Chapter 11 Managing Human Resource Systems MGMT Chuck Williams Designed & Prepared by B-books, Ltd.

The Human Resource Management Process Recruiting Attracting Qualified Employees Selection Training Developing Qualified Employees The human resource management process illustrated in Exhibit 11.1—attracting, developing, and keeping qualified employees—remains one of the most important and difficult of all management tasks. Managers often treat these questions as separate issues. However, the human resource process components are interdependent issues. You can't solve one problem without considering its impact on the others. More specifically, Exhibit 11.1 indicates that human resource needs affect how the company uses recruiting and selection to attract employees. In turn, the kind and number of employees hired influence the orientation, training, performance appraisal, and compensation strategies the company uses, which then affect who stays and who leaves. Finally, as indicated by the feedback loop, the process comes full circle, as the number and kind of employees who leave the company affect its human resource needs and planning. Performance Appraisal Compensation Keeping Qualified Employees Employee Separation

Employment Legislation Federal Employment Laws Adverse Impact and Employment Discrimination Sexual Harassment Laws 1

Adverse Impact and Employment Discrimination Four-Fifths Rule Adverse Impact Disparate Treatment Intentional discrimination that results in equally qualified people being treated differently Unintentional discrimination that works to the disadvantage of members of protected groups Comparison of selection rates of a protected to a nonprotected group to determine if adverse impact has occurred The EEOC has investigatory, enforcement, and informational responsibilities. Therefore, it investigates charges of discrimination, enforces the provisions of these laws in federal court, and publishes guidelines that organizations can use to ensure they are in compliance with the law. Disparate treatment, which is intentional discrimination, occurs when people who, because of their of race, sex, ethnic group national origin, religious beliefs, etc., are purposefully not given the same hiring, promotion, or membership opportunities as other employees, despite being qualified. Legally, one of the key parts of discrimination lawsuits is establishing motive, that the employer intended to discriminate. If no motive can be established, then a case of disparate treatment may actually be a case of adverse impact. Adverse impact, which is unintentional discrimination, is a substantially different rate of selection in hiring, promotion, or other employment decisions that works to the disadvantage of members of a particular race, sex, or ethnic group. The courts and federal enforcement agencies use the four-fifths rule to determine if adverse impact has occurred. Adverse impact occurs if the selection rate for a protected group of people is less than four fifths (or 80%) of the selection rate for a nonprotected group (usually white males). However, violation of the four-fifths rule is not an automatic indication of discrimination. If an employer can demonstrate that a selection procedure or test is valid, meaning that the test accurately predicts job performance or that the test is job related because it assesses applicants on specific tasks actually used in the job, then the organization may continue to use the test. However, if validity cannot be established, then a violation of the four-fifths rule may likely result in a lawsuit brought by employees, job applicants, or the EEOC itself. 1.2

Sexual Harassment Hostile Work Environment Quid Pro Quo Unwelcome and demeaning sexually related behavior creates an intimidating and offensive work environment Employee outcomes depend on whether an individual submits to sexual harassment According to the EEOC, sexual harassment is a form of discrimination in which unwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature occur. From a legal perspective, there are two kinds of sexual harassment, quid pro quo and hostile work environment. Quid pro quo sexual harassment occurs when employment outcomes, such as hiring, promotion, or simply keeping one's job, depend on whether an individual submits to being sexually harassed. By contrast, a hostile work environment occurs when unwelcome and demeaning sexually related behavior creates an intimidating, hostile, and offensive work environment. 1.3

Recruiting Job Analysis and Recruiting Internal Recruiting External Recruiting 2

Application Forms and Résumés References and Background Checks Selection Application Forms and Résumés References and Background Checks Selection Tests Interviews Selection is the process of gathering information about job applicants to decide who should be offered a job. To make sure that selection decisions are accurate and legally defendable, the Uniform Guidelines on Employee Selection Procedures recommend that all selection procedures be validated. Validation is the process of determining how well a selection test or procedure predicts future job performance. The better or more accurate the prediction of future job performance, the more valid a test is said to be. 3

Training Training Needs Training Methods Training Evaluation 4 Training means providing opportunities for employees to develop the job-specific skills, experience, and knowledge they need to do their jobs or improve their performance. Needs assessment is the process of identifying and prioritizing the learning needs of employees. Needs assessments can be conducted by identifying performance deficiencies, listening to customer complaints, surveying employees and managers, or formally testing employees' skills and knowledge. Note that training should never be conducted without first performing a needs assessment. Sometimes, training isn't needed at all, or it isn't needed for all employees. To choose the best method, you should consider a number of factors such as the number of people to be trained, the cost of training, and the objectives of the training. For instance, if the training objective is to impart information or knowledge to trainees, then you should use films and videos, lectures, and planned readings. In our robbery training example, trainees would hear, see, or read about what to do in case of a robbery. Refer to Exhibit 11.7 in the text on how to determine the best method given the training objective. After selecting a training method and conducting the training, the last step is to evaluate the training. Training can be evaluated in four ways: on reactions, how satisfied trainees were with the program; on learning, how much employees improved their knowledge or skills; on behavior, how much employees actually changed their on-the-job behavior because of training; or on results, how much training improved job performance, such as increased sales or quality, or decreased costs. 4

Performance Appraisal Measuring Job Performance Sharing Performance Feedback Performance appraisal is the process of assessing how well employees are doing their jobs. Most employees and managers intensely dislike the performance appraisal process. Because they are used for so many important purposes, companies with poor performance appraisal systems face tremendous problems. For example, performance appraisals are used as a basis for compensation, promotion, and training decisions. In human resource planning, performance appraisals are used for career planning and for making termination decisions. And because of their key role in so many organizational decisions, performance appraisals are also central to many of the lawsuits that employees (or former employees) file against employers. 5

Compensation Compensation Decisions Employment Benefits 6 Compensation includes both the financial and nonfinancial rewards that organizations give employees in exchange for their work. 6

Compensation Decisions Job evaluation Piecework Commission Profit sharing Employee stock ownership plans Stock options Hierarchical Compressed Pay Level Variability Structure Cafeteria plans Flexible plans Payroll deductions Employment Benefits Depicted are the four basic kinds of compensation decisions. These are described on the next slides. Beyond the Book 6.1

Employee Separations Terminations Downsizing Turnover Retirements 6.2 Employee separation is a broad term covering the loss of an employee for any reason. Involuntary separation occurs when employers decide to terminate or lay off employees. Voluntary separation occurs when employees decide to quit or retire. Because employee separations affect recruiting, selection, training, and compensation, organizations should forecast the number of employees they expect to lose through terminations. 6.2