReference Checks and Recommendations

Do not always provide an organization with meaningful information about applicantsConcerns over the legality of asking for and providing confidential information about applicantsLegal status surrounding reference-checking and providing recommendations is not clear


Selection of ManagersSelection of Managers

Assessment centerseveral interviewswork samplesSimulationspaper-and-pencil tests of abilities and attitudes

Individuals evaluated on many dimensionsShown to be a valid way to select managers


SummarySummary

The way that an organization hires employees is directly tied to other HR programsThe linkage with training is important

Putting more money into selection can significantly reduce the amount of money it must spend on training

A selection system will make some mistakesNo guarantee of successful job performance


Performance Evaluation and ManagementPerformance Evaluation Performance Evaluation and Managementand Management

chapterchapter

9


Performance ManagementPerformance Management

Process by which executives, managers, and supervisors work to align employee performance with the firm’s goals

Defines, measures, monitors, and gives feedback

Performance evaluation is a crucial part of a firm’s performance management process

The activity used to determine the extent to which an employee performs work effectively

Informal performance evaluation systemFormal performance evaluation system



Shareholders

Market


Shareholders

Market


Shareholders

Market


Process1

Process2

Process3

Process1

Process2

Process3


The ProcessLevel












Resources













CommunicationLegal

complianceHRM research

MotivationHR and

employmentplanning

Development

Purposes of Formal Performance EvaluationPurposes of Formal Performance Evaluation


NoteNote

To provide information that can serve the organization’s goals and that complies with the law, a performance evaluation system must provide accurate and reliable data.

This is enhanced if a systematic processis followed.


Six Steps for a Systematic ProcessSix Steps for a Systematic Process

Establish performance standards for each position and the criteria for evaluationEstablish performance evaluation policies on when to rate, how often to rate, and who should rateHave raters gather data on employees’ performanceHave raters (and employees in some systems) evaluate employees’ performanceDiscuss the evaluation with the employeeMake decisions and file the evaluation


Characteristics of Effective CriteriaCharacteristics of Effective Criteria

Reliability – a measure of performance must be consistentRelevance – a measure of performance must be related to the actual output of an incumbentSensitivity – criteria must be able to reflect the difference between high and low performersPracticality – the criteria must be measurable

Data collection cannot be inefficient or too disruptive


Who Should Evaluate the Employee?Who Should Evaluate the Employee?

Immediate supervisorRating by a committee of several supervisorsRating by the employee’s peers (co-workers)Rating by the employee’s subordinatesRating by someone outside the immediate work situationSelf-evaluationRating by a combination of approaches


360360--Degree Appraisal SystemsDegree Appraisal Systems

PositiveMultiple perspectives of a person’s performanceRatings can evaluate person based on actual contact and observationFeedback is provided from multiple directions (above, below, and peer)Upward feedback when anonymous, results in full participationLearning about weaknesses and strengths is motivation

NegativeFeedback from all sources can be overwhelmingRater can hide in a group of raters and provide harsh evaluationsConflicting ratings can be confusing and frustratingProviding feedback that is constructive requires a plan and well-trained raters

Not typically found in organizations


Performance Evaluation MethodsPerformance Evaluation Methods

Individual Evaluation Methods

Multiple-Person Evaluation Methods


Individual Evaluation MethodsIndividual Evaluation Methods

Individual Evaluation Methods

Graphic Rating Scale Forced Choice

Essay Evaluation

Critical Incident Technique

Checklists and Weighted ChecklistsBehaviorally

Anchored Rating Scales

Behavioral Observation

Scales


Advantages and Disadvantages of Some Individual Advantages and Disadvantages of Some Individual Methods of Performance EvaluationMethods of Performance Evaluation

Individual Methods CommentsRating Scales Easy to use, easy to complete, relatively low cost; focuses too much on

person instead of on performance.

Forced Choice Selectively low cost, easy to use; difficult to explain to those evaluated.

Essay Good in providing specific feedback if evaluator is a good writer; difficult in making comparisons across those being evaluated.

Critical Incidents Time consuming, must be disciplined to log in incidents, reveals critical behaviors that can be fed back easily.

Behavior Scales Difficult to develop, time consuming, great for providing specific feedback to aid in improving performance.


MultipleMultiple--Person Evaluation MethodsPerson Evaluation Methods

RankingPaired

Comparison

ForcedDistribution

Management byObjectives


Advantages and Disadvantages of Some MultipleAdvantages and Disadvantages of Some Multiple--Person Methods of Performance EvaluationPerson Methods of Performance Evaluation

Multiple-Person Methods

Comments

Ranking and Paired Comparisons

Hard to use for providing feedback, good for making comparisons among employees.

MBO Focuses on results that are important, sometimes too short-term oriented, does not engage in comparisons among employees.


