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Human Resource Management: Finding and Keeping the Best Employees

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1 Human Resource Management: Finding and Keeping the Best Employees
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.

2 LEARNING GOALS Chapter Eleven Explain the importance of human resource management, and describe current issues in managing human resources. Illustrate the effects of legislation on human resource management. Summarize the five steps in human resource planning. Describe methods that companies use to recruit new employees, and explain some of the issues that make recruitment challenging. 11-2

3 LEARNING GOALS Outline the six steps in selecting employees.
Chapter Eleven Outline the six steps in selecting employees. Illustrate employee training and development methods. Trace the six steps in appraising employee performance. Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. 11-3

4 LEARNING GOALS Chapter Eleven Demonstrate how managers use scheduling plans to adapt to workers’ needs. Describe how employees can move through a company: promotion, reassignment, termination, and retirement. 11-4

5 MARK PARKER Nike Started as shoe designer, rose to CEO in 2006.
Profile Started as shoe designer, rose to CEO in 2006. The 7,000 workers at Nike’s 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, and 2008. 11-5

6 NAME that COMPANY Chapter Eleven This company is one of the largest U.S. steel producers. It pays its teams bonuses that are calculated on quality—tons 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! Company: Nucor Steel 11-6

7 HUMAN RESOURCE MANAGEMENT
Working with People is Just the Beginning LG1 See Learning Goal 1: Explain the importance of human resource management, and describe current issues in managing human resources. Human resource management is more than hiring employees. It involves a multitude of tasks and responsibilities. This slide gives some insight into the various roles the HRM department has now assumed. Business leaders in many companies now understand the effect management of human capital can have in creating a competitive advantage in the marketplace. 11-7

8 HUMAN RESOURCE MANAGEMENT (HRM)
Working with People is Just the Beginning LG1 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. HRM’s role has grown because of: Increased recognition of employees as a resource. Changes in law that rewrote old workplace practices. See Learning Goal 1: Explain the importance of human resource management, and describe current issues in managing human resources. 11-8

9 UNCOVERING the SECRETS of HRM Things Your HR Manager Doesn’t Tell You
Working with People is Just the Beginning UNCOVERING the SECRETS of HRM Things Your HR Manager Doesn’t Tell You LG1 We’re short-staffed and under pressure too. We’re 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. See Learning Goal 1: Explain the importance of human resource management, and describe current issues in managing human resources. Uncovering the Secrets of HRM This slide shows that the HR department can help or hurt your career. Some folks will approach HR with every little problem they encounter. However, with the decline in employment, HR departments are often under pressure to get more pressing things taken care of. If you want to succeed in a company, make sure the HR staff knows you and likes you. They can help you move up. Click the link on the slide and surf through various Facebook posts that have gotten people fired. This will help promote class discussion. Ask students: Do you think the terminations described in the stories link on the slide were justified? Source: Smart Money, May 2010. 11-9

10 DEVELOPING the FIRM’S ULTIMATE RESOURCE
LG1 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. See Learning Goal 1: Explain the importance of human resource management, and describe current issues in managing human resources. 11-10

11 CHALLENGES in FINDING HIGH-LEVEL WORKERS
The Human Resource Challenge CHALLENGES in FINDING HIGH-LEVEL WORKERS LG1 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 See Learning Goal 1: Explain the importance of human resource management, and describe current issues in managing human resources. Demographic changes are creating a challenging environment for HR managers, requiring companies to come up with creative ways to attract, develop and retain employees. 11-11

12 CIVIL RIGHTS ACT of 1964 Laws Affecting Human Resource Management LG2 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 See Learning Goal 2: Illustrate the effect of legislation on human resource management. The Civil Rights Act of 1964 was a significant piece of legislation and directly brought the federal government into human resource management. 11-12

13 1972 EQUAL EMPLOYMENT OPPORTUNITY ACT (EEOA)
Laws Affecting Human Resource Management 1972 EQUAL EMPLOYMENT OPPORTUNITY ACT (EEOA) LG2 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. See Learning Goal 2: Illustrate the effect of legislation on human resource management. 11-13

