Chapter Learning Objectives After studying this chapter you should be able to: Describe the environmental context of human resource management, including its strategic importance and its relationship with legal and social factors. Discuss how organizations attract human resources, including human resource planning, recruiting, and selecting. Describe how organizations develop human resources, including training and development, performance appraisal, and performance feedback. © 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.

Chapter Learning Objectives (cont’d) After studying this chapter you should be able to: Discuss how organizations maintain human resources, including the determination of compensation and benefits and career planning. Discuss the nature of diversity, including its meaning, associated trends, impact, and management. Discuss labor relations, including how employees form unions and the mechanics of collective bargaining. Describe the issues associated with managing knowledge and contingent and temporary workers. © 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 Environmental Context of Human Resource Management Human Resource Management (HRM) The set of organizational activities directed at attracting, developing, and maintaining an effective work force. The Strategic Importance of HRM Human capital reflects the organization’s investment in attracting, retaining, and motivating an effective workforce critical for effective organizational functioning. © 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 Legal Environment of HRM Equal Employment Opportunity Compensation and Benefits Labor Relations Health and Safety Title VII of Civil Rights Act of 1964 Fair Labor Standards Act of 1938 (FLSA) National Labor Relations Act of 1935 (Wagner Act) Occupational Safety and Health Act of 1970 (OSHA) Pregnancy Discrimination Act Equal Pay Act of 1963 Labor Management Relations Act of 1947 (Taft-Hartley Act) Age Discrimination in Employment Act Employee Retirement Income Security Act of 1974 (ERISA) Americans with Disabilities Act Family and Medical Leave Act of 1993 (FMLA) Civil Rights Act of 1991 © 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.

Equal Employment Opportunity Title VII of the Civil Rights Act of 1964 Forbids discrimination in the employment relationship. Employers are not required to seek out and hire minorities but they must treat fairly all who apply. Adverse impact Occurs when minority group members’ pass rate on a selection standard is less than 80% of the pass rate of the majority group. © 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.

Equal Employment Opportunity Equal Employment Opportunity Commission Federal agency charged with enforcing Title VII as well as several other employment-related laws. Age Discrimination in Employment Act of 1967 Outlaws discrimination against people older than 40 years of age. © 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.

Equal Employment Opportunity (cont’d) Affirmative Action The commitment of employers to proactively seek out, assist in developing, and hire employees from groups that are underrepresented in the organization. Various executive orders, especially Executive Order 11246, require federal contractors to develop affirmative action plans and engage in affirmative action in hiring veterans and the disabled. © 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.

Equal Employment Opportunity (cont’d) Americans with Disabilities Act of 1990 (ADA) Forbids discrimination on the basis of disabilities and requires employers to provide reasonable accommodations for disabled employees. Civil Rights Act of 1991 Amended the original Civil Rights Act, making it easier to bring discrimination lawsuits while also limiting punitive damages that can be awarded in those lawsuits. © 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 Fair Labor Standards Act of 1938 (FLSA) Sets a minimum wage and requires overtime pay for work in excess of 40 hours per week. Salaried professional, executive, and administrative employees are exempt from the Act’s minimum wage and overtime provisions. Equal Pay Act of 1963 Requires men and women to be paid the same amount for doing the same jobs; exceptions are permitted for seniority and performance pay. © 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.

Benefits Employee Retirement Income Security Act of 1974 (ERISA) Sets standards for pension plan management and provides federal insurance if pension plans go bankrupt. Family and Medical Leave Act of 1993 (FMLA) Requires employers to provide up to 12 weeks of unpaid leave for family and medical emergencies. © 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.

Labor Relations National Labor Relations Act of 1935 (Wagner Act) Set up procedures for establishing unions and requires employers to bargain collectively with unions. National Labor Relations Board (NLRB) Is the federal agency that enforces the NLRA. Labor Management Relations Act of 1947 (Taft-Hartley Act) Limited power of unions and increased management’s rights during organizing campaigns. © 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.

