Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 1 CHAPTER 14 CHAPTER 14 Management 3rd Edition Chuck Williams Managing Human Resource Systems Prepared by Deborah Baker Texas Christian University

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 2 CHAPTER 14 What Would You Do? You are the senior vice president of HR at Electronic Arts…  Videogames are the largest and fastest-growing sector of the entertainment industry  It’s your job to make sure that scarce game industry talent signs with EA  You need experienced people, who are both creative and disciplined How do you build a pipeline of talent and create a pool of applicants for managerial positions? How do you retain talented people?

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 3 CHAPTER 14 The Human Resource Management Process Recruiting Selection Attracting Qualified Employees Determining Human Resource Needs Human Resource Planning Compensation Employee Separation Keeping Qualified Employees Developing Qualified Employees Training Performance Appraisal

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 4 CHAPTER 14 Determining Human Resource Needs After reading the next two sections, you should be able to: 1.describe the basic steps involved in human resource planning. 2.explain how different employment laws affect human resource practice.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 5 CHAPTER 14 Human Resource Planning 1 Supply and Demand of Human Resources Human Resource Information Systems Human Resource Information Systems

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 6 CHAPTER 14 Blast From The Past The First HR Department  1892: Munsterberg created the foundation of industrial psychology  1900: B.F. Goodrich established the first HR department  1914: Henry Ford formed the Sociological Department

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 7 CHAPTER 14 Forecasting Demand and Supply Internal forecasts External forecasts Internal forecasts External forecasts Direct managerial input Best guess Statistical / historical ratios Direct managerial input Best guess Statistical / historical ratios Work Force Forecasting Forecasting Methods 1.1

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 8 CHAPTER 14 Internal Forecast Factors 1.1  New positions  New equipment and technology  Eliminated positions  Terminations  Retirements  Resignations  Turnover  Transfers  Deaths  Promotions  Organization’s mission  Productivity of current employees  Skills/education of current employees

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 9 CHAPTER 14 External Forecast Factors 1.1  Demographics of labor supply  Geographic population shifts  Manufacturing-to service-to information- based economy shift  Economic conditions  Unemployment rate  Labor unions  Availability of applicants  Technological advances  Competitors  Growth of businesses Adapted from Exhibit 14.2

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 10 CHAPTER 14 Human Resource Information Systems 1.2  Computerized employee information system  Uses  transaction processing  employee self-service  decision support

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 11 CHAPTER 14 Human Resource Information Systems 1.2 HRIS Work History Performance Appraisal Personal Data Educational Data Company Employment History Promotion Data Adapted from Exhibit 14.3

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 12 CHAPTER 14 Employment Legislation 2 Federal Employment Laws Adverse Impact and Employment Discrimination Sexual Harassment Laws

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 13 CHAPTER 14 Federal Employment Laws 2.1 Equal Pay Act of 1963 Civil Rights Act of 1964 Age Discrimination in Employment Act of 1967 Pregnancy Discrimination Act of 1978 Americans with Disabilities Act of 1990 prohibits unequal pay for males and females doing similar work prohibits discrimination on basis of race, color, religion, gender, origin prohibits discrimination on basis of race, color, religion, gender, origin prohibits discrimination against persons age 40 and over prohibits discrimination in employment against pregnant women prohibits discrimination in employment against pregnant women prohibits discrimination on the basis of physical or mental disabilities prohibits discrimination on the basis of physical or mental disabilities

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 14 CHAPTER 14 Federal Employment Laws (cont.) 2.1 National Labor Relations Board Occupational Safety and Health Act guarantee employees the right to form and join unions requires employers provide a safe workplace for employees Family & Medical Leave Act of 1993 Family & Medical Leave Act of 1993 permits workers to take up to 12 weeks of unpaid leave for pregnancy, etc. Civil Rights Act of 1991 strengthened the Civil Rights Act of 1964

