Managing Human Resources Chapter 9 1 1

Chapter 9 Learning Goals What is the human resource management process? How are human resource needs determined? How do human resource managers find good people to fill the jobs? What is the employee selection process? What types of training and development do organizations offer their employees?

Chapter 9 Learning Goals (cont’d.) What is a performance appraisal? How are employees compensated? What is organizational career management? What are the key laws and federal agencies affecting human resource management? What trends are affecting human resource management?

Learning Goal 1 What is the human resource management process? Job analysis and HR planning Employee recruitment and selection Employee training, performance appraisal, and compensation Ends when employee leaves organization

Human Resource Management The process of hiring, developing, motivating, and evaluating employees to achieve organizational goals

Human Resource Management Process Strategies & objectives of the organization Job analysis & design HR planning & forecasting Employee recruitment Employee selection Training & development Performance planning & evaluation Compensation & benefits Organizational career management

Learning Goal 2 How are human resource needs determined? Job analysis Studying a job to determine its tasks and duties for Setting pay Determining employee job performance Specifying hiring requirements Designing training programs Job description Lists the tasks and responsibilities of the job Job specification Describes skills, knowledge, and abilities needed to fill the job described in the job description

HR planning & forecasting Job analysis & design HR planning & forecasting Employee recruitment Employee selection Job Analysis: A study of the tasks required to do a particular job well job description job specification 2 2

HR planning & forecasting Job analysis & design HR planning & forecasting Employee recruitment Employee selection Demand forecast: Determining the number of employees needed by some future time Supply forecast (internal): Estimating the number of current employees who will be available to fill various jobs at some future time 2 2

Labor Supply & Demand Labor shortage in the 1990s has turned the tables for employers some individuals seeking work advertise themselves as free agents employers bid for interviews with free agents US Department of Labor estimates there are 10 million free agents Source: Entrepreneur, Jan. 2000, p. 16. 2 2

Learning Goal 3 How do human resource managers find good people to fill the jobs? Most firms begin by trying to fill the job from within If internal candidates are not available, an external search begins Local media is used to find workers who are Nontechnical Unskilled Nonsupervisory Highly trained recruits are found by using College recruiters Executive search firms Job fairs Company Web sites

HR planning & forecasting Job analysis & design HR planning & forecasting Employee recruitment Employee selection Recruitment: Attempt to find and attract qualified applicants in the external labor market job fair 2 2

Employee Talent Ratings made by Fortune magazine: Most admired employee talent: Microsoft Cisco Systems Coca-Cola Least admired employee talent: MedPartners Shoney’s Trump Hotels & Casinos Source: Fortune, Mar. 1, 1999, p. 70. 2 2

Learning Goal 4 What is the employee selection process? Applicant submits an application or résumé Receives a short, structured interview Applicant may be asked to take an aptitude, personality, or skills test Selection interview In-depth discussion of applicant’s Work experience, skills, and abilities Education and career interests Applicants seeking professional or managerial positions may be interviewed by several people Successful applicants may be asked to undergo a physical exam

HR planning & forecasting Job analysis & design HR planning & forecasting Employee recruitment Employee selection Selection: The process of determining which people in the applicant pool possess the qualifications necessary to be successful on the job 2 2

Steps of the Selection Process Initial screening Employment testing Selection interview Background and reference checks Physical examination Decision to hire 2 2

Learning Goal 5 What types of training and development do organizations offer their employees? Training and development programs are designed to increase employees’ knowledge, skills, and abilities to foster job improvement Formal training Development programs Job rotation Executive education programs Mentoring Special project assignments

Training and Development: Training & development Performance planning & evaluation Compensation & benefits Training and Development: Activities that provide learning situations in which an employee acquires additional knowledge or skills to increase job performance on-the-job training off-the-job training 2 2

Training and Development Forecasting International predicts that the need for life-long learning will characterize business in the future Implications: need for higher training budgets need for constant retraining due to turnover use of technology for just-in-time training training as a motivational & retention tool Source: HR News, Dec. 1999, pp. 18-20. 2 2

Learning Goal 6 What is a performance appraisal Compares an employee’s actual performance with the expected performance Typically used to determine an employee’s Compensation Training needs Advancement opportunities

Performance planning & evaluation process: Training & development Performance planning & evaluation Compensation & benefits Performance planning & evaluation process: Performance planning: Setting standards & expectations Employee job task behavior Performance evaluation Rewards & job changes 2 2

Performance Evaluation 360° Evaluation: performance feedback that combines self-appraisal with ratings made by coworkers at the same level, above, and below the target person in the managerial hierarchy Advantages: provides a well-rounded view avoids individual bias can have more impact than a single source can establish consensus

Learning Goal 7 How are employees compensated? Direct pay Indirect pay Hourly wage or monthly salary paid to an employee May include bonuses and profit shares Indirect pay Various benefits and services Required by law: unemployment and worker’s compensation, Social Security Optional: paid vacations and holidays, pensions, health and other insurance products, employee wellness programs, college tuition reimbursement

Types of Compensation or Pay: Training & development Performance planning & evaluation Compensation & benefits Types of Compensation or Pay: hourly wages salaries piecework and commission accelerated commission schedule bonus profit sharing fringe benefits 2 2

Learning Goal 8 What is organizational career management? Facilitation of employee job changes including Promotions Upward move with more authority, responsibility and pay Transfers Horizontal move in the organization Layoffs Temporary separation arranged by the employer, usually when business is slow Retirements Permanent separation that ends one’s career

Types of Career Change: Organizational career management 1. Job change within the organization transfer promotion demotion 2. Separation from the organization layoff termination resignation retirement 2 2

Learning Goal 9 What are the key laws and federal agencies affecting human resource management? Federal law prohibits age, race, gender, color, national origin, religion or disability discrimination Americans with Disabilities Act bans discrimination against disabled workers Family and Medical Leave Act requires employers to provide employees up to 12 weeks of unpaid leave a year Other Federal agencies dealing with HR administration: Equal Employment Opportunity Commission (EEOC) Occupational Safety and Health Administration (OSHA) Office of Federal Contract Compliance Programs (OFCCP) Wage and Hour Division of the Department of Labor

Laws Affecting Human Resources 1. Fair Labor Standards Act (1938) 2. Equal Pay Act (1963) 3. Occupational Health & Safety Act (1970) 4. Americans with Disabilities Act (1990) 2 2

Learning Goal 10 What trends are affecting human resource management? Women comprise 45% of the American workforce Growing numbers of dual-career couples Companies are facing issues like sexual harassment and nonwork issues such as child and elder care Workers change jobs 3 to 5 times during their career Lessens loyalty between employer and employee American workforce is becoming more diverse Companies are offering diversity training and mentoring of minorities

Trends in Human Resources 1. Social change More women in the work force More people changing jobs 2. Demographics More diverse work force 3. Advancing Technology enables more outsourcing enables more telecommuting 4. Global Competition adaptable employees, need for language training & cultural orientation 2 2

Amount of Time MBAs Expect to Stay in Their First Job People Changing Jobs Amount of Time MBAs Expect to Stay in Their First Job 1 to 2 years 5 or more years 2 to 3 years 4 to 5 years 3 to 4 years Source: Fortune, Mar. 16, 1998. 2 2