Human Resource Management CHAPTER 12

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 2 Learning Objectives Explain the role of human resource management in organizational strategic planning. Describe federal legislation and societal trends that influence human resource management. Explain what the changing social contract between organizations and employees means for workers and human resource managers. Show how organizations determine their future staffing needs through human resource planning.

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 3 Learning Objectives (contd.) Describe the tools managers use to recruit and select employees. Describe how organizations develop an effective workforce through training and performance appraisal. Explain how organizations maintain a workforce through the administration of wages and salaries, benefits, and terminations.

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 4 The Strategic Role of Human Resource Management All managers are resource managers Employees are viewed as assets Matching process, integrating the organization’s goals with employees’ needs How a company manages its workforce may be single more important factor in sustained competitive success

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 5 Current Strategic Issues Becoming more competitive globally Improving quality, productivity, & customer service Managing mergers & acquisitions Applying new information technology for e-business Determine a company’s need for skills and employees

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 6 Strategic Human Resource Management Goals Develop an Effective Workforce Training Development Appraisal Maintain an Effective Workforce Wage and salary Benefits Labor relations Terminations HRM planning Job analysis Forecasting Recruiting Selecting Attract an Effective Workforce Company Strategy HRM Environment Legislation Trends in society International events Changing technology Exhibit 12.1

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 7 Environmental Influences on HRM Competitive Strategy – Building Human Capital – Globalization – Information Technology Federal Legislation

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 8 Globalization IHRM = addresses the complexity that results from recruiting, selecting, developing, and maintaining a diverse workforce on a global scale

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 9 Information Technology Human resource information technology = an integrated computer system designed to provide data and information used in HR planning and decision making Traditional HR to e-HR significantly affected every area of human resource management Some organizations are close to a paperless HRM system – saves time, money, frees staff

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 10 Federal Legislation Discrimination = hiring or promoting of applicants based on criteria that are not job relevant Affirmative action = policy requiring employers to take positive steps to guarantee equal employment opportunities for people within protected groups

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 11 Major Federal Laws - HRM Equal Opportunity/Discrimination Laws Compensation/Benefits Laws Health/Safety Laws Exhibit 12.3

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 12 The Changing Social Contract New ContractOld Contract Employee Employer Employability, personal responsibility Partner in business improvement Learning Job security A cog in the machine Knowing Continuous learning, lateral career movement, incentive compensation Creative development opportunities Challenging assignments Information and resources Traditional compensation package Standard training program Routine jobs Limited information SOURCE: Based on Louisa Wah, “The New Workplace Paradox “ Management Review, January 1998,7; and Douglas T. Hall and Jonathan B. Moss, “The New Protean Career Contract: Helping Organizations and Employees Adapt,” Organizational Dynamics, winter 1998, Exhibit 12.4

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 13 HR Issues in the New Workplace Employer of choice Teams and Projects Temporary Employees Technology Work-Life Balance Downsizing

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 14 HR Issues in the New Workplace An employer of choice is a company that is highly attractive to potential employees because its human resource practices focus on both – Tangible benefits and – Intangible benefits Employer of Choice

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 15 HR Issues in the New Workplace Teams and Projects – major trend in today’s workplace With emphasis on projects, distinctions between job categories and descriptions are collapsing Many of today’s workers straddle functional & departmental boundaries; handle multiple tasks/responsibilities Virtual team = made up of members who – are geographically or organizationally dispersed, – rarely meet face to face, and – do their work using advance information technologies. Teams and Projects

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 16 HR Issues in the New Workplace In opening years of the 21 st century, largest employer in U.S. was a temporary employment agency, Manpower, Inc. Temporary Employees do everything from data entry to interim CEO Contingent workers = people who work for an organization, but not on a permanent or full-time basis, including temporary placements, contracted professionals, or leased employees Temporary Employees

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 17 HR Issues in the New Workplace Telecommuting and virtual teams are related trends Telecommuting = using computers and telecommunications equipment to perform work from home or another remote location Work anywhere - wireless Internet devices, laptops, cell phones, fax machines Extreme telecommuting = people live nd work in countries far away from the organization’s physical location Technology

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 18 HR Issues in the New Workplace Telecommuting is one way organizations help employees lead more balanced lives Flexible scheduling important in today’s workplace – 27% of workforce/flexible hours Broad Work-Life Balance initiatives – critical retention strategy – on-site gym & childcare, paid leaves & sabbaticals Work-Life Balance Many European companies ahead of U.S. companies

