8–2 © 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. Chapter Learning Objectives After studying this chapter you should be able to: 1.Describe the environmental context of human resource management, including its strategic importance and its relationship with legal and social factors. 2.Discuss how organizations attract human resources, including human resource planning, recruiting, and selecting. 3.Describe how organizations develop human resources, including training and development, performance appraisal, and performance feedback.

8–3 © 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. Chapter Learning Objectives (cont’d) After studying this chapter you should be able to: 4.Discuss how organizations maintain human resources, including the determination of compensation and benefits and career planning. 5.Discuss labor relations, including how employees form unions and the mechanics of collective bargaining. 6.Describe the issues associated with managing knowledge and contingent and temporary workers.

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. –HR decisions should be linked to strategy Walmart ( cost leadership): higher than average wages? © 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. 8–4

8-5 Strategic Human Resource Management Strategic Human Resource Management 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

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. 8–6 We will cover EEO law in next class.

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What is HRM? A Case Study Example: College Hunks Hauling Junk What HUMAN RESOURCE issues do owners Omar and Nick have to be concerned with? What happens to the company if they consistently fail to hire the right people? g&feature=relmfuhttp:// g&feature=relmfu 7-9

8–10 © 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. FIGURE 8.1 Human Resource Planning – the first step of Attracting a Workforce

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. 8–11

8–12 © 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.

7-13 Managers Challenge: What are the responsibilities of Truck Captains and Wingmen? What are the job specification requirements?

Recruiting Human Resources Recruiting Human Resources Recruiting –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. 8–14

Recruiting Human Resources (cont’d) Realistic Job Preview (RJP) –Is a successful method to ensure person-job fit. Executive search firms Union halls Employee referrals Sources of External Recruits Advertising Campus interviews Employment agencies Walk-ins © 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. 8–15

The Selection Process Pool of candidates complete application blanks Remaining candidates complete test battery Remaining candidates are interviewed by managers Final candidates receive job offers Physical exams may be required for employment Initial screening Test scoring References checked, final decisions made © 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. 8–16

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. 8–17 © 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.

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. 8–18 © 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.

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. 8–19

7-20 College Hunks Hauling Junk Interviews

Interview Questions

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. 8–22

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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. 8–24

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. 8–25

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. And terminations. –Appraisal provides feedback to employees to improve their performance and plan future careers. 8–26 © 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.

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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. 8–29 © 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. 8–30 © 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.

8–31 © 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. FIGURE 8.2Graphic Rating Scales for a Bank Teller

8–32 © 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. FIGURE 8.3Behaviorally Anchored Rating Scale

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. 8–33 © 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 employees and 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. 8–34 How could College Hunk’s use 360 degree Feedback?

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. 8–35

College Hunks Feedback Employee …… Tracks mud in customer residence; Lets customer’s dog out; Sits in truck in front of customer’s house and talks on phone for 45 minutes; Manager says…… ____________________ 36 What happens when an employee exhibits poor performance and the manager provides NO FEEDBACK? Does timing matter?

Keeping Employees: Direct Compensation Forms 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. 8–37

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. 8–38

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. 8–39

Managing Labor Relations 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. 8–40

8–41 © 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. FIGURE 8.9The Union-Organizing Process

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. 8–42 © 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. 8–43

So why does HR matter? What is strategic HR? 2.Why do companies need strategic HR? 3.What is HR planning? 4.What is the general purpose of Recruitment and Selection practices? 5.What is the general goal of Performance Appraisal and Feedback? 6.What is the general goal of Compensation? 7.Everything about HR is in a heavily _________________ environment. Why?