© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. Chapter 2 Understanding the Legal and Environmental Context of HRM

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. Chapter Outline 2-1 Legal Issues in the Workplace 2-2 Environmental Issues in the Workplace

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1 Legal Issues in the Workplace HRM laws address:  Specific employment practices.  Broader issues such as employment discrimination, safety, privacy, and employees’ rights to due process.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity Passed by Congress in the 1960s. Designed to eradicate employment discrimination based on race, color, sex, religion, national origin, age, and disability; these categories are referred to as protected classifications. Protected groups are sub-categories of people within each protected classification.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

2-1a Equal Employment Opportunity (cont.) Civil Rights Act of 1964 (Title VII): Entitles victims to relief in the form of legal costs and back pay. Civil Rights Act of 1991: Addresses the issue of mixed-motive cases, in which employment decision is partly on a legitimate motive and partly on a discriminatory one. Pregnancy Discrimination Act of 1978 Immigration Reform and Control Act of 1986 Age Discrimination in Employment Act of 1967 Genetic Information Nondiscrimination Act (2008)

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity (cont.) Americans with Disabilities Act of 1990 (Title I)  An individual is considered disabled if a physical or mental impairment “substantially limits” one or more major life activities.  To win a complaint, an individual must establish that, with accommodation, he or she is qualified to perform the essential functions of the job.  The employer must prove that the candidate is unable to perform the job satisfactorily even with reasonable accommodation or that the reasonable accommodation would impose “undue hardship.”

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity (cont.) Two types of discrimination:  Intentional discrimination or disparate treatment -Treating people unfairly based on their membership in a protected group. -May also occur as the result of trying to ‘‘protect’’ the group members’ interests.  Unintentional discrimination or disparate impact -Any practice without business justification that has unequal consequences for people of different protected groups.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity (cont.) Discrimination and the courts  The plaintiff must establish a prima facie case of discrimination.  To establish a prima facie case, the plaintiff must present evidence that makes the employer’s actions appear discriminatory.  When a plaintiff establishes a prima facie case, the burden shifts to the employer to rebut the case by presenting evidence that justifies the fairness of its actions.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity (cont.) Establishing a prima facie case of intentional discrimination  Restricted company policy: Plaintiff proves that the company has a formal policy that restricts the selection of a protected group.  Discriminatory remarks: Plaintiff must produce evidence that certain biased remarks were made by the employer regarding the protected group.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity (cont.) Establishing a prima facie case of intentional discrimination – McDonnell-Douglas test:  Used to infer the presence of discriminatory intent when more direct evidence of discrimination is lacking.  Requires the plaintiff to show that he or she: -Belongs to the protected group in question. -Has applied for and is qualified for the job for which the employer was seeking applicants. -Was rejected. -After rejection, the position remained open or was filled by someone who was not a member of that protected group.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity (cont.) Establishing a prima facie case of unintentional discrimination – The four-fifths rule:  Helps determine whether between-group differences in hiring rates are large enough to be important.  Is calculated by comparing the hiring rate of the “disadvantaged” protected group with the rate of the “advantaged” group.  A prima facie case of discrimination is established when the hiring rate of the former group is less than four-fifths of the latter group.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity (cont.) Rebutting a prima facie case of intentional discrimination  Restricted company policy -When the employer has a policy that excludes an entire protected group, it uses the BFOQ defense. -BFOQ refers to "bona fide occupational qualification.” -The employer argues that it purposely discriminated against all members of a group for reasons including all or nearly all, authenticity, propriety, and safety.  Discriminatory remarks: Requires the employer to argue that the remarks were not very derogatory or that the person who made the remarks had no influence on the hiring decision.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity (cont.) Rebutting a prima facie case of intentional discrimination – The McDonnell-Douglas test  Employer must present evidence showing that its employment decision was based on legitimate, nondiscriminatory reasons.  The plaintiff could still win the case if they prove that the reason offered by the employer was merely a pretext or an excuse; the “real” reason for the action was discrimination.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1a Equal Employment Opportunity (cont.) Rebutting a prima facie case of unintentional discrimination – The four-fifths rule  A firm must demonstrate that the procedure in question is a business necessity.  According to the CRA of 1991, when several selection devices are used, only those causing the disparate impact must be justified.  The exception to this rule occurs when the elements of a respondent’s decision-making process are not capable of separation for analysis; the decision- making process may be analyzed as one employment practice.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1b Affirmative Action Affirmative action programs aim to redress past discrimination against protected classes and correct racial and gender imbalances in the workforce. It attempts to accomplish this aim through initiatives that are ‘‘color-conscious.’’ Most firms are under no obligation to implement affirmative action programs.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1b Affirmative Action (cont.) Firms voluntarily implementing affirmative action believe that they can:  Attract and retain a larger and better pool of applicants.  Create a more diverse workforce.  Avoid discrimination lawsuits.  Improve the firm’s reputation within the community and its consumer base.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1b Affirmative Action (cont.) Affirmative action is implemented through two primary steps:  Utilization analysis  Developing an affirmative action plan (AAP)

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1b Affirmative Action (cont.) Utilization analysis  A statistical procedure that compares the percentage of each protected group for each job category within the organization to that in the available labor market.  If the organizational percentage is less than the labor market percentage, the group is classified as being “underutilized.”

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-1b Affirmative Action (cont.) Affirmative action plan (AAP)  Affirmative action plans target the underutilized protected groups.  An AAP is a written statement that specifies how the organization plans to increase the utilization of targeted groups.  The AAP consists of three elements – goals, timetables, and action steps.  An AAP practice sometimes involves the use of preferential treatment.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

2-2 Environmental Issues in the Workplace Cultural diversity The changing nature of work Mergers and takeovers Corporate downsizing

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-2a Cultural Diversity in the Workplace To manage diversity effectively, an organization must be sensitive to the needs of new workers and seek to identify and eliminate barriers, if any. Diversity training makes employees aware of their biases regarding minority groups and teaches them ways to overcome those biases.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-2a Cultural Diversity in the Workplace (cont.) Breaking the “glass ceiling” – Helping minorities and women reach their career goals, and implementing promotion procedures that are less subject to bias. Meeting the needs of older employees – Compensating for their diminishing skills, and placing them on jobs relying less on physical prowess and more on maturity and experience. Implementing work and family programs – Introduction of nontraditional work arrangements such as telecommuting, flextime, and job sharing.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. Telecommuting: A nontraditional work arrangement in which employees work at home. Limitations of telecommuting include lack of supervision and unavailability for meetings. Flextime: Setting up a flexible work schedule in which workers put in their eight hours each day but choose their starting and ending times. Job sharing: An alternate work schedule in which a full-time job is shared by two people. 2-2a Cultural Diversity in the Workplace (cont.)

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

2-2b The Changing Nature of Work The changing nature of work is attributed to technological changes and movement of jobs from manufacturing to service. Training programs are initiated to provide employees with the skills needed to move into more technical and/or service-oriented jobs. Firms are also offering literacy training programs to help workers overcome deficiencies in their basic skills before they can master the more advanced skills.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-2c Mergers and Takeovers Occurrence of a merger or takeover can create problems like increased voluntary turnover and organizational conflict. HRM practices that help restore employee loyalty and organizational commitment are increasingly important.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 2-2d Corporate Downsizing The process of reducing the workforce size, called downsizing, usually takes the form of massive layoffs. Factors triggering downsizing:  Decline or crisis in the firm.  Advent of technological advances.  Organizational restructuring, in which the structure of a firm is modified to become less hierarchical by cutting out the “layer” of middle management. Downsizing can lead to poor employee morale and voluntary turnover.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.

2-2d Corporate Downsizing (cont.) One of management’s most difficult tasks is to reestablish morale and motivation following layoffs. The management team must draft a new corporate mission statement that conveys the organization’s new vision and goals in an optimistic way. To help employees who have lost their jobs, employers can provide services such as outplacement, relocation assistance, and personal and family counseling.