Health and Safety Occupational Safety and Health Act of 1970 (OSHA) requires that employers: Provide a place of employment that is free from hazards that cause death or serious physical harm. Obey safety and health standards set by the Occupational Safety and Health Administration (OSHA). © 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 Legal Environment of HRM (cont’d) Alcohol and drug dependencies AIDS in the workplace Sexual harassment Emerging Legal Issues © 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.

Attracting Human Resources Job Analysis A systematic analysis of jobs within an organization. Job Description A listing of the job’s duties; its working conditions; and the tools, materials, and equipment use to perform the job. Job Specification A listing of the knowledge, skills, abilities, and other credentials the incumbent jobholder will need to do a job. © 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.

Human Resource Planning FIGURE 8.1 Human Resource Planning © 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 Human Resources The process of attracting qualified persons to apply for jobs that are open. Internal Recruiting (Promotion from Within) Involves considering present employees as candidates for openings. Can help build morale and reduce turnover of high-quality employees. Can create a “ripple effect”—the disadvantage of having to successively fill vacated positions. © 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 Human Resources (cont’d) Executive search firms Union halls Employee referrals Sources of External Recruits Advertising Campus interviews Employment agencies Walk-ins Realistic Job Preview (RJP) Is a successful method to ensure person-job fit. © 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.

References checked, final decisions made The Selection Process Pool of candidates complete application blanks Initial screening Remaining candidates complete test battery Test scoring Remaining candidates are interviewed by managers References checked, final decisions made Final candidates receive job offers Physical exams may be required for employment © 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.

Selecting Human Resources Validation The process of determining the predictive value of information gained from a selection device. Application Blanks Gather information about work history, educational background, and other job-related demographic data. Must not ask for information unrelated to the job. Are used to decide if a candidate merits further evaluation. Provide interviewers with candidate information. © 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.

Selecting Human Resources (cont’d) Tests Ability, skill, aptitude, or knowledge tests are usually the best predictors of job success. Must be validated, administered, and scored consistently. The testing process must be the same for all candidates. © 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.

Selecting Human Resources (cont’d) Interviews Interviewer biases can be overcome and interview consistency and validity can be improved by training interviewers and using structured interviews. Assessment Centers Are used to select managers from current employees for promotion. Other Techniques Polygraph testing, physical exams, drug tests, and credit checks to screen prospective 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.

Developing Human Resources Training Teaching operational or technical employees how to do the job for which they were hired. Development Teaching managers and professionals the skills needed for both present and future jobs. Assessing Training Needs Determining training needs is the first step in developing a training plan. © 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.

Developing Human Resources (cont’d) Lectures Role play and case studies On-the-job and vestibule training Common Training Methods Web-based and electronic training © 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 Development Evaluation Training and development programs should always be evaluated. Approaches include measuring relevant job performance criteria before and after the training to determine the effect of training. © 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.

Performance Appraisal A formal assessment of how well employees do their jobs. Reasons for Performance Appraisal Appraisal validates the selection process and the effects of training. Appraisal aids in making decisions about pay raises, promotions, and training. Appraisal provides feedback to employees to improve their performance and plan future careers. © 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.

Judgmental Appraisal Methods Ranking Method Compares employees directly with each other. Difficult to do with large numbers of employees. Difficult to make comparisons across work groups. Employees are ranked only on overall performance. Do not provide useful information for employee feedback. © 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.

Judgmental Appraisal Methods (cont’d) Rating Method Compares each employee with a fixed standard. Uses graphic rating scales of job performance dimensions to be rated on a standard scale. Behaviorally-Anchored Rating Scale (BARS) Is a rating scale where each point on the scale is associated with behavioral anchors. © 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.

Graphic Rating Scales for a Bank Teller FIGURE 8.2 Graphic Rating Scales for a Bank Teller © 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.

Behaviorally Anchored Rating Scale FIGURE 8.3 Behaviorally Anchored Rating Scale © 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.