14 CONTROVERSIAL PROCEDURES of the EEOC
Laws Affecting Human Resource Management CONTROVERSIAL PROCEDURES of the EEOC LG2 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. See Learning Goal 2: Illustrate the effect of legislation on human resource management. Ask the students: Did Affirmative Action create reverse discrimination against whites and males by unfairly giving preference to females and minorities? 11-14

15 CIVIL RIGHTS ACT of 1991 and OFCCP
Laws Affecting Human Resource Management CIVIL RIGHTS ACT of and OFCCP LG2 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. See Learning Goal 2: Illustrate the effect of legislation on human resource management. 11-15

16 LAWS PROTECTING EMPLOYEES with DISABILITIES
Laws Protecting Employees with Disabilities and Older Employees LAWS PROTECTING EMPLOYEES with DISABILITIES LG2 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. See Learning Goal 2: Illustrate the effect of legislation on human resource management. 11-16

17 AGE DISCRIMINATION in EMPLOYMENT ACT (ADEA)
Laws Protecting Employees with Disabilities and Older Employees AGE DISCRIMINATION in EMPLOYMENT ACT (ADEA) LG2 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. See Learning Goal 2: Illustrate the effect of legislation on human resource management. 11-17

18 MINDING the LAW in HRM Effects of Legislation LG2 Employers must know the law and act accordingly. Legislation affects all areas of HRM. Court cases highlight that sometimes it’s proper to go beyond providing equal rights. Changes in law and legislation occur regularly. See Learning Goal 2: Illustrate the effect of legislation on human resource management. 11-18

19 The MILLION WOMAN SUIT AGAINST WALMART (Legal Briefcase)
Over 1 million women filed suit against Walmart for gender dominance in the store’s 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. See Learning Goal 2: Illustrate the effect of legislation on human resource management. Although the Supreme Court ruled in favor of Walmart, the court did not decide whether Walmart had, in fact, discriminated against the women, only that they could not proceed as a class. 11-19

20 PROGRESS ASSESSMENT What’s human resource management?
What did Title VII of the Civil Rights Act of achieve? What’s the EEOC and what was the intention of affirmative action? What does accommodations mean in the Americans with Disabilities Act of 1990? Human resource management is the process of determining the needs of the organization and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals. Title VII prohibits discrimination in hiring, firing, compensating, apprenticeships, training, terms, conditions, or privileges of employment based on race, religion, creed, sex, or national origin. At a later date age discrimination was added to the act. The Equal Employment Opportunity Commission was created by the Civil Rights Act. The EEOC was permitted to issue guidelines for acceptable employer conduct in administering equal employment opportunity. Affirmative action is the most controversial policy of the EEOC and was designed to “right past wrongs” by increasing opportunities for minorities and women. Employers are required to make “reasonable accommodations” for employees with disabilities, such as modifying equipment or widening doorways. 11-20

21 HUMAN RESOURCE PLANNING PROCESS
Determining a Firm’s Human Resource Needs LG3 Preparing a human resource inventory of employees. Preparing a job analysis. Assessing future human resource demand. Assessing future labor supply. Establishing a strategic plan. See Learning Goal 3: Summarize the five steps in human resource planning. 11-21

22 WHAT’S a JOB ANALYSIS? Determining a Firm’s Human Resource Needs LG3 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. See Learning Goal 3: Summarize the five steps in human resource planning. 11-22

23 RECRUITING EMPLOYEES Recruiting Employees from a Diverse Population LG4 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. See Learning Goal 4: Describe methods that companies use to recruit new employees, and explain some of the issues that make recruitment challenging. 11-23

24 IT’S 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. See Learning Goal 4: Describe methods that companies use to recruit new employees, and explain some of the issues that make recruitment challenging. 11-24

