Human Resource Management: An International Perspective

1
Human Resource Management An International
Perspective

• Fachhochschule Ludwigshafen am Rhein
• Dr. Yvonne Stedham

2
Course Materials available on

• http//www.scsr.nevada.edu/ystedham/

3
Introductions

• Instructor
• Students Table Tents
• Name
• Expected graduation
• Work Experience
• Traveling and Languages
• Interest in HR
• Aspirations

4
Relevance of this Course

• What is HRM? HRM Functions?
• What is the relationship between HR and
  organizational performance?
• Why would HR practices differ from country to
  country? HR trends and practices in the U.S.

5
Course Overview

• This course was designed to introduce students to
  the issues that emerge from performing the human
  resource management function in an international
  context.
• The focus of the course is on the relevance of
  the human resource management function to the
  performance of an organization.
• The relationship between the external environment
  of an organization and human resource management
  (HRM) will be explored with a particular emphasis
  on the effect of cultural differences on
  management processes.
• Current HRM trends and practices in the U.S. will
  be reviewed. Relevant legal conditions, as well
  as trends and developments in Employee Staffing
  and Selection and Compensation will addressed.

6
HR and Organizational Performance

• What is an organization?
• What is organizational effectiveness?
• How does HR contribute?

7
HR and Organizational Performance

• What is an organization? Why do organizations
  exist?
• Organizations People
• Mission, goals, objectives --- concerted effort
  efficiency effectiveness.
• When is an organization effective?
• Distinguish between efficiency and effectiveness.
  Distinguish effectiveness measures for the short,
  intermediate, and long run.

8
Measurement of organizational effectiveness

• Long run?
• Intermediate run?
• Short run?
• A contingency approach

9
The Organization
10
Strategic Planning

• Scanning the environment SWOT
• Vision
• Mission
• Goals
• Objectives
• Strategies and Tactics
• Performance Indicators

11
The International Organization
12
HR and Org. Performance

• Individual effectiveness is the foundation for
  organizational effectiveness.
• Individual effectiveness depends on .

13
HR and Org. Performance

• Individual effectiveness f(Ability,Motivation)
• Individual effectiveness Ability Motivation

14
HR and Org. Performance

• Match
• Individuals
• (Knowledge, Skills, Abilities and Needs)
• with
• Jobs
• (Requirements and Rewards)

15
The HRM Framework
16
Course Format

• Syllabus

17
HR and Org. PerformanceStrategic HRM

• Political Development and the Role of HR
• Reading September 11
• Economic Development and the Role of HR
• Agriculture/LandIndustrial/Capital-Information/Kn
  owledge
• Jeffrey Pfeffer
• What CEOs want from HR
• HR Leaders
• Case Sun Micro Systems
• Globalization

18
Reasons for becoming international

• Groups of four
• Why do companies internationalize?
• List specific reasons and purposes.
• At least three

19
Reasons for becoming international

• Profit Revenue Cost (VolumePrice) Cost
• A desire for continued growth.
• Domestic market saturation
• The potential to now exploit a new technological
  advantage
• Preferable suppliers (quality, cost)
• Labor market (supply, quality, cost)
• Government involvement/restrictions
• Reducing distance to customers (cost)
• Tariff barriers
• Increased foreign competition in home country
• Reduce general business risk by diversifying
  into other countries

20
Types of "international" organizations

• International organizationAny organization that
  exports to/imports from organizations in other
  countries with primarily domestic production
  -Multidomestic.
• Multinational organization An organization with
  operations in different countries but each is
  viewed as a relatively separate enterprise.
• Global organization An enterprise structured so
  that national boundaries become blurred. The best
  people are hired irrespective of national origin.
  Transnational

21
Globalization

• European Training and Development Journal Article
  Engle/Stedham et al.

22
HR and Org. PerformanceStrategic HRM

• HR Management Roles
• Administrative record keeping, processing, ST,
  Examples?
• Operational support, IT, Examples?
• Strategic org-wide, LT, Examples?
• HR as a strategic partner Involvement in
  strategic planning, decision-making on mergers,
  acquisitions, and downsizing, redesigning
  organizations and work processes, ensuring
  financial accountability for HR results,
  attracting and retaining human resources,
  developing human resource capabilities and
  competencies, identifying and rewarding
  performance
• HR Planning
• KSAs requirements vs KSA availabilities
• Filling the gap
• International Issues
• Staffing and Compensation

23
Country Specific External Conditions for HR

• List external conditions and trends that affect
  the HR function. Specify which function is
  affected.
• Create such a list first for Germany and then for
  the U.S.
• Groups of four
• Appoint a spokesperson and share with the class.

24
External EnvironmentCulture and Ethics
International HRM

• Why different answers for different countries?

25
External EnvironmentCulture and Ethics
International HRM

• Cultural differences
• What is culture?
• Cultural characteristics
• Social stratification, religion, education,
  language, political system, economic system
• Where do cultural differences come from?
• Kluckhohn and Strodbeck
• Six Values Orientation Dimensions

26
Cultural dimensions

• All peoples have common life problems (?)
  choose different solutions
• Six basic dimensions describe the cultural
  orientations of societies
• What is the nature of people?
• What is a person's relationship to nature?
• What is a person's relationship to other people?
• What is the primary mode of activity?
• What is the conception of space?
• What is the temporal orientation?

