Notes

Human Resource Management ESB
Topic 1
What is HRM?
Process of managing human resources (human capital and intellectual assets) to achieve an organizations objectives. People working for a company: their knowledge, abilities and so on compound the Capital (K). HRM consists on the use of these features of the people to achieve the organizations goals. Policies and practices involved in carrying out the people or human resource aspects of a management position, including recruiting, training, rewarding and appraising. Within the HRM we differentiate between: o Rules and regulations these are the policies, the principles that are written on paper, and which every company should take into account. o Practices: how the organizations actually perform their activities. Although the policies establish some rules, the companies not always follow them. So it is important to know not only what they should do, but also what they really do. Managing people is something that is necessary in every organization (even in the smallest butcher shop). Every organization has to recruit, reward, train and even fire its workers. Managing people is a core aspect of management departments. The operational part of HRM consist on series of tasks (recruiting, training, rewarding and appraising)Core Functions Designing management systems to ensure that human talent is used effectively and efficiently to accomplish organizational goals. o Efficiency: doing the things at lower possible cost o Effectiveness: doing the right things.
The term HRM is used in 2 ways: Generic approach: describes a body of management activities- seen as a new term for personnel management. Personnel Management = Human Resource Management Distinctive approach to the management of people: distinct from personnel management- a distinct philosophy. This other approach considers that HRM treats the people differently. People are a resource, not a cost that needs to be minimized. People Management is just the basics.
Personnel Management vs. HRM - HRM is qualitatively different from personnel management. - HRM is resource centered whereas personnel management is workforce centered. HRM deals with people as a resource and not as a cost. - HRM places greater emphasis on planning, monitoring and control. Characteristics of Time Personnel Management HRM Short: someone has retired, Long term: plans to be we should hire someone else. prepared for the future (just

Reactive, ad hoc, marginal Physiological Contract Compliance: as long as you stick to the rules, you wont be fired. External controls: establishment of measures to control the working hours. in case). Proactive, strategic and integrated. Commitment: give your best for the company and we will support your development, your career.. Self- control: time doesnt matter. As long as they achieve the objectives, working hours are not measured. Unitarist (at the end of the day interests of workers and employees are relatedthey are all in the same boat. If company grows or expands, the workers get compensations also. If the company fails, workers are also in trouble), individual (No more collective arrangements are needed), high trust. Organic, devolved, flexible roles.
Control systems
Employee relations perspective
Pluralist (the objectives of employees and managers are divergent), collective, low trust. Each side doesnt trust the other side. As workers are less powerful, they need to create associations or representations.
Preferred structures/systems Roles Evaluation criteria
Bureaucratic/mechanistic centralized, formal and defined roles. Specialist/professional Largely integrated into line management Cost minimization Maximum utilization (human asset accounting)
Psychological contract: employment contract where both parts agree some obligations and expectations between them. Mutual expectations which are not qualified in the contract.
Employee
Employer
Video: Google Google has an enviable reputation for people management. It ranks on top in the best places to work reports.

Googles value proposition combines a focus on innovation and smart business practices with a small-company feel (includes direct assets to top management). HRM plays an important role by embedding Googles mission into daily work life. It is rare to find a place where everyone knows the mission and actually believes it. Googles benefits and compensation packages have three purposes: o To create a community o To drive innovation (the more people interact, the higher the likelihood of creating serendipitous sparks of innovation). o Promote efficiency (oil changes and so on help employees to save time in their personal lives).
HR: Business Partner

According to whether its focus is on Processes or People respectively in Day to Day Operations or Future Strategies, Dave Ulrich distinguishes 4 roles of HRM as a Business Partner. Strategic Partner: occupied in deciding processes future oriented (strategic focus). Change agent: preparing people (educating them) for the necessities of tomorrow (future oriented perspective strategic focus) Employee champion: manage people on a day to day perspective or basis (operational focus). Administrative expert: operational (in a day to day basis) but focused on processes.
HRM Process
In HRM there are three different categories of tasks: 1. Allocation (or attraction): identify, select and hire competent employees. It includes: a. Human resource planning, recruitment, selection 2. Qualification: make sure that the employees are always qualified to do the tasks that they have to do. It includes: a. Orientation: workers need to be oriented before they can perform 100%. b. Training: preparation to be able of switching jobs. Workers need to adapt themselves to the new philosophy. Thanks to these 2 processes the company achieves adapted and competent employees with up-to-date skills and knowledge. 3. Motivation: company needs to keep their workers motivated for a long time. It includes: a. Performance management: feedbacks so that employees can know if they are working as it is expected or if they need to improve something. b. Compensations and benefits c. Career development Thanks to this measure the company achieves to have competent and high-performing employees who are capable of sustaining high performance over the long term.
HRM Value Chain

According to Porters analysis every business function consists on primary (direct) and support (indirect) activities.

Support activities: the activities that support and that make possible the primary activities. It is necessary to have plans before to know what to do with the operational (or primary) activities. Within the support activities we can find. o HR planning o HR Marketing o HR Controlling o HR Management o HR Information Management Primary activities are connected (interconnections) between them. All these activities are placed as they take place in the system (chronologically). These are: o Recruiting o Selecting o Training o Rewarding o Leading o Managing Performance o Motivating o Releasing
With all these activities both the support and primary ones margins are obtained. What you do in HRM is done for the sake of the companys benefits (to get margin). HRM is oriented along companys success, but its smarter investing on people, because what you get back from it is higher than what you save by cutting or firing employees (reducing the investment on HRM).
HRM Value Creation

HRM creates value by engaging in activities that produce employee behaviors that the company needs to achieve its strategic goals. The objective of HRM is to achieve some behaviors (being flexible, not to make mistakes, etc). There are different ways of achieving this behavior performance: selection, reward (people mush profit of their ideas), appraisal (it consist on praising people for having good ideas, and also the other way around) and training. HR Scorecard Contains quantitative standards firms use to measure HR activities measures employee behaviors resulting from these activities Measures strategically relevant organizational outcome of those employee behaviors.
Article SHRM What are the biggest challenges facing HRM executives? 1. Retaining and rewarding the best employees: it is about knowledge. Competition about skilled people. It is less expensive to keep good employees than having to get new ones. One way of retaining good employees in the company is making them emotionally connected to the company. In Google, all the workers love their job. This

is very important because it means that although you are paid less in another place, you still want to stay there. There are 3 forms of attachment to an organization: Rational: for example if I get more money in 1 company than in another. Normative: employees are obliged to be there. There are rules that determine its attachment to certain company. Emotional: the employees love what they do, and doesnt matter how much they are going to get paid, there is something stronger that attach them to its job. This is the strongest form of attachment what workers really want, independently of what they need).
Topic 2: HR Planning
HR Planning is the process of analyzing and identifying the need for and availability of human resources so that the organization can meets its objectives. An effective HR planning consists on finding out the right people, the right capabilities or qualifications these people should have, the right time and also in which area of the organization (right place) they should be employed to make possible for the organization to achieve its objectives.
Right Capabilities
Right Time
Right People
Effective HR Planning
Right Place
Job analysis: systematic way of gathering and analyzing information about the content, context and the requirements of jobs. Systematic process of determining the skills, duties and knowledge required for performing jobs in an organization. Job: group of tasks that must be performed for an organization to achieve its goals. Position: collection tasks and responsibilities performed by 1 person; theres a position for every individual in the organization.
The Job Analysis provides a summary of jobs duties and responsibilities, its relationship to other jobs, the knowledge and skills required and working conditions under which it is performed. Job analysis is performed on 3 occasions: 1. Organization is founded and job analysis process is initiated for the first time. 2. When new jobs are created.

3. When jobs are changed significantly as a result of new technologies, methods, procedures or systems. The job analysis allows figuring out what needs to be done to fulfill its mission. Job description: document that states the tasks, duties and responsibilities of the job. Job descriptions are accurate and relevant. They provide statements of what employees are expected to do on the job, how they do it, etc. Thanks to this document we can infer what workers are suppose to do. Job specification: document containing the minimum acceptable qualifications that a person should posses in order to perform a particular job. These are the minimum (not ideal) qualifications. Based on description we infer which qualification the worker may have to contribute in the job. It includes: skill requirements, physical demands, knowledge requirements and abilities needed. The outcomes of the job are: Recruiting and selection decisions Performance appraisal Job evaluation-wage and salary decisions (compensation) for determining who shall get what salary. They depend on the contribution or the value of a job into the organization. Training requirements: to know who shall get what kind of training it closes the gap between what people should know and what they actually know.
Collecting Job Analysis information

1. Interview: a. information source: individual employees, group employees and supervisors b. Formats: structured or unstructured c. Advantages: quick, direct way to find information d. Disadvantages: distorted information (employees exaggerate information-they make job more important or difficult than what it really is). 2. Questionnaire: analyst administers a structured questionnaire to employees, who identify the tasks they perform. a. Information source: employees fill out questionnaires about job-duties. b. Formats: structured checklists or open questions c. Advantages: quick and efficient way to collect information from large number of employees. d. Disadvantages: preparing and testing the questionnaire is expensive and timeconsuming. In this case, some employees may also exaggerate the significance of their tasks. 3. Observation: job analyst watches the worker perform job tasks and records his/her observations. It helps analysts to identify interrelationships between physical and mental tasks. It is used basically on jobs with manual skills. a. Information source: observing and noting physical activities of employees as they go about their jobs. b. Advantages: it provides first-hand information and reduces info distortion

c. Disadvantages: time consuming, it is difficult to capture the entire job and it is of little use if job involves high level of mental activity. It only works when you can see something. Manual activities are, therefore, easier of observing. 4. Logs (employee recording): employee describe their daily work activities in a diary or log. Problem of employees exaggerating job importance is overcome. a. Information source: workers keep a chronological diary/log or what they do and the time they spent on each activity. b. Advantages: it produces a more complete picture of the job, and it involves employee participation (employees do it themselves). c. Disadvantages: it involves also distortion of information and depends upon employees to accurately recall their activities.
Writing a Job Description:

1. We asses information 2. We discuss information 3. We try to package the responsibilities in jobs.
Sections of Job Description I. Job identification: it is a number that identifies the job. Each job is identified by a number or title. It also includes the job title, the department and the reporting relationships. II. Job Summary: it is a brief abstract of what the purpose of the job is. It comprises 1 or 2 sentences. Concise overview that states job content. III. Responsibilities and duties: list of the responsibilities and the duties each job involves. Delineates the major duties to be performed, direct supervision and budgetary limitations. IV. Authority of the Job Holder: decision responsibility V. Standards of Performance: it is needed for performing what worker is expected to deliver. VI. Working conditions: these are some specifications each job involves (shift schedule, implies risk for the workers, it is an outdoor job, etc). VII. Job specifications: document containing the minimum acceptable qualifications that a person should posses in order to perform a particular job. There are 2 options, since the job specification can be either an individual document or it can also be included as a part of the job description.
Writing a Job Specification

What traits and experience are required to do this job well? Specifications Based on Judgment: experienced people of organization departments decide together the requirements. Based on their expertise. Specifications Based on Statistical analysis (it implies a lot of effort and time). This is a more scientific approach.

o Analyze the job and decide how to measure job performance: we get clues about what criteria would be willing to accept that the job is performed correctly. Select personal traits that you believe should predict successful performance: formulate hypothesis about personal traits (the more experience the worker has, the more able to deliver the correct performance it is). Test candidates for these traits (measure peoples skills) Measure the candidates subsequent job performance. Statistically analyze relationship between traits and job performance: use regression analysis to determine what influences what.
o o o
HR Forecasting and Planning

Forecasting: using information from past and present to identify expected future conditions. o HR demand (quantity and quality)forecasting demand: estimating HR demand using specific forecasting methods. Trying to forecast how many employees we will need at some time in some specific department. o HR supply (quantity and quality, inside and outside) I. External supply: dependent on economic conditions, unemployment rate, demographic development, etc. II. Internal supply: information from qualification inventories, replacements charts, HRIS, etc. Planning: activities undertaken to fulfill demand, and increase/decrease supply. o Recruiting: which positions the company will have to fill, and how to fill them. o Training and development: which KSAs (knowledge, skills and abilities) the company need and how to acquire/produce them.
Shortage of workers forecasted: When there is shortage of workers, organization will have to intensify their efforts to recruit the necessary people to meet the need of the firm. Some actions are: o Innovative recruiting: organization may have to recruit in more different geographical areas than in the past, explore new methods, and seek different kinds of candidates. o Compensation incentives: firms competing for workers in high-demand situation rely on compensation incentives. Examples: 4 day workweeks, flexible working hours, telecommuting, part-time employment and child-care centers. o Training programs: needed to prepare previously unemployable individuals for positions within the firm. I. Remedial education II. Skills training o Different selection standards: lowering of employment standards. Selection criteria that screen out certain workers may have to be altered to ensure that enough people are available to fill jobs. A firm may be willing to hire an inexperienced worker and train the individual to do the job.