25 EMPLOYEE SOURCES Recruiting Employees from a Diverse Population LG4
See Learning Goal 4: Describe methods that companies use to recruit new employees, and explain some of the issues that make recruitment challenging. Job candidates can come from internal and external sources. In order to attract qualified employees from external sources, many employers offer referral bonuses to employees who refer a new employee to the company. 11-25

26 SELECTION Selecting Employees Who Will be Productive LG5 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. See Learning Goal 4: Describe methods that companies use to recruit new employees, and explain some of the issues that make recruitment challenging. 11-26

27 STEPS in the SELECTION PROCESS
Selecting Employees Who Will be Productive STEPS in the SELECTION PROCESS LG5 Obtaining complete application forms Conducting initial and follow-up interviews Giving employment tests Conducting background investigations Obtaining results from physical exams Establishing trial (probationary) work periods See Learning Goal 5: Outline the six steps in selecting employees. 11-27

28 OOPS! Areas Where Job Applicants Make Mistakes
Selecting Employees Who Will be Productive OOPS! Areas Where Job Applicants Make Mistakes LG5 See Learning Goal 5: Outline the six steps in selecting employees. OOPs! Applicants’ Mistakes This slide presents the job application areas where the applicants make the most mistakes. The results are based on the survey of over 1,400 CFOs of U.S. companies with 20 or more employees. The top two areas where applicants make the most mistakes are interviews and resumes. Ask the students: What are your experiences with interviews or resume errors? How many of you follow up after an interview? Source: USA Today, 11-28

29 HIRING CONTINGENT WORKERS
LG5 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. See Learning Goal 5: Outline the six steps in selecting employees. 11-29

30 WHY HIRE CONTINGENT WORKERS?
Hiring Contingent Workers WHY HIRE CONTINGENT WORKERS? LG5 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 See Learning Goal 5: Outline the six steps in selecting employees. 11-30

31 STUDENTS and the CONTINGENT WORKFORCE
Hiring Contingent Workers STUDENTS and the CONTINGENT WORKFORCE LG5 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. See Learning Goal 5: Outline the six steps in selecting employees. 11-31

32 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 don’t have jobs to offer or if the unpaid internships replace paid jobs? See Learning Goal 5: Outline the six steps in selecting employees. 11-32

33 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? The five steps in human resource planning are: (1) preparing a human resource inventory of the organization’s employees, (2) preparing a job analysis, (3) assessing future human resource demand, (4) assessing future labor supply, and (5) establishing a strategic plan. Some factors that make it difficult to recruit qualified employees include: organizational policies that demand promotions from within, union regulations, and low wages. The six steps in the selection process are: (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, and (6) establishing trial period. Contingent workers include part-time workers, temporary workers, seasonal workers, independent contractors, interns and co-op students. Contingent workers are sometimes hired in an uncertain economic climate, when full-time workers are on leave, when there is peak demand for labor or products and finally when quick service is necessary. 11-33

34 TRAINING and DEVELOPING EMPLOYEES
Training and Developing Employees for Optimum Performance TRAINING and DEVELOPING EMPLOYEES LG6 Training and Development -- All attempts to improve productivity by increasing an employee’s ability to perform. Training focuses on short-term skills. Development focuses on long-term abilities. See Learning Goal 6: Illustrate employee training and development methods. 11-34

35 THREE STEPS of TRAINING and DEVELOPMENT
Training and Developing Employees for Optimum Performance THREE STEPS of TRAINING and DEVELOPMENT LG6 Assessing organization needs and employee skills to develop appropriate training needs. Designing training activities to meet identified needs. Evaluating the training’s effectiveness. See Learning Goal 6: Illustrate employee training and development methods. 11-35