27
External EnvironmentCulture and Ethics
International HRM

• Self-Assessment
• Global Readiness Index and Personal Values
• Understanding your own values
• If you understand others you are learned, if you
  understand yourself you are wise!

28
External EnvironmentCulture and Ethics
International HRM

• Measuring Culture
• Geert Hofstede IBM
• Cultures Consequences
• Survey

29
Hofstede Publications

• Hofstede, Geert (1980) Cultures Consequences
• Hofstede, Geert (1991) Cultures and
  Organizations
• Hofstede, Geert (1984) Cultures Consequences
  International Differences in Work-Related Values
• Hofstede, Geert and Michael Harris Bond (1984)
  The Confucius Connection from cultural roots to
  economic growth. Organizational Dynamics, 16, 4,
  4-21

30
Hofstede Publications

• Hofstede, Geert (2001) Cultures Consequences
  Comparing Values, Behaviors, Institutions, and
  Organizations Across Nations.
• Hofstede, Geert (1994) VSM94 Values Survey
  Module 1994 Manual. Tilberg, Netherlands IRIC.
• Hofstede, Geert and Bond, M.H. (1984)
  Hofstedes Culture Dimensions An Independent
  Validation Using Rokeachs Value Survey.
  Journal of Cross-Cultural Psychology 15(4)
  417-433.
• ___

31
Hofstedes Cultural Dimensions

• Individualism/Collectivism
• Individualistic society self and immediate
  family
• Collectivistic group give up freedom for
  security
• Masculinity/Femininity
• Masculine aggressive achievement materialistic
• Feminine emphasis is on relationships and
  quality of life
• Uncertainty Avoidance
• Acceptance of ambiguity and uncertainty need for
  strict rules and regulations
• Power Distance
• Acceptance of unequal distribution of power and
  other attributes
• Confucian Dynamism or LT/ST
• ST instant gratification
• LT discipline and perseverance

32
Compare Germany, the U.S. and Japan

• Ind hi, mod, low?
• Masc vs Fem?
• Uncertainty A hi, mod, low?
• Power distance - hi, mod, low?
• LT vs ST?

33
Cultural Differences and HR Management

• Japan has the following cultural characteristics
  .
• Japan is known for the following management
  approaches .
• The U.S. has the following cultural
  characteristics .
• The U.S. is known for the following management
  approaches .
• Germany has the following cultural
  characteristics .
• Germany is known for the following management
  approaches .

34

• U.S. Japan Germany
• Individualism 91 46 67
• Power distance 40 54 35
• Uncertainty
• avoidance 46 92 65
• Masculinity 62 95 66
• ST/LT 29 80 25

35
Cultural Differences and HR Management

• Japan hi UNC, hi POW, Coll, MAS, LT
• Consensus, group based, long dm, lack of risk
  taking and creativity, life time employment
• U.S. low UNC, low POW, Ind, MAS, ST .
• Delegation, participative management, emphasis on
  individual performance, creativity and risk
  taking
• Germany moderately hi UNC, low POW, Ind, ST
• Expert based, need for education and
  certification, delegation, participative
  management, extensive employee protection,
  somewhat risk averse

36
André Laurents Research

• Main reason for a hierarchical structure is so
  that everybody knows who has authority over
  whom.
• In order to have efficient work relationships,
  it is often necessary to bypass the hierarchical
  line.
• It is important for managers to have at hand the
  precise answers to most questions their
  subordinates may raise about their work.

37
Laurents Research

• Main reason for a hierarchical structure is so
  that everybody knows who has authority over
  whom.
• Germany 26 agree
• US 17 agree
• Japan 50 agree
• France, Italy, Spain 43, 42, 34
• In order to have efficient work relationships,
  it is often necessary to bypass the hierarchical
  line.
• Germany 45 disagree
• US 32 disagree
• France, Italy, Spain 43, 56, 74
• It is important for managers to have at hand the
  precise answers to most questions their
  subordinates may raise about their work.
• Germany 46 agree
• US 18 agree
• Japan 78 agree
• France, Italy, Spain 53, 66, 77

38
External EnvironmentCulture and Ethics
International HRM

• Ethics Questionnaire

39
External EnvironmentCulture and Ethics
International HRM

• What is ethics?
• Relevance?
• Different across cultures?
• Beekun/Stedham/Yamamura Papers
• Nikes Voice
• Personnel demands attention overseas

40
External EnvironmentCulture and Ethics
International HRM

• Ethics Philosophies
• Consequentialist vs Non-consequentialist
• Consequentialist Utilitarianism, Egoism
• Non-consequentialist Justice, Inherent Morality

41
International HRM The Expatriate Assignment

• Numbers
• 37,000 MNCs worldwide
• Control 200,000 foreign affiliates
• 73 million employees
• In the U.S., MNCs employ 3 mill Americans, 10
  of the U.S. manufacturing workforce
• 80 of mid- and large-size U.S. companies send
  managers abroad
• 300,000 U.S. expatriates are on assignment at any
  given time
• Optimal level of internationalization?

