Supervision in Organizations Chapter 5 Acquiring the Right People

Learning Outcomes After reading this chapter, I will be able to: Describe the human resource management process. Discuss the influence of government regulations on human resource decisions. Contrast recruitment and downsizing options. Explain the importance of validity and reliability in selection. Describe the selection devices that work best with various kinds of jobs. Identify various training methods.

Human Resources Management (HRM) The management function that is concerned with getting, training, motivating, and keeping competent employees. Balancing the supply of employees with the demand for employees. Matching the talents and skills of employees with those required by the organization. Creating a working environment that fosters high employee performance. Meeting the pay and benefits needs of employees. Human resource management (HRM) is the management function that is concerned with getting, training, motivating, and keeping competent employees. While some large organizations have Human Resources Departments, not only small-business managers but also many managers who work for large companies must make human resource decisions: recruiting candidates, reviewing application forms, interviewing applicants, inducting new employees, appraising employee performance, and providing training.

The Strategic Human Resources Management Process To hire competent, high-performing employees who can sustain their performance over the long-term, an organization should follow an eight-step human resource management process (see the above slide). The first three steps represent employment planning, adding staff through recruitment and reducing staff by downsizing, and selecting competent employees. These new employees must be adapted to the organization (orientation) and their job skills must be kept current (training and development). The last steps in the HRM process are performance appraisals, compensation and benefits, and safety and health. These elements are used to identify employment goals, correct performance problems, and promote sustained high-level performance. The Strategic Human Resources Management Process

The Legal Environment Of HRM The impact of federal, state and local laws on HRM practices Affirmative action programs Programs that ensure that decisions and practices enhance the employment, upgrading, and retention of members of protected groups Since the middle of the 1960s, the federal government has greatly expanded its influence over HRM by enacting a wealth of regulations and laws. As a result, employers must ensure that equal employment opportunities exist for job applicants and current employees. To balance the “shoulds and should-nots” of these laws often falls within the realm of affirmative action. Today, many organizations have affirmative action programs to ensure that decisions and practices enhance the employment, promotion, and retention of members of protected groups. As a result, managers are not completely free to choose whom they hire, promote, or fire.

Major U.S. Federal Laws and Regulations Related to HRM YEAR LAW OR REGULATION 1963 Equal Pay Act 1964 Civil Rights Act, Title VII (amended in 1972) 1967 Age Discrimination in Employment Act (amended in 1978) 1973 Vocational Rehabilitation Act 1974 Privacy Act 1978 Pregnancy Discrimination Act, Title VII 1978 Mandatory Retirement Act 1986 Immigration Reform and Control Act 1988 Polygraph Protection Act 1988 Worker Adjustment and Retraining Notification Act 1990 Americans with Disabilities Act 1991 Civil Rights Act 1993 Family and Medical Leave Act 2002 Sarbanes-Oxley Act

Employment Planning Employment planning Steps in the planning process: The process by which management ensures it has the right number and kinds of people in the right places at the right time, who are capable of helping the organization achieve its goals Steps in the planning process: Assessing current human resources. Assessing future human resources needs and developing a program to meet those needs. Human Resource Planning follows three steps: (1) assessing current human resources, (2) assessing future human resource needs, (3) developing a program to meet future human resource needs. Depending on the organization’s objectives and strategies, demand for human resources is contingent upon demand for the organization’s products or services and on the levels of productivity. After estimating total revenue, management can estimate the number and kinds of human resources needed to obtain those revenues. After it has assessed current capabilities and future needs, management can estimate future human resources shortages and over-staffing. Then, it can develop a program to match these estimates with forecasts of future labor supply.

How Does a Supervisor Conduct an Employee Assessment Human resource inventory report A report listing the name, education, training, prior employer, languages spoken, and other information about each employee in the organization Job analysis An assessment of the kinds of skills, knowledge, and abilities needed to successfully perform each job in an organization Management should begin by generating a human resource inventory to assess what talents and skills are currently available in the organization. The next step is a job analysis to define the jobs within the organization and on-the-job behaviors that will promote success.

