2. Human Resource Management
Chapter Thirteen
Human Resource Management
© The McGraw-Hill Companies, Inc., All Rights Reserved.
McGraw-Hill/Irwin
Introduction to Business

3. Learning Objectives
Describe the five components of a human resource management system and the way they work together to help a company obtain a competitive advantage.
Appreciate the issues involved in the process of recruiting qualified people to join a company and the steps involved in the selection process.

4. Learning Objectives
Explain how training and development activities help to build abilities, skills, and knowledge of a company’s employees.
Understand why the process of appraising employees’ performance is a major factor influencing the way they wish to contribute to achieving a company’s goals and objectives.

5. Learning Objectives
Explain why linking pay to performance in a fair and equitable manner is an important source of employee motivation and commitment to a company.
Appreciate the importance of good labor relations and the importance of collective bargaining in aligning the goals of employees and companies.

6. The Components of a Human Resource Management System
Human resources
the people a company employs, from its CEO and top managers, the middle managers throughout its functions, to its nonmanagerial employees

7. The Components of a Human Resource Management System
the set of activities designed to recruit high-quality employees and then improve their skills and capabilities

8. The Five Components of the HRM System
Figure 13.1

9. The Components of a Human Resource Management System
Performance appraisal
the task of accurately identifying differences in the level and quality of work employees do and providing them with feedback that increases their performance levels

10. The Components of a Human Resource Management System
Labor relations
the process of working with employees, or the unions that represent them, to create work rules and a negotiation process to resolve disputes between them

11. Recruitment and Selection
Human resource planning
External and internal recruitment
The selection process

12. Recruitment and Selection
the process of identifying and attracting a pool of qualified applicants
Selection
creating the set of job- and company-specific criteria that determines which job applicants are the best match for a particular job and company

13. Human Resource Planning
the process of forecasting the type and number of employees a company will require in the future to meet the objectives of its business model

14. Question?
What is the process of obtaining detailed information about the tasks and responsibilities involved in each job in a company?
Job description
Job analysis
Job enlargement
Job specification
The correct answer is “B” – job analysis. See next slide.

15. Human Resource Planning
Job analysis
the process of obtaining detailed information about the tasks and responsibilities involved in each job in a company

16. Technical Sales Representative
Figure 13.2

17. Human Resource Planning
Job description
a list of the specific tasks, duties, and responsibilities that make up a particular job
Job specifications
a written list of the required skills, abilities, and knowledge needed to do a particular job

18. External and Internal Recruitment
a policy of promoting employees who already work for a company
External recruitment
a policy of filling advanced job positions with applicants from outside the company

19. Sample interview questions
The Selection Process
Step 1: Screening applications and résumés
Step 2: Applicant testing and reference checks
Step 3: The interview process
Step 4: Making the final selection
Sample interview questions

20. The Four Steps in the Selection Process
Figure 13.3

21. Types of Standardized Tests
Figure 13.4

22. The Interview Process Structured interview Nondirective interviews
all applicants are asked a series of standard questions
Nondirective interviews
questions are open ended to give applicants ample opportunity to reveal skills, abilities, strengths, and weaknesses

23. Training and Development
the process through which companies increase their employees’ work skills and knowledge to improve their job performance

24. Training-Needs Analysis
a method of identifying the kinds of employee training that will result in the greatest performance gains
Training gap
a specific type training an employee needs to acquire

25. Training-Needs Analysis
Figure 13.5

26. Types and Methods of Training and Development
On-the-job training
training employees receive in the course of doing their jobs

27. Methods of Training and Development
Figure 13.6

28. Performance Appraisal and Feedback
the process of evaluating the contributions an employee has made toward a company’s functional and corporate-wide goals
Performance feedback
the communication of performance appraisal information to employees to influence their future performance levels

29. Performance Appraisal Methods
Managers can evaluate:
Results or outcomes of an employee’s activities
Specific employee actions or behaviors that produced those outcomes

30. Who Appraises Performance?
Figure 13.7

31. Who Appraises Performance?
360-degree performance appraisal
the process of using multiple sources of information to appraise an employee’s performance

32. Giving Performance Feedback
Formal appraisals
appraisals conducted on a regular basis to provide employees with ongoing performance feedback
Informal appraisals
appraisals that take place as managers and subordinates meet from time to time to discuss important work issues