42
International HRM The Expatriate Assignment

• Staffing Philosophies
• Ethnocentric Key positions are filled with
  PCNs (parent country nationals), e.g., Procter
  Gamble Associate with higher incidence of IHRM
  problems
• Polycentric Key positions are filled with HCNs
• Geocentric or global Best managers are
  recruited from within or outside the company
  regardless of nationality, TCNs used by
  European MNCs, transpatriates, some U.S.
  companies (Philips, Heinz, Unilever, IBM)
• Regiocentric Recruiting on a regional basis

43
International HRM The Expatriate Assignment

• Expatriate Selection
• Relevant KSAs?
• Technical, Managerial
• Adaptiveness
• Measurement
• SMILE Speciality management ability
  international flexibility language facility
  endeavor (Matsushita)
• Spouse and Family
• Failure rates
• 40 on average lower for European and Japanese
• Rosalie Tung

44
International HRM The Expatriate Assignment

• Expatriate Selection
• Failure rates
• 40 on average lower for European and Japanese
• Rosalie Tung Reasons
• Selection is based on headquarter criteria
• Lack of training, preparation, orientation
• Alienation/lack of support from headquarters
• Inability to adapt to local culture/work enviro
• Problems with spouse,family
• Compensation
• Poor programs fro career support/repatriation

45
International HRM The Expatriate Assignment

• Training
• Cultural toughness China, Brazil, India, Japan,
  Russia, Mexico, Saudi Arabia, South Korea, France
• Less than 1/3 of expatriates receive training
• Pre-departure training, postarrival training,
  reentry training
• Culture, language, everyday matters
• Cross-cultural training to ease the adjustment to
  the new environment by reducing culture shock
  a state of disorientation and anxiety about not
  knowing how to behave in an unfamiliar culture

46
International HRM The Expatriate Assignment

• Training
• Four stages of culture shock
• Honeymoon
• Irritation and hostility
• Gradual adjustment
• Biculturalism
• Training techniques and Rigor of training
• Area studies
• Culture assimilators
• Language training
• Sensitivity training
• Field experiences
• Colgate In-country training

47
International HRM The Expatriate Assignment

• Training Examples
• ABB (Asea Brown Bovari) rotates 500 managers
  around the world .. Every two to three years
• PesiCo orientation program for foreign managers
  one year at U.S. bottling division plants
• Honda of America Japanese language, culture,
  lifestyle training .. Tokyo up to 3 years
• GE engineers and managers must have global
  perspective .. Regular language and
  cross-cultural training

48
International HRM The Expatriate Assignment

• Compensation
• 100,000 manager in U.S. -gt 300,000 in London,
  1mill in Tokyo or Stockholm
• Equity and goodwill
• Purchasing power and standard of living
• Tax differentials and tax equalization
• Balance sheet approach
• Allowances Cost of living, housing, education,
  home leave, shipping and storage
• Repatriation

49
International HRM The Expatriate Assignment

• You have been assigned the mentor to an employee,
  John Smith, from the U.S. who will be working
  with you in your department for the next three
  years. His family, wife who is a computer
  programmer and two sons (13 and 15 years old), is
  coming with him.
• You are writing to John telling him about what to
  expect on the job and in the community. Tell
  him about some of the cross-cultural conflicts he
  may run into with his co-workers and how he
  should handle them. You also want to give advice
  to each family member.
• Groups of four make a list of relevant issues.

50
International HRM The Expatriate Assignment

• Nancy Adler Paper Female Expatriates
• Asia Pacific Journal of Human Resource Management
  Stedham/Nechita paper Comparing Theory and
  Practice of Expatriate Assignments

51
HR Trends and Practices in the U.S.

• The Legal Environment
• Staffing and Selection
• Compensation and Benefits

52
HR Trends and Practices in the U.S.

• The Legal Environment
• The employment relationship
• Discrimination legislation

53
Legal Conditions in the U.S.

• The Employment Relationship Equitable Exchange
• Psychological Contract
• Employment Contract
• Formal agreement, voluntary Defines and governs
  the terms and conditions of the employment
  relationship promises and expectations change
  with time
• Written or oral, both are legally enforceable

54
Sources of Laws and Regulations

• Common Law England Court-made Law Case-by-case
  decisions ? Precedence (Germany and other country
  code-based law) States develop and administer
  own common law.
• Constitutional Law Supersedes Prohibits
  deprivation of employment right without due
  process.

55
Employment at Will

• Right of both parties to terminate the
  employment relationship at any time, for any
  reason
• (Tennessee Court in late 1900s)
• If set-term contract Termination for
• Just cause
• Failure to perform
• If indeterminate-term contract --- employment
  at will (common law) most are at-will

56
Workplace Torts

• Breaches of legal duty by ER when establishing
  or modifying the initial relationship (common
  law)
• Tort
• Civil wrong violation of a duty by the ER that
  leads to harm or damages suffered by others -
  Examples
• 1. Fraud or misrepresentation lie/mislead
  applicant when communicating conditions and terms
  -gt ER violates a duty to be truthful in the
  presentation of information
• 2. Negligent hiring ER violates duty to protect
  Ees and customers against unreasonable and
  foreseeable risk of harm

57
Fair Labor Standards Act 1938

• Minimum Wage 5.75
• Lower for tipped employees
• Child Labor
• Age 16 no restrictions
• Age 18 harzardous occupations
• Age 14-15 limitations on hours