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 15 CHAPTER 14 Adverse Impact and Employment Discrimination 2.2 Four-FifthsRuleFour-FifthsRule Adverse Impact Disparate Treatment Intentional discrimination that results in equally qualified people being treated differently Unintentional discrimination that works to the disadvantage of member of protected groups Comparison of selection rates of a protected to a nonprotected group, to determine if adverse impact has occurred

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 16 CHAPTER 14 Sexual Harassment 2.3 Hostile Work Environment Hostile Work Environment Quid Pro Quo unwelcome and demeaning sexually related behavior creates an intimidating and offensive work environment unwelcome and demeaning sexually related behavior creates an intimidating and offensive work environment employee outcomes depend on whether an individual submits to sexual harassment employee outcomes depend on whether an individual submits to sexual harassment

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 17 CHAPTER 14 Common Managerial Mistakes in Sexual Harassment Laws 2.3  That the victim and harasser must be of the opposite sex  That harassment can only occur between coworkers or supervisors and subordinates  That only victims can file complaints Assuming:

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 18 CHAPTER 14 Company Responsibilities 2.3  Respond immediately to make sure sexual harassment laws are followed  Write a clear, understandable sexual harassment policy  Establish clear reporting procedures  Comply with federal, state, and local sexual harassment laws

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 19 CHAPTER 14 Finding Qualified Workers After reading the next two sections, you should be able to: 3.explain how companies use recruiting to find qualified job applicants. 4.describe the selection techniques and procedures that companies use when deciding which applicants should receive job offers.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 20 CHAPTER 14 Recruiting 3 Job Analysis and Recruiting Job Analysis and Recruiting Internal Recruiting External Recruiting

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 21 CHAPTER 14 Job Analysis and Recruiting  work activities  tools and equipment used to do the job  context in which the job is performed  personnel requirements for performing the job  work activities  tools and equipment used to do the job  context in which the job is performed  personnel requirements for performing the job Information Collected by a Job Analysis 3.1

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 22 CHAPTER 14 Job Analysis and HRM 3.1 Job Analysis Job Description Job Specifications HR Subsystems RecruitingRecruitingSelectionSelectionTrainingTrainingPerformanceAppraisalPerformanceAppraisalSeparationSeparation Adapted From Exhibit 14.6

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 23 CHAPTER 14 Job Analysis and Recruiting 3.1 Job Description Job Description written description of the basic tasks, duties, and responsibilities required of an employee holding a particular job written description of the basic tasks, duties, and responsibilities required of an employee holding a particular job Job Specification Job Specification a written summary of the qualifications needed to successfully perform a job

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 24 CHAPTER 14 Internal Recruiting 3.2  A pool of applicants who already work for the company  “Promotion from within”  Improves employee morale and motivation  Reduces employer time and cost  Job posting is the procedure for internal advertising  Career path is a planned sequence of jobs

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 25 CHAPTER 14 Methods for External Recruiting 3.3  Advertising  Employee referrals  Walk-ins  Outside organizations  Employment services  Special events  Internet job sites

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 26 CHAPTER 14 Selection 4 Selection Tests Interviews Application Forms and Résumés References and Background Checks

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 27 CHAPTER 14 Topics to Avoid on Application Blanks and During Selection Children 2. Age 3. Disabilities 4. Physical characteristics 5. Maiden name 6. Citizenship 7. Lawsuits 8. Arrest records 9. Smoking 10. Medical conditions Adapted from Exhibit 14.7

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 28 CHAPTER 14 References and Background Checks 4.2  References or background checks are not always provided by previous employers  Making background checks more effective  dig deeper for more information  get permission in writing  document all checks  consider hiring private investigators

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 29 CHAPTER 14 Selection Tests 4.3 WorkSample BiographicalData Personality AssessmentCenters CognitiveAbility SpecificAbility SelectionTests

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 30 CHAPTER 14 Interviews 4.4  Unstructured Interviews  free-flow of questions  Structured Interviews  interviewer uses standard set of prepared questions  Semi-structured Interviews  some structure combined with interviewer judgement

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 31 CHAPTER 14 Questions in Structured Interviews 4.4 Situational Questions Behavioral Questions Background Questions Job-Knowledge Questions

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 32 CHAPTER 14 Guidelines for Conducting Effective Structured Interviews 4.4 Planning the Interview  Identify and define the KSAO needed for job  Develop key behavioral questions for each KSAO  For each KSAO, develop a list of things to look for in applicant’s responses KSAO: Knowledge, skills, abilities, and other characteristics More

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 33 CHAPTER 14 Guidelines for Conducting Effective Structured Interviews 4.4 Conducting the Interview  Create a relaxed interview atmosphere  Review the applicant’s information  Allocate adequate time  Put the applicant at ease  Tell the applicant what to expect  Obtain job-related information (refer to KSAO)  Describe the job and organization More

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 34 CHAPTER 14 Guidelines for Conducting Effective Structured Interviews 4.4 After the Interview  Review your notes immediately  Evaluate the applicant on each KSAO  Determine each applicant’s probability of success and make a hiring decision

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 35 CHAPTER 14 What Really Works Using Selection Tests to Hire Good Workers 4 Cognitive Ability Tests 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success76% Work Sample Tests 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success77% More

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 36 CHAPTER 14 What Really Works Using Selection Tests to Hire Good Workers 4 Assessment Centers 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success69% Structured Interviews 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success76% More

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 37 CHAPTER 14 What Really Works Using Selection Tests to Hire Good Workers 4 Cognitive Ability + Work Sample Tests 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success82% Cognitive Ability + Integrity Tests 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success83% Cognitive Ability + Structured Interviews 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success82%

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 38 CHAPTER 14 Developing Qualified Workers After reading the next two sections, you should be able to: 5.describe how to determine training needs and select the appropriate training methods. 6.discuss how to use performance appraisal to give meaningful performance feedback.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 39 CHAPTER 14 Training 5 Training Needs Training Methods Training Evaluation

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 40 CHAPTER 14 Determining Training Needs 5.1 Conducting Needs Assessments Identify Performance Deficiencies Test Employee Skills and Knowledge Survey Employers and Managers Listen to Customer Complaints

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 41 CHAPTER 14 The Work Keys Method 5.1 Step 1 Step 2 Step 3 Job Analysis Test Employee Skills Compare Employee Skills to Required Skills Adapted From Exhibit 14.11

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 42 CHAPTER 14 Training Methods 5.2 Adapted From Exhibit Impart Information and Knowledge Develop Analytical and Problem-Solving Skills Practice, Learn, or Change Job Behaviors All of the above films and videos lecture planned readings films and videos lecture planned readings case studies coaching and mentoring group discussions case studies coaching and mentoring group discussions on-the-job training role-playing simulations and games vestibule training on-the-job training role-playing simulations and games vestibule training Computer-based learning

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 43 CHAPTER 14 Evaluating Training 5.3 Reactions Learning Behavior Results how satisfied trainees were with the program how much employees improved their knowledge or skills how much employees actually changed their on-the-job behavior how much training improved job performance

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 44 CHAPTER 14 Performance Appraisal 6 Measuring Job Performance Sharing Performance Feedback

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 45 CHAPTER 14 Measuring Job Performance: Common Rating Errors 6.1  Central tendency  all workers are rated as being “average”  Halo error  all workers are rated as performing at the same level in all parts of their jobs  Leniency error  all workers are rated as performing at a high level

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 46 CHAPTER 14 Measuring Job Performance 6.1 Improving Job Performance Measurements Improve Performance Appraisal Measures Train Performance Raters

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 47 CHAPTER 14 Improving Performance Appraisal Measures 6.1  Objective performance measures  quantifiable outcomes (output, scrap, sales, customer complaints, or rejection rates)  Subjective performance measures  trait rating scales  behavioral observation scales (BOS)

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 48 CHAPTER 14 Rater Training 6.1  Teach raters how to avoid errors  Improve rating accuracy  Video training and role playing often used

