© 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.

6–2 Learning Objectives After studying this chapter, you should be able to: 1.Discuss the role of ethics in human resource decision making 2.Describe the concept of rightsizing and organizational strategies for rightsizing 3.Describe how to manage termination and retention 4.Describe the elements of voluntary turnover 5.Discuss key human resource issues during mergers and acquisitions

© 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. 6–3 Ethics and Human Resource Management EthicsEthics  Are an individual’s beliefs about what is right and wrong, and good and bad.  Are formed by the societal context in which people and organizations function. Ethical Behavior versus Legal BehaviorEthical Behavior versus Legal Behavior  Codes of conduct and ethical statements  Ethical training and orientation  Social responsibility versus profits

© 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. 6–4 Rightsizing the Organization The process of monitoring and adjusting the composition of the organization’s workforce to its optimal size.

© 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. 6–5 Temporary Solutions for Dealing with Increased Demand for Employees Offer overtime Employee leasing Part-time workers Meeting the Demand for 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. 6–6 Dealing with a Decrease in the Demand for Employees Reduce contingent workforce Retain core of permanent workers Utilize strategic layoffs Adjusting for Fewer 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. 6–7 Justice in Organizations Distributive justice Procedural justice Interactional justice Types of Justice

© 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. 6–8 Critical Dimensions of Procedural Justice

© 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. 6–9 Legal Issues in Layoffs Protecting Employee RightsProtecting Employee Rights  If layoffs result in disparate impact for protected groups, legal actions can become problematic.  Decisions to layoff more senior employees can result in age discrimination suits.  Layoff decisions related to performance must be based on a defensible performance appraisal 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. 6–10 Is Downsizing Effective? Stable EmployersStable Employers  Have changes in employment between plus and minus 5%. Employment DownsizersEmployment Downsizers  Have employment declines of more than 5%; plant and equipment declines of less than 5%  Have the lowest levels of return on assets and did poorly on stock price. Asset DownsizersAsset Downsizers  Have employment declines of less than 5% but plant and assets declines were at least 5% greater than declines in unemployment.

© 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. 6–11 Beyond the Book: Should Firms Use Downsizing When Employees Are No Longer Needed? YESYES  It leads to quicker decision making, more precise accountability, and harder-working employees.  It can significantly reduce a firm’s salary expense when unneeded employees are terminated. NONO  Employees are needed or they wouldn’t have been hired in the first place.  It is expensive because firms must make severance payments and fund retirement plans.

Managing Terminations and Retention Involuntary TurnoverInvoluntary Turnover  Is terminating employees whose services are no longer desired. PunishmentPunishment  Is following unacceptable behavior with some type of negative consequences. DisciplineDiscipline  Is a system of rules and procedures for how and when punishment is administered and how severe the punishment. © 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. 6–12

© 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. 6–13 Typical Disciplinary Problems

© 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. 6–14 Verbal warning Written warning Suspension Termination Progressive Disciplinary Plans

© 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. 6–15 Employment-at-Will Doctrine An employer can terminate any employee at any time, for any reason (good or bad), or for no reason at all.

Exceptions to Employment-at-Will The termination would violate a specific law.The termination would violate a specific law. The employee has a contractual right to his or her job.The employee has a contractual right to his or her job. The employee’s rights of due process have been violated.The employee’s rights of due process have been violated. Termination for refusing to commit a crime or for reporting a crime or unethical or unsafe behavior on the part of the organization.Termination for refusing to commit a crime or for reporting a crime or unethical or unsafe behavior on the part of the organization. The employee’s termination involves an employer’s breach-of-good-faith (promise).The employee’s termination involves an employer’s breach-of-good-faith (promise). © 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. 6–16

© 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. 6–17 Exceptions to the Doctrine of Employment-at-Will 1.The termination would violate a specific law. Various laws forbid termination for a specific reason. Some of the most common reasons are termination based on gender or race (violates the Civil Rights Act) or termination because of union activity (violates the Taft-Hartley Act). 2.The employee has a contractual right to his or her job. The contract might be a formal contract or an implied contract guaranteeing or implying a guarantee of employment. 3.The employee’s rights of due process have been violated. For example, if an employee is accused of theft, the employee has the right to know of the charges and to refute those charges—in a court of law if necessary. 4.Public–policy exception.This exception has been less common but involves cases in which an employee is discharged for refusing to commit a crime or for reporting a crime or unethical or unsafe behavior on the part of the organization. Thus, whistle-blowers are protected under this exception. 5.Breach-of-good-faith exception. This is the most difficult exception to establish because it involves a breach of promise. In one of the best-known cases, an employee claimed that he was terminated after 25 years of employment so that the company could avoid paying him his sales commission. Note: These exceptions have been cited in various court cases, but there is no guarantee that any specific state will recognize any one of these exceptions in its jurisdiction.

© 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. 6–18  Make explicit statements that employment is at-will.  Write contracts specifying termination procedures.  Document performance or behavior problems that may lead to discharge. Beyond the Book: Preventing Employment-at-Will Problems

© 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. 6–19 Managing Voluntary Turnover Job DissatisfactionJob Dissatisfaction  Is the feeling of being unhappy with one’s job.  Is a major cause of voluntary turnover. Job EmbeddednessJob Embeddedness  Refers to the fact that people will stay on their jobs, even when they are unhappy and should leave.  Community ties or obligations keep the employee on the 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. 6–20 Beyond the Book: A Traditional Model of Quitting

© 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. 6–21 A Model of the Turnover 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. 6–22 Pay and benefits Supervisors and co-workers Nature of the work Causes of Job Dissatisfaction

© 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. 6–23 The Effects of Job Dissatisfaction Organizational CommitmentOrganizational Commitment  Is the degree to which an employee identifies with an organization and is willing to exert effort on behalf of the organization. Organizational Citizenship Behaviors (OCBs)Organizational Citizenship Behaviors (OCBs)  Are behaviors that are beneficial to the organization but are not formally required as part of an employee’s job.  Also known as contextual performance.

© 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. 6–24 Measuring and Monitoring Job Satisfaction Primarily done through attitude surveys distributed to employeesPrimarily done through attitude surveys distributed to employees Responses are used to track changes in employees’ attitudesResponses are used to track changes in employees’ attitudes

© 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. 6–25 Retention Strategies Realistic job previews (RJPs)Realistic job previews (RJPs)  Are pre-employment previews that provide accurate and realistic information to the job applicant.  Can be used to socialize new employees into their new job roles.  Are effective in reducing turnover. Stock OptionsStock Options  Are rights, given to employees, to purchase a certain number of shares at a given price.

© 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. 6–26 Managing Human Resources During Mergers and Acquisitions HR manager plays a key role as communicator because:HR manager plays a key role as communicator because:  Employees are concerned about their jobs.  Speculation and rumors begin circulating.  An atmosphere of distrust emerges.