Job Analysis Components Job description A written statement of what a job holder does, how it is done, and why it is done Tasks, duties and responsibilities that the job entails Job specification A statement of the minimum acceptable qualifications that an incumbent must possess to perform a given job successfully Knowledge, skills, and abilities required of the job holder Information gathered during job analysis allows management to compose the following: a written job description that states what a jobholder must do, plus how and why it is done. A job specification is developed that states the minimum knowledge, skills, and abilities that a worker must possess to perform the job successfully. These documents can assist managers to recruit and select appropriate new hires.

Recruitment And Selection The process of locating, identifying, and attracting capable applicants Selection process The process of screening job applicants to ensure that the most appropriate candidates are hired Recruitment is the process of locating, identifying, and attracting capable employees. Many companies are finding new employees on the World Wide Web. The source that is used should reflect the local labor market, the type or level of position, and the size of the organization.

Recruiting Sources for Organizations Internal searches Advertisements (Newspaper ads are near extinction) Employee referrals (most effective) Public employment agencies Private employment agencies School placement (excellent source for entry-level positions) Temporary help services Employee leasing and independent contractors Internet (4 out of 5 companies) Are certain recruiting sources better than others? Employee referrals can produce the best applicants for two reasons. First, current employees screen applicants before referring them. Second, current employees believe that their reputations with the firm will be reflected in the candidates that they recommend; so, they reflect only those who they believe will not make them look bad. Employee referrals, however, may not generate the diversity of applicants required by EEOC laws.

Downsizing Options Firing Layoffs Attrition Transfers Reduced workweeks Early retirements Job sharing In the past decade, most large U.S. businesses, as well as many government agencies and small businesses, have been forced to shrink the size of their workforce or restructure their skill composition. Downsizing has become a relevant means of meeting the demands of a dynamic environment. The figure above presents the following major downsizing options: Firing is permanent involuntary termination. Layoffs are temporary involuntary termination. Attrition is not filling openings creating by voluntary resignations or retirement. Transfers involve moving employees either laterally or downward. Reduced workweeks require employees to work fewer hours per week, share jobs, or work part time. Early retirements provide incentives to more senior employees for retiring before their normal retirement date. Job sharing means that employees share one full-time position

How Does A Supervisor Handle Layoffs? Dealing with the “Downsizing Survivors” Provide opportunities for employees to talk to counselors about their guilt, anger, and anxiety. Provide group discussions for the survivors to vent their feelings. Implement employee participation programs such as empowerment and self-managed work teams. Downsizing is a critical human resource management issue. Many organizations have helped lay-off victims through job-help services, psychological counseling, support groups, severance pay, extended health insurance benefits, and detailed communication. However, little has been done to help those who are left behind. While lay-off victims get to start over with a clean slate, survivors do not. As a result, layoff-survivor sickness has become a workplace problem. The symptoms include insecurity, guilt, depression, stress, fear, loss of loyalty, and reduced effort. To maintain morale and productivity, management must assure individuals who are still on-the-job that they are valuable to the organization.

How Does A Supervisor Handle Layoffs? For the downsized employee: Offering a variety of job-help services Psychological counseling Support groups Severance pay Extended health insurance benefits

Selection Terms Reliability Validity The degree to which a selection device measures the same thing consistently (stability) Example: an individual consistently achieves nearly identical scores on the same exam. Validity The proven relationship between a selection device and some relevant criterion (a measure of job success) Example: superior job performance and high employment test scores When a selection device measures the same thing consistently, it exhibits reliability. To be effective predictors, selection devices must possess and acceptable level of consistency. If a selection device contains a proven relationship between the selection device and some relevant criterion it demonstrates validity. The burden is on management to verify that any selection device it uses to differentiate applicants is related to job performance.

