Refers to policies, practices, and systems that influence employees behavior, attitudes, and performance HRM Practices Job Analysis - the process of getting detailed information about jobs. Recruitment - the process through which the organization seeks applicants. Training - a planned effort to facilitate learning of job-related knowledge, skills, and behavior.
Job design - making decisions about what tasks should be grouped into a particular job. Selection - identifying the applicants with the appropriate knowledge, skills, and ability. Development - the acquisition of knowledge, skills, and behavior that improves employees' ability to meet the challenges of future jobs. Performance management - helps ensure that employees activities and outcomes are congruent with the organizations objectives. Pay structure, incentives, and benefits. Labor and employee relations. Trends Enhancing the Importance of HRM
1. Increased globalization of the economy 2. Technological changes, challenges, and opportunities 3. Increase in litigation & regulation related to HRM 4. Changing characteristics of the workforce Trend 1: Changing Characteristics of the Workforce Growing Workforce diversity, which complicates HRM 2010 only 15% of US workforce will be native-born white males Greater proportion of women and minorities have entered male- dominated positions Nearly 90% of the growth in the US workforce from 1995 2008 came from women, immigrants, African-Americans, Hispanic and Asians. More dual-career couples in the labor force Fewer than 20% of the workforce fit the male, white, single-earner household mold May 2008: 11.6% of US population foreign born about half of the youngest 100 million Americans are immigrants and their US born children. Trend 1: Changing Characteristics of the Workforce Labor shortages/aging workforce vs. Millennials rising Baby Boomers: expected to create a shortage of skilled workers and perhaps affect economic output increase social security and Medicare costs/contributions some experts predict enough Boomers will remain in the workforce to make up for any shortfall of workers and reduce the projected govt. unfunded obligations. Age discrimination litigation is expected to increase: 2008 Supreme Court ruling on age discrimination changed the burden of proof needed to prove age discrimination and may further increase litigation Generation Y/ Millennials / Net Generation: estimated in 2014 there will be almost 63 million Gen Y in the workforce while Boomers will decline to 48 million Expected to have greater career vs. personal demands / career vs. child/elder care More racially and ethnically diverse than Boomers and Gen Xers
Trend 1: Changing Characteristics of the Workforce HRM must develop and implement programs Diversity more flexible work schedules better training programs child and elder care arrangements and career development strategies
Can lead to greater probability of EEO legal actions
Trend 2: The Increased Globalization of the Economy Opportunity for global workforce and labor cost reduction Development of a worldwide labor market for US companies Easy to move work around when it can be digitized Political and union resistance . Corporate downsizing linked to new technology Increasing global competition for US products and services Barriers to entry have been reduced, increasing international competition from firms and individuals alike. Requires constant vigilance over productivity and customer satisfaction Opportunity for expansion that present global challenges for HR US exports now generate about one in six American jobs, an increase of over 20% in just 10 years U.S. firms are expanding in new countries and new markets restructuring/downsizing Reverse globalization Trend 3: Technological Changes, Challenges, & Opportunities Great opportunities presented by Web-based systems Products and services can be delivered more effectively through an optimal combination of people, software and equipment; thereby, increasing productivity. Maximize profit margins and sustained customer value Electronic tracking of HR activities such as turnover and performance reviews. Software is easily customized to each organization. What are some Opportunities of Internet/Computerization on HRM Activities? New threats: Privacy Confidentiality Intellectual property Trend 4: Increase in Litigation & Regulation Related to HRM Federal, state, & municipal lawsuits on the increase Organizations are bound by a plethora of federal, state, and local laws, regulations, executive orders, and rules Federal lawsuits increased over 125% since 1991. Jury awards have gotten much larger: 2008, 26% of judgments were $1 million of more Expected increase in age discrimination lawsuits. State laws regarding corporate acquisitions and mergers, AIDs victims and sexual orientation, family leave benefits, and video displays Health and safety regulations, employee pensions and other compensation programs, plant closures, mergers and acquisitions, new immigration laws, and equal opportunity laws and guidelines. More HR-related legislation is expected-new EEO legislation related to fair pay, union organizing, changes in the ADA law, and especially laws related to illegal workers. Wrongful discharge, negligent hiring and retention The Strategic Management Process Type of Strategy at Each Company Level Strategic Human Resource Management Strategic Human Resource Management The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility. Involves formulating and executing HR systemsHR policies and activities that produce the employee competencies and behaviors that the company needs to achieve its strategic aims. Linking Company-Wide and HR Strategies Topic 2: Job Analysis and HR Planning What is Talent Management?
