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Chapter12Chapter12 PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc., 2004. All rights reserved. Effective Management.

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Presentation on theme: "Chapter12Chapter12 PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc., 2004. All rights reserved. Effective Management."— Presentation transcript:

1 Chapter12Chapter12 PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc., 2004. All rights reserved. Effective Management of Human Resources

2 © Copyright 2004 McGraw-Hill. All rights reserved.12–2 Learning Objectives After studying the chapter, you should be able to:After studying the chapter, you should be able to: Explain why strategic human resource management can help an organization gain a competitive advantage. 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. 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. 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. Explain why performance appraisal and feedback is such a crucial activity.

3 © Copyright 2004 McGraw-Hill. All rights reserved.12–3 Learning Objectives (contd) Explain the issues managers face in determining levels of pay and benefits. Explain the issues managers face in determining levels of pay and benefits.

4 © Copyright 2004 McGraw-Hill. All rights reserved.12–4 Strategic Human Resource Management Human Resource Management (HRM)Human 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. 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 ActivitiesHRM Activities Recruitment and selection Recruitment and selection Training and development Training and development Performance appraisal and feedback Performance appraisal and feedback Pay and benefits Pay and benefits Labor relations Labor relations

5 © Copyright 2004 McGraw-Hill. All rights reserved.12–5 Strategic Human Resource Management Strategic Human Resource ManagementStrategic Human Resource Management The 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 organizations strategy and goals. The 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 organizations strategy and goals. The objective of strategic HRM is the development of an HRM system that enhances the organizations efficiency, quality, innovation, and responsiveness to customers. The objective of strategic HRM is the development of an HRM system that enhances the organizations efficiency, quality, innovation, and responsiveness to customers.

6 © Copyright 2004 McGraw-Hill. All rights reserved.12–6 Components of a Human Resource Management System Figure 12.1

7 © Copyright 2004 McGraw-Hill. All rights reserved.12–7 Overview of the Components of HRM Recruitment and SelectionRecruitment and Selection Developing a pool of qualified applicants. Developing a pool of qualified applicants. Determining relative qualifications of applicants and and their potential for a job. Determining relative qualifications of applicants and and their potential for a job. Training and DevelopmentTraining and Development Developing, on an ongoing basis, employees abilities and skills as necessitated by changes in technology and the competitive environment. Developing, on an ongoing basis, employees abilities and skills as necessitated by changes in technology and the competitive environment.

8 © Copyright 2004 McGraw-Hill. All rights reserved.12–8 Overview of HRM Components (contd) Performance Appraisal and FeedbackPerformance 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. 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 BenefitsPay and Benefits Rewarding high performing employees with raises, bonuses and recognition. Rewarding high performing employees with raises, bonuses and recognition. Increased pay provides an additional incentive.Increased pay provides an additional incentive. Benefits, such as health insurance, reward employee membership in firm.Benefits, such as health insurance, reward employee membership in firm.

9 © Copyright 2004 McGraw-Hill. All rights reserved.12–9 Overview of HRM Components (contd) Labor RelationsLabor Relations Maintaining an effective relationship with labor unions that represent workers. 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. Unions seek to participate, through collective bargaining with the employer, in the determination of pay rates and the setting of working conditions.

10 © Copyright 2004 McGraw-Hill. All rights reserved.12–10 The Legal Environment of HRM Equal Employment Opportunity (EEO)Equal 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. 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. Equal Employment Opportunity Commission (EEOC) enforces employment laws. Management of diversity is crucialManagement of diversity is crucial Managers must take steps to ensure discrimination does not occur.Managers must take steps to ensure discrimination does not occur.

11 © Copyright 2004 McGraw-Hill. All rights reserved.12–11 Major Equal Employment Opportunity Laws Affecting Human Resources Management Federal Anti-Discrimination LawsFederal Anti-Discrimination Laws 1963Equal Pay Act 1963Equal Pay Act 1964Title VII of the Civil Rights Act 1964Title VII of the Civil Rights Act 1967Age Discrimination in Employment Act 1967Age Discrimination in Employment Act 1978Pregnancy Discrimination Act 1978Pregnancy Discrimination Act 1990Americans with Disabilities Act 1990Americans with Disabilities Act 1991Civil Rights Act 1991Civil Rights Act 1993Family and Medical Leave Act 1993Family and Medical Leave Act

12 © Copyright 2004 McGraw-Hill. All rights reserved.12–12 Recruitment and Selection RecruitmentRecruitment Activities that managers engage in to develop a pool of candidates for open positions. Activities that managers engage in to develop a pool of candidates for open positions. SelectionSelection The process that managers use to determine the relative qualifications of job applicants and their potential for performing well in a particular job. The process that managers use to determine the relative qualifications of job applicants and their potential for performing well in a particular job.

