2. Chapter Learning Objectives After studying this chapter you should be able to:
Describe the environmental context of human resource management, including its strategic importance and its relationship with legal and social factors.
Discuss how organizations attract human resources, including human resource planning, recruiting, and selecting.
Describe how organizations develop human resources, including training and development, performance appraisal, and performance feedback.
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3. Chapter Learning Objectives (cont’d) After studying this chapter you should be able to:
Discuss how organizations maintain human resources, including the determination of compensation and benefits and career planning.
Discuss the nature of diversity, including its meaning, associated trends, impact, and management.
Discuss labor relations, including how employees form unions and the mechanics of collective bargaining.
Describe the issues associated with managing knowledge and contingent and temporary workers.
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4. The Environmental Context of Human Resource Management
Human Resource Management (HRM)
The set of organizational activities directed at attracting, developing, and maintaining an effective work force.
The Strategic Importance of HRM
Human capital reflects the organization’s investment in attracting, retaining, and motivating an effective workforce critical for effective organizational functioning.
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5. The Legal Environment of HRM
Equal Employment Opportunity
Compensation and Benefits
Labor Relations
Health and Safety
Title VII of Civil Rights Act of 1964
Fair Labor Standards Act of 1938 (FLSA)
National Labor Relations Act of 1935 (Wagner Act)
Occupational Safety and Health Act of 1970 (OSHA)
Pregnancy Discrimination Act
Equal Pay Act of 1963
Labor Management Relations Act of (Taft-Hartley Act)
Age Discrimination in Employment Act
Employee Retirement Income Security Act of (ERISA)
Americans with Disabilities Act
Family and Medical Leave Act of 1993 (FMLA)
Civil Rights Act of 1991
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6. Equal Employment Opportunity
Title VII of the Civil Rights Act of 1964
Forbids discrimination in the employment relationship.
Employers are not required to seek out and hire minorities but they must treat fairly all who apply.
Adverse impact
Occurs when minority group members’ pass rate on a selection standard is less than 80% of the pass rate of the majority group.
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7. Equal Employment Opportunity
Equal Employment Opportunity Commission
Federal agency charged with enforcing Title VII as well as several other employment-related laws.
Age Discrimination in Employment Act of 1967
Outlaws discrimination against people older than 40 years of age.
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8. Equal Employment Opportunity (cont’d)
Affirmative Action
The commitment of employers to proactively seek out, assist in developing, and hire employees from groups that are underrepresented in the organization.
Various executive orders, especially Executive Order 11246, require federal contractors to develop affirmative action plans and engage in affirmative action in hiring veterans and the disabled.
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9. Equal Employment Opportunity (cont’d)
Americans with Disabilities Act of 1990 (ADA)
Forbids discrimination on the basis of disabilities and requires employers to provide reasonable accommodations for disabled employees.
Civil Rights Act of 1991
Amended the original Civil Rights Act, making it easier to bring discrimination lawsuits while also limiting punitive damages that can be awarded in those lawsuits.
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10. Compensation Fair Labor Standards Act of 1938 (FLSA)
Sets a minimum wage and requires overtime pay for work in excess of 40 hours per week.
Salaried professional, executive, and administrative employees are exempt from the Act’s minimum wage and overtime provisions.
Equal Pay Act of 1963
Requires men and women to be paid the same amount for doing the same jobs; exceptions are permitted for seniority and performance pay.
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11. Benefits Employee Retirement Income Security Act of 1974 (ERISA)
Sets standards for pension plan management and provides federal insurance if pension plans go bankrupt.
Family and Medical Leave Act of 1993 (FMLA)
Requires employers to provide up to 12 weeks of unpaid leave for family and medical emergencies.
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12. Labor Relations National Labor Relations Act of 1935 (Wagner Act)
Set up procedures for establishing unions and requires employers to bargain collectively with unions.
National Labor Relations Board (NLRB)
Is the federal agency that enforces the NLRA.
Labor Management Relations Act of (Taft-Hartley Act)
Limited power of unions and increased management’s rights during organizing campaigns.
