Managing Human Resources

1
Managing Human Resources

• Chapter 13

2
Learning Goals

• Explain the strategic importance of managing
  human resources effectively
• Describe several important laws and government
  regulations that affect how organizations manage
  their human resources
• Explain the objective of human resources planning
  and describe how organizations respond to the
  unpredictability of future business needs

(continued)
3
Learning Goals
(cont'd)

• Describe the hiring process
• Describe several types of training and
  development programs
• Describe several principles for improving the
  accuracy of managers appraisals of employee
  performance
• Describe the basic elements of a monetary
  compensation package

4
Strategic Importance

• Human resources management (HRM) the
  philosophies, policies, and practices that an
  organization uses to affect the behaviors of
  people who work for the organization

• Strategic use of HRM activities can improve
  organizational effectiveness

5
Shared Responsibilities for Managing Human
Resources Planning Activity
Line Managers
HR Professionals
Employees

• Include HRprofessionals inthe formulationand
  implementation of business strategy and
  discussions of its HR implications

• Stay informed ofthe latest technical principles
  for managing human resources

• Accept responsibility for managing their own
  behavior and careers in organizations

6
Shared Responsibilities for Managing Human
ResourcesRecruitment and Selection Activity
Line Managers
HR Professionals
Employees

• Help disseminate information about open positions
  to all potentially qualified internal applicants
• Understand and abide by all legal regulations

• Develop a recruiting plan to guarantee a diverse
  pool of applicants

• Participate in recruiting by making referrals and
  answering questions about the organization

7
Shared Responsibilities for Managing Human
Resources Training and Development Activity
Line Managers
HR Professionals
Employees

• Develop and administer training and development
  programs
• Inform employees of opportunities for training
  and development

• Identify own training and development needs
• Actively seek out and participate inactivities
  that help build own competencies
• Assist in socialization and training of other
  employees

• Work with employees to identify their training
  and development needs
• Provide on-the-job socialization and training

8
Shared Responsibilities for Managing Human
Resources Performance Appraisal Activity
Line Managers
HR Professionals
Employees

• Develop performance appraisal tools and train
  managers to use them
• Train managers in how to conduct performance
  review sessions

• Candidly appraise the performance of others when
  askedto participate in 360-degree appraisals

• Help develop performance measures
• Conduct performance appraisals

9
Shared Responsibilities for Managing Human
Resources Performance Appraisal Activity
(contd)
Line Managers
HR Professionals
Employees

• Monitor managers decisions to be sure they are
  performance-based

• Seek and use honest feedback to improve own
  performance

• Use performance information to make decisions
  about pay raises, promotions, firing etc
• Provide feedback to employees to help them
  improve future performance

10
Shared Responsibilities for Managing Human
Resources Compensation Activity
Line Managers
HR Professionals
Employees

• Assist in developing incentive and bonus plans

• Establish appropriate rates of base pay in
  compliance with legal requirements
• Work with managers to design and develop
  incentives and bonus plans
• Work with accounting and financial staff to
  monitor compensation costs

• Develop an accurate understanding of all elements
  of the organizations pay practices
• Be alert to dysfunctional and possible unethical
  attempts to game performance-based pay practices

11
Conditions for Gaining a Sustainable Competitive
Advantage Through HRM
Competitors must not be able to easily copy the
companys approach to HRM
Employees must be rare or unique in some way
Employees mustbe a source ofadded value
12
Changes in HR Practices at GE to Encourage
Innovation

• Recruiting more managers from outside the company
• Hiring more employees from the countries where GE
  sells its products and services
• Setting goals for managers to develop creative
  new business ideas and tying compensation to
  meeting these goals
• Rewarding managers for revenue growth and
  customer satisfaction
• Urging people to stay in their jobs longer so
  they can develop deeper knowledge of their
  industry

13
Social Consequences of HRM Snapshot
Our aim is to treat our jobcandidates as well
as we treat our customers,to do something
memorable for them. You cant treat people
shabbily, especially in a world where there are
far more open jobs than there is available talent
to fill them. We strive to put the humanity back
into the recruiting experience.
Jason S. Warner, Director of North American
Recruiting, Starbucks Corporation
14
Legal and Regulatory Environment Equal
Employment Opportunity EEO