MBO Program ProcessMBO Program Process

Supervisor and employee conduct meetings to define key tasks of the subordinate and to set a limited number of objectives (goals)Participants set objectives that are realistic, challenging, clear, and comprehensiveSupervisor, after consulting with the employee, establishes the criteria for assessing the accomplishment of the objectivesDates for reviewing intermediate progress are agreed upon and usedSupervisor and employee make any required modifications in the original objectivesFinal evaluation by the supervisor is made; counseling meeting is held with employeeObjectives for next cycle are set by employee after consulting with supervisor (keeping in mind previous cycle and future expectations)


Problems with the MBO ProcessProblems with the MBO Process

Too much paperwork is involvedToo many objectives are set, and confusion occursMBO is forced into jobs where establishing objectives is extremely difficultFailure to tie in MBO results and rewardsToo much emphasis on the short termSupervisors are not trained in the MBO process and the mechanicsinvolvedOriginal objectives are never modifiedMBO is a used as a rigid control device that intimidates rather than motivates


Problems in Performance EvaluationProblems in Performance Evaluation

Opposition to Evaluation

System Design and Operating Problems

Rater Problems


EmployeesEmployees’’ Problems with Performance EvaluationProblems with Performance Evaluation

Employees do not understand the system or its purpose

Employees are not work-oriented

Evaluation may be below the employee’s expectations


Rater ProblemsRater Problems

Rater Problems

Standards of Evaluation Halo Effect

Leniency or Harshness

Central Tendency Error

“Recency of Events” Error

Contrast Effects

Personal Bias (stereotyping;

“similar to me”)


The Feedback InterviewThe Feedback Interview

Can be effective if the evaluation information is meaningful, clear, and helpfulFeeding back information can be quite stressful if the evaluation is:

considered unfairInaccuratepoorly designed


SummarySummary

Properly performed, performance evaluation can contribute to:

organizational objectivesemployees’ development and satisfaction

These are goals of performance management


Compensation: An OverviewCompensation: An Compensation: An OverviewOverview

chapterchapter

10


CompensationCompensation

Deals with every type of reward individuals receive in exchange for performing organizational tasksMajor cost of doing businessChief reason why most individuals seek employmentAn exchange relationship











Resources













Why do we compensate employees?Why do we compensate employees?

Payment for Services Rendered?Motivation?Productivity?Efficiency?Cooperation?Compliance?Creativity?Loyalty?Competitiveness?Social Reasons?Legal Reasons?…….?


Compensation TypesCompensation TypesCompensation

Non-FinancialFinancial

Direct

• Wages• Salaries• Commissions• Bonuses• Expenses• Allowances• Contributions

Indirect

• Unemployment• Health• Pension• Retirement• Workers’ Comp• Pay for time not

worked• Employee

Services

The Job

• Skill Variety• Task Identity• Task Significance• Autonomy• Feedback

Job Environment

• Sound Policies• Competent Staff• Leadership Model• Status Symbols• Working

Conditions• Workplace

Flexibility


Objective of CompensationObjective of Compensation

To create a system of rewards that is equitable to the employer and employee alike

The desired outcome is an employee who is:Attracted to the workMotivated to do a good job for the employer


RequirementsRequirements

A Compensation system should

be:(* focus of this chapter)

Adequate*Equitable*

Balanced

Cost-effective

Secure

Incentive-providing*

Acceptable to the employee


External Influences on CompensationExternal Influences on Compensation

Union RestrictionsLabor Market

Conditions

Composition ofthe Labor Force

Location of theOrganization

GovernmentRestrictions

Competitiveness


NoteNote

Comparable Worth

Attempts to prove that employers systematically discriminate by paying women less than their work is intrinsically worth, versus what they pay men who work in comparable (equally valuable) positions – and to remedy this situation.


Internal Influences on CompensationInternal Influences on Compensation

Corporate Culture Nature of the Task

Work GroupLeader’s style and

experience

Strategy Goals


Pay and MotivationPay and Motivation

Motivation – set of attitudes and values that predisposes a person to act in a specific, goal-directed manner:

the direction of behavior (working to reach a goal)the strength of behavior (how hard or strongly the individual will work)


SocialComparison

Theories

ExpectancyTheory

ReinforcementTheories

NeedsTheories

Herzberg’sTwo-Factor

Theory

Theories of MotivationTheories of Motivation


Pay and EmployeesPay and Employees’’ SatisfactionSatisfaction

Pay Satisfaction – refers to an employee’s liking for or dislike of the employer’s compensation package (including pay and benefits)

Lawler’s Model – the distinction between the amount employees receive and the amount they think others are receiving is the immediate cause of pay satisfaction or dissatisfaction


Pay dissatisfaction is a function of six Pay dissatisfaction is a function of six important judgments:important judgments:

A discrepancy between what employees want and what they receiveA discrepancy between a comparison outcome and what they getPast expectations of receiving more rewardsLow expectations for the futureA feeling of deserving or being entitled to more than they are gettingA feeling that they are not personally responsible for poor results


Pay and EmployeesPay and Employees’’ ProductivityProductivity

Studies indicate that if pay is tied to performance, the employee produces a higher quality and quantity of work

The key to making compensation systems more effective is to be sure that they are directly connected to expected behaviors


Compensation DecisionsCompensation Decisions

Pay-Level DecisionExamines pay relative to employees working on similar jobs in other organizationsObjective is to keep the organization competitive in the labor marketPay survey is the major tool used in this decision

Pay-Structure DecisionExamines pay relative to employees working on different jobs within the organizationInvolves setting a value on each job within the organization relative to all other jobsJob evaluation is the approach used

Individual Pay DeterminationExamines pay relative to employees working on the same job within the organization


PayPay--Level StrategiesLevel Strategies

High-Pay Strategy

Low-Pay Strategy

Comparable-Pay Strategy


Factors Affecting the Choice of Pay StrategyFactors Affecting the Choice of Pay Strategy

The motivation and attitudes held by managementThe ethical and moral attitude of managementThe degree to which an organization can attract and retain personnelThe organization’s ability to pay


