Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc. CHAPTER 8 Managing Human Resources

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc. 8-2 Learning Objectives Define human resource management, discuss its strategic significance, and explain how managers plan for human resources Identify the issues involved in staffing a company, including internal and external recruiting and selection Discuss different ways in which organizations go about developing the capabilities of employees and managers Explain ways in which organizations evaluate employee performance

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc. 8-3 More Learning Objectives Discuss the importance of wages and salaries, incentives, and benefit programs in attracting and keeping skilled workers Describe some of the key legal issues involved in hiring, compensating, and managing workers Discuss workplace diversity, the management of knowledge workers, and the use of contingent and temporary workers as important changes in the contemporary workplace

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc. 8-4 Human Resource Management Human resource managers are responsible for: Recruiting Training Employee development Design of evaluation Compensation & benefits programs

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc. 8-5 Job Analysis A detailed study of the specific duties in a particular job and the human qualities required for that job

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc. 8-6 Job Description Outlines the objectives, responsibilities, and key tasks of a job Describes the conditions under which the tasks must be accomplished Explains the relationships between that position and others in the firm Describes the skills required to do the job

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc. 8-7 Job Specification Describes the type of attributes a person needs for the job Skills Abilities Other credentials

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc. 8-8 Forecasting Determining the firm’s demand for employees and the likely supply of employees short, medium, and long-term, based upon existing demand and anticipated changes in demand Must address the shortage or surplus of required skills in the labour market and within the organization itself Internal Supply External supply

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc. 8-9 Employee Information Systems Computerized systems that contain information about employees, and which can be used to track availability and suitability for upcoming jobs Information may include Education Work experience Skills Career aspirations

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Internal Recruiting Hiring from within the organization Promoting or transferring existing staff Closed promotion systems managers choose the candidates for a promotion Open promotion systems allow individual employees to apply for positions of interest Seniority may also be the basis for promotional consideration

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc External Recruiting Hiring from outside of the firm recruiting selection

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Application Forms First step in recruiting Allows employers to gather information relevant to the hiring decision History Education Work experience Job-related demographic information

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Testing Aptitude and ability tests Video assessment Drug screening Tests must be job-related and a good indicator of future job performance Tests cannot be used to discriminate against anyone for reasons unrelated to the job

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Assessment Centres Trainees perform work-related exercises under the supervision of expert appraisers selection tests simulated situations presentations group discussions Allows appraisers to test trainees’ managerial behaviours under stressful conditions Allows opportunity for criticism and support

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Video Assessment Use of videos to show potential new hires realistic work situations Candidates are then asked to respond to various ways of handling the situations in the videos As with all tests, the assessment must be relevant to the job and a useful screening tool

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Interviews Structured Involves the use of a common set of questions Unstructured Questions may vary from candidate to candidate More often used when interviewing managerial or professional candidates

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Workforce Development Orientation Training and development on-the-job off-the-job

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Orientation Introduces employees to the firm and their position policies personnel programs nature of the job

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Work-Based Programs On-the-job training Employees gain new skills while performing them at work Vestibule training Employees work in a simulated environment Systematic job rotations and transfers

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc On-the-Job Training Employees learn new skills while performing their duties Advantages it allows employees to learn under realistic circumstances Disadvantages trainees may be distracted by the workplace lack of standardization May be unplanned and informal, or planned and formal

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Instructional-Based Programs Trains workers through the use of classroom-based programs Lecture or discussion Computer-assisted instruction Employees use personal computers and software to learn specific materials Off-the-job training Employees learn new skills at a location other than the work site

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Training Technology New technologies are reshaping the face of employee training Video teleconferencing Delivery of centralized training to branch offices allows for cost savings in travel and highly effective training Interactive video A combination of video and computer-based instruction

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Performance Appraisal Formal evaluations of employee performance Actual performance is compared to objectives Should be regularly scheduled Performance expectations must be made clear Results are used to determine training needs, promotion opportunities, compensation, and dismissal May involve feedback from peers, supervisors, and subordinates (360 degree feedback)

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Methods for Appraising Performance Ranking Methods Simple ranking (rank order from top to bottom) Forced distribution (group into predefined frequencies of performance ratings) Rating Methods Graphic rating scale (statement with rating scale) Critical Incident Method Recall and discussion of especially good, or poor, performance

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Compensation and Benefits Wages and salaries Incentive programs Comparable worth consideration Benefits programs