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 49 CHAPTER 14 Sharing Performance Feedback 6.2  Managers often fail to effectively give employees performance feedback  360-degree feedback  boss, subordinates, peers, and the employee  best for employee development

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 50 CHAPTER 14 Performance Feedback Separate developmental feedback from administrative feedback 2.Base performance appraisal feedback sessions on self-appraisals 3.Eliminate the “grading” aspect of performance appraisal 1.Separate developmental feedback from administrative feedback 2.Base performance appraisal feedback sessions on self-appraisals 3.Eliminate the “grading” aspect of performance appraisal Recommendations for Sharing Performance Feedback

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 51 CHAPTER 14 Performance Feedback Overall progress 2.Problems encountered in meeting job requirements 3.Opportunities to improve performance 4.Long-range plans and opportunities 5.General discussion of possible plans and goals for the coming year 1.Overall progress 2.Problems encountered in meeting job requirements 3.Opportunities to improve performance 4.Long-range plans and opportunities 5.General discussion of possible plans and goals for the coming year What to Discuss in Performance Appraisal Feedback Sessions

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 52 CHAPTER 14 Keeping Qualified Workers After reading the next two sections, you should be able to: 7.describe basic compensation strategies and explain how they affect human resource practice. 8.discuss the four kinds of employee separations: termination, downsizing, retirements, and turnover.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 53 CHAPTER 14 Compensation 7 Decisions Compensation Decisions Employment Benefits

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 54 CHAPTER 14 Compensation Decisions 7.1 Job evaluation Piecework Commission Profit sharing Employee stock ownership plans Stock options Cafeteria plans Flexible plans Payroll deductions Hierarchical Compressed Adapted from Exhibit PayLevelPayVariabilityPayStructureEmploymentBenefits

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 55 CHAPTER 14 Pay-Level Decisions 7.1  Should workers be paid at, below, or above current market wage?  above market pay makes it easier for managers to attract and retain employees  Job evaluation is used to determine the worth of jobs  pay the “going rate”

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 56 CHAPTER 14 Pay-Variability Decisions 7.1  Piecework  Commission  Profit sharing  Employee stock ownership plans (ESOPs)  Stock options

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 57 CHAPTER 14 Pay-Structure Decisions 7.1  Hierarchical pay structures  big differences in pay among pay levels  work best for independent work  Compressed pay structures  fewer pay levels with smaller differences in pay among pay levels  work best for interdependent work

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 58 CHAPTER 14 Employee Benefits 7.2  Compensation other than direct wages  Employee benefits are legally mandated:  Social Security  worker’s compensation  unemployment insurance  Cafeteria benefit plans  employees can select from optional benefits  Payroll deductions

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 59 CHAPTER 14 Employee Separations 8 Terminations Downsizing Turnover Retirements

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 60 CHAPTER 14 Terminating Employees 8.1  Often mismanaged  Minimize problems in firing employees  firing should not be the first option  firing should be for a good reason  “employment at will”  wrongful discharge  firing should be done in private

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 61 CHAPTER 14 Downsizing Provide clear reasons for the layoffs. 2.Get information to avoid laying off employees with critical skills. 3.Training managers in how to tell employees. 4.Give employees the bad news early in the day. 5.Provide outplacement services and counseling. 6.Communicate with survivors.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 62 CHAPTER 14 Retirement 8.3  Offer financial benefits to encourage employees to retire  Are attractive to many employees  Are difficult to predict which or how many employees will use the program  May cause the company to lose valuable employees Early Retirement Incentive Programs…

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 63 CHAPTER 14 Employee Turnover 8.4  Loss of employees who voluntarily choose to leave the company  Functional turnover (encouraged)  the loss of poor-performing employees  Dysfunctional turnover (discouraged)  the loss of high performing employees

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved 64 CHAPTER 14 What Would You Do—II? MGM Mirage Resorts  The Bellagio Casino and Resort had 24 weeks to…  review 100,000 resumes  conduct 25,000 interviews  hire and train a staff of 9,600  Hiring honest people was critical If you had been the VP of Human Resources at Bellagio, what would you have done?