Chapter 11

Human Resource Management: Finding and Keeping the Best Employees

McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Eleven

LEARNING GOALS

1. Explain the importance of human resource management, and describe current issues in managing human resources. 2. Illustrate the effects of legislation on human resource management.
3. Summarize the five steps in human resource planning. 4. Describe methods that companies use to recruit new employees, and explain some of the issues that make recruitment challenging.
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Chapter Eleven

LEARNING GOALS

5. Outline the six steps in selecting employees. 6. Illustrate employee training and development methods. 7. Trace the six steps in appraising employee performance. 8. Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits.
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Chapter Eleven

LEARNING GOALS

9. Demonstrate how managers use scheduling plans to adapt to workers needs. 10. Describe how employees can move through a company: promotion, reassignment, termination, and retirement.

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Profile

MARK PARKER
Nike

Started as shoe designer, rose to CEO in 2006. The 7,000 workers at Nikes headquarters have access to two gyms, an Olympic-size pool, five restaurants, and have free on-site childcare. Named one of the 100 Best Places to Work in 2006, 2007 and 2008.
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Chapter Eleven

NAME that COMPANY

This company is one of the largest U.S. steel producers. It pays its teams bonuses that are calculated on qualitytons of steel that go out the door with no defects. There are no limits on bonuses a team can earn; they usually average around $20,000 per employee each year.
Name that company!

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Working with People is Just the Beginning

LG1

HUMAN RESOURCE MANAGEMENT

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Working with People is Just the Beginning

LG1

HUMAN RESOURCE MANAGEMENT (HRM)

Human Resource Management -- The process

of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational goals.

HRMs role has grown because of:

1. Increased recognition of employees as a resource. 2. Changes in law that rewrote old workplace practices.
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Working with People is Just the Beginning

LG1

UNCOVERING the SECRETS of HRM

Things Your HR Manager Doesnt Tell You

Were short-staffed and under pressure too. Were not always going to be able to help in the way you hope.

We can help you move up the career ladder.

What you post on Facebook can get you fired.

Source: Smart Money, May 2010.

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Developing the Firms Ultimate Resource LG1

DEVELOPING the FIRMS ULTIMATE RESOURCE

Service and high-tech manufacturing requires employees with highly technical job skills. Such workers are scarce, making recruiting and retention more important and more difficult.

The human resource job is now the job of all managers in an organization.
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The Human Resource Challenge

LG1

CHALLENGES in FINDING HIGH-LEVEL WORKERS

A shortage of trained workers in key areas Worker shortage in skilled trades An increasing number of baby boomers who delay retirement A declining economy with fewer full-time jobs Expanding global markets with low-wage workers Increasing benefit demands and benefit costs A decreased sense of employee loyalty
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Laws Affecting Human Resource Management

LG2

CIVIL RIGHTS ACT of 1964

Title VII prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions or privileges of employment based on:
Race Religion Creed Sex Age National Origin

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Laws Affecting Human Resource Management

LG2

1972 EQUAL EMPLOYMENT OPPORTUNITY ACT (EEOA)

Strengthened the Equal Employment Opportunity Commission (EEOC). Gave EEOC the right to issue workplace guidelines for acceptable employer conduct. EEOC could mandate specific recordkeeping procedures.

EEOC was vested with the power of enforcement.

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Laws Affecting Human Resource Management

LG2

CONTROVERSIAL PROCEDURES of the EEOC

Affirmative Action -- Policy designed to right past wrongs by increasing opportunities for minorities
and women.

Reverse Discrimination -- Discriminating against

members of a dominant or majority group (e.g. whites or males) usually as a result of policies designed to correct previous discrimination against minority or disadvantaged groups.

This policy has been at the center of many debates and lawsuits.
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Laws Affecting Human Resource Management

LG2

CIVIL RIGHTS ACT of 1991 and OFCCP

Civil Rights Act of 1991

- Amended Title VII and gave victims of discrimination the right to a jury trial and possible damages.

Office of Federal Contract Compliance Programs (OFCCP)

- Ensures that employers doing business with the federal government comply with the nondiscrimination and affirmative action laws.

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Laws Protecting Employees with Disabilities and Older Employees

LG2

LAWS PROTECTING EMPLOYEES with DISABILITIES

Americans with Disabilities Act of 1990 (ADA)

- Requires employers to give applicants with physical or mental disabilities the same consideration for employment as people without disabilities.

- Passage in 2008 of Americans with Disabilities Amendments Act expanded protection.