The goal-oriented and integrated process of planning, recruiting, developing, managing and compensating employees. Introduction Job analysis is vital to any HRM program and answers such questions as How long does it take to complete important tasks? Which tasks are grouped together as a job? Can a job be designed so that performance is enhanced? What behaviors are needed to perform the job? What traits and experience suit a person to the job? Can job analysis information help develop HRM programs? The Basics of Job Analysis: Terms Job Analysis The procedure for determining the duties and skill requirements of a job and the kind of person who should be hired for it. Job Description A list of a jobs duties, responsibilities, reporting relationships, working conditions, and supervisory responsibilitiesone product of a job analysis. Job Specifications A list of a jobs human requirements, that is, the requisite education, skills, personality, and so onanother product of a job analysis. Uses of Job Analysis Information Job analysis Job description and specification Recruiting and selection decisions Performance appraisal Job evaluation wage and salary decisions (compensation) Training requirements Steps in Job Analysis 1 2 3 4 5 Steps in doing a job analysis: Review relevant background information. Decide how youll use the information. Select representative positions. Actually analyze the job. Verify the job analysis information. 6 Develop a job description and job specification. HR Planning Reacting quickly to opportunities Rapid access to accurate information Human resources Business success depends on Assesses the future supply of, and demand for, human resources Provides mechanisms to eliminate gaps between supply and demand Requires periodic readjustment as labor market conditions change Human resource planning The Human Resource Planning Process Strategic Planning Technological forecasts Economic forecasts Market forecasts Organizational planning Investment planning Annual operating plans Annual employment requirements Numbers Skills Occupation categories Human Resource Demand Existing employment inventory After application of expected loss and attrition rates Human Resource Supply Analyzing Current Supply of Employees How many and what kinds of employees do I currently have, in terms of the skills and training necessary for the future?
This involves more than simply counting current employees The Skills Inventory Management Inventory Skills Inventory Identify the skills, abilities, experiences, and training employees currently have Useful for career planning, management development, and related activities In its simplest form, a list of names, characteristics, skills on index cards Others involve expensive and complex computer databases Recruitment Sources Internal Sources faster, cheaper, more certainty External Sources new ideas& approaches Direct Applicants &Referrals - self selection, low cost Newspaper Advertising - large volume, low quality recruits Electronic Recruiting Internet Public & Private Employment Agencies - headhunters can be expensive Colleges& Universities- campus placement services JOBS JOBS Recruiters Functional Area - HR versus operating area specialist
2 Steps to Enhance Recruiter Impact 1. Provide timely feedback
2. Recruit in teams
Summary
HR planning uses labor supply and demand forecasts to anticipate labor shortages and surpluses to enhance organizations success and reduce human suffering.
