1. Chapter 6 Managing Human Resources
Fundamentals of
MANAGEMENT
Core Concepts & Applications
Griffin Eighth Edition
Chapter 6 Managing Human Resources

2. Chapter Outline The Environmental Context of Human Resource Management
The Strategic Importance of HRM
The Legal Environment of HRM
Change and HRM
Attracting Human Resources
Human Resource Planning
Recruiting Human Resources
Selecting Human Resources
Developing Human Resources
Training and Development
Performance Appraisal
Performance Feedback

3. Chapter Outline (cont’d)
Maintaining Human Resources
Determining Compensation
Determining Benefits
Managing Workforce Diversity
The Meaning of Diversity
The Impact of Diversity
Managing Diversity in Organizations
Managing Labor Relations
How Employees Form Unions
Collective Bargaining

4. Learning Objectives
After studying this chapter, you should be able to:
Describe the environmental context of human resource management, including its strategic importance and its relationship with legal and social factors.
Discuss how organizations attract human resources, including human resource planning, recruiting, and selecting.
Describe how organizations develop human resources, including training and development, performance appraisal, and performance feedback.

5. Learning Objectives (cont’d)
Discuss how organizations maintain human resources, including the determination of compensation and benefits.
Discuss the nature of diversity, including its meaning, associated trends, and impact.
Discuss labor relations, including how employees form unions and the mechanics of collective bargaining.

6. The Environmental Context of Human Resource Management
Human Resource Management (HRM)
The set of organizational activities directed at attracting, developing, and maintaining an effective work force.
Three particularly vital components of this context are:
The strategic importance of HRM
The legal Environment of HRM
The social environment of HRM

7. The Strategic Importance of HRM
Firms have come to realize the value of their human resources in improving productivity.
HRM is critical to bottom-line performance of the firm.
HR planning is part of the strategic planning process.
Today human capital reflects the organizations investment in attracting, retaining and motivating an effective workforce.

8. The Legal Environment of HRM
THE BANGLADESH LABOUR ACT, 2006
An Act to consolidate and amend the laws relating to employment of labour, relations between workers and employers,. determination of minimum wage, payment of wages and compensation for injuries to workers, formation of trade unions, raising and settlement of industrial disputes, health, safety, welfare and working conditions of workers, and apprenticeship and matters ancillary thereto.

9. The Legal Environment of HRM
THE BANGLADESH LABOUR ACT, 2006
An Act to consolidate and amend the laws relating to
employment of labour,
relations between workers and employers,.
determination of minimum wage,
payment of wages and compensation for injuries to workers,
formation of trade unions,
raising and settlement of industrial disputes,
health, safety, welfare and working conditions of workers,
and apprenticeship and matters ancillary (subsidiary) thereto.

10. Social change and HRM
Various social changes are also affecting how organizations interact with their employees.
First, many organizations are using more and more temporary workers today.
Second, dual-career families are much more common today than just a few years ago.

11. #Attracting Human Resources
1.Human Resource Planning
2.Recruiting Human Resources
3.Selecting Human Resources

12. Human Resource Planning:
The starting point in attracting qualified human resources is planning. HR planning in turn involves job analysis and forecasting the demand and supply of labor.
Job Analysis
A systematic analysis of jobs within an organization.
Job Description—a listing of the job’s duties; its working conditions; and the tools, materials, and equipment used to perform the job.
Job Specification—a listing of the skills, abilities, and other credentials the incumbent jobholder will need to do a job.

13. Human Resource Planning
Predict demand
Forecast internal supply
Forecast external supply
Assess trends in •
External labor markets
Current employees
Future organizational plans
General economic trends
Compare future demand
and internal supply
Plan for dealing with predict-
ed shortfalls or overstaffing
Figure 8.1

14. Forecasting HR Demand and Supply
Replacement chart
A list of managerial positions in the organization, the occupants, how long they will stay in the position, and who will replace them.
Employee information system (skills inventory)
A database of employees’ education, skills, work experience, and career expectations, usually computerized.

15. Recruiting Human Resources
The process of attracting qualified persons to apply for jobs that are open. Two types:
Internal Recruiting
External Recruiting

16. Internal Recruiting External Recruiting
Considering present employees as candidates for openings.
Promotion from within can help build morale and reduce turnover of high-quality employees.
Disadvantage of internal recruiting is its “ripple effect” of having to successively fill vacated positions.
External Recruiting
Attracting persons from outside the organization.
Advertising in newspapers
Interviews
Employment agencies and search firms
Hiring “walk-ins” and “gate hires”
Realistic Job Preview (RJP)
Considered a successful method to ensure person-job fit by providing a real picture of the job to the applicant.