36 MOST COMMONLY USED TRAINING and DEVELOPMENT ACTIVITIES
Training and Developing Employees for Optimum Performance MOST COMMONLY USED TRAINING and DEVELOPMENT ACTIVITIES LG6 Orientation On-the-Job Training Apprenticeships Off-the-Job Training Online Training Vestibule Training Job Simulation See Learning Goal 6: Illustrate employee training and development methods. An example of orientation: At Zappos every new employee in the online retailer’s Henderson, Nevada headquarters must spend two weeks answering customer calls, two weeks learning in a classroom, and a week shipping boxes in the company’s Kentucky fulfillment center. 11-36

37 DEVELOPING EFFECTIVE MANAGERS
Management Development LG6 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 See Learning Goal 6: Illustrate employee training and development methods. 11-37

38 WHY GOOD EMPLOYEES QUIT
Management Development LG6 See Learning Goal 6: Illustrate employee training and development methods. Why Good Employees Quit This slide presents some of the reasons why good employees quit. Ask the students: Why is it important for managers to understand why employees leave a company? (It translates directly into the bottom line of the organization. The higher the turnover, the higher the costs for recruiting, selecting, training and development, etc.) Ask the students: What are other reasons why employee retention is important? (Some other reasons may be morale of the workers, ability to recruit, reputation and image of the company, etc.) Ask the students: Would you like to work at a place that feels like it has a revolving door? Source: Robert Half International 11-38

39 USING NETWORKS and MENTORING
Networking LG6 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. See Learning Goal 6: Illustrate employee training and development methods. Many students are familiar with social networking, but are unfamiliar with career networking. Ask the students: How can you use sites like Facebook, YouTube, and Twitter to establish and maintain contacts with key managers in and out of the organization? 11-39

40 APPRAISING PERFORMANCE on the JOB
Appraising Employee Performance to Get Optimum Results APPRAISING PERFORMANCE on the JOB LG7 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 worker’s ability. See Learning Goal 7: Trace the six steps in appraising employee performance. 11-40

41 SIX STEPS of PERFORMANCE APPRAISALS
Appraising Employee Performance to Get Optimum Results SIX STEPS of PERFORMANCE APPRAISALS LG7 Establishing performance standards that are understandable, measurable and reasonable. Clearly communicating those standards. Evaluating performance against the standards. Discussing the results with employees. Taking corrective action. Using the results to make decisions. See Learning Goal 7: Trace the six steps in appraising employee performance. 11-41

42 MAJOR USES of PERFORMANCE APPRAISALS
Appraising Employee Performance to Get Optimum Results MAJOR USES of PERFORMANCE APPRAISALS LG7 Identify training needs Use as a promotion tool Recognize worker’s achievements Evaluate the firm’s hiring process Judge the effectiveness of the firm’s orientation process Use as a basis for possible termination of a worker See Learning Goal 7: Trace the six steps in appraising employee performance. Major Uses of Performance Appraisals This slide gives students insight as to the importance of regular performance appraisals. To start a discussion on performance appraisals, ask students to discuss the 360-degree review. After the discussion use the next slide to walk students through some of the problems associated with performance appraisals. 11-42

43 Appraising Employee Performance to Get Optimum Results
PERFORMANCE APPRAISAL MISTAKES Common Problems Made While Reviewing Employees LG7 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. See Learning Goal 7: Trace the six steps in appraising employee performance. Performance Appraisal Mistakes This slide highlights some of the problems made while reviewing employees. Ask the students: How can managers avoid some of the issues discussed in this slide? To start a discussion about performance appraisals and teams ask students: Do you think it is fair to have your own performance appraised based on the work of others on your team? 11-43

44 PROGRESS ASSESSMENT Name and describe four training techniques.
What’s the primary purpose of a performance appraisal? What are the six steps in a performance appraisal? Off-the-job training occurs away from the workplace and consists of internal or external programs to develop any of a variety of skills or to foster personal development. An apprenticeship program involves a student or apprentice working alongside an experienced employee to master the skills and procedures of a craft. Vestibule training or near-the-job training is done in a classroom with equipment similar to that used on the job so employees learn proper methods and safety procedures before assuming a specific job assignment. Job simulation is the use of equipment that duplicates job conditions and tasks so trainees can learn skills before attempting them on the job. The primary purpose of a performance appraisal is to determine whether workers are doing an effective and efficient job, with a minimum of errors and disruptions. The six steps in a performance appraisal are: (1) establishing performance standards, (2) communicating those standards, (3) evaluating performance, (4) discussing results with employees, (5) taking corrective action, and (6) using the results to make decisions. 11-44

