6 Chapter Managing Human Resources

Learning Outcomes Describe the key components of the human resource management process and the important influences on that process. Discuss the tasks associated with identifying and selecting competent employees. Explain how employees are provided with needed skills and knowledge. Describe strategies for retaining competent, high-performing employees. © Pearson Education Limited 2015 After studying this chapter, you will be able to: Describe the key components of the human resource management process and the important influences on that process. Discuss the tasks associated with identifying and selecting competent employees. Explain how employees are provided with needed skills and knowledge

Describe the key components of the human resource management process and the important influences on that process. 6.1 © Pearson Education Limited 2015

Human Resource Management The quality of an organization is to a large degree determined by the quality of the people it employs. Staffing and HRM decisions and actions are critical to ensuring that the organization hires and keeps the right people. Getting that done is what human resource management (HRM) is all about. © Pearson Education Limited 2015

The Legal Environment © Pearson Education Limited 2015 The primary environmental force that affects an organization is the legal environment. HRM practices are governed by laws, which vary from country to country, and further vary within state or provinces. As a manager, it will be important for you to know what you legally can and cannot do. The primary U.S. Laws affecting HRM are seen here in Exhibit 7-2, which reflects the federal government’s expansion of influence over HRM since the mid-1960s in the areas of equal employment opportunity and discrimination, compensation and benefits, and health and safety. Since the mid-1960s, many state laws have added to the provisions of the federal laws. Therefore, today’s employers must ensure that equal employment opportunities exist for job applicants and current employees. Decisions regarding who will be hired, or which employees will be chosen for a management training program, must be made without regard to race, sex, religion, age, color, national origin, or disability.

Affirmative Action Programs that ensure that decisions and practices enhance the employment, upgrading, and retention of members of protected groups. Trying to balance the “shoulds and should nots” of these laws often falls within the realm of affirmative action programs, which ensure that decisions and practices enhance the employment, upgrading, and retention of members of protected groups such as minorities and females. Although these regulations have significantly helped to reduce employment discrimination and unfair employment practices, they have also reduced management’s control over HR decisions. © Pearson Education Limited 2015

6.2 Discuss tasks associated with identifying and selecting competent employees. © Pearson Education Limited 2015

Identifying and Selecting Employees HRM Process: employment planning recruitment and downsizing selection © Pearson Education Limited 2015 Every organization needs competent, talented people to do whatever work is necessary for doing what the organization is in business to do, so the first phase of the HRM process involves three tasks: Employment planning Recruitment and downsizing, and Selection Employment planning is the process by which managers ensure that they have the right number and kinds of people in the right places at the right times, people who are capable of effectively and efficiently completing those tasks that will help the organization achieve its overall goals. This process translates the organization’s mission and goals into an HR plan that allows the organization to achieve those goals by: Assessing current and future human resource needs, and Developing a plan to meet those needs

Conducting Employee Assessments Managers conduct an employee assessment by first reviewing the current human resource status through generating a human resource inventory, which generally lists the name, education, training, prior employment, languages spoken, capabilities, and specialized skills of each employee in the organization. Another part of the assessment is job analysis, a process in which workflows are analyzed and the skills and behaviors necessary to perform jobs are identified. The job analysis helps determine the kinds of skills, knowledge, and attitudes needed to successfully perform each job. This information is then used to develop or revise job descriptions and job specifications. © Pearson Education Limited 2015 A job description is a written statement that describes what a job holder does, how it’s done, and why it’s done. It typically includes job content, job environment, and conditions of employment. The job specification states the minimum qualifications that a person must possess to perform a given job successfully. It identifies the knowledge, skills, and attitudes needed to do the job effectively. The job description and job specification are important documents as managers begin recruiting and selecting. They focus the manager’s attention on the list of necessary qualifications, assist in determining whether candidates are qualified, and help ensure that the hiring process does not discriminate.

Recruiting Applicants © Pearson Education Limited 2015 There are multiple sources of applicants, as seen here in Exhibit 7-3. The source used should reflect the local labor market, the type or level of position, and the size of the organization. Most studies show that the best applicants come from employee referrals. Because the recommenders know both the job and the person being recommended, and want to protect their reputation, they tend to only refer well-qualified applicants. However, managers shouldn’t always opt for the employee-referred applicant when such referrals may not increase the diversity and mix of employees.

Handling Layoffs © Pearson Education Limited 2015 In the past decade, and especially during the last several years, most global organizations, many government agencies, and some small businesses have been forced to shrink the size of their workforce or restructure their skill composition. Downsizing has become a relevant strategy for meeting the demands of a dynamic environment. While options can include firing or layoffs, other restructuring choices may be more beneficial to the organization. Here in Exhibit 7-4 we see a summary of major downsizing options. Keep in mind that, regardless of the method chosen, employees suffer.

Selecting Job Applicants © Pearson Education Limited 2015 The selection process seeks to predict which applicants will be successful if hired. Any selection decision can result in the four possible outcomes shown in Exhibit 7-5. A decision is correct when: The applicant who was hired proved to be successful on the job, or When the applicant who was not hired would not have been able to do the job.. When we reject applicants who would have performed successfully (called reject errors) or if we hired applicants who performed poorly (called accept errors). Reject errors mean increased selection costs because more applicants have to be screened but also can open the organization to charges of employment discrimination. Accept errors cost the organization in wasted training, the costs generated or profits forgone because of the employee’s incompetence, severance, and the additional recruiting and selection screening. The major intent of any selection activity is to reduce the probability of making reject errors and accept errors while increasing the probability of making correct decisions. We do this by using reliable and valid selection procedures.

Selection Devices: Tests Managers use a number of selection devices to reduce accept and reject errors. The best-known include written tests, performance-simulation tests, and interviews. Evidence shows that tests of intellectual ability, spatial and mechanical ability, perceptual accuracy, and motor ability are moderately valid predictors for many semiskilled and unskilled operative jobs in industrial organizations. However, an enduring criticism of written tests is that intelligence and other tested characteristics may not necessarily be good indicators of an applicant’s job performance. This criticism has led to an increased use of performance-simulation tests, which are made up of actual job behaviors. The best-known performance-simulation tests are work sampling (a miniature replica of the job) and assessment centers (which simulate real problems one may face on the job). The former is suited to persons applying for routine jobs; the latter to managerial personnel. Because its content is essentially identical to job content, performance simulation should be a better predictor of short-term job performance than written tests and should minimize potential employment discrimination allegations. Additionally, well-constructed performance-simulation tests are valid.

Effective Interviewing The interview is the most universal selection device, along with the application form. Interviews can be reliable and valid selection tools when structured, well organized, and limited to relevant questioning. Research shows that potential biases can creep into interviews if they’re not well structured and standardized. The following are highlights from this research: The interviewer tends to hold a stereotype of what represents a good applicant. The interviewer tends to favor applicants who share his or her own attitudes. The order in which applicants are interviewed will influence evaluations. The order in which information is elicited during the interview will influence evaluations. Managers can make interviews more valid and reliable by reviewing the job description and job specification to help assess the applicant; preparing a structured set of questions to ask all applicants for the job; reviewing an applicant’s résumé before meeting him or her; asking questions and listening carefully to the applicant’s answers; and writing an evaluation of the applicant while the interview is still fresh. In behavioral or situation interview, applicants are observed not only for what they say but also for how they behave. Applicants are presented with situations and are asked to “deal” with the situation. Research shows that these behavioral interviews are nearly eight times more effective for predicting successful job performance than traditional interviews are.

6.3 Explain how employees are provided with the needed skills and knowledge. © Pearson Education Limited 2015

Orientation Job orientation: expands on the information the employee obtained during the recruitment and selection stages, clarifies the new employee’s specific duties and responsibilities as well as how his or her performance will be evaluated, and corrects any unrealistic expectations new employees might hold about the job. Work unit orientation: familiarizes an employee with the goals of the work unit, makes clear how his or her job contributes to the unit’s goals, and provides an introduction to his or her coworkers. Organization orientation: informs the new employee about the organization’s goals, history, philosophy, procedures, and rules. This information includes relevant HR policies such as work hours, pay procedures, overtime requirements, and benefits, and often a tour of the organization’s physical facilities. Managers are responsible for making the integration of a new employee into the organization as smooth and anxiety-free as possible. An orientation process introduces new hires to the organization. The major goals are to: Reduce the initial anxiety all new employees feel as they begin a new job Familiarize new employees with the job, the work unit, and the organization as a whole, and Facilitate the outsider–insider transition.

Employee Training Methods © Pearson Education Limited 2015 Most training takes place on the job because it’s simple and usually costs less, but many other training methods are available. The more popular on-the-job and off-the-job training methods are summarized here in Exhibit 7-7. Managers ensure that training is working by evaluating the results. That typically means that several managers, representatives from HRM, and a group of workers who have recently completed a training program are asked for their opinions. These reactions are not necessarily valid, so training must also be evaluated in terms of how much the participants learned; how well they are using their new skills on the job; and whether the training program achieved its desired results.