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Effective Management of Human ResourcesChapter 12 Effective Management of Human Resources PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc., All rights reserved.
Learning Objectives After studying the chapter, you should be able to:Explain why strategic human resource management can help an organization gain a competitive advantage. Describe the steps managers take to recruit and select organizational members. Discuss the training and development options that ensure organization members can effectively perform their jobs. Explain why performance appraisal and feedback is such a crucial activity. © Copyright 2004 McGraw-Hill. All rights reserved.
Learning Objectives (cont’d)Explain the issues managers face in determining levels of pay and benefits. © Copyright 2004 McGraw-Hill. All rights reserved.
Strategic Human Resource ManagementHuman Resource Management (HRM) Activities that managers engage in to attract and retain employees and to ensure that they perform at a high level and contribute to the accomplishment of organizational goals. HRM Activities Recruitment and selection Training and development Performance appraisal and feedback Pay and benefits Labor relations © Copyright 2004 McGraw-Hill. All rights reserved.
Strategic Human Resource ManagementThe process by which managers design the components of a human resource system to be consistent with each other, with other elements of organizational structure, and with the organization’s strategy and goals. The objective of strategic HRM is the development of an HRM system that enhances the organization’s efficiency, quality, innovation, and responsiveness to customers. © Copyright 2004 McGraw-Hill. All rights reserved.
Components of a Human Resource Management SystemFigure 12.1 © Copyright 2004 McGraw-Hill. All rights reserved.
Overview of the Components of HRMRecruitment and Selection Developing a pool of qualified applicants. Determining relative qualifications of applicants and and their potential for a job. Training and Development Developing, on an ongoing basis, employees’ abilities and skills as necessitated by changes in technology and the competitive environment. © Copyright 2004 McGraw-Hill. All rights reserved.
Overview of HRM Components (cont’d)Performance Appraisal and Feedback Providing information about how to train, motivate, and reward workers such that managers can evaluate and then give feedback to enhance worker performance. Pay and Benefits Rewarding high performing employees with raises, bonuses and recognition. Increased pay provides an additional incentive. Benefits, such as health insurance, reward employee membership in firm. © Copyright 2004 McGraw-Hill. All rights reserved.
Overview of HRM Components (cont’d)Labor Relations Maintaining an effective relationship with labor unions that represent workers. Unions seek to participate, through collective bargaining with the employer, in the determination of pay rates and the setting of working conditions. © Copyright 2004 McGraw-Hill. All rights reserved.
The Legal Environment of HRMEqual Employment Opportunity (EEO) The equal right of all citizens to the opportunity to obtain employment regardless of their gender, age, race, country of origin, religion, or disabilities. Equal Employment Opportunity Commission (EEOC) enforces employment laws. Management of diversity is crucial Managers must take steps to ensure discrimination does not occur. © Copyright 2004 McGraw-Hill. All rights reserved.
Federal Anti-Discrimination LawsMajor Equal Employment Opportunity Laws Affecting Human Resources Management Federal Anti-Discrimination Laws 1963 Equal Pay Act 1964 Title VII of the Civil Rights Act 1967 Age Discrimination in Employment Act 1978 Pregnancy Discrimination Act 1990 Americans with Disabilities Act 1991 Civil Rights Act 1993 Family and Medical Leave Act © Copyright 2004 McGraw-Hill. All rights reserved.
Recruitment and SelectionActivities that managers engage in to develop a pool of candidates for open positions. Selection The process that managers use to determine the relative qualifications of job applicants and their potential for performing well in a particular job. © Copyright 2004 McGraw-Hill. All rights reserved.
The Recruitment and Selection System© Copyright 2004 McGraw-Hill. All rights reserved. Figure 11.2
Human Resource PlanningHuman Resource Planning (HRP) Activities that managers engage in to forecast their current and future needs for human resources. HRP must be done prior to recruitment and selection. Demand forecasts Estimates of the number and qualifications of employees the firm will need. Supply forecasts Estimates of the availability and qualifications of current workers and those in the labor market. © Copyright 2004 McGraw-Hill. All rights reserved.
Human Resource Planning: OutsourcingUsing outside suppliers and manufacturers to produce goods and services. Using contract workers rather than hiring them. More HR flexibility for the firm. Lower human capital costs. Problems with Outsourcing Loss of control: outsource labor contractors are not committed to the firm. Unions are against outsourcing that has the potential to eliminate member’s jobs. © Copyright 2004 McGraw-Hill. All rights reserved.
