Transcript Chapter 1

Part 4
Creating the
Human
Resource
Advantage
© 2015 McGraw-Hill Education.
10-2
CHAPTER 9
Motivating the Workforce
CHAPTER 10
Managing Human Resources
10-3
Learning Objectives
LO 10-1
Define human resources management and explain its
significance.
LO 10-2
Summarize the processes of recruiting and selecting human
resources for a company.
LO 10-3
Discuss how workers are trained and their performance
appraised.
LO 10-4
Identify the types of turnover companies may experience
and explain why turnover is an important issue.
LO 10-5
Specify the various ways a worker may be compensated.
LO 10-6
Discuss some of the issues associated with unionized
employees, including collective bargaining and dispute
resolution.
LO 10-7
Describe the importance of diversity in the workforce.
10-4
Nature of Human Resource Management
Human Resource Management (HRM)
• All activities involved in determining an organization’s
human resources needs, as well as acquiring, training
and compensating people to fill those needs
 Called personnel management
in some companies
 Managers try maximizing
employee satisfaction while
motivating them to productively
meet objectives
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Planning for Human Resource Needs
During a company’s planning period, the human
resources department:
 Determines the current number of workers and how
many plan to retire or leave during the planning
period
 Forecasts how many qualified employees will need
to be hired, or determines if layoffs are required
 Forecasts the availability of future qualified hires
 Develops a strategy which may include
outsourcing, automation or temporary workers
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Planning for Human Resources Needs
Next, managers analyze the
jobs in order to match people
to available assignments
Job
Analysis
• Determines, through observation and
study, pertinent information about a job
including specific tasks and necessary
abilities, knowledge and skills
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Planning for Human Resources Needs
Using the job analysis, managers develop:
Job Description
Job Specification
• A formal, written
explanation of a
specific job, usually
including job title, tasks,
relationship with other
jobs, physical and
mental skills required,
duties, responsibilities
and working conditions
• A description of the
qualifications necessary
for a specific job, in
terms of education,
experience, and
personal and physical
characteristics
10-8
Recruiting and Selecting New Employees
Job descriptions and job specifications are used to
develop recruiting materials
Recruiting
• Forming a pool of qualified applicants from which
management can select employees
 Internal sources include current employees
 External sources includes everything else
 Some companies use agencies or executive
search firms, sometimes called headhunters
10-9
Recruiting and Selecting New Employees
Selection
• The process of collecting information about applicants
and using that information to make hiring decisions
o Includes the application, interviewing, testing and
reference checking
o The process can be lengthy and expensive but
necessary in order to find applicants who can do the
work and fit into the firm’s structure and culture
o Careful hiring saves future hiring expenses
10-10
Recruiting and Selecting New Employees
The next phase of the selection process is the
interview
 Through interviews, management obtains detailed
information about the applicant’s experience and
skills and their reasons for changing jobs
 The interviewer can answer the applicant’s
questions about the job, compensation, working
conditions, policies, company culture and so on
 An interviewee’s questions may be as revealing as
their answers
10-11
Recruiting and Selecting New Employees
 Personality tests such as MyersBrigg are used to assess an
applicant’s potential for a certain
kind of job
 For instance, extroversion and a
love of people would be good
qualities for a sales or retail job
 Interestingly, there does not seem
to be any difference between
introversion and extroversion in
making a good manager
10-12
Recruiting and Selecting New Employees
Before making a job offer, the company should check
references; including verifying educational background
and previous work experience
 An Internet search is often done to determine social
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media or other public activities
Public companies are likely to do a more extensive
background search
Reference checking is important as applicant’s may
misrepresent themselves on their applications and
resumes
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Recruiting and Selecting New Employees
Managers must be aware of legal restraints and
regulations in order to avoid legal problems
Title VII of the
Civil Rights Act
Equal
Employment
Opportunity
Commission
(EEOC)
• Prohibits discrimination in employment and
created the Equal Employment Opportunity
Commission
• A federal agency dedicated to increasing job
opportunities for women and minorities and
eliminating job discrimination based on race,
religion, color, sex, national origin or handicap
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Recruiting and Selecting New Employees
Other laws affecting HRM include:
Americans with Disabilities Act (ADA)
• Prevents discrimination against persons with disabilities
Age Discrimination in Employment Act
• Focuses on discrimination against those 40 years and older
Equal Pay Act
• Mandates that men and women who do equal work receive the
same wage
• Wage differences are acceptable if based on seniority,
performance or qualifications
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Video Interviews
Interviewing for a job has traditionally required the
interviewee to go to the physical location of the job applied
for no matter how far the distance
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However since 2011, human resource managers have
taken to video conferencing to conduct interviews over 49
percent of the time
This has not only increased the diversity of people being
interviewed as they are no longer restricted by travel, but it
has decreased the amount of time used in the recruiting
process as well as the costs of recruiting
SOURCE: Andrea Huspeni. “Video Chat: It Ain’t Just for Long Distance Relationships Anymore (Infographic)”. www.youngentrepreneur.com.
September 17, 2013. http://www.youngentrepreneur.com/startingup/start-ups/video-chat-it-aint-just-for-long-distance-relationships-anymoreinfographic/#%21. (accessed September 24, 2013); Elaine Pofeldt. “Ace Your Next Interview”. Money. September 2013. Page 31.