58
Fair Labor Standards Act 1938

• Exempt vs Non-exempt Employees
• Exempt executive, administrative, professional,
  outside sales ER does not have to pay overtime
• Non-exempt must be paid overtime
• Overtime
• Hours worked in excess of 40 hours must be
  compensated 1.5 the regular rate of pay
• Compensatory time off
• Illegal in private sector unless given at 1.5 rate

59
Statutory Laws

• Derived from written statutes that are passed by
  legislative bodies such as Federal Congress
  State Legislature/Assemblies Local
  Municipal/Councils
• Agencies Interpret, administer, enforce law and
  publish rules and regulatory guidelines that are
  given great deference by courts.
• . DOL Department of Labor OFCCP Office for
  Contract Compliance Programs EEOC Equal
  Employment Opportunity Commission

60
Discrimination Legislation EEO Framework -
Specific Laws

• U.S. Constitution
• 5th Amendment Due Process of law --- Prohibition
  upon federal government no person shall be
  deprived of life, liberty, or property does not
  speak directly to specific subjects such as
  employment ? Courts prefer to defer to existing
  statutory laws because it they are more
  specific!!
• 14th Amendment Prohibition for States to enacts
  any law that does not guarantee equal
  protection for all.

61
Statutory Laws

• Civil Rights Act 1866
• Right to make and enforce contracts for
  employment for all citizens as enjoyed by white
  citizens.
• Civil Rights Act of 1871
• Right to sue if deprived of any rights or
  privileges guaranteed by the Constitution and
  laws for ALL citizens. Must show intention.
• Equal Pay Act 1963
• Equal pay for equal work regardless of SEX
  (female employees only) amendment to FLSA .

62
Equal Pay Act

• Equal Work
• Substantially similar in terms of skill, effort,
  responsibilities, working conditions.
• Exceptions
• Seniority Merit Quantity of production
• Note If in violation of EPA, ER may not LOWER
  wages.

63
Title VII of CRA 1964

• Coverage ERs with 15 or more employees Federal,
  State, Local governments Educational
  Institutions Employment Agencies Labor Unions
• Not covered Until recently Congress Private
  Clubs Religious Organizations.
• CRA 1964 Several Titles each focusing on
  discrimination in a different sectors of
  society (education, right to vote, ) Title VII
  focuses on discrimination in employment.

64
Title VII

• 703 (a)
• Employer may not discriminate on the basis of
  race, color, national origin, sex, and religion
  in any employment decision.

65
Title VII

• Color White, black, yellow, brown, red.
• Race Local geographic or global human population
  distinguished by genetically transmitted physical
  characteristics Caucasian Negro Hispanic
  Oriental Indian.
• National Origin Citizenship Heritage Any
  country, nation.
• Religion All kinds not associated with any of
  the other characteristics Christian, Hindu,
  Muslim, Buddhist.

66
Title VII

• 703 (b) . Nondiscriminatory apprenticeship
  program
• 704 (a) . Unlawful to discriminate if opposed
  unlawful employment practice assisted in TVII
  investigation.
• 704 (b) . Prohibits ads concerning employment
  indicating preference for any of the prohibited
  factors.
• 1978 Amendment
• Pregnancy Discrimination Act --- prohibits
  discrimination on the basis of pregnancy,
  childbirth, or related condition. Reinstatement
  right for similar position no loss of seniority
  coverage of disability insurance.

67
Title VII

• Exemptions that are written into the law
• Discrimination on the basis of the protected
  factors is permissible when such qualification
  is a bona-fide occupational qualification (BFOQ)
  reasonably necessary to the operation of that
  particular business or enterprise burden of
  proof is with ER very narrowly interpreted ---
  preferences of ER, coworkers, clients are
  irrelevant.
• Seniority Systems Bona fide seniority or merit
  systems are lawful if no intention to
  discriminate job or departmental systems are not
  seen as bona fide, plant or company-wide
  systems are seen as bona fide.

68
Exemptions to TVII

• Testing Employer may give and act upon
  professionally developed ability tests if they
  are not used to discriminate on the basis of the
  protected factors.
• Preferential Treatment It is unlawful to
  interpret TVII as requiring preferential
  treatment of individuals of protected groups -
  reverse discrimination
• National Security Discrimination is permitted

69
Further TVII Issues

• Fetal Protection -- Johnson Controls 1991 An
  employers exclusion of fertile women, but not
  fertile men, could not be justified on grounds
  that the rule protected the womans reproductive
  capacity and the physical welfare of the fetus.
  The safety qualification is limited to those
  instances where sex or pregnancy presents danger
  to customers or third parties. A fetus is not a
  third party whose safety is essential to the
  operation of the employers business, and thus
  cannot be the basis of a BFOQ.

70
Sexual Harassment

• Quid pro quo
• Hostile work environment sexual harassment.
• Unwelcome sexual advances in exchange for a
  favorable employment condition.
• Employer is liable. ER liable even if the
  employer had no knowledge of the harassment.
• Pattern of behavior. Reasonable person standard.
• Training, Policy, and Complaint and Investigation
  Process.

71
Sexual Harassment

• Examples
• Office Romance
• Stedham/Mitchell paper

72
Executive Order 11246

• Contractors doing business with federal
  government ( amount of contract specified). Same
  provisions as TVII AND requires contractors to
  develop affirmative action plans Formal,
  specific personnel programs that are designed to
  increase the participation of protected groups.