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Wages and Salaries Wages paid based on number of hours worked or number of units produced Salaries paid at regular intervals regardless of the time or output involved Wage and salary considerations amount of total compensation competitors’ compensation levels compensation across various jobs and ranks

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Job Evaluation A method of determining the relative value or worth of a job to the organization so that individuals who perform it can be appropriately compensated

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Establishing a Pay Structure Useful for determining basic compensation Develop a pay structure by linking a rational pay scale, level by level, to jobs Linking should be based on the value of the job to the organization

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Performance-Based Compensation Merit Pay Employees are paid based on their relative contribution to the firm for some of their compensation Skill-Based Pay Employees are paid for acquired skill level, rather than specific performance Knowledge-Based Pay Employees are paid for learning

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Incentive Compensation Systems Piece-Rate Plan employees are paid a certain amount for each unit of product they produce Individual Incentive Plan employees receive a salary increase, or other similar reward, for outstanding performance Sales Commission salespeople are paid based on unit, or dollar, sales Other Incentives may be non-monetary, such as time relief or points

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Team and Group Incentive Systems Gainsharing programs Employees get a bonus if the firm’s costs are reduced due to increased work efficiency Performance increases Awards directed to a team of employees to reward combined effort Profit-sharing plans The profitability level of the firm is used to determine the reward level for its employees

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Indirect Compensation and Benefits Benefits: non-financial rewards Mandated Protection Plans: EI, CPP Optional Protection Plans: health, dental, life insurance Paid Time Off: vacation time, personal leave Other Types of Benefits: wellness programs, child-care benefits Cafeteria-Style Benefits Plan: employees choose their own benefits

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Equal Employment Opportunity Regulations protecting people from unfair, or inappropriate, discrimination in the workplace Decisions are made whenever employees are hired or promoted The regulations are there to prevent such decisions from being made on any basis other than job-related reasons

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Canadian Human Rights Act Ensures that any individual who wishes to obtain employment has an equal opportunity to apply Key anti-discrimination legislation enacted in 1977 applies to all federal agencies, federal Crown corporations, and firms that do business inter- provincially prohibits discrimination based on: age, race, colour, national/ethnic origin, physical handicap, religion, gender, marital status, or prison record (if pardoned) enforced by the Human Rights Commission

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Bona Fide Occupational Requirement Allows an individual to be chosen over another due to job characteristics when only a particular type of candidate is acceptable because of the nature of the job a washroom attendant in a luxurious hotel should be a female

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Employment Equity Act Federally legislated Designates four groups as employment disadvantaged women visible minorities aboriginal people people with disabilities Companies covered by the act are required to publish statistics showing their employment of individuals from the four groups

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Comparable Worth Principle equal wages should be paid for work of equal value to the firm jobs must be classified based on the qualifications needed to do the job jobs with similar requirements must be paid the same critics argue that such approaches ignore the supply and demand aspects of labour; more scarce employees are paid more than those with plentiful skill sets

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Dealing with Sexual Harassment Develop clear and enforceable policies Inform all employees of the policies Train employees to recognize and refrain from sexual harassment Take complaints seriously Establish a procedure to deal with complaints Take action against those involved

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Employee Health and Safety Health and safety programs reduce absenteeism and labour turnover, increase productivity and morale, by making the workplace safer & healthier Each province has its own regulations Government inspectors come on-site, unannounced, to ensure that health and safety regulations are being met Canada places behind other industrialized nations in safety for mining and construction

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Retirement Retirement plans may allow early retirement, usually after the age of 55 Flexible plans allow those who wish to leave early to do so, while allowing those who are able and willing to work longer the opportunity to do so Regular retirement age is 65 years, but many choose to work beyond that time Health statistics show that workers over the age of 65 are more likely to suffer from work-related causes

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Managing Workforce Diversity Everyone in the workforce must be treated equitably The workforce is becoming more diverse Gender Race Age Ethnicity Physical ability

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Managing Knowledge Workers Employees who are experts in specific fields technology, engineering, science Identify with their profession rather than the firm Prefer to work independently Define performance based on their industry and peers, rather than their employer Pose a special management challenge

Business Fifth Canadian edition, Griffin, Ebert & Starke © 2005 Pearson Education Canada Inc Managing Contingent and Temporary Workers Contingent Workers work for a firm on a basis other than full or part-time freelance, on-call, temporary subcontractors Temporary Workers Hired through outside agencies Management Issues fairness and cost issues