Chapter 9 STAFFING AND HUMAN RESOURCE MANAGEMENT Chapter 9 explains the nature of staffing, giving insight into the

major component of human resource management. The view of staffing here includes its strategic and legal aspects, human resource planning, recruitment, selection and placement, orientation, training and development, performance evaluation (appraisal), and compensation. Included also is a glimpse of how labor unions contribute to staffing and human resource management. Two other aspects of staffing, termination and managing ineffective performers, are covered later in Chapter 16. Human resource management is inherently interesting to many students because it relates directly to their experiences in seeking employment. Learning Objectives _______________________________________________________________________ 1. Explain how human resource management is part of business strategy. 2. Describe the components of organizational staffing. 3. Present an overview of recruitment and selection. 4. Present an overview of employee orientation, training, and development. 5. Explain the basics of a performance evaluation system. 6. Summarize the basics of employee compensation. 7. Understand the role of labor unions in human resource management. Chapter Outline and Lecture Notes _______________________________________________________________________ I. HUMAN RESOURCE MANAGEMENT AND BUSINESS STRATEGY The modern role for human resource professionals is that of a partner in helping the organization attain its business strategy. Without effective human resource management, the company cannot accomplish high-level goals such as competing globally, grabbing market share, and being innovative. A specific way HRM contributes to business strategy is by helping to build high-performance work practices. An integration of 92 studies found that organizations can increase their performance 20 percent by implementing highperformance work practices. II. THE STAFFING MODEL Staffing the organization is the heart of human resource management. Staffing follows a logical flow of events (see Exhibit 9-1 in the text): (a) awareness of legal aspects, (b) human resources planning; (c) recruitment; (d) selection, (e) orientation, training, and development, (f) compensation, and (g) performance evaluation. A major strategy of staffing is to retain valuable employees, and any aspect of staffing can contribute to retention. The main reasons for turnover are individual, environmental, and workplace factors. A recent theory of turnover called job embeddedness suggests that a combination of many factors influences whether employees stay with a firm. Among these influences are the job itself and off-the-job factors such as personal and family commitments.

9/Staffing and Human Resource Management A. Legal Aspects of Staffing Federal, state, provincial, and local laws influence every aspect of organizational staffing. Exhibit 9-2 summarizes key legislation that affects staffing in the United States. (See also http://www.eeoc.gov/abouteeo/overview_laws.html ) When a possible legal issue arises, the manager should review the relevant legislation in depth and confer with a company specialist in employment law. Affirmative action programs help implement the spirit and letter of employment discrimination law in the U.S. Affirmative action consists of complying with antidiscrimination law and correcting past discriminatory practices. Employers actively recruit, employ, train, and promote minorities and women who may have been discriminated against previously by the employer. A national debate continues over whether any person in a competitive situation deserves a preference because of race, ethnicity, or sex. Under Title VII, the ADA, and the ADEA, it is illegal to discriminate in any aspect of employment, including: hiring and firing; compensation, assignment or classification of employees; transfer, promotion, layoff, or recall; job advertisements; recruitment; testing; use of company facilities; training and apprenticeship programs; fringe benefits; pay, retirement plans, and disability leave; or other terms and conditions of employment. An example of discrimination is harassment on the basis of race, color, religion, sex, national origin, disability, or age. Although most forms of discrimination may appear clear-cut, a good deal of interpretation is required to decide if a given employee is the subject of discrimination. B. Strategic Human Resource Planning Staffing begins with strategic human resources planning, the process of anticipating and providing for the movement of people into, with, and out of an organization to support the firms business strategy. Planning helps identify the gaps between current employee competencies and behavior and the competencies and behavior needed in the organizations future. The four basic steps in strategic human resource planning are planning for (1) future needs, (2) future turnover, (3) recruitment, selection, and layoffs, and (4) training and development. In step 3 a major choice is between the training and promoting current employees versus hiring from the outside. III. RECRUITMENT Recruitment is the process of attracting job candidates with the right characteristics and skills to fill job openings. The preferred recruiting method is to begin with a large number of possible job candidates and then give serious consideration to a much smaller number. A. Purposes of Recruitment Recruitment searches for a good person-organization fit, and attempts to sell the organization to high-quality prospective candidates.