73
Age Discrimination in Employment Act 1967

• Amended 1986. Protects EEs and applicants who are
  40 years old and above (no upper limit).
• No mandatory retirement age (except law
  enforcement officers, firefighters, tenured
  professors, executive under certain conditions,
  top policy makers).
• No reverse discrimination.

74
Americans with Disabilities Act 1990

• Since 1994 covers ERs with 15 or more EEs.
• 43 mill. disabled Americans.
• Protects
• Physical or mental impairment that substantially
  limits one or more life activities (walk, see,
  ..)
• Record of impairment
• Regarded as having impairment
• about 1,000 disabilities incl. affective
  disorders, biochemically based disorders - AIDS,
  Cancer, Anxiety Disorders, Eating Disorders,
  Infertility, Epilepsy
• Disability evaluated with adjustive equipment
  (glasses)

75
Americans with Disabilities Act

• How it protects
• .Punitive damages
• .Essential job functions
• .Reasonable accommodations
• .Restructuring of physical facilities
• .Perceptual restructuring
• 1994 5,500 complaints (25 more than were
  expected)
• Sample Job Description

76
Family and Medical Leave Act 1993

• Employers with more than 50 employees have to
  provide 12 weeks of unpaid leave for family or
  medical emergencies.
• Employer must guarantee the employee the same or
  a comparable job. The employer must also pay the
  health-care coverage for the EE --- which the EE
  has to be back if he/she fails to return to work.
  ERs are allowed to exempt key employees
  defined as the highest paid 10 of their work
  force whose leave would cause substantial
  economic harm to the employer. Also exempt are
  EEs who have not worked at least 1,250 hours (25
  hrs a week) in the previous 12 months.

77
Enforcement of Laws and Court Process

• Filing a Discrimination Complaint
• Local EEO Agency
• NERC (Nevada Civil Rights Commission)
• EEOC
• Investigation
• Right to sue letter

78
Evidence of Discrimination

• Intentional Discrimination
• Disparate Treatment different standards applied
  to various groups
• Adverse or Disparate Impact same standards are
  applied but disproportionately less minority
  applicants are selected

79
Federal Court Process

• Presentation of evidence in TVII
• Burden of Proof shifts
• Plaintiff ? Defendant ? Plaintiff
• Prima Facie Evidence
• 1. Disparate Treatment 1. Job-based/legitimate 1.
  Defendant explanation pretext true
  McDonnell Rule 4 conditions reason was
  rejection for prejudice
• 2. Adverse Impact 2. Business Necessity, 2.
  Other method
• 80 or 4/5 Rule BFOQ, Validation

80
Disparate Treatment 4 Conditions- McDonnel Rule

• Plaintiff must show
• belongs to protected class
• applied and was qualified for the job
• despite the qualifications - was rejected
• position remained open and the employer continued
  to seek applications from persons with the
  complainants qualifications
• -gtApplied also in ADEA cases

81
Adverse Impact 80 or 4/5 Rule

• Selection Ratios
• Number of nonminority applicants selected
• DIVIDED BY
• Number of nonminority applicants applied
• THIS IS
• Nonminority selection ratio
• Number of minority applicants selected
• DIVIDED BY
• Number of minority applicants applied
• THIS IS
• Minority selection ratio

82
Adverse Impact

• Compare the two selection ratios
• If the ratio for nonminorities is smaller there
  may be evidence of discrimination
• If the ratio is less than 80 or 4/5 of the
  nonminority ratio, then there is evidence of
  adverse impact (because the difference in the
  ratios is statistically significant)

83
Adverse Impact - Example

• 100 White applicants
• 100 African American applicants
• 20 of the White applicants are selected
• 5 of the African Americans are selected
• 20100 .2 Nonminority Selection Ratio
• 5100 .05 Minority Selection Ratio
• .05 .2 .25 This does not meet the 80
  rule!

84
Adverse Impact - Example

• 100 White applicants
• 100 African American applicants
• 20 of the White applicants are selected
• 16 of the African Americans are selected
• 20100 .2 Non-minority ratio
• 16100 .16 Minority ratio
• .16 .2 .80 meets the 80 rule

85
HR Trends and Practices in the U.S.

• Staffing and Selection
• Measurement Principles
• Reliability and Validity
• Selection Methods
• Application forms and resumes
• Interview
• Assessment Centers

86
Staffing and Selection

• The most important HR function
• Definitions
• Recruitment Creating a pool of qualified
  applicants
• Staffing
• Mutual process by which
• the individual and the organization become
  matched to
• form the employment relationship.
• Mutual Process Series of interrelated activities
  - R, S, DM, job offers, hiring.

87
Selection

• Selection
• The process of obtaining
• and using information
• about job applicants
• to determine who should be hired.
• Focus here is on how to collect relevant info on
  applicants KSAs.

88
Recruitment

• How can we mess up?
• Recruitment Planning
• Relevant market
• Number of contacts
• Yield ratios

89
Recruitment

• Recruitment Sources and Channels - Effectiveness
• Internal vs external recruitment
• Peter Principle
• Walk-ins
• Referrals
• College
• Employment Agencies and Professional Societies
• Advertising
• Temporary Employees
• Internet
• Realistic Job Previews

90
Measurement in Selection

• Selection decisions are based on what
  information? Purpose is to ..

