Chapter Eleven Human Resource Management: Finding and Keeping the Best Employees Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

HUMAN RESOURCE MANAGEMENT 11-2

HUMAN RESOURCE MANAGEMENT (HRM) Human Resource Management -- The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational goals. HRM’s role has grown because: 1. Increased recognition of employees as a resource. 2. Changes in law that rewrote old workplace practices. 11-3

DEVELOPING the FIRM’S ULTIMATE RESOURCE The human resource job is now the job of all managers in an organization. 11-4

11-5 HR & Legal Issues

CIVIL RIGHTS ACT of 1964 Title VII prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions or privileges of employment based on:  Race  Religion  Creed  Sex  Age  National Origin 11-6

1972 EQUAL EMPLOYMENT OPPORTUNITY ACT (EEOA) Strengthened the Equal Employment Opportunity Commission (EEOC). Gave EEOC the right to issue workplace guidelines for acceptable employer conduct. EEOC could mandate specific recordkeeping procedures. EEOC was vested with the power of enforcement. 11-7

CONTROVERSIAL PROCEDURES of the EEOC Affirmative Action -- Policy designed to “right past wrongs” by increasing opportunities for minorities and women in the workplace. 11-8

CONTROVERSIAL PROCEDURES of the EEOC Affirmative Action -- Policy designed to “right past wrongs” by increasing opportunities for minorities and women in the workplace. Reverse Discrimination -- Discrimination against whites or males in hiring or promoting. This policy has been at the center of many debates and lawsuits. 11-9

CIVIL RIGHTS ACT of 1991 and OFCCP Civil Rights Act of 1991  Amended Title VII and gave victims of discrimination the right to a jury trial and possible damages. Office of Federal Contract Compliance Programs (OFCCP)  Ensures that employers doing business with the federal government comply with the nondiscrimination and affirmative action laws

LAWS PROTECTING EMPLOYEES with DISABILITIES Americans with Disabilities Act of 1990 (ADA)  Requires employers to give applicants with physical or mental disabilities the same consideration for employment as people without disabilities.  Passage in 2008 of Americans with Disabilities Amendments Act expanded protection

AGE DISCRIMINATION in EMPLOYMENT ACT (ADEA) Age Discrimination in Employment Act (ADEA)  Protects workers 40 and over from employment and workplace discrimination in hiring, firing, promotion, layoff, compensation, benefits, job assignments and training

MINDING the LAW in HRM Employers must know the law and act accordingly. Legislation affects all areas of HRM. Court cases highlight that sometimes it’s proper to go beyond providing equal rights. Changes in law and legislation occur regularly

HR MUST PLAN FOR THE FUTURE HUMAN RESOURCE MANAGEMENT 11-14

5 STEPS in the HUMAN RESOURCE PLANNING PROCESS 11-15

STEPS in the HUMAN RESOURCE PLANNING PROCESS 1.Preparing a human resource inventory of employees. 2.Preparing a job analysis. 3.Assessing future human resource demand. 4.Assessing future labor supply. 5.Establishing a strategic plan

5 STEPS in the HUMAN RESOURCE PLANNING PROCESS 1.Preparing a human resource inventory of employees. 2.Preparing a job analysis

WHAT’S a JOB ANALYSIS? Job Analysis -- A study of what employees who holds various job titles do. Job Description -- Specifies the objectives of the job, the type of work, the responsibilities and duties, working conditions and relationship to other jobs. Job Specifications -- A summary of the minimal education and skills needed to do a particular job

STEPS in the HUMAN RESOURCE PLANNING PROCESS 1.Preparing a human resource inventory of employees. 2.Preparing a job analysis. 3.Assessing future human resource demand. 4.Assessing future labor supply. 5.Establishing a strategic plan

HUMAN RESOURCE MANAGEMENT 11-20

HUMAN RESOURCE MANAGEMENT (HRM) The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational goals

THE HIRING PROCESS: RECRUITMENT 11-22

RECRUITING EMPLOYEES Recruitment -- The set of activities for obtaining the right number of qualified people at the right time. Human resource managers use both internal and external sources to recruit employees

RECRUITING EMPLOYEES Recruiting Internal Less expensive Maintains morale External

EMPLOYEE SOURCES 11-25

THE HIRING PROCESS: SELECTION 11-26

SELECTION Selection -- The process of gathering information and deciding who should be hired, under legal guidelines, to fit the needs of the organization and individuals

STEPS in the SELECTION PROCESS 1. Obtaining complete application forms 2. Conducting initial and follow-up interviews 3. Giving employment tests 4. Conducting background investigations 5. Obtaining results from physical exams 6. Establishing trial (probationary) work periods 11-28