13 © Copyright 2004 McGraw-Hill. All rights reserved.12–13 The Recruitment and Selection System Figure 11.2

14 © Copyright 2004 McGraw-Hill. All rights reserved.12–14 Human Resource Planning Human Resource Planning (HRP)Human Resource Planning (HRP) Activities that managers engage in to forecast their current and future needs for human resources. Activities that managers engage in to forecast their current and future needs for human resources. HRP must be done prior to recruitment and selection. HRP must be done prior to recruitment and selection. Demand forecasts Demand forecasts Estimates of the number and qualifications of employees the firm will need.Estimates of the number and qualifications of employees the firm will need. Supply forecasts Supply forecasts Estimates of the availability and qualifications of current workers and those in the labor market.Estimates of the availability and qualifications of current workers and those in the labor market.

15 © Copyright 2004 McGraw-Hill. All rights reserved.12–15 Human Resource Planning: Outsourcing OutsourcingOutsourcing Using outside suppliers and manufacturers to produce goods and services. Using outside suppliers and manufacturers to produce goods and services. Using contract workers rather than hiring them. Using contract workers rather than hiring them. More HR flexibility for the firm.More HR flexibility for the firm. Lower human capital costs.Lower human capital costs. Problems with OutsourcingProblems with Outsourcing Loss of control: outsource labor contractors are not committed to the firm. Loss of control: outsource labor contractors are not committed to the firm. Unions are against outsourcing that has the potential to eliminate members jobs. Unions are against outsourcing that has the potential to eliminate members jobs.

16 © Copyright 2004 McGraw-Hill. All rights reserved.12–16 Job Analysis Job AnalysisJob Analysis Identifying the the tasks, duties and responsibilities that make up a job and the knowledge, skills, and abilities needed to perform the job. Identifying 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.A job analysis should be done for each job in the organization. Job analysis methods: Job analysis methods: Observing what current employees do.Observing what current employees do. Having workers/managers fill out questionnaires.Having workers/managers fill out questionnaires. Current trend is toward flexible jobs where tasks and duties are not easily defined in advance. Current trend is toward flexible jobs where tasks and duties are not easily defined in advance.

17 © Copyright 2004 McGraw-Hill. All rights reserved.12–17 RecruitmentRecruitment External RecruitingExternal Recruiting Seeking outside the firm for people who have not worked at the firm previously. Seeking 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.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: External recruiting challenges: Higher costs of external recruiting.Higher costs of external recruiting. Jobs that require employer-specific skills.Jobs that require employer-specific skills. Difficulty in assessing recruits qualifications.Difficulty in assessing recruits qualifications.

18 © Copyright 2004 McGraw-Hill. All rights reserved.12–18 RecruitmentRecruitment Internal RecruitingInternal Recruiting Seeking to fill open positions with current employees from within the firm. Seeking to fill open positions with current employees from within the firm. Benefits of internal recruiting: Benefits of internal recruiting: Job candidates, their qualifications, and availability are already known.Job candidates, their qualifications, and availability are already known. Current employees know the firms culture and are familiar with the organization.Current employees know the firms culture and are familiar with the organization. Internal advancement (promotion from within) serves to motivate employees.Internal advancement (promotion from within) serves to motivate employees.

19 © Copyright 2004 McGraw-Hill. All rights reserved.12–19 Selection Tools Figure 11.3

20 © Copyright 2004 McGraw-Hill. All rights reserved.12–20 The Selection Process Determining an applicants qualifications related to the job requirements.Determining an applicants qualifications related to the job requirements. Background information Background information Education, prior employment, and college major.Education, prior employment, and college major. Interviews Interviews Structured interviews: managers ask each applicant the same job-related questions.Structured interviews: managers ask each applicant the same job-related questions. Unstructured interviews: resemble normal conversations.Unstructured interviews: resemble normal conversations.

21 © Copyright 2004 McGraw-Hill. All rights reserved.12–21 The Selection Process (contd) Interviews (contd) Interviews (contd) Structured interviews are preferred; not collecting necessary information and bias are possible problems in using unstructured interviews.Structured interviews are preferred; not collecting necessary information and bias are possible problems in using unstructured interviews. Paper-and-pencil tests Paper-and-pencil tests Ability tests assess if applicants have the right skills for the job.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.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.Tests must show reliability and validity to avoid costly discrimination lawsuits.

