1. Human Resources Management

2. HRM Questions To Consider
Why is HRM not just “personnel” anymore?
Should you “promote from within” or look for “new blood?”
What tools will best help you select a job candidate?
What are the keys to running a good interview?
Should you measure employee performance using objective or subjective measures?
How do you give feedback effectively?

3. Human resource management and competitive advantage
Big trend in the past two decades to link human resource practices, strategy and performance
“Strategic” HRM: managing the HRM system to support the organization’s strategy and goals
Work closely with the “line” organization to improve efficiency, quality, innovation, and responsiveness.
Support high performance work practices
E.g., Cross-functional and self-managed work teams, TQM, employee involvement, training, information sharing
Contrast with HRM as “personnel” – administering policies

4. HRM Systems and Market Value
$410,000
Market
Value in
Dollars
per
Employee
$390,000
$370,000
$350,000
$330,000
$310,000
$290,000
$270,000
$250,000
Lowest
Quintile
Middle
Quintile
Top
Quintile
Firms with excellent HRM Systems have greater market value per employee
Quality of the HRM System

5. The HRM Process Environment Compensation and Benefits Career
Development
Performance
Management
Human
Resource
Planning
Recruitment
Derecruitment
Selection
Identification and selection
of competent employees
Orientation
Training
Adapted and competent
employees with up-to-date
skills and knowledge
Competent employees who
are capable of sustaining high
performance over the long term
Environment

6. Recruitment: A dizzying variety of methods

7. Internal vs. External Recruitment Pros & Cons
External Recruiting – seeking outside the firm
Pro: Brings in new skills and ideas
Con: Outsider’s actual capabilities and fit (e.g., with organizational culture) are relatively unknown
Internal Recruiting – moving people in the firm
Pro: Job candidates and qualifications are relatively better known
Pro: “Promotion from within” motivates employees
Con: Often costly if job skills must be learned on the job
A balance is typically most effective

8. Selection: The prediction exercise
Selection: Assessing applicant’s qualifications in order to hire the most appropriate candidates
Tools for selection:
Resumes
Interviews
Tests and Simulations
Key issue:
Validity of tools varies

9. Each selection tool has strengths and weaknesses
Standard Tools:
Resumes and application forms – initial screening
Interviews – almost universal, reasonably valid
Written tests - measure intelligence, ability, personality, interest, etc. – popular; validity varies
Reference checks – tough to get negative information
Performance-simulation tests
Work sampling - perform key tasks (non-managerial jobs)
Assessment center - simulate challenges of managerial jobs
Most valid
Most expensive

10. Suggestions For Interviewing
Structure the interview to maximize validity of information:
Structured (job-related questions) interviews in preference to unstructured (conversational) interviews
Use multiple interviews rather than just a single one
Get detailed answers about actual job behaviors rather than generalities about job responsibilities
Take notes during the interview – things blend together!
Avoid over-talking; practice active listening
Watch cognitive biases (stereotyping; same-as-me; halo)
Ask appropriate questions

11. Training and Development
Training (individual performers and managers): Helping employees be effective performers in their current jobs:
Example: Learn technical, interpersonal, problem-solving skills.
Development (usually managers or professionals): Enabling employees to take on new challenges:
Example: Varied job experience is key developmentally

12. Employee Performance Management
Performance appraisals are often done poorly
They are put off because of “today’s crisis”
Managers often don’t deliver negative feedback well
High-performing organizations put enormous attention on “fixing” these problems with performance management
Through systems and through training

13. Doing performance appraisal well
What basis to evaluate performance on?
Subjectively (manager’s perceptions)
Rich information
Potential for favoritism of certain employees
Potential for inconsistency across managers
Potential for biased perceptions (think cognitive biases)
Objectively (measurable results)
(Apparently) less bias
Information not as rich
Recommendation: Incorporate both types of evaluation

14. Doing performance appraisal well
To use subjective evaluation effectively:
Evaluate behaviors rather than traits
Describe specific, important job-related behaviors rather than making overall judgments or citing outlying incidents.
To use objective evaluation effectively:
Work with employees to set goals
Consider degree to which employee efforts controls goal achievement

15. Example of subject evaluation: Graphic Rating Scale
Evaluates poorly by the subjective evaluation criteria

16. Better subjective evaluation: Behaviorally Anchored Rating Scale

17. Additional evaluation techniques: Forced Rankings
The Problem: Every employee gets rated as high-performing, so it is not possible to differentiate between employees.
Potential Solution: Forced ranking
Each manager is required to categorize employees using a pre-set, fixed scheme
Example: Managers must rate 10% as excellent; 20% as exceeds requirements; 50% meets requirements; 20% below requirements
Sometimes coupled with additional rules (two consecutive below requirement ratings = dismissal required).
Pros:
Better differentiation of high and low performers
Deters retention of low performers
Cons:
Assumes each department has equal # of high / low performers
Employees feel they are in competition with each other
Labels often leave good employees uncomfortable (“I’m average?”)

18. Delivering Feedback Effectively
The recommended imagery is joint problem-solving rather than chewing someone out.
What: Be specific and focus on correctable behavior.
How: Focus on problem-solving / improvement, not criticism.
When: Set a timetable for agreed changes.
Treat subordinates with respect.
Express confidence in worker’s ability to improve.
Use both formal and informal feedback opportunities.
Obviously, chewing someone out has its uses, at times.

19. Compensation And Benefits
Compensation trends are following the move towards flat, flexible, responsive organizations:
Reduce number of pay levels – “bands” not levels
Skill-based pay
Pay for performance
Benefits
Legally required: social security, workers’ compensation
Voluntary: health insurance, retirement, day care
Cafeteria-style benefits plans

20. Pay for performance Traditional model:
Salary with (permanent) increases based on individual performance
Pay-for-performance: Variable compensation based on individual, group and/or organization performance.
For example, commissions; bonuses; employee stock options
Benefits of pay-for-performance:
Increased motivational leverage
Large changes (tied to current performance) rather than small
Encourage focus on team or organizational goals
Flexible
Allows costs to naturally vary with firm success
Reduced need for downsizing or salary “cuts”.