Surplus of employees forecasted: Companies look for alternatives to layoffs but downsizing may ultimately be required. Succession planning: process of ensuring that qualified persons are available to assume key managerial positions once the positions are vacant. The main goal is to help the company ensure a smooth transition and operational efficiency. The changes of this century make succession planning more important. CEOs are being terminated more quickly than in the past. Boards tens to be harder on internal candidates than on external ones. Although at times there are justifications for searching externally for top level executives, an internal succession process may be best.
Useful formulas: Required amount of Staff: (AT=amount of tasks; PT/C= average process Time per case; WT=Work time provided by staff member; CA=Contingency allowance (time not directly spent on doing these tasks)). New demand: the organization is growing Demand for replacement: some people are leaving and it is necessary to replace them. Gross staff required Current headcount + Expected departures Expected Entries = Net Staff required. Theoretically this is a good method, but for practical issues it is not very useful. Tasks usually include several tasks and, therefore, it is not easy to calculate the amount of tasks that are actually done. Forecasting and Planning tools 1) Method-Time Measurement (MTM): it is a predetermined motion time system that is used primarily in industrial settings to analyze the methods used to perform any manual operation or task and, as a product of that analysis, set the standard time in which a worker should complete that task. Processes are turned apart into tinny activities. In each piece it is measured how long takes to conduct it. More authomatization is conducted. 2) Trend analysis and ratio analysis: thanks to charts we can benchmark the typical ratio, which makes easier to get out own benchmark. 3) Replacement Chart: it is based on a succession chart, which implies planning the orderly replacement of key employees. It is used to determine who should replace someone in his/her position (who will be promoted). The date to make such decision can be taken from yearly performance appraisal (we infer how they are doing). Succession Planning is the process of ensuring that qualified persons are available to assume key managerial positions once the positions are vacant. The main goal is to help ensure a smooth transition and operational efficiency.
Ex 2 (p 46): What is the net staff demand for each profession for next year?

Staff required Current Exp. depart. Exp. entries Net staff Bricklayers 16 -20 +2 -1 -3 Carpenters 11 -10 +1 -2 0 Locksmiths 5 -5 +1 -1 0 Crane Operators 6 -5 +4 -2 3
We have 3 more bricklayers of what we actually need, but at the same time we need still 3 more crane operators. So, we can train the bricklayers so that they are able to carry out the tasks of a crane operator. This way it is not necessary for the company to hire more personnel.
Ex 3 (p47): Calculate the net staff demand, assuming that the team currently comprises 8 members. Disaster Planning Disaster plans should focus on possible catastrophes that range from natural calamities such as hurricanes, earthquakes, to human-made crises. Plans should also cover day-to-day occurrences such as power failures, server malfunctions or virus attacks. These plans need to address how the company will respond when employees who play an important role or possess unique skills become incapacitated or unavailable for a period of time. Job Design Concepts Process of determining the specifics tasks to be performed, the methods used in performing theses tasks, and how the job relates to other work in the organization. Job enrichment: changes in the content and level of responsibility of a job so as to provide greater challenges to the worker. Provides vertical expansion of responsibilities. Worker has opportunity to derive a feeling of achievement, recognition, responsibility and personal growth in performing the job. Job enlargement: increasing the number of tasks a worker performs, with all the tasks at the same level of responsibility. Job rotation (cross-training): moves employees from one job to another to broaden their experience. Rotational training programs help employees understand a variety of jobs and the interrelationships. Reengineering: fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance (cost, quality, service and speed).

Topic 3 Recruiting
Staffing: it is the overall process of bringing people into an organization. Within this concept we include two processes. The Staffing process consists on a series of hurdles aimed at selecting the best candidate for the job. Recruitment: contracting potential candidates Selection: hiring and selecting the adequate candidates out of the potential ones previously recruited.
Recruitment: process of attracting individuals on a timely basis, in sufficient numbers, with appropriate qualifications to apply for jobs with an organization. Goals: o Provide information that attracts a significant pool of qualified candidates. o Provide information that discourages unqualified candidates from applying. It is important to be cautious; otherwise there is a lot of vain work: read all applications, even the ones from unqualified applicant. Factors: o Employment conditions in an area, supply of workers, lack of qualified candidates. o Image of the company, organizational growth or decline, organizational size. Companies want to be a good employer branding. o Job attractiveness, working conditions, salary and benefits. Advantages of Centralized Recruiting: o Strengthens employer brand and facilitates applying strategic priorities: such as promote women to higher positions. o Reduces duplication of HR activities and builds teams of HR experts. (It builds routine and expertise). o Provides better measurement of HR performance and allows sharing of applicant pools. You can control how much time it takes to fill a position, which channels are the most appropriate ones.
1. Identification of Staff Requirementspersonnel requirements planning Identification of Supply Marketspersonnel recruitment planning 2. Make a decision: a. HR leasing (borrow a person) b. Search/Contract/Recruit whether internally or externally. i. Preselection (questionnaire, document analysis) ii. Selection (test, interview and assessment center) iii. Contracting 3. Controlling Staffing Success: staffing process finishes when candidate signs the contract and managers make sure that it has been successful.

Employee leasing is the process of dismissing employees who are then hired by a leasing company (which handles all HR-related activities) and contracting with the company to lease back the employees. The PEO performs all the HR duties of an employer and in return is plaid a placement fee of normally 4 or 8 percent of payroll cost plus 9 to 20% of gross wages. Unlike temporary agencies, which supply workers only for limited periods, employee leasing companies place their employees with subscribers on a permanent basis. The main difference between HR hiring and HR leasing is that in the leasing case a 3rd party is involved. In these cases, two different contracts are signed. On the one hand, we can find the labor contract the worker sign with the leasing company. On the other hand, the company has signed a leasing contract with the leasing company so as to make use of its services. Pros and Cons of HR Leasing o Advantages: I. higher degree of flexibility II. easier to get rid III. probation period for the employee IV. it involves less effort for the company (it does not need to have a HR department and, therefore, care about its correspondent activities) o Disadvantages: I. Lack of identification and more commitment II. it is more expensive
Staffing from within versus from Outside

From Within o With transfer: transfer workers from one job to another I. Redeployment (manager offers a new position to someone, without having to post it) and Job posting (company advertises an internal job and workers can apply to it). Horizontal: at the same level of hierarchy Vertical: transferring to another hierarchical level. II. Part-to Full Time (ask them to work more hours)/Temp-to-Permanent (to offer another temporal contract to temp workers). III. Contracting Apprentices/Interns (these are no permanent workers) o Without transfer (this should be the first option the company should take into account). I. Extra Work/Overtime: when additional workload is temporary. You can ask the workers to work more so as to cover the temporary need. II. Vacation Postponement: ask employees to postpone vacations for another period (in case there is an increasing of workload). III. Training: train workers to work faster, more efficiently, etc. IV. Process Optimization: if you restructure the process to become more efficient. This way you can cut out efficiency of ex 10%.

From Outside o Hiring o Leasing o Outsourcing: process of hiring an external provider to do the work that was previously done internally. Subcontracting of various functions to other firms has been a common practice in industry for decades.
Staffing from Within - Advantages: o Reduced risk through foreknowledge of candidates strengths and weaknesses o Accurate view of candidates skills o Candidates have strong commitment to company. They want to stay, want to grow in the organization. o Increase morale, encourages ambitious employees. o Less training and orientation needed, internal candidates know the organization. I. Cost saving: it is less expensive II. Opportunity to develop managers - Disadvantages: o Failed applicants become disconnected, infighting, morale problems o Time wasted interviewing inside candidates who will not be considered. o Inbreeding strengthens tendency to maintain status quo. I. Possibly inferiority of internal candidates, missing good outside talent. II. Training needs: technology, processes, structures and culture.
External Recruiting Sources

Job Advertisements - Effective ads create attention, interest, desire and action (AIDA) o Comprise: the company, position (job), the responsibilities (duties), the requirements, what we offer you and how to get into contact. o Create a positive impression of the firm - Response rate is influenced by several factors: o Identification of the organization o Labor market conditions o Specification of listed requirements o Date of publication - Media Choice: selection of the best medium depends on positions for which company is recruiting: o Newspaper: local for operational jobs, national/international for specific labor o Trade and professional journals: specialized employees. o Internet job sites: global labor market o Wider distribution: if specialized skills, higher level jobs, short supply in market. - Blind Box Ads: some reasons to do so:

o o o Companies dont want competitors to know about some strategic techniques. They dont want that the current worker know that he/she is going to be replaced. If companies dont have good reputation this is a way people know about them, without even realizing.
Internet, Social Networking and Mobile Recruiting Internet is the most commonly used search tactic used by job seekers and recruiters. Recruiters can place ads on their sites. Staffing experts say it is also a good idea to post your firms job at free association and trade group sites, where your specific talent pool is most likely to congregate. Passive job seekers are people who are not looking for jobs but could be persuaded to take new one given the right opportunity. Mobile recruiting is the process of recruiting candidates via their mobile devices. It has the advantages of speed. Text messages work well because they are inexpensive, easy to send, fast and work with any cell phone. Using social networks is an inexpensive way to recruit people as compared to print ads. Drawback: some groups of people are less likely to be wired. That is why relying too heavily on electronic recruiting could hurt a companys diversity efforts. Advantages: Cost effectiveness More applicants attracted over longer period. Immediate applicant responses Online prescreening of applicants Links to other job search sites Automaton of applicant tracking and evaluation
Disadvantages: Exclusion of older and minority workers. Information privacy concerns.
Employment Agencies - Public employment agencies focus on helping unemployed individuals to find jobs - Private employment agencies provide more comprehensive services and are perceived to offer positions and applicants of higher caliber. - Public Employment Agencies State agencies maintain local public employment offices in most communities of any size. Individuals who become unemployed must register at one of these offices and be available for suitable employment. In addition to matching unemployed applicants with job openings, these agencies assist employers with apprenticeship programs, employment testing, job analysis, etc.

- Private Employment Agencies Charging fees enables private employment agencies to tailor their services to the specific need of their clients. When recruiting abroad, companies frequently use local employment agencies because they understand a countrys culture, labor market, and better how to recruit workers there. Private employment agencies differ in the services they offer, their professionalism, and the caliber of their counselors. The reasons to use a Private employment agency are: No HR department the firm lacks recruiting and screening capabilities. The company doesnt want to deal with Hr issues; they are like brokers. to reach currently employed individuals who are more comfortable dealing with agencies To reduce internal time devoted to recruiting.
How to avoid problems with employment agencies? 1. provide the agency with accurate/complete job descriptions 2. Review candidates accepted or rejected for effectiveness and fairness of agencys processes. 3. Screen agency for effectiveness in filling positions. Executive Recruiters (Head Hunters) Management consulting, executive search of headhunters firms specialize in executive placement and hard-to- fill positions. These agencies are also called head hunters and are known for recruiting with-collar employees and offer an important service in bringing qualified applicants and open positions together. Their fees can range up to 35% of a persons first year salary. They charge employers up to 50% of the first year salary. When to pay? o There is a base feeeven if the client doesnt accept the candidate; a lot of work has been already incurred. o When the candidate is accepted by the client and he/she is integrated in the company. o Probation period turns out that the hiring of the worker was successful. Have a nationwide/international contacts Do through investigations of candidates (screening).
The guidelines for choosing a recruiter are: Make sure the firm is capable of consulting a thorough search. Meet individual who will handle your assignment. Ask how much the search firm charges. Do not solely rely on the recruiter to do reference checking.