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9/Staffing and Human Resource Management B. Job Descriptions and Job Specifications The job description explains in detail what the jobholder is supposed to do. A job specification is a statement of the personal characteristics needed to perform the job. Many firms see job descriptions and job specifications decreasing in relevance because some workers are expected to occupy flexible roles. C. Recruiting Sources Recruiting sources can be classified into (1) present employees, (2) referrals by present employees, (3) external sources other than online approaches, and (4) online recruiting including company Web sitesknown as e-recruiting. Company Websites have ascended as recruiting sources, as has creating pages on social networking sites. The data presented in Exhibit 9-3 are instructive, with employee referrals and the Internet being the two major recruiting sources. D. Global Recruiting Multinational businesses must have the capability to connect with other parts of the globe to locate talent anywhere in the world. Company recruiters must meet job specifications calling for multiculturalism (being able to conduct business in other cultures) on top of more traditional skills. Global recruiting for managers can be difficult because candidates must be found who can blend the work practices of the two cultures. IV. SELECTION Selection follows recruitment. Good candidates are the lifeblood of any firm, and selection mistakes can cost the employer three times the workers annual salary. A. Preliminary Screening Interview A brief screening interview helps determine if the candidate is plausible. The screening interview is often conducted over the telephone. Knockout questions are sometimes used for quickly disqualifying candidates. B. Types of Psychological and Personnel Tests Tests remain an important part of selection, and have shown a recent surge in use. 1. Types of Psychological and Personnel Tests The four commonly used types are achievement, aptitude, personality (including emotional intelligence), and honesty and integrity. A major factor measured by integrity tests is conscientiousness. The Big Five Personality Factors presented in Exhibit 9-5 are useful for discussions about job demands. 2. Validity and Equal Employment Opportunity The EEOC insists that selection instruments must be validated, job-related, and not discriminatory toward any group. At their best, batteries of tests make an important contribution to selection and therefore to increasing workforce productivity. The most valid predictors of job success for a variety of general jobs are cognitive intelligence and conscientiousness. C. The Job Interview and Job Simulations Employment interviews are more valid when the interviewer is trained and experienced. Keep in mind the importance of the realistic job preview, a complete disclosure of the potential negative features of a job to a job candidate. Guidelines for 130

9/Staffing and Human Resource Management conducting a productive job interview are presented in Exhibit 9-6. Several of the suggestions reflect a screening approach referred to as behavioral interviewing because the answers to many of the questions reveal actual job behaviors relevant to a given position. Exhibit 9-7, the Job Interviewee Checklist, can be useful for class discussion. An extension of behavioral interviewing is to give the job application a job simulation (work task to perform) to help determine job qualifications. Job simulations are mostly relevant for experienced candidates, whereas many people are hired for positions they have never performed. Applicants tend to regard job simulations to be relevant. D. Reference Checking and Background Investigation A reference check is an inquiry to a second party about a job candidates suitability for employment. The two main areas of inquiry are past job performance and the ability to get along with co-workers. Asking about violent behavior has become more frequent. Former and prospective employers have a qualified privilege to discuss an employees past performance. Job applicants have legal access to written reference unless they sign a waiver. Background investigations are closely related to reference checks, except that they focus on information form sources other than former employees. Credit checks are usually included as part of the checking. Background investigations are useful because so many job candidates present untrue information. An estimated 40 to 70 percent of job applicants enhance their work histories in their rsums and during the interview. E. The Physical Examination and Drug Testing The physical exam gives some indication as to the persons physical ability to handle the requirements of a particular job, and provides a basis for later comparisons. The ADA increases the importance of the physical exam. So long as the candidate can perform the essential aspects of the job, including the employer making reasonable accommodations, the candidate cannot be disqualified. About 60 percent of large companies test all job applicants for illegal drug use, and the number is declining. Testing hair samples is a recent approach to drug testing. Abuse of prescription drugs is also a problem. A concern is that inaccurate drug testing may unfairly deny employment to worthy candidates, yet drug abusers create many problems if hired. F. Cross-Cultural Selection Managers and employment interviewers should familiarize themselves with key facts about the other culture, such as differences among various schools. Many selection principles apply well across cultures, but some do not. A key aspect of cross-cultural selection is choosing workers who will fit well as expatriates. One predictor of success is the desire for an out-of-the country assignment. Matching the persons style to the culture is another key success factor.

