Chapter 3: Human Resource Planning, Recruitment, and Selection Creating Effective Organizations

Development of Human Resource Management Parallels the protection and treatment of workers 1. Social Welfare Department 1880 – 1935 a.Helping injured workers and their families b.Company unions: parties and social events c.Worker health 2. Labor Relations Department 1935 – 1950 a.Collective bargaining b.Contract administration 3. Industrial Relations Department 1950 – 1970 a.Labor relations b.Benefits and vacations c.Testing and selection d.Compensation systems 4. Personnel Department 1970 – 1990 a.Legal compliance b.Staffing c.Performance evaluation d.Compensation and benefits e.Employee relations f.Safety and health 5. Human Resource Management

Staffing Model Strategic Planning Environmental Scanning Operational Planning Forecasting Projected Staffing Requirements Goals and Objectives Recruitment Planning Applicant Search Preliminary Screening Selection Decision Placement Strategic Business Planning Human Resource Planning Long-range planning Selection Recruitment Middle-range planning Short-range planning Human Resource Planning

Typical Steps in the Selection Process Reference checks Employment testing Drug testing Final interview Selection decision Placement on the job Reject applicant Preliminary screening Application blanks Interviews

Forecasting Employment Needs 1. Budgeting 2. Work-load Analysis 3. Unit Demand 4. Expert Opinion 5. Trend Predictions

Example of Predicting Labor Supply and Required New Hires for a Hotel Chain Supply Analysis Supply Demand Comparison Key Positions A % Quit (rounded) ( ) B Number of Present Employees C Projected Turnover by 2000 D Employees Left by 2000 E Projected Labor Demand in 2000 F Projected New Hires in 2000 General Manager Resident Manager Food/Beverage Director Controller Assistant Controller Chief Engineer Director of Sales Sales Manager Convention Manager Catering Director Banquet Manager Personnel Director Restaurant Manager Executive Chef Sous Chef Executive Housekeeper Total Employees

Solving the ‘Surplus Personnel’ Problem 1. Layoffs 2. Attrition 3. Reduced Hours/Job Sharing 4. Unpaid Vacations 5. Early Retirements

High Performance Work Practices – Financial Performance Sample: 968 U.S. firms with 100 or more employees Financial Data: 10-K reports with the SEC High Performance Work Practices: What proportion of the workforce participates in: 1.Formal information sharing program 2.Formal job analysis 3.Hiring from within 4.Employee attitude surveys 5.Quality of Work Life Programs 6.Company incentive, profit-sharing, or gain-sharing plans 7.Formal grievance and complaint procedures 8.Pre-employment testing 9.Performance appraisals are used to determine promotion 10.Formal performance appraisals 11.Promotion by seniority or performance 12.Selection ratio for hiring 13.What is the average number of hours of training received per employee per year?

High Performance Work Practices - Results A one standard deviation increase from the mean in high performance work practices is associated with: 7.05% decrease in turnover 7.05% decrease in turnover $27,044 increase in sales annually per employee $27,044 increase in sales annually per employee $18,641 increase in market value annually per employee $18,641 increase in market value annually per employee $3,814 increase in profits annually per employee $3,814 increase in profits annually per employee Source: Mark A. Huselid, “The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance.” Academy of Management Journal, vol 38 (1995):