The Head hunting process: 1. Recruitment requirements: the client states specifically to the recruiting company what it wants. 2. Search candidate Database: executive recruiters have access to some specific programs. 3. Contact Suitable Candidate by Telephone on a Confidential Basis. 4. Interview Suitable Candidates: informal interview. 5. Shortlist Suitable Candidates 6. Forward shortlisted candidate to client The Company makes the decision and the client is provided with the name of the candidate. Temp Agencies: recruiting source and alternative Temps are agencies that hire and place workers in temporary positions. Temps are typically used for short-term assignments or to help when managers cannot justify hiring a fulltime employee. Temps give organizations added flexibility because they can be hired and laid off as needed. The employment costs of temporaries are often lower than those of permanent employees. Some companies use the just-in-time staffing approach in which core staff of employees is augmented by a trained and highly skilled supplementary workforce. Therefore, Temps help organizations meet short term fluctuations in HR needs. This method is also called employee leasing: trained workers are employed by a leasing company, which provides them to employers when needed. The main concern about Temps is being misled about assignments likeliness to become full-time position. Benefits of temps: No recruitment, screening, payroll and administration costs. Flexible scheduling, low absenteeism. Unofficial probation period for prospective employees.
Costs of temps: Increased labor costs due to fees paid to agencies. Temps lack commitment to the firm.
To work with a Temp Agency is required: 1. Job description information: ensure that agency understands the job to be filled and the sort of person you want to fill it. 2. Time sheets: verification of hours worked and agreement to pay. 3. Temp-to-perm policy: what if you want to hire a temp as a permanent employee? Some guidelines for using temps are: 1. Do not train your contingent workers. Ask their staffing agency to handle training. 2. Do not negotiate to pay of your contingent workers. The agency should set pay. 3. Do not coach or counsel a contingent worker on his/her job performance.

4. Do not negotiate a contingent workers vacations or personal time off. Direct the worker to his or her agency. 5. Do not routinely include contingent workers in your companys employee functions. 6. Do not allow contingent workers to utilize facilities intended for employees. 7. Do not let managers issue company business cards, nameplates, or employee badges to contingent workers without HR and legal approval. 8. Do not let managers discuss harassment or discrimination issues with contingent workers. 9. Do not terminate a contingent worker directly. Contact the agency to do so. Employee Referrals The recruitments efforts of a company can be guided by employee referrals or recommendations from the firms current employees about potential candidates. Word-ofmouth recommendations are the way most job positions are filled. Many companies strengthen their employee referral program, since they have found that their employees can serve an important role in the recruitment process by soliciting application from among their friends and associates. Employees therefore are asked to recommend recruits and referring employees participate in recruitment success. Referral is a cost-effective and highly efficient recruitment program. It has some advantages but at the same time, there are also some drawbacks. Disadvantages: o Possibility of friendship being confused with job performance. o Potential nepotism (practice of hiring relatives). It invites charges of favoritism. o Potential for adverse impact. o Corporate inbreeding. Since employees and their referrals tend to have the same backgrounds, employers who rely heavily on referrals could screen out, and discriminate against, protected classes. This is part of a three-stage trend: I. Attraction: people with values similar to an organization are attracted to it and become employees. II. Selection: these employees choose applicants similar to themselves III. Attrition: those who dont fit in leave. Advantages: o Employees motivation to make a good recommendation (reputation). o availability of accurate job information for the recruit (realistic job preview) o Employee referrals tend to.. I. be more acceptable applicants II. be more likely to accept an offer III. have a higher survival rate (they stay longer) o High quality of employee-referred applicants. o Preselection takes place: it leads to rather high selection ratio of successful workers performance.

Job Fairs Job fairs can be a good way to cast a wide net for diverse applicants in certain regions. At a job fair companies and their recruiters set up booths, meet with prospective applicants and exchange employment information. The drawback of this is that many of the applicants they attract might not be qualified. Another problem is that they only attract applicants in the regional area in which they are held. There are also virtual fairs and holding one of them can also be cost effective for both recruiters and attendees because they do not have to pay travel costs. College Recruiting Educational institutions are a source of young applicants with formal training but relatively little full-time work experience. Community colleges can provide candidates for technical jobs. For technical and managerial positions, colleges and universities are generally the primary source. Establishing a relationship with faculty members is important, because most professors are aware of their students academic performance and attributes. The advantage is that you start really early, before any other competitor look. Before students have finish with their students you already know about them. The main disadvantage, however, is that you only get beginners. On campus recruiting (placement services, job fairs..) o aiming at entry-level employees I. attract good candidates II. Determine which candidates are worthy of further consideration. o Helping to establish cooperative education assignments/internships. On-site visits o Assigned hosts o Information packages o Planned interviews o Timely employment offers Internships: special form of recruitment that involves placing a student in a temporary job with no obligation either by the company to hire the student permanently or by the student to accept a permanent position with the form following graduation. It typically involves a temporary job for summer months or part-time job during school year.
Employer Branding An employer brand is internally and externally a clear view of what makes a firm different and desirable as an employer. A strong employer brand is related to: pride of individuals expected from being organization members applicant pool quantity and quality Stable and positive workforce attitudes and organizational performance compared to broader market. Positive consequences would be: stabilizing workforce and human resources, attracting new people and motivation those who are already inside the organization.

The main goals of employer branding are: 1. Establish an image of the employment experience. 2. Create synergy with consumer brand a. Align promise to customer with promise to employees. 3. Clearly state what is in it for me to potential applicants. 4. Entice the right candidates to apply for the job. Steps to follow: 1. Understand the organization: if you try to establish a brand, you need to know about the organization and its jobs. 2. Create a compelling brand promise that mirrors your customer brand promise, articulate your value proposition for employees. The ultimate objective is that what the company communicates is what you really want to communicate. 3. Develop standards to measure the fulfillment of the brand promise. 4. Align all people practices to support and reinforce the brand promise. 5. execute and measure Designing and organization that matches with what you are communicating. Rerecruiting Rerecruiting is the process of keeping track of and maintaining relationships with former employees to see if they would be willing to return to the firm. The advantage of tracking former employees is that the form knows their strengths and weaknesses and the exemployees know the company. Tracking, recruiting and hiring former employee can be a benefit and can encourage others to stay with the firm. Walk-ins or Unsolicited Applications Walk-in job seekers seeking job that pay hourly wages are common in smaller organizations. Employers also receive unsolicited applications and resumes. Good public relations dictate that any person contacting an organization for a job should be treated with courtesy and respect. Not treating applicants with respect will harm a companys employer brand. Research has shown that a candidate who has been treated well by a potential employer will, on average, tell one other person. On the other hand, a candidate who has been treated poorly will tell eleven other people. unsolicited applicants (people apply directly) Seek employment through a personal direct approach to employer. Courteous treatment of any applicant of good business practice. May provide a stockpile of prospective applicants if there are no current openings.
Employer attractiveness
Interest value: extent to which an individual is attracted to an employer because of the excitement and creativity of the work environment. Social value: attraction based on a collegial work environment with good team atmosphere

Economic value: attraction based on salary and benefits Development value: based on recognition of work and career-enhancing opportunities Application value: based on employees ability to apply what they have learned to teach others and interact with customers in a way that is positive and humanitarian.

Topic 4 Selection
Process of choosing from a group of applicants the individual best suited for a particular position and the organization, to bring them into an organization respectively position. Properly marching people with jobs and the organization is the goal of the selection process. Importance of selecting the right employees: Organizational performance Costs of recruiting and hiring: lower costs because it is not necessary not fire the workers and start the selection process again. Legal obligations and liabilities.
If individuals are overqualified, under qualified, or dont fit the job or organizations culture, they will be ineffective and probably leave the firm, voluntarily or otherwise. Benefits of Effective selection - Improves effectiveness of other HR practices and prevents numerous problems. It contributes to the good performance of the organization. - Motivated employees who fit with the organizational culture can reduce disciplinary problems and diminish costs associated with replacing employees who quit. Strategic selection decisions Selection implies that we look for a fit between the candidate and job, but also between the candidate and the organization. There are basically two rules: Job-person-fit: seeks to match an individuals abilities and interests with the demands of a specific job (in terms of qualifications, expertise and individual abilities). Organization-person-fit: it is concerned with how well the individuals characteristics match the broader culture, values, and norms of the firm.
Selection errors A firm that selects high quality employees reaps substantial benefits, which recur every year the employee is on the payroll. On the other hand, poor selection decisions can cause irreparable damage. A bad hire can negatively affect the morale of the entire staff, especially in a position where teamwork is critical. There are two different types of mistakes: Hire somebody who afterwards doesnt fulfill the expectations. Reject somebody who would later on turn out to be very successful. This is, however, difficult to see. We dont usually realize of these errors.

We can attempt to avoid these errors if we follow a professional selection process.
Correct decision
Rejection error
Acceptance error
Correct decision
Quality of Selection Instruments We should use some told to find the fit between the candidates and the organizations culture. We should rely more in these tools and not that much on intuition. 1. Objectivity: indicates whether results are independent from person who handles the selection instruments. Results should be independent from interviewers/test operators subjective judgments? It is a condition that is achieved when everyone scoring a given test obtains the same results. 2. Reliability: indicates whether results (excluding learning effects) are consistent for a person when retested with identical/equivalent tests/instruments. Are the results stable over time? Extent to which a selection test provides consistent results. If a test has low reliability, its validity as a predictor will also be low. However. The existence of reliability alone does not guarantee the tests validity. 3. Validity: indicates whether an instrument is measuring what it is supposed to measure. They indeed indicate what are supposed to indicate. (Does the instrument measure what it is intended to measure (future job performance)?). If a test cannot indicate ability to perform the job, it has no value. Validity, often reported as a correlation coefficient, summarizes the relationship between two variables. Other criteria: a) Utility b) Legality or fairness c) Acceptability Making Selection Decisions 1. Predictor Weighting Approach: it combines a set of selection score into an overall score in which some measures count more than others. Apply for different instruments finding out different scores and do a kind of average with them. 2. Minimum cutoff Approach: it requires an applicant to have al least a minimum score of defined selection methods. 3. Multiple hurdle Approach: applicants must meet the minimum requirements of one selection method before they can proceed to the next one. In every step less people remain left.

4. Banding approach: groups of score (bands) are derived by statistical analysis, in which applicants dont significantly differ. Based on statistical analysis, ranges for ideal candidate are created. This way, everyone that is within this range, is part of the pool of applicants.
Common selection instruments

Most commonly used selection methods are: Information gathering, which means analyzing everything that has been written by the applicant. Interviewing Testing
Depending on the country your are applying to some tools or others will be used. Tools also depend on the qualifications of the people who carry this kind of activities: for example in Germany, the HR department is basically formed by lawyers, while in the US major of the workers are psychologists. For that reason, interviews are the most common tool used in Germany, while in the US they prefer testing candidates. Information Gathering - Application letter - CV/resume - Application form/questionnaire o It includes: address, education, work experience, and special training. o It provides standardized data base, which is the main objective. o It is more often used at operational level. - Certificates/references - Photo (nowadays it must not be required, in order to cope with discriminative issues) - Work sample Job Competencies There are 4 types of job competencies: technical, methodological, social and personal. At the same time, there are two different kinds of profiles: organization (job description and job specifications) and the persons profile. This includes what the applicant has: they look for the one that adapts better to the qualifications required. Technical competencies: knowledge, skills and capabilities that enable somebody to conduct the functional tasks of a job independently. First of all, it is necessary to have a list of what is needed in the job (job description and specification). It depends on the position the candidate applies for (it differs from job to job). Some examples are: o Familiarity with marketing tools. o Knowledge of labor law o Experience with recruitment Methodological competencies: knowledge, skills and capabilities that enable somebody to plan and organize a job and to develop solutions and implement them.

