Chapter 12 Human Resource Management

Attracting & retaining employees Ensuring employees attain org. goals Strategic Human Resource Management –When the components of HRM are coordinated –When HRM is coordinated with strategy, structure, etc. –When the HRM system contributes to org. performance

5 Components of HRM Recruitment & Selection –Recruitment: Attract a pool of qualified candidates –Selection: Choose the candidate who will perform the best on the job

5 Components of HRM Training & Development –Develop employee’s skills & abilities –Helps new employees integrate –Ongoing process Example: Technology updates

5 Components of HRM Performance Appraisal & Feedback –Control system – measure employee performance –Used to distribute rewards to employees –Used to determine motivational / training needs –Developmental purpose

5 Components of HRM Compensation –Should be related to performance Labor Relations –Develop good working relationships with labor unions

The Legal Environment Equal Employment Opportunity (EEO) –Laws that ensure that all citizens have equal opportunity to obtain employment regardless of gender, race, national origin, religion, etc. –Based on Title VII of Civil Rights Act –Equal Employment Opportunity Commission Enforces EEO laws

Recruitment & Selection

Human Resource Planning Forecasting current & future HR needs Performed prior to Recruitment & 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.

Human Resource Planning Outsourcing –Using outside suppliers and manufacturers to produce goods and services More Flexible Cheaper –Disadvantages Loss of control Less knowledge & commitment Angers unions –Not appropriate for complex jobs

Job Analysis Job description – tasks, duties, responsibilities of the job Job Specification – knowledge, skills, & abilities need to perform the job Information is gathered from: –Interviews with current employees –Surveying current employees

Recruitment External Recruiting –Look for people who have never worked for the company before College job fair, newspaper, websites, etc. –Advantages Large applicant pool Access to people who have appropriate KSAs Fresh ideas –Disadvantages Expensive Riskier Require more training

Recruitment Internal Recruiting –Lateral moves or promotions –Advantages Already familiar with the org. Managers know what to expect out of the candidate Boosts morale and motivation Cheaper –Disadvantages Limited pool of applicants

Realistic Job Preview Managers have a tendency to overemphasize the positive aspects of the job Results in a poor fit Realistic job preview sets appropriate expectations –More likely the new employee will be satisfied

Selection Determining an applicant’s qualifications related to the job requirements Background Information –Education level, years of experience Interviews –Structured interviews - managers ask each applicant the same job-related questions. –Unstructured interviews - normal conversations. –Usually structured interviews preferred; bias is more likely in unstructured interviews.

Selection Paper & Pencil tests –Ability tests (math & reading skills) –Personality Tests (Honesty) Physical Ability Tests –for physically demanding jobs

Selection Performance Tests –Applicant performs actual job task –Example: Typing References –People knowledgeable of applicants KSAs –Often the final step –Many employers are reluctant to say anything negative

Selection Selection 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.

Training How to perform your current job better Classroom Instruction –Lectures, videos, role-play, etc. On-the-job Training –Learning occurs in the work setting as new worker does the job. –Training given by co-workers or supervisor

Development Preparing an individual to take on a more challenging job Varied work experience –Top managers need expertise in a variety of areas –International assignments, different departments, etc. Formal Education –Executive MBA / Distance learning

Performance Appraisal The evaluation of employees’ job performance and contributions to their organization. Contributes to effective management by: –Providing information on which HR decisions can be made –Determine training & development needs

Types of Performance Appraisal Traits Appraisals –Personal characteristics relevant to job performance are assessed Ex: personality –Disadvantages Employees with a particular trait may choose not to use that particular trait on the job. Traits and performance are not always obviously linked Difficult to give feedback on traits

Types of Performance Appraisal Behavioral Appraisals –The behaviors employees exhibit on the job are assessed. –How employees perform their jobs –Focuses on what a worker does right and wrong –Provides good feedback for employees to change their behaviors

Types of Performance Appraisal Results Appraisals –The results of employee behavior is assessed –Often multiple behaviors can create the same results –Allows employees freedom to do the job how they prefer

Types of Performance Appraisal Objective appraisals –Assesses performance based on facts Example: sales figures Subjective appraisals –Assessments based on a manager’s perceptions of traits, behavior, or results. Example: Behavior observation scales (BOS), Forced ranking systems

Subjective Appraisal

Who Appraises Performance? Manager –Most common Self –Self appraisals can supplement manager view Peer appraisal –Common in team settings. 360 Degree –Peers, subordinates, superiors, customers, etc.

Performance Feedback Be specific and focus on correctable behavior. Focus on problem-solving and improvement, not criticism. Express confidence in worker’s ability to improve. Treat subordinates with respect and praise achievements. Set a timetable for agreed changes.

Pay & Benefits Pay level –An organization’s compensation rates in comparison with those of similar companies 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. Should be consistent with strategy

Pay & Benefits Pay Structure –Clusters jobs into categories based on their importance & level of skill required –Determines why some jobs in the company are paid more than others –Individual compensation also depends on performance, seniority, skill level.

Pay & Benefits Benefits –Legally required: social security, workers’ compensation –Voluntary: health insurance, retirement, day care, etc. –Cafeteria-style Choose the best mix of benefits for you Can be hard to manage

Labor Relations Managerial activities to ensure the organization & union have effective working relationships Unions –Organizations designed to represent worker’s interests –Elected by workers

Unions National Labor Relations Act (1935) –Permits unions –Created the NLRB to oversee the relationship between employers and unions Not all workers want unions –membership costs money –workers might not want to strike. Union membership is lower today than 40 years ago

Collective Bargaining Negotiation between management & union Issues include wages, benefits, job security, etc. Contract is signed by both sides Grievance procedure –Procedure for employees who feel like they have been unfairly treated Arbitration