17. Selecting Human Resources
Once the recruiting process has attracted a pool of applicants, the next step is to select whom to hire.

18. A Sample Human Resource Selection Process
Barney, Jay B. and Ricky W. Griffin, The Management of Organizations. Copyright © 1992 by Houghton Mifflin Company. Used with permissions.

19. Selecting Human Resources
Validation
The process of determining the predictive (analytical) value of information.
Application Blanks
Used to gather information about work history, educational background, and other job-related demographic data.
Must not ask for information unrelated to the job.
Used to decide if a candidate merits further evaluation.
Provides interviewers with information about a candidate.

20. Selecting Human Resources (cont’d)
Tests
Ability, skill, aptitude, or knowledge tests are usually the best predictors of job success.
Must be validated, administered, and scored consistently.
The testing process must be the same for all candidates.

21. Selecting Human Resources (cont’d)
Interviews
Interviews can be poor predictors of job success due to interviewer biases.
Interview validity can be improved by training interviewers and using structured interviews.

22. Selecting Human Resources (cont’d)
Assessment Centers
A method for selecting managers; particularly good for selecting current employees for promotion and content validation of major parts of the managerial job.
Other Techniques
Use of Polygraph testing has declined due to passage of the Polygraph Protection Act.
Employers use physical exams, drug tests, and credit checks to screen prospective employees.

23. #Developing Human Resources
Regardless of how effective a selection system is, however, most employees need additional training if they are to grow and develop in their jobs. Evaluating their performance and providing feedback are also necessary.
Training and Development
Performance Appraisal
Performance Feedback

24. #Developing Human Resources
Training and Development
Training
Teaching operational or technical employees how to do the job for which they were hired.
Development
Teaching managers and professionals the skills needed for both present and future jobs.

25. Developing Human Resources (cont’d)
Training and Development
Assessing Training Needs
Determining training needs is the first step in developing a training plan.
Common Training Methods
Lectures—work well for factual material.
Role play and case studies—good for improving interpersonal relations skills or group decision-making.
On-the-job and vestibule training—facilitates learning physical skills through practice and actual use of tools.

26. Developing Human Resources (cont’d)
Training and Development (cont’d)
Evaluation of Training
Training and development programs should always be evaluated.
Approaches include measuring relevant job performance criteria before and after the training to determine the effect of training.

27. The Training Process Assess training needs • Who needs to be trained?
What do they need to know?
What do they already know?
Plan training evaluation
Did trainees like the training?
Can they meet the training objectives?
Do they perform better on the job?
Develop training program
Content
Methods
Duration
Location
Trainers
Set training objectives
Specific
Measurable
Conduct training
Modify training program
based on evaluation
Evaluate training
The Training Process
Figure 14.2

28. Developing Human Resources (cont’d)
Performance Appraisal
A formal assessment of how well employees do their jobs.
Reasons for performance appraisal
Appraisal validates the selection process and the effects of training.
Appraisal aids in making decisions about pay raises, promotions, and training.
Provides feedback to employees to improve their performance and plan future careers.

29. Developing Human Resources (cont’d)
Performance Appraisal (cont’d)
Objective measures of performance
Actual output (units produced), scrap (argument) rate, taka volume of sales, and number of claims processed.
Can become contaminated (infected) by outside factors resulting in “opportunity bias” where some have a better chance to perform than others.
Special performance tests assess each employee under standardized conditions.
Performance tests measure ability and not motivation.

30. Developing Human Resources (cont’d)
Performance Appraisal (cont’d)
Judgmental Methods
Ranking—compares employees directly with each other.
Difficult to do with large numbers of employees.
Difficult to make comparisons across work groups.
Employees are ranked only on overall performance.
Do not provide useful information for employee feedback.
Rating—compares each employee with a fixed standard.
Graphic rating scales consist of job performance dimensions to be rated on a standard scale.
Behaviorally-anchored rating scale (BARS) is a sophisticated method in which supervisors construct a rating scale where each point on the scale is associated with behavioral anchors.