Attributes which are not specific to one particular job only, but apply to many jobs. They have to do with methods of approaching tasks. Examples: o Analytical skills o Languages proficiencies o Computer programs Social Competencies: knowledge, skills and capabilities regarding necessary relationships to others o Communication ability o Cooperation ability o Ability to manage conflict Personal Competencies: capabilities and characteristics that express somebodys work related attitudes: personality features important for success in the job o Ambitiousness o Flexibility o Autonomy
We can distinguish 5 different types of personality, which are useful for the achievement of different goals. These are: Extroversion, agreeableness, conscientiousness, emotional stability and openness to experience..
The goals person with each personality wants to achieve differ from others: These are: Statues, autonomy, achievement and communion.
For example: agreeable personality type look basically for communion. Job requirements, personal skills and aptitude By using some specific charts we can show the requirements that a job involves and which are the skills the candidate possesses. The difference between both issues is the aptitude. It could be that the candidate posses some skills which are not necessary. But it is also possible, that some of the requirements that are necessary for the job are not available skills.
Exercise: developing a Competency profile

Interviews
There are basically three different types of interviews: 1. Appraisal interview: structured communication between the employee and the supervisor about evaluation of performance of the employee. 2. Exit interview: to find out why people leave the organization. They dont want to lose people and their talent. 3. Selection interview: find out what qualities, knowledge and skills candidates can provide and whether they fit or not with the job and the organization. I. Most frequently used selection method II. Applicants respond to questions of an interviewer (manager/organizational representative..) III. Areas of questions include education, experience, skills, knowledge, CV related aspects. IV. Allows providing information to applicants, selling the organization/job. V. It is used to select qualified candidates, learn about applicants expectations and discuss contract issues. VI. Decisions made on combination of answers and impressions from non-verbal behavior. Within the selection interviews we can determine different characteristics: o Interview structure o Interview content o Interview administration Unstructured versus Structured interviews Structured (directive interview): in this case, a list of predetermined questions is used and all applicants are asked the same questions. It has 2 advantages: It derives the questions systematically from the job requirements. What we talk is related to the requirements. By asking everybody the same, we are able to compare the real profiles of different candidates: compare their answers and therefore, their profiles.
Unstructured (non-directive) interview: it uses basically open ended questions such as tell me about yourself, questions that have not been planned in advance. It also allows the interviewer to pose different questions to different applicants. This kind of interviews are not recommended by professionals. Difficulties of Unstructured Interviews (lead to consequences that they are not valid) o Validity: r=0.38 o Information from the application documents may influence interviewers behavior and assessment. o Interviewer follows the candidates lead o Interviewer bias: attractiveness, clothing, facial expressions and gestures influence interviewers predictions.

o o Impression management strategies may be used to influence interviewers predictions. First impression bias.
Structured Interview - Validity of structured interviews: r=0.51 - Use findings from job analysis to derive interview questions. - Pose standardized questions in the same order to all candidates - Train interviewers - Separate information gathering and evaluation, and standardize evaluation. - Calculate final outcome via arithmetic combination of rating on job-relevant dimensions. Steps 1) Determine what to measure: a. Use job analysis results to determine needed knowledge, skills and abilities b. Think about characteristics that separate top performers from the rest c. Focus on attributes that are critical for success across jobs in the organization. 2) Write Questions a. Meet as a group with other people who will conduct interviews b. Create behavioral and situational questions that measure attributes from Step 1. c. Be sure that all questions are appropriate and legal. 3) Plan evaluation for Each Question a. Write typical examples of good, average and poor responses to each question b. Assign numerical point scores to the typical answers. c. Make sure that everyone who will interview agrees on the evaluations. Interviews should not be misunderstood as a channel of information. A realistic job review should be complement of an interview. Content of the interview 1) Occupational experience: interviewer will explore the candidates knowledge, skills, abilities and willingness to handle responsibility. 2) Academic achievement: in the absence of work experience, persons academic record takes on greater importance. 3) Interpersonal skills: an individual may possess important technical skills significant to accomplishing a job. However, if the person cannot work well with others, chances for success are slim. 4) Personal Qualities: these can be observed during the interview include physical appearance, speaking ability, vocabulary, poise, adaptability, leadership ability, etc. 5) It refers to managements perception of the degree to which the prospective employee will fit in with the firms culture or value system.

Typical Interview Structure 1. Warm-up: small talk, build comfortable/open atmosphere, introduce interviewer, sketch process 2. Self-introduction of Application: ask applicant to introduce him/herself, talk about personal/professional background, assess on scales. Talk about yourself: assess whether the person meet the point. Bringing specific information is important. 3. Free Talk: pose open questions related to applicants introduction/documents, assess on scales 4. Behavioral Questions: ask for particular situations when applicant had o apply relevant competencies, assess on scales. 5. Realistic job preview: give information, about job/company/conditions. 6. Situational Questions: let applicant solve incidents critical for job under consideration and assess on scales. 7. Close the interview: sum up, answer questions of applicant and describe the next steps. Types of interview Questions - Situational: ask what applicant would do in a hypothetical situation. It starts with imagine or suppose. Puts the applicant in a particular situation and then asks for a description of behavior. Responses are classified as: poor, average or superior response. Based on critical incidents that may occur in a job or are supposed to reveal a certain competency. The incidents are turned into questions and applicants are asks to indicate how they would behave in the described situation. To facilitate objectivity, benchmark answers are developed. Ex: Your spouse and two teenage children are sick in bed with a cold. There are no relatives or friends available to look after them. Your shift starts in 3 hour. What would you do? I. II. III. Id stay at home (1 point) Id phone my supervisor and explain the situation (3 points) Id come to work (5 points)
Behavioral: ask about applicant behavior in characteristic past situations. It aims at concrete examples of the past. Asks the applicant to describe actions in a particular past situation. Ex: tell me about the most recent experience you had working as part of a group. Questions are focused on what applicants have accomplished and how they went about doing it. Underlying assumption is best predictor of the future is the past. And it aims at collecting detailed behavior descriptions of actual events. Job knowledge: Ask questions that reveal knowledge in area of expertise. Ex: What steps would you follow to conduct a brainstorming session with a group of employees on safety?/ What factors should you consider when developing a television advertising campaign?

Stress: ask questions that put applicants under stress to see how they behave under stress. The unique thing you can find out is how the applicants cope with pressure. This is a form of interview in which the interviewer intentionally creates anxiety. Ex: I dont really feel like your answering the question. Could you please start again?/ Why did you do so poorly on this test?
Others: Job-sample simulation questions: involve situations in which an applicant may be required to answer questions related to the performance of a task. Worker requirements questions: those that seek to determine the applicants willingness to conform to the requirements of the job. For example: the interviewer may ask whether the applicant is willing to perform repetitive work or move to another city.
Interview Organization
Sequential: conducting various interviews one after another. Ways in which interviews can be conducted: 1) Unstructured sequential Interview: there is no clear distribution of tasks. Each interviewer asks what it wants. 2) Structured Sequential interview: clear distribution of tasks between different interviews. Each one asks for a determined area of interest: educational, experience, etc. 3) Panel Interview (or Board): several of the firms representatives interview a candidate at the same time. Companies use this kind of interview to gain multiple viewpoints because there are many cross-functional workplace relationships in business these days. a. Advantages: Morise principleit must not rely on one evaluation only. b. Disadvantages: people feel themselves less comfortable. 4) Mass Interview: multiple interviewers meet several interviewees at the same time. It is also known as group interview. Several applicants interact in the presence of one or more company representatives. It may provide useful insights into the candidates interpersonal competence as they engage in a group discussion. a. Advantages: how applicants interact to each other. b. Disadvantages: time efficiency. 5) Phone/Skype/Computer/Web-assisted Interviews. Assessment Problems and Errors 1) Attribution error: we conclude because of a bad observation, without having any reason behind. 2) Halo Error: one component we observe makes us forget everything else. It screens out all the rest. 3) Primacy effect (past performance): early observations bias at some degree performcne afterwards.

4) Regency effect: last behavior get stack in our mind. 5) Hierarchy effect: people tend to judge the people better because of the hierarchy. Whether they have or not a higher education. 6) Contract effect (friendship): when interviewing a candidate, never interview a friend or member or your family (someone you already know). 7) Similarity effect: we tend to rate people who are similar to us better than those who are different. 8) Exaggerated strictness 9) Central Tendency 10) Leniency Effect 11) Emotional rating: whether you find someone sympatric or not. 12) Low rating for low challenge: when evaluating an applicant the benchmark should be always the same, it must be clear. 13) Focus on few incidents: if you dont judge the whole interview but just some peaks, bad choices can be done. Not focus on concrete, specific answer, but look at the whole interview. Background investigations and reference checks: - 40% of applicants lie about work histories and educational background. - 20% of applicants falsify credentials and licenses. - 30% of applicants make misrepresentations on their resumes. - Numbers may vary from country to country. Sources of information: a) Former Employers b) Current supervisors c) Criminal records d) Written References e) Social Networks Legal Liabilities: - Defamation: harming the reputation of another by making a false statement to a third party. - Negligence: failure to exercise the standard of care that a reasonably prudent person would have exercised in the same situation. o Negligence referral: when a past employer fails to warn a potential employer of the inherent danger presented by a former employee. o Negligence hiring: failing to conduct a reasonable investigation of an applicants background and then assigns a potentially dangerous person to a position where he or she can inflict harm. Using Selection Tests Advantages: - Reliable and accurate means of selecting qualified candidates. - Cost small in comparison

Identify attitudes and job-related skills that interviews cannot recognize. Reduce turnover by exact personality profiling.
Potential Problems: - Legal liabilities - Test anxiety: it is not indicating the real intelligence of the applicant because the situation creates stress. It biases the results. They dont behave as they would do when there is no pressure. Types of tests - Cognitive Ability testing: measures learning, understanding, reasoning and ability to solve problems, e.g. Intelligence Tests. - Personality testing: measures patterns of thought emotion and behavior. - Physical Ability Testing: assesses muscular strength, cardiovascular endurance, and coordination. - Integrity testing: assess the likelihood that applicants will be dishonest or engage in illegal activity (measures how honest you are). - Drug Testing: normally requires applicants to provide a urine sample that us tested for illegal substances. This practice is not allowed in some countries. - Work Sample Testing (Assessment centre): it measures performance on some element of the job.
Cognitive Aptitude/Ability tests

These are tests that determine general reasoning ability, memory, vocabulary, verbal fluency, and numerical ability. Cognitive aptitude tests are a form of IQ tests. They may be helpful in identifying job candidates who have extensive knowledge bases. Cognitive ability tests are said to be a powerful predictor of future work performance. Cognitive ability tests measure verbal, numerical and abstract reasoning score reflects the persons ability to acquire, retain, organize and apply information. People who score well on cognitive ability tests are more likely to: Develop a greater knowledge of the job, more quickly. Make effective decisions (looking alternatives) successfully reason and solve problems and Respond appropriately to new or complex situations.
There is a clear correlation between intelligence and decisions making and solving problem. The more intelligent the person, the better they perform.
Personality tests
These are self-reported measures of traits, temperaments, or dispositions. This are not time constrained and do not measure specific problem-solving skills. These questionnaires tap into softer areas, such as leadership, teamwork, and personal assertiveness. Some firms use these tests to classify personality types. With this information, organizations can create diverse

teams for creativity or homogeneous teams for compatibility. Honesty and integrity are important personality traits to consider in the selection process. Personality: unique combination of psychological characteristics that affect how a person reacts and interacts with others. Personality tests: tests that use projective techniques and trait inventories to measure basic aspects of an applicants personality (traits, temperament, dispositions) such as introversion, stability and motivation. Disadvantage: personality tests (particularly the projective type) are the most difficult tests to evaluate and use. Advantage: tests have been used successfully to predict dysfunctional job behaviors and identify successful candidates for overseas assignments.
Personality job-fit: an employees job satisfaction and likelihood of turnover depends on the compatibility of the employees personality and occupation. Other tests - Psychomotor/Physical Ability Testing: these are tests that measure strength, coordination and dexterity- Job-Knowledge tests: tests that measure a candidates knowledge of the duties of the job for which he or she is applying. These are tests are commercially available but individual firms may also design them specifically for any job. - Mechanical comprehension Testing - Internet testing: increasingly used to test skills required by applicants. Skills may be tested through online game. - Work Sample Tests: tests that require an applicant to perform a task or set of tasks representative of the job. A real test of validity should be, however, a performance assessment: take individuals to a job and give them the opportunity to perform it. - Vocational Interest tests: indicate the occupation a person is most interested in and the one likely to provide satisfaction. These tests compare the individuals interests with those of successful employees in a specific job. Physical Examination - reasons for the pre-employment medical examinations: o Verify that applicant meets physical requirements of the position, is physically capable of performing the work. o Discover medical limitations to be taken into account in placing the applicant. o Establish a baseline of the applicants health for future insurance or compensation claims. o Must be directly relevant to job requirements. o Reduce absenteeism and accidents. - Substance abuse screening: o Reasons: 80% of larger corporations in the US require workplace drug testing. o Types: I. Urine analysis, hair follicle tests and blood tests.

