. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-1 Chapter 9 Managing human resources

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-2 Learning objectives After studying the chapter, you should be able to: –explain why strategic human resource management can help an organisation gain a competitive advantage –describe the steps managers take when determining organisational needs, including planning, recruiting and selecting organisational members –discuss the role of managers in developing staff for performance through training and development options that ensure organisational members can effectively perform their jobs

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-3 Learning objectives (cont.) –explain why performance appraisal and feedback is such a crucial activity, and list the choices managers must make in designing effective performance appraisal and feedback procedures –explain the issues managers face in maintaining worker effectiveness when determining elements such as wages and conditions, occupational health and safety, and career development.

. Management challenge ‘Interview: new model HR’ Tanith Dodge: Marks & Spencer PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-4

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-5 Strategic human resource management Human resource management (HRM) –Activities that managers engage in to attract and retain employees and to ensure that they perform at a high level and contribute to the accomplishment of organisational goals HRM activities include: –planning, recruitment and selection –training, development, performance appraisal and feedback –wages and conditions, industrial relations, occupational health and safety, career development, and managing change.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-6 Strategic human resource management (cont.) Strategic human resource management is the process by which managers design the components of a human resource system to be consistent with each other, with other elements of organisational structure and with the organisation’s strategy and goals. The objective of strategic HRM is the development of an HRM system that enhances the organisation’s efficiency, quality, innovation and responsiveness to customers.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-7 Components of a human resource management system Each component of an HRM system influences the others and all must fit together. Recruitment & selection Industrial relations Wages & conditions Training & development Performance appraisal & feedback

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-8 Components of a human resource management system (cont.) Recruitment and selection –Developing a pool of qualified applicants –Determining relative qualifications of applicants and their potential for a job Training and development –Developing, on an ongoing basis, employees’ abilities and skills as necessitated by changes in technology and the competitive environment Performance appraisal and feedback –Providing information about how to train, motivate and reward workers such that managers can evaluate and then give feedback to enhance worker performance

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-9 Components of a human resource management system (cont.) Wages and conditions –Rewarding high-performing employees with raises, bonuses and recognition Increased pay provides additional incentive. Benefits and conditions such as health insurance reward membership in firm. Industrial relations –Creating and maintaining effective working relationships with unions that represent workers Unions seek to participate, through collective bargaining, in the determination of pay rates and the setting of working conditions.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-10 The legal environment of HRM Equal employment opportunity (EEO) –EEO is the equal right of all citizens to the opportunity to obtain employment regardless of their gender, age, race, country of origin, religion or disabilities. –Commonwealth and State legislation covers employment laws and includes the Age Discrimination Act 2004, Disability Discrimination Act 1992, and the Occupational Health and Safety (Commonwealth Employment) Act –Australian Human Rights and Equal Opportunity Commission (HREOC) enforces most EEO laws and handles complaints. Management of diversity is crucial. Managers must take steps to ensure discrimination does not occur.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-11 Human resource planning (HRP) –HRP is the activities that managers engage in to forecast their current and future needs for human resources. –HRP must be done prior to recruitment and selection. –Demand forecasts Estimates of the number and qualifications of employees the firm will need –Supply forecasts Estimates of the availability and qualifications of current workers and those in the labour market

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-12 Human resource planning: outsourcing –Using outside suppliers and manufacturers to produce goods and services –Using contract workers rather than hiring them Outsourcing is more flexible for the firm. Outsourcing provides human capital at a lower cost. –Problems with outsourcing Loss of control over output; outsource contractors are not committed to the firm. Unions are against outsourcing as it has the potential to eliminate members’ jobs.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-13 Job analysis –The process of identifying tasks, duties and responsibilities that make up a job (job description), and knowledge, skills and abilities needed to perform the job (job specifications) –Needs to be done for each position in the organisation –Methods Observing what current workers do Having workers and managers fill out questionnaires

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-14 Recruitment and selection Recruitment –Activities that managers engage in to develop a pool of candidates for open positions Selection –The process that managers use to determine the relative qualifications of job applicants and their potential for performing well in a particular job

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-15

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-16 Recruitment External recruiting –Seeking outside the firm for people who have not worked at the firm previously Newspapers advertisements, open houses, on- campus recruiting, employee referrals, and through the Internet –External recruitment is difficult since many new jobs have specific skill needs. A multi-prong approach to external recruiting works best.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-17 Recruitment (cont.) Internal recruiting –Seeking to fill open positions with current employees from within the firm –Benefits of internal recruiting Job candidates, their qualifications and availability are already known. Current employees know the firm’s culture and are familiar with the organisation. Internal advancement (promotion from within) can serve to motivate employees.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-18 Honesty in hiring There is a temptation to overrate and oversell the attractiveness of the job and firm. –Managers may feel that if they are honest, an applicant may not be willing to work there. Research indicates this is a poor strategy. Realistic job preview –Providing an honest assessment of the advantages and disadvantages of a job and organisation Avoids hiring, training and then losing an employee because as applicants they misperceived the job before agreeing to come to work