22 © Copyright 2004 McGraw-Hill. All rights reserved.12–22 Selection Process Physical ability tests Physical ability tests Measures of dexterity, strength, and stamina for physically demanding jobs.Measures of dexterity, strength, and stamina for physically demanding jobs. Measures must be job-related to avoid discrimination.Measures must be job-related to avoid discrimination. Performance tests Performance tests Tests that measure an applicants current ability to perform the job or part of the job such as requiring an applicant to take typing speed test.Tests that measure an applicants 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.Tests must be related to job requirements.

23 © Copyright 2004 McGraw-Hill. All rights reserved.12–23 Selection Process Specialized performance tests Specialized performance tests Assessment centers are facilities where managerial candidates are assessed on job- related activities over a period of a few days.Assessment centers are facilities where managerial candidates are assessed on job- related activities over a period of a few days. References References Obtaining relevant information can be difficult to due to legal liability and privacy issues.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.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 employees actions.Failure to check references can create additional employer liability for an employees actions.

24 © Copyright 2004 McGraw-Hill. All rights reserved.12–24 Reliability and Validity Selection tools must be reliable and valid.Selection tools must be reliable and valid. Reliability is the degree to which the tool measures the same thing each time it is used. 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.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. 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.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. Managers have both an ethical obligation and a legal duty to develop good selection tools.

25 © Copyright 2004 McGraw-Hill. All rights reserved.12–25 Training and Development TrainingTraining Teaching organizational members how to perform current jobs and helping them to acquire the knowledge and skills they need to be effective performers. Teaching organizational members how to perform current jobs and helping them to acquire the knowledge and skills they need to be effective performers. DevelopmentDevelopment Building the knowledge and skills of organizational members to enable them to take on new duties and challenges. 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.Training is used more often at lower levels of firm; development is common with managers.

26 © Copyright 2004 McGraw-Hill. All rights reserved.12–26 Training and Development (contd) Needs AssessmentNeeds Assessment An assessment of which employees need training or development and what type of skills or knowledge they need to acquire. An assessment of which employees need training or development and what type of skills or knowledge they need to acquire. Figure 12.4

27 © Copyright 2004 McGraw-Hill. All rights reserved.12–27 Types of Training Classroom InstructionClassroom Instruction Employees acquire skills in a classroom setting. Employees acquire skills in a classroom setting. Includes use of lectures, videos, role-playing, and work simulations.Includes use of lectures, videos, role-playing, and work simulations. On-the-Job TrainingOn-the-Job Training Employee learning occurs in the work setting as new worker does the job. 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.Training is given by co-workers and can be done continuously to update the skills of current employees.

28 © Copyright 2004 McGraw-Hill. All rights reserved.12–28 Types of Managerial Development Varied Work ExperiencesVaried Work Experiences Top managers have need to and must build expertise in many areas. 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.Employees identified as possible top managers are assigned different tasks and a variety of positions in an organization. Formal EducationFormal Education Tuition reimbursement is common for managers taking classes for MBA or job-related degrees. 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.Long-distance learning can be used to reduce travel and expenses for managerial training.

29 © Copyright 2004 McGraw-Hill. All rights reserved.12–29 Performance Appraisal and Feedback Performance AppraisalPerformance Appraisal The evaluation of employees job performance and contributions to their organization. The evaluation of employees job performance and contributions to their organization. Performance FeedbackPerformance 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. 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.

30 © Copyright 2004 McGraw-Hill. All rights reserved.12–30 Types of Performance Appraisal Trait AppraisalsTrait Appraisals Assessing subordinates on personal characteristics that are relevant to job performance. Assessing subordinates on personal characteristics that are relevant to job performance. Disadvantages of trait appraisals Disadvantages of trait appraisals Employees with a particular trait may choose not to use that particular trait on the job.Employees with a particular trait may choose not to use that particular trait on the job. Traits and performance are not always obviously linked.Traits and performance are not always obviously linked. It is difficult to give feedback on traits. It is difficult to give feedback on traits.

31 © Copyright 2004 McGraw-Hill. All rights reserved.12–31 Types of Performance Appraisal Behavior AppraisalsBehavior Appraisals Assesses how workers perform their jobsthe actual actions and behaviors that exhibit on the job. Assesses how workers perform their jobsthe 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. Focuses on what a worker does right and wrong and provides good feedback for employees to change their behaviors. Results AppraisalsResults Appraisals Assesses what a worker accomplishes or the results they obtain from performing their jobs. Assesses what a worker accomplishes or the results they obtain from performing their jobs.

32 © Copyright 2004 McGraw-Hill. All rights reserved.12–32 Performance Appraisal and Feedback Objective AppraisalsObjective Appraisals Assesses performance based on facts (e.g., sales figures). Assesses performance based on facts (e.g., sales figures). Subjective AppraisalsSubjective Appraisals Assessments based on a managers perceptions of traits, behavior, or results. Assessments based on a managers perceptions of traits, behavior, or results.