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Developing the Workforce
Orientation
• Familiarizing newly hired employees with fellow workers,
company procedures and the physical properties of the company
Usually includes
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A tour of the building
Introductions to co-workers and supervisors
Distribution of manuals and policies
Socializing the new employee into the ethics
and culture of the company
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Developing the Workforce
Training
• Teaching employees to do specific job tasks through
either classroom development or on-the-job experience
• On-the-job training – workers learn by actually
performing the tasks of the job
• Classroom training – teaches employees with lectures,
conferences, video and Web-based instruction
Development
• Training that augments the skills and knowledge of
managers and professionals
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Developing the Workforce
Assessing an employee’s strengths and weaknesses
on the job is one of the most difficult tasks for
managers
Performance appraisal is crucial as it
 Gives employees feedback on how they are
doing and how to improve
 Provides a basis for determining compensation
 Generates information about the quality of the
firm’s selection, training and development
activities
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Developing the Workforce
Performance appraisals may be objective or subjective
 Objective appraisal is quantifiable; such as how
many of something was produced or the score on a
test
 One popular subjective appraisal method is ranking
employees against each other
 Another method is the 360-degree feedback
system, providing feedback from a panel of
superiors, peers and subordinates
10-20
Developing the Workforce
Turnover
Promotion
Transfer
• Occurs when
employees quit or
are fired and must
be replaced by
new employees
• Can also take the
happy form of a
promotion or
transfer
• An advancement
to a higher-level
job with increased
authority,
responsibility and
pay
• Managers prefer to
promote based on
merit but some
companies and
labor unions
require it be based
on seniority
• A move to another
job within the
company at
essentially the
same level and
wage
10-21
Developing the Workforce
► Many companies in
recent years are
choosing to downsize
by eliminating jobs
► Reasons might be due
to financial constraints
or the need to become
more productive and
competitive
10-22
Developing the Workforce
Separations
• Employment changes involving resignation,
retirement, termination or layoff
 Traditionally, companies could fire workers at will, that
is, for any reason other than race, religion, sex or age
 Recent legislation requires companies fire employees
fairly, for just cause only
The HR department strives to minimize employee
losses as recruiting and training is expensive
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Compensating the Workforce
People don’t work for free and their pay and benefits
are a substantial portion of an organization’s expenses
 Compensation for a specific job is typically
determined through a
• A study that tells a company how
Wage/Salary much compensation comparable
firms are paying for specific jobs
Survey
the firms have in common
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Financial Compensation
Wages - financial rewards based on the
number of hours the employee works or
the level of output achieved
Time wages –
based on
hours worked
Minimum wage
– federally
mandated
Tip wages $2.13 plus tips,
must equal
minimum wage
10-25
Compensating the Workforce
Many companies pay on an incentive system, such as:
Piece Wages
Commission
• Pay based on the level of output achieved
• Major advantage is this system motivates
employees
• An incentive system that pays a fixed amount or a
percentage of the employee’s sales
• Motivates employees to sell as much as they can
• Some companies combine commission with time
wages or salaries
10-26
Compensating the Workforce
Salary
• A financial reward calculated on a weekly, monthly or annual basis
Bonuses
• Monetary rewards offered by companies for exceptional performance
as incentives to further increase productivity
Profit Sharing
• A form of compensation whereby a percentage of company profits is
distributed to the employees whose work helped to generate them
ESOPs
• Employee stock ownership plans distribute company stock to
employees as a form of profit sharing
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Compensating the Workforce
Benefits
• Nonfinancial forms of compensation provided to
employees, such as pension plans, health insurance,
paid vacations and holidays, and the like
 According the Bureau of Labor Statistics, employer
costs for compensation in the U.S. average $27.42
per hour worked
 Wages and salaries account for 70.8% while
benefits account for 29.2%
Benefits increase employee security, morale and motivation
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Compensating the Workforce
 The employee assistance program (EAP) offers
employees’ personal assistance with problems that
may hurt their job performance
 Flexible benefit programs allow employees to
choose the benefits they want, up to a certain
amount
 Fringe benefits include sick leave, vacation pay,
pension plans and other extra compensation
 Soft benefits include perks that help balance life
and work, such as spas, food service and child
care
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Compensating the Workforce
o An on-site fitness center is
one of the benefits large
companies have begun to
offer employees
o Such benefits are
particularly important for
employees who work long
hours or who struggle to
maintain a healthy worklife balance
10-30
Managing Unionized Employees
Labor Unions
• Employee organizations formed to deal with
employers for achieving better pay, hours and working
conditions
 On average, union workers make about $200 more per
week than non-union workers
 Union growth has slowed and prospects for growth do
not look good
 Significant aspects of HRM, particularly compensation,
are dictated by union contracts at many companies
10-31
Managing Unionized Employees
Collective Bargaining
• The negotiation process through which management and
unions reach an agreement about compensation, working
hours and working conditions for the bargaining unit
Labor Contract
• The formal, written document that spells out the relationship
between the union and management for a specified period
of time – usually two or three years