33. Pay and Benefits Pay Benefits
the monetary rewards, such as wages, bonuses, and salaries, associated with a particular job
Benefits
the monetary rewards, such as paid health care, life insurance, sick and vacation pay, and pensions, employees receive because they are a member of a company

34. Pay and Benefits Pay structure Pay level
the relative pay and benefits received by employees doing different types of jobs or jobs at different levels in a company’s hierarchy
Pay level
the average salary a company chooses to pay its employees compared to other companies in its industry

35. Types of Incentive Pay Incentive pay
the extra rewards employees receive when they achieve specific work goals

36. Individual Incentive Plans
Piecework plans
pay plans that link the pay employees receive to the number of units of a product an employee makes
Commission systems
pay plans that link the pay employees receive to the amount of revenue they earn by selling a company’s products

37. Individual Incentive Plans
Merit pay
a pay system that links superior performance directly to higher permanent rewards, such as a certain percentage increase in salary
Bonus pay
a one-time reward employees receive for accomplishing a specific goal

38. Group and Companywide Reward Systems
Profit sharing plans
pay plans that reward employees on the basis of the profit a company earns in a particular period
Employee stock ownership plan
a plan that allows employees to buy a company’s shares at below-market prices

39. Group and Companywide Reward Systems
Organization bonus systems
the one-time rewards employees receive if a company achieves cost savings, quality increases, and so on, in a specified time period

40. Labor Relations Labor relations
the process of establishing rules and practices between a company and its employees that specify how human resources should be employed and rewarded

41. Labor Relations Trade unions
organizations that represent the interests of employees who hold similar types of jobs in a particular industry

42. Competition and Cooperation among Stakeholders
Figure 13.8

43. Union-Management Relations
Industrial conflict
the clash that occurs when workers and unions attempt to obtain a greater share of a company’s profits at the expense of other stakeholders
Working-to-rule
when workers perform their jobs exactly as specified in their employment contracts but do no more

44. Question?
What is a situation that arises when workers refuse to do their jobs in an attempt to bring the work process to a halt?
Lockout
Strike
Grievance
Collective bargaining
The correct answer is “B” – strike. See next slide.

45. Union-Management Relations
Lockout
when managers decide to shut down a company’s operations until workers are willing to accept the employment conditions being offered to them
Strike
a situation that arises when workers refuse to do their jobs in an attempt to bring the work process to a halt

46. Collective Bargaining: Resolving the Conflict
the process through which union representatives and managers negotiate a binding labor agreement over work-related issues, such as pay, benefits, and grievance procedures

47. Collective Bargaining: Resolving the Conflict
Integrative bargaining solution
a “win-win” solution that allows both parties to benefit from the labor contract agreed upon
Attitudinal structuring
the attempt by negotiators on each side to influence each other’s attitudes during the bargaining process

48. Collective Bargaining: Resolving the Conflict
Grievance procedures
labor-contract rules used to resolve labor disputes between companies and their employees

49. Collective Bargaining: Resolving the Conflict
Mediation
a conflict resolution method that involves the use of a neutral third party, or mediator, to help labor and management resolve their differences and reach an agreement

50. Collective Bargaining: Resolving the Conflict
Arbitration
a conflict resolution method that involves the use of a third party to negotiate and impose a binding agreement on labor and management

51. Video: Patagonia
Michael Crooke, CEO, explains that employees at Patagonia are treated in a very different fashion than traditional firms.
How are employees “evaluated” at Patagonia?
Discussion Questions:
How do Patagonia’s HR practices effect innovation at the company?
Answer: The selection of employees is carefully orchestrated to hire only those individuals with passion. Further, employees’ values are more often than not aligned with those of the corporation. The progressive policies and practices encourage, foster, and reinforce innovative practices.
Is there evidence of training and development at Patagonia?
Answer: While one does not “see” training and development in the video, one can reasonably conclude, based on the various practices of the company that training and development is built into their model. While it may not be of the traditional type, the internship, for example, provides training and development opportunities for employees in areas that are consistent with the company’s core values and philosophy. .
How are employees “evaluated” at Patagonia?
Answer: The elements of passion and direct involvement with the products that employees are involved with appear to be the fundamental basis upon which they are evaluated. One other area appears to be that of participating in socially conscious and grass root activist organizations that further the aims of social responsibility. While these are not directly related to the operations of the firm, they are the metrics by which Patagonia assesses employee contributions.