33 © Copyright 2004 McGraw-Hill. All rights reserved.12–33 Who Appraises Performance? Figure 11.6

34 © Copyright 2004 McGraw-Hill. All rights reserved.12–34 Who Appraises Performance? (contd) SelfSelf Self appraisals can supplement manager view. Self appraisals can supplement manager view. Peer AppraisalPeer Appraisal Coworkers provide appraisal; common in team settings. Coworkers provide appraisal; common in team settings. 360 Degree Performance Appraisals360 Degree Performance Appraisals A performance appraisal by peers, subordinates, superiors, and clients who are in a position to evaluate a managers performance. A performance appraisal by peers, subordinates, superiors, and clients who are in a position to evaluate a managers performance.

35 © Copyright 2004 McGraw-Hill. All rights reserved.12–35 Effective Performance Feedback Formal AppraisalsFormal Appraisals An appraisal conducted at a set time during the year and based on performance dimensions that were specified in advance. An appraisal conducted at a set time during the year and based on performance dimensions that were specified in advance. Informal AppraisalsInformal Appraisals An unscheduled appraisal of ongoing progress and areas for improvement. An unscheduled appraisal of ongoing progress and areas for improvement.

36 © Copyright 2004 McGraw-Hill. All rights reserved.12–36 Effective Feedback Guidelines Be specific and focus on correctable behavior. Provide a suggested improvement.Be specific and focus on correctable behavior. Provide a suggested improvement. Focus on problem-solving and improvement, not criticism.Focus on problem-solving and improvement, not criticism. Express confidence in the employees ability to improve.Express confidence in the employees ability to improve. Provide both formal and informal feedback.Provide both formal and informal feedback. Treat subordinates with respect and praise achievements.Treat subordinates with respect and praise achievements. Set up a timetable for agreed-to changes.Set up a timetable for agreed-to changes.

37 © Copyright 2004 McGraw-Hill. All rights reserved.12–37 Pay and Benefits Pay LevelPay Level The relative position of an organizations incentives in comparison with those of other firms in the same industry employing similar kinds of workers. The relative position of an organizations 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.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.High wages attract and retain high performers but raise costs; low wages can cause turnover and lack of motivation but provide lower costs.

38 © Copyright 2004 McGraw-Hill. All rights reserved.12–38 Pay and Benefits (contd) Pay StructurePay Structure The arrangement of jobs into categories based on their relative importance to the organization and its goals, level of skills, and other characteristics. The arrangement of jobs into categories based on their relative importance to the organization and its goals, level of skills, and other characteristics. BenefitsBenefits Legally required: Social Security, unemployment insurance and workers compensation. Legally required: Social Security, unemployment insurance and workers compensation. Voluntary: health insurance, retirement, day care. 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. Cafeteria-style benefits plans allow employees to choose the best mix of benefits for them; such plans can be hard to manage.

39 © Copyright 2004 McGraw-Hill. All rights reserved.12–39 Labor Relations Labor RelationsLabor Relations The activities managers engage in to ensure they have effective working relationships with the labor unions that represent their employees interests. The 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. Laws regulating areas of employment. Fair Labor Standards Act (1938) prohibits child labor, sets a minimum wage and maximum working hours.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.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.Work Place Safety (1970) OSHA mandates procedures for safe working conditions.

40 © Copyright 2004 McGraw-Hill. All rights reserved.12–40 UnionsUnions UnionsUnions Represent workers interests to management in organizations. Represent workers 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 managements strength. The power that managers has over an individual worker causes workers to join together in unions to try to counter managements 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. 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.

41 © Copyright 2004 McGraw-Hill. All rights reserved.12–41 Unions (contd) Unions and WorkersUnions and Workers Not all workers want unions. Not all workers want unions. Union membership costs money in dues and workers might not want to strike.Union membership costs money in dues and workers might not want to strike. Union membership is lower now than 40 years ago. Union membership is lower now than 40 years ago. The manufacturing and heavy industries where unions are dominant have declined.The manufacturing and heavy industries where unions are dominant have declined. Workers no longer see the need for union representation in the work place.Workers no longer see the need for union representation in the work place.

42 © Copyright 2004 McGraw-Hill. All rights reserved.12–42 Unions (contd) Collective bargainingCollective bargaining Negotiation between labor and management to resolve conflicts and disputes about issues such as working hours, wages, benefits, working conditions, and job security. Negotiation 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 managements administration of the contract. 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 managements administration of the contract.


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