- 2011 saw new regulations that widen the range of disabilities covered by the ADA and shift the burden of proof of disability from employees to employers.
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Laws Protecting Employees with Disabilities and Older Employees

LG2

AGE DISCRIMINATION in EMPLOYMENT ACT (ADEA)

Age Discrimination in Employment Act (ADEA)

- Protects workers 40 and over from employment and workplace discrimination in hiring, firing, promotion, layoff, compensation, benefits, job assignments and training.

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Effects of Legislation
LG2

MINDING the LAW in HRM

Employers must know the law and act accordingly.

Legislation affects all areas of HRM. Court cases highlight that sometimes its proper to go beyond providing equal rights. Changes in law and legislation occur regularly.
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The MILLION WOMAN SUIT AGAINST WALMART

(Legal Briefcase)

Over 1 million women filed suit against Walmart for gender dominance in the stores management ranks. The case charged that not only did the company leapfrog over women for leadership roles, it engaged in pay inequality and harassment. The Supreme Court dismissed the class-action suit.
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Progress Assessment

PROGRESS ASSESSMENT

Whats human resource management? What did Title VII of the Civil Rights Act of 1964 achieve? Whats the EEOC and what was the intention of affirmative action?

What does accommodations mean in the Americans with Disabilities Act of 1990?
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Determining a Firms Human Resource Needs

LG3

HUMAN RESOURCE PLANNING PROCESS

1) Preparing a human resource inventory of employees. 2) Preparing a job analysis.

3) Assessing future human resource demand.

4) Assessing future labor supply. 5) Establishing a strategic plan.
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Determining a Firms Human Resource Needs

LG3

WHATS a JOB ANALYSIS?

Job Analysis A study of what employees do who

hold various job titles.

Job Description A summary of the objectives of

the job, the type of work, the responsibilities and duties, working conditions and relationship to other jobs.

Job Specifications -- A summary of the minimum

qualifications needed to do a particular job.
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Recruiting Employees from a Diverse Population

LG4

RECRUITING EMPLOYEES

Recruitment -- The set of activities for obtaining the

right number of qualified people at the right time.

Human resource managers use both internal and external sources to recruit employees.

Small businesses often make use of web sources like CareerBuilder and Monster to recruit employees.

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ITS NOT EASY BEING SMALL

(Spotlight on Small Business)

To survive, small businesses must recruit and retain qualified workers. Unfortunately, they lack the resources of larger companies to compete for employees. Small businesses need innovations like:
- Letting staff help recruit and select candidates. - Test-drive an employee. - Seek out publicity through local media.
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Recruiting Employees from a Diverse Population

LG4

EMPLOYEE SOURCES

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Selecting Employees Who Will be Productive

LG5

SELECTION

Selection -- The
process of gathering information and deciding who should be hired, under legal guidelines, to serve the best interest of the individual and the organization.

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Selecting Employees Who Will be Productive

LG5

STEPS in the SELECTION PROCESS

1. Obtaining complete application forms 2. Conducting initial and follow-up interviews 3. Giving employment tests 4. Conducting background investigations 5. Obtaining results from physical exams 6. Establishing trial (probationary) work periods
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Selecting Employees Who Will be Productive

LG5

OOPS!
Areas Where Job Applicants Make Mistakes

Source: USA Today, www.usatoday.com.

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Hiring Contingent Workers

LG5

HIRING CONTINGENT WORKERS

Contingent Workers -- Include part-time and

temporary workers, seasonal workers, independent contractors, interns and co-op students.

There are about 5.7 million contingent workers in the U.S. Majority of contingent workers are under 25.
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Hiring Contingent Workers

LG5

WHY HIRE CONTINGENT WORKERS?

Companies hire contingent workers:

- When full-time workers are on leave

- During periods of peak demand

- In uncertain economic times - To save on employee benefits

- To screen candidates for future employment

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Hiring Contingent Workers

LG5

STUDENTS and the CONTINGENT WORKFORCE

With temporary staffing agencies, companies have easier access to screened workers.
Worker information is entered into their databases. When students come back to town, they can call the agency and ask them to put their names into the system for work.
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ARE UNPAID INTERNS TOO INTERRED?

(Making Ethical Decisions)

With few entry-level positions available, interns can end up in an unpaid position for as long as six months with no chance of advancement. Some businesses give interns lots of responsibility; a Toronto paper fired all paid staff and replaced them with unpaid interns. Is it ethical for companies to use unpaid interns if they know they dont have jobs to offer or if the unpaid internships replace paid jobs?
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Progress Assessment

PROGRESS ASSESSMENT

What are the five steps in human resource planning? What factors make it difficult to recruit qualified employees? What are the six steps in the selection process?