91
Measurement in Selection

• How can we mess up?
• Measure irrelevant KSAs
• Measure KSAs inaccurately

92
Definition of Measurement

• Application of rules for assigning numbers to
  objects to represent quantities of attributes.
• Differences between applicant scores are due to
  actual differences in KSAs.
• Rules
• Specified algorithms to assign numbers (She is a
  10) same results by different users

93
Quality of Measures Reliability

• How good a measure is my test? To what extent
  does the measure accurately capture the KSA we
  are interested in?
• The scores obtained on a measure are
• X obtained X true X error
• If there was no error in the measure, every time
  we apply the measure to the same person we should
  get the same score.
• A reliable measure is a consistent measure.
• The reliability of a measure reflects the
  measures consistency.

94
Reliability

• Three methods to evaluate the reliability of a
  measure
• Each method focuses on a different source of
  measurement error. Measurement error are those
  factors that impact the obtained score but are
  not at all related to the attribute that is being
  measured.
• The methods
• Test-Retest Reliability
• Parallel or Equivalent Forms Reliability
• Internal Consistency Reliability
• Split-Half and Odd-Even Cronbach Alpha
• Spearman-Brown Adjustment

95
Spearman-Brown Formula to Correct a Split-Half
Reliability Coefficient

96
Reliability

• The conclusion that a measure is reliable can
  only be drawn if, and only if, the reliability
  coefficient (a correlation coefficient) is
  statistically significant (as determined by a
  t-test.

97
Standard Error of Measurement

98
Reliability

• Important
• The difference in the score between two
  applicants is only significant if it is at least
  two times the standard error of measurement.
• Example The standard error of measurement for a
  test is 1.5. Candidate A scores 18, candidate B
  scores 24 - does candidate B really have more of
  the attribute that is being measured?

99
Quality of MeasuresValidity

• Validity in Selection concerns the following
  question How appropriate is it to make
  inferences from the scores on a measure to
  performance?
• Is the score a good predictor of performance? Is
  the score actually related to future performance?
• Relationship between reliability and validity

100
Validity

• Three methods to evaluate the validity of a
  measure.
• Content Validity
• Criterion-Related (Empirical) Validity Validity
  Coefficient
• Predictive Validity
• Concurrent Validity

101
Content versus Face Validity

• Content Validity deals with the representative
  sampling of the content domain of a job by a
  selection measure
• Face Validity concerns the appearance of whether
  a measure is measuring what is intended

102
Utility Analysis

• Using dollar-and-cents terms as well as other
  measures
• such as percentage increase in output,
• it shows the degree to which the use of a
  selection measure improves the quality of
  individuals selected
• over what would have happened if the measure had
  not been used.

103
An Equation for Calculating the Utility of a
Selection Program

• Expected Dollar Gain from Selection
• NsrxySDyZx-NT(C)
• Expected Dollar Gain from Selectionreturn in
  dollars to the organization for having a valid
  selection program

104
Utility

• Nsnumber of job applicants selected
• rxyvalidity coefficient of the selection
  procedure
• SDystandard deviation of job performance in
  dollars
• Zxaverage score on the selection procedure of
  those hired expressed in z or standardized score
  form as compared to the applicant pool
• NTnumber of applicants assessed with the
  selection procedure
• Ccost of assessing each job applicant with the
  selection procedure

105
Strategies for Selection Decision-Making

• Compensatory Model
• Multiple Hurdles
• Combination
• Profile Matching

106
Application Forms and Resumes

• Information about the applicants background and
  present status -- brief and general OR long and
  detailed??
• Based on .. Past behavior is a good predictor of
  future behavior
• To determine minimum qualifications and general
  suitability for job permanent record
• Determine relative strengths and weaknesses
• It is assumed that all data collected are used
• Training and Experience Requirements
• Job-related training - formal and informal
• Type of training length quality

107
Application Form

• Specific job-related experience and
  accomplishments
• Minimum qualifications
• Maintained Filing System YES NO
• Used computer and Microsoft Word for Windows 2000
  word processor to type letters and reports
• Used a Dictaphone to transcribe correspondence
• TE Evaluation Form
• Specific tasks are listed indicate YES NO
• For YES, describe experience

108
Application

• Likely candidate for Adverse Impact -- Why?
• Current forms -- 100 had at least 1
  inappropriate question on average 7
  inappropriate questions.
• Are these questions acceptable? What do you
  really want to know?
• What was your maiden name?
• What is your date of birth? What is your age?
• What is your height and weight?
• What language do you commonly use?
• What is your religious faith?
• List the number and ages of your children?
• Do you have any physical or mental disabilities?
• List your birthplace.
• Have you ever been arrested?
• Do you own your car/residence?

109
Application Forms ...

• Adverse Impact High
• Validity On average .1 -- corrected for
  attenuation .13
• Select content
• Job-related - Job-related language
• Usefulness
• Fairness -- Face Validity

110
Resumé

• U.S. Short and concise dates job related
  achievements
• Groups
• Compare to German resumé

111
References and Recommendations

• To verify information
• Assess applicants job experience
• Assess applicants effectiveness in those jobs --
  what done and how well??

