The Nature of Human Resource Management

The Nature of Human Resource Management
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin The Nature of Human Resource Management CHAPTER 1 PowerPoint Slides by Charlie Cook

Human Resource Management
Human Resource Management (HRM) The comprehensive set of managerial activities and tasks concerned with developing and maintaining a qualified workforce–human resources–in ways that contribute to organizational effectiveness. Effective human resource management is a vital strategic concern for organizations today.

Evolution of the Human Resource Function
Scientific Management First serious study of management practice focused on structuring individual jobs to maximize the efficiency and productivity of workers. Frederick Taylor and Frank and Lillian Gilbreth used time and motion studies of each job task to develop “the one best way” (production standards) to do the job.

Evolution of the Human Resource Function
Origins of the Human Resource Function Growth in the size and complexity of firms resulted in the creation of specialized units to hire new employees and, later on, to manage the existing workforce as well. Managerial time became more devoted to labor relations and the administration of legal and regulatory matters.

The Human Relations Era
Human Relations Movement Became the dominant management approach in the 1930s. The results of Roethlisbeger and Mayo’s Hawthorne studies at Western Electric demonstrated the importance of understanding human behavior in the workplace. Workers were no longer considered tools but people. Important contributors to the human relations movement: Abraham Maslow and his “hierarchy of human needs” Douglas McGregor and his “Theory X and Theory Y” framework The managerial premise for human relations shifted from treating workers as output resources to making workers happier and more satisfied; this change was intended to make them want to work harder and be more productive.

Personnel Management Personnel Departments
By the 1940s, specialized units run by personnel managers were common in large organizations. Primarily responsible for hiring first-line employees and administering basic HR activities such as pay and benefits. During the 1940s and 50s, personnel management evolved increasingly toward developing testing techniques for optimizing the fit between people and jobs. Were generally regarded as a limited, routine-oriented support function within organizations and not accorded any strategic importance. Also were considered a “dumping ground” for superfluous, poor, and non-promotable managers.

Contemporary Human Resource Management
During the 1960s and 1970s, firms began to recognize the increasing strategic importance of effective HRM practices to productivity and competitiveness. The HRM function–building a motivated and committed workforce–reached its maturity as firms focused on maximizing effectiveness and making work more meaningful and fulfilling. The 1980s and 1990s era of mergers, takeovers, acquisitions, and marketplace globalization led to the downsizing, rightsizing, or reengineering of firms. Outsourcing of traditionally internal functions, including HRM staff activities, by firms became commonplace.

The Human Resource Management Process
Strategic human resource perspective The global environment The legal environment Human resource planning Recruiting human resources Selecting and placing human resources Basic compensation and benefits Performance management Incentives Career Planning and Development Training and Development Managing diverse workforce Managing labor relations Managing the work environment Managing new employment relationships Effective and efficient human resource practices; human resource goal attainment

A Systems View of Human Resource Management
The Organizational System The marketing function The human resource function The finance function The operations function Other fundamental organizational functions

Goals of Human Resource Management
Facilitating organizational effectiveness Enhancing productivity and quality The human resource function in contemporary organizations Complying with legal and social obligations Promoting individual growth and development

Line vs. Staff Perspectives
Organizations typically divide managers into two groups: Line (now operating) managers in operations, finance, and marketing functions supervise and direct the workforce in the creation of goods and services. Their contributions to the organization can be measured directly. Staff managers in legal, accounting, and HR departments perform indirect or support functions, which makes their contributions less easily measured directly. HR departments are assigned staff functions and staff responsibility. HRM activities are distributed throughout organizations, yet HR departments are responsible for monitoring and ensuring organizational compliance with laws, regulations, policies, procedures, and rules.

Smaller vs. Larger Organization Perspectives
Smaller organizations make extensive use of operating managers to carry out HRM functions. A single manager may handle all basic HR functions–hiring, work scheduling, discipline. Very small firms are exempt from many legal regulations. Certain HR functions may be subcontracted out.

Smaller vs. Larger Organization Perspectives
HRM in large firms is handled by a self-contained separate organizational unit of HR specialists. The HR department may be divided into distinct subunits that handle specific HR administration activities and functions such as recruiting and selection, wage and salary administration, training and development, and labor relations.