Selection Devices Written tests Performance-simulation tests Intelligence, aptitude, ability, and interest test batteries Performance-simulation tests Selection devices that are based on actual job behaviors; work sampling and assessment centers Interviews Effective if conducted correctly Realistic job preview (RJP) Providing positive and negative information about the job and the company during the job interview Typical written tests include tests of intelligence, personality, aptitude, ability, interest, and integrity. Written tests were once widely used, however, they fell into disfavor. They were frequently characterized as being discriminatory and lacking job-related validation. Written tests have made a comeback: properly designed written tests reduce the likelihood of making poor hiring decisions and the cost of developing and validating written tests had fallen. Tests of intellectual ability, spatial and mechanical ability, perceptual accuracy, and motor ability are moderately valid predictors for semiskilled and unskilled operative jobs. Intelligence tests are reasonably good predictors for supervisory positions. Since it can be argued that intelligence and other tested characteristics can be somewhat removed from actual on-the-job performance, the use of performance simulations tests has increased. Based on job analysis data, performance-simulation tests meet the requirement of job relatedness better than do written tests. Work sampling and assessment centers are the two best known types. Because content is essentially identical to job content, performance simulation tests should minimize allegations of employment discrimination. Moreover, because of the nature of their content and the methods used to determine content, well-constructed performance-simulation tests are valid predictors. The interview can exert a disproportionate influence on the selection decision. Therefore, the person with the best interview skills often gets the job, even though he or she may not be the most qualified. But, interviews are valuable for assessing an applicant’s intelligence, level of motivation, and interpersonal skills A realistic job preview (RJP) can increase job satisfaction among employees and reduce turnover. The RJP should include both positive and negative information about the job and the company. Doing so can ensure that the applicants are well-matched to the jobs for which they are being considered and that their expectations about life on the job are realistic. As a result, those who are hired should be more committed to the organization and less likely to become problem employees.

Interviews The interview method of selection is most valid at determining: Professionalism Intelligence Level of motivation Interpersonal skills

Potential Biases in Interviews Prior knowledge about the applicant will bias the interviewer’s evaluation. The interviewer tends to hold a stereotype of what represents a good applicant. The interviewer tends to favor applicants who share his or her own attitudes. The order in which applicants are interviewed will influence evaluations. The order in which information is elicited during the interview will influence evaluations. The interview can exert a disproportionate influence on the selection decision. The following sums up research findings on interviews: Prior knowledge about the applicant will bias the interviewer. Interviewers hold stereotypes about what represents “good” applicants. Interviewers favor applicants who share their own attitudes. The order in which applicants are interviewed affects evaluations. Continued on next slide

Potential Biases in Interviews (cont’d) Negative information is given unduly high weight. The interviewer may make a decision concerning the applicant’s suitability within the first four or five minutes of the interview. The interviewer may forget much of the interview’s content within minutes after its conclusion. The interview is most valid in determining an applicant’s intelligence, level of motivation, and interpersonal skills. Structured and well-organized interviews are more reliable than unstructured and unorganized ones. The interview can exert a disproportionate influence on the selection decision. The following sums up research findings on interviews: Negative information is given unduly high weight. Interviewers determine an applicant’s suitability in the first five minutes of the interview. Interviewers forget much of an interview’s content within minutes after it has been ended. Interviews are most valid in determining an applicant’s intelligence, motivation, and interpersonal skills. Structured, well organized interviews are more effective than those that are loosely organized.

Making Interviews More Effective Behavioral (Situation) Interview An interview in which candidates are observed not only for what they say, but how behave to determine how they might behave under stress. Candidates are presented a complex situation and asked to “deal with” it. Research indicates that behavioral interviews are nearly eight times more effective than other interview formats.