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13. Health and Safety
Occupational Safety and Health Act of 1970 (OSHA) requires that employers:
Provide a place of employment that is free from hazards that cause death or serious physical harm.
Obey safety and health standards set by the Occupational Safety and Health Administration (OSHA).
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14. The Legal Environment of HRM (cont’d)
Alcohol and drug dependencies
AIDS in the workplace
Sexual harassment
Emerging Legal Issues
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15. Attracting Human Resources
Job Analysis
A systematic analysis of jobs within an organization.
Job Description
A listing of the job’s duties; its working conditions; and the tools, materials, and equipment use to perform the job.
Job Specification
A listing of the knowledge, skills, abilities, and other credentials the incumbent jobholder will need to do a job.
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16. Human Resource Planning
FIGURE 8.1
Human Resource Planning
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17. Recruiting Human Resources
The process of attracting qualified persons to apply for jobs that are open.
Internal Recruiting (Promotion from Within)
Involves considering present employees as candidates for openings.
Can help build morale and reduce turnover of high-quality employees.
Can create a “ripple effect”—the disadvantage of having to successively fill vacated positions.
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18. Recruiting Human Resources (cont’d)
Executive search firms
Union halls
Employee referrals
Sources of External Recruits
Advertising
Campus interviews
Employment agencies
Walk-ins
Realistic Job Preview (RJP)
Is a successful method to ensure person-job fit.
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19. References checked, final decisions made
The Selection Process
Pool of candidates complete application blanks
Initial screening
Remaining candidates complete test battery
Test scoring
Remaining candidates are interviewed by managers
References checked, final decisions made
Final candidates receive job offers
Physical exams may be required for employment
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20. Selecting Human Resources
Validation
The process of determining the predictive value of information gained from a selection device.
Application Blanks
Gather information about work history, educational background, and other job-related demographic data.
Must not ask for information unrelated to the job.
Are used to decide if a candidate merits further evaluation.
Provide interviewers with candidate information.
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21. Selecting Human Resources (cont’d)
Tests
Ability, skill, aptitude, or knowledge tests are usually the best predictors of job success.
Must be validated, administered, and scored consistently.
The testing process must be the same for all candidates.
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22. Selecting Human Resources (cont’d)
Interviews
Interviewer biases can be overcome and interview consistency and validity can be improved by training interviewers and using structured interviews.
Assessment Centers
Are used to select managers from current employees for promotion.
Other Techniques
Polygraph testing, physical exams, drug tests, and credit checks to screen prospective employees.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

23. Developing Human Resources
Training
Teaching operational or technical employees how to do the job for which they were hired.
Development
Teaching managers and professionals the skills needed for both present and future jobs.
Assessing Training Needs
Determining training needs is the first step in developing a training plan.
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24. Developing Human Resources (cont’d)
Lectures
Role play and case studies
On-the-job and vestibule training
Common Training Methods
Web-based and electronic training
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25. Training and Development Evaluation
Training and development programs should always be evaluated.
Approaches include measuring relevant job performance criteria before and after the training to determine the effect of training.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

26. Performance Appraisal
A formal assessment of how well employees do their jobs.
Reasons for Performance Appraisal
Appraisal validates the selection process and the effects of training.
Appraisal aids in making decisions about pay raises, promotions, and training.
Appraisal provides feedback to employees to improve their performance and plan future careers.
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27. Judgmental Appraisal Methods
Ranking Method
Compares employees directly with each other.
Difficult to do with large numbers of employees.
Difficult to make comparisons across work groups.
Employees are ranked only on overall performance.
Do not provide useful information for employee feedback.
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28. Judgmental Appraisal Methods (cont’d)
Rating Method
Compares each employee with a fixed standard.
Uses graphic rating scales of job performance dimensions to be rated on a standard scale.
Behaviorally-Anchored Rating Scale (BARS)
Is a rating scale where each point on the scale is associated with behavioral anchors.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

29. Graphic Rating Scales for a Bank Teller
FIGURE 8.2
Graphic Rating Scales for a Bank Teller
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30. Behaviorally Anchored Rating Scale
FIGURE 8.3
Behaviorally Anchored Rating Scale
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31. Errors in Performance Appraisal
Recency Error
The tendency of the evaluator to base judgments on the subordinate’s most recent performance because it is the most easily recalled.
