Slide content created by Charlie Cook, The University of West Alabama Copyright © Houghton Mifflin Company. All rights reserved. Chapter Fourteen Managing Human Resources in Organizations

Copyright © Houghton Mifflin Company. All rights reserved.14–2 Human Resource Management (HRM) –The set of organizational activities directed at attracting, developing, and maintaining an effective work force. Attract, Train, and Retain Strategic Importance of HRM –HRM is increasingly important as firms realize the value of their human capital in improving productivity. –The process of hiring and training employees is both time consuming and expensive. You want to hire the right individual for each position. –HR planning is now part of the strategic planning process.

Copyright © Houghton Mifflin Company. All rights reserved.14–3 The Legal Environment of HRM Human Resource Management practices are governed by a country’s laws and regulations. Laws and Regulations: reduce employment discrimination reduce unfair practices limit management discretion in human resource decisions

Major Responsibilities of HRM Plan for Staffing Needs Recruiting (Attract Qualified People) Selection (Hire the Best Employee) Training & Development Performance Appraisal Compensation & Benefits Copyright © Houghton Mifflin Company. All rights reserved.14–4 Attract, Train, Retain

Copyright © Houghton Mifflin Company. All rights reserved.14–5 Employment-at-Will –A traditional view of the workplace in which an organization can fire an employee for any or no reason. –The new argument: an organization should be able to fire only people who are poor performers or who violate rules. –Recent court cases have placed limits on an organization’s ability to terminate employees by requiring just cause for firing or dismissal as part of an organization-wide cutback.

Copyright © Houghton Mifflin Company. All rights reserved.14–6 Planning for Staffing Needs Job Analysis –A systematic analysis of jobs within an organization. Job Description –A listing of the job’s duties; its working conditions; and the tools, materials, and equipment used to perform the job. Data Conversion Operators use a computer terminal to prepare mail for automated sorting equipment. They read type or handwritten addresses from a letter image on the terminal screen, and then select and type essential information so an address bar code can be applied to the letter. Job Specification –A listing of the skills, abilities, and other credentials the incumbent jobholder will need to do a job. Typing or data entry experience is required. Applicants must demonstrate the ability to type the required number of words and/or numbers per minute in a performance test. Once understand the organization’s jobs, then plan for future HR needs.

Copyright © Houghton Mifflin Company. All rights reserved.14–7 Recruiting –The process of attracting qualified persons to apply for jobs that are open. Internal Recruiting –Considering present employees as candidates for openings. Advantage: build morale and retain high-quality employees. Disadvantage: internal recruiting can create a “ripple effect” of having to successively fill vacated positions. External Recruiting –Attracting persons from outside the organization Realistic Job Preview (RJP) is considered a successful method to ensure person-job fit.

Copyright © Houghton Mifflin Company. All rights reserved.14–8 Selecting Selection Devices: Application Blanks - Used to gather information about work history, educational background, and other job-related demographic data. Must not ask for information unrelated to the job. Tests - Ability, skill, aptitude, or knowledge tests are usually the best predictors of job success. Must be validated, administered, and scored consistently. Interviews - Interviews can be poor predictors of job success due to interviewer biases. Interview validity can be improved by training interviewers and using structured interviews. Assessment Centers – Popular method for selecting managers and current employees for promotion. Two to three days of managerial exercises. Other Techniques - Physical exams, drug tests, and credit checks to screen prospective employees.

Copyright © Houghton Mifflin Company. All rights reserved.14–9 Selecting Validation: –Determining the extent to which a selection device is really predictive of future job performance.

Copyright © Houghton Mifflin Company. All rights reserved.14–10 Training and Development –Assessing training needs Determining what needs exist is the first step in developing a training plan. –Common training methods Lectures –Work well for factual material. Role play and case studies –Good for improving interpersonal relations skills or group decision- making. On-the-job and vestibule training –Facilitates learning physical skills through practice and actual use of tools

Copyright © Houghton Mifflin Company. All rights reserved.14–11 Performance Appraisal A formal assessment of how well employees do their jobs. Should be done regularly to: Validates the selection process and the effects of training. Aids in making decisions about pay raises, promotions, and training. Provides feedback to employees to improve their performance and plan future careers. Performance appraisal errors: Recency error Errors of leniency and strictness Halo error

Copyright © Houghton Mifflin Company. All rights reserved.14–12 Performance Appraisal (cont’d) Objective measures of performance Actual output (units produced), scrap rate, dollar volume of sales, and number of claims processed. Can become contaminated by outside factors resulting in “opportunity bias” where some have a better chance to perform than others. Special performance tests are a method in which each employee is assessed under standardized conditions. Performance tests measure ability and not motivation. Judgmental methods Ranking—compares employees directly with each other. Rating—compares each employee with a fixed standard. Graphic rating scales Behaviorally-anchored rating scale (BARS)

Copyright © Houghton Mifflin Company. All rights reserved.14–13 Graphic Rating Scales for a Bank Teller

Copyright © Houghton Mifflin Company. All rights reserved.14–14 Behaviorally Anchored Rating Scale

Copyright © Houghton Mifflin Company. All rights reserved.14–15 Performance Feedback –Is best given in a private meeting between the employee and immediate supervisor. –Discussion should focus on the facts: The assessed level of performance How and why the assessment was made. How the employee’s performance can be improved. –“360 degree” feedback Managers are evaluated by everyone around them. Provides a richer array of performance information on which to base an appraisal.

Copyright © Houghton Mifflin Company. All rights reserved.14–16 Compensation Determining Compensation –Compensation The financial remuneration given by the organization to its employees in exchange for their work. –Wages –Salary –Incentives What determines the level of compensation?

Copyright © Houghton Mifflin Company. All rights reserved.14–17 Determining Compensation (cont’d) –Wage-level decision The wage-level decision is a management policy decision to pay above, at, or below the going rate for labor in an industry or geographic area. Factors that affect the wage-level decision: –the size and current success of the firm. –the level of unemployment in the labor force. –Area wage surveys Can provide information about the maximum, minimum, and average wages for a particular job in a labor market. Factors such as seniority, initial qualifications, individual merit, and labor market conditions influence wage decisions

Copyright © Houghton Mifflin Company. All rights reserved.14–18 Benefits Determining Benefits –Benefits (Indirect compensation) Things of value other than compensation that an organization provides to its workers. The average company spends an amount equal to more than one-third of its cash payroll on employee benefits. A good benefit plan encourages employees to stay with the company and attracts new employees. Benefits do not necessarily stimulate high performance. –Managing benefits effectively: Shop carefully for the best-cost providers. Avoid redundant coverage. Provide only the benefits that employees want.

Copyright © Houghton Mifflin Company. All rights reserved.14–19 Managing Labor Relations Labor Relations –The process of dealing with employees when they are represented by a union. –Organizations prefer employees remain nonunion because unions limit management’s freedom. –The best way to avoid unionization is to practice good employee relations all the time by: Providing fair treatment with clear standards in pay, promotions, layoffs, and discipline. Providing a complaint and appeal system. Avoiding favoritism.

Copyright © Houghton Mifflin Company. All rights reserved.14–20 Managing Labor Relations Collective Bargaining –The process of agreeing on a satisfactory labor contract between management and labor. The contract contains agreements about wage, hours, and working conditions and how management will treat employees. Grievance Procedure –The step-wise means by which a labor contract is enforced. Grievances are filed on behalf of an employee by the union when it believes employees have not been treated fairly under the contract.