Human Resource Management Chapter 10 McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives LO 1 Discuss how companies use human resources management to gain competitive advantage LO 2 Give reasons why companies recruit both internally and externally for new hires LO 3 Identify various methods for selecting new employees LO 4 Evaluate the importance of spending on training and development

Learning Objectives (cont.) LO 5 Explain alternatives for who appraises an employee’s performance LO 6 Describe the fundamental aspects of a reward system LO 7 Summarize how unions and labor laws influence human resources management

Human Resource Management Human resources management (HRM) Formal systems for the management of people within an organization.

Strategic Human Resources Management Human capital The knowledge, skills, and abilities of employees that have economic value. Value as an asset Carnegie quote

The HR Planning Process Demand forecasts determining how many and what type of people are needed. Supply of labor how many and what types of employees the organization actually will have. Future leaders Future managers Bob Johnson at Provident mutual double the number of agents in five years from 300 to 600. Standard & Poor’s said it could not be done because of only a 90% retention of existing agents and only a 10% delivery rate of hires. For example start with 300 and at the end of the year with no recruiting you would be left with 270to get to the target of 345 at year end you would need to retain 75 new agents. To retain 75 you would need to recruit 150@ $10,000 for a cost in the first year of $1,500,000. Financially this would hurt the firm’s rating.

An Overview of the HR Planning Process Good slide for your management book plus the next one. Figure 10.1

Ex. 9.1 Strategic Human Resource Management Ex. 9.1 Strategic Human Resource Management Company Strategy HRM planning Job analysis Forecasting Recruiting Selecting Attract an Effective Workforce Maintain an Effective Workforce Wage and salary Benefits Labor relations Terminations What is the picture of the person you want for an effective workplace? What about the benefits? How do you complete that picture through training? Described Phoenix mutuals data dimensions. Go into the nine satisfiers of a career money, challenge, growth, prestige,recognition, people, intellectual, Develop an Effective Workforce Training Development Appraisal © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

The HR Planning Process Job analysis A tool for determining what is done on a given job and what should be done on that job.

Ex. 9.4 Attracting an Effective Workforce Ex. 9.4 Attracting an Effective Workforce Choose Recruiting Sources Want ads Headhunters Internet Select the Candidate Application Interview Tests HR Planning Retirements Growth Resignations Welcome New Employee Company Needs Strategic goals Current and future competencies Market changes Employee turnover Corporate culture Matching Model Employee Contributions Ability Education and experience Creativity Commitment Expertise and knowledge Match with Company Inducements Pay and benefits Meaningful work Advancement Training Challenge Covey’s vision-begin with the end in mind. Who will develop into the employee that can be empowered. Will they be a short-term or long-term employee. Tell me about yourself. Your management book. Employee’s Needs Stage of career Personal values Promotional aspirations Outside interest Family concerns Match with © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Staffing the Organization Recruitment The development of a pool of applicants for jobs in an organization Internal, external Selection Choosing from among qualified applicants to hire into an organization

Selection Interviews Background Checks Personality Tests Applications and Résumés Reference Checks Drug Testing Cognitive Ability Tests Performance Tests Integrity Tests Interviews Background Checks Personality Tests Government validity

Interviewing a Job Applicant Use open-ended questions in which the right answer is not obvious. Prepare a road map. Know what you want. What is a good interview what is a bad interview? What are you trying to find out? Are they talking or are they listening? Do not ask questions that are not relevant to the job. Allow enough time so that the interview will not be rushed. Listen--don’t talk. Avoid reliance on your memory. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Interviews Structured interview Selection technique that involves asking all applicants the same questions and comparing their responses to a standardized set of answers. Be prepared. Covey “the end in mind. What are your satisfiers that can fill the applicants needs?

Use of Pre-employment Selection Tools Facebook, phone answering message. Figure 10.2

Performance Tests Assessment center A managerial performance test in which candidates participate in a variety of exercises and situations. Data Dimensions City Council, inbox

Training “the end in mind” Visualize Needs Orientation, team training, computer, DVD, Mentors, shadowing. Appraisals with methods to overcome deficiencies.

Reliability and Validity The consistency of test scores over time and across alternative measurements. Validity The degree to which a selection test predicts or correlates with job performance Criterion, content AIB--- compliance

Workforce Reductions Outplacement The process of helping people who have been dismissed from the company regain employment elsewhere. Cost Agreement Cost and generally assigned agreement

Termination Employment-at-will The legal concept that an employee may be terminated for any reason.

Advice on Termination Aetna Table 10.1

Legal Issues and Equal Employment Opportunity Adverse impact When a seemingly neutral employment practice has a disproportionately negative effect on a protected group. Competition

Performance Appraisal 360-degree appraisal Process of using multiple sources of appraisal to gain a comprehensive perspective on one’s performance

Giving Feedback Summarize the employee’s performance, and be specific. Explain why the employee’s work is important to the organization. Thank the employee for doing the job. Raise any relevant issues, such as areas for improvement. Express confidence in the employee’s future good performance. Can you give negative feedback?

Factors Affecting the Wage Mix Figure 10.6

Pay Structure Figure 10.7

Employee Benefits Cafeteria benefit program Flexible benefit programs An employee benefit program in which employees choose from a menu of options to create a benefit package tailored to their needs. Save 10% Flexible benefit programs Benefit programs in which employees are given credits to spend on benefits that fit their unique needs. comparable worth 401(k)---Vision, dental, vacation, sick days, workers compensation and social security. Mandated

Designing the “Right” Package of Benefits Usually Mandatory Social security Workers’ compensation Unemployment compensation Group life insurance Retirement pensions Paid vacations Optional but Frequently Offered Disability insurance Paid sick leave Health insurance Employee assistance program Paid rest breaks Tuition assistance Optional but Less Frequently Offered Wellness programs Credit unions Funeral leave Vision-care plans Parental leave Retirement counseling © 2006 by South-Western, a division of Thomson Learning. All rights reserved. Adapted from Exhibit 10.10 9

Labor Relations Labor relations The system of relations between workers and management.

Collective Bargaining Union shop An organization with a union and a union security clause specifying that workers must join the union after a set period of time. Right-to-work Legislation that allows employees to work without having to join a union.

Determinants of Union Voting Behavior Figure 10.8

Managing Diversity History Laws Cultural Older Women Labor force

The Changing Workplace  Cultural diversity & employee attitudes  Immigrants  Many are women  People of color  Globalization  Average worker is older now © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Guidelines for Diversity Training Table 11.8

Sexual Harassment Quid pro quo harassment Hostile environment Submission to or rejection of sexual conduct is used as a basis for employment decisions Hostile environment Occurs when unwelcome sexual conduct has the effect of unreasonably interfering with job performance or creating an intimidating or hostile, working environment

Basic Components of an Effective Sexual Harassment Policy Table 11.3

Five Proven Stress Busters Take a brief break from a stressful situation and do something small and constructive, like washing your car or getting a hair cut. Get help with a stressful task from a co-worker, boss, or friend. Concentrate intensely on reading, surfing the Internet, a sport, or hobby. Contrary to common sense, concentration is at the heart of stress reduction. Finish anything you have started. Accomplishing almost anything reduces some stress. Find somebody or something that makes you laugh, and have a good laugh. © 2006 by South-Western, a division of Thomson Learning. All rights reserved. 9

Techniques to Reduce and Control Procrastination Break task down into smaller units Post a progress chart in your work area Make a commitment to others Techniques to Reduce and Control Procrastination Force yourself to confront an uncomfortable task Reward yourself for achieving milestones Use subliminal messages Calculate the cost of procrastination © 2006 by South-Western, a division of Thomson Learning. All rights reserved. 5