SummarySummary

The objective of the compensation function is to create a system of rewards that is equitable to the employer and employee alikeCompensation should be adequate, equitable, cost-effective, secure, incentive-providing, and acceptable to the employeeThe pay-structure decision involves comparing jobs within the organization to determine their relative worthDetermining the worth of a job is difficult because it involves measurement and subjective decisionsUsing systematic job evaluation procedures is one way to determine net worth


Compensation: Methods and PoliciesCompensation: Methods Compensation: Methods and Policiesand Policies

chapterchapter

11


Compensation SystemCompensation System

A Compensation system should

be:(* focus of this chapter)

AdequateEquitable

Balanced*

Cost-effective*

Secure*

Incentive-providing

Acceptable to the employee*


NoteNote

To the individual

employee, the most

important compensation

decision is how much he

or she will earn.


Determination of Individual PayDetermination of Individual Pay

Three questions need to be addressed:How should one employee be paid relative to another when they both hold the same job in the organization?Should we pay all employees doing the same work at the same level the same?If not, on what basis should we make the distinction?


Pay differentials are based on:Pay differentials are based on:

Individual differences in experience, skills, and performance

Expectations that seniority, higher performance (or both) deserve higher pay


Reasons for pay differentialsReasons for pay differentials

Pay differentials allow firms to recognize that different employees performing the same job make substantially different contributions to meeting organizational goalsDifferentials allow employers to communicate a changed emphasis on important job roles, skills, knowledge, etc.Differentials provide organizations with an important tool for emphasizing norms of enterprise without having employees change jobs (i.e., promotion)Pay differentials allow firms to recognize market changes between jobs in the same grade without requiring a major overhaul of the whole compensation systemWithout differentials,

the pay system violates the internal equity norms of most employees,reducing satisfaction with pay, andmaking attraction and retention of employees more difficult


Methods of PaymentMethods of Payment

Flat Rates

Payment for Time Worked

Variable Pay: Incentive Compensation


Payment for Time WorkedPayment for Time Worked

General, across-the-board increase for all employeesMerit increases paid to some employees

based on some indicator of job performanceCost-of-living adjustment (COLA)

based on the consumer price index (CPI)Seniority


Variable PayVariable Pay

Percentage of an employee’s paycheck is put at riskIf business goals are not met, the pay rate will not rise above the lower base salaryAnnual raises are not guaranteedHelps manage labor costsDoes not guarantee equitable treatment of employees


Support bymanagement

Acceptance byemployees

Supportiveorganizational

cultureTiming

Variable Pay: Key Design FactorsVariable Pay: Key Design Factors


Types of Variable PayTypes of Variable Pay

Individual Incentives

Group Incentives

Organization Incentives


Individual Variable PayIndividual Variable Pay

Merit incentivesEmployees fail to make the connection between pay and performanceThe secrecy of the reward is perceived by other employees as inequityThe size of the merit award has little effect on performance

Individual incentivesPieceworkproduction bonusesCommissions

Possible only in situations where performance can be specified in terms of output

e.g., sales dollars generatede.g., number of items completed

Employees must work independently of each other so that individual incentives can be applied equitably


Effective Individual Incentive PlansEffective Individual Incentive Plans

The task is likedThe task is not boringThe supervisor reinforces and supports the systemThe plan is acceptable to employees and managersThe incentive is financially sufficient to induce increased outputQuality of work is not especially importantMost delays in work are under the employees’ control


Reasons to Use Team IncentivesReasons to Use Team Incentives

When it is difficult to measure individual outputWhen cooperation is needed to complete a task or projectWhen management feels this is a more appropriate measure on which to base incentives


OrganizationOrganization--wide Incentiveswide Incentives

Usually based on one of two performance concepts:A sharing of profits generated by all employees altogetherA sharing of money saved as a result of employees’efforts to reduce costs


Approaches to OrganizationApproaches to Organization--wide Incentiveswide Incentives

SuggestionSystems

Gainsharing

Profit Sharing Ownership


Suggestion Systems: Essential ElementsSuggestion Systems: Essential Elements

Management commitmentClear goalsDesignated administratorStructured award systemRegular publicityImmediate response to each suggestion


Gainsharing PlansGainsharing Plans• Employees earn bonuses tied to unit-wide performance as measured by a

predetermined, gainsharing formula

• Commonly used gainsharing plans:• Lincoln Electric Plan• Scanlon Plan• Rucker Plan• ImproShare

• Key Elements in Designing a Gainsharing Plan• Strength of reinforcement• Productivity standards• Sharing the gains• Scope of the formula• Perceived fairness of the formula• Production variability


Newer Approaches to GainsharingNewer Approaches to Gainsharing

Business Plan Gainsharing

Winsharing

Spot Gainsharing


Typical Profit Sharing PlansTypical Profit Sharing Plans

Cash or current distribution plans provide full payment to participants soon after profits have been determinedDeferred plans credit a portion of current profits to employees’ accounts with cash payments made at the time of retirement, disability, severance, or deathA combination of both incorporates aspects of current and deferred options


OwnershipOwnership

Employee stock ownership plan (ESOP) – employees receive stock in the companyESOPs are tax qualified

i.e., in return for meeting certain rules designed to protect the interests of plan participants, ESOP sponsors receive various tax benefits

