Trend and Ratio Analysis

Year Business Factor (sales in millions)

Labor Productivity (annual sales per

employee)

HR Demand (number of employees)

1

2

3

4

5

6

$3.613

$3.748

$3.880

$4.095

$4.283

$4.446

$11,120

$11,120

$12,520

$12,520

$12,520

$12,520

325

337

310

327

342

355

Determines the relationship between two variables.

2-1© SHRM

Trend Analysis

Plots the number of employees for the last six years and projects the trend out for two more years.

2-2© SHRM

Turnover Analysis

• Most often expressed using an annualized formula.

• Calculated by dividing the number of separations per year by the average number of employees per month.

• 65 separations per year ÷ 225 average employees per month = 28.9% turnover.

• May also be calculated quarterly and used to project the annual turnover.

2-3© SHRM

Flow Analysis

CurrentStaff

Transfers 5Promotions 4New hires 15Recalls 10

Total 34

Inflow Outflow

Promotions 5Resignations 13Demotions 0Retirements 4Terminations 3Layoffs 15

Total 40

Projects future movement.

2-4© SHRM

Demand Analysis Techniques

Project the number of employees and the types of skills needed for the future.

SPHR only

2-5© SHRM

Organizational Approach to International Business

SPHR only

Ethnocentric Polycentric Regiocentric Geocentric

Four terms describe how a firm manages its international operations.

2-6© SHRM

International Employees

TCNs

Inpatriates

Localnationals

Expatriates

Employee Types

Employee Types

SPHR only

2-7© SHRM

Employeejob

Jobanalysis

Job description

Job specifications

Job competencies

Job Analysis and Employee Jobs

2-8© SHRM

Job Analysis

2-9© SHRM

Job Analysis Methods

• Observation

• Interview

• Open-ended questionnaire

• Highly structured questionnaire

• Work diary or log

2-10© SHRM

Job Analysis Uses

Career paths/succession planning

Legal defense

Training

Organizationaldesign

Performance standards

Performanceappraisals

Time management/goal setting

Recruiting

Affirmative action plan

Compensationadministration

Jobanalysis

2-11© SHRM

Which of the following would MOST likely be an essential job function?

A. Devotes approximately 8% of time to direct customer contact

B. Regularly reviews engineering design documents

C. As time permits, participates in an ongoing employee committee assignment

D. May delegate template preparation to administrative support

Answer: B2-12© SHRM

Job Descriptions

2-13© SHRM

Job Specifications

2-14© SHRM

Job Competencies

• Job competencies are the knowledge, skills, abilities, and personal characteristics that work together to produce outstanding performance.

• They are the critical success factors needed to perform in a job or functional area.

• Core competencies are aligned with key business objectives and/or values and contribute to organizational success.

2-15© SHRM

The FIRST step in determining which candidates are qualified for an open position is a(n)

A. review of the job description.

B. assessment of the company’s ability to pay.

C. review of the candidates’ résumés.

D. evaluation of internal candidates.

Answer: A2-16© SHRM

Internal Recruitment Sources

2-17© SHRM

External Recruitment Sources

Former employees, previous applicants, and walk-ins

Labor unions and third-party sources

The Internet

Educational recruiting

Trade and professional associations

Media advertising

School-to-work programs

Employee databases

Minority recruiting

Nontraditional labor pools

2-18© SHRM

Employment Branding

• Positions the company as an “employer of choice” in the labor market.

• Must be aligned with strategic plan, vision, mission, and values.

• Uses the same tools used to market the product to create an image of what it is like to work for the company.

2-19© SHRM

Recruitment Effectiveness

• Short-term– Time to recruit

applicants– Selection and

acceptance rates– Cost per applicant

hired– Quantity and quality

of applicants– EEO implications

• Long-term– Performance of hires– Turnover– Absenteeism per hire– Training costs

2-20© SHRM

Evaluating Recruitment Sources

YieldRatios

Qualified applicants 100

= 33%Total applicants 300

Minority applicants 80

= 27%Total applicants 300

Female applicants 185

= 62%Total applicants 300

Offers extended 5

= 33%Qualified applicants 15

Offers accepted 3

= 60%Offers extended 5

Offers extended 5= 50%

Final interviews 10

2-21© SHRM

A company made 30 offers, and 18 were accepted. What is the yield ratio of acceptance to offers?

A. 35%

B. 45%

C. 55%

D. 60%

Answer: DCalculation: 18 ÷ 30 = 60%

2-22© SHRM

Flexible Staffing

• Uses alternative recruiting sources and workers who are not regular employees.

• The choice of arrangement depends on:– The function.

– Level of supervision required.

– Time constraints.

– Financial constraints.

– Legal risks and liability.

2-23© SHRM

Co-Employment

• Organization and alternative staffing supplier share joint responsibility for alternative workers.

• Agreement summarizes:– Legal relationship.

– Rights and obligations.

• Potential liability varies depending on the nature of the agreement.

2-24© SHRM

Selection Process

2-25© SHRM

Step 1: Analyzing Application Forms

2-26© SHRM

Step 2: Interviewing

• Prescreening• In-depth interviews

– Structured– Patterned– Stress– Directive– Nondirective– Behavioral– Situational– Group

Questions should be job-related and nondiscriminatory.