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 19 HR Issues in the New Workplace Downsizing = intentional, planned reduction in the size of a company’s workforce Managers can smooth the downsizing process – Regularly communicating with employees – Providing them with as much information as possible – Providing assistance to workers who will lose their jobs – Using training and development for remaining employees Downsizing

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 20 HR Issues in Attracting an Effective Workforce HR issues present many challenges for organizations and HR managers as they work toward the three primary HR goals ● Attracting ● Developing ● Maintaining an effective workforce

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 21 Matching Model An employee selection approach in which the organization and the applicant attempt to match each other’s needs, interests, and values Attracting an Effective Workforce

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 22 Attracting an Effective Workforce Choose Recruiting Sources Want ads Headhunters Internet Choose Recruiting Sources Want ads Headhunters Internet HR Planning Retirements Growth Resignations Select the Candidate Application Interview Tests Welcome New Employee Employee Contributions Ability Education Creativity Commitment Expertise Company Inducements Pay and benefits Meaningful work Advancement Training Challenge Matching Model Match with Company Needs Strategic goals Current & future competencies Market changes Employee turnover Corporate culture Employee Needs Stage of career Personal values Promotion aspirations Outside interests Family concerns Match with Exhibit 12.5

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 23 Human Resource Planning Forecasting of human resource needs and the projected matching of individuals with expected vacancies ● ? = New technologies emerging ● ? = Volume of business likely next 5-10 years ● ? = Turnover rate, how much is avoidable, if any

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 24 Recruiting Recruiting = activities or practices that define the desired characteristics of applicants for specific jobs ● Internal – promote-from-within policies used by many to fill high-level positions ● External = recruiting newcomers from outside has advantage of multiple sources ● E-cruiting = use of Internet - fastest- growing approach to recruiting

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 25 Basic Building Blocks of HR Management Job Analysis Job Description Job Specification

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 26 Selecting Selection = process of determining the skills, abilities, and other attributes a person needs to perform a particular job Validity = relationship between an applicant’s score on a selection device and his or her future job performance

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 27 Selecting (contd.) Application form - device used for collecting information about an applicant’s education, previous job experience, and other background characteristics Research = biographical information inventories can validly predict future job success

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 28 Interviewing An Applicant Know what you want Prepare a road map Use open-ended questions Do not ask irrelevant questions Do not rush interview Do not rely on your memory

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 29 Reasons For Not Asking About Home Ownership ● Might adversely affect applicants chances at the job ● Minorities and women may be less likely to own a home ● Home ownership is probably unrelated to job performance

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 30 Interview as Predictor of Success Interview is not generally a valid predictor of job performance – has high face validity as a selection tool Panel interviews – candidate meets with several interviewers who take turns asking questions – increases interview validity Computer-based interviews - complement traditional interviewing information

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 31 Inappropriate or Illegal Questions Race-related questions Age Religion Gender National origin Marital/family status Employment Applications and Interviews

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 32 Testing and Assessment Employment Test = written or computer- based test designed to measure a particular attribute such as intelligence or aptitude Assessment Center = technique for selecting individuals with high managerial potential based on their performances on a series of simulated managerial tasks

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 33 Developing an Effective Workforce Training and development = planned effort to facilitate employees’ learning of job-related skills and behaviors $ 51.1 billion spent in 2005 On-the-job training = an experienced employee “adopts” a new employee to teach him or her how to perform job duties Cross training Mentoring Following selection, next goal of HRM is to develop employees

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 34 Performance Appraisal Process of observing and evaluating an employee’s performance, recording the assessment, and providing feedback to the employee Steps ● Observing and assessing performance ● Recording the assessment ● Providing feedback to employee

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 35 Making Performance Appraisals A Positive Force 1. The accurate assessment of performance through the development and application of assessment systems such as a rating scale 2. Training managers to effectively use the performance appraisal interview to provide feedback that reinforces good performance and motivate employee development

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 36 Assessing Performance Accurately 360° Feedback Process Performance Evaluation Errors – Stereotyping – Halo effect – BARS – Behaviorally-anchored rating scale

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 37 Maintaining an Effective Workforce Compensation – Wage and Salary Systems – Compensation Equity – Pay for Performance Benefits Termination

Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 38 Termination  Employees who are poor performers can be dismissed  Employers can use exit interviews in a positive manner Value of termination for maintaining an effective workforce is two fold