II. III. IV. V. Before formal hiring or transfer/promotion to new position. After work accident. In the presence of obvious behavioral symptoms Random or periodic basis.
Big 5 Personality Traits 1. Extraversion: friendliness, gregariousness, assertiveness, activity level, excitementseeking and cheerfulness. It is basically the tendency to be sociable, assertive, and active and to experience positive effects, such as energy and zeal. 2. Emotional Stability/neuroticism: the tendency to exhibit poor emotional adjustment and experience negative effects such as anxiety, insecurity and hostility. Some states are: anxiety, anger, Depression, immoderation, vulnerability. 3. Openness to experience: the disposition to be imaginative, nonconforming, unconventional and autonomous. Some characteristics are: imagination, artistic interests, emotionality, adventurousness, Intellect and liberalism. 4. Agreeableness: it is about the tendency to be trusting, compliant, caring and gentle. Some features are: trust, morality, altruism, cooperation, modesty and sympathy. 5. Conscientiousness: It is comprised of two related factors: achievement and dependability. It involves: self-efficacy, orderliness, dutifulness, achievement, striving, self-discipline and cautiousness. Where you focus your attention: Extraversion: people who prefer extraversion tend to focus their attention on the outer world of people and things. Introversion: people who prefer introversion tend to focus their attention on the inner world of ideas and impressions.
The way you take in information: Sensing: people who prefer sensing tend to take in information through the five senses and focus on the here and now. Intuition: people who prefer intuition tend to take in information from patters and the big picture and the focus on future possibilities.
The way you make decisions: Thinking: people who prefer thinking tend to make decisions based primarily on logic and on objective analysis of cause and effect. Feeling: people who prefer feeling tend to make decisions based primarily on values and on subjective evaluation of person-centered concerns.
How you deal with the outer world: Judging: people who prefer judging tend to like a planned and organized approach to life and prefer to have things settled. Perceiving: people who prefer perceiving tend to like a flexible and spontaneous approach to life and prefer to keep their opinions open.

MBTI (Myers-Briggs Type Indicator)
Belbins Team Roles Assessment You need all these roles (no people). So, each person can take over multiple roles. If some roles are missing this would affect companys performance. Psychologists have identified different roles so that the company can work well. Work Samples and Simulations Measuring Work performance directly: Work samples: in the course of an interview you give the candidate a tool and he/she should show you how it works. Testing requiring applicant to perform task or set of tasks representative of the job. Video Based Situational Testing Miniature job Training and Evaluation Assessment centers
Such tests are by their nature job related. It produces highly validity, reduces adverse impact, and is highly acceptable to applicants. Works samples, moreover, are often integral parts of assessment centers. Assessment Centers Assessment center is a selection approach that requires individuals to perform activities similar to those they might encounter in an actual job. This is one of the most powerful tools for

assessing managerial talent because it is designed to determine if they will be effective in performing a specific job. It is a 1-3 day seminar with 8-12 participants who are observed and assessed by managers and experts upon performing different role plays, case studies, etc. In an assessment center, candidates perform a number of exercises that simulate the tasks they will carry out in the job they seek. Exercises or components are characteristic for current or future work environments or tasks areas. Components include: group discussions with/without objectives (cooperative/competitive) simulations/computerized role-plays in-basket/ in-tray exercises presentations psychological tests interviews
An advantage of the assessment center approach is the increased reliability and validity of the information provided. Research has shown that the in-basket exercise, a typical component of assessment centers, is a good predictor of management performance. Its validity provides an alternative to paper-and-pencil tests. Steps of the AC Process 1. Prepare a. determine objectives and target group b. select observers c. define job requirements d. compose exercises according requirements e. inform participants 2. Conduct a. train observers b. welcome participants describe process c. participants conduct exercises d. observers observe performance e. evaluate observations 3. Decide and Feedback a. Discuss evaluations b. prepare appraisals c. Select and Identify winners d. Inform participants about results e. Agree on development activities.

Topic 5 Training and development
Training is an operational approach while development is a more general and person-focused approach. Development basically means forming a manager from a normal employee. Preparing current workers for future jobs. The first area of training starts at the very beginning of the job, and should be continuously conducted (despite the gaps and qualifications of the workers). This first stage of the training process is called orientation, induction or onboarding. Orientation is important because you can never suppose that a hire brings along with all the knowledge about the company-so, you have to train her or him. Orientation helps new hires to.. 1. Feel welcome and at ease 2. Understand the organization (in terms of products, processes, structures and culture of the company). 3. Know what is expected in work and behavior (it is a clear understanding of what I am supposed to do). 4. Begin the socialization process into values and also networks (teams, colleagues, etc). It is done through information on.. 1. 2. 3. 4. 5. 6. Employee benefits Personnel policies Daily routines Organizations and operations Safety measures and regulations Facilities
Training process
Training is a systematic process, since all the education given should be delivered in a organized and planned way. It should follow some steps. 1. 2. 3. 4. Needs analysis (what to train) Instructional design (appropriate way of closing the gap that exists efficiently). Program implementation Evaluation: control whether gaps identified at the beginning have been closed or not. If they have already been closed, fine. Otherwise, think about other ways to close them.
Training Teaching employees the skills they need to perform their jobs. Strategic training: training programs must make sense in terms of the companys strategic goals (future ones) Performance management: integrated approach to assigning, training, assessing, and rewarding employee performance. Training always connected to performance

management. Through performance management gaps of training and development are found. It is a good instrument to identify the needs. Through performance management it can be shown whether the training works or not. Identifying training needs General objective Employee skills = job requirements. If employee skills < job requirements => Training need. If employee skills > job requirements => Transfer/ restructuring need. Having employees who are better qualified of what it is required by the company is not good, they can look for another job where his/her superior qualifications are required or important. Some ways of solving this would be: o Job enlargement: add more of the same tasks into the current job (same quality level). o Job enrichment: give the worker more responsibilities (higher level tasks). o Job rotation: people used in different positions (springer). o Project work: assign to some people additional projects.
Methods for identifying training needs The following methods can focus on every individual employee, or on contrary they can focus on groups, teams or departments. 1. Assessment center results (in-house). It allows both identifying the needs and selecting people for higher positions. 2. Individuals diaries 3. Attitude surveys 4. Performance appraisals 5. Job-related Performance data 6. Tests 7. Observations 8. Interviews Training methods Methods - On-the-job Training - Apprenticeship Training - Informal Learning Job Instruction Training Lectures
Categories Into-the-job On-the-job (while working) Near the job (takes place not far away from the job) Off-the-job (while you are away) Out-of-the job (granted to people who leave or need to leave the company)
Programmed Learning Audiovisual Training Simulated training Computed-based Training (CBT) Internet-based Training

Non-manager methods On-the-job training It is a method by which employees are given hands-on experience with instructions from their supervisors or other trainer. 80-90% of employee learning occurs via OJT. It is, however, one of the most poorly implemented training methods. This basically means, having a person learn a job by actually doing the job. Drawbacks are: Lack of a well-structured training environment Poor training skills on the part of managers The absence of well-defined job performance criteria.
To overcome with these problems, training experts suggest: Develop realistic goals and /or measures for each OJT area. Plan a specific training schedule for each trainee, including set periods for evaluation and feedback. Help managers establish a nonthreatening atmosphere conductive to learning. Conduct periodic evaluations after training is completed to ensure employees have not forgotten what they have learned.
PROPER way to do On-the-job Training P- prepare: decide what employees need to be taught. R-reassure: put each employee at ease. Learn about hit or her previous experience. O-orient: show the employee the correct way to do the job. P-perform: when employees are ready, let them try the job themselves. E- evaluate R-reinforce and review: provide praise and encouragement, and give feedback about how the employee is doing. It needs to be conducted systematically. The main issue, however, it is always talked about OJT even if you dont do anything. The major advantage is that there is no necessary transfer. When you learn something in class, you have to transfer the knowledge into the practice, into the actual job. Other advantages are: Inexpensive Learning by doing Immediate feedback
Steps to ensure OJT success: 1. 2. 3. 4. Prepare the learner Present the Operation Do a tryout (let employees to do it) Follow up (check whether it was fine or not).
There are different types of OJT:

Coaching Job rotation Special Assignments
Classroom instruction This is the traditional way of learning, inside a classroom. Some of the advantages are motivation and attendance. If a trainee experiences problems, a live instructor is generally on the best position to help the trainee. The classroom training method also lends itself particularly well to what is called blended learning, in which lectures and demonstrations are combined with other audiovisual material (DVDs, videotapes, etc.). Classroom instruction is still the number one training method. Programmed Instruction Also known as self-directed learning, it uses books, manuals, or computers to break down content into sequences for employees to learn at their own pace. After being presented, the trainee is required to answer a question. If the response is correct, the trainee can go to the next step. If it is incorrect, further explanatory information is provided and the trainee is told to try again. Trainees are actively involved in the instructional process. The main advantage is that the speed of learning can be managed. Everyone learns at their own speed. Audiovisual methods To teach skills and procedures for many production jobs, audiovisual devices can be used. Video recordings are often used to illustrate the steps in a procedure such as assembling electronic equipment or working with a problem in a procedure. When it is not possible to obtain video, audio recording can be very valuable. Teleconferencing and videoconferencing allow an instructional program to be transmitted to many locations simultaneously and permit trainees to interact with one another. Web conferencing is used to conduct live meeting or presentations over the Internet. During a web conference, trainees sit at their own computers and are connected to other participants via the web. A webinar is a one-way conference. Podcasts allow reps to learn about new products while they are in the field.
Simulation methods It is either impractical or unwise to train employees or the actual equipment used on the job. The simulation method emphasizes realism in equipment and its operation at minimum cost and maximum safety. The distinction between simulation and computer-based training has blurred. In the simulation, trainees perform common tasks such as moving leads from one end of a loading area to the other. If a trainee makes a wrong move, he/she sees instantly the consequences. These types of technologies are making it easier to offer training in new and different ways. It is, however, really expensive to produce such things.