45 COMPENSATION PROGRAMS
Compensating Employees: Attracting and Keeping the Best 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. See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. 11-45

46 TYPES of PAY SYSTEMS Salary Hourly Wage/Day Work Piecework System
LG8 Salary Hourly Wage/Day Work Piecework System Commission Plans Bonus Plans Profit Sharing Plans Gain-Sharing Plans Stock Options See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. Students should be aware when accepting a job offer to consider not just the salary but the entire compensation package. 11-46

47 COMPENSATING TEAMS Compensating Teams LG8 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.) See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. Skill-based pay is increased when teams learn and apply new skills. Gain sharing bases team bonuses on improvements over previous performance. Nucor Steel calculates bonuses on quality—tons 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. 11-47

48 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 it’s about 30%. Healthcare has been the most significant increase in fringe benefit cost. See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. The rising cost of healthcare and the cost of employer provided health insurance is unsustainable in the long term. This requires both management and employees to create systems that keep cost down, but still provide meaningful coverage. This could include employee wellness programs and/or higher deductibles. 11-48

49 HEALTHCARE, a PERK NOT to be TAKEN LIGHTLY
Fringe Benefits LG8 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. See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. Healthcare, a Perk Not to be Taken Lightly Many companies now ask their employees to pitch in for healthcare costs. This slide shows students how to cope with those costs and find what’s best for them. Source: Kiplinger’s Personal Finance, November 2010. 11-49

50 WHO PAYS for EMPLOYEE BENEFITS?
Fringe Benefits LG8 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. See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. Who Pays for Employee Benefits? Entrepreneur used statistics from the Bureau of Labor Statistics to create this list. Ask students: Did you think more Americans had retirement plans sponsored by their employer? What about healthcare? Source: Entrepreneur, May 2011. 11-50

51 The RANGE of FRINGE BENEFITS
LG8 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 See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. 11-51

52 SPECIAL PERKS at DREAMWORKS
Fringe Benefits LG8 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. See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. Special Perks at Dreamworks Employee perks can take different shapes. Companies like Dreamworks try to offer benefits to keep the work environment loose and creative. Have students read this article from Entrepreneur.com (http://www.entrepreneur.com/humanresources/compensationandbenefits/article html) with ideas for twenty low-cost employee perks. 11-52

53 CAFETERIA-STYLE and SOFT BENEFITS
Fringe Benefits LG8 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 farmer’s markets See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. The name of the game today regarding employee benefits is creativity! 11-53

54 LET’S GO to the BEACH! Average Vacation Days by Country
Fringe Benefits LG8 See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. Vacation Days Per Year This slide presents a comparison of number of vacation days given and used per year in different countries. France leads with an average of 38 vacation days given per year whereas the U.S. ties for last with just 17 days. Even though the U.S. comes in last with only 17 days, an interesting fact to share with the students is that most Americans don’t even use these 17 days. Ask the students: What impact does this benefit of number of days of vacation have on recruiting at an international level? (Most should be able to identify that domestically, it may not have much of an impact. However internationally, potential candidates would be comparing between different countries, especially if they are from one of the countries that offer a much higher number of vacation days, such as Italy, France, or Germany. This may have an impact on the ability of an organization to recruit.) Source: Reuters, June 24, 2010. 11-54

55 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. See Learning Goal 8: Summarize the objectives of employee compensation programs, and evaluate pay systems and fringe benefits. 11-55

56 FLEXIBLE SCHEDULING PLANS
Flextime 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. See Learning Goal 9: Demonstrate how managers use scheduling plans to adapt to workers’ needs. 11-56