Job Analysis Job AnalysisIdentifying the the tasks, duties and responsibilities that make up a job and the knowledge, skills, and abilities needed to perform the job. A job analysis should be done for each job in the organization. Job analysis methods: Observing what current employees do. Having workers/managers fill out questionnaires. Current trend is toward flexible jobs where tasks and duties are not easily defined in advance. © Copyright 2004 McGraw-Hill. All rights reserved.
Recruitment External RecruitingSeeking outside the firm for people who have not worked at the firm previously. A multi-prong approach to external recruiting works best: newspapers advertisements, open houses, on-campus recruiting, employee referrals, and through the Internet. External recruiting challenges: Higher costs of external recruiting. Jobs that require employer-specific skills. Difficulty in assessing recruits’ qualifications. © Copyright 2004 McGraw-Hill. All rights reserved.
Recruitment Internal RecruitingSeeking to fill open positions with current employees from within the firm. Benefits of internal recruiting: Job candidates, their qualifications, and availability are already known. Current employees know the firm’s culture and are familiar with the organization. Internal advancement (promotion from within) serves to motivate employees. © Copyright 2004 McGraw-Hill. All rights reserved.
Selection Tools Figure 11.3© Copyright 2004 McGraw-Hill. All rights reserved. Figure 11.3
The Selection Process Determining an applicant’s qualifications related to the job requirements. Background information Education, prior employment, and college major. Interviews Structured interviews: managers ask each applicant the same job-related questions. Unstructured interviews: resemble normal conversations. © Copyright 2004 McGraw-Hill. All rights reserved.
The Selection Process (cont’d)Interviews (cont’d) Structured interviews are preferred; not collecting necessary information and bias are possible problems in using unstructured interviews. Paper-and-pencil tests Ability tests assess if applicants have the right skills for the job. Personality tests seek to determine if applicants possess traits (e.g.,“honesty”) relevant to job performance. Tests must show reliability and validity to avoid costly discrimination lawsuits. © Copyright 2004 McGraw-Hill. All rights reserved.
Selection Process Physical ability testsMeasures of dexterity, strength, and stamina for physically demanding jobs. Measures must be job-related to avoid discrimination. Performance tests Tests that measure an applicant’s current ability to perform the job or part of the job such as requiring an applicant to take typing speed test. Tests must be related to job requirements. © Copyright 2004 McGraw-Hill. All rights reserved.
Selection Process Specialized performance testsAssessment centers are facilities where managerial candidates are assessed on job-related activities over a period of a few days. References Obtaining relevant information can be difficult to due to legal liability and privacy issues. Employers must carefully check references of prospective employees where safety and risk to others is a concern. Failure to check references can create additional employer liability for an employee’s actions. © Copyright 2004 McGraw-Hill. All rights reserved.
Reliability and ValiditySelection tools must be reliable and valid. Reliability is the degree to which the tool measures the same thing each time it is used. Example: scores should be similar for the same person taking the same test over time. Validity is the degree to which the test measures what it is supposed to measure. Example: how well a physical ability test predicts the job performance of a firefighter. Managers have both an ethical obligation and a legal duty to develop good selection tools. © Copyright 2004 McGraw-Hill. All rights reserved.
Training and DevelopmentTeaching organizational members how to perform current jobs and helping them to acquire the knowledge and skills they need to be effective performers. Development Building the knowledge and skills of organizational members to enable them to take on new duties and challenges. Training is used more often at lower levels of firm; development is common with managers. © Copyright 2004 McGraw-Hill. All rights reserved.
Training and Development (cont’d)Needs Assessment An assessment of which employees need training or development and what type of skills or knowledge they need to acquire. © Copyright 2004 McGraw-Hill. All rights reserved. Figure 12.4
Types of Training Classroom Instruction On-the-Job TrainingEmployees acquire skills in a classroom setting. Includes use of lectures, videos, role-playing, and work simulations. On-the-Job Training Employee learning occurs in the work setting as new worker does the job. Training is given by co-workers and can be done continuously to update the skills of current employees. © Copyright 2004 McGraw-Hill. All rights reserved.
Types of Managerial DevelopmentVaried Work Experiences Top managers have need to and must build expertise in many areas. Employees identified as possible top managers are assigned different tasks and a variety of positions in an organization. Formal Education Tuition reimbursement is common for managers taking classes for MBA or job-related degrees. Long-distance learning can be used to reduce travel and expenses for managerial training. © Copyright 2004 McGraw-Hill. All rights reserved.