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9/Staffing and Human Resource Management V. ORIENTATION, TRAINING, AND DEVELOPMENT Most firms no longer operate under a sink or swim philosophy when it comes to employee learning. A. Employee Orientation An employee orientation program more formally acquaints new employees with the company imparts information about the corporate culture. Orientation also conveys to new employees the specific nature of their job and expectations in terms of performance. A buddy or a mentor might also assist in orientation. Another aspect of orientation is informal socialization in which coworkers introduce new employees to aspects of the organizational culture. B. Training and Development Training is any procedure intended to foster and enhance learning among employees, and is aimed at acquiring job skills. Training is used to develop both hard (technical, scientific, and numerical) sills as well as soft skills (interpersonal skills and attitudes). A substantial amount of skills training in industry is delivered through computers. Elearning is a Web-based form of computer-based training. Much computer-based training includes an interaction between the trainee and the training material. Some training is delivered through MP3 players, enabling workers to receive training at any spare moment, or just in time. Despite the contribution and growth of e-learning, many students, however, need the classroom interaction. Many companies are now taking a balanced approach of classroom training combined with e-learning. Developing interpersonal skills requires face-to-face practice. Many workers lack enough self-discipline and self-motivation to follow through with e-learning. Development is a form of personal improvement generally consisting of enhancing knowledge and skills of a complex and unstructured nature. A new thrust in development is to teach managers to become better life-long learners. Conducting training and development programs begins with determining what types of training are needed. Training and development needs can also be identified for the entire organization, or a large chunk thereof. However, there are also universal training needs relating to such topics as communication, motivation, and decision making. After needs are assessed, they must be carefully matched to training and development programs. Sometimes a program must be tailored to fit company requirements. A current trend is for non-managers to participate in training and development usually reserved for managers and future managers. Informal learning (outside of classrooms) has been elevated in status recently. VI. PERFORMANCE EVALUATION (OR APPRAISAL) A performance evaluation (or appraisal) is a formal system for measuring, evaluating, and reviewing performance. Research indicates that performance has three major components: task performance, citizenship performance, and counterproductive performance. An offshoot of evaluating employees against a performance standard is to 132

9/Staffing and Human Resource Management use forced rankings in which employees are measured against each other. One ranking approach is forcing employees into the categories of Top 20%, Vital 70%, and Bottom 10%. When bottom-group employees are fired, the system is called rank and yank. Forced rankings are highly controversial. The concerns include that managers are forced to rank some good workers as bottom performers, teamwork suffers, and that discrimination occurs. A widely-used performance appraisal is 360-degree feedback, in which a person is evaluated by a sampling of all the people with whom he or she interacts. Self-assessment is also included. The 360-degree survey can also be used to supplement a traditional performance appraisal. However, 360-dgree feedback is used more often for development than appraisal. A. Purposes of Performance Evaluation Performance evaluations serve a number of important administrative and leadership purposes. Administrative purposes include salary administration and documenting poor performance for purposes of dismissal. The leadership purposes of performance appraisal include increasing productivity and helping employees grow and develop. Performance appraisals help measure whether the previous steps in the staffing model have been effective. B. Design of the Performance-Evaluation System Performance-evaluation systems measure traits, behavior, results, or a combination of the three. Traits are the stable aspects of people, closely related to personality. Behavior, or activity, is what people do on the job. Results are what people accomplish, or the objectives they attain. Research strongly suggests that employees are the most satisfied with performance appraisal when they participate in the process. Many workers dislike having their performance evaluated, and many managers dislike evaluating workers. One alternative to performance appraisals is for managers to have face-to-face conversations with workers about their performance on a regular basis. VII. COMPENSATION Compensation, the combination of pay and benefits, is closely related to staffing. A. Types of Pay Wages and salary are the most common forms of pay. Wages are hourly pay, whereas salary is an annual amount of money paid to a worker. A bonus serves as a reward for good performance. To determine how much a given job should receive in wages or pay, many companies perform a job evaluation, the process of rank-ordering job based on job content. The major thrust in compensation for workers at all levels is variable pay, in which the amount of money a worker receives is partially dependent on his or her performance. Another approach to variable pay, stack ranking, requires managers to 133

