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Managing Human Resources

Chapter�10

10–1

Management

Stephen P. Robbins Mary Coulter

tenth edition

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Learning Outcomes�Follow this Learning Outline as you read and study this chapter.

10.1 The Human Resource Management Process

Explain why the HRM process is important.
Discuss the environmental factors that most directly affect the HRM process.

10.2 Identifying and Selecting Competent Employees

Define job analysis, job description, and job specification.
Discuss the major sources of potential job candidates.
Describe the different selection devices and which works best for different jobs.
Explain why a realistic job preview is important.

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Learning Outcomes

10.3 Providing Employees with Needed Skills

and Knowledge

Explain why orientation is so important.
Describe the different types of training and how that training can be provided.

10.4 Retaining Competent, High Performing

Employees

Describe the different performance appraisal methods.
Discuss the factors that influence employee compensation and benefits.
Describe skill-based and variable pay systems.

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Learning Outcomes

10.5 Contemporary Issues in Managing Human

Resources

Explain how managers can manage downsizing.
Discuss how managers can manage workforce diversity.
Explain what sexual harassment is and what managers need to know about it.
Describe how organizations are dealing with work-life balance issues.
Discuss how organizations are controlling HR costs.

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The Importance of Human Resource Management (HRM)

As a significant source of competitive advantage

People-oriented HR creates superior shareholder value

As an important strategic tool

Achieve competitive success through people by treating employees as partners

To improve organizational performance

High performance work practices lead to both high individual and high organizational performance.

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Exhibit 10–1 Examples of High-Performance Work Practices

Self-managed teams
Decentralized decision making
Training programs to develop knowledge, skills, and abilities
Flexible job assignments
Open communication
Performance-based compensation
Staffing based on person–job and person–organization fit

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Source: Based on W. R. Evans and W. D. Davis, “High-Performance Work Systems and Organizational Performance: The Mediating Role of Internal Social Structure,” Journal of Management, October 2005, p. 760.

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The HRM Process

Functions of the HRM Process

Ensuring that competent employees are identified and selected.
Providing employees with up-to-date knowledge and skills to do their jobs.
Ensuring that the organization retains competent and high-performing employees.

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Exhibit 10–2 Human Resource Management Process

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Environmental Factors Affecting HRM

Employee Labor Unions

Organizations that represent workers and seek to protect their interests through collective bargaining.

Collective bargaining agreement

A contractual agreement between a firm and a union elected to represent a bargaining unit of employees of the firm in bargaining for wage, hours, and working conditions.

Governmental Laws and Regulations

Limit managerial discretion in hiring, promoting, and discharging employees.

Affirmative Action: Organizational programs that enhance the status of members of protected groups.

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Exhibit 10–3 Major U.S. Federal Laws and Regulations � Related to HRM

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1963 Equal Pay Act

1964 Civil Rights Act, Title VII (amended in 1972)

1967 Age Discrimination in Employment Act

1973 Vocational Rehabilitation Act

1974 Privacy Act

1978 Mandatory Retirement Act

1986 Immigration Reform and Control Act

1988 Worker Adjustment and Retraining Notification Act

1990 Americans with Disabilities Act

1991 Civil Rights Act of 1991

1993 Family and Medical Leave Act of 1993

1996 Health Insurance Portability and Accountability Act of 1996

2004 FairPay Overtime Initiative

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Managing Human Resources

Human Resource (HR) Planning

The process by which managers ensure that they have the right number and kinds of people in the right places, and at the right times, who are capable of effectively and efficiently performing their tasks.
Helps avoid sudden talent shortages and surpluses.
Steps in HR planning:

Assessing current human resources
Assessing future needs for human resources

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Current Assessment

Human Resource Inventory

A review of the current make-up of the organization’s current resource status.
Job Analysis

An assessment that defines a job and the behaviors necessary to perform the job.
Requires conducting interviews, engaging in direct observation, and collecting the self-reports of employees and their managers.

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Current Assessment (cont’d)

Job Description

A written statement that describes a job.

Job Specification

A written statement of the minimum qualifications that a person must possess to perform a given job successfully.

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Meeting Future Human Resource Needs

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Supply of Employees

Demand for Employees

Factors Affecting Staffing

Strategic Goals

Forecast demand for products and services

Availability of knowledge, skills, and abilities

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Recruitment and Decruitment

Recruitment

The process of locating, identifying, and attracting capable applicants to an organization

Decruitment

The process of reducing a surplus of employees in the workforce of an organization

Online Recruiting

Recruitment of employees through the Internet

Organizational Web sites
Online recruiters

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Exhibit 10–4 Major Sources of Potential Job � Candidates

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Exhibit 10–5 Decruitment Options

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Selection

Selection Process

The process of screening job applicants to ensure that the most appropriate candidates are hired.

What is Selection?

An exercise in predicting which applicants, if hired, will be (or will not be) successful in performing well on the criteria the organization uses to evaluate performance.
Selection errors:

Reject errors for potentially successful applicants
Accept errors for ultimately poor performers

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Exhibit 10–6 Selection Decision Outcomes

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Validity and Reliability

Validity (of Prediction)

A proven relationship between the selection device used and some relevant criterion for successful performance in an organization.

Reliability (of Prediction)

The degree of consistency with which a selection device measures the same thing.

Individual test scores obtained with a selection device are consistent over multiple testing instances.