CONTINGENT WORKERS 11-29

HIRING CONTINGENT WORKERS Contingent Workers -- Workers who do not have an expectation of regular, full-time employment. Include part-time and temporary workers, seasonal workers, independent contractors, interns and co-op students

WHY HIRE CONTINGENT WORKERS? Companies hire contingent workers:  When full-time workers are on leave  During periods of peak demand  In uncertain economic times  To save on employee benefits  To screen candidates for future employment 11-31

TRAINING and DEVELOPING EMPLOYEES 11-32

TRAINING and DEVELOPING EMPLOYEES Training and Development -- All attempts to improve productivity by increasing an employee’s ability to perform. Training – short-term skill oriented. Development – long-term career oriented

MOST COMMONLY USED TRAINING and DEVELOPMENT ACTIVITIES Orientation On-the-Job Training Apprenticeships Off-the-Job Training Online Training Vestibule Training Job Simulation 11-34

DEVELOPING EFFECTIVE MANAGERS Management Development -- The process of training and educating employees to become good managers and tracking the progress of their skills over time. Management training includes:  On-the-job coaching  Job rotation  Off-the-job courses and training 11-35

USING NETWORKS and MENTORING Networking -- Establishing and maintaining contacts with key managers in and out of the organization and using those contacts to develop relationships. Mentors -- Managers who supervise, coach and guide selected lower-level employees by acting as corporate sponsors

APPRAISING PERFORMANCE ON THE JOB 11-37

APPRAISING PERFORMANCE on the JOB Performance Appraisal -- An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training or termination

11-39  Establish Standards Understandable Measurable Reasonable  Communicate Standards  Evaluate Performance  Discuss Results  Take Corrective/Reward Action – if necessary  Use Results to Make Decisions SIX STEPS of PERFORMANCE APPRAISALS

MAJOR USES of PERFORMANCE APPRAISALS Identify training needs Use as a promotion tool Recognize worker’s achievements Evaluate the firm’s hiring process Judge the effectiveness of the firm’s orientation process Use as a basis for possible termination of a worker 11-40

COMPENSATION 11-41

COMPENSATION PROGRAMS A managed and competitive compensation program helps:  Attract the kinds of employees the business needs.  Build employee incentive to work efficiently and productively.  Keep valued employees from going to competitors or starting their own firm.  Provide employee financial security through wages and fringe benefits

TYPES of PAY SYSTEMS Salary Hourly Wage/Day Work Piecework System Commission Plans Bonus Plans Profit Sharing Plans 11-43

COMPENSATING TEAMS Team-based pay programs are more challenging than individual pay systems

FRINGE BENEFITS on the JOB Fringe Benefits -- Sick leave, vacation pay, pension and health plans that provide additional compensation to employees beyond base wages. In 1929, Fringe benefits accounted for less than 2% of payroll cost. Today it’s about 30%. Healthcare has been the most significant increase in fringe benefit cost

The RANGE of FRINGE BENEFITS Fringe benefits include incentives like:  Company cars  Country club memberships  Recreation facilities  Special home mortgage rates  Paid and unpaid sabbaticals  Day-care and elder care services  Dental and eye care  Legal counseling  Short or compressed work weeks 11-46

CAFETERIA-STYLE and SOFT BENEFITS Cafeteria-Style Fringe Benefits -- Allow employees to choose the benefits they want (up to a certain dollar amount). Soft Benefits include:  Onsite haircuts and shoe repair  Concierge services  Free meals at work  Doggie daycare  Onsite farmer’s markets 11-47

FLEXIBLE SCHEDULING PLANS 11-48

USING FLEXTIME PLANS Flextime Plan -- Gives employees some freedom to choose which hours to work as long as they work the required number of hours. Most flextime plans require Core Time -- When all employees are expected to be at their job stations. Flextime is hard to incorporate into shift work and managers have to work longer hours

COMPRESSED WORK WEEKS Employees enjoy long weekends after working long days. Productivity is a concern. Nurses and firefighters often work compressed work weeks

JOB SHARING Job Sharing -- Lets two or more part-time employees share on a full-time job. Provides employment opportunities for many people who cannot work full time. Workers tend to be enthusiastic and productive. Absenteeism and tardiness are reduced. Employers can schedule part-time workers in peak demand periods

MOVEMENT of EMPLOYEES Employees are promoted Employees are reassigned. Employees are terminated due to performance or economic situations. Employees resign Employees retire