57 USING FLEXTIME PLANS 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. See Learning Goal 9: Demonstrate how managers use scheduling plans to adapt to workers’ needs. 11-57

58 A FLEXTIME CHART Flextime Plans LG9
See Learning Goal 9: Demonstrate how managers use scheduling plans to adapt to workers’ needs. Flextime gives employees some freedom and empowers them to work when it best meets their schedule. The benefits are obvious and often lead to a more motivated workforce. 11-58

59 COMPRESSED WORK WEEKS Flextime Plans LG9 Employees enjoy long weekends after working long days. Productivity is a concern. Nurses and firefighters often work compressed work weeks. See Learning Goal 9: Demonstrate how managers use scheduling plans to adapt to workers’ needs. 11-59

60 HOME-BASED WORK Home-Based Work LG9 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. See Learning Goal 9: Demonstrate how managers use scheduling plans to adapt to workers’ needs. BoA’s program adds up to a $100 million a year saving and employees in the program work remotely about 60 percent of the time. 11-60

61 VIRTUALLY THERE Tools to Help You Work From Home
Home-Based Work LG9 Communication: Google Apps Skype Yammer Collaboration: Google Docs GoToMeeting Dropbox See Learning Goal 9: Demonstrate how managers use scheduling plans to adapt to workers’ needs. Virtually There Click on these links to visit pages containing useful tools for working outside of the office. Source: Entrepreneur, January 2011. 11-61

62 GOING NOWHERE FAST Worst Commutes in the World
Home-Based Work LG9 See Learning Goal 9: Demonstrate how managers use scheduling plans to adapt to workers’ needs. Going Nowhere Fast IBM ranked cities from 1 to 100 (100 being the worst). Factors included traffic, road rage and gridlock. 69% of commuters in Beijing have said traffic has been so bad some days, they turned around and went home. New York and LA ranked rather low on the list considering they’re notorious in U.S. traffic problems. Those in Moscow have to normally spend hours in their cars. Ask students: Would you travel 2.5 hours just to get to and from work? Would flextime be more beneficial for these workers? Source: Bloomberg Businessweek, December 20, 2010. 11-62

63 JOB SHARING BENEFITS Job Sharing Plans LG9 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. See Learning Goal 9: Demonstrate how managers use scheduling plans to adapt to workers’ needs. 11-63

64 MOVING EMPLOYEES Employees are promoted or reassigned.
Moving Employees Up, Over and Out LG10 Employees are promoted or reassigned. Employees are terminated due to performance or economic situations. Employees retire. See Learning Goal 10: Describe how employees can move through a company: promotion, reassignment, termination, and retirement. 11-64

65 TERMINATING EMPLOYEES
LG10 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. See Learning Goal 10: Describe how employees can move through a company: promotion, reassignment, termination, and retirement. 11-65

66 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? Alternative compensation techniques include: (1) commission Plans - rewarding employees with a percentage of sales, (2) bonus plans - rewarding employees with payment based on achievement of a predetermined goal, (3) profit sharing plans - giving employees the ability to share in a percentage of the company’s profit, (4) gain-sharing plans - bonus is based on improvements over previous performance, and (5) stock options - granting employees shares of stocks based on performance. The hope is that profit sharing plans will motivate employees to think like owners. Flextime benefits include allowing employees to adjust to work/life demands. Challenges of flextime include not being applicable for all businesses, making communication more difficult, and creating the possibility of resentment if employees abuse the system. Telecommuting benefits include cost saving for employers and allows employees to manage work/life demands. Challenges of telecommuting include that it requires disciplined employees to stay focused and communication with employees may suffer. Job sharing benefits include employment opportunities for those who cannot (or prefer not to) work full-time, reduced absenteeism and tardiness, retention of experienced workers and ability to schedule workers during peak times. Challenges of job sharing include the need to hire, train, motivate, and supervise at least twice as many employees. 11-66


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