HR recruiting creates an applicant pool should a labor shortage occur. Internal Sources of Candidates Foreknowledge of candidates strengths and weaknesses More accurate view of candidates skills Candidates have a stronger commitment to the company Increases employee morale Less training and orientation required Failed applicants become discontented Time wasted interviewing inside candidates who will not be considered Advantages Disadvantages Finding Internal Candidates Posting open job positions Rehiring former employees Hiring-from-Within Tasks Succession planning (HRIS) Outside Sources of Candidates 1 2 3 4 5 Advertising Recruiting via the Internet Employment Agencies Temp Agencies and Alternative Staffing Offshoring/Outsourcing 6 7 8 9 On Demand Recruiting Services (ODRS) Executive Recruiters College Recruiting Referrals and Walk-ins Locating Outside Candidates Recruiting via the Internet Advantages Cost-effective way to publicize job openings More applicants attracted over a longer period Immediate applicant responses Online prescreening of applicants Links to other job search sites Automation of applicant tracking and evaluation Disadvantages Exclusion of older and minority workers Unqualified applicants overload the system Personal information privacy concerns of applicants Advertising for Outside Candidates The Media Choice Selection of the best medium depends on the positions for which the firm is recruiting. Newspapers: local and specific labor markets Trade and professional journals: specialized employees Internet job sites: global labor markets Constructing (Writing) Effective Ads Create attention, interest, desire, and action (AIDA). Create a positive impression (image) of the firm. College Recruiting On-campus recruiting goals To determine if the candidate is worthy of further consideration To attract good candidates On-site visits Invitation letters Assigned hosts Information packages Planned interviews Timely employment offer Follow-up Internships Sources of Outside Applicants Employee referrals Walk-ins Telecommuters Other Sources of Outside Applicants Military personnel The Selection Process In the past, hiring decisions were based on subjective likes and dislikes of the boss Selection tools were designed to aid gut reactions The selection decision is a series of steps through which applicants pass At each step, more applicants are screened out The Selection Process Step 1: Preliminary Screening Nearly all ask for enough information to determine minimal qualifications The application eliminates the need for interviewers to gather basic information Application blanks vary in length and sophistication Application blanks are subject to the same legal standards as any other selection method They generally limit questions that imply something about the applicants physical health The first step in most selection processes involves completing an application form Step 1: Preliminary Screening Applicants who are judged minimally qualified proceed to the next phase of the selection process The weighted application blank is designed to be scored more systematically and is more like the BIB The weights are totaled for each applicant, and the one with the highest score is the preferred choice Current high and low performers are compared on a variety of characteristics known at the time they applied for the job Weights are then assigned to the degree of difference on each characteristic Step 2: Employment Interview The interview is the selection technique most often encountered by persons applying for jobs Structure the interview to be reliable and valid Train managers to use good interviewing techniques Types of Interviews Interviews Vary Along Two Dimensions 1. How structured it is 2. Whether it focuses on historical information or hypothetical situations An unstructured interview has no predetermined script or protocol 1. Structured interviews are more reliable and valid than unstructured interviews 2. Standardization lowers the possibility that biases have been introduced by the interviewer Types of Interviews Questions about past experience have higher validity than future-oriented hypothetical questions Behavioral description interview applicants relate actual incidents from their past work experience to the job for which they are applying Situational interview seeks to identify whether an applicant possesses relevant job knowledge and motivation by asking hypothetical questions Two types of structured interviews have gained popularity Training for Interviewing Training programs can reduce many of the errors found in traditional, unstructured interviews Knowing how to ask questions Understanding how to take behaviorally oriented notes during the interview Being aware of potential biases Step 4: Employment Tests Employment tests attempt to measure Some cost as little as $1 per applicant The Mental Measurements Yearbook summarizes the tests and their effectiveness It can be expensive to develop an employment test, so many employers purchase existing tests Attitudes Manual dexterity Intelligence Personality Work Sample Performance Tests Applicants are often asked to run the machines they would run on the job Requires applicants to do a sample of the work that the job involves in a controlled situation Has high validity among selection tests Cognitive Ability Tests 3 Dimensions Cognitive Ability Tests: 1. Verbal Comprehension 2. Quantitative Ability 3. Reasoning Ability
Verbal Comprehension -a persons capacity to understand and use written and spoken language. Quantitative Ability - the speed and accuracy with which one can solve arithmetic problems. Reasoning Ability - a persons capacity to invent solutions to diverse problems. Psychomotor Ability Simulations These psychomotor ability tests are not as popular as they once were Choice reaction time Speed of limb movement Finger dexterity