The HRM Function at Texas Instruments
Vice President, human resources Director, training/ development Director, recruiting and staffing Director, compensation and benefits Director, employee relations Director, leadership development

HRM as a Center of Expertise
The Organizational System The marketing function The human resource function as a center of expertise The finance function The operations function Other fundamental organizational functions

Professionalism and HRM
What it takes to become a successful HRM professional: a solid educational background; general management skills and abilities reflecting conceptual, diagnostic, and analytical skills; a fundamental understanding of functional areas of business; knowledge of business and corporate strategy; and an understanding of the role and importance of the human resource function for one’s organization.

Functional Areas of HRM
Typical HRM Functions: Recruitment, Selection and Placement Compensation and Benefits Employee and Labor Relations Training and Development Human Resource Planning

Professionalism and HRM
Professional associations and certification: Society for Human Resource Management (SHRM) Human Resource Certification Institute (HRCI)

The Strategic Human Resource Environment
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin The Strategic Human Resource Environment CHAPTER 2 PowerPoint Slides by Charlie Cook

Strategic Human Resource Management
Organizational mission, top management team SWOT analysis Corporate and business strategies Formulation of other functional strategies Human resource strategy formulation Top management oversight and strategic leadership Development strategy Compensation strategy Staffing strategy Implementation of other functional strategies Organization design Technology Work/labor force Organization culture Human resource strategy implementation Organizational systems and processes Interpersonal/ group processes Individual Process Organizational effectiveness; attainment of strategic goals

Organizational Purpose and Mission
An organization’s purpose is its reason for existence. A business’s purpose is to earn profit for its owners. A university’s purpose is to educate and pursue knowledge. An organization’s mission statement specifies how its managers have decided to fulfill its purpose. It identifies the unique set of characteristics and strengths of the organization that are its competitive advantage and It defines the scope of business operations in the provision of products and services offered and the markets in which it intends to compete.

STARBUCKS MISSION STATEMENT
To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow. The following five guiding principles will help us measure the appropriateness of our decisions: Provide a great work environment and treat each other with respect and dignity. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. Develop enthusiastically satisfied customers all of the time. Contribute positively to our communities and our environment. Recognize that profitability is essential to our future success. Courtesy—Starbucks Coffee Company.

Influence of the Top Management Team
The top management team of an organization refers to the group of senior executives responsible for the overall strategic operation of a firm: Chairperson of the board of directors Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) President of the firm Senior executives responsible for each major functional area Top management’s clear communication of the strategic vision sets the tone for the organization and plays a major role in shaping its culture.

SWOT Analysis Strategic Actions
Strengths Internal Analysis Weaknesses Strategic Actions Opportunities External Analysis Threats Accomplish the strategy by exploiting opportunities with strengths, correcting weaknesses, and building defenses against threats.

Strategy Formulation Organizations formulate strategy at three basic levels: Corporate strategy The set of strategic alternatives that an organization chooses when managing operations across several industries and diverse markets. Business strategy The set of strategic alternatives that an organization selects from in deciding how to compete in a particular industry. Functional strategy How a firm has decided to manage each of its major internal functions such as marketing, finance, distribution, and human resources.

Corporate Strategy and HRM
A grand strategy is a single overall framework for action the top management team develops to compete in one market or a few closely related markets.

Growth strategies: Niche: Identifying a unique niche in a market and then succeeding in aggressively expanding within the chosen niche. External Growth through acquisition, mergers, and joint ventures. Strategic HRM challenges under growth strategies: To successfully recruit and train sufficient numbers of qualified employees to operate expanding niche operations. In external growth, HRM focuses on melding disparate workforces into a single cohesive and integrated unit.

A retrenchment or turnaround strategy is a grand strategy utilized when major changes in current operations are required to make an organization competitive again. Downsizing or “rightsizing” Actions taken to reduce costs and scale back operations, thus freeing up resources for investment in more promising products and markets. Strategic HRM challenges during this “period”: To manage the process so that surviving employees feel attached to and remain committed to the organization. To optimize the transition process for displaced workers through severance packages and outplacement counseling.

A stability strategy focuses on maintaining the status quo after a period of change in an organization. The strategy’s goals are to stay in current markets (where no growth is anticipated) and to protect the organization from external threats. Strategic HRM challenge of the stability strategy: To retain the firm’s existing employees when there are few chances for advancement, no likelihood of compensation or salary increases, and other HR negative factors.