112
References

• Sources of and methods to collect Reference Data
• Methods In-person Mail Letter of R Phone
• Sources Former ER Personal Investigative
  agencies Public record
• Usefulness of reference data
• Reliability .4 or less
• Validity .16-.26
• Reference giver-better if immediate supervisor
• Old and new jobs are very similar?
• Adverse Impact ??

113
References ..

• Validity -- not much evidence -- favorable info
  -- job related
• better if content of the new and old job are very
  similar
• low validity because low reliability and
  restricted range
• Defamation of character
• Recommendations
• dont use subjective info
• written consent by applicant
• ask only specific job-related info
• development of reference checking system

114
Employment Interview

• KSAs to be measured
• Validity
• Adverse Impact

115
Employment Interview

• Research
• Interview does not add to selecting the most
  qualified candidate because..

116
Interview

• Sources of problems
• impression formation
• human perception

117
Improve the Validity of the Interview

• 1. Decide on location and seating
• 2. More than one interviewer Panel
• 3. KSAs to be measured Measure interpersonal,
  communication skills
• 4. Job-related questions only - Multiple
  Questions (Behavioral Interview Questions)
• 5. Limit pre-interview info
• 6. Use a rating format
• 7. Train the interviewer

118
Interview Simulation

• Role Play

119
HR Trends and Practices in the U.S.

• Staffing and Selection - Selection Methods
• Assessment Centers
• Managerial positions
• Battery of tests
• Management, interpersonal, soft skills
• Physical Attractiveness
• Notion of Fit
• Emotional Intelligence

120
Judge and Ferris (1992) The Elusive Criterion
of Fit in HR Staffing

• The practice of selection strongly emphasizes a
  less tangible notion of fit
• between job applicant and the organization.
• How could fit be measured?
• Definition of fit The degree to which the
  goals and values of an
• applicant or employee match those of employees
  considered successful in
• the organization.
• The notion of liking an applicant
• Why fit control mechanism, homogeneity,
  job-related ,
• predictability of public behavior
• The employment interview and fit
• Impression Management

121
Emotional Intelligence

• Daniel Goleman
• Developing emotional intelligence
• Five dimensions
• Self-awareness Realistic self assessment-how
  does this fir with my values analyze gut feeling
• Managing emotions anger, anxiety, sadness
  controlling ones impulses manage stress effect
  on ability to pay attention
• Motivating other what moves us to action is
  emotion optimism
• Showing empathy read emotions in others
  prevents acting in self interest
• Staying connected emotions are not only
  contagious, they spread from the top down

122
HR Trends and Practices in the U.S.

• Compensation and Benefits
• Theory
• Techniques
• Benefits

123
Compensation and Benefits

• Exchange relationship
• Equity
• Internal Equity
• External Equity
• Individual Equity

124
Internal Equity

• Worth of a job?

125
Internal Equity

• Worth of a job?
• Input .. KSAs
• Ouput
• Attributes Complexity

126
Internal Equity

• Develop of job hierarchy
• Job Evaluation
• Job Evaluation Methods
• Compensable Factors
• Ranking
• Classification
• Point Factor Method
• The Hays System Know-How, Problem Solving,
  Accountability

127
External Equity

• Myth of a market pay rate
• Published data
• Survey design
• Benchmark jobs
• Relevant market
• Level and range
• Administration
• Benefits
• Philosophy
• Leveling

128
Integrating Internal and External Equity

• Scatterplot
• Regression Analysis JE points and Market pay
• Market Pay Line
• Follow, lead, lag
• Pay grades Height and Width Overlap
• Compa Ratio, Red and green circle employees
• Pay Compression

129
Individual Equity

• Money as a motivator?

130
Individual Equity

• Motivation Theories
• Variable Pay Systems
• Individual Piece rate, sales commission,
  bonuses, special recognitions, safety awards,
  attendance bonus
• Group (Team) Gainsharing, quality improvement
  awards, labor cost reduction payout
• Organization Profit sharing, employee stock
  ownership options, executive stock options,
  deferred compensation
• Merit Pay Systems - Design

131
Individual Equity

• Performance measurement?
• Size of reward Purchasing power and recognition
• Type of reward
• Linkage to performance
• Pay Secrecy
• Example Compensation at IBM

132
Individual Equity

• Annual Pay Raises Exercise
• Attached
• Individually make decisions
• Groups decide

133
Employee Benefits

• Compensation Package
• Direct vs Indirect
• Direct Base Pay and Variable Pay
• Indirect Benefits
• Composition
• 20 of direct pay in benefits
• For each 1.00 in pay additional 20 cents in
  benefits

134
Employee Benefits

• Types of Benefits
• Government Mandated
• Security Workers Compensation, Unemployment
  Compensation
• Retirement Security Social Security
• Health Care COBRA and HIPPA provisions
• Family Oriented Family Medical Leave Act
• Time off Military reserve, Jury, Election
• Employer Voluntary

135
Employee Benefits

• Employer Voluntary
• Security Supplemental UE benefits, Severance pay
• Retirement Security Early retirement options,
  Pension plans, IRAs, 401 (k) plans
• Health Care Medical, Dental, Vision,
  Prescription Drugs, EAPs, Wellness Programs,
  HMOs
• Financial, Insurance Life, Disability,
  Educational assistance
• Family Oriented Dependent Care, Child Care,
  Alternative work arrangements
• Time off Lunch and rest breaks, holidays and
  vacations, funeral and bereavement leaves
• Social and recreational

136
Employee Benefits

• Package design?

