1. Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART 3........................ Understanding People in Organizations

2. Copyright ©2003 Prentice Hall, Inc. 9 - 2 Chapter 9 Managing Human Resources and Labor Relations

3. Copyright ©2003 Prentice Hall, Inc. 9- 3 Human Resource Management Attracting, developing, and maintaining an effective workforce A critical, bottom-line function!

4. Copyright ©2003 Prentice Hall, Inc. 9- 4 Why HRM has grown in importance? Poor HRM can have a substantial negative impact on the bottom line (profit), while effective HRM practices result in a significant competitive advantage. Legal action can be an expensive and embarrassing result of poor HRM.

5. Copyright ©2003 Prentice Hall, Inc. 9- 5 Who is responsible for HRD? Depends on the size of the company.

6. Copyright ©2003 Prentice Hall, Inc. 9- 6 steps of human resource planning 1. Job analysis. The systematic review of jobs within an organization. 2. Forecasting demand for labor within the company, based on past human resource usage, future organizational plans, and general economic trends. 3. Forecasting the internal and external supply of labor. 4. Matching demand with supply, and planning how to most effectively manage projected shortfalls and surpluses.

7. Copyright ©2003 Prentice Hall, Inc. 9- 7 Human Resource Planning Process Conduct analysis Forecast demand for labor Forecast internal supply of labor Forecast external supply of labor Develop plan to match demand with supply

8. Copyright ©2003 Prentice Hall, Inc. 9- 8 Job Analysis Systematic Review of Jobs Within a Firm Job Description Responsibilities and working conditions, plus tools, materials and equipment to perform the job Job Description Responsibilities and working conditions, plus tools, materials and equipment to perform the job Job Specification\requirement Skills, abilities, and credentials\qualifications needed to perform the job Job Specification\requirement Skills, abilities, and credentials\qualifications needed to perform the job

9. Copyright ©2003 Prentice Hall, Inc. 9- 9 discussion Why job description is necessary? 1. Avoid overlapped and duplications. 2. Achieve employees high morals. 3. Responsibility is clearly identified.

10. Copyright ©2003 Prentice Hall, Inc. 9- 10 Forecasting Labor Supply Internal Forecasting Replacement Charts Skills Inventories External Forecasting State Employment Commissions Government Reports College Information

11. Copyright ©2003 Prentice Hall, Inc. 9- 11 Forecasting Labor Supply Forecasting the internal labor supply means determining the number and type of employees who will be in the firm at some future date. management tools: 1. Replacement charts: List each key management position, who occupies it, how long that person will likely stay in the job, and who (by name) is qualified as a replacement. 2. Skills inventories: Computerized information systems containing information about each employee’s education, work experience, and career aspirations. Forecasting the external labor supply means determining the number and type of employees who will be available for hiring from the labor market at large. sources can help: 1. State employment commissions e.g. job centers. 2. Government reports 3. College information regarding enrollment in various majors

12. Copyright ©2003 Prentice Hall, Inc. 9- 12 Managing a Projected Shortfall how? Hire new employees, if people are indeed available in the external market. Consider hiring temporary workers, especially if the shortfall appears short-term or uncertain. Retrain and transfer current employees into understaffed areas, providing a morale boost to strong employees. Convince older workers not to retire, which usually requires strong financial incentives. The creative solution: Develop and install productivity enhancing systems

13. Copyright ©2003 Prentice Hall, Inc. 9- 13 External Recruiting Attracting outside candidates to apply for jobs External Recruiting Attracting outside candidates to apply for jobs Recruiting Attracting Qualified Candidates to Apply for a Job Internal Recruiting Considering current employees for new positions Internal Recruiting Considering current employees for new positions What are the strengths and weaknesses of each approach?

14. Copyright ©2003 Prentice Hall, Inc. 9- 14 Recruiting Recruiting: Attracting qualified candidates to apply for the jobs an organization is seeking to fill. Recruiting can be either internal or external. 1. Internal recruiting: Considering current employees for new positions. Tools may include job postings, skills inventories, and recommendations from managers. 2. External recruiting: Attracting outside candidates to apply for jobs. Tools may include advertising, campus interviews, employment agencies, executive search firms, and referrals from current employees.

15. Copyright ©2003 Prentice Hall, Inc. 9- 15 Discussion What are the strengths and weaknesses of the internal and external recruitment?

16. Copyright ©2003 Prentice Hall, Inc. 9- 16 Selecting Human Resources 1. Application forms: applications are often used to screen out applicants who do not merit further attention. 2. Tests: Many organizations test ability, skill, aptitude\ability, or knowledge that is relevant to a specific job. Occasionally, organizations also test general intelligence and personality. Other types of tests include polygraphs (i.e. lie detector tests). 3. Interviews: Interviews are very popular, but not always predictive of job success because of potential bias on the part of interviewers. Structured interviews—when all interviewers ask all candidates the same questions— improve the validity of interviews as a selection technique. Validity: How effectively does the information you gather predict the future performance of a candidate?

17. Copyright ©2003 Prentice Hall, Inc. 9- 17 Developing the Workforce through training On-the-job training: Conducted while the employee is at work. Can be either formal or informal. Off-the-job training: Takes place away from the worksite, typically in a classroom setting. Vestibule training: Performed in a simulated environment (e.g. often used to train pilots, or machine-operators). Performance appraisal\evaluation: Evaluating job performance to determine effectiveness. Appraisals are often used to determine raises, promotions, demotions, and firings.

18. Copyright ©2003 Prentice Hall, Inc. 9- 18 Compensation and Benefits A major factor in attracting and retaining skilled employees is a company’s compensation system: Definition: The total package it offers employees in return for their labor. In determining compensation, companies usually start by examining the compensation offered by their competitors. Wages: Money paid for time worked. Usually expressed on an hourly basis. Salary: Money paid for accomplishing a specific job. Usually expressed on a yearly basis.

19. Copyright ©2003 Prentice Hall, Inc. 9- 19 Benefits Compensation Other Than Wages and Salaries Optional Benefits, to worker Retirement plans: provide pensions Health, life, & disability insurance Vacations & holidays Counseling services Mandatory Benefits Social security Workers’ compensation

20. Copyright ©2003 Prentice Hall, Inc. 9- 20 Incentive programs They are designed to motivate high performance. They include: 1. Bonus: paid when they sell certain number of goods or services for the year. 2. Merit salary system: individual incentives linking compensations to performance in nonsales jobs. E.g., CEO receive stock options as incentives for his managerial talent.

21. Copyright ©2003 Prentice Hall, Inc. 9- 21 Woman Managers Earn Significantly Less Than Men Source: Appendix I: Congressional Briefing Slides: Women in Management, Sept. 26, 2001, p. 19. 0$.20 $.40$.60 $.80$1.00 Professional Medical Services Finance, Insurance & Real Estate Retail Trade Other Professional Services Entertainment & Recreational Services Business & Repair Services Communications 20001995INDUSTRY Full-time Female Earnings for Every $1.00 Earned by Full-time Male Managers $.88 $.90 $.68 $.76 $.65 $.69 $.83 $.88 $.62 $.83 $.76 $.82 $.73 $.86

22. Copyright ©2003 Prentice Hall, Inc. 9- 22 Equal Opportunity Unfair Discrimination Is Not Legal Equal Opportunity Laws Protect workers from discrimination based on prejudice Protected Class People with common characteristics as indicated by law Equal Employment Opportunity Commission (EEOC): Federal agency that enforces discrimination-related laws Affirmative Action Plan to hire and develop members of protected classes

23. Copyright ©2003 Prentice Hall, Inc. 9- 23 Contemporary Legal Issues in Human Resource Management Employee safety and health AIDs in the workplace Sexual harassment Quid pro quo Hostile work environment Employment-at-will

24. Copyright ©2003 Prentice Hall, Inc. 9- 24 Managing Workforce Diversity BlackHispanicAsian & OtherWhite 1986 10.6% 6.9% 2.8% 79.8% 1996 11.0% 9.5% 4.1% 75.3% 2006* 10.6% 11.7% 4.9% 72.7% *Projection

25. Copyright ©2003 Prentice Hall, Inc. 9- 25 Managing Knowledge Workers Knowledge workers add value because of what they know Computer Scientists Physical Scientists Engineers Hiring and retaining knowledge workers is a critical HR challenge

26. Copyright ©2003 Prentice Hall, Inc. 9- 26 Developing a Management Strategy Assessing True Costs Understanding Pros & Cons Contingent Workers A Rapidly Growing Trend Management challenges: Careful Planning

27. Copyright ©2003 Prentice Hall, Inc. 9- 27 Labor Relations Managing unionized employees Labor Relations Managing unionized employees Managing Organized Labor Labor Union People working together to achieve shared job-related goals

28. Copyright ©2003 Prentice Hall, Inc. 9- 28 Union Membership Has Declined Significantly25201510 Percentage Unionized 197719801985199019952000 Data for 1981 and 1982 were not available.

29. Copyright ©2003 Prentice Hall, Inc. 9- 29 Union-Management Relations Bargaining Perspectives Trends in Organized Labor Future Outlook

30. Copyright ©2003 Prentice Hall, Inc. 9- 30 Collective Bargaining Negotiating a Labor Contract Union's Demand Union's Expectation Union's Minimum Limit Employer's Maximum Limit Employer's Expectation Employer's Desired Result BARGAINING ZONE

31. Copyright ©2003 Prentice Hall, Inc. 9- 31 Contract Issues  Compensation  Benefits  Job Security  Other Union Issues  Management Rights

32. Copyright ©2003 Prentice Hall, Inc. 9- 32 When Bargaining Fails… Union Tactics: Strike Picketing Boycott Work slowdown Management Tactics: Lockouts Strikebreakers

33. Copyright ©2003 Prentice Hall, Inc. 9- 33 Mediation Voluntary Arbitration Compulsory Arbitration Resolving Disputes

34. Copyright ©2003 Prentice Hall, Inc. 9- 34 Chapter Review Define human resource management Discuss staffing, developing human resources, and evaluating performance Describe the role of compensation in attracting and keeping skilled workers Identify the key legal issues surrounding human resource management

35. Copyright ©2003 Prentice Hall, Inc. 9- 35 Chapter Review Discuss important changes in the contemporary workplace Explain why workers unionize and discuss the collective bargaining process