Chapter Fourteen
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Transcript Chapter Fourteen
Mgmt 371
Chapter Fourteen
Managing Human Resources in
Organizations
Much of the slide content was created by Dr, Charlie Cook, Houghton Mifflin, Co.©
1
The Environmental Context of
Human Resource Management
Human Resource Management (HRM)
The set of organizational activities directed at
attracting, developing, and maintaining an effective
work force.
The Strategic Importance of HRM
HRM is increasingly important as firms realize the
value of their human capital in improving
productivity.
HRM is critical to bottom-line performance of the
firm.
HR planning is now part of the strategic planning
process.
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The Legal Environment of HRM
(Equal Employment Opportunity)
Equal Employment Opportunity
Title VII of the Civil Rights Act of 1964
Forbids discrimination in the employment relationship
on the basis of race, color, religion. sex, or national
origin.
Employers are not required to seek out and hire
minorities but they must treat fairly all who apply.
Adverse impact
When minority group members pass a selection
standard at a rate less than 80% of the rate of the
majority group.
Equal Employment Opportunity Commission (EEOC)
Federal agency charged with enforcing Title VII as
well as several other employment-related laws.
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The Legal Environment of HRM
(Equal Employment Opportunity)
Affirmative Action (E.O.11246)
Intentionally seeking and hiring qualified or
qualifiable employees from racial, sexual, and
ethnic groups that are underrepresented in the
organization
Several executive orders require federal
contractors to develop affirmative action plans and
take affirmative action in hiring veterans and the
disabled.
Pregnancy Discrimination Act
Specifically outlaws discrimination on the basis of
pregnancy.
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The Legal Environment of HRM
(Equal Employment Opportunity)
Age Discrimination in Employment
Act of 1967 (ADEA)
Outlaws discrimination against persons
older than 40 years of age
Americans with Disabilities Act of
1990 (ADA)
Forbids discrimination on the basis of
disabilities and requires employers to
provide reasonable accommodations for
disabled employees.
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The Legal Environment of HRM
(Equal Employment Opportunity)
Civil Rights Act of 1991
Amended the original Civil Rights Act,
making it easier to bring discrimination
lawsuits while also limiting punitive damages
that can be awarded in those lawsuits.
Prohibits race norming.
Places burden of proof on complaining
parties initiating disparate impact charges.
Provides for extraterritorial application of Title
VII.
Provides for jury trials
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The Legal Environment of HRM
(Compensation and Benefits)
Fair Labor Standards Act of 1938 (FLSA)
Sets a minimum wage and requires overtime pay
for work in excess of 40 hours per week for nonexempt employees.
Salaried professional, executive, and
administrative employees are exempt from the
Act’s minimum wage and overtime provisions.
Equal Pay Act of 1963
Requires men and women to be paid the same
amount for doing the same jobs; exceptions are
permitted for seniority and merit pay.
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The Legal Environment of HRM
(Compensation and Benefits)
Employee Retirement Income Security
Act of 1974 (ERISA)
Sets standards for pension plan
management and provides federal
insurance if pension plans go bankrupt.
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The Legal Environment of HRM
(Compensation and Benefits)
Family and Medical Leave Act of
1993 (FMLA)
Requires employers to provide up
to 12 weeks of unpaid leave for
qualifying family and medical
emergencies.
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The Legal Environment of HRM
(Compensation and Benefits)
Eligibility Requirements for FMLA
Must work for a covered employer (private with 50+
employees, state governments and agencies, or the
federal government.
Employee must have worked for at least 12 months for
a covered employer.
Employee must have worked in excess of 1,250 hours
to be eligible. [156.25 work days, 31.25 work weeks]
Work at a facility with 50 or more employees who live
within 75 miles of the place of employment
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The Legal Environment of HRM
(Labor Relations)
The National Labor Code
National Labor Relations Act of 1935 (Wagner Act)
Set up procedures for employees to vote whether to
have a union; if the vote is for a union, management is
required to bargain collectively with the union.
National Labor Relations Board (NLRB)—the
federal agency empowered to enforce provisions of
the NLRA.
Labor Management Relations Act of 1947 (TaftHartley Act)
Amended the NLRA to limit the power of unions and
increase management’s rights during organizing
campaigns.
Allows the U.S. president to prevent or end a strike
that endangers national security.
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The Legal Environment of HRM
(Health and Safety)
Occupational Safety and Health Act of 1970
(OSHA)
Requires that employers:
Provide a place of employment that is free from
hazards that may cause death or serious physical
harm.
Obey the safety and health standards established by
Occupational Safety and Health Administration
(OSHA).
Emerging Legal Issues
Sexual orientation harassment
Alcohol and drug dependence
AIDS
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Social Change and HRM
Temporary Workers
An increasing trend is to use more temporary workers
without the risk that the organization may have to
eliminate their jobs.
Dual-Career Families
Firms are increasingly having
to make accommodations for
dual-career partners by:
Delaying transfers
Offering employment to spouses
Providing more flexible work
schedules and benefits packages
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Change and HRM
Employment-at-Will
A traditional view of the workplace in which an
organization can fire an employee for any or no
reason.