Who is considered a contingent worker, and why do company hire such workers?

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Training and Developing Employees for Optimum Performance

LG6

TRAINING and DEVELOPING EMPLOYEES

Training and Development -- All attempts to improve productivity by increasing an employees

ability to perform.

Training focuses on short-term skills. Development focuses on long-term abilities.

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Training and Developing Employees for Optimum Performance

LG6

THREE STEPS of TRAINING and DEVELOPMENT

1. Assessing organization needs and employee skills to develop appropriate training needs. 2. Designing training activities to meet identified needs. 3. Evaluating the trainings effectiveness.

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Training and Developing Employees for Optimum Performance

LG6

MOST COMMONLY USED TRAINING and DEVELOPMENT ACTIVITIES

Orientation On-the-Job Training Apprenticeships Off-the-Job Training Online Training Vestibule Training Job Simulation
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Management Development
LG6

DEVELOPING EFFECTIVE MANAGERS

Management Development -- The process of

training and educating employees to become good managers and monitoring the progress of their skills over time.

Management training includes:

- On-the-job coaching - Understudy positions - Job rotation - Off-the-job courses and training
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Management Development
LG6

WHY GOOD EMPLOYEES QUIT

Source: Robert Half International

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Networking

LG6

USING NETWORKS and MENTORING

Networking -- Establishing and maintaining

contacts with key managers in and out of the organization and using those contacts to develop relationships.

Mentors -- Managers who supervise, coach and

guide selected lower-level employees by acting as corporate sponsors.

Networking and mentoring go beyond the work environment.

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Appraising Employee Performance to Get Optimum Results

LG7

APPRAISING PERFORMANCE on the JOB

Performance Appraisal -- An evaluation that

measures employee performance against established standards in order to make decisions about promotions, compensation, training or termination.

A 360-degree review gives managers opinions from people at different levels to get a more accurate idea of the workers ability.
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Appraising Employee Performance to Get Optimum Results

LG7

SIX STEPS of PERFORMANCE APPRAISALS

1. Establishing performance standards that are understandable, measurable and reasonable. 2. Clearly communicating those standards.

3. Evaluating performance against the standards.

4. Discussing the results with employees.

5. Taking corrective action.

6. Using the results to make decisions.
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Appraising Employee Performance to Get Optimum Results

LG7

MAJOR USES of PERFORMANCE APPRAISALS

Identify training needs

Use as a promotion tool

Recognize workers achievements Evaluate the firms hiring process Judge the effectiveness of the firms orientation process Use as a basis for possible termination of a worker
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Appraising Employee Performance to Get Optimum Results

LG7

PERFORMANCE APPRAISAL MISTAKES

Common Problems Made While Reviewing Employees

Contrast Effect - Comparing one employee to

another.

Halo/Horn Effect - Allowing performances in specific

areas to unfairly influence overall performance evaluation.

Similar-to-Me Effect - Generosity to those you feel

are more like you.

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Progress Assessment

PROGRESS ASSESSMENT

Name and describe four training techniques.

Whats the primary purpose of a performance appraisal? What are the six steps in a performance appraisal?

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Compensating Employees: Attracting and Keeping the Best

COMPENSATION PROGRAMS

LG8

A managed and competitive compensation program helps:

- Attract the kinds of employees the business needs. - Build employee incentive to work efficiently and productively. - Keep valued employees from going to competitors or starting their own firm.

- Maintain a competitive market position by keeping costs low due to high productivity from a satisfied workforce.
- Provide employee financial security through wages and fringe benefits.
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Pay Systems

TYPES of PAY SYSTEMS

LG8

Salary
Hourly Wage/Day Work Piecework System Commission Plans Bonus Plans

Profit Sharing Plans

Gain-Sharing Plans Stock Options
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Compensating Teams
LG8

COMPENSATING TEAMS

Team-based pay programs are more challenging than individual pay systems. The two most common methods for teams involve:
- Skill-Based: Pay is increased as skill increases.
(Eastman Chemical uses this system.)

- Gain-Sharing: Pay is increased as performance increases. (Nucor Steel uses this system.)

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Fringe Benefits

FRINGE BENEFITS on the JOB

LG8

Fringe Benefits -- Sick leave, vacation pay,

pension and health plans that provide additional compensation to employees beyond base wages.

In 1929, fringe benefits accounted for less than 2% of payroll cost. Today its about 30%. Healthcare has been the most significant increase in fringe benefit cost.