Empathy Self- awareness Self- regulation Self- motivation Social Skills Polygraph and Honesty Tests May be an invasion of privacy Can lead to self-incrimination The polygraph is erroneously called a lie detector Records changes in breathing, blood pressure, pulse, and skin response, then plots the reactions on paper In recent years, objections have been raised May not be reliable and valid Popular by the mid-1980s because of increases in on-the-job crime Polygraph and Honesty Tests Exemptions The Employee Polygraph Protection Act of 1988 made it illegal for most private organizations to use the polygraph as a selection device Polygraph use is legal during an ongoing investigation of dishonesty if employee rights are safe-guarded Government agencies Certain Dept. of Defense and Dept. of Energy contractors Private employers whose business involves security and controlled substances Polygraph and Honesty Tests Organizations searching for an alternative to the polygraph are turning to paper-and-pencil tests Overt integrity tests ask direct questions and gather a history of theft and other illegal activities Personality-based integrity tests assess a predisposition toward deviant and disruptive behavior Honesty tests have acceptable levels of validity and reliability They can also be used to predict future job performance Step 4: Reference Checks When applying for a job, you may be asked for a list of references Rarely does someone knowingly include the name of a reference who will give a negative impression This built-in bias is why references are criticized Equally important are concerns over the legality of asking for, and providing, such information Giving out confidential information could be a violation of the employees right to privacy Giving a negative recommendation opens the reference up to a defamation lawsuit Step 5: Reference Checks Fear of being sued led many managers to refuse to provide references for former employees Organizations must also be wary of any policy suggesting that all references be neutral Many organizations include statements in employee handbooks about reference checking policies Managers often give out only verifiable kinds of information, such as date of employment and job title They could be sued for a negligent referral Step 6: Physical Examinations Physical ability tests include: muscular tension, power, and endurance cardiovascular endurance flexibility balance coordination Physical Examinations Reasons for preemployment medical examinations: To verify that the applicant meets the physical requirements of the position. To discover any medical limitations to be taken into account in placing the applicant. To establish a record and baseline of the applicants health for future insurance or compensation claims. To reduce absenteeism and accidents. To detect communicable diseases that may be unknown to the applicant. Step 7: Selection Decision Put offer in writing Include salary, benefits, start date, job responsibilities Communicate decision to winner Set deadline for offer acceptance Step 7: Selection Decision If offer is rejected Make counter-offer or Extend offer to the runner-up If offer is accepted Notify the other job candidates that they were not chosen Topic 4: Interviewing Interviews Selection interviews-a dialogue initiated by one or more persons to gather information and evaluate the an applicants qualifications for employment.
To increase an interviews utility: Interviews should be structured, standardized, and focused on goals oriented to skills and observable behaviors. Interviewers should be able to quantitatively rate each interview. Interviewers should have a structured note-taking system that will aid recall to satisfying ratings. Situational Interview A situational interview confronts applicants on specific issues, questions or problems likely to arise on the job.
Situational interviews consist of: experience-based questions future-oriented questions. Examples of Questions That Provide Structure Situational Questions 1. Suppose a more experienced coworker was not following standard work procedures and claimed the new procedure was better. Would you use the new procedure? 2. Suppose you were giving a sales presentation and a difficult technical question arose that you could not answer. What would you do? Past Behavior Questions 3. Based on your past work experience, what is the most significant action you have ever taken to help out a coworker? 4. Can you provide an example of a specific instance where you developed a sales presentation that was highly effective? Background Questions 5. What work experiences, training, or other qualifications do you have for working in a teamwork environment? 6. What experience have you had with direct point-of-purchase sales? Job Knowledge Questions 7. What steps would you follow to conduct a brainstorming session with a group of employees on safety? 8. What factors should you consider when developing a television advertising campaign? Using a Streamlined Interview Process 1. Prepare for the interview Knowledge and experience Motivation Intellectual capacity Personality factor 2. Formulate questions to ask in the interview Intellectual factor Motivation factor Personality factor Knowledge and experience factor 3. Conduct the interview Have a plan Follow your plan 4. Match the candidate to the job