The new argument: an organization should be able to
fire only people who are poor performers or who violate
rules.
Recent court cases have placed limits on an
organization’s ability to terminate employees by
requiring just cause for firing or dismissal as part of an
organization-wide cutback.
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Attracting Human Resources
Job Analysis
A systematic analysis of jobs within an organization.
Job Description
A listing of the job’s tasks, duties, and responsibilities
(TDR); its working conditions; and the tools, materials,
and equipment use to perform the job.
Job Specification
A listing of the knowledge, skills, abilities (KSA), and
other credentials the incumbent jobholder will need to
do a job.
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Attracting Human Resources
Forecasting HR Demand and
Supply
Replacement chart
A list of managerial positions
in the organization, the
occupants, how long they will
stay in the position, and who
will replace them.
Employee information system
(skills inventory) (OCI)
A database of employees’
education, skills, work
experience, and career
expectations, usually
computerized.
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Human Resource Planning (HRP)
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Recruiting Human Resources
Recruiting
The process of attracting qualified persons to apply for
jobs that are open.
Internal Recruiting
Considering present employees as candidates for
openings.
Advantage: promotion from within can help build
morale and reduce turnover of high-quality employees.
Disadvantage: internal recruiting can create a “ripple
effect” of having to successively fill vacated positions.
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Recruiting Human Resources
(cont’d)
External Recruiting
Attracting persons from outside the
organization.
Realistic Job Preview (RJP) is considered a
successful method to ensure person-job fit.
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Selecting Human Resources
Validation:
Determining the extent to which a selection device is
really predictive of future job performance.
Predictive validation
Correlating previously collected test scores of
employees with the employees’ actual job
performance.
Content validation
The use of logic and job analysis to determine that
selection techniques measure the exact skills needed
for job performance.
Used to establish the job relatedness of a selection
device.
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Selecting Human Resources
Application Blanks
Used to gather information about work history,
educational background, and other job-related
demographic data.
Must not ask for information unrelated to the job.
Tests
Ability, skill, aptitude, or knowledge tests are usually
the best predictors of job success.
Must be validated, administered, and scored
consistently.
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Selecting Human Resources
Interviews
Interviews can be poor predictors of job
success due to interviewer biases.
Interview validity can be improved by training
interviewers and using structured interviews.
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Selecting Human Resources
Assessment Centers
A popular method for selecting managers and are
particularly good for selecting current employees for
promotion.
A content validation of major parts of the managerial
job.
Other Techniques
Polygraphs have declined in popularity due to passage
of the Polygraph Protection Act.
Employers now use physical exams, drug tests, and
credit checks to screen prospective employees.
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Figure
14.2:
The
Training
Process
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Developing Human Resources
(cont’d)
Training and Development
Assessing training needs
Determining what needs exist is
the first step in developing a
training plan.
Common training methods
Lectures
Work well for factual material.
Role play and case studies
Good for improving interpersonal
relations skills or group decisionmaking.
On-the-job and vestibule training
Facilitates learning physical skills
through practice and actual use of
tools
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Developing Human Resources
(cont’d)
Performance Appraisal
A formal assessment of how well employees do their
jobs.
Reasons for performance appraisal
Validates the selection process and the effects of
training.
Aids in making decisions about pay raises,
promotions, and training.
Provides feedback to employees to improve their
performance and plan future careers.
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Developing Human Resources
(cont’d)
Performance Appraisal (cont’d)
Objective measures of performance
Actual output (units produced), scrap rate, dollar
volume of sales, and number of claims processed.
Can become contaminated by outside factors resulting
in “opportunity bias” where some have a better chance
to perform than others.
Special performance tests are a method in which each
employee is assessed under standardized conditions.
Performance tests measure ability and not motivation.
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Developing Human Resources
(cont’d)
Performance Appraisal (cont’d)
Judgmental methods
Ranking—compares employees directly with each
other.
Difficult to do with large numbers of employees.
Difficult to make comparisons across work groups.
Employees are ranked only on overall performance.
Do not provide useful information for employee feedback.
Rating—compares each employee with a fixed
standard.
Graphic rating scales
Behaviorally-anchored rating scale (BARS)
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Figure 14.3: Graphic Rating Scales
for a Bank Teller
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Figure 14.4: Behaviorally
Anchored Rating Scale
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Performance Appraisal Errors
Recency Error - most raters can only recall
an employees last 30 to 60 days of
performance (Critical Incident Method can
reduce this error).
Central Tendency - rating all subordinates as
average.
Common to Graphic Rating Scales when comments must be
provided for below or above average ratings.
Leniency Error - everyone is rated above
average (usually done to reduce or avoid
conflict).
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Performance Appraisal Errors
Strictness Error - rating all subordinates as lower than
their actual performance indicates.
Rater Bias - personal prejudices cloud the evaluation
(women are perceived as passive leaders, e.g.).