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Fringe Benefits

LG8

HEALTHCARE, a PERK NOT to be TAKEN LIGHTLY

Compare all the costs, not just premiums. Take part in wellness programs. The average wellness bonus is $386! Order generic drugs when you need prescriptions filled.
Source: Kiplingers Personal Finance, November 2010.

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Fringe Benefits

LG8

WHO PAYS for EMPLOYEE BENEFITS?

74% of full-time workers have employee-provided retirement plans. 39% of part-time workers have employee-provided retirement plans.
71% of workers have medical care benefits.
Source: Entrepreneur, May 2011.

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Fringe Benefits

LG8

The RANGE of FRINGE BENEFITS

Fringe benefits include incentives like:

- Company cars - Country club memberships

- Recreation facilities
- Special home mortgage rates - Paid and unpaid sabbaticals

- Day-care and elder care services

- Dental and eye care - Legal counseling - Short or compressed work weeks
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Fringe Benefits

LG8

SPECIAL PERKS at DREAMWORKS

Free DVDs and screenings of current films. Free breakfast and lunch plus dinner when working late. Free snack rooms on every floor. Profit sharing. Ping-Pong and poker tournaments during work hours.
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Fringe Benefits

LG8

CAFETERIA-STYLE and SOFT BENEFITS

Cafeteria-Style Fringe Benefits -- Allow

employees to choose the benefits they want (up to a certain dollar amount).

Soft Benefits include:

- Onsite haircuts and shoe repair - Concierge services

- Free meals at work

- Doggie daycare - Onsite farmers markets
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Fringe Benefits

LETS GO to the BEACH!

Average Vacation Days by Country

LG8

Source: Reuters, June 24, 2010.

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WORKING WORLDWIDE
(Reaching Beyond Our Borders)

Managers need to understand the business needs of each country they operate in.
- Compensation: Conversion to foreign currencies and special allowances often are needed.

- Health and Pension Standards: Benefits are different country-by-country.

- Paid Time Off: Vacation time, sick and personal leave vary. - Taxation: Tax policies vary. - Communication: Employees can feel disconnected in other countries.
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Flextime Plans

FLEXIBLE SCHEDULING PLANS

LG9

Flextime Plan -- Gives employees some freedom to

choose which hours to work as long as they work the required number of hours or complete their tasks.

Compressed Work Week -- Employees work the

full number of work hours, but in fewer than the standard number of days.

Job Sharing -- Lets two or more part-time

employees share on a full-time job.
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Flextime Plans

USING FLEXTIME PLANS

LG9

Most flextime plans require Core Time -- When all

employees are expected to be at their job stations.

Flextime is difficult to incorporate into shift work and managers have to work longer hours.
Communication among employees can also be difficult under flextime and managers have to be alert to any system abuses.

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Flextime Plans

A FLEXTIME CHART

LG9

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Flextime Plans

COMPRESSED WORK WEEKS

LG9

Employees enjoy long weekends after working long days. Productivity is a concern.

Nurses and firefighters often work compressed work weeks.

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Home-Based Work
LG9

HOME-BASED WORK

About 10 million Americans telecommute at least several days a month. 12% of U.S. businesses use some home-based work.

Bank of America has My Work that saves an estimated $5,500 per enrolled employee every year.
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Home-Based Work
LG9

VIRTUALLY THERE
Tools to Help You Work From Home

Communication:
- Google Apps - Skype - Yammer

Collaboration:
- Google Docs - GoToMeeting - Dropbox

Source: Entrepreneur, January 2011.

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Home-Based Work
LG9

GOING NOWHERE FAST

Worst Commutes in the World

Source: Bloomberg Businessweek, December 20, 2010.

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Job Sharing Plans

LG9

JOB SHARING BENEFITS

Provides employment opportunities for many people who cannot work full time.

Workers tend to be enthusiastic and productive.

Absenteeism and tardiness are reduced.

Employers can schedule part-time workers in peak demand periods.

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Moving Employees Up, Over and Out

LG10

MOVING EMPLOYEES

Employees are promoted or reassigned.

Employees are terminated due to performance or economic situations. Employees retire.

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Terminating Employees
LG10

TERMINATING EMPLOYEES

As the economic crisis grew, more and more employers have had to lay off employees. Even when the economy is booming, employers are hesitant to hire full-time workers because of the cost of termination. Firing employees is more difficult for employers because of laws preventing termination for certain acts.
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Progress Assessment

PROGRESS ASSESSMENT

Name and describe five alternative compensation techniques.

What advantages do compensation plans such as profit sharing offer an organization? What are the benefits and challenges of flextime? Telecommuting? Job sharing?

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