E-Learning E-learning covers a wide variety of applications such as web and computer-based training, and social networks. It allows the firm to bring the training to employees rather than vice versa, which is generally more efficient and cost-effective. E-learning also allows companies to offer individual training components to employees when and where they need them- this type of training, which is referred to as just-in-time training, helps alleviate the boredom trainees experience during training courses. It is usually provided by an outsourced company. The main advantage is that the material is available continuously. Workers can determine the speed of learning, can go back is something was not clear enough. Manager methods On-the-job experiences Some skills and knowledge can be acquired by listening and observing or by reading. Other, however, may be acquired through actual practice and experience. The following methods provide on-the-job-experiences. 1. Coaching: involves a continuing flow of instructions, comments and suggestions from the manager to the subordinate. It is a more functional, technic learning approach. 2. Understudy assignments groom an individual to take over a managerial job by giving trainees experience in handling important functions of the job. 3. Job rotation and later transfers: provide trainees with a variety of work experiences and broaden the understanding they need to manage people more effectively. 4. Special projects and junior boards give trainees an opportunity to study an organizations challenges, make decisions, etc. 5. Action learning: training method whereby trainees work full-time on projects with others in the organization and discuss with them the aspects that when right and wrong. It is necessary t understand the interconnections between jobs and positions. 6. Managerial staff meeting: enable participants to become more familiar with the problems and event occurring outside the immediate areas. 7. Planned career progressions: utilize all different methods to provide employees with the training and development necessary to progress through series of jobs. Seminars and conferences These are useful for bringing groups of people together for training and development. They can be used to communicate ideas, policies, or procedures, but they are also good for raising points of debate or discussing issues. Case studies Useful method used in classroom learning situations. There area many variables on which management decisions are based, and, on general, improve their decision-making skills. Case studies are most appropriate when: Analytic problem-solving and critical thinking skills are most important. The KSAs are complex, and participant need time to master them.

Active participation is desired. The process or learning is as important as the content. Tea, problem-solving and interaction are possible.
Management games and simulations Player-managers are faced with the task of making a series of management decisions affecting a hypothetical organization. Learning takes place indirectly. They see themselves in a situation of play, instead of learning, which is funnier. You learn without necessarily wanting it. Simulation doesnt always require a computer. Games and simulations are being used to help the managers of government agencies. Role playing It consists of playing the roles of others, often a supervisor and a subordinate who are facing a particular problem, such as a disagreement or a performance problem. Participants can improve their ability to understand and cope with others. They forget who they really are and focus on the role they are playing. This is a really powerful technic. Role-playing is a versatile teaching model, applicable to a variety of training experiences. Computers programs that can simulate role-playing have also been developed. The trainees are given feedback as to how well they applied their managerial skills to each situation. Behavior modeling Showing people what to do, how to behave in some situations. It shows techniques about how to deal with critical situations in business (conflicts with employees). It is an approach that demonstrates desired behavior and gives trainees the chance to practice and role-play those behaviors and receive feedback. It consists basically on 4 components: 1. Learning points: goals of the program are initially outlined. They can be a sequence of behaviors that are to be taught. 2. Modeling: participants view videos in which a model manager is portrayed dealing with an employee in an effort to improve his or her performance. 3. Practice and role-play 4. Feedback and reinforcement: when the trainees behavior increasingly resembles that of the model, the trainer and other trainees reinforce the behavior with praise, approval, encouragement and attention. Tuition assistance programs Corporations offer their employees tuition assistance if they take courses related to the firms businesses. Tuition assistance, which are generally administrated through a companys HR department, offer employees the opportunity to further integrate their educational credentials with their career plans. The main problem is how to make sure the money is not wasted; once done the course they are not going to leave the organization. To cope with this problem companies usually establish a contract or agreement that makes sure you are going to stay in the organization during a period of time. Otherwise, worker will have to pay a fee.

Corporate universities Some large corporations have their own universities where they train their employees and future managers. Centralized training and development activities are taken place within these institutions. It is a focus oriented approach towards training new hires. Evaluating the training effort - Training effects to measure: this is really important. It is a condition, which is measured at different levels. o Reaction of trainees to the programsatisfaction (did the learners like the training program?) o Learning that actually took place Learning (did the learners learn the content?) o Behavior that changed on the job impact (did the learners deploy the learnings on the job?) o Results achieved as a result of the trainingResults (did the implementation of the training program impact business results?). o ROI (did the training investment pay off) - Designing Studies o Controlled experimentation: there are basically two different groups I. Teaches II. Not teaches The difference between performance of a group that has been taught and the one that has not received any training shows if the training was effective or not. o Time series Design (TS Graph): it can show either the performance of the workers or the mistakes carried out by workers, both before or once the training has taken place. It means to look at certain figures over time.

Topic 6 Performance Management
Performance Appraisal vs. Performance Management
Performance Appraisal Setting work standards, assessing performance, and providing feedback to employees to motivate, correct and continue their performance. Performance Management Integrated approach to ensure that an employees performance supports and contributes to the organizations strategic aims. This is a more comprehensive term. It establishes the standards of how good or bad, which are derived from companys strategies. This term is used by most of companies: this is not just about grading employees but also helping the organization to become better. Performance Appraisal Performance Assessment Performance Evaluation Performance Measurement
All of them address the identification of performance degree (how good or bad and employee does his or her work). Why Performance Management? - Strategic Focus: this is important to ensure that employees by doing what they are paid for, they help to achieve organizations objectives. - Learning Organization: learning from each one of us needs a step in between: thinking whether we are doing it well or not. Building Blocks of an Effective Performance Management Process 1. Performance Assessment (appraisal): systematic, well-defined and useful assessment. It means systematically measuring employees performance (appraising it). Depending on the company, this can be done more or less often. Consulting agencies, for example, usually conduct the performance assessments in a monthly basis. 2. Performance-Linked Rewards, Recognition and Compensation. This basically means that the results are linked to performance appraisal. Make a difference whether the employee contributes much or little into the company. 3. Workflow Management and Process Control: if we want to make the organization better, we shouldnt blame the employees but remove the blocks that dont allow them to perform successfully. 4. Direction Sharing and Role Clarification: clear understanding of each role and where is the organization heading to. Through an integrated process everybody should know how she or he contributes into the organization. 5. Goal setting and alignment: the vision and strategy must be broken down into clear objectives. 6. Ongoing Performance Monitoring: the company and its people dont wait until the end when the performance is due. But if as soon as they identify the errors, they should be

communicated. Whenever you see something is not working, you should address it and correct it. 7. Ongoing Feedback, Coaching and Support Functions of Performance Appraisal - Motivated employees to improve and maintain performance. Performance Appraisal is, therefore, a tool of motivation. This is the main function. - Guides supervision (correct poor, reinforce good performance). The natural response of a manager is to make sure that in his or her area everyone is doing the best he or she can. - Allows for performance-linked pay. - Allows for sound promotion decisions: climbing up the career ladder. This implies detailed judgment in order to build promotion decision on it. - Informs career planning: it determined which areas an employee is good at/average of bad. - Permits assessment of training needs: areas in which there is room for improvement. Here it is where training is needed. - Permits evaluation of training effectiveness. - Structures communication - Contributes to optimal utilization of HR: be optimal. The ideal state is that in every organization you have somebody who does his or her job excellently. If not, it needs training. If training doesnt work, this person may need another job because he or she is not able to do this job. Look for another job (whether inside or outside the organization) that matches his or her competences. Performance Appraisal Process 1. Define job: clear definition of what is expected. Then, you can design an exam whether employees accomplish or not the objectives. It establishes what are the standards or benchmarks against which the employee is going to be judged. 2. Appraise Performance: evaluate how much of it you get from an employee. 3. Provide Feedback: that provides and makes possible to get an even better appraisal next time. This has basically to do with weaknesses of managers who dont understand their own work. Roadblock: Unrealistic (Soft) Appraisal - Fear of having to hire and train someone new - Fear of unpleasant reaction of the appraised o Employees lose chance to improve: if you dont tell subordinates what they need to do better, they wont improve it. They will keep doing it the same way. o Lawsuits due to dismissals involving inaccurate PA: risks of lawsuits due to dismissals in accurate performance appraisals. Roles in Performance Appraisal Supervisors: - They play the major roles, the operational tasks. - Usually do the actual appraising

Must be familiar with basic appraisal techniques Must understand and avoid problems that can cripple appraisals. Must know how to conduct appraisals fairly. Direct supervisors know what you do right or wrong. The acceptance is a prerequisite for motivation, and it is based on fairness.
HR Department - Servers in a policy-making and advisory role - Provides advice and assistance regarding the appraisal tool to use. - Trains supervisors to improve their appraisal skills. It is not just about handling the instruments, but also in being objective, fair, etc. - Monitors appraisal systems effectiveness and compliance with law. - It is up to them to develop the system, processes, and advice people and so on, about how to appraise performance. Who should do the appraisal? a. Immediate supervisor: the one who does the appraisal is the direct supervisor. b. Self-rating: each employee is asked to evaluate him or herself. c. Subordinates: upward feedback. Subordinates appraise their managers. According to criteria they can appraise: managerial skills among other things. d. Peers: peer assessment. Colleagues (from the same level of responsibility) evaluate performance of other colleagues- It is used in organization: not just graded by superiors but also by colleagues. e. Clients: in sales areas, clients are asked to rate the service they have been provided by the company. f. Rating Committee: these are particularly important when you need to standardize performance appraisal across departments or areas. g. 360 Feedback: multi-size feedback. Rating done of integration of different rating (supervisor, subordinate, colleagues, etc.). Integration of all ratings to create a final feedback.
Performance Appraisal Methods

Performance appraisal methods can be broadly classified as measuring traits, behavior or results. Trait approaches continue to be used despite their subjectivity. Behavioral approaches provide more action-oriented information to employees. The results-oriented approach has become more popular because it focuses on the measurable contributions that employees make to the organization. Trait Methods 1. Graphic Rating Scales It is a trait approach to performance appraisal whereby each employee is rated according to a scale of characteristics. In the graphic rating scale method, each trait of characteristic to be rated is represented by a scale on which a rater indicates the degree to which an employee possesses that trait or characteristic. Differences can be found in:

Characteristics or dimensions on which individuals are rated The degree to which the performance dimension is defined for the rater How clearly the points on the scale are defined.
Subjectivity bias is defined somewhat when the dimensions are described as precisely as possible. The rating form should provide enough space for comments on the behavior associated with each scale. 2. Mixed-Standard Scales The mixed standard-scale method is a modification of the basic rating scale method. A trait approach to performance appraisal similar to other scale methods but based on comparison with a standard. In this case, the rate is given three specific descriptions of each trait. These descriptions reflect three levels of performance: superior, average and inferior. 3. Forced-choice Method The forced-choice method requires the rater to choose from statements that appear equally favorable or equally unfavorable. The statements are designed to distinguish between successful and unsuccessful performance. The forces-choice method is not without limitations, the primary on being the cost of establishing and maintaining its validity. It cannot be used as effectively as some of the other methods as a tool for developing employees. Example: Yahoo Microsoft a. Yahoo: establishes a performance Management system: Bell-shaped/Forceddistribution or also called Stack-Ranking. Contrary to what happen with Yahoo, the implementation of such measure should be done openly and communicated to everyone. No hide it. It forces managers to decide who the worst is, but there is not always necessarily someone really bad, who therefor needs to be faired (someone who misses the corporate objectives). This measure has been basically developed for selection purposes: so as to decide who stays within the company and who has to leave. This method, therefore, triggers competition among employees as well as favoritism. If a company, for example, has too many people employees, it might be a good way of determining who the worse are, and therefore reduce this way the workforce. b. Microsoft: it decided to give up using this method. The reason is basically: they trigger teamwork, instead of competition among employees. Since they look for more innovation, they need people work together and promote the creation of teams. Two companies using the same system of appraisal can have different results depending on the background and context of each one.