Introducing Employee to the Organization Employee Orientation The introduction of a new employee to the job and the organization Objectives of orientation To reduce the initial anxiety all new employees feel as they begin a new job To familiarize new employees with the job, the work unit, and the organization as a whole To facilitate the outsider–insider transition Besides having the requisite knowledge, skills, and abilities to perform on the job, new hires must be acclimated to the organization’s culture (orientation) and trained to do the job (training). The major objectives of employee orientation are to reduce the anxiety level that all new employees feel; to familiarize them with the job, the work unit, and the organization; and to facilitate the outsider-insider transition. Successful orientation maximizes new hire on-the-job success and minimizes turnover.

Training Employee training A learning experience in that it seeks a relatively permanent change in employees such that their ability to perform on the job improves. Changing skills, knowledge, attitudes, or behavior Changing what employees know, how they work; or their attitudes toward their jobs, co-workers, managers, and the organization Fact: U.S. business firms spend over $30 billion a year on formal training Employee training is a learning experience that involves changing skills, knowledge, attitudes, or behavior. Managers can be alerted to training needs by numerous signals: for instance, productivity related signals like decreases in output and quality or increases in accidents; and, future elements like jobs that have been redesigned or technological breakthroughs.

Determining if Training Is Needed Generating a new training program is easy. But if the training effort is not evaluated, any employee-training efforts can be rationalized. Training programs are typically evaluated by participants or managers. While their reactions are easy to obtain, they are often not valid, because their comments may be influenced by factors that have little to do with the effectiveness of the training—difficulty, entertainment value, or the personality characteristics of the instructor. Training must also be evaluated in terms of how much the participants learned, how well they are using their new skills on the job, and whether the training program achieved its desired results.

Typical Training Methods On-the-Job Training Methods Job rotation Understudy assignments Off-the-Job Training Methods Classroom lectures Films and videos Simulation exercises Vestibule training Most training takes place on the job. Such training is convenient and cost effective. But, on-the-job training can disrupt the workplace, and some skills are too complex to learn on the job. In such cases, training should take place outside of the work setting. Popular on-the-job methods include job rotation and understudy assignments. Job rotation uses lateral transfers to allow employees to work at different jobs. New employees frequently learn their jobs from a seasoned veteran. In the trades, this is called an apprenticeship, in white-collar jobs, an understudy assignment. Both methods can help workers learn technical skills. A number of off-the-job methods are popular. Classroom lectures are well suited for conveying specific information. Films and videos can demonstrate skills not easily illustrated by other methods. Simulation exercises, such as case analyses, experiential exercises, role playing, and group interaction are excellent for teaching interpersonal and problem-solving skills. Vestibule training allows employees to learn their jobs on the same equipment they will be using at work. Exhibit 6.7

Compensation And Benefits Compensation administration Determining a cost-effective pay structure that will attract and retain competent employees, provide an incentive for them to work hard, and ensure that pay levels will be perceived as fair. Factors influencing pay levels Employee’s job Kind of business Environment surrounding the job Geographic location Employee performance levels and seniority. How does management decide who will get paid $12.65 an hour and who will receive $325,000 per year? The answer lies in compensation administration: the process of determining a cost-effective pay structure that attracts and retains competent employees, provides incentives for hard work, and ensures that pay levels will be perceived as fair. The primary determination of pay is the kind of job an employee performs: that is, the higher the skills, knowledge, and abilities—and the greater the authority and responsibility—the higher the pay. Other factors which influence employee compensation are the nature of the business, the environment surrounding the job, geographic location, and employee performance levels and seniority. Irrespective of the foregoing factors, there is one other most critical factor: management’s compensation philosophy.

Benefits Employee benefits Types of benefits Nonfinancial rewards designed to enrich employees’ lives Types of benefits Social Security Workers’ and unemployment compensations Paid time off from work Life and disability insurance Retirement programs health insurance As nonfinancial rewards intended to enrich employee’s lives, today’s employee benefits programs seek to provide something that each employee can value. The scope of these benefits varies from social security and worker’s compensation to paid vacation time, retirement plans, and life, health, or disability insurance.