Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CHAPTER 11 Human Resource Management: Finding and Keeping the Best Employees

What is HRM? 11-2 Human Resource Management (HRM) All the activities involved in acquiring, developing and maintaining an organization’s human resources HRM Activities Acquiring Human Resources – Planning labor needs – Job Analysis – Recruiting – Selection Developing Human Resources – Orientation – Training and Development – Evaluation (Performance Appraisals) Maintaining Human Resources – Financial Compensation – Benefits Legal Issues Impacting HRM

HUMAN RESOURCE MANAGEMENT 11-3 LO 11-1 Human Resource Management (HRM) -- The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational goals. HRM’s role has grown because of: 1. Increased recognition of employees as a resource. 2. Changes in law that rewrote old workplace practices.

HUMAN RESOURCE MANAGEMENT 11-4 LO 11-1

UNCOVERING the SECRETS of HRM Things Your HR Manager Doesn’t Tell You 11-5 Source: Smart Money, accessed November LO 11-1 We’re short-staffed and under pressure too. We’re not always going to be able to help in the way you hope. We can help you move up the career ladder. What you post on Facebook can get you fired.post on Facebook

HUMAN RESOURCE PLANNING 11-6 LO 11-3 HRM Planning Determining the optimal number of employees Clearly identifying job positions and their requirements Workforce Profile: Personnel inventory - Age - Education - Training - Experience - Specialized skills - Current position - Previous positions Forecasting Based on - Predicted sales - Current workforce skills - Technology changes - Use of temporary workers - Turnover - Retirement - Planned reassignments

HUMAN RESOURCE PLANNING 11-7 LO 11-3 Supply > Demand Laid Off – termination for economic or business reason Fire – terminating the employee for performance reasons Attrition – normal reduction of the work force that occurs when employees leave the firm on their own accord (retire, find another job) Early Retirement – letting employees within a few years of retirement retire early and allowing them to receive their full benefits Demand > Supply Hire – Bring in new employees Promote – Put existing employees in new, “better” positions Transfer – Moving an existing employee to a different position

WHAT’S a JOB ANALYSIS? 11-8 LO 11-3 Job Analysis – A study of what employees do who hold various job titles. Two Parts of a Job Analysis: Job Description – A summary of the objectives of the job, the type of work, the responsibilities and duties, working conditions and relationship to other jobs. Job Specifications -- A summary of the minimum qualifications needed to do a particular job.

RECRUITING EMPLOYEES 11-9 LO 11-4 Recruitment -- The set of activities for obtaining the right number of qualified people at the right time. Human resource managers use both internal and external sources to recruit employees. Small businesses often make use of web sources like CareerBuilder and Monster to recruit employees.CareerBuilderMonster

EMPLOYEE SOURCES LO 11-4

SELECTION (i.e. HIRING) – MAKING THE RIGHT CHOICE LO 11-5 Selection -- The process of gathering information and deciding who should be hired, under legal guidelines, to serve the best interest of the individual and the organization.

STEPS in the SELECTION PROCESS LO Obtaining complete application forms 2. Conducting initial and follow-up interviews 3. Giving employment tests 4. Conducting background investigations 5. Obtaining results from physical exams 6. Establishing trial (probationary) work periods

OOPS! Areas Where Job Applicants Make Mistakes Source: USA Today LO 11-5

KEEPING the RIGHT FACE on FACEBOOK Your online personality be appealing to employers. Some of the worst things to do are:  Posting provocative or inappropriate photos.  Information on drug use or excessive drinking.  Bad mouthing a previous employer.  Discriminatory comments related to race, gender, religion, etc.

HIRING CONTINGENT WORKERS Contingent Workers -- Include part-time and temporary workers, seasonal workers, independent contractors, interns and co-op students LO 11-5 There are about 5.7 million contingent workers in the U.S. Majority of contingent workers are under 25.

WHY HIRE CONTINGENT WORKERS? LO 11-5 Companies hire contingent workers:  When full-time workers are on leave.  During periods of peak demand.  In uncertain economic times.  To save on employee benefits.  To screen candidates for future employment.