COLA or cost-of-living adjustment is automatic
wage increases during periods of inflation

Givebacks are wage and benefit concessions
10-32
Managing Unionized Employees
Sometimes, management and labor simply cannot agree
Labor tactics
Picketing
• A public protest against management practices that
involves union members marching and carrying antimanagement signs at the employer’s plant or work site
Strikes
• Employee walkouts; one of the most effective weapons of
labor unions
Boycott
• An attempt to keep people from purchasing the products
of a company
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Management Tactics
Lockout
Strikebreakers
• Management’s version of a strike,
wherein a work site is closed so that
employees cannot go to work
• People hired by management to
replace striking employees; called
“scabs” by striking union members
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Managing Unionized Employees
If labor and management still fail to reach an agreement, they
have three forms of outside resolution:
Conciliation
• Happens when a third party is brought in to keep the two sides
talking
Mediation
• The third party’s role is to suggest or propose a solution to the
problem
Arbitration
• The settlement of a dispute by a third party whose solution is
legally binding and enforceable
•
Compulsory arbitration is when the government
requests arbitration to end a strike
10-35
Goodbye Human Resources?

Some companies are reinventing their Human Resources
department by getting rid of it, or at least, delegating many
HR duties to frontline or department managers

The hiring and recruiting process that traditionally occurs in
the Human Resources department can sometimes misalign
with the needs of the department where the new hire will work

Delegating these processes to the manager of the
department leads to better placement of employees that are
aligned with the needs and environment of the department

It also gives the management more of an active role in the
leadership of his department, as he is responsible for the new
and existing employees
SOURCE: Todd Henneman. “Is HR At Its Breaking Point?”. www.workforce.com. March 22, 2013. http://www.workforce.com/articles/is-hr-at-itsbreaking-point. (accessed October 1, 2013)
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Importance of Workforce Diversity
Diversity
• The participation of different ages, genders, races,
ethnicities, nationalities and abilities in the workplace
 Understanding diversity means recognizing and
accepting differences and valuing unique perspectives
 Primary characteristics are inborn and unchangeable
 Secondary characteristics can be changed
 Managers must remember that each person is defined
by the interrelationships of all characteristics and they
must consider the complete person
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Importance of Workforce Diversity
The U.S. workforce is becoming increasingly diverse
 Companies are improving their HRM programs to
recruit, develop and retain more diverse employees
to better serve their diverse customers
 The Census Bureau predicted that by 2042,
minorities will make up more than 50% of the U.S.
population
 Effectively managing diversity in the workforce
involves cultivating and valuing its benefits and
minimizing its problems
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Importance of Workforce Diversity
Some of the benefits to workforce diversity:

More productive use of a company’s human
resources
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Reduced conflict among employees as they learn to
respect each other’s differences
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More productive working relationships
Increased commitment to organizational goals
Increased innovation and creativity
Increased ability to serve the needs of diverse
customers
10-39
Importance of Workforce Diversity
Many companies strive to improve their working
environment through
• Legally mandated plans that try to increase
job opportunities for minority groups by
analyzing the current pool of workers,
Affirmative
identifying areas where women and
Action
minorities are underrepresented, and
Programs
establishing specific hiring and promotion
goals, with target dates, for addressing the
discrepancy
10-40
Discussion
?
?
What activities are
involved in acquiring and
maintaining the
appropriate level of
qualified human
resources? Name the
stages of the selection
process.
What is the significance of
a performance appraisal?
How do managers
appraise employees?