Interview Evaluation Form What Can Undermine An Interviews Usefulness? Nonverbal behavior and impression management Applicants personal characteristics Interviewers inadvertent behavior Factors Affecting An Interviews Usefulness First impressions (snap judgments) Interviewers misunderstanding of the job Candidate-order (contrast) error and pressure to hire Rater Problems Horn Effect Central tendency error Leniency or harshness Halo effect The Halo Effect Hard to eliminate when it does occur To reduce the possibility, evaluate all subordinates on one dimension before proceeding to the next Not as common as once believed Occurs when rater assigns values on the basis of an overall impression of the ratee Can be positive or negative True halo occurs when high or low ratings are justified by the ratees performance Halo Error Leniency or Harshness Error Consequently, leniency or harshness errors may occur Asking raters to distribute ratings can force a normal distribution Raters can assess their tendencies by examining their ratings Being objective is hard for everyone Central Tendency Error A central tendency error occurs when a rater avoids using high or low ratings This average rating fails to discriminate between subordinates It offers little information for making HRM decisions Topic 5: Compensation and Benefits Objective of Compensation Adequate Acceptable to employees Provides incentive Secure Cost effective Balanced Equitable Effective compensation Determination of Individual Pay How should one employee be paid relative to another when they both hold the same job? Management must answer these questions Should all employees doing the same work, at the same level, be paid the same? Differences in experience, skills, and performance Most employers pay different rates to employees performing the same job based on Belief that seniority, higher performance, or both deserve higher pay Determination of Individual Pay Changed emphasis on job roles, skills, knowledge Emphasizes the norms of enterprise without having employees change jobs Employees performing the same job make substantially different contributions to goals Satisfies the internal equity norms of employees Recognizes market changes between jobs in the same grade without overhauling the whole system Reasons to pay different rates for the same job Methods of Payment Time worked Output produced Skills Knowledge Competencies A combination of these factors Introduction Employers View: Pay is critical in attaining strategic goals. Pay impacts employee attitudes and behaviors. Employee compensation is significant organizational cost. Employees View: Policies having to do with wages, salaries, and other earnings affect their overall income and thus their standard of living. Both level of pay and fairness compared with others pay are important. CURRENT TRENDS IN COMPENSATION CompetencySkill-Based Pay employee is paid for the range, depth, and types of skills and knowledge he is capable of Competencies - demonstrable characteristics of the person, including knowledge, skills, and behaviors, that enable performance CURRENT TRENDS IN COMPENSATION Skill-based pay programs employer defines specific skills, and has a method for determining the persons pay based on his or her skill competencies. CURRENT TRENDS IN COMPENSATION Broadbanding - collapsing salary grades and ranges into just a few wide levels or bands, each of which contains a relatively wide range of jobs and salary levels. CURRENT TRENDS IN COMPENSATION emphasis on rewarding individuals for their skills and competencies, and to defining salary grades much more broadly. emphasis on performance-based variable pay. emphasis on giving individuals a choice in the rewards they receive INCENTIVE PLANS Individual incentive programs give performance-based pay to individual employees who meet their individual performance standards
Variable pay refers to group pay plans that tie payments to productivity Piecework - Pay is tied directly to what the worker produces
Team or Group Incentive Plans Tying team performance to the companys strategic goals
Main disadvantage is that each workers rewards are not based just on his own efforts Stock option - the right to purchase a specific number of shares of company stock at a specific price during a period of time Incentives for Salespeople Most companies pay their salespeople a combination of salary and commissions
Typically a 70% base salary/30% incentive mix Merit pay, or a merit raise - any salary increase awarded to an employee based on his or her individual performance Profit-sharing plan - most employees receive a share of the companys annual profits Employee stock ownership plan (ESOP), a corporation contributes shares of its own stockor cash to be used to purchase such stockto a trust established to purchase shares of the firms stock for employees Gainsharing plans - want to encourage improved employee productivity by sharing resulting financial gains with employees Types of Compensation Base Pay, Commissions, Overtime Pay Bonuses, Profit Sharing, Merit Pay, Stock Options Benefits: dental, insurance, medical, vacation, leaves, retirement Travel, meal, housing allowance
Compensation Direct Indirect Non-financial Wages Salary Bonuses Commissions Insurance Vacation Childcare Praise Self-esteem Recognition What is the purpose of compensation?
Topic 6: Performance Appraisal Performance Management System Defining Performance Evaluating Performance Providing Feedback on Performance The process by which executives, managers, and supervisors work to align employee performance with the firms goals An effective performance management process Has a precise definition of excellent performance Uses measurements of performance Provides feedback to employees What? Performance Management An integrated approach to ensuring that an employees performance supports and contributes to the organizations strategic aims. Aim is to improve organizational, functional, unit and individual performance by linking the objectives of each. It is done through defining goals, developing skills, appraising performance, provide feedback and rewarding employees.
