Chapter 2 Understanding the Legal and Environmental Context of HRM

1
Chapter 2Understanding the Legal and
Environmental Context of HRM
2
HRM and Competitive Advantage
HR Planning Job Analysis
Recruitment Selection
Output Retention Legal Compliance Company Image
Competence Motivation Work Attitudes
Cost Leadership Product Differentiation
Training/Develop. Performance App. Compensation Pr
oductivity Imp.
Workplace Justice Unions Safety
Health International
3
Linking Legal Compliance to Competitive Advantage
Minimize Litigation
Perceived Fair Processes
Lower Costs
Lower Turnover
Legal Compliance
Competitive Advantage
Attract High- Quality Applicants
Enhanced Company Reputation
Increased Employee Competence
Retain High- Performing Employees
4
Equal Employment Opportunity

• Protected classifications
• race
• color
• religion
• sex
• national origin
• age
• disability

5
Equal Employment Opportunity

• Protected Groups
• subcategories of people within each protected
  classification
• Example male and female are protected
  groups within the protected classification of
  sex

6
Major EEO Laws

• Civil Rights Act of 1964 (Title VII)
• Civil Rights Act of 1991
• Pregnancy Discrimination Act of 1978
• Immigration and Reform Control Act of 1986
• Age Discrimination in Employment Act of 1967
• Americans with Disabilities Act of 1990

7
Civil Rights Act of 1964 (Title VII)

• Prohibits discrimination based on race, color,
  religion, national origin, and sex
• Covers employers with15 or more workers who work
  for at least 20 weeks/year
• Remedies include legal costs and back pay

8
Civil Rights Act of 1991

• Punitive and compensatory damages possible
  (capped at 50,000 to 100,000 depending on firm
  size)
• Mixed-motive decisions unlawful
• partly legitimate, partly discriminatory

9
Pregnancy Discrimination Act of 1978

• Prohibits discrimination against women based on
  pregnancy, childbirth, or related medical
  conditions
• Pregnancy-related condition must be treated same
  as any temporary disability

10
Immigration Reform and Control Act of 1986

• Prohibits discrimination based on national origin
  and citizenship
• Covers employers with four or more employees
• Unlawful to knowingly hire an unauthorized alien

11
Age Discrimination Act of 1967

• Prohibits discrimination against workers aged 40
  and above
• Covers employers with 20 or more employees

12
The Americans with Disabilities Act of 1990
(Title I)

• Prohibits discrimination against those with
  disabilities
• Covers employers with 15 or more workers

13
Americans with Disabilities Act of 1990 (Title I)

• Physical or mental impairment
• substantially limits
• major life activities
• Reasonable accomodation
• undue hardship

14
males
females
Disparate Treatment
intentional discrimination example females
treated differently from males
15
Disparate Impact
unintentional discrimination example arbitrary
selection practice favors Group A over B C
16
Discrimination and the Courts
prima facie
rebuttal
Plaintiff
Defendant
17
Establishing a Prima Facie Case

• Company policy
• Discriminatory remarks
• The McDonnell-Douglas Test
• The four-fifths rule

18
Rebutting Discriminatory Remarks

• Claim the remarks were not made
• Claim the remarks had no bearing on the
  employment decision
• Claim the remarks were made by someone who had no
  influence on the hiring decision

19
McDonnell-Douglas Test

• Belongs to the protected group in question
• Has applied for and is qualified for the job for
  which the employer was seeking applicants
• Was rejected
• After rejection, the position remained open or
  was filled by someone who was not a member of
  that protected group

20
Rebutting the McDonnell-Douglas Test

• Show that the employment decision was based on
  legitimate, nondiscriminatory reasons

21
The Four-Fifths Rule
Total Applicants
Selected
Passing Rate
Groups
White Males 100 70 .70
Black Males 40 20 .50
.50 / .70 .71 which is lt .80, therefore prima
facie case
22
Rebutting the Four-Fifths Rule

• Demonstrate that the procedure in question is a
  business necessity

23
Bona Fide Occupational Qualification

• All or nearly all
• Authenticity
• Propriety
• Safety

24
When Several Selection Devices Are Used
25
EEO vs. Affirmative Action
EEO
Color Blind
Affirmative Action
Color Conscious
26
Is Affirmative Action Legally Mandated?

• Only in some cases
• Mandatory for federal government contractors
• Mandatory when court ordered as a part of a
  settlement

27
Why Implement Voluntary Affirmative Action?

• Attract and retain a larger and better pool of
  applicants
• Avoid discrimination lawsuits
• Improve the firms reputation within the
  community and its customer base

28
Steps to Implement an Affirmative Action Program

• 1. Conduct a utilization analysis
• 2. Develop an affirmative action plan

29
1. Conduct a Utilization Analysis
Groups
Employees
In Labor Market
Utilization
Hispanics 10 20 under utilization
Females 30 50 under utilization
30
2. Develop an Affirmative Action Plan
Groups
Employees
Goals
Action Plan
Hispanics 10 15 expand 5
years recruiting
Females 30 45 review 5 years
promotion proced.
31
Three Elements of an Affirmative Action Plan

• Goals
• Timetables
• Action steps

32
Match Affirmative Action to Severity of
Underutilization
33
When is Preferential Treatment Legal?

• Remedial purpose
• Necessary for goal achievement
• More than protected group status considered
• Temporary
• Reasonable goals
• Doesnt unjustly burden nonminorities
• Applicant must meet minimum quals.

34
Environmental Issues in the Workplace

• Cultural diversity
• The changing nature of work
• Mergers and takeovers
• Corporate downsizing
• Total quality management

35
Changing Workforce Demographics

• More African-Americans
• More Hispanics
• More Asian and Pacific Islanders
• More older workers
• More dual income, single-parent,
  families dealing with eldercare

36
Cultural Diversity A Strategic Advantage?

• Attract a larger and better pool of applicants
• New ideas/approaches

37
Managing Cultural Diversity

• Diversity training
• Breaking the glass ceiling
• Meeting the needs of older employees
• Implementing work and family programs

38
Diversity Training

• Can be effective in overcoming biases
• Potential EEO liability

39
Breaking the Glass Ceiling

• Women and minorities have failed to reach highest
  levels of management.
• Overcoming the glass ceiling
• Training
• Career counseling
• Mentoring
• Promotion procedures

40
Meeting the Needs of Older Employees

• Redesign jobs to compensate for hearing and
  vision loss.
• Reassign older workers to other jobs.

41
Implementing Work and Family Programs

• Working at home (telecommuting)
• Flextime
• Job sharing

42
Changing Nature of Work
Manufacturing
Service
43
Mergers and Takeovers Consequences

• Increased voluntary turnover
• Rise in organizational conflict

44
Why So Many Companies are Downsizing

• Decline or crisis in the firm
• Technological advances
• Organizational restructuring

45
Impacts of Downsizing

• Often fail to achieve economic goals
• Lower employee loyalty and morale

46
Alternatives to Layoffs

• Hiring freeze
• Restrict overtime
• Retrain/redeploy
• Use part-timers
• Use job sharing
• Use consultants

• Unpaid vacations
• Shorter work week
• Pay reductions
• Sabbaticals
• Early retirement