Errors in Performance Appraisal Recency Error The tendency of the evaluator to base judgments on the subordinate’s most recent performance because it is the most easily recalled. Errors of Leniency and Strictness Being too lenient, too strict, or tending to rate all employees as “average.” Halo Error Allowing the assessment of the employee on one dimension to spread to that employee’s ratings on other dimensions. © 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.

“360 degree” Performance Appraisal “360 degree” Feedback A process in which managers are evaluated by everyone around them. Provides a richer array of performance information on which to base an appraisal. © 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.

Performance Appraisal Feedback Performance Feedback Is best given in a private meeting between the employee and immediate supervisor. Is more effective if managers are properly trained to conduct feedback interviews. Focus of Appraisal Discussion: Assessed level of performance How and why the assessment was made How the employee’s performance can be improved in the future. © 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.

Direct Compensation Forms of Compensation Purposes of compensation Wages are hourly compensation paid to operating employees. Salary is paid for the total contribution of an employee and is not based on total hours worked. Incentives are special compensation opportunities that are usually tied to performance. Purposes of compensation Provide a reasonable standard of living. Provide a tangible measure of an individual’s value to the organization. © 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 Determining Compensation Wage-level decisions: Organization strategy Availability of resources Wage survey data Unemployment rates Wage-structure decisions: Internal equity Job rankings Job evaluations Individual wage decisions: Experience Performance Seniority © 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.

Indirect Compensation: Determining Benefits Pay for time not worked Life, health, and other insurance Service benefits Cafeteria benefit plans Types of Employee Benefits © 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.

Managing Workforce Diversity Diversity Defined When members of a group differ from one another along dimensions such as age, gender, or ethnicity. Diversity as a Competitive Advantage Higher productivity; lower turnover and absenteeism Increased reputation as “good place to work” Better understanding of different market segments Increased creativity and innovation © 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.

Managing Workforce Diversity (cont’d) Diversity as a Source of Conflict Personnel actions (e.g., hiring, promotion, and firing) being attributed to an individual’s diversity status. Misunderstood, misinterpreted, or inappropriate actions among people of different groups. Fear, distrust, or individual prejudices. © 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.

Reasons for Increasing Diversity Legislation and legal action Changing demographics in the labor force Increasing diversity and multiculturalism in organizations Increased awareness that diversity improves the quality of the work force The globalization movement © 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.

Managing Diversity in Organizations Individual Strategies Understanding the nature and meaning of diversity and multiculturalism. Developing empathy in understanding the perspective of others. Developing tolerance of fundamental cultural differences. Having a willingness to communicate and discuss diversity and multiculturalism issues. © 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.

Organizational Approaches to Managing Diversity Organizational policies Organizational practices Diversity training Organizational culture Managing Diversity in Organizations © 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.

Managing Labor Relations The process of dealing with employees when they are represented by a union. Organizations prefer that employees remain nonunion because unions limit management’s freedom. The best way to avoid unionization is to practice good employee relations by: Providing fair treatment with clear standards in pay, promotions, layoffs, and discipline. Providing a complaint and appeal system and avoiding favoritism. © 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 Union-Organizing Process FIGURE 8.9 The Union-Organizing Process © 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.

New Challenges in the Changing Workplace Managing Knowledge Workers Knowledge workers’ contributions to an organization are based on what they know (as experts). Computer scientists, engineers, and physical scientists Knowledge Worker Management and Labor Markets Offering competitive starting salaries and sign-on bonuses. Regular upward compensation adjustments to stay competitive with external labor market rates. © 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.

Managing the Changing Workplace Contingent and Temporary Workers Are not permanent or full-time employees Independent contractors, on-call workers, temporary employees, contract and leased employees, and part-time workers. Represent about 10 percent of the U.S. workforce. The increasing use of this type of workers is driven by the strategic need for organizations to maintain flexibility in staffing levels and to control labor costs. © 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.