Incorporate job design, recruitment and selection, training and development, career planning and compensation and benefits, in addition to performance appraisal. What? Performance Appraisal Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance. Concerned with determining how well employees are doing their jobs against set of criteria, communicating that information to employees and establishing a plan for performance improvement. 3 Purposes of Performance Management Strategic Developmental Administrative Recommendations - Developing an Effective Performance Management System Mirror the corporate culture and values Have visible CEO and senior management support. Focus on the right company performance measures. Link job descriptions to the performance management system. Differentiate performance fairly and effectively. Train managers in performance management. Communicate the total rewards system. Require managers to search, offer and acquire regular performance feedback. Set clear expectations for employee development. Track effectiveness of the performance management system. Adjust the system as required.
Ethics and Fair Treatment at Work The Meaning of Ethics The principles of conduct governing an individual or a group. The standards you use to decide what your conduct should be. Ethical behavior depends on a persons frame of reference. Ethical Decisions Normative judgments Morality Ethics and the Law A behavior may be legal but unethical. A behavior may be illegal but ethical. A behavior may be both legal and ethical. A behavior may be both illegal and unethical. Ethics and Behaviors Ethics, Fair Treatment, and Justice Distributive justice Components of Organizational Justice Procedural justice How Managers Use Personnel Methods To Promote Ethics and Fair Treatment Emphasizing ethics and fairness in personnel selection Disciplining all instances of unethical conduct Providing mandatory employee ethics training Ensuring fair and objective performance appraisals HRM Practices that Promote Ethics HRM-Related Ethics Activities Selection Fostering the perception of fairness in the processes of recruitment and hiring of people: Formal hiring procedures that test job competencies Respectful interpersonal treatment of applicants Feedback provided to applicants Training Employees How to recognize ethical dilemmas How to use ethical frameworks to resolve problems How to use HR functions in ethical ways HRM-Related Ethics Activities (contd) Performance Appraisal Appraisals that make it clear that the company adheres to high ethical standards by measuring and rewarding employees who follow those standards. Standards are clearly defined. Employees understand the basis for appraisals. Appraisals are objective. Reward and Disciplinary Systems The organization swiftly and harshly punishes unethical conduct. HRM-Related Ethics Activities (contd) HRs Ethics Compliance Activities Complying with the Sarbanes-Oxley Act of 2002 Requires that CEOs and CFOs of publicly traded companies personally attest to accuracy of their companies financial statements and that their internal controls are adequate. Increased the need for ethics training and verification of training. Firms are using online ethics training programs to comply with the acts requirements. Managing Employee Discipline Clear rules and regulations A system of progressive penalties Fair and Just Discipline Process A formal unbiased appeals process Employee Privacy Employee privacy violations upheld by courts: Intrusion or surveillance Publication of private matters Disclosure of medical records Appropriation of an employees name or likeness Actions triggering privacy violations: Background checks Monitoring off-duty conduct and lifestyle Drug testing Workplace searches Monitoring of workplace Managing Dismissals Dismissal Involuntary termination of an employees employment with the firm. Terminate-at-Will Rule Without a contract, the employee can resign for any reason, at will, and the employer can similarly dismiss the employee for any reason (or no reason), at will. Wrongful Discharge An employee dismissal that does not comply with the law or does not comply with the contractual arrangement stated or implied by the firm via its employment application forms, employee manuals, or other promises. Managing Dismissals (contd) Statutory exceptions Common law exceptions Protections Against Wrongful Discharge Public policy exceptions Grounds for Dismissal Unsatisfactory performance Misconduct Lack of qualifications Changed requirements of (or elimination of) the job Bases for Dismissal Managing Dismissals (contd) Fostering Perceptions of Fairness in Dismissals Provide the employee with full explanations of why and how termination decisions were made. Institute a formal multi-step procedure (including warning) and establish a neutral appeal process. Have the employees direct supervisor inform the employee of the dismissal decision. Security Measures Disable employee passwords and network access. Collect all company property and keys. Escort employee from company property.