ORIENTATION LO 11-6 Effective orientations are the first step in the training & development process Introduce employees to the company culture Strong orientation programs reduce employee turnover Formal or Informal, Long or Short

TRAINING and DEVELOPING EMPLOYEES LO 11-6 Training and Development -- All attempts to improve productivity by increasing an employee’s ability to perform. Training focuses on TEACHING short-term skills. Development focuses on ENHANCING long-term abilities.

MOST COMMONLY USED TRAINING and DEVELOPMENT ACTIVITIES LO 11-6 Training –The process of teaching employees new skills –Training Programs On-the-job training Job simulation Off-the-job training Role Playing Classroom teaching and lectures Developing Labor –The process of enhancing or augmenting employees’ current skills –Development Programs Conferences / Seminars Classroom teaching and lectures Role Playing

WHY GOOD EMPLOYEES QUIT Source: Robert Half International LO 11-6

USING NETWORKS and MENTORING LO 11-6 Networking -- Establishing and maintaining contacts with key managers in and out of the organization and using those contacts to develop relationships. Mentors -- Managers who supervise, coach and guide selected lower-level employees by acting as corporate sponsors. Networking and mentoring go beyond the work environment.

APPRAISING PERFORMANCE on the JOB Performance Appraisal -- An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training or termination LO 11-7 Major Uses of a Performance Appraisal Identify training needs Use as a promotion tool Recognize worker’s achievements Evaluate the firm’s hiring process Judge the effectiveness of the firm’s orientation process Use as a basis for possible termination of a worker

SIX STEPS of PERFORMANCE APPRAISALS LO Establishing performance standards that are understandable, measurable and reasonable. 2. Clearly communicating those standards. 3. Evaluating performance against the standards. 4. Discussing the results with employees. 5. Taking corrective action. 6. Using the results to make decisions.

DOs and DON’Ts of PERFORMANCE APPRAISALS LO 11-7

PERFORMANCE APPRAISAL MISTAKES Common Problems Made While Reviewing Employees LO 11-7 Contrast Effect - Comparing one employee to another. Halo/Horn Effect - Allowing performances in specific areas to unfairly influence overall performance evaluation. Similar-to-Me Effect - Generosity to those you feel are more like you.

COMPENSATION PROGRAMS LO Basic Ways to Compensate Employees 1.Financial Compensation The payment employees receive in return for their labor 2.Benefits Rewards in addition to regular compensation that are provided indirectly to the employee Effective employee reward systems must: Enable employees to satisfy their basic needs Provide rewards comparable to those offered by other firms Be distributed fairly in the organization Recognize that different people have different needs

TYPES of PAY SYSTEMS LO 11-8

TYPES of PAY SYSTEMS LO 11-8

TYPES of PAY SYSTEMS LO 11-8

FRINGE BENEFITS on the JOB LO 11-8 Fringe Benefits -- Sick leave, vacation pay, pension and health plans that provide additional compensation to employees beyond base wages. In 1929, fringe benefits accounted for less than 2% of payroll cost. Today it’s about 30%. Healthcare has been the most significant increase in fringe benefit cost.

EMPLOYEE BENEFITS: FROM BIRTHDAY CAKES TO DEATH BENEFITS Source: Kiplinger’s Personal Finance, November LO 11-8 Paid Vacation & Holidays Paid Sick Days Health Insurance Retirement Programs (401k) Product Discounts Tuition Reimbursement Social Security Medicare Contributions Unemployment Payments Workers’ Compensation Federal Family and Medical Leave Legally Mandated Benefits Optional Benefits

The RANGE of FRINGE BENEFITS LO 11-8 Fringe benefits include incentives like:  Company cars  Country club memberships  Recreation facilities  Special home mortgage rates  Paid and unpaid sabbaticals  Day-care and elder care services  Dental and eye care  Legal counseling  Short or compressed work weeks

CAFETERIA-STYLE and SOFT BENEFITS LO 11-8 Cafeteria-Style Fringe Benefits -- Allow employees to choose the benefits they want (up to a certain dollar amount). Soft Benefits include:  Onsite haircuts and shoe repair  Concierge services  Free meals at work  Doggie daycare  Onsite farmer’s markets