Diversification is a widely used strategic approach to managing a portfolio of businesses competing in several different markets at once. Related diversification: The relatedness of the businesses (e.g., internal operations, suppliers, customers, locations) is used to achieve cost savings or profit synergies and competitive advantage. HR practices focus on cross-organizational training and experiences to develop overall organizational perspective. Unrelated diversification: The diversity of the businesses (no overlapping as in a related diversification) is assumed to offer protection from business cycle downturns. HR functions under unrelated diversification are customized and decentralized to the particular business units.

Business Strategy and HRM
The Adaptation Model Reactor Little consideration of environment; drift with little concern for strategy Prospector Stress innovation and growth; seek new opportunities Analyzer Stress maintenance of status quo with moderate innovation and growth Defender Stress stability, conservatism, and maintenance of status quo Environmental Turbulence Dynamic, growing environment characterized by high uncertainty and risk Moderately stable environment with some uncertainty Very stable little uncertainty

Competitive Strategies Differentiation: A firm develops an image or reputation for its product or service that sets it apart or causes it to be perceived as being different from its competitors. HRM activities focus on developing high quality work and customer service satisfaction capabilities in the workforce. Cost Leadership: By minimizing costs, a firm can offer the lowest prices and gain higher revenues. Cost leadership comes from internal operational efficiencies and external cost controls. HR activities focus on developing a highly efficient workforce and reengineering operations for higher productivity and lowered labor costs.

Competitive Strategies (continued) Focus: Targeting a differentiated product or service with low cost or unique features for a specific market segment by geographic locations, by consumer preference, or by other distinct customer characteristics. HR activities are focused on creating a workforce that understands the competitive nature of the focal market.

Functional Strategy and HRM
The third level of strategy concerns how a company will decide to conduct its basic functional activities, such as marketing, finance, operations, research and development, and human resources. HR strategy formulation should be integrated with corporate, business, and other functional strategies.

Human Resource Strategies
Human resource strategy formulation Development strategy Performance management Training Development Career planning Staffing strategy HR Planning Recruiting Selection Placement Compensation strategy Wage/salary structure Employee benefits Incentives

Functional Organization Design (U-Form)

Conglomerate Organization Design (H-Form)
Divisional Organization Design (M-Form)

Determinants of Corporate Culture
Founder’s Vision Shared Experiences Culture (values) Heroes, Ceremonies Symbols, Stories

Technology and Organization Design
Manufacturing Organizations combine and transform resources into tangible outcomes that are then sold to others. Service Organizations transform resources into intangible outputs and create time and place utility for their customers. City Bank

Labor Trends and Workplace Issues
Workforce diversity Age Gender Ethnicity Disabilities Lifestyles Unfair Strike Vote Unionization and collective bargaining Union membership Organizing drives Strikes

Human Resource Strategy Implementation
Organizational systems/processes Single-use plans – programs – projects Standing plans – policies – standard operating procedures – rules Individual processes Psychological Contracts Personality traits Attitudes Motivation Equity Theory Expectancy Theory Reinforcement Stress Interpersonal processes Group dynamics Leadership Communications

High Performance Work Systems
Human resource practices that may lead to improved firm performance Self-directed work teams Attitude surveys Information sharing (e.g., newsletters) Contingent pay Favorable selection ratio (i.e., many applicants for each opening in the firm) Formal performance appraisal Social events

Human Resource Management Angelo S. DeNisi & Ricky W. Griffin
The Legal Environment CHAPTER 3 PowerPoint Slides by Charlie Cook

Legal Regulation of HRM
Prospective Employees Protection from discrimination in selection, initial job placement, and initial compensation Current Employees Protection from discrimination in performance appraisal, subsequent job placement, training and development opportunities, career and promotion opportunities, and all other dimensions of work in the organization

The Regulatory Environment of HRM
Creation of national, state, and local regulations New laws and statutes enacted at the national level are adopted or extended by state and local government bodies. Enforcement of regulations The regulatory process is carried out through existing or special agencies, regulatory groups, and the court system. Fines and lawsuits are used as enforcement tools. Practice and implementation of regulations Organizations and managers must put into practice and adhere to the guidelines and regulations that the courts and regulatory agencies attempt to enforce. Compliance with the regulatory process can be hindered by the ambiguity and differing interpretations of the intent of new regulations.

Equal Employment Opportunity
Thirteenth Amendment (1865) Abolished slavery. Fourteenth Amendment (1868) Required the government to follow due process and prohibited the individual states (but not private employers) from denying equal protection to their residents. Reconstruction Civil Rights Acts (1866 and 1871) Extended protection offered to people under 13th and 14th Amendments. Granted the same property rights to all citizens and established the right of individuals to sue in federal court if deprived of their civil rights.