Leniency Error - everyone is rated above average
(usually done to reduce or avoid conflict).
Halo Effect - one (or a few) characteristic the ratee
possesses is generalized to the employee’s entire
performance evaluation. (A negative halo is sometimes
called the horns effect).
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Performance Appraisal Errors
Contrast Error (Varying Standards)- rating
employees performing similar jobs relative to one
another rather than to established performance
standards.
Similar performance is rated differently
A problem of all comparative methods.
33
Developing Human Resources
Performance Feedback
Is best given in a private meeting
between the employee and immediate
supervisor.
Discussion should focus on the facts:
The assessed level of performance
How and why the assessment was
made.
How the employee’s performance can
be improved.
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Developing Human Resources
Performance Feedback
Properly training managers can
help them conduct more effective
feedback interviews.
“360 degree” (multi-source)
feedback
Managers are evaluated by
everyone around them.
Provides a richer array of
performance information on which
to base an appraisal.
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Maintaining Human Resources
(Compensation)
Determining Compensation
Compensation
The financial remuneration given by the organization
to its employees in exchange for their work.
Wages
Salary
Incentives
Purposes of compensation
Provide the means to maintain a reasonable standard
of living.
Provide a tangible measure of the value of the
individual to the organization.
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Maintaining Human Resources
(Compensation)
Wage-level decision
The wage-level decision is a management policy
decision to pay above, at, or below the going rate
for labor in an industry or geographic area.
Factors that affect the wage-level decision:
the size and current success of the firm.
the level of unemployment in
the labor force.
Area wage surveys
Can provide information about the maximum,
minimum, and average wages for a particular job in a
labor market.
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Maintaining Human Resources
(Compensation)
Wage-structure decision
Job evaluations
Wage surveys data and the wage structure
Individual wage decision
Factors such as seniority, initial qualifications,
individual merit, and labor market conditions
influence
wage decisions.
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Maintaining Human Resources
(Compensation)
Determining Benefits
Benefits (Indirect compensation)
Things of value other than compensation that
an organization provides to its workers.
The average company spends an amount
equal to more than one-third of its cash payroll
on employee benefits.
A good benefit plan encourages employees to
stay with the company and attracts new
employees.
Benefits do not necessarily stimulate high
performance.
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Maintaining Human Resources
(Compensation)
Managing benefits effectively:
Shop carefully for the best-cost providers.
Avoid redundant coverage.
Provide only the benefits that employees want.
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Maintaining Human Resources
(Compensation)
Types of benefits
Pay for time not worked
Insurance
Employee service benefits
Cafeteria benefit plans
Flexible plans that provide basic coverage and
allow employees to choose the additional benefits
they want up to the cost limit set by the
organization.
Other benefits
On-site childcare, mortgage assistance, and paidleave programs.
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Managing Labor Relations
Labor Relations
The process of dealing with employees when they are
represented by a union.
Organizations prefer employees remain nonunion
because unions limit management’s freedom.
The best way to avoid unionization is to practice good
employee relations all the time by:
Providing fair treatment with clear standards in pay,
promotions, layoffs, and discipline.
Providing a complaint and appeal system.
Avoiding favoritism.
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The Union-Organizing Process
Authorization Card Campaign
Recognition
[50% + 1]
Certification
[30%]
File recognition
petition
File Certification
Petition
Consent Election
Decree
Collective Bargaining
Begins
Formal Election
Hearing
Election
[Simple Majority of Ballots Cast] 43
Managing Labor Relations
Collective Bargaining
The process of agreeing on a satisfactory labor
contract between management and labor.
The contract contains agreements about wage, hours,
and working conditions and how management will
treat employees.
Grievance Procedure
The step-wise means by which a labor contract is
enforced.
Grievances are filed on behalf of an employee by the
union when it believes employees have not been
treated fairly under the contract.
44
New Challenges in the Changing
Workplace
Managing Knowledge Workers
Knowledge workers
Employees whose contributions to an
organization are based on what they
know (e.g., computer scientists,
engineers, and
physical scientists).
Tend to work in high-technology areas
Are experts in abstract knowledge
areas.
Like to work independently and identify
strongly with their professions.
Have skills that require continual
updating and additional training.
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New Challenges in the Changing
Workplace
Knowledge Worker Management and Labor Markets
Demand is strong for knowledge workers.
External labor market pressures
Internal labor market pressures
Contingent and Temporary Workers
Trends in contingent and temporary workers
There have been dramatic and consistent increases in
contingent workers—10% of the U.S. workforce is
either contingent or temporary.
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New Challenges in the Changing
Workplace
Contingent and Temporary Workers (cont’d)
Managing contingent workers
Careful planning allows for integrating contingent
workers into the organization in a coordinated fashion
for well-defined time periods.
Understanding contingent workers and acknowledging
their advantages and disadvantages.
Carefully assess and document the true labor-cost
savings of using contingent workers.
Decide early on how similarly contingent employees
will be treated relative to permanent employees.
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