31. Graphic Rating Scales for a Bank Teller/cashier
Dimension:
Punctuality
This teller is always on time for work and promptly opens her or his window
scheduled.
Strongly
disagree 1 2 3 4
Disagree
Agree
agree
Congeniality
This teller always greets his or her customers warmly and treats them with
respect and dignity.
Accuracy
This teller is always accurate in her or his work.
Figure 8.2

32. Behaviorally Anchored Rating Scale
Job:
Specialty store manager
Dimension:
Inventory control
Always orders in the right quantities and at the right time
Almost always orders at the right time but occasionally orders too much
or too little of a particular item
Usually orders at the right time and almost always in the right quantities
Often orders in the right quantities and at the right time
Occasionally orders at the right time but usually not in the right quantities
Occasionally orders in the right quantities but usually not at the right time
Never orders in the right quantities or at the right time 7 6 5 4 3 2 1
Figure 8.3

33. Developing Human Resources (cont’d)
Performance Appraisal (Cont’d)
Performance Appraisal Errors
Recency error—the tendency of the evaluator to base judgments on the subordinate’s most recent performance because it is the most easily recalled.
Errors of leniency (kindness) and strictness—being too soft, too strict, or tending to rate all employees as “average.”
Halo error—allowing the assessment of the employee on one dimension to spread to that employee’s ratings on other dimensions. Sex, age etc discrimination

34. 360-degree feedback method:
In human resources or industrial psychology, 360-degree feedback, also known as multi-rater feedback, multi source feedback, or multi source assessment, is feedback that comes from members of an employee's immediate work circle.
Most often, 360-degree feedback will include direct feedback from an employee's subordinates, peers, and supervisor(s), as well as a self-evaluation. It can also include, in some cases, feedback from external sources, such as customers and suppliers or other interested stakeholders.

36. Developing Human Resources (cont’d)
Performance Feedback (cont’d)
The last step in most performance appraisal systems is given feedback to subordinates about their performance.
Feedback interviews are not easy to conduct. Many managers are uncomfortable with the task, especially if feedback is negative and subordinates are disappointed by what they hear.
Properly training managers can help them conduct more effective feedback interviews..

37. #Maintaining Human Resources
After organizations have attracted and developed an effective workforce, they must also make every effort to maintain that workforce.
To do so requires effective compensation and benefits as well as career planning is important.
Determining Compensation
Determining benefits
Career planning

38. Determining Compensation: The financial remuneration given by the organization to its employees in exchange for their work. Determining Benefits: Things of value other than compensation that an organization provides to its workers. Career Planning: Few people work in the same job their career. Some people change jobs within one organization, others change organizations, and many do both. When these movements are haphazard and poorly conceived, both the individual and the organization suffer.

39. Managing Workforce Diversity
When members of a group differ from one another along dimensions such as age, gender, or ethnicity.
Diversity promotes competitive advantage by:
increasing organizational systems’ flexibility.
bringing added creativity.
increasing the market scope of products.
broadening the resources acquisition basis.
adding a diversity of viewpoints to problem-solving, decision-making processes.
decreasing the cost of doing business.

40. Managing Workforce Diversity (cont’d)
Diversity as a Source of Conflict
Personnel actions (e.g., hiring, firing, and promotion) being attributed to an individual’s diversity status.
Misunderstood, misinterpreted, or inappropriate actions between people or groups.
Cultural differences in work hours, personal styles, interpersonal relations, and conflict management.
Fear, distrust, or individual prejudices.

41. Managing Diversity in Organizations
Individual Strategies
Understanding the nature and meaning of diversity and multiculturalism.
Developing empathy in understanding the perspective of others.
Developing tolerance of fundamental cultural differences.
Having a willingness to communicate and discuss diversity and multiculturalism issues.

42. Managing Diversity in Organizations (cont’d)
Organizational Approaches
Organizational Policies
Actively seek a diverse and varied workforce.
Positive responses to diversity problems.
Mission statement of commitment to diversity.
Organizational Practices
Support networks, structured benefits packages, flexible working hours, and diversity in work groups and teams.

43. Managing Diversity in Organizations (cont’d)
Organizational Approaches (cont’d)
Diversity Training
Training that enables organization members to function in a diverse workplace.
Organizational Culture
Incorporating into a culture the valuation of diversity.

44. Reasons for Increasing Diversity

45. Managing Labor Relations
The process of dealing with employees when they are represented by a union.
Organizations prefer employees remain nonunion because unions limit management’s freedom.
The best way to avoid unionization is to practice good employee relations by:
Providing fair treatment with clear standards in pay, promotions, layoffs, and discipline.
Providing a complaint and appeal system and avoiding favoritism.

46. Managing Labor Relations (cont’d)
Collective Bargaining
The process of agreeing on a satisfactory labor contract between management and labor.
The contract contains agreements about wage, hours, and working conditions and how management will treat employees.
Grievance (complaint) Procedure
The means by which a labor contract is enforced.
Grievances are filed on behalf of an employee by the union when it believes employees have not been treated fairly under the contract.