9/Staffing and Human Resource Management rank each employee within each unit, and distribute raises and bonuses accordingly. Yahoo uses stack ranking to help retain top performers. B. Employee Benefits An employee benefit is any noncash benefit given to workers as a condition of their employment. The benefit package averages about 35 percent of salaries. A substantial number of firms offer a flexible benefit package in which employees select a group of benefits tailored to their preferences. Exhibit 9-9 presents a representative list of employee benefits, organized by type and frequency. Despite the importance of benefits, many companies in recent yeas have either decreased or required employees to pay a larger share, particularly with medical benefits. Health-care insurance and pensions have been looked upon carefully by management as a detriment to competing successfully against foreign competitors. To reduce costs, many companies have shifted workers to a consumer driven health plan in which workers assume a much large deductible. Some companies have eliminated company pension plans by declaring bankruptcy, and then forcing the federal government to pay partial benefits through the Pension Benefit Guaranty Corp. Cash balance plans are another method for reducing pension expenses. VIII. THE ROLE OF LABOR UNIONS IN HUMAN RESOURCE MANAGEMENT When a firm is unionized, the labor union influences almost all human resources programs and practices. A major purpose of a labor union is to attain fair treatment for workers in such areas as compensation including health and retirement benefits, safe working conditions, working hours, job security, and work-life programs. In the U. S., about 12.5% of wage and salary workers are union members; 36.5% for government workers, and 7.8% for private industry. Because the manufacturing sector has been hardest hit by foreign competition, union leaders are often unable to push for improved compensation. Unions face the threat of work being sent offshore or a company declaring bankruptcy. Many instances exist of healthy partnerships between management and labor unions in which both sides gain advantage. The American Rights to Work Group notes that the companies on its list of partners excel in human resource management practices such as creating new jobs, and protecting workers safety and health. Costco and HarleyDavidson make the list. Comments on End-of-Chapter Questions ___________________________________________________________________________ 1. What is your opinion about paying human resource managers as much as managers in other functions, such as marketing, operations, and finance? The positive argument for paying human resource managers as much as their counterparts in other business functions is that human resources contributes mightily to the bottom line in such activities as recruiting the right people to the organization, organizing training programs that boost productivity, and efficiently managing compensation. Many more human resource managers earn hefty executive incomes, 134

9/Staffing and Human Resource Management including Dennis Donovan, the former executive vice president of HR at Home Depot who left after CEO Robert Nardelli was ousted. One counterargument is that some traditional managers wonder what HR managers do aside from shuffling papers. Also, supply and demand rules. If HR managers are willing to work for less than their counterparts in other functions, why bother paying them equivalent wages? 2. If you were applying for a position in your chosen field, what would be your reaction to being fingerprinted as part of the screening process? Many people would regard being finger printed as part of applicant screening to be an invasion of privacy. Part of the problem is that finger printing is perceived by many as a process mostly reserved for criminals and suspected criminals. The opposite view is that companies must protect themselves from hiring people with criminal records and potential terrorists, so finger printing is necessary. Some people would also argue that because they have nothing to hide, finger printing as part of the application process would not be bothersome. 3. Why should a manager who does not work in the human resources department be familiar with the various aspects of staffing? Staffing is a key part of virtually every manager's responsibilities. Human resources specialists provide professional assistance, yet it remains the manager's responsibility to carry out such functions as making hiring decisions and evaluating performance. 4. Noted psychologist David McClelland once said, They say you can teach a squirrel to fly. But its easier to hire the eagle. What did McClelland mean by his metaphor? Assuming the statement is true, what implication does the statement have for staffing and human resource management? McClelland meant that hiring people with the right aptitude and skills is more effective than starting from scratch in attempting to train an employee. The implication is that selecting the right people for a given job remains an effective human resource management strategy. 5. What have you learned about staffing that you might apply to your own job search? The astute student will find some information of value here. A small fact such as the concern some employers have about the abuse of prescription drugs could help a person prepare for the physical exam. Some readers might have such a critical job skill that they have no concern about a job search. However, for most people understanding the staffing process will help them find a better job. 6. What would be the advantages and disadvantages to the organization and individuals if a company abolished performance evaluations? The advantage to a company of abolishing the performance appraisal system is that negative attitudes about the system, and conflict over the ratings, would subside. Employees who believed that pay increases should be based solely on seniority 135

9/Staffing and Human Resource Management would have their day. The disadvantages, however, would be substantial. Less information would be available for making decisions about pay, transfers, promotions, and downsizing. Companies would lack vital evidence they need to justify firing workers in case they faced a lawsuit. Many high-performing employees would be discouraged because they would lack formal recognition for their accomplishments. Also, anecdotes and hearsay would replace documentation for evaluating employees. 7. What is your opinion of the ethics of American business firms reducing health care benefits and pensions of retirees to help compete against foreign manufacturers? Here would be a good opportunity to run this proposition through an ethical screen. An unethical feature of reducing health and pension benefits is that the companies involved are reneging on promises made in the past, often by previous management. The people will get hurt the most are retirees who are now just squeezing by financially. The positive argument for the ethics is that by lowering operating costs, the American business firms in questions can be more competitive thereby saving many jobs.

Comments on Skill-Building Exercises _______________________________________________________________________ Presenting Yourself in 30 SecondsEnd of Chapter We have found this exercise to be extremely valuable for career development. Armed with a 30second self-promotion speech, the student is prepared for job interviews, job fairs, and chance encounters with key people. I enjoy immensely watching the attentive body language of students watching other students give their 30-second presentations. The Selection InterviewEnd of Chapter This activity is usually well received. It illustrates how difficult it is to conduct a good interview. A typical problem is that the interviewer talks more than the intervieweea common shortcoming of neophyte interviewers. Recruiting on the NetInternet A key feature of this exercise is that it duplicates exactly what managers and specialists do to recruit employees. Students are likely to be fascinated with observing how others present themselves on a rsum. One frustration built into this exercise, is that some recruiting approaches require that the company pay a fee before gaining access to the rsum bank. Answers to Case Questions _______________________________________________________________________ Can Boomer Road Warriors Really Solve Our Problems? 136

9/Staffing and Human Resource Management This case illustrates how fresh and imaginative thinking may be called for in recruiting workers in strong demand but short supply. 1. What advice would you offer the trucking company in question about recruiting retired baby boomer couples as drivers? The trucking company in question should move forward with hiring trucker couples, but not be blinded by the allure of the idea. Even though trucking companies are in dire need of truckers, the couples should still be screened for such factors as physical capability and conscientiousness. 2. Would the trucking company in question really be hiring two people to do the job of one trucker? The company is probably not paying as much as it would be for two full-time truckers because the pay offered for a couple is usually less than the compensation for two truckers. Another consideration is that a team can keep the truck on the road for longer stretches than an individual trucker might because of regulations about how many hours in one day a trucker can be at the wheel. However, if the couple takes many recreational stops, the number of hours the truck remains on the road would not exceed that accomplished by an individual driver. 3. What other out-of-the-ordinary recruiting source for truckers could you offer this company, as well as other truckers? Hispanics were mentioned in the case as a promising source of candidates for trucker training and hiring. Within the United States, it might be effective to recruit new truckers in areas of high unemployment created by downsizing in basic industries. Many companies in western states, for example, recruit workers in Michigan because of the auto industry cutbacks. Recruiting potential truckers from countries with job shortages is also potentially fruitful, providing that work permits could be obtained. 4. What advice can you offer the trucking company in question to avoid practicing job discrimination against young applicants for their trucking jobs? The company should maintain equal employment opportunity, and certainly not discriminate against qualified younger candidates for trucker positions. Because so few young people are applying to work as truckers, the company would most likely not be faced with the prospects of turning down a young trucker just to hire an older person or couple.

The Scrutinized Job Candidates This case illustrates that all behavior exhibited by a job candidate might be interpreted as an indicator of how the person will behave on the job. So the job candidate has to avoid behavior that is likely to be interpreted as rude or insensitive. 137

9/Staffing and Human Resource Management 1. How fair is it for the recruiters described here to reject candidates because they display poor manners, such as receiving e-mail messages during the job interviews or while talking to the human resources representative? The candidates are being fair because people who display poor manners during job interviews are most likely even ruder on the job. The underlying principle is that job candidates attempt to be at their best during the recruiting and interviewing process. Consulting your BlackBerry during an interview reflects high insensitivity, and is most likely not a random event. 2. What significance is it if the candidate who is waiting reads the National Enquirer instead of the company annual report? Reading the National Enquirer is usually a form of recreation because the newspaper focuses on gossip and scandal. So the sensible candidate would size up the situation, and at leas fake more interest in reading the annual report than the National Enquirer. Even reading The Wall Street Journal suggests a little insensitivity. The candidate should be focused on absorbing information about the company during the time surrounding the interview. 3. How valid is the management recruiters belief that the way a person drives is related to job performance in aspects of a job that do not involve driving? We could probably use some research to find a link between driving and job behavior. However, gross errors in judgment, such as speeding or blaming another drive for an accident, might bring into question the drivers maturity and judgment. 4. What lessons do these recruiters have for graduates seeking entry-level technical and professional jobs? The lessons here include (a) all behavior displayed during and around a job interview is subject to interpretation, (b) performing well in a job interview includes displaying good manners, and (c) any minor miscue might be interpreted negatively so be at your best.

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