Protected Classes in the Workforce
Classes or categories of individuals who share one or more common characteristics as defined by the various laws enacted to protect against employment discrimination. Race, color, religion, gender, age, national origin, disability, and military veteran status are class definitions that distinguish groups specifically protected from discrimination.

Forms of Illegal Discrimination
Disparate impact Disparate treatment Forms of illegal discrimination Retaliation Pattern or practice

Discrimination and Equal Employment Opportunity
Disparate Treatment Discrimination Employers cannot consciously treat protected class individuals differently from others. Bona Fide Occupational Qualification (BFOQ) Employers must prove that a discriminatory employment preference is a business necessity. Disparate (Adverse) Impact The effect of an apparently neutral employment practice that results in the disproportionate selection of the majority group over protected class candidates. Four-fifths Rule Disparate impact exists when the selection rate for protected class candidates is less than four-fifths (80%) of the selection rate for the majority group.

Equal Employment Opportunity Legislation
Civil Rights Act (Title VII) 1964 Prohibits discrimination on the basis of race, color, religion, sex, national origin; created the EEOC Executive Orders 11246, 11478 Prohibits discrimination by federal contractors; requires AA plans Equal Pay Act 1963 Requires equal pay for equal work (men and women) Age Discrimination and Employment Act 1967 Protects persons over 40 years of age from discrimination Vocational Rehabilitation Act 1973 Requires affirmative employment for disabled by federal contractors Vietnam Era Veterans’ Readjustment Act 1974 Requires affirmative employment for veterans by federal contractors

Equal Employment Opportunity Legislation
Pregnancy Discrimination Act 1978 Requires equal treatment of pregnant women in the workplace; preserves job rights after leave Civil Rights Act 1991 Provides compensatory and punitive damages for intentional discrimination; covers overseas employees of U.S. companies Americans with Disabilities Act (ADA) 1990 Prohibits discrimination against disabled persons (physical and mental); requires reasonable accommodation of disability Family and Medical Leave Act 1993 Provides up to 12 weeks of unpaid leave for infant care and illness; protects employment rights and benefits during leave

Enforcing Equal Employment Opportunity
Charge Filed Copy to Employer Deferred to State EEOC Investigation Dismiss Charge Reasonable Cause Settlement Individual Files Suit w/o EEOC Conciliation No Filing (180 days) Individual Files Suit Consent Decree Unsuccessful Federal District Court

Investigating & Resolving a Discrimination Complaint
Does Claim Have Merit? No Yes Agency finds probable cause that employer violated Title VII EEO agency drops case Party can file a private lawsuit against employer Agency seeks conciliation agreement (out-of-court settlement) Is Case Important and Is Agency Likely to Win? Does Conciliation Succeed? No No Yes Yes Case is dropped EEOC litigates case in federal court Agreement is carried out and case is dropped

Discrimination Case in Court
Prima facie case established; burden of proof shifts to defendant to prove innocence Does the Current System of Promotion Result in Fewer Qualified Women Being Promoted? Yes No Defendant argues that plaintiff was not promoted for a nondiscriminatory reason Prima facie case not established; plaintiff must prove some type of intent to discriminate Plaintiff argues that this reason is a pretext and that the real reason was discrimination Does the Judge/Jury Believe Plaintiff? Is There Evidence of Some Intent to Discriminate? No No Yes Yes No Plaintiff loses case Plaintiff wins case and may be entitled to damages Plaintiff loses case

Affirmative Action Plans
Utilization Analysis comparing employer’s workforce composition to available labor supply Develop Goals and Timetables of non-quota flexible goals for matching internal conditions to the external labor market Develop List of Action Steps specifying how the organization will make efforts to reduce under- utilization of protected classes

Legal Issues in Compensation
Fair Labor Standards Act (FLSA) 1938 Established minimum wage and 40-hour work week; overtime paid at 1½ normal wage after 40 hours Non-exempt employees FLSA provisions apply primarily to non-exempt employees who work on an hourly basis Exempt employees Executive, professional, administrative, and outside sales employees paid on a non-hourly basis are exempted from FLSA regulations on compensation Employee Retirement Income Security Act 1974 ERISA provides protection for employee pension benefit funds

Legal Issues in Labor Relations
National Labor Relations Act (1935) Sought to counter the power of organizations by establishing the rights of workers to organize and setting up the process for electing representative unions with which employers must bargain. Taft-Hartley Act (1947) Rebalanced the labor relations power relationship by requiring the same labor relations obligations for labor as for management. Landrum-Griffin Act (1959) Regulated the internal affairs of unions to ensure their honest and democratic operation.

