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Business in a Changing World McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved. Chapter 11 Managing Human Resources 2

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11-4 Amadeus ConsultingAmadeus Consulting: Where Employees are the Company Lisa Calkins and John Basso have created a company for which people are motivated to work for the long term.

11-5 Managing Human Resources Human Resources Management – all the activities involved in determining the organization’s needs for human resources and acquiring, training, and compensating people to fill those needs.

11-6 Increasing in importance – Employee Concerns: Compensation Job satisfaction Personal performance Leisure Environment Opportunities for advancement Managing Human Resources HRM

What is the Primary Reason you Accepted Your Job? Source: Snapshots, USA Today, March 13, 2008, p. B1 11-7

11-8 Job analysis – systematically determining pertinent information about a job (tasks, abilities, knowledge, skills) Job description -- formal & written specifications of the job (title, tasks, relationships, skills, duties, responsibilities). Job specification – description of the job qualifications (education, experience, personal/physical characteristics). Planning – Human Resource Needs

11-9 Recruiting – the formation of a pool of qualified job candidates from which management selects employees. Internal Sources Current employees Promotion from within External Sources advertising Employment agencies Online - Monster.com; Hotjobs.comMonster.comHotjobs.com Employee Recruiting & Selection

11-10 Selection – the process of collecting information about applicants and using information to make hiring decisions. Application Interviewing Testing Reference Checking Employee Recruiting & Selection

11-11 Application -- First stage of the selection process Name, address, telephone Education, previous work experience, references Qualifications for the position Employee Recruiting & Selection

11-12 Interview -- 2 nd phase of selection Detailed information on candidate (applicant) Attitudes toward job Employee Recruiting & Selection

11-13 Testing -- Ability and performance testing Aptitude, IQ, Personality tests Applicant assessment Goodness of “fit” Myers-Briggs Type Indicator Myers-Briggs Employee Recruiting & Selection

11-14 Top 10 Interview Questions Employee Recruiting & Selection

11-15 Recruiting & Selecting Employees Top 10 Mistakes Made in Interviewing 1. Not taking the interview seriously 2. Not dressing appropriately (dressing down) 3. Not appropriately discussing experience and education 4. Being too modest about one’s accomplishments 5. Talking too much 6. Too much concern about compensation 7. Speaking negatively of a former employer 8. Not asking enough or appropriate questions 9. Not showing the proper enthusiasm level 10. Not engaging in appropriate follow-up to interview

11-16 Reference Checking -- Verifying education Previous work experience Privacy issues Employee Recruiting & Selection

11-17 Recruiting & Selecting Employees Sampling of Psychological Tests

11-18 Legal Issues in Recruiting & Selection Title VII of the Civil Rights Act -- Prohibits discrimination in employment Equal Employment Opportunity Commission (EEOC) Tests must be validated

11-19 Legal Issues in Recruiting & Selection Laws affecting HRM -- Americans with Disabilities Act (ADA) Age Discrimination in Employment Act Equal Pay Act

11-20 Training & Development Training -- teaching employees to do specific job tasks through classroom development or on-the-job experience. Development – training that augments the skills and knowledge of managers and professionals.

11-21 Training & Development HiPiHiHiPiHi, Novo King, UOneNet – Stimulate new training conceptsUOneNet

11-22 Assessing Performance Performance Assessment – Strengths Weaknesses Provides feedback Objective or subjective Quantitative or qualitative

11-23 Performance Characteristics

11-24 Turnover Turnover – employees voluntarily leave (quit); involuntary leave (fired). Management must replace workers. Promotion – advancement to higher-level job with increased authority, responsibility, and pay Transfer – move to another job within the company usually at same or similar level and wage rate Separations – employment changes involving resignation, retirement, termination, or layoff

11-25 Compensating the Workforce Reasons Employees Stay in Their Current Jobs Interesting job responsibilities41% Long-term potential31% Loyalty to the company18% Compensation6% Loyalty to manager4%

11-26 Compensating the Workforce Designing fair compensation plans Wage/salary survey – study indicating how much compensation comparable firms are paying for specific jobs that firms have in common

11-27 Compensating the Workforce Financial Compensation: Wages – financial rewards based on hours worked and/or level of output achieved.

11-28 Managing the workforce: Costco Versus Wal-Mart ElementCostcoWal-Mart # of Employees100,000 U.S. 137,000 (International) 1,420,000 U.S. 635,000 (International) Sales$64.4 billion$ billion Average hourly wage$17.25$10.11 % of employees w/ health plans82%80% Turnover (annually)17%40% Profits per employee$13,647$11,039

11-29 Compensation Piece wages – based on level of output achieved. Motivate employees to increase output. Commission – incentive system that pays a fixed dollar amount or a percentage of the employee’s sales. Motivates employees to sell as much as possible.

11-30 Compensation Salary – financial reward calculated on weekly, monthly, or annual basis. (White collar employees, executives, professionals). Bonuses – monetary rewards provided by firm for exceptional performance or incentive to increase productivity

11-31 Compensation Profit sharing – a percentage of company profits distributed to employees, sometimes in the form of stock. ESOP– Employee Stock Ownership Plan. Company distributes shares to employees as a form of compensation.

11-32 MajorSalary Computer science$56,921 Electrical engineering$56,429 Engineering$56,336 Economics$52,926 Nursing$52,129 Chemistry$52,125 Civil engineering$49,427 Finance$48,795 Accounting$43,823 Business administration/management$43,823 Political science/government$43,594 Marketing$43,459 Human resources$40,250 Best Entry-Level Salaries

11-33 Benefits What are benefits? Non-financial forms of compensation: Pension plans Insurance (health, disability, life) Child & elder care

11-34 Benefits Bureau of Labor Statistics (2008) Total compensation = $28.11 per hour Wages/salaries = 69.8% Benefits = 30.2% Taxes, FICA, etc = 7.9%

11-35 Benefits EAP – Employee Assistance Program – Counseling and assistance for employees’ personal problems that may negatively impact job performance.

11-36 Fringe Benefits Traditional Fringe Benefits Sick leave Pension plans Health plans Extra compensation (bonuses) Soft Benefits Perks – work-life bal ance On-site child care Spas Food service Hair salons

11-37 Fringe Benefits Cafeteria Benefit Plans – a set financial amount allocated to employees which allows for selection of benefits most appropriate to each employee

11-38 Managing Unionized Employees Labor union – employee organization formed to deal with employers for achieving better pay, hours, and working conditions.

11-39 Managing Unionized Employees Collective Bargaining – negotiation process where management and unions reach agreement on wages, hours, and working conditions for the bargaining unit (employees represented by union).

11-40 Managing Unionized Employees Labor contract – the formal, written document that stipulates the relationship between union and management for a specific time period. The outcome of collective bargaining.

11-41 Unionized Employees 12% of workforce Unionized workers earn more per hour Concentrated in certain industries automotive manufacturing steel production Construction Public-sector (government)

11-42 Collective Bargaining Process

11-43 Labor & Management Disputes Pickets – public protests against the actions of the company or management. Strike – employee walkouts; work stoppage. Most effective economic weapon for unions in private sector. Boycott – attempt to keep people form purchasing the company’s products. Lockout – management’s version of the strike. Worksite is closed to prevent employees from working.

11-44 Outside Resolution of Disputes Conciliation – 3 rd party intervention so that management & labor continue talks. Mediation – 3 rd party helps to bring labor and management together to resolve disputes Arbitration – 3 rd party settles dispute by imposing solution that is legally binding

11-45 Workforce Diversity

11-46 Population by Race (in thousands) Ethnic GroupTotalIncrease Total population293, % White239, % Hispanic41, % Black37, % American Indian % Asian13, % Native Hawaiian %

11-47 Benefits of Valuing Workforce Diversity More productive use of human resources Reduced conflict among employees More productive working relationships Increased commitment to organizational goals Increased innovation and creativity Increased ability to serve the needs of diverse customers

11-48 Affirmative Action Legally mandated plans that try to increase job opportunities for minority groups by: Analyzing the current pool of workers Identifying areas where women and minorities are underrepresented Establishing specific hiring and promotion goals to resolve the discrepancy. Prohibits organizations from setting hiring quotas that might result in reverse discrimination.