4. Essay Method It is a trait approach to performance appraisal that requires the rater to compose a statement describing employee behavior. The appraiser is usually instructed to describe the employees strengths and weaknesses and to make recommendations for his or her development. This method can be combined with other rating methods. They also provide an excellent opportunity for supervisors to point out the unique characteristics of the employee being appraised. The major limitation of the essay method is that composing an essay that attempts to cover all of an employees essential characteristics is a very time-consuming task. Behavioral methods 1. Critical Incident Method A critical incident is an unusual event that denotes superior or inferior employee performance in some part of the job. It occurs when employee behavior results in unusual success or unusual failure in some part of the job. The manager keeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to how well they perform. This method can also help a manager counsel employees when they are having performance problems while the problem is still minor. It also increases the objectivity of the appraisal by requiring the rater to use job performance criteria to justify the ratings. 2. Behavioral Checklist Method It consists of having the rater check the statements on a list that the rater believes are characteristics of the employees performance or behavior. Some statements are the following: It is able to explain equipment clearly Keeps abreast of new developments in technology Tends to be a steady worker Reacts quickly to customers needs.
3. Behaviorally Anchored Rating Scale (BARS) It consists of series of 5 to 10 vertical scales. These dimensions are anchored by behaviors identified though a critical incident job analysis. The critical incidents are placed along the scale and are assigned point values according to the opinions of experts. BARS are typically developed by a committee that includes both subordinates and managers. Committees task is to identify all the relevant characteristics or dimensions of the job. Major advantages of BARS are that personnel outside the HR department participate with HR staff in its development. The main disadvantage, however, is that it requires considerable time and effort to develop. Moreover, since scales are specific to particular jobs, a scale designed for one job might not apply to another. Developing a BARS Generate critical incidents Develop performance dimensions Reallocate incidents Advantages of BARS More accurate instrument Clearer standards Feedback

Scale the incidents Develop a final instrument Independent dimensions consistency
4. Behavior Observation Scale (BOS) It is a behavioral approach to performance appraisal that measures the frequency of observed behavior. BOS is designed to measure how frequently each of the behaviors has been observed. The value of a BOS is that this approach allows the appraiser to play the role of observer rather than of judge. It is preferred for: Maintaining objectivity Distinguishing good performers from poor performers Providing feedback Identifying training needs
Results methods 1. Productivity Measures A number of results are available to evaluate performance. Criteria contamination: you cannot always simply compare the outcome rejecting the situation or the context where is has placed in. Production workers, for example, are evaluated on the basis of the number of units they produce, while managers, on the basis of company profits or growth rate. Each of these measures directly relates what employees accomplish to results that benefit the organization. Problems, however, are: criteria contamination, results can be contaminated by external factors that employees cannot influence. It can also encourage employees to focus on shortterm basis, while ignoring the long-term ramifications. Factors such as cooperation, adaptability, initiative and concern for human relations are important to the job success of employees. Information, however, is not very rich. No idea of what problems lead having below average results. 2. Management by Objectives It attempts to overcome some of the limitations of results appraisals. MBO is a philosophy of management that has employees establish objectives by consulting with their superiors. An MBO system consists of a cycle that begins with setting the organizations common goals and objectives and ultimately returns to that step. The system works as a goal-setting process whereby objectives are established for the organization, departments and individual managers and employees. The following guidelines can help an MBO program succeed: a. Managers and employees must be willing to establish goals and objectives together. Goal setting works because it helps employees focus on important tasks. It also establishes an automatic feedback system. b. The objectives should be quantifiable and measurable for the long and short terms.

c. The results that are expected must be under the employees control. d. Goals and objectives must be consistent for each employee level. e. Managers and employees must establish specific times when the goals are to be reviewed and evaluated. The MBO is a comprehensive and formal organization-wide goal-setting and appraisal program: Setting of organizational goals Setting of departmental goals Discussion of departmental goals Defining expected results (setting individual goals) Conducting periodic performance reviews Providing performance feedback
Problems with MBO Setting unclear objectives Time-consuming Appraisal Process Conflict with Subordinates over objectives
3. The Balanced Scorecard It can be used to appraise individual employees, teams, business units, and the corporation itself. It accounts four different categories: financial, customer, processes and learning. These internal processes are critical for creating customer satisfaction and loyalty. It is an integrated strategic management tool, which leads to concrete targets for each one. The BSC appraisal enables managers to translate bored corporate goals into divisional, departmental, and team goals in a cascading way. Some recommendations are: Translate the strategy into a scorecard of clear objectives. Attach measures to each objective. Cascade scorecards to the front line. Provide performance feedback based on measures. Empower employees to make performance improvements. Reassess the strategy: one of the benefits of BSC is that it is a continuous loop process.
Tool Graphic Rating Scale
BARS Alternation Ranking
Advantages Simple to use, provides quantitative rating for each employee Provides behavioral anchors, very accurate Simple to use, avoids central tendency and other biases
Disadvantages Standards may be unclear, biases can turn up Difficult to develop May cause disagreement among employees, unfair if

Forced Distribution Method Results in predetermined number or percentage of people in each group Helps specify whats right and wrong about employees performance Tied to jointly agreed performance objectives all employees are excellent Employees appraisal results depend on choice of cutoff points. Difficult to rate or rank employees relative to one another Time-consuming
Critical incident Method
MBO
Goal Setting (SMART goals) Participative goal setting Yields Higher Commitment Specific: clearly stating the desired results Measurable: answering how much Attainable: not too tough, not too easy-challenging but doable Relevant: important for whats to be achieved Timely: reflecting deadlines and milestones (within which period).
Solutions to Appraisal Problems 1. Know the problems (understand what is going on) 2. Use the right tool: certain tool might be appropriate to avoid some errors. Some tools can prevent some problems from occurring. a. To avoid central tendency it is useful to produce a ranking list. 3. Train supervisors 4. Control Outside Influences 5. Document the Process (protocol): whenever something is documented or written down you can talk about it. Appraisal Interview Some guidelines for conducting an Appraisal Interview are the following: Talk in terms of objective data Dont get personal (talk about behavior, the one youre not satisfied with) Encourage the employee to talk Dont tiptoe around: be frank and clear. Dont avoid critical things.
Interview Strategy may differ with regard to overall appraisal results:
Satisfactory Promotable Satisfactory - Not promotable Unsatisfactory Correctable Unsatisfactory Not correctable
Formal Written warnings: letter which states what need to be changed, in which periods, and so on. Otherwise, company sees itself under the obligation of terminating the contract.

Purposes of a Written Warning o Shake employee out of bad habits o Help defend your rating- both to your own boss and to the courts A written warning should o Identify standards by which employee is judged (determined what it was expected) o Make clear that employee was aware of the standards (they know what it was expected) o Specify deficiencies relative to the standards o Indicate employees prior opportunity for correction.
Suggestions for Appraisal Interview How to criticize a Subordinate? - Do it a manner that lets the person maintain his/her dignity - Criticize in private and constructively - Give regulate feedback so that the review contains no surprises - Criticize as objective as possible and free of biases How to handle a Defensive Subordinate? - Recognize that defensive behavior is normal - Never attack a persons defenses - Build up an atmosphere of mutual trust How to ensure improved performance? - Dont make subordinate feel threatened during the interview - Give subordinate opportunity to present his or her ideas and feelings.

Topic 7 Reward Management
Rewarding implies that benefits are managed by the company on purpose with the objective of acquiring and retaining the kind of employees the company needs. It is used to manage also the performance of employees. In order to get rewards they should behave in a certain way. Employees try to give their best in order to get the best in terms of rewards (performance rewarding). People make rational choices, and therefore they compare the benefits and costs that a determinate job implies and according to this they decide whether to work in one or another company.
Aligned Reward Strategy

Total rewards (compensation): monetary and non-monetary rewards provided to employee in order to attract, motivate and retain them. Reward systems strategic objectives: Compliance with all laws and regulations Costs effectiveness for the organization Internal and external equity Performance enhancement or organization Performance recognition for employees.
Aligned Reward Strategy: it is based on creating a bundle of rewards (a total reward package), which specifically elicit employee behaviors that the firm needs to support and achieve its competitive strategy. Developing an Aligned Reward Strategy: - What must our company do to be successful in achieving its desired competitive position? (find out which is the needed behavior) - What are employee behaviors necessary to successfully implement the competitive strategy? - What compensation programs should we use to reinforce these behaviors? (Incentives, reward aspects which reward cooperation but dont punish competition). - What measurable requirements must be compensation program meet to be deemed successful? - How well do our current compensation programs match these requirements? Relationship between program and rewards. Components of compensation systems Direct financial compensation: pay that a person receives in the form of wages, salary, commission and bonuses. Indirect financial compensations (benefits): all financial rewards that are not included in direct financial compensation.

Nonfinancial compensation: satisfaction that a person receives from the job itself of from the psychological and/or physical environment in which the person works. They need to be managed as well as the financial compensations. Training opportunities Career opportunities Leadership (person and style) Team fit Corporate communication: team meetings Working hours: whether they are flexible or rigid; if worker can take days off or sabbatical/maternity leaves.. Job content: value for election decision-making Work environment and equipment: it has to do with the reputation of the organization; you are proud of working in such company. they provide you with a car, office, assistance, etc.
Financial components/compensation: salary, incentives and benefits. Although one offer pays you a lot, you may go for another offer, because the work is more attractive (the nonfinancial compensations are better).
Determinants of pay
1. Job value: value of a job to the company success, its profitability (whether it is more or less important for the company). 2. Requirements: the more difficult the job is, the higher the compensation should be. 3. Performance (piece rates, commission): The one, who performs the best, should receive more money. Establish, therefore, a link between performance and reward. 4. competencies, Skills and qualifications (experiences) 5. Market: it basically has to do with orienting the salaries according to competition. No pay more than the competition. 6. Seniority: pay more those who stay longer in the organization in order to trigger loyalty (motivate workers to stay into the organization). 7. Hierarchical status: those who are higher up in the hierarchy of the organization should earn more than others (lowers). 8. Social status: family status cost of living. Some firms index pay increases to the inflation rate. In a questionable practice, some companies sacrifice merit pay to provide across-the-board increases designed to offset the results of inflation. Location is also a factors affecting cost of living. Compensation philosophy: there are some differences regarding the philosophy the company follows: Entitlement (public services): Seniority-based pay Across-the-board raises (general raises) Pay scales raised annually Industry comparisons of compensation only

Santa Claus bonuses: same for everyone, regardless the contribution or performance.
Performance No raises for length of service (seniority) Market adjusted pay structures No raises for longer-service poor Broader industry comparison Performance (no matter how long you stay) Bonuses tied to performance results Pay determination process: Job evaluation: the formal systematic means used to identify the relative worth of jobs within an organization. Linking performance to pay: certain amount of money for yearly salaries increases (for example average 3%). Since it is linked to performance not everyone gets this 3% of increase. Depending on the performance the increase will be larger or not.
Methods of job Evaluation

Job evaluation: measures the value of a job or position regardless who is performing it (no matter of the person). The primary purpose of job evaluation is to eliminate internal pay inequities that exist because of illogical pay structures. Job evaluation measures job worth in an administrative rather than an economic sense. May companies use job evaluation for the following purposes: to identify the organizations job structure To eliminate pay inequities and bring order to the relationship`s among jobs To develop a hierarchy of job value for creating a pay structure.
Quantitative approach: ranking or rating Qualitative approach: summary (evaluating all requirements of a job in sum); analytic (evaluating each individual requirement of a job). Job ranking method (ranking-holistic/summary): the rater examines the description of each job being evaluated and arranges the jobs in order according to their value to the company. First step is conducting job analyses and writing job descriptions. List all the jobs and assemble experts who discuss about ranking the jobs according to importance for the organization. Raking jobs relative to all others with regard to defined criteria. Job Classification Method (rating/holistic): there is not list of jobs, but of different components of each job. Rank the different tasks with regard to importance for the company. It involves defining number of classes or grades to describe a grouped of jobs. Categorized jobs into pre-determined groups or classes of jobs which are of roughly the same value. Factor comparison Method (ranking-analytic): ranking single requirements based I mutual comparison (summing-up proportionally). It assumes that there are 5 universal factors consisting of mental requirements, skills, physical requirements,

responsibilities and working conditions. the evaluator makes decisions on these factors independently. A monetary scale is created, and jobs are ranked according to their value for each factor. Point method (rating-analytic): grading single requirements in predetermined requirement-classes. Come up with analytical average score according to relevance for the company. Raters assign numerical values to specific job factors, such knowledge required, and the sum of these values provides a quantitative assessment of a jobs relative worth. They require time and effort to design.
Hay plan/job evaluation Methodology: is a widely used refined version of the point method to evaluate clerical, trade, technical, professional, managerial and executive-level jobs. Input (know-how) there are scales behind and you get points for the position of job you are looking at. o Technical know-how: how much it is required/components of a job position are measured. o Management breadth o Human relations skills Throughput (problem-solving): o Thinking environment o Thinking challenge Output (accountability) o Freedom to act: how huge or small the freedom to act is. o area of impact o Nature of impact (of a wrong decision).
Motivation theory Background

1. Maslow theory Higher needs are motivated once the lower ones have already been satisfied.
2. Herzbergs two-factors-theory: There are some factors that when given prevent dissatisfaction but do not cause/provide motivation. Other, however, are just the other way around. - Hygiene factors: those which de-motivate if not given but do not motivate given (salary, incentivesextrinsic) - Motivating factors: those which motivate when given, but do not frustrate if not given (challenge, recognitionintrinsic).