Employee Safety and Health
Occupational Safety and Health Act (1970) OSHA was passed as comprehensive legislation that focused on worker safety and health in the workplace. The act granted the federal government the power to establish and enforce occupational safety and health standards for businesses in interstate commerce. OSHA is premised on the General Duty Clause that every employer has an obligation to provide a safe working environment. OSHA compliance officers conduct unannounced workplace inspections and can issue citations and impose fines for violations of the Act.

Emerging Areas of Discrimination Law
Employees with disabilities Definition of what constitutes a disability is constantly changing and expanding: an impairment that limits major life activities having a record of impairment being regarded as having a disability includes both physical and psychological impairments Reasonable accommodation The question of “reasonable accommodation” AIDS Considered a disability against which employers may not discriminate in any employment-related matter Coworker education and accommodation of the individual

Sexual Harassment Definition of Sexual Harassment Unwelcome sexual advances in the work environment occurring with sufficient frequency to create an abusive work environment. Quid Pro Quo Harassment The harasser offers to exchange something of value for sexual favors from the harassed. Hostile Work Environment An employee feels uncomfortable or sexually harassed by conditions in the work environment.

Employment-at-Will Employment-at-will is based on the premise that both employer and employee have the mutual right to terminate an employment relationship at any time, for any reason, and without advance notice. Wrongful discharge suits arise from employees’ beliefs that an employer did not afford them due process or have good cause to fire them. In other instances, employers’ use of employment-at-will to discharge employees is modified by an implied contract that promises continued employment. employees’ exercising their legal rights. an employer’s failure to deal with employees in good faith.

Ethics and Human Resource Management
Definition of Ethics A person’s beliefs about what is right or wrong and what is good and bad Ethics and the law Ethics are formed from the societal context in which an individual exists. What is legal is not always ethical.

Evaluating Legal Compliance
Step 1 Have managers develop a clear understanding of the laws that govern HRM. Step 2 Organizations should rely on their own legal and HR staffs to answer questions and review procedures. Step 3 Conduct external legal audits of the organization’s human resource procedures for compliance with laws and regulations.

The Global Environment
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin The Global Environment CHAPTER 4 PowerPoint Slides by Charlie Cook

Global Business Centers
Europe North America Pacific Asia

The World’s Ten Largest Multinational Firms
Source: Fortune, August 2, Reprinted by permission of Fortune Magazine.

Global Issues in International HRM
Developing an international HRM strategy International human resource management Developing an understanding of the cultural environment of HRM Developing an understanding of the political and legal environment of HRM

International HRM Strategy
Home Country Nationals Employees whose nationality is the same as that of country in which the parent company is based. Host Country Nationals Employees whose nationality is the same as that of the country in which the foreign affiliate is located. Third Country Nationals Employees whose nationality is neither that of the parent company’s country nor that of the host country where the foreign affiliate is located.

International HRM Strategy
Ethnocentric staffing model Firms using this model hire home-country nationals to staff higher-level foreign positions. HRM prepares managers for overseas assignments, develops their compensation packages, and handles returning-employee adjustments. Polycentric staffing model HRM practices put more host-country nationals at all levels throughout the foreign subsidiary. Geocentric staffing model This model puts home-, host-, and third-country nationals all in the same category. Positions in fully internationalized firms are filled with the best-qualified persons, regardless of their origin.

Understanding the Cultural Environment
Beliefs, Values Language Fluency Cultural Differences Symbols, Customs Societal Roles

Political and Legal Issues of International Business
Government stability Trade incentives Political and legal issues Trade controls Economic communities

Management Challenges in International Business
Differences in culture, level of economic development, and legal systems International business Determination of the most appropriate source of employees Working conditions, compensation, and cost of living

Specific HR Issues in International Business
Exporting is the process of making a product in the firm’s domestic marketplace and selling it in another country. Licensing involves one company granting its permission to another company in a foreign country to manufacture and/or market the first firm’s products in the local market. Direct investment occurs when a firm headquartered in one country builds or purchases operating facilities in a foreign country Joint venture or strategic alliance refers to two or more firms cooperating in owning or managing an operation.