Errors of Leniency and Strictness
Being too lenient, too strict, or tending to rate all employees as “average.”
Halo Error
Allowing the assessment of the employee on one dimension to spread to that employee’s ratings on other dimensions.
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32. “360 degree” Performance Appraisal
“360 degree” Feedback
A process in which managers are evaluated by everyone around them.
Provides a richer array of performance information on which to base an appraisal.
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33. Performance Appraisal Feedback
Performance Feedback
Is best given in a private meeting between the employee and immediate supervisor.
Is more effective if managers are properly trained to conduct feedback interviews.
Focus of Appraisal Discussion:
Assessed level of performance
How and why the assessment was made
How the employee’s performance can be improved in the future.
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34. Direct Compensation Forms of Compensation Purposes of compensation
Wages are hourly compensation paid to operating employees.
Salary is paid for the total contribution of an employee and is not based on total hours worked.
Incentives are special compensation opportunities that are usually tied to performance.
Purposes of compensation
Provide a reasonable standard of living.
Provide a tangible measure of an individual’s value to the organization.
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35. Steps in Determining Compensation
Wage-level decisions:
Organization strategy
Availability of resources
Wage survey data
Unemployment rates
Wage-structure decisions:
Internal equity
Job rankings
Job evaluations
Individual wage decisions:
Experience
Performance
Seniority
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36. Indirect Compensation: Determining Benefits
Pay for time not worked
Life, health, and other insurance
Service benefits
Cafeteria benefit plans
Types of Employee Benefits
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37. Managing Workforce Diversity
Diversity Defined
When members of a group differ from one another along dimensions such as age, gender, or ethnicity.
Diversity as a Competitive Advantage
Higher productivity; lower turnover and absenteeism
Increased reputation as “good place to work”
Better understanding of different market segments
Increased creativity and innovation
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38. Managing Workforce Diversity (cont’d)
Diversity as a Source of Conflict
Personnel actions (e.g., hiring, promotion, and firing) being attributed to an individual’s diversity status.
Misunderstood, misinterpreted, or inappropriate actions among people of different groups.
Fear, distrust, or individual prejudices.
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39. Reasons for Increasing Diversity
Legislation and legal action
Changing demographics in the labor force
Increasing diversity and multiculturalism in organizations
Increased awareness that diversity improves the quality of the work force
The globalization movement
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40. Managing Diversity in Organizations
Individual Strategies
Understanding the nature and meaning of diversity and multiculturalism.
Developing empathy in understanding the perspective of others.
Developing tolerance of fundamental cultural differences.
Having a willingness to communicate and discuss diversity and multiculturalism issues.
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41. Organizational Approaches to Managing Diversity
Organizational policies
Organizational practices
Diversity training
Organizational culture
Managing Diversity in Organizations
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42. Managing Labor Relations
The process of dealing with employees when they are represented by a union.
Organizations prefer that employees remain nonunion because unions limit management’s freedom.
The best way to avoid unionization is to practice good employee relations by:
Providing fair treatment with clear standards in pay, promotions, layoffs, and discipline.
Providing a complaint and appeal system and avoiding favoritism.
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43. The Union-Organizing Process
FIGURE 8.9
The Union-Organizing Process
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44. New Challenges in the Changing Workplace
Managing Knowledge Workers
Knowledge workers’ contributions to an organization are based on what they know (as experts).
Computer scientists, engineers, and physical scientists
Knowledge Worker Management and Labor Markets
Offering competitive starting salaries and sign-on bonuses.
Regular upward compensation adjustments to stay competitive with external labor market rates.
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45. Managing the Changing Workplace
Contingent and Temporary Workers
Are not permanent or full-time employees
Independent contractors, on-call workers, temporary employees, contract and leased employees, and part-time workers.
Represent about 10 percent of the U.S. workforce.
The increasing use of this type of workers is driven by the strategic need for organizations to maintain flexibility in staffing levels and to control labor costs.
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