1.Explain the importance of employee recruitment and list some useful sources for finding suitable applicants. 2.Identify the steps in evaluating job applicants. 3.Describe the roles of training and development for both managerial and nonmanagerial employees. 4.Explain the various types of compensation plans, including the use of incentive plans. 5.Discuss the human resource issues of co-employment, legal protection, labor unions, and the formalizing of employer–employee relationships. 20–2 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Recruiting Personnel The Need for Quality EmployeesThe Need for Quality Employees  Employee performance directly or indirectly affects the capability of the firm to service customer needs.  Employee performance affects profitability.  Payroll costs affect firm’s bottom line.  Quality of employees determines the long-term competitive potential of the firm. 20–3 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

The Lure of Entrepreneurial Firms Advantages of Employment in Small FirmsAdvantages of Employment in Small Firms  Quicker movement to decision-making levels of management  Greater managerial freedom  More opportunities for broad-based managerial experience  Flexibility in work scheduling and job sharing 20–4 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Sources of Employees © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 20–5 Internet recruiting Public employment offices Employee referrals Walk-ins Private employment agencies Help-wanted advertising Schools Executive search firms Temporary help agencies

Diversity in the Workforce Workforce DiversityWorkforce Diversity  Differences among employees in terms of such dimensions as gender, age, and race.  Diversity is increasing with higher proportions of women, older workers, and racial minorities entering the workforce. 20–6 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Job Descriptions Job DescriptionJob Description  A summary outlining the essential duties required by a specific job  Aids in personnel recruitment.  Helps focus employees on their work.  Provides direction in training.  Serves as the basis for performance review. Job SpecificationJob Specification  A list of the knowledge, skills and abilities needed by the job holder to successfully perform a specific job  Aids in selecting the most qualified job applicant. 20–7 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Evaluating Prospects and Selecting Employees 20–8 1 Test the applicant Interview the applicant Use application forms Check references and background information 234 Require physical examinations 5 Steps in Recruiting Employees © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Evaluating Job Applicants © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 20–9 Telephone Screening Credit Checks Skills Assessment Face-to-Face Interviews Drug Screening Motor Vehicle Record Checks Background Checks Personality and Behavior Testing Physical Examinations

Testing the Applicant Job-Related TestingJob-Related Testing  The U.S. Supreme Court has upheld the Equal Employment Opportunity Commission’s requirement that any test used in making employment decisions must be job-related. ValidityValidity  The extent to which a test assesses true job performance ability. ReliabilityReliability  The consistency of a test in measuring job performance ability. 20–10 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Training and Developing Employees Purposes of Training and DevelopmentPurposes of Training and Development  Prepare new recruit to perform the duties of the job.  Improve the performance of current employees.  Prepare employees for career advancement.  Improve morale of current employees.  Serve as an inducement to potential applicants. 20–11 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Types of Training and Development © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 20–12 Orientation of New and Current Personnel Development of Managers and Professionals Training to Improve Quality Training of Nonmanagerial Employees Training and Development

20–13 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Steps in Job Instruction Training PREPARE EMPLOYEES Put employees at ease. Place them in appropriate jobs. Find out what they know. Get them interested in learning PRESENT THE OPERATIONS Tell, show, and illustrate the task. Stress key points. Instruct clearly and completely TRY OUT PERFORMANCE Have employees perform the task. Have them tell, show, and explain. Ask employees questions and correct any errors. FOLLOW UP Check on employees frequently. Tell them how to obtain help. Encourage questions. 20.1