Domestic Issues in International HRM
Local recruiting and selection issues Domestic issues in international HRM Local training issues Local compensation issues

Managing International Transfers and Assignments
Expatriates are employees sent to work in another country and may be either parent-country nationals or third-country nationals. Commonly required skills for expatriates Managerial competence, adaptability to new situations, language training, overall physical and emotional health, independence and self-reliance, job experience and education. Avoiding costly expatriate failures (early returns) To increase the likelihood of success in overseas postings, firms choose expatriates carefully, pay differential compensation (hardship premiums), and provide cross-cultural training for expatriates and their families.

Expatriate Compensation Balance Sheet
U.S. Domestic Base Salary U.S. Expatriate Balance Sheet Taxes U.S. hypothetical tax and social security Foreign and excess U.S. taxes paid by company Consumption U.S. spendable income U.S. hypothetical housing and utility U.S. auto purchase Excess foreign costs paid by the company Savings U.S. level savings Foreign service / hardship premium added by company

International Labor Relations
Labor parties Many other countries have labor parties that take a direct and active role in national politics. Labor unions in many countries are much more concerned with social issues than are unionized groups in the U.S. Labor-management relations differences Labor “contracts” in some instances are considered understandings that can be broken by either party. Strikes and work stoppages are used more to garner public support than as a bargaining tool against employers. The degree of cooperation between management and labor ranges from confrontational in Europe to cordial in Japan.

Human Resource Planning and Job Analysis
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Human Resource Planning and Job Analysis CHAPTER 5 PowerPoint Slides by Charlie Cook

Staffing The process of determining the organization’s current and future human resource needs and then taking steps to ensure that those needs are met.

Strategic Importance of Human Resource Planning
Alterations in organizational strategy create the necessity for change in organizational structure. Structural change affects both quantitative and qualitative characteristics of the human resource needs in an organization. The fluidity of human resources in organizations requires effective human resource planning that takes a careful and considered approach to workforce changes.

Job Analysis and Other HR Functions
Basic line management functions Human resource planning Compensation Selection process Performance appraisal Training and development Job analysis

Job Analysis and Human Resource Planning
The process of gathering and organizing detailed information about various jobs within the organization so that managers can better understand the processes through which those jobs can be most effectively performed. Essential Functions are those parts of the job (tasks, duties, and responsibilities) which have been identified as critical to successfully accomplishing the job. Identifying essential job functions is crucial to avoiding discrimination against the disabled. Disabled persons must be considered for employment if they can carry out the essential functions with reasonable accommodation.

Knowledge, Skills, and Abilities (KSA)
Job A Family Job A4 Job A1 Job A2 Job A3

Steps in Job Analysis Determining information needs
Determining methods for obtaining information Determining who will collect information

Determining Information Needs
Types of information general work activities how the job relates to other jobs procedures used on the job behaviors required on the job physical movements and demands machines, tools, equipment, and work aids physical environment of the job organizational and social context of the job work schedule and incentive compensation personal requirements (i.e., skills, education, training, experience, physical demands)

Selecting Job Analysis Methods
Job analysts individuals who perform job analysis in organizations Job analysis methods observing tasks and job behaviors interviewing job incumbents and supervisors distributing questionnaires and check lists having the job analyst actually perform the job

Responsibilities for Job Analysis
Parties responsible for conducting job analysis line managers human resource group or department job analysts Dictionary of Occupational Titles (DOT) A federal index of occupations listed by a standardized code. It describes the people, data, and things associated with different jobs listed. O*NET An online job information resource that provides information on 33 knowledge areas and on the relative importance of 46 skills, 36 cross-functional skills, and other data useful as comparison job analysis information.

Collecting Job Analysis Data
Subject Matter Experts (SMEs) are individuals presumed to be highly knowledgeable about jobs who will provide data for job analysis; they may be job incumbents, supervisors, or other employees. Job analysis information identifies the major job dimensions that can then be subdivided into specific job tasks. identifies the basic KSAs necessary to perform the job tasks.

Specific Job Analysis Techniques
Narrative job analysis One or more SMEs prepare a straight written narrative or text description of the job. Fleishman job analysis system This approach relies on a taxonomy of 52 abilities representative of relevant work dimensions and considered to be enduring individual attributes that account for differences in performance. SMEs use Fleishman scales to represent the level of ability required for a job.