ESOPs are defined contribution plansthe employers makes yearly contributions that

accumulate to produce a benefit that is not defined in advance


PeoplePeople--Based PayBased Pay

Skill-BasedPay

Knowledge-Based Pay

Credential-Based Pay

Feedback Pay


Executive PayExecutive Pay

More likely to be based on More likely to be based on comparative performancecomparative performance::Compensation committees link CEO’s pay to returns to shareholdersVariable performance-based pay is emphasized over guaranteesCEOs are encouraged to invest in company stockPerformance yardsticks are linked to actual key productivity indices, to the competition, or to bothCEOs are held responsible for the cost of capital


Issues in Compensation AdministrationIssues in Compensation Administration

Pay Secrecy or Openness

Pay Security

Pay Compression


GuaranteedAnnual Wage

(GAW)

SupplementaryUnemploymentBenefits (SUB)

Cost of LivingAdjustments

(COLAS)Severance Pay

Pay Security PlansPay Security Plans


Solutions to Pay CompressionSolutions to Pay Compression

Reexamining how many entry-level people are neededReassessing recruitment itselfFocusing on the job evaluation process, emphasizing performance instead of salary-grade assignmentBasing all salaries on longevityGiving first-line supervisors and other managers the authority to recommend equity adjustments for incumbents who have been unfairly victimized by pay compressionLimiting the hiring of new employees seeking excessive salaries


SummarySummary

There is a growing realization that traditional pay systems do not effectively link pay to performanceThe trend is toward a total compensation approach made up of base pay, variable pay, and benefitsFlexibility is an essential ingredient in any compensation plan and can be built using a variable pay approach


Employee Benefits and ServicesEmployee Benefits and Employee Benefits and ServicesServices

chapterchapter

12


Indirect Financial Compensation Indirect Financial Compensation -- BenefitsBenefits

All employer-provided rewards and services (other than wages and salaries) arising from:

legally required social insurance paymentsprivate insurance and retirement planspayment for time not workedextra cash payments other than bonuses based on performanceemployee services


BackgroundBackground

Most benefits and services are available to workers as long as they are employed by an organization regardless of seniority or performanceDecisions about indirect compensation are more complex than those concerned with wages and salariesEmployers face rising benefits costs resulting from:

increased legislationinsurers’ insolvencycost of advanced medical technologiesaging workforcenew immigrationmore women in the workforceglobal competition


Changes in Benefits ProgramsChanges in Benefits Programs

ThenNuclear families of working male with female and 2.3 children at homeEmployment for large part of careerWhite male-dominated workforceCradle-to-grave expectationsPaternalistic employerEntitlement perception of benefitsLow cost of benefits

Protection for illnessSingle set of benefits

NowDouble-income families with and with-out children, and single-head familiesMultiple career industry, & job movesMulticultural workforcePortability issuesShared responsibilityBenefits as part of total compensationBenefits costs escalating faster than CPI and employer’s ability to payPromotion of wellnessCafeteria and customized benefits programs


The Role of ManagersThe Role of Managers

Benefits & Services Function

Operating Manager (OM) HR Manager (HRM)

Benefits & services budget Preliminary budget approved or adjusted by top management

Preliminary budget developed by HRM

Voluntary benefits & services Programs approved by OM (top management)

Programs recommended by HRM

Communication of benefits & services

OM cooperates with HRM Primary duty of HRM

Evaluation of benefits & services

Done by HRM

Administration of benefits & services programs

Done by HRM


Benefits and Services ProgramsBenefits and Services Programs

Mandated Benefits

Voluntary Benefits

Income in Retirement

Employee Services

Flexible Benefits


Mandated Benefits ProgramsMandated Benefits Programs

Unemployment Insurance

Social Security

Workers’Compensation


Unemployment InsuranceUnemployment Insurance

Unemployment tax paid by employer

Unemployment tax rates, eligibility requirements, weekly benefits, and duration of regular benefits vary from state to state

Employee receives compensation for a limited time –typically a maximum of 26 weeks


Social SecuritySocial Security

Social SecurityRetirement incomeDisability benefitsDeath benefitsSurvivor’s benefits6.2% of eligible earnings up to

$84,900 (2002)$87,000 (2003)

Employee and employer funded

MedicareHospital insurance (Medicare, Part A)Medical Insurance (Medicare, Part B)1.45% of eligible earnings (unlimited)Employee and employer funded


WorkersWorkers’’ CompensationCompensation

Based on the principle of liability without faultEmployer absolutely liable for providing benefits to employees that result from occupational disabilities or injuries regardless of faultEmployers assume costs of occupational injuries and accidentsEmployers pay premium to insurance company or state fund

experience-rated (5-10 year period)Disability must be work relatedBenefits include:

medical caredisability incomeRehabilitationdeath benefits


Voluntary Benefits ProgramsVoluntary Benefits Programs

Insurance Protection

Retirement Plans

Compensation for Time Not Worked


SickLeave

FamilyLeave

Maternityand Parental

Leave

PaidVacations

PersonalTime Off

PaidHolidays

Compensation for Time Not WorkedCompensation for Time Not Worked


EmployerEmployer--Purchased InsurancePurchased Insurance

Health Insurance

Life Insurance

Disability Income Replacement


Health InsuranceHealth Insurance

Traditional membership programsPay for both physician and hospital expenses as these costs are incurredApproach is not preventive

Health maintenance organizations (HMO)Outpatient and hospital coverage offered for a fixed monthly feePrepayment for comprehensive health care that promotes preventive care

Preferred provider organizations (PPO)Health care plan based on agreements between doctors, hospitals,and other related medical service facilities with an employer or an insurance companyServices provided for a fixed feeIncentives to use selected providersEmphasis on cost control


SimplifiedEmployeePension

IRAs

401 (k)Plans

PrivatePensions

RetirementIncome from

Savings &Work

IndividualRetirementAccounts

(IRAs)

Income in Retirement ProgramsIncome in Retirement Programs


Pension BenefitsPension Benefits

Defined benefit pension planSpecifies the benefit employees will receive at retirement

Defined contribution pension planSpecifies the employer’s contributionCannot predetermine the employee’s actual pension benefit


Employee ServicesEmployee Services

Employee Services

Stock Ownership

PlansEducation Programs

Financial Services

Childcare

Eldercare

Pre-retirement Programs

Social and Recreational

Programs


Flexible Benefits PlansFlexible Benefits Plans

Allow employees to choose between two or more types of benefitsCommon choices include:

health carelife insurancedisability insuranceoption of receiving cash to spend on coverage in the open market


Reimbursement AccountsReimbursement Accounts

Also known as flexible spending accountsProvide funds from which employees pay for expenses not covered by the regular benefits packageUsually pretax deductionsFunds can be allocated for:

unreimbursed health careChildcarecare for elderly or disabled relatives


Managing an Effective Benefits ProgramManaging an Effective Benefits Program

Step 1: Set Objectives and Strategy for BenefitsPacesetter strategyComparable benefits strategyMinimum benefits strategy

Step 2: Involve Participants and UnionsStep 3: Communicate BenefitsStep 4: Monitor Costs Closely


SummarySummary

Top managers must consider the following when making decisions about benefits:

Mandated programs must be fundedThere is little evidence that benefits and services really motivate performanceBenefits do not necessarily increase satisfactionMost employees view benefits and services as entitlementsUnions, competitors, and industry trends continue to pressure employers to provide or increase voluntary benefitsCosts of benefits and services continue to escalate dramatically

To avoid administrative nightmares, employers should concentrateon fewer benefits plans

If possible, implement those preferred by most employees


Training and DevelopmentTraining and DevelopmentTraining and Development

chapterchapter

13











Resources













Nature of Corporate TrainingNature of Corporate Training

Training is often seen as an employee benefit, which is not expected to provide a tangible return. Isn’t training just part of enlightened management, intrinsically good unquestionably valuable in unmeasurable ways?

No.

Training must be treated like any other investment.

If the return on a given training investment is not easily quantified, how can managers describe the specific benefits to the organization of that training effort?How can the investment in training to be assessed before the investment is made?If top managers are committed to spending a certain percentage of revenue on training, how can they be sure that they are investing in the right training?


Common ViewCommon View

In a prevailing view, people exist in a vacuum. If managers want to establish or improve a certain performance output, all they need to do is arrange for the proper training input.

Skills/Knowledge Performance

Training is likely to be prescribed when training is not needed.


The Systems ViewThe Systems View

Shareholders

Market


Shareholders

Market


Shareholders

Market


Process1

Process2

Process3

Process1

Process2

Process3


The ProcessLevel



Reacting to Training RequestsReacting to Training Requests

Identify, at the Organizational Level, the critical business issue – the actual performance problem or opportunity of concern.Identify, at the Process Level, the business process that has the greatest impact on the critical business issue.Use a Process Map to document the adjudication process and to identify any gaps between desired and actual performance of each process step.Identify the jobs that have an impact on the performance of the process steps in which there are gaps.Develop a list of desired outputs. Identify which of the desired outputs are not being produced.Identify the causes of any subpar output. Possible causes include missing or inadequate Performance Specifications, Task Interference, missing or unaligned Consequences, missing or inadequate Feedback, lack of Skills or Knowledge, and lack of Individual Capacity.


Proactive Training PlanningProactive Training Planning

Identify major clients (by business unit or department, with a senior manager as the contact in each client organization).Develop an HRM plan with the client contact. Begin by identifying the client organization’s anticipated operating needs for the next 18 months. These needs should be based on the business unit’s strategy or the departments contribution to the strategy. On the basis of these needs, identify the training that will be required to meet them.Consolidate all of the business-unit HRM plans into a plan and budget for the HRM function.Review progress toward the plan with the client every 6 months.Review progress at the end of the year and update the plan for the next year.


HRM as Performance DepartmentHRM as Performance Department

HRM can transform itself from a training operation to the organization’s performance department.

Understand that their mission is to improve performance, not to provide skills and knowledge.Only conduct training and development that are linked to organization performance needs.Only conduct training and development that are supported by the environment in which the trainees work.Evaluate training and development according to its contributions to organization performance needs.Conduct diagnoses that go beyond training.Recommend solutions to both training and development and non-training and development needs.Understand the business at all Three Levels of Performance and the influence of all Nine Performance VariablesUnderstand that the department is a business and must be run as a business.


Different TypesDifferent Types

Orientation – orients, directs, and guides employees to understand work, firm, colleagues, and mission (socialization)Training – helps employees do their current workDevelopment – prepares individuals for the future

Focuses on learning and personal development


To reduceanxiety

To reduceturnover

To developrealistic

expectationsTo save time

Goals of OrientationGoals of Orientation


How Orientation WorksHow Orientation Works

Orientation should begin with the most relevant and immediate kinds of informationThe most significant part of orientation is the human sideNew employees should be “sponsored” or directed in the immediate environment by an experienced worker or supervisorNew employees should be gradually introduced to the people with whom they will workNew employees should be allowed sufficient time to get their feet on the ground before job demands on them are increased


TrainingTraining

The systematic process of altering the behavior of employees in a direction that will achieve organization goalsTraining is related to present job skills and abilitiesTraining has a current orientationHelps employees master specific skills and abilities needed to be successful


Goals of TrainingGoals of Training

Training validityDid the trainees learn skills or acquire knowledge or abilities during the training?

Transfer validityDid the knowledge, skills, and abilities learned in training lead to improved performance on the job?

Intraorganizational validityIs the job performance of a new group of trainees in the same organization that developed the program comparable to the job performance of the original training groups?

Interorganizational validityCan a training program that has been validated in one organization be used successfully in another firm?


Learning Theory and TrainingLearning Theory and Training

The trainee must be motivated to learnThe trainee must be able to learnThe learning must be reinforcedThe training must provide for practice of the materialThe material presented must be meaningfulThe material must be communicated effectivelyThe material taught must transfer to the job


Learning OrganizationsLearning Organizations

Organizations that are proficient in:A systematic approach to problem solvingExperimentation with new approachesLearning from their own experience and historyLearning from the experiences and best practices of othersTransferring knowledge quickly and efficiently throughout the organization


Managing the Training ProgramManaging the Training Program

Determining needs and objectivesChoosing trainers and traineesSelecting training content and methods to be used Developing evaluation criteriaEvaluating the training


Needs AssessmentNeeds Assessment

Organizational Analysis

Person Analysis

Task Analysis


EmployeesEmployees’’ Needs for TrainingNeeds for Training

Observe employeesListen to employeesAsk supervisors about employees’ needsExamine the problems employees have


Steps to a Performance AnalysisSteps to a Performance Analysis

Behavioral discrepancyCost-value analysisIs it a “cant do” or “won’t do” situation?Set standardsRemove obstaclesPracticeTrainingChange the jobTransfer or terminateCreate a motivational climate


Instructional MethodsInstructional Methods

Training and Development Instructional

Methods

On-the-Job Training Case Method

Behavior Modeling

In-Basket Technique

Management Games

Role Playing

Outdoor-Oriented Programs


OnOn--thethe--Job Training for ManagersJob Training for Managers

Coaching and counseling

Transitory anticipatory experiences

Transfers and rotation


OffOff--thethe--Job TrainingJob Training

Lecture-discussion approachComputer-assisted instruction (CAI)

InternetIntranetsMultimedia-based training (MBT)Virtual reality (VR)Distance learning


Diagnostic Steps in Development ProgramsDiagnostic Steps in Development Programs

Organizational AnalysisOrganizational Analysis

Work AnalysisWork Analysis

Human Resource AnalysisHuman Resource Analysis

1. Determine short- and long-term goals of the organization

2. Examine work requirements, specifications, and changes in work

3. Determine behaviors needed to perform work and performance standards

4. Develop behavior objectives to be accomplished through development programs

Objectives to be used in evaluation of success of program


Development: Individual TechniquesDevelopment: Individual Techniques

Goal Setting Behavior Modification


Goal Setting: Key StepsGoal Setting: Key Steps

DiagnosisPreparing the employees for goal setting by increased interpersonal interaction, communication, training, and action plansEmphasizing the attributes of goals that should be understood by a manager and subordinatesConducting immediate reviews to make necessary adjustments in established goalsPerforming a final review to check the goals set, modified, and accomplished


Criticisms of Goal SettingCriticisms of Goal Setting

Goal setting is complex and difficult to sustainGoal setting works well for simple jobs but not for complete jobsGoal setting encourages game playingGoal setting is used as another check on employeesAccomplishment of goals can become an obsession


Applied Behavior ModificationApplied Behavior Modification

Managers must identify and define the specific behaviorCan it be seen?Can it be measured?

Managers must measure or count the occurrences of the pinpointedbehaviorManagers conduct the ABC analysis

AntecedentBehaviorConsequence

The action plan and strategiesPositive reinforcementNegative reinforcementExtinctionPunishment

Evaluation of critical behaviorComparing baseline versus after action behaviorsProviding feedback to make changes


Questions for Performance AnalysisQuestions for Performance Analysis

AntecedentDoes the employee know what is expected?Are the standards clear?Have they been communicated?Are they realistic?

BehaviorCan the behavior be performed?Could the employee do it if his or her life depended on it?Does something prevent its occurrence?

ConsequenceAre the consequences weighted in favor of performance?Are improvements being reinforced?Do we note improvement even though the improvement may still leave the employee below company standards?Is reinforcement specific?


A Group Technique A Group Technique –– Team BuildingTeam Building

A development process that helps or prepares organization members to work more efficiently or effectively in groupsDesigned to enhance individual team members’

problem-solving skillsCommunicationsensitivity to othersparticipation


Total Quality Management (TQM)Total Quality Management (TQM)

TQM – a philosophy, a process, and a set of principles that provide an organization with what is needed to continuously improve its effectivenessEveryone in the firm developing and fine-tuning processes that are:

customer-orientedFlexibleResponsive

To achieve change and to convert to TQM, there must be changes in:

AttitudesCommunicationemployee involvementcommitment


Criteria for Training EvaluationCriteria for Training Evaluation

Participants’ reactionWhether participants like or dislike the training or developmentprogram

LearningExtent to which participants have assimilated the knowledge offered and skills practiced in the training or development programDoes the participant score higher on tests after the training ordevelopment than before?