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-19

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-20 Reliability and validity Selection tools must be reliable and valid. –Reliability is the degree to which the tool measures the same thing each time it is used. Example: scores should be similar for the same person taking the same test over time –Validity is the degree to which the test measures what it is supposed to measure Example: how well a physical ability test predicts the job performance of a firefighter

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-21 Training and development: developing people for performance Training –Teaching organisational members how to perform current jobs and helping them to acquire the knowledge and skills they need to be effective performers Development –Building the knowledge and skills of organisational members to enable them to take on new duties and challenges

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-22 Training and development Needs assessment –An assessment of which employees need training or development and what type of skills or knowledge they need to acquire

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-23

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-24 Types of training Classroom instruction –Employees acquire skills in a classroom setting. It includes use of videos, role-playing and simulations. On-the-job training –Employee learning occurs in the work setting as the new worker does the job. Training is given by coworkers and can be done continuously to update the skills of current employees.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-25 Types of development Varied work experiences –Top managers have a need to develop expertise in many areas. Employees identified as possible top managers are assigned different tasks and a variety of positions in an organisation. Formal education –Tuition reimbursement is common for managers taking classes for an MBA or job-related degrees and diplomas. Flexible learning can also be used to reduce travel and suit time-challenged managers, e.g. Internet and print-based learning that has no or minimal attendance requirements.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-26 Performance appraisal and feedback Performance appraisal –The evaluation of employees’ job performance and contributions to their organisation Performance feedback –The process through which managers share performance appraisal information, give subordinates an opportunity to reflect on their own performance and develop, with subordinates, plans for the future

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-27

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-28

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-29 Who appraises performance? (cont.) Self –Self appraisals can supplement the manager’s view. Peer appraisal –Co-workers provide appraisal; this is common in team settings. 360-degree –A performance appraisal by peers, subordinates, superiors and clients who are in a position to evaluate a manager’s performance.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd degree performance appraisals –Used to improve motivation and performance –Variety of people involved including peers, subordinates, supervisors and clients –Multiple sources of information –Has potential problems –Trust is critical to the process –Anonymity helpful –Can be used for self-development activities rather than pay/reward decisions

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-31 Effective performance feedback Formal appraisals –An appraisal conducted at a set time during the year and based on performance dimensions that were specified in advance Informal appraisals –An unscheduled appraisal of ongoing progress and areas for improvement

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-32 Effective feedback tips –Be specific and focus on correctable behaviour. Provide a suggested improvement. –Focus on problem-solving and improvement, not criticism. –Express confidence in worker’s ability to improve. –Use both formal and informal feedback. –Treat subordinates with respect and praise achievements. –Set a timetable for agreed changes.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-33 Wages, conditions and the role of industrial relations Pay level –The relative position of an organisation’s incentives in comparison with those of other firms in the same industry employing similar kinds of workers Managers can decide to offer low, average or high relative wages. High wages attract and retain high performers but raise costs; low wages can cause turnover and lack of motivation but provide lower costs. How employees are paid has a profound effect on motivation. Wages include base salaries, pay rises and bonuses.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-34 Wages and conditions Managers use different kinds of pay plans to help an organisation achieve its goals and gain as well as maintain a competitive advantage.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-35 Move from centrally based industry awards to Australian Workplace Agreements –Reforms from 1993 –Dramatic federal industrial relations (IR) changes from 2005 with enterprise-level agreements instead of award-based agreements –Certified (collective agreements) or Australian Workplace Agreements (AWAs) are only two options –Work Choices legislation seals arrangements in 2005 –Awards replaced with Australian Fair Pay and Conditions standard

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-36 Occupational health and safety –Regulated by government legislation –Ensures a safe and healthy work environment –Injury and deaths in the workplace exceed road toll –Managers have a moral obligation –Lost time also a significant cost –Working in a safe environment is a right –Common hazards include manual lifting, chemicals, noise, repetitive movements

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-37 Career development The opportunity to advance is highly motivational. It should be a lifelong, organisationally supported endeavour; however, many employees are mobile in turbulent, changing times. Career development is critical to equip staff with necessary knowledge, skills and understandings to work in ever-changing environments.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-38 Career development (cont.) Workforce and career-planning initiatives are being driven by the ageing workforce and altering attitudes to work–life balance issues. Career planning provides tangible benefits for individuals and organisations, and managers should be proactive here.

. Management in the media ‘Disadvantage under attack’ The steady decline in Aboriginal and Torres Strait Islander employment in the public sector PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-39

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-40 Summary Strategic HRM activities work towards attracting, retaining and effectively using human resources. HR needs have to be planned for with forecasts and job analysis. Recruiting creates a pool of candidates that are then selected in the selection phase. Training and development enhances performance for current and future tasks.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-41 Summary (cont.) Performance appraisal evaluates the employee’s job performance and contribution to the organisation. Feedback shares performance information, allows for reflection and generation of plans for further learning experiences, benefiting both individuals and the firm. Performance feedback encourages higher levels of motivation. Wages and benefits are some tools used to attract and keep employees with levels based on job importance, employee skills and benchmarks.

. PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 9-42 Summary (cont.) Industrial relations (IR) strive for effective working relationships with unions that represent employee interests. Recent federal government legislation has altered the IR landscape dramatically since 2005 with the introduction of Certified Agreements or Australian Workplace Agreements.