Task analysis inventory is a family of job analysis methods; each method focuses on analyzing the focal job to create task inventories. Each task is then evaluated separately on job dimensions. Functional job analysis The first approach to a single universal instrument that can be used to describe all jobs in common terms of people, data, and things. The degree to which these three factors are present in the job determines the complexity of the job.

Position analysis questionnaire Developed by Ernest McCormick as a standardized job analysis instrument consisting of 194 items in six sections that are related to job dimensions of work behaviors. Critical incidents approach relies on critical incidents of behaviors that distinguish effective from ineffective performers. Useful in developing appraisal instruments and focusing on effective performance.

Job Descriptions and Job Specifications
lists the tasks, duties, and responsibilities that a particular job entails. Job specification specifies the characteristics of the individual who will perform the job. It lists the knowledge, skills, abilities, and other characteristics that are necessary to be able to perform the job successfully.

The Human Resource Planning Process
Forecasting the supply of human resources Forecasting the demand for human resources Comparing forecasted supply and forecasted demand Taking appropriate actions

Forecasting the Supply of Human Resources
Sources for labor supply forecast information an organization’s records related to the internal supply of human resources external information about the supply of human resources Methods to forecast future labor supplies mathematical models that assume linearity of current trends input from supervisors and managers in the organization Executive succession involves systematically planning for future promotions into top management positions. includes slotting replacement candidates into successor roles before their anticipated positions open.

Forecasting the Demand for Human Resources
Changes in corporate strategy create structural changes in firms and in the human resource requirements of firms. Statistical approaches that are based heavily on trend analysis may overlook important dynamics in the business environment. Unit (bottom-up) forecasting relies on organizational units to predict their own future demand for employees. Top-down forecasting is the use of top managers and top executives to develop a forecast of human resource demand.

Labor-related Forecasting Ratios
Productivity Ratio The average number of units produced per direct labor employee per year. Staffing Ratio Used to calculate the number of individuals required in jobs not directly involved in the production of actual products. Learning Curve An elaboration of basic forecasting methods that takes into account increases in productivity related to gains in experience and learning. Multiple Regression A complex mathematical procedure forecasting technique that relies on multiple correlation indices that are interrelated to predict HR demand.

Human Resource Information System
Name: Cedric Cool DOB: 11/1/64 Job: Entertainer Hired: 05/1/94 Education: Charming College Performance: Appropriately slick Annual pay: $28,500 - $34,000 KSA: Beer Commercials

Outcomes of Human Resource Planning
Comparison of demand and supply Supply larger than demand Demand higher than supply Demand equal to supply Plan for workforce reduction Plan for growth Plan for stability

Recruiting Human Resources
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Recruiting Human Resources CHAPTER 6 PowerPoint Slides by Charlie Cook

Organizational and Individual Goals in Recruiting
Organizational Goals Attract a pool of qualified applicants Keep pool at manageable size Provide realistic job previews ? Individual Goals Meet work-related goals Meet personal goals Address personal needs

Internal and External Recruiting

Methods of Recruiting Internal Recruiting Job posting
Vacancies posted via bulletin board, memo, and intranets. Supervisory recommendations Supervisors forward their recommendations for their employees to higher managers. Union halls Union members are able to apply for open positions on a priority basis through the union hiring hall process. Recall from layoffs

Methods of Recruiting External Recruiting General labor pool
The local labor market for potential employees. Referrals Individuals who are prompted to apply by a member of the organization. Direct applicants (walk-ins and drop-ins) Individuals who apply (without any proactive action from the organization) whether or not an opening actually exists at the time of application.

Techniques for External Recruiting
State Employment Service World-Wide Headhunters, Inc. (Internet-based applications only) Advertisements Word of Mouth ProTemps Belle College Placement Office

Realistic Job Previews
A technique to ensure that job seekers understand the actual nature of the jobs available to them. As a result, some candidates will withdraw from consideration while others will choose to join. Those who remain are generally more successful; satisfied with both their job choice and the organization.

The Prospective Employee’s Perspective
ABC Inc. The People Company Now Hiring Through its recruiters and recruiting materials, the organization signals its basic values and concerns to prospective employees. Prospective employees use information gained in the recruiting process to assess their “fit in” with the organization.

Alternatives to Recruiting
Overtime Employee Leasing Help Wanted Part-Time Workers Temporary Workers

Evaluating the Recruiting Process
The recruiting process is effective if it results in a reasonable pool of available and qualified potential employees. