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11Chapter

Human ResourceManagement

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Learning Objectives

After studying the chapter, you should be able to:Explain why strategic human resource management

can help an organization gain a competitiveadvantage.

Describe the steps managers take to recruit andselect organizational members.

Discuss the training and development options thatensure organization members can effectively

perform their jobs.

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Learning Objectives (contd)

Explain why performance appraisal and feedback issuch a crucial activity, and list the choicesmanagers must make in designing effectiveperformance appraisal and feedback procedures.

Explain the issues managers face in determining indetermining levels of pay and benefits

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Chapter Outline

Strategic Human Resource ManagementAn Overview of the Components of HRM

The Legal Environment

Recruitment and SelectionHuman Resource Planning

Job Analysis

External and Internal Recruitment

The Selection Process

Training and Development

Types of Training

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Chapter Outline (contd)

Training and Development (contd)Types of Development

Transfer of Training and Development

Performance Appraisal and FeedbackTypes of Performance Appraisal

Who Appraises Performance

Effective Performance Feedback

Pay and Benefits

Pay Level

Pay Structure

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Chapter Outline (contd)

Pay and Benefits (contd)Benefits

Labor Relations

UnionsCollective Bargaining

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Strategic Human Resource Management

Human Resource Management (HRM)Activities that managers engage in to attract and

retain employees and to ensure that they performat a high level and contribute to theaccomplishment of organizational goals.

HRM activities

Recruitment and selection

Training and development

Performance appraisal and feedbackPay and benefits

Labor relations

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Strategic Human Resource Management

Strategic Human Resource ManagementThe process by which managers design the

components of a human resource system to beconsistent with each other, with other elements of

organizational structure, and with the organizationsstrategy and goals.

The objective of strategic HRM is the development of

an HRM system that enhances the organizations

efficiency, quality, innovation, and responsiveness to

customers.

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Components of aHuman Resource

Management System

Figure 11.1

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Overview of the Components of HRM

Recruitment and SelectionDeveloping a pool of qualified applicants.

Determining relative qualifications of applicants andand their potential for a job.

Training and Development

Developing, on an ongoing basis, employeesabilities and skills as necessitated by changes in

technology and the competitive environment.

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Overview of HRM Components (contd)

Performance Appraisal and FeedbackProviding information about how to train, motivate,

and reward workers such that managers canevaluate and then give feedback to enhance worker

performance. Pay and Benefits

Rewarding high performing employees with raises,bonuses and recognition.

Increased pay provides additional incentive.

Benefits, such as health insurance, reward

membership in firm.

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Overview of HRM Components (contd)

Labor relationsMaintaining an effective relationship with labor

unions that represent workers.

Unions seek to participate, through collective

bargaining, in the determination of pay rates and thesetting of working conditions.

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Recruitment and Selection

RecruitmentActivities that managers engage in to develop a

pool of candidates for open positions.

Selection

The process that managers use to determine therelative qualifications of job applicants and theirpotential for performing well in a particular job.

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Human Resource Planning

Human Resource Planning (HRP)Activities that managers engage in to forecast their

current and future needs for human resources.

HRP must be done prior to recruitment and

selection

Demand forecasts

Estimates of the number and qualifications of

employees the firm will need.

Supply forecasts

Estimates of the availability and qualifications of

current workers and those in the labor market.

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The Recruitment and Selection System

Figure 11.2

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Human Resource Planning: Outsourcing

OutsourcingUsing outside suppliers and manufacturers to

produce goods and services

Using contract workers rather than hiring them.

Outsourcing is more flexible for the firm.

Outsourcing provides human capital at a lower cost.

Problems with Outsourcing

Loss of control over output; outsource contractorsare not committed to the firm.

Unions are against outsourcing that has potential toeliminate members jobs.

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Job Analysis

Job analysisIdentifying the tasks, duties and responsibilities

that make up a job and the knowledge, skills, andabilities needed to perform the job.

A job analysis should be done for each job in theorganization.

Job analysis methods:

Observing what current workers do.

Having workers and manages fill out questionnaires.

Current trend is toward flexible jobs where tasksand duties are not easily defined in advance.

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Recruitment

External RecruitingSeeking outside the firm for people who have not

worked at the firm previously.

Newspapers advertisements, open houses, on-

campus recruiting, employee referrals, and throughthe Internet.

External recruitment is difficult since many newjobs have specific skill needs.

A multi-prong approach to external recruiting worksbest.

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Recruitment

Internal RecruitingSeeking to fill open positions with current

employees from within the firm.

Benefits of internal recruiting:

Job candidates, their qualifications, and availability

are already known.

Current employees know the firms culture and are

familiar with the organization.

Internal advancement (promotion from within) canserve to motivate employees.

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Honesty in Hiring

The temptation to over-rate and oversell theattractiveness of the job and firm.

Managers may feel that if they are honest, anapplicant may not be willing to work there.

Research indicates this is a poor strategy.

Realistic Job Preview

Providing an honest assessment of the advantage

and disadvantages of a job and organization.Avoids hiring, training and then losing an employee

because as applicants, they misperceived the job

before agreeing to come to work.

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Selection Tools

Figure 11.3

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The Selection Process

Determining an applicants qualificationsrelated to the job requirements

Background information

Education, prior employment, and college major

Interviews

Structured interviews where managers ask each

applicant the same job-related questions.

Unstructured interviews that resemble normal

conversations.

Usually structured interviews preferred; bias is

possible in unstructured interviews.

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The Selection Process (contd)

Determining an applicants qualificationsrelated to the job requirements (contd)

Physical ability tests

Measures of dexterity, strength, and stamina for

physically demanding jobs

Measures must be job related to avoid discrimination.

Paper-and-Pencil Tests

Ability tests assess if applicants have the right skills

for the job.

Personality tests seek to determine if applicants

possess traits relevant to job performance.

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Selection Process

Determining an applicants qualificationsrelated to the job requirements (contd)

Performance Tests

Tests that measure an applicants current ability to

perform the job or part of the job such as requiring anapplicant to take typing speed test.

Assessment centers are facilities where managerial

candidates are assessed on job-related activities over

a period of a few days.References

Obtaining relevant information can be difficult to due

to legal liability and privacy issues

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Reliability and Validity

Selection tools must be reliable and valid.Reliability is the degree to which the tool measures

the same thing each time it is used.

Example: scores should be similar for the same

person taking the same test over time.

Validity is the degree to which the test measureswhat it is supposed to measure

Example: how well a physical ability test predicts the

job performance of a firefighter.

Managers have both an ethical obligation and alegal duty to develop good selection tools.

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Training and Development

TrainingTeaching organizational members how to perform

current jobs and helping them to acquire theknowledge and skills they need to be effective

performers. Development

Building the knowledge and skills of organizationalmembers to enable them to take on new duties and

challenges.

Training is used more often at lower levels of

firm; development is common with managers.

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Training and Development: Needs Assessment

Needs AssessmentAn assessment of which employees need training or

development and what type of skills or knowledge they needto acquire.

Figure 11.4Source:

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Types of Training

Classroom InstructionEmployees acquire skills in a classroom setting.

Includes use of videos, role-playing, and simulations.

On-the-Job Training

Employee learning occurs in the work setting asnew worker does the job.

Training is given by co-workers and can be done

continuously to update the skills of current employees.

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Types of Development

Varied Work ExperiencesTop managers have need to and must build

expertise in many areas.

Employees identified as possible top managers are

assigned different tasks and a variety of positions inan organization.

Formal Education

Tuition reimbursement is common for managers

taking classes for MBA or job-related degrees.

Long-distance learning can also be used to reduce

travel and other expenses for managerial training.

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Performance Appraisal and Feedback

Performance AppraisalThe evaluation of employees job performance and

contributions to their organization.

Performance Feedback

The process through which managers shareperformance appraisal information, givesubordinates and opportunity to reflect on theirown performance, and develop, with subordinates,

plans for the future.

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Performance Appraisal and Feedback

Trait AppraisalsAssessing subordinates on personal characteristics

that are relevant to job performance.

Disadvantages of trait appraisals

Employees with a particular trait may choose not to

use that particular trait on the job.

Traits and performance are not always obviously

linked

It is difficult to give feedback on traits.

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Performance Appraisal and Feedback

Behavior AppraisalsAssesses how workers perform their jobsthe

actual actions and behaviors that exhibit on the job.

Focuses on what a worker does right and wrong

and provides good feedback for employees tochange their behaviors.

Results appraisals

Assesses what a worker accomplishes or the resultsthey obtain from performing their jobs.

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Performance Appraisal and Feedback

Objective appraisalsAssesses performance based on facts (e.g., sales

figures).

Subjective appraisals

Assessments based on a managers perceptions oftraits, behavior, or results.

Graphic rating scales

Behaviorally anchored rating scales (BARS) Behavior observation scales (BOS)

Forced ranking systems

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Subject Measures of Performance:Graphic Rating Scale

Figure 11.5a

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Subject Measures of Performance:Behaviorally Anchored Rating Scale (BARS)

Figure 11.5b

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Subject Measures of Performance:Behavioral Observation Scale (BOS)

Figure 11.5c

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Who Appraises Performance?

SelfSelf appraisals can supplement manager view.

Peer appraisal

Coworkers provide appraisal; common in teamsettings.

360 Degree

A performance appraisal by peers, subordinates,

superiors, and clients who are in a position toevaluate a managers performance

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Effective Performance Feedback

Formal appraisalsAn appraisal conducted at a set time during the

year and based on performance dimensions thatwere specified in advance

Informal appraisalsAn unscheduled appraisal of ongoing progress and

areas for improvement

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Effective Feedback Tips

Be specific and focus on correctable behavior.Provide a suggested improvement.

Focus on problem-solving and improvement,

not criticism.

Express confidence in workers ability to

improve.

Use both formal and informal feedback.

Treat subordinates with respect and praise

achievements.

Set a timetable for agreed changes.

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Pay and Benefits

Pay levelThe relative position of an organizations incentives

in comparison with those of other firms in the sameindustry employing similar kinds of workers

Managers can decide to offer low, average or highrelative wages.

High wages attract and retain high performers but

raise costs; low wages can cause turnover and lack

of motivation but provide lower costs.

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Pay and Benefits (contd)

Pay StructureThe arrangement of jobs into categories based on

their relative importance to the organization and itsgoals, level of skills, and other characteristics.

BenefitsLegally required: social security, workers

compensation

Voluntary: health insurance, retirement, day care

Cafeteria-style benefits plans allow employees tochoose the best mix of benefits for them; can behard to manage.

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Labor Relations

Labor RelationsThe activities managers engage in to ensure they

have effective working relationships with the laborunions that represent their employees interests.

Laws regulating areas of employment. Fair Labor Standards Act (1938) prohibits child labor,

sets a minimum wage and maximum working hours.

Equal Pay Act (1963) men and women doing equal

work will get equal pay. Work Place Safety (1970) OSHA mandates

procedures for safe working conditions.

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Unions

UnionsRepresent workers interests to management in

organizations.

The power that managers has over an individual

worker causes workers to join together in unions totry to prevent this.

Unions are permitted by the National Labor Relations

Act (1935) which also created the NLRB to oversee

the relationship between employers and unions. Not all workers want unions. Union membership costs

money in dues and workers might not want to strike.

Union membership is lower today than 40 years ago.

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Unions (contd)

Collective bargainingNegotiation between labor and management to

resolve conflicts and disputes about issues such asworking hours, wages, benefits, working conditions,

and job security.The process that unions and management go

through to negotiate work agreements that areincluded in a contract which spells out agreed-upon

terms such as the grievance procedure for resolvingdifferences between the union and managementover managements administration of the contract.