2-27© SHRM

Interviewer Biases

StereotypingFirst-impression and similar-to-me errors

Contrast effect

Nonverbal bias

Questioninginconsistencies

Negative emphasis

Halo/horn effect

Cultural noise2-28© SHRM

An interviewer assumes that a woman will do poorly in a job that requires math and analytical skills. This interviewing bias is known as

A. horn effect.

B. cultural noise.

C. stereotyping.

D. negative emphasis.

Answer: C2-29© SHRM

Step 3: Testing andBackground Investigation

• Tests– Cognitive ability– Personality– Aptitude– Psychomotor– Assessment centers– Honesty/integrity– Polygraph– Substance abuse

• Background checks– Work reference– Verification of academic

credentials– Credit history– Motor vehicle– Criminal background

2-30© SHRM

Selection Reliability

• Ability to measure or predict behavior with consistency.

– Example: Scores for a test that is taken twice should be similar.

• The following errors may create inconsistent results:

– Failure to measure an important attribute

– Irrelevant questions in an interview

– Different time limits for people taking a test

– Rater bias in evaluating candidates

2-31© SHRM

Selection Validity

• Content validity– Degree to which a test measures knowledge, skills, and

abilities that are part of the job

• Construct validity– Degree to which a test measures a trait such as

intelligence

• Criterion-related validity– Correlation of test results to job performance

• Predictive

• Concurrent

2-32© SHRM

Criterion-Related Validity

Predictors Criterion Variable

Completed application form

Résumé data

Interview answers

Test scores

Performance evaluations

Productivity

Absenteeism

The greater the overlap between predictors and variables, the better the predictor.

Complete correlation = +1 or –12-33© SHRM

Approaches to Establishing Criterion-Related Validity: Concurrent Validity

Correlate two sets of numbers.

Test employees on key attribute.

Measure employees' job performance.

2-34© SHRM

Approaches to Establishing Criterion-Related Validity: Predictive Validity

Obtain correlation between these two numbers.

Measure all applicants on attribute.

Hire and wait for some time period.

Measure performance of newly hired employees.

2-35© SHRM

Realistic Job Previewing

• Helps a candidate make an informed decision.

• Allows the organization to objectively portray the job.

• Examples of job preview techniques may include:– Job telephone information line.

– Job simulations.

– Video presentations.

– Workplace tours.

– Interviews with job incumbents.

2-36© SHRM

Step 4: Contingent Job Offer

A conditional job offermay depend on:

• Verification of IRCA documents.

• A medical exam (if job-related and consistent with business necessity).

2-37© SHRM

Step 5: Employment Offer

• Formally communicated through an offer letter.

• Clearly states terms of the offer.• Avoids language that implies a contract

(states that employment is at will).• Clarifies contingencies (physical exam).• Clarifies acceptance details and deadline.

2-38© SHRM

Employment Contracts

• Agreement between employer and employee that explains the employment relationship.– Express contract is based on oral or written

words.

– Implied contract results from actions or conduct.

• Employment-at-will is presumed if a written employment contract does not exist.

2-39© SHRM

Which type of employment situation would MOST likely warrant a written employment contract?

A. A full-time telecommuter

B. A salesperson

C. A graphic artist

D. A department manager

Answer: B

2-40© SHRM

Retention

2-41© SHRM

Organizational Exit

• Manages the way people leave an organization.

• Layoffs or RIFs are based on:

– Skills.

– Work record.

– Seniority.

– Disparate impact implications.

– EEO/legal considerations.

• Management should document the criteria used to make layoff decisions.

• Separation should be considered a termination if there is no chance of a recall.

• Severance packages are not required by federal law.

2-42© SHRM

A firm is laying off 15% of its workforce due to declining global markets. What can HR do to help the remaining employees through the transition?

A. Run a series of regional focus groups with mid-level managers.

B. Publicize that exit interviews were conducted with all separated employees.

C. Regularly communicate with employees about ongoing business challenges.

D. Hold a corporate-wide teleconference to address rumors.

Answer: C2-43© SHRM

Wrongful Terminations

2-44© SHRM

Voluntary Retirement

• Management must:− Identify what units of the company are eligible to

participate in a voluntary program.

− Communicate that the plan is voluntary.

• The plan must comply with the Older Worker’s Benefit Protection Act.− Voluntary waivers or claims under ADEA are valid

only when waivers are “knowingly and voluntarily” made.

2-45© SHRM

The OWBPA requires that employees signing a waiver of their ADEA rights must

A. be given at least 14 days to consider the agreement.

B. receive severance pay or something of value.

C. consult an attorney prior to signing the waiver.

D. have at least three days to revoke the agreement after it is signed.

Answer: B2-46© SHRM

Exit Interviews

• Gain candid information from departing employees.

• Are conducted most often when terminations are voluntary.

• Are conducted by a neutral party.

• Exit form may be used to collect information.

• Comments are typically kept confidential.

• Assurance may be given that remarks will not be shared with a supervisor.

2-47© SHRM

Records Management

• Requirements may depend on:– Federal and state statutes.

– Status as a government contractor or subcontractor.

– Number of employees or purpose of record keeping.

– Industry, location, or customers.

2-48© SHRM