By paying fair salaries you get people not to be frustrated, but to get extraordinary motivation we need to take other components, such as challenge or recognition. 3. Vrooms Expectancy Theory (M=V*E) Motivation is the product of expectancy (that effort will lead to performance) and valence (value placed on result respectively reward connected to it). If any factor (E or V) is 0, there is no motivation to work towards the reward. Confidence building and training can increase employee motivation Knowledge of workers desired necessary to set appropriate incentives.
For example if V=1 (something is important for you) but you think you cannot achieved (E=0.1), your motivation will be also low (1*0.1=0.1). Here it is where incentives tackle. We should connect the incentives to the outcome in order to motivate people. 4. Skinners Behavior Modification (Reinforcement theory) behavior that leads to a positive consequence (reward) tend to be repeated Behavior that leads to a negative consequence (punishment) tends not to be repeated. Behavior can be changed by providing scheduled rewards (or punishments).
Individual Employee incentive and recognition plans

Merit Pay Salary increase awarded to an employee due to performance (linked to performance results).Increase added to employees base pay based in their level of performance. The main disadvantage to employees is that it increases the employees base pay. Therefore, employees receive the added amount each year they are on the payroll regardless of later performance levels. Permanent, cumulative salary increase Annual lump-sum-non permanent Tied to individual and/or organizational performance
Incentives for Professional Employees Bonuses, stocks options, profit sharing, flexible work hours, improved pension plans, etc. linked to performance. Stock option plans give the executives the option to buy a specified amount of stock in the future at or below the current market price. The stock option is a longterm incentive designed to integrate the interests of management with those of the organization. Companies are placing a higher % of their compensation budget in variable pay as more and more companies embrace the concept of pay for performance. Spot bonuses are relatively small monetary gifts provided to employees for outstanding work or effort during a reasonably short period of time. Recognition-Based awards Alone or in conjunction with financial rewards: social recognition, performance-based recognition and performance feedback.

Incentives for salespeople- Sales Compensation Plans
1. Straight salaries: appropriate for tasks such as finding new clients, account servicing, training customers sales-force participating in trade shows, etc. Sales persons receive a fixed salary regardless of their sales levels. Organizations use straight salary primarily to emphasize continues product service after the sale. 2. Commission plan (% of sales results): persons pay is totally determined as a % of sales. If there are no sales, the salesperson working on this receives no pay. a. Keep sales costs proportionate to sales revenue b. May cause neglect of non-selling duties c. can create wide variation in salespersons income d. Sales success may be linked to factors other than performance 3. Combination Plan (combination of salary and commission) a. Gives salespeople a floor to their earnings b. Salary component covers specified service activities.
Pay Grades and Wage Curve

According o the results of the job evaluation, jobs are grouped in pay grades. Pay grades are prices-leading to a wage curve. A pay grade is the grouping of similar jobs to simplify pricing jobs, In following this approach, you also avoid a false suggestion of preciseness. The wage curve is the fitting of plotted points to create a smooth progression between pay grades. The line drawn minimizes the distance between all dots and the line; a line of best fit may be straight or curved. A wage curve shows pay rates paid for jobs in each pay grade, relative to the points or rankings assigned to each job/grade by the job evaluation. It shows relationships between value of the job as determined by the job evaluation and the current average pay rates for grades. Pay rates: includes a minimum and maximum pay rate with enough variance between the 2 to allow for a significant pay difference. Pay ranges are preferred over single pay rates because they allow a form to compensate employees according to performance and length of service.
Competency-Based Pay
It is a compensation plan that rewards employees for the capabilities they attain. It is a type of skill-based pay plan for professional and managerial employees. Paying for the employees range, depth, and types of skills and knowledge, rather than for the job title he or she holds. The company may want to keep some competencies in the company for future situations (although they are not used right now). Some people are paid for having these competencies. What are competencies? Demonstrable characteristics of a person, including knowledge, skills and behaviors that enable performance.
Why use Competency-Based-pay?

1. Support high-performance work systems: departments of highly competent employees, who may not contribute a lot to the company at the moment. 2. Support strategic aims: it is necessary to achieve some strategic goals (these people are paid in order to retain these competencies for the future) 3. Support performance management: it triggers employees to develop competencies for their own benefit and profit of company. It is regularly done by future oriented performance appraisal. It takes into consideration potential development of employees competencies.
Pay surveys
It is a collection of data on compensation for worker performing similar jobs in other organizations. It is a means of obtaining data regarding what other firms are paying for specific jobs or classes within a given labor market. The surveys may be purchased, outsourced to a consulting firm, or conducted by the organization itself. The purposes are: to price benchmark jobs (found in many organizations) to market-price wages for jobs to make decisions about benefits
Market competitiveness and compensation: Sources a. b. c. d. Employer Self-Conducted Survey: asking applicants Consulting Firms: buying the data Professional Associations: provide information Government agencies: public employment agencies in Germany can provide data about salaries and benefits given by private organizations. e. Internet Meet the Market strategy: pay what market pays Lag the Market strategy: pay slightly below the market average Lead the market strategy: pay above the market average
Pay for Performance

Incentives: financial rewards paid to workers whose production exceeds a predetermined standard. The main objective is to improve productivity. Given the proper incentives, most employees will work harder and smarter. They are prospective rewards you get if you fulfill certain conditions. Incentive plans: - Individual employee Incentive and Recognition plans: it can result counterproductive if the team doesnt fulfill the objectives eventually. - Sales compensation plans: each item sold delivers certain amount of money - Organization Wide Incentive Plans: it plays out more if the company is doing well; if it accomplishes its objectives.

Team/Group Based Variable Pay Plans: if you want to foster collaboration among team members. It is based on the performance of the entire team. Incentives for Managers and Executives Bonuses Piecework: incentive plan in which employees are paid for each unit they produce. It is especially prevalent in the production/operations area. Requirements for the plan include developing output standards for the job and being able to measure the output of a single employee.
Team/Group-Based Variable Pay Plans

Incentives are based on teams performance. Team incentives have both advantages and disadvantages. Advantages: Easier to develop performance standards for groups than for individuals. The output of the team is more likely to reflect a complete product or service More inclined to assist others and work collaboratively if the organization bases rewards on the teams output. (helps ensure collaboration and sense of cooperation). Reinforces team planning and problem solving Encourages rapid training of new members
Disadvantages: Exemplary performer: If individuals in this category perceive that they contribute more than others in the groups, they may become disgruntled and leave. Pay is not proportionate to an individuals effort Rewards free riders
Alternatives: team bonus distributed equally to all members Team bonus distributed due to individual contribution o determined by numbers o determined by team manager o determined by team itself
Organization Wide Incentives Plans

1. Profit-sharing Plans - Cash Plans o Employees receive cash share of the firms profits at regular intervals o Funding formula for distributing employees share of the gains needed. - Profit based incentives (dependent on organizations success of profit). o Profits distributed to employees based on their individual merit rating. There is a link between the organization and individuals performance. So, the ones who contribute more into the organization get a larger part of this %.

Deferred profit-sharing plans: compensation plan that results in the distribution of a predetermined percentage of the firms profits to employees. Many firms use this type of plan to integrate the employees interests with those of the company. These plans can aid in recruiting, motivating and retaining employees, which usually enhances productivity. o Predetermined portion of profits is placed in employees account under a trustees supervision. It involves placing company contribution in an irrevocable trust, credited to individual employees accounts. The funds are normally invested in securities and become available to the employee at retirement, termination or death. 2. Employee Stock ownership Plan: part of stock is sold at discount to employees to make them owners of the company they work for. The employee decides that certain amount of money does not go to the bank account, but company should buy stock for you. If the company does so, it achieves to reduce price in stock. The intention of the company is that employees keep the share or stock so they become owners also of the company. Employees are more motivated to help the company grow. Firm annually contributes own stock (with a limit of a percentage of compensation) to be used to purchase the stock at a reduced price. o Employees develop a sense of ownership in and commitment to the firm.
Incentives for Managers and Executives

1. Short-Term Incentives (Annual Bonus): plans designed to motivate short-term performance of managers tied to company profitability. 2. Long-term Incentives: cash, stock options, golden parachutes, guaranteed loans, etc. Golden Parachute contract is a perquisite that protects executives in the event that another company acquires their firm or the executive I forced to leave the firm for other reasons. 3. Issues in awarding Bonuses a. Eligibility basis b. Fund Size basis c. Individual awards
Effective Incentives Plans

Criteria for Effectives Incentive Plans o Incentives must be linked to strategy o Reward must be related to efforts o Plan must be easy to understand o Employees must accept and support the plan o Plan must be treated like a contract o Plan must emphasize long-term as well as short-term success. Why Incentives Plans Fail o Performance pay cannot replace good management o Pay is not a motivator. You get what you pay for. o Rewards undermine intrinsic motivation

o o o Rewards punish Rewards rupture relationships Rewards can have unintended consequences
Pay Equity
External equity: if there are two different companies from the same industry, which have the same size, workers in the same position should earn more or less the same; compensation surveys help organizations determine the extent to which external equity is present. External equity exists when a firms employees receive pay comparable to workers who perform similar jobs in other firms. Internal Equity: it is solved by job analysis and job evaluation- If the difference between the best and worst paid employees is fair. Internal equity exists when employees receive pay according to the relative value of their jobs within the same organization. It doesnt exist when CEO pay is about 334 times the average workers pay. Individual equity: if there are individuals who work harder, are more intellectual or contribute more into the organization, they should earn more. Is the link between performances and rewards fair enough? It should be solves through performance appraisal and incentive play. It exists when individuals performing similar jobs for the same firm receive pay according to factors unique to the employee, such as performance level or seniority. Procedural equity: it is transparent to employees how salaries and salaries increases are determined. Is there a fair determination. CEOs, for example, are the ones who decide about their own salary: why can they do that? It is not fair. Grievance Mechanisms are quite useful to put up with this issue.
Benefits- Types
1. 2. 3. 4. Supplemental Pay (Pay for time not worked) Insurance Benefits Retirement Benefits Employee Services
Flexible Benefits Programs

Cafeteria (Flexible) Benefits Approach o Each employee is given a limited benefits fund budget to spend on preferred benefits o Types of plans I. Flexible spending accounts II. Core plus option plans Flexible Work Arrangements Job/work sharing Telecommuting Flexible schedules Compressed workweek schedules

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Human Resource Management ESB

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Employee relations perspective

Preferred structures/systems Roles Evaluation criteria

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HR: Business Partner

HRM Value Chain

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HRM Value Creation

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Collecting Job Analysis information

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Writing a Job Description:

Writing a Job Specification

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HR Forecasting and Planning

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Staffing from within versus from Outside

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External Recruiting Sources

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Disadvantages: Exclusion of older and minority workers. Information privacy concerns.

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Common selection instruments

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Exercise: developing a Competency profile

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Cognitive Aptitude/Ability tests

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There are different types of OJT:

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Performance Appraisal Methods

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