BehaviorExternal measure of changes or lack of changes in job behavior

ResultsEffect of the program on organizational dimensions such as:

employee turnoverProductivityvolume of salesquality


An Evaluation Matrix: Issues to ConsiderAn Evaluation Matrix: Issues to Consider

Relevant Issues to Evaluate

What to Measure What to Examine for Answers

How to Collect Data

Are the participants learning, changing attitudes, or improving skills?

Participants’ attitudes or skills before and after (even during) training or development sessions

CommentsMethod of participationCo-workersSuperiors

InterviewsQuestionnairesRecordsObservations

Are the training or development materials used on the job?

Participants’ on-the-job performance, behavior, and style

Subordinates’performance, attitudes, and style

RecordsInterviewsQuestionnairesCritical incidentsObservations


An Evaluation Matrix: Issues to ConsiderAn Evaluation Matrix: Issues to Consider

Relevant Issues to Evaluate

What to Measure What to Examine for Answers

How to Collect Data

What are the costs of training and develop-ment programs and techniques?

Fixed and variable costs of conducting training or development

Costs of trainersParticipants’ timeTravel expensesConsultants’ feesTraining aidsRent and utilities

Budget records

How long does the training or develop-ment have an effect on participants?

Participants’ on-the-job performance, behavior, and style over an extended period of time

Subordinates’performance, attitudes, and style

RecordsInterviewsQuestionnairesCritical incidentsObservations


SummarySummary

Formal training and development have been shown to be more effective than informal or no training and development

For most training and development programs the results tend to be assumed rather than evaluated


Career Planning and DevelopmentCareer Planning and Career Planning and DevelopmentDevelopment

chapterchapter

14


The Concept of CareerThe Concept of Career

A career is the pattern of work-related experiences and activities over the span of the person’s work life, e.g.,

job positionsjob dutiesDecisionssubjective interpretations about work-related events











Resources













Career Development SystemCareer Development System

ISSUE:

Are employees developing themselves in a way that links personal effectiveness and satisfaction with the achievement of the organization’s strategic objectives?

INDIVIDUAL NEEDS

How do I find career opportunities within the organization that will do the following?

• Use my strengths

• Address my developmental needs

• Provide challenges

• Match my interests

• Match my values

• Match my personal style

ORGANIZATIONAL NEEDS

What are the organization’s major strategic issues over the next two or three years?

• Critical needs and challenges to be faced?

• Critical skills, knowledge, and experience needed to meet these challenges?

• Staffing levels required?

• Does the organization have the strength necessary to meet the critical challenges?


Career StagesCareer StagesStage I: Apprenticeship

Important needs – safety, security, physiologicalExpected to show competence in learning and following directionsMust be able to accept the psychological state of dependence

Stage II: AdvancementImportant needs – achievement, esteem, autonomyDemonstrate competence in a specific technical areaExpected to be an independent contributor of ideas in the chosen area

Stage III: MaintenanceImportant needs – esteem, self-actualizationExpected to become the mentors of those in Stage ICentral activities are training and interaction with othersAssume responsibility for the work of others

Stage IV: Strategic ThinkingImportant needs – self-actualizationInvolves shaping the direction of the organization itselfExpected to play the roles of manager, entrepreneur, and idea generatorAttention directed to long-range strategic planning


Social Enterprising Conventional

Investigative Artistic

Realistic

Career Choice and PersonalityCareer Choice and Personality

HollandHolland’’s s Personality Personality TypesTypes


Career Development: A CommitmentCareer Development: A Commitment

Career development programs are most valuable when they are:

offered regularlyopen to all employeesmodified when evaluation indicates that change is necessary


Career DevelopmentCareer Development

Career Development

Programs

Career Counseling Career Pathing

Training

Career Information

Systems

Management or Supervisory

Development

Human Resources

Special Groups


Causes of Early Career DifficultiesCauses of Early Career Difficulties

Initial Job Challenge

Initial Job Satisfaction

Initial Job Performance Evaluation


Realistic jobpreviews

Challenginginitial

assignments

Enrichedinitial

assignments

Demandingbosses

How to Counteract Early Career ProblemsHow to Counteract Early Career Problems


Causes of the Midcareer PlateauCauses of the Midcareer Plateau

Fewer jobs at the top of organizationsManager may have the abilityHowever, no opening exists

Openings may existManager may lack the ability or skillsManager may lack the desire to fill the opening


How to Counteract Midcareer ProblemsHow to Counteract Midcareer Problems

Midcareer counseling

Midcareer alternativesLateral transfersDownward transfersFailback positions


Minimize Retirement Adjustment ProblemsMinimize Retirement Adjustment Problems

When do employees plan to retire?Who is attracted by early retirement?What do employees plan to do during retirement?

Can the organization help them prepare for these activities?

Do retirees plan a second career?Can the organization assist in this preparation?

Which retirees can still be consulted by the organization to help new employees?