137
Employee Benefits

• Employee preferences
• Competition
• Cost
• Attraction and retention

138
Employee Benefits

• Social Security Act 1935
• Social Security Retirement employer and
  employee pay
• Employer payroll tax to fund UE (3.5) of the
  first 6,000 earned by each worker
• Employer pays Workers Comp, by State
• Time off benefits most expensive 5 to 13 of
  total compensation

139
Employee Benefits

• COBRA Consolidated Omnibus Budget
  Reconciliation Act require extended health care
  coverage for employers with 20 or more employees
• HIPPAA Health Insurance Portability and
  Accountability Act
• HMO Health Maintenance Organization

140
Employee Benefits

• Flexible benefits plans Cafeteria-Style
  benefits plans
• Work Life Balance Reading
• Flexible Spending Accounts
• Benefits Communication

141
HR Audit

• Instructions for HR Audit Case Study
• Teams of three students
• You will be provided with some background
  information for the company you picked.
• An HRM audit is a formal review of the outcomes
  of HRM functions. To conduct the audit, the HR
  department identified key functions and the key
  measures of business performance and customer
  satisfaction that would indicate each function is
  succeeding.

142
HR Audit

• Business and Customer Satisfaction Indicators
• Staffing Average days to fill open requisitions
  Ratio of acceptances to offers made Ratio of
  minority/women applicants to representation in
  local labor market Average years of
  experience/education per job family Anticipation
  of personnel needs Timeliness of referring
  qualified workers to line supervisors Treatment
  of applicants Skill in handling terminations
  Adaptability to changing labor market

143
HR Audit

• Compensation Per capita average merit increases
  Percentage of overtime hours to straight time
  Ratio of average salary offers to average salary
  in community Fairness of existing job evaluation
  system Competitiveness in local labor market
  Relationship between pay and performance Employee
  satisfaction with pay
• Benefits Average unemployment compensation
  payment Average workers compensation payment
  Benefit cost per payroll dollar Percentage of
  sick leave to total pay Promptness in handling
  claims Fairness and consistency in the
  application of benefit policies Communication of
  benefits to

144
HR Audit

• Training Percentage of employees participating in
  training programs per job family Percentage of
  employees receiving tuition refunds Training
  dollars per employee Extent to which training
  programs meet the needs of employees and the
  company Communication to employees about
  available training opportunities Quality of
  introduction/orientation programs
• Employee Appraisal and Development Distribution
  of performance appraisal ratings Appropriate
  psychometric properties of appraisal forms
  Assistance in identifying management potential
  Organizational development opportunities provided
  by HRM

145
HR Audit

• Overall Effectiveness Ratio of HR staff to
  employee population Turnover rate Absenteeism
  rate Ratio of per capital revenue to per capita
  cost Net income per employee Unionization
  Accuracy and clarity of information provided to
  managers and employees Competence and expertise
  of staff Working relationship between
  organizational units and the HR department answer
  the questions that are provided with the
  background information in detail.

146
HR Audit

• You need to conduct some research to gather
  additional information about the company. Since
  you do not have access to all the information
  required for an in-depth HR audit, you are asked
  to provide an analysis of the HR function in
  your company by also using the following
  questions
• To what extent does your company emphasize the
  importance and value of the human resources of
  the company through the philosophy and beliefs of
  top management?
• To what extent does your company invest time and
  money in improving human resource procedures and
  practices?

147
HR Audit

• To what extent does your company develop, monitor
  and evaluate human resource practices?
• To what extent does your company emphasize ensure
  uniform application of all human resource
  policies throughout the company?
• To what extent does your company include the HR
  director/function in the development of strategic
  plans for the company?
• Are the HR practices consistent with the
  companys mission?
• Is this company considered an employer of choice
  (check The Most Admired Companies annual
  publication by Fortune Magazine)?
• Is this company known for progressive and novel
  HR practices? Describe and explain.

148
HR Audit

• Suggested (not required) structure for your
  report
• Company Introduction
• Industry and products Market Share Current
  Status
• Revenue, Number of employees
• Level of internationalization
• History Positives and Setbacks
• Business Strategy - Mission
• HR Practices and their Success
• Strategic Role of HR
• Code of Ethics
• Consistency between Strategy and HR Practices
• Unique HR Aspects
• The number one thing you should know about this
  company?
• Why we would love (or not) to work for this
  company.
• Recommendations

149
HR Audit

• Appendix Answers to the questions that were
  provided with the background information.
• The report should not be between 10 and 15 pages
  long. It is due the last day of class.
• You have 20 minutes for your presentation and 10
  minutes for questions and answers. Each team
  member must participate in the presentation.
• You presentation may, but does not have to,
  follow the structure of your report.
• Company List
• BP Amoco,
• Motorola
• GM
• Johnson Johnson
• American Airlines
• Southwest Airlines
• Ford
• Arthur Anderson

150
Course Summary

• Warren Bennis
• List 10 things that you have learned in this
  course.
• How will you be able to apply these things?
• How will these things help you in your future
  career?