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Exhibit 10–7 Selection Tools

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Application Forms
Written Tests
Performance Simulations Tests
Interviews
Background Investigations
Physical Examinations

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Application Forms

Strengths and weaknesses:

Almost universally used
Relevant biographical data and facts that can be verified
Can predict job performance
Weighted-item applications are difficult and expensive to create and maintain

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Written Tests

Types of Tests

Intelligence: how smart are you?
Aptitude: can you learn to do it?
Attitude: how do you feel about it?
Ability: can you do it now?
Interest: do you want to do it?

Legal Challenges to Tests

Lack of job-relatedness of test items or interview questions to job requirements
Discrimination in equal employment opportunity against members of protected classes

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Performance Simulation Tests

Testing an applicant’s ability to perform actual job behaviors, use required skills, and demonstrate specific knowledge of the job.

Work sampling

Requiring applicants to actually perform a task or set of tasks that are central to successful job performance.

Assessment centers

Dedicated facilities in which job candidates undergo a series of performance simulation tests to evaluate their managerial potential.

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Other Selection Approaches

Interviews

Although used almost universally, managers need to approach interviews carefully.

Background Investigations

Verification of application data
Reference checks:

Lack validity because self-selection of references ensures only positive outcomes.

Physical Examinations

Useful for physical requirements and for insurance purposes related to pre-existing conditions.

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Other Selection Approaches (cont’d)

Realistic Job Preview (RJP)

The process of relating to an applicant both the positive and the negative aspects of the job.

Encourages mismatched applicants to withdraw.
Aligns successful applicants’ expectations with actual job conditions, reducing turnover.

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Employee Needed Skills and Knowledge

Orientation

Education that introduces a new employee to his or her job and the organization.

Work unit orientation
Organization orientation

Employee Training

Types of training
Training Methods

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Exhibit 10–8 Types of Training

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Type	Includes
General	Communication skills, computer systems application and programming, customer service, executive development, management skills and development, personal growth, sales, supervisory skills, and technological skills and knowledge
Specific	Basic life/work skills, creativity, customer education, diversity/cultural awareness, remedial writing, managing change, leadership, product knowledge, public speaking/presentation skills, safety, ethics, sexual harassment, team building, wellness, and others

Source: Based on “2005 Industry Report—Types of Training,” Training, December 2005, p. 22.

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Exhibit 10–9 Training Methods

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Traditional �Training Methods

On-the-job
Job rotation
Mentoring and coaching
Experiential exercises
Workbooks/manuals
Classroom lectures

Technology-Based Training Methods

CD-ROM/DVD/videotapes/ audiotapes
Videoconferencing/ teleconferencing/�satellite TV
E-learning

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Employee Performance Management

Performance Management System

A process of establishing performance standards and appraising employee performance.

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Exhibit 10–10 Advantages and Disadvantages of Performance � Appraisal Methods

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Method	Advantage	Disadvantage
Written essays	Simple to use	More a measure of evaluator’s writing ability than of employee’s actual performance
Critical incidents	Rich examples; behaviorally based	Time-consuming; lack quantification
Graphic rating scales	Provide quantitative data; less time-consuming than others	Do not provide depth of job behavior assessed
BARS	Focus on specific and measurable job behaviors	Time-consuming; difficult to develop
Multiperson comparisons	Compares employees with one another	Unwieldy with large number of employees; legal concerns
MBO	Focuses on end goals; results oriented	Time-consuming
360-degree appraisals	Thorough	Time-consuming

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Compensation and Benefits

Benefits of a Fair, Effective, and Appropriate Compensation System

Helps attract and retain high-performance employees
Impacts the strategic performance of the firm

Types of Compensation

Base wage or salary
Wage and salary add-ons
Incentive payments
Skill-based pay
Variable pay

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Exhibit 10–11 Factors That Influence Compensation � and Benefits

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Sources: Based on R.I. Henderson, Compensation Management, 6^th ed. (Upper Saddle River, NJ: Prentice Hall, 1994), pp. 3–24; and A. Murray, “Mom, Apple Pie, and Small Business,” Wall Street Journal, August 15, 1994, p. A1

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Contemporary Issues in Managing Human Resources

Managing Downsizing

The planned elimination of jobs in an organization

Provide open and honest communication.
Provide assistance to employees being downsized.
Reassure and counseling to surviving employees.

Managing Workforce Diversity

Widen the recruitment net for diversity
Ensure selection without discrimination
Provide orientation and training that is effective

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Exhibit 10–12 Tips for Managing Downsizing

• Communicate openly and honestly:

° Inform those being let go as soon as possible

° Tell surviving employees the new goals and expectations

° Explain impact of layoffs

• Follow any laws regulating severance pay or benefits

• Provide support/counseling for surviving employees

• Reassign roles according to individuals’ talents and backgrounds

• Focus on boosting morale:

° Offer individualized reassurance

° Continue to communicate, especially one-on-one

° Remain involved and available

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Current Issues in HRM (cont’d)

Sexual Harassment

An unwanted activity of a sexual nature that affects an individual’s employment.

Unwanted sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when submission or rejection of this conduct explicitly or implicitly affects an individual’s employment.

An offensive or hostile environment

An environment in which a person is affected by elements of a sexual nature.

Workplace Romances

Potential liability for harassment

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Current Issues in HRM (cont’d)

Work-Life Balance

Employees have personal lives that they don’t leave behind when they come to work.
Organizations have become more attuned to their employees by offering family-friendly benefits:

On-site child care
Summer day camps
Flextime
Job sharing
Leave for personal matters
Flexible job hours

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Current Issues in HRM (cont’d)

Controlling HR Costs

Employee health care

Encouraging healthy lifestyles

Financial incentives
Wellness programs
Charging employees with poor health habits more for benefits

Employee pension plans

Reducing pension benefits
No longer providing pension plans

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