Performance Appraisal and FeedbackThe evaluation of employees’ job performance and contributions to their organization. Performance Feedback The process through which managers share performance appraisal information, give subordinates an opportunity to reflect on their own performance, and develop, with subordinates, plans for the future. © Copyright 2004 McGraw-Hill. All rights reserved.
Types of Performance AppraisalTrait Appraisals Assessing subordinates on personal characteristics that are relevant to job performance. Disadvantages of trait appraisals Employees with a particular trait may choose not to use that particular trait on the job. Traits and performance are not always obviously linked. It is difficult to give feedback on traits. © Copyright 2004 McGraw-Hill. All rights reserved.
Types of Performance AppraisalBehavior Appraisals Assesses how workers perform their jobs—the actual actions and behaviors that exhibit on the job. Focuses on what a worker does right and wrong and provides good feedback for employees to change their behaviors. Results Appraisals Assesses what a worker accomplishes or the results they obtain from performing their jobs. © Copyright 2004 McGraw-Hill. All rights reserved.
Performance Appraisal and FeedbackObjective Appraisals Assesses performance based on facts (e.g., sales figures). Subjective Appraisals Assessments based on a manager’s perceptions of traits, behavior, or results. © Copyright 2004 McGraw-Hill. All rights reserved.
Who Appraises Performance?© Copyright 2004 McGraw-Hill. All rights reserved. Figure 11.6
Who Appraises Performance? (cont’d)Self Self appraisals can supplement manager view. Peer Appraisal Coworkers provide appraisal; common in team settings. 360 Degree Performance Appraisals A performance appraisal by peers, subordinates, superiors, and clients who are in a position to evaluate a manager’s performance. © Copyright 2004 McGraw-Hill. All rights reserved.
Effective Performance FeedbackFormal Appraisals An appraisal conducted at a set time during the year and based on performance dimensions that were specified in advance. Informal Appraisals An unscheduled appraisal of ongoing progress and areas for improvement. © Copyright 2004 McGraw-Hill. All rights reserved.
Effective Feedback GuidelinesBe specific and focus on correctable behavior. Provide a suggested improvement. Focus on problem-solving and improvement, not criticism. Express confidence in the employee’s ability to improve. Provide both formal and informal feedback. Treat subordinates with respect and praise achievements. Set up a timetable for agreed-to changes. © Copyright 2004 McGraw-Hill. All rights reserved.
Pay and Benefits Pay LevelThe relative position of an organization’s incentives in comparison with those of other firms in the same industry employing similar kinds of workers. Managers can decide to offer low, average or high relative wages. High wages attract and retain high performers but raise costs; low wages can cause turnover and lack of motivation but provide lower costs. © Copyright 2004 McGraw-Hill. All rights reserved.
Pay and Benefits (cont’d)Pay Structure The arrangement of jobs into categories based on their relative importance to the organization and its goals, level of skills, and other characteristics. Benefits Legally required: Social Security, unemployment insurance and workers’ compensation. Voluntary: health insurance, retirement, day care. Cafeteria-style benefits plans allow employees to choose the best mix of benefits for them; such plans can be hard to manage. © Copyright 2004 McGraw-Hill. All rights reserved.
Labor Relations Labor RelationsThe activities managers engage in to ensure they have effective working relationships with the labor unions that represent their employees interests. Laws regulating areas of employment. Fair Labor Standards Act (1938) prohibits child labor, sets a minimum wage and maximum working hours. Equal Pay Act (1963) requires that men and women doing equal work will get equal pay. Work Place Safety (1970) OSHA mandates procedures for safe working conditions. © Copyright 2004 McGraw-Hill. All rights reserved.
Unions Unions Represent worker’s interests to management in organizations. The power that managers has over an individual worker causes workers to join together in unions to try to counter management’s strength. Unions are permitted by the National Labor Relations Act (1935) which also created the National Labor Relations Board (NLRB) to oversee the relationship between employers and unions. © Copyright 2004 McGraw-Hill. All rights reserved.
Unions (cont’d) Unions and Workers Not all workers want unions.Union membership costs money in dues and workers might not want to strike. Union membership is lower now than 40 years ago. The manufacturing and heavy industries where unions are dominant have declined. Workers no longer see the need for union representation in the work place. © Copyright 2004 McGraw-Hill. All rights reserved.
Unions (cont’d) Collective bargainingNegotiation between labor and management to resolve conflicts and disputes about issues such as working hours, wages, benefits, working conditions, and job security. The process that unions and management go through to negotiate work agreements that are included in a contract which spells out agreed-upon terms such as the grievance procedure for resolving differences between the union and management over management’s administration of the contract. © Copyright 2004 McGraw-Hill. All rights reserved.
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