1. Managing Human Resources
Chapter 8
Managing Human Resources

2. The Foundations of Human Resource Management (HRM)
Set of organizational activities directed at attracting, developing, and maintaining an effective workforce

3. The Strategic Importance of HRM
HRM’s importance has grown dramatically in the last two decades. This new importance stems from:
Increased legal complexities
The recognition that human resources are a valuable means for improving productivity
The awareness today of the costs associated with poor human resource management

4. Human Resource Planning
HR planning involves job analysis and forecasting the demand for and supply of labor.
Job Analysis
Systematic analysis of jobs in an organization
Job Description 
Systematic evaluation of the duties, working conditions, tools, materials, and equipment related to the performance of a job
Job Specification  
Description of the skills, abilities, and other credentials required by a job

5. The Human Resource Planning Process
Perform Job Analysis
Forecast Demand for Labor
Forecast Internal Supply of Labor
Forecast External Supply of Labor
Develop Plan to Match Demand with Supply

6. Forecasting HR Demand & Supply
Forecasting the supply of labor is really two tasks:
Forecasting Internal Supply
The number and type of employees who will be in the firm at some future date
Forecasting External Supply
The number and type of people who will be available for hiring from the labor market at large

7. Forecasting HR Demand & Supply
Replacement Charts
Listing of each managerial position, who occupies it, how long that person will likely stay in the job, and who is qualified as a replacement
Employee Information System (or Skills Inventory)
Computerized system containing information on each employee’s education, skills, work experiences, and career aspirations

8. Matching HR Supply & Demand
After comparing future demand and internal supply, managers can make plans to manage predicted shortfalls or overstaffing.
If a shortfall is predicted:
New employees can be hired.
Present employees can be retrained and transferred into understaffed areas.
Individuals approaching retirement can be convinced to stay on.
Labor-saving or productivity-enhancing systems can be installed .

9. Staffing the Organization
External Staffing
The process of acquiring staff from outside the company
Internal Staffing
The process of promoting staff from within the company

10. Recruiting Human Resources
Process of attracting qualified persons to apply for open jobs
Internal Recruiting
Practice of considering present employees as candidates for job openings
External Recruiting
Practice of attracting people outside an organization to apply for jobs

11. Selecting Human Resources
Application Forms (Blanks)
Tests
Interviews
Other Techniques
Validation  
Process of determining the predictive value of information

12. Developing Human Resources
Orientation 
Process of introducing new employees to the organization so that they can become effective contributors more quickly.

13. Assessing Training & Development Needs
Needs Analysis
Determines the organization’s true needs and the training programs necessary to meet them
What knowledge, skills, and abilities does the organization need to compete?
What skills must its workforce possess in order to perform the organization’s work effectively?

14. Training & Development Techniques & Methods
Work-Based Program  
Training technique that ties training and development activities directly to task performance
On-the-Job Training: Work‑based training, sometimes informal, conducted while an employee is in actual work situation
Vestibule Training: Worked‑based training conducted in a simulated environment away from the work site
Systematic Job Rotation & Transfer: Work‑based training in which employees are systematically moved from one job to another so that they can learn a wider array of tasks and skills

15. Training & Development Techniques & Methods
Instructional-Based Program  
Training designed to impart new knowledge and information
Lecture or Discussion Approach: Instructional‑based training in which knowledge and information are descriptively presented
Computer-Assisted Training: Instruction‑based training in which is knowledge and information are presented via computer

16. Training & Development Techniques & Methods
Training Technology
Video Teleconferencing
Trainers in centralized locations deliver material live by satellite hookup to remote sites
Interactive Video
Material is presented via video technology on a monitor from a central serving mechanism, a video disk, CD-ROM, or web site

17. Training & Development Techniques & Methods
Team Building & Group‑Based Training
More and more organizations are using teams as a basis for doing their jobs.
Many of the same companies are developing training programs specifically designed to facilitate intragroup cooperation among members of teams.

18. Evaluating Employee Performance
Performance Appraisal
Formal evaluation of an employee’s job performance in order to determine the degree to which the employee is performing effectively

19. The Performance Appraisal Process
Conducting the Performance Appraisal
Who should conduct the performance appraisal?
What sources of information should be used?
Providing Feedback
360° Feedback: Performance appraisal system in which information is provided from all sources—supervisors, employees, peers, and so forth

20. The Performance Appraisal Process
Methods for Appraising Performance
Ranking Methods
Simple Ranking Method: Performance appraisal method that ranks employees from best to worst
Forced Distribution Method: Performance appraisal method that classifies employees into different performance categories based on a predetermined distribution
Rating Methods
Graphic Rating Scale: Performance rating method using a numerical scale to rate performance along a set of dimensions
Critical Incident Method: Performance rating method based on stated examples that reflect especially good or poor performance

21. Providing Compensation & Benefits
Set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks

22. Determining Basic Compensation
The base level of wages or salary paid to an employee
Wages: Compensation in the form of money paid for time worked
Salary: Compensation in the form of money paid for discharging the responsibilities of a job

23. Determining Basic Compensation
Pay Surveys in Compensation
Method used to obtain information about compensation paid to employees by other employers
Job Evaluation
Methods for determining the relative worth of jobs in order to set compensation levels
Establishing a Pay Structure
Compensation for different jobs is based on the organization’s assessment of the relative value to the organization of each job class.

24. Performance-Based Compensation
Merit Pay Plan  
Performance‑based pay plan basing part of compensation on employee merit
Skill-Based or Knowledge-Based Pay  
Performance‑based pay plan rewarding employees for acquiring new skills or knowledge

25. Incentive Compensation Systems
Piece-Rate Incentive Plan  
Incentive‑based pay plan that provides payment for each unit produced
Individual Incentive Plan  
Incentive‑based pay plan that rewards individual performance on a real-time basis
Sales Commission  
Individual incentive plan rewarding employees with a percentage of sales volume that they generate

26. Team & Group Incentive Systems
Gainsharing Program  
Group‑based incentive plan that gives rewards for productivity improvements
Profit Sharing  
Group‑based incentive plan in which employees are paid a share of company profits

27. Indirect Compensation & Benefits
Compensation other than wages and salaries

28. Mandated Protection Plans
Protect employees when their income is threatened or reduced by illness, disability, death, unemployment, or retirement.
Unemployment Insurance: Mandated coverage protecting employees who are laid off
Social Security: Mandated federal retirement program
Worker’s Compensation Insurance: Legally required insurance covering workers who are injured or become ill on the job

29. Optional Protection Plans
Protect employees in the same manner as mandatory plans, except companies can choose whether or not to provide them.
Private Pension Plan: Prearranged company pensions provided to retired employees

30. Other Types of Benefits
Paid Time Off
Paid holidays, paid vacations, sick leave, & personal leave
Other Types of Benefits
Wellness Program: Benefit in the form of programs designed to help employees from becoming sick
Childcare: These plans might include scheduling help, referrals to various types of services, or reimbursement accounts for childcare expenses. In many cases, they actually include company‑paid day care.
Cafeteria Benefit Plan: Benefit plan that sets limits on benefits per employee, each of whom may choose from a variety of alternative benefits

31. The Legal Context of Human Resource Management
Equal Employment Opportunity
Legally mandated nondiscrimination in employment on the basis of race, creed, sex, or national origin
Illegal Discrimination
Discrimination against protected classes that causes them to be unfairly differentiated from others
Protected Class
Set of individuals who by nature of one or more common characteristics are protected by law from discrimination on the basis of any of those characteristics

32. Equal Employment Opportunity Legislation
Title VII of the Civil Rights Act of 1964: Federal law forbidding employment discrimination on the basis of race, color, religious beliefs, sex, or national origin
Equal Pay Act of 1963: Federal law requiring organizations to pay men and women the same pay for doing equal work
Comparable Worth: Principle that jobs which are worth the same should be compensated at the same level regardless of who performs them
Age Discrimination and Employment Act (ADEA): Federal law prohibiting discrimination against people over 40 on the basis of age
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33. Equal Employment Opportunity Legislation
Pregnancy Discrimination Act of 1979: Federal law forbidding discrimination against women who are pregnant
Civil Rights Act of 1991: Amendment that extends Title VII of the Civil Rights Act of 1964 and provides for compensatory and punitive damages
Americans with Disabilities Act of 1990 (ADA): Federal law prohibiting discrimination on the basis of disability and requiring employers to make reasonable accommodation for disabled applicants and employees
Family and Medical Leave Act of 1993: Federal law requiring employers to provide unpaid leave for specified family and medical reasons
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34. Enforcing Equal Employment Opportunity
Equal Employment Opportunity Commission (EECO) 
Agency created by Title VII to enforce discrimination- related laws
Affirmative Action Program  
Practice of recruiting qualified employees belonging to racial, gender, or ethnic groups who are underrepresented in an organization
Reverse Discrimination  
Practice of discriminating against well-represented groups by over-hiring members of underrepresented groups

35. Legal Issues in Compensation
Laws Affecting Total Compensation
Fair Labor Standards Act: Federal law setting minimum‑wage and over‑time pay requirements
Laws Affecting Other Forms of Compensation
Employee Retirement Income Security Act of 1974 (ERISA): Federal law regulating private pension plans

36. Contemporary Legal Issues in HR Management
Occupational Safety and Health Act of 1970 (OSHA)
Federal law setting and enforcing guidelines for protecting workers from unsafe conditions and potential health hazards in the workplace
Emerging Areas of Discrimination Law
AIDS in the Workplace
Sexual Harassment
Quid Pro Quo Harassment
Hostile Work Environment
Employment-at-Will

37. New Challenges in the Changing Workplace
Managing Workforce Diversity
Range of workers’ attitudes, values, and behaviors that differ by gender, race, and ethnicity

38. New Challenges in the Changing Workplace
Managing Knowledge Workers
Employee who is of value because of the knowledge that he or she possesses

39. New Challenges in the Changing Workplace
Contingent Worker  
Employee hired on something other than a full-time basis to supplement an organization’s permanent work force