Career Planning and PathingCareer Planning and Pathing

Career planning – involves matching an individual’s career aspirations with the opportunities available in an organization

Career pathing – the sequencing of the specific jobs associated with the opportunities available in the organization


A Career Planning and Pathing ProcessA Career Planning and Pathing Process

Individual needs and aspirations

Personal counseling and assessment

Individual development efforts

Matching Matching Placement on career path

Organizational needs and opportunities

Personnel planning and career information

Formal training and development programs

Feedback

Feedback


Informalcounseling

Formalcounseling

Tuition aidprograms

Job posting

Career Planning ApproachesCareer Planning Approaches


Job Posting: Minimum ConditionsJob Posting: Minimum Conditions

It should include promotions and transfers as well as permanent vacanciesAvailable jobs should be posted at least three to six weeks prior to external recruitingEligibility rules should be explicit and straightforwardStandards for selection and bidding instructions should be stated clearlyVacationing employees should be given the opportunity to apply ahead of timeEmployees who apply but are rejected should be notified of the reason in writing

A record of the reason should be placed in their personnel files


Career PathingCareer Pathing

Important in workforce planningHas the potential for closing the gap between the needs of the individual and the needs of the organizationTraditional career paths have emphasized upward mobility in a single occupation or functional area


Realistic Career PathsRealistic Career Paths

Include lateral and downward possibilities, as well asupward possibilitiesTentative and responsive to changes in organizational needsFlexible enough to take into account the qualities of individualsJobs along the paths specified in terms of acquirableskills, knowledge, and other specific attributes


Problems and IssuesProblems and Issues

Integrating career development and workforce planningManaging dual careersCareer planning and equal employment opportunityDownsizing and job loss


Job Layoff and Job LossJob Layoff and Job Loss

Job layoff exists when three conditions occur:There is no work available at the time and the employee is sent homeManagement expects the no-work situation to be temporaryManagement intends to recall the employee

Job loss means that the employee has permanently lost his or her job


Managerial Responses to Layoffs and Job LossManagerial Responses to Layoffs and Job Loss

Layoff Criteria

Outplacement Services

Severance Pay


SummarySummary

“Work, if the longing of the unemployed is any indication, remains a fundamental need – even in the crushing form it has increasingly assumed in the modern world. It provides not simply a livelihood, but an essential passage into the human community. It makes us less alone.”

Harry Maurer


OrganizationalDevelopmentOrganizationalOrganizationalDevelopmentDevelopment


DefinitionDefinition

Organization Development (OD) is the systematic application of behavioral science knowledge at various levels, such as group, inter-group, organization, etc., to bring about planned change. Its objectives is a higher quality of work-life, productivity, adaptability, and effectiveness. It accomplishes this by changing attitudes, behaviors, values, strategies, procedures, and structures so that the organization can adapt to competitive actions, technological advances, and the fast pace of change within the environment.


The Three Levels of PerformanceThe Three Levels of PerformanceShareholders

Market


Shareholders

Market


Shareholders

Market


Process1

Process2

Process3

Process1

Process2

Process3


The ProcessLevel



Organizational LevelOrganizational Level

Relationship with the Market

Major Functions

Corporate Strategy

Corporate Goals

Organization Structure

Deployment of Resources


Process LevelProcess Level

Organizational level plus

Work Flow

Cross-relations

How the work is done

Business view


Job/Performer LevelJob/Performer Level

Organization level plus

Process level plus

Skills, Competence

Hiring practice

Promotions, Rewards

Job Descriptions

Responsibilities

Standards, Feedbacks

Motivation

Satisfaction

Training


The Nine Performance VariablesThe Nine Performance Variables

OrganizationGoals

JobGoals

ProcessGoals

OrganizationDesign

JobDesign

ProcessDesign

OrganizationManagement

JobManagement

ProcessManagement

Goals Design Management

OrganizationLevel

ProcessLevel

Job/PerformerLevelTh

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Leve

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The Three Performance Needs


Performance NeedsPerformance Needs

Specific standards that reflect customers’

expectations for product and service quality,

quantity, timeliness and cost.

Necessary components, configured in a way

that enables the goals to be efficiently met.

Management practices that ensure that goals

are current and are being achieved.

Goals

Design

Management


Organizational GoalsOrganizational Goals

Organizational goals are part of the business strategy

and must comprise the following:

The organizations competitive advantage

New Services

New Markets

Emphasis on products, services, markets

Investment on resources and expected returns


Organization DesignOrganization Design

Organization Structure

Responsibilities, Functional Components

Relationships, Input/Output Connections


Organization ManagementOrganization Management

Corporate Goal Management

Performance Management

Resource Management

Interface Management


Process GoalsProcess Goals

External process goals must derive from corporate

goals

Internal process goals must be driven by the needs of

internal customers

Functional goals must be integrated in key processes


Process DesignProcess Design

Logical process structure

Streamlines paths

Can processes meet the goals?

Are all necessary processes in place?


Process ManagementProcess Management

Goal Management

Performance Management

Resource Management

Interface Management


Job GoalsJob Goals

Does the job contribute to key processes?

Are outputs and goals in line with requirements of key processes?


Job DesignJob Design

Optimum contribution to job goals

Boundaries and responsibilities


Job ManagementJob Management

Performance Specification

Task Support

Consequences

Feedback

Skills and Knowledge

Individual Capacity


20 Topics (1)20 Topics (1)

Delegation of Responsibility

Conflict Management

Learning Capabilities

New Leadership Paradigm

Delaying and Team Orientation



Creativity

Just-in-Time Information

Reward and Evaluation

Management Development

Constraints and Policies



Brain Drain

Training and Employee Orientation

Value Lens

Process Awareness

Speed vs Accuracy



External Lens

Corporate Image

Solution Gap

Knowledge Management

Communications

Hrm

Documents

Transcript of Hrm