FLEXIBLE SCHEDULING PLANS LO 11-9 Flextime Plan -- Gives employees some freedom to choose which hours to work as long as they work the required number of hours or complete their tasks. Compressed Work Week -- Employees work the full number of work hours, but in fewer than the standard number of days. Job Sharing -- Lets two or more part-time employees share on a full-time job. Home Based Work – Allows employees to perform job by telecommuting from offsite (or home) location

HOME-BASED WORK LO 11-9

LEGAL ISSUES IMPACTING HRM LO 11-2 Civil Rights Act (1964, 1991), Title VII –Prohibits discrimination based on sex, race, color, religion, or national origin –Enforced by EEOC (Equal Employment Opportunity Commission), 1972 –Disparate Treatment – intentional discrimination –Disparate Impact – unintentional discrimination –Affirmative Action – plan that increases minorities and women in workforce –Reverse Discrimination –Sexual Harassment Quid Pro Quo Hostile Work Environment Age Discrimination Act (1967) –Prevents discrimination against individuals aged 40 or above Americans with Disabilities Act (1990) –Prevents discrimination against qualified individuals with disabilities, and requires employers to make reasonable accommodations –AIDS Fair Labor Standards Act (1938) –Establishes a minimum wage and overtime for employees working over 40 hours per week –Most managers and other professionals are exempt Unemployment Compensation (1930’s) –Requires employers to maintain insurance to protect workers when laid off –20 weeks in SC (most other states: 26 weeks)

CIVIL RIGHTS ACT of LO 11-2 Title VII prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions or privileges of employment based on:  Race  Religion  Creed  Sex  National Origin

1972 EQUAL EMPLOYMENT OPPORTUNITY ACT (EEOA) LO 11-2 Strengthened the Equal Employment Opportunity Commission (EEOC). Gave EEOC the right to issue workplace guidelines for acceptable employer conduct. EEOC could mandate specific recordkeeping procedures. EEOC was vested with the power of enforcement.

CONTROVERSIAL PROCEDURES of the EEOC LO 11-2 Affirmative Action -- Policy designed to “right past wrongs” by increasing opportunities for minorities and women. Reverse Discrimination -- Discriminating against members of a dominant or majority group (e.g. whites or males) usually as a result of policies designed to correct previous discrimination against minority or disadvantaged groups. This policy has been at the center of many debates and lawsuits.

UNDERSTANDING AFFIRMATIVE ACTION LO 11-2 Affirmative Action (a series of executive orders) –Applies to all employers with 50 or more employees holding federal contracts in excess of $50,000 –Such employers must actively encourage job applications from members of minority groups and hire qualified employees from minority groups not fully represented in the organization Valid Affirmative Action Program 1.Identify racial/gender imbalance 2.Plan doesn’t unnecessarily trammel rights of majority 3.No bar is created (no quotas) 4.Must be temporary

CIVIL RIGHTS ACT of 1991 and OFCCP LO 11-2 Civil Rights Act of 1991  Amended Title VII and gave victims of discrimination the right to a jury trial and possible damages. Office of Federal Contract Compliance Programs (OFCCP)  Ensures that employers doing business with the federal government comply with the nondiscrimination and affirmative action laws.

LAWS PROTECTING EMPLOYEES with DISABILITIES Americans with Disabilities Act of 1990 (ADA)  Requires employers to give applicants with physical or mental disabilities the same consideration for employment as people without disabilities LO 11-2  Passage in 2008 of Americans with Disabilities Amendments Act expanded protection.  2011 saw regulations that widen the range of disabilities covered by the ADA and shift the burden of proof of disability from employees to employers.

AGE DISCRIMINATION in EMPLOYMENT ACT (ADEA) Age Discrimination in Employment Act (ADEA) LO 11-2  Protects workers 40 and over from employment and workplace discrimination in hiring, firing, promotion, layoff, compensation, benefits, job assignments and training.

MINDING the LAW in HRM LO 11-2 Employers must know the law and act accordingly. Legislation affects all areas of HRM. Court cases highlight that sometimes it’s proper to go beyond providing equal rights. Changes in law and legislation occur regularly.