Human Resource Management Chapter 10 Human Resource Management McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives After reading this chapter, you should be able to: Determine appropriate responses to major changes in the environment affecting human resources. Comply with the legal framework governing human resources. Develop tactics to implement desired human resource strategies. Prepare a staffing program to recruit and select the best applicants. Establish orientation, training, and career development programs to enhance employees’ contributions to the firm. Implement an effective performance appraisal program to capitalize on employees’ strengths and reduce employees’ weaknesses. Develop a reward system to attract, retain, and motivate employees. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Dealing effectively with human resource (HR) issues is essential for all managers. The human resource staff supports managers in carrying out HR responsibilities. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Skills for Managing Human Resources Congruency Skills Performance Appraisal Skills Hiring Skills Pay Allocation Skills Training Skills McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved. 3

Environment of Human Resources Workforce Diversity Globalization Unions Legislation McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved. 3

The Legal & Regulatory Environment 13.3 The Legal & Regulatory Environment Categories of laws and regulations affecting HRM: Equal Employment Opportunity Civil Rights Act/Age Discrimination/Disabilities Health and Safety Protection Occupational Safety and Health Act Compensation and Benefits Fair Labor Standards Act Equal Pay Act Comparable Worth

CIVIL RIGHTS ACT Race/color, sex, national origin, religion Includes all organizations with 15 or more employees Enforced by the Equal Employment Opportunity Commission Investigates complaints Voluntary conciliation Files cases in federal courts Original law provided for actual damages only Amendments allow penalties for intentional discrimination

AGE DISCRIMINATION IN EMPLOYMENT ACT Employees 40 years of age or older Covers all organizations with 20 or more employees Enforced by the EEOC Allows for double damages Penalties for intentional discrimination provided in amendments to law

AMERICANS WITH DISABILITIES ACT Protects those with disabilities Physical or mental impairment that substantially limits a major life activity Record of such an impairment Regarded as having such an impairment Enforced by the EEOC Reasonable accommodation Reassign marginal duties Modify work schedules Modify exams and testing materials Provide qualified readers/interpreters Permitting use of paid/unpaid leave

BONA FIDE OCCUPATIONAL QUALIFICATION Social Modesty – shower or locker room Aesthetics – acting, modeling Necessary Requirement Religion Age Other

EMPLOYMENT AT WILL STATUATORY EXCEPTIONS JUDICIAL EXCEPTIONS OSHA, Fair Labor Standards Act, Labor Relations Act JUDICIAL EXCEPTIONS Public policy/exercise of legal right Implied contracts Fair dealing/due process

Human Resource Management Process Strategic HR Planning HR Tactics Career Development Staffing Orientation Training Performance Appraisal Compensation and Benefits McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Strategic Human Resource Planning (SHRP) The development of a vision about where the company wants to be and how it can use human resources to get there. The ultimate objective of SHRP is a sustained competitive advantage. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Conditions and Select Responses Human Resource Planning Product Demand Labor Productivity Internal Labor Market External Labor Market Labor Demand Labor Supply Conditions and Select Responses Labor demand exceeds labor supply Training or retraining Succession planning Promotion from within Recruitment from outside Subcontracting Use of contingent workers Use of overtime Labor supply exceeds labor demand Pay cuts Reduced hours Work sharing Voluntary early retirements Inducements to quit Layoffs Labor demand equals labor supply Replacement of quits from inside or outside Internal transfers and redeployment McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Staffing Process Recruitment – the process of generating a pool of qualified candidates for a particular job. An effective recruitment effort should create a pool of qualified applicants. Selection – the screening process used to decide which of the applicants to hire. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

RECRUITING SOURCES Internal – current and past employees, interns, temps Employee referrals Web/internet Advertising – newspaper/professional journals Recruiting agencies – public and private Job fairs Schools and colleges Professional association/unions

SELECTION TOOLS Application Forms Letters of Recommendation Ability Tests Personality Tests Performance Simulation Tests SELECTION TOOLS Psychological Tests Honesty Tests Physical Exams Interviews McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved. 3

Orientation Helps new employees to: Learn more about the company Learn what is expected of them in the job Reduce the initial anxiety of a transition Become familiar with co-workers Learn about work rules and personnel policies McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Employee Training Training is a planned effort to provide employees with specific skills to improve their performance. Effective training can also improve morale and increase an organization’s potential. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Develop and Conduct Training The Training Process Develop and Conduct Training Needs Assessment Organization Needs Task Needs Person Needs Location Presentation Type Evaluation McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Performance Appraisal Performance appraisal has three important objectives: Two-way communication between supervisors and employees. Constructive feedback to employees in order to capitalize on strengths and reduce weaknesses. Help managers decide who should be paid more based on contribution. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Improving Performance Appraisal Accuracy 13.8 Improving Performance Appraisal Accuracy Rating Scale Format Memory Aids Rater Training Rewards Multiple Raters/360 Degree Feedback Adapted from Figure 13.3

Compensation Employees are paid for their contributions to the company. The three key objectives of the compensation system are to: Attract high-quality workers from the labor market. Retain the best employees the company already has. Motivate employee performance. McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Components of Total Compensation Indirect Compensation / Benefits Base Compensation Pay Incentives McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Compensation System Should: Fit the firm’s strategic objectives Fit with the firm’s characteristics and environment Achieve internal equity (perception of fairness) Achieve external equity Be based on employee contributions McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.