• Job applicants and employees should be

• Judged on characteristics that are related to the
  work that they are being hired to do

2. Judged on their job performance after being
hired
3. Protected from discrimination based on their
personal background characteristics, such as
gender, race, ethnicity, religion, and so forth
15
Title VII of the Civil Rights Act (1964 with
amendments in 1978 and 1991)

• Prohibits discrimination by employers, employment
  agencies, and unions with 15 or more employees on
  the basis of

• Race
• Color
• Religion
• Sex
• National origin
• Pregnancy (Pregnancy Discrimination Act, 1978)

• Identifies pregnancy as a disability and entitles
  the woman to the same benefits as any other
  disability

• 1991 Amendment clarifies how cases brought under
  the act should proceed

16
Enforcement of U.S. EEO Laws
Makes rules to implement and interpret EEO laws
Conducts investigations and may file lawsuits in
federal courts
Equal EmploymentOpportunityCommission (EEOC)
Imposessanctions
Makes judgments about guilt, which may be
appealed to federal courts
17
EEO in the Global Arena Whos Protected Where by
Legislation?
Country United States India Canada China United
Kingdom Mexico

• Race or Color

• Sex

• Religion

• Age
• No
• No
• No

(continued)
18
EEO in the Global Arena Whos Protected Where by
Legislation?
Country United States India Canada China United
Kingdom Mexico

• Disability
• No

• Sexual Orientation
• No
• No
• No

• PoliticalIdeology
• No
• No
• No
• No

• NationalOrigin
• No

• Marital orFamily Status
• No
• No
• No

19
Legal and Regulatory Environment Compensation
and Benefits

• Fair Labor Standards Act (1938)

• Establishes a minimum wage, which may be raised
  by individual states
• Controls hours through premium pay for overtime
• Controls working hours for children
• Applies to most nonmanagerial employees in
  private industry

• Equal Pay Act (1963)

• Requires men and women to be paid equally when
  they are doing equal work (in terms of skill,
  effort, responsibility, and working conditions)
  in the same organization

20
Compensation and Benefits Comparable Worth

• Some states extend the Equal Pay Act by requiring
  employers to assess the worth of all jobs and
  ensure that jobs of comparable worth are paid
  similarly

21
Human Resource Planning

• Involves forecasting the organizations human
  resources needs and developing the steps to be
  taken to meet them

• Contingent workers employees who are hired by
  companies for specific tasks or short periods of
  time with the understanding that their employment
  may be ended atany time

• Layoffs a strategy of last resort. Potential
  negative effects of layoffs

• More gossip
• Lower morale
• More resignations
• Less employee loyalty
• More charges of discrimination
• More workplace violence

22
Historical Trend in Growth Rate of the U.S.
Workforce (adapted from Figure 13.1)
23
Effects of Layoffs as Reported by Human Resource
Managers in Companies That Reduce Their Workforce
(adapted from Figure 13.2)
More profits
More gossip
Lower morale
More resignations
Less employee loyalty
More charges of discrimination
More workplace violence
24
Human Resource Planning (contd)

• Competency inventory a detailed file maintained
  for each employee that lists level of education,
  training, experience, length of service, current
  job title and salary, and performance history

• Purpose of competency models

To keep track of the talent in the organization
so that it can be nurtured and used effectively
25
Hiring Process

• Activities related to the recruitment of
  applicants to fill open positions in an
  organization and the selection of the best
  applicants for a position
• Vacancies stimulate the hiring process through