From Training to Implementation Suggestions for Training Efforts:Suggestions for Training Efforts:  Put it (an employee’s personal action plan) on paper  Measure results (increased productivity) of training  Involve peers to support and reinforce training  Involve supportive superiors  Provide access to experts to fill in training gaps 20–14 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Development of Managerial and Professional Employees Determining the need for trainingDetermining the need for training Creating a plan for trainingCreating a plan for training Setting a timetable for trainingSetting a timetable for training Providing employee counselingProviding employee counseling 20–15 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Compensation and Incentives for Employees Wage or Salary LevelsWage or Salary Levels  Competitive compensation  Time- or output-based compensation Financial IncentivesFinancial Incentives  Commission systems  Piecework  Group incentives and team awards  Bonus and profit-sharing plans 20–16 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Compensation and Incentives for Employees (cont’d) Performance-Based Compensation PlansPerformance-Based Compensation Plans  Keys to developing an effective bonus plan:  Set attainable goals.  Include employees in planning.  Keep updating goals. 20–17 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Stock Incentives Employee Stock Ownership Plans (ESOPs)Employee Stock Ownership Plans (ESOPs)  Plans through which a firm is sold either in part or in total to its employees.  Employees’ performance is motivated by their sharing of ownership in the firm.  Owners can cash out and withdraw without selling to outsiders.  ESOPs offer tax advantages to owners and employees. 20–18 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Compensation and Incentives for Employees (cont’d) Employee BenefitsEmployee Benefits  Supplements to compensation designed to be attractive and beneficial to employees.  Benefits are a substantial portion of payroll costs.  Small firms tend to provide fewer benefits.  Use of flexible benefit plans is growing.  Small firms are increasingly outsourcing the administration of their benefits programs. 20–19 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Special Issues in HRM Co-Employment AgreementsCo-Employment Agreements  Outsourcing administrative processes to a fee-for- services organization (PEO) that handles payroll and benefit administration for those employees.  Allows small firms to provide improved employee benefits.  Makes small firms subject to additional government regulations affecting larger firms.  Professional Employment Organization (PEO)  A company that sets up co-employment agreements, assisting businesses with the administrative demands of keeping employees on their payrolls. 20–20 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Legal Protection of Employees Civil Rights Act (1964) as amendedCivil Rights Act (1964) as amended  Legislation prohibiting discrimination based on race, color, religion, sex, or national origin.  Applies to all employers of more than 15 people. Americans with Disabilities Act (1990)Americans with Disabilities Act (1990)  Legislation prohibiting discrimination against persons with disabilities; requires firms make “reasonable accommodations” in the employment of disabled persons. 20–21 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Legal Protection of Employees (cont’d) Sexual harassment policy guidelines:Sexual harassment policy guidelines:  Establish clear policies and procedures regarding sexual harassment in the workplace.  Require employees to report incidents of harassment to management immediately.  Investigate any and all complaints of sexual harassment fairly and thoroughly.  Take appropriate action against violators and maintain claimant confidentiality.  If a lawsuit is to be filed, contact an attorney. 20–22 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Legal Protection of Employees (cont’d) Occupational Safety and Health Act (1970)Occupational Safety and Health Act (1970)  Legislation that regulates the safety of workplaces and work practices.  Created the Occupational Safety and Health Administration (OSHA) to establish and enforce health and safety standards. Fair Labor Standards Act (FLSA)Fair Labor Standards Act (FLSA)  Federal law that establishes a minimum wage and provides for overtime pay for more than 40 hours per week. 20–23 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Legal Protection of Employees (cont’d) Family and Medical Leave Act (1993)Family and Medical Leave Act (1993)  Firms must provide up to 12 weeks of unpaid leave for childbirth and other family needs.  Firms must continue health-care coverage during the leave and guarantee that employee can return to the same or a comparable job. Labor UnionsLabor Unions  Participating in collective bargaining for labor contracts.  Implementing HR policies to minimize employees’ desire for organization and representation. 20–24 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Special Issues in HRM (cont’d) Formalizing Employer-Employee RelationshipsFormalizing Employer-Employee Relationships  Standardizing personnel policies and procedures  Avoiding the paralytic effects of excessive regulation while avoiding the increasing costs of informality  Establishing a performance review system based on SMART goals:  Specific  Measurable  Achievable  Realistic  Time-bound 20–25 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Special Issues in HRM (cont’d) The Need for a Human Resource ManagerThe Need for a Human Resource Manager  Conditions favoring appointment of an HR manager:  A substantial number of employees (100 or more)  Unionized employees  High labor turnover rate  Need to recruit and select skilled/professional employees  Considerable need to train supervisors or operative employees  Poor employee morale  Strong competition for personnel 20–26 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Key Terms behavioral interview Civil Rights Act co-employment employee benefits employee training Fair Labor Standards Act (FLSA) Family and Medical Leave Act flexible benefit programs (cafeteria plans) headhunter human resource management (HRM) job description Job Instruction Training job specification management development Occupational Safety and Health Act on-the-job training piecework professional employer organization (PEO) reliability validity workforce diversity 20–27 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.