26
Vacancies Stimulate the Hiring Process(adapted
from Figure 13.3)
Organizational Growth

• Internal
• Movement
• Promotion
• Demotion
• Transfer

Recruitment
Vacancy Created
Selection
Exit from Organization (Turnover)
27
Problems Encountered When Applying for Jobs on
the Internet(adapted from Figure 13.4)
Difficult to navigate site
Difficult to use
Wanted more personal contact
Concerns about security of personal data
Lack of relevant information about the company
Not enough jobs listed to make it worth the effort
Slow feedback and follow-up
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Hiring Process Recruitment
Organization web site
Internal job positions, paper-based and Intranet
Common recruitment methods
Announcementsin newspapers,magazines,
employment websites, etc.
Employee referrals
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Hiring Process Employee Selection

• A process that involves deciding which of these
  recruits should actually be hired and for which
  positions

Résumés
Reference checks
Commoninformationsources
Tests
Interviews
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Hiring Process Examples of Questions to Use in
a Structured Interview

• Competency Being Assessed Teamwork

• Sketch out two or three key strengths you have in
  working as part of a work team. Can you
  illustrate the first strength with a recent
  example? repeat this question and the following
  probes for each strength

Probes

• When did this example take place?
• What possible negative outcomes were avoided by
  the way you handled the situation?
• How often do situations like this happen?
• What happened in the next time it came up?

(continued)
31
Hiring Process Examples of Questions to Use in
a Structured Interview
(contd)

• Competency Being Assessed Teamwork

2. Tell me about a time when you used your
teamwork competency to solve a problem with a
customer
Probes

• Where did this take place?
• What did the customer say?
• What did you tell your teammates?
• Did the team have any problems dealing with the
  situations? Explain
• How did the customer respond?

32
Training and Development

• Training activities that help employees overcome
  limitations and improve performance in their
  current jobs

Orientation training
Basic skills training
Commontrainingapproaches
E-learning
Team training
33
Training and Development
(cont'd)

• Development practices that help employees gain
  the competencies they will need in the future in
  order to advance in their careers

Career development
Coredevelopmentapproaches
Coaching
Mentoring
34
Performance Appraisal

• A formal, structured system for evaluating an
  employees job performance

• Common uses of performance appraisal

• To make decisions about who will be promoted,
  demoted, transferred, or dismissed
• To make decisions about pay raises
• To improve future performance of employees

35
Performance Appraisal Performance Feedback
Sessions

• Managers and their subordinates meet to exchange
  performance information and discuss how to
  improve future performance

• Performance information increasingly includes

• Employees own assessment of performance
• Assessment by teammates
• Information from customers

36
Performance Appraisal Accuracy

• Difficult for managers to accurately assess
  performance of subordinates

• Two approaches to improve accuracy

• Use appropriate rating scales that provide
  specific descriptions of what each level of
  performance means
• Use multiple raters

• One example. 360-degree appraisalmeasures
  performance by obtaining assessments of the
  employee from a variety of sources supervisors,
  subordinates, colleagues inside the company,
  people outside the organization with whom the
  employee does business, and even a self-appraisal
  by the employee

37
Performance Appraisals for Teams

• Some teams may have full responsibility for
  constructing and conducting their own performance
  appraisals of each other
• Team self-appraisal of each member is difficult
• Manager to whom the team reports is often
  responsible for collecting performance
  information from the team and discussing it with
  each team member privately

38
Compensation Two Components

• Nonmonetary compensation the many forms of
  social and psychological rewards, such as
  recognition and respect from others and
  opportunities for self-development

• Monetary compensation the direct payments such
  as salary, wages, and bonuses, as well as
  benefits such as covering the costs of insurance
  plans

39
Compensation Pay Fairness

• What people believe they deserve to be paid in
  relation to what others deserve to be paid

• However, compensation must be externally
  competitive to attract qualified applicants

• Components of pay system employees consider in
  evaluating fairness

• Base payperceived fairness increases if at or
  above market average
• Incentive paysuch as commissions, bonuses, and
  profit sharing
• Employee benefitssome required by law and others
  are voluntary

40
Average Annual Monetary Benefits and
Earnings(adapted from Figure 13.6)
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Vacationing Around the World(adapted from Figure
13.7)
Italy
France
Germany
Brazil
Britain
Canada
South Korea
Japan
U.S.
0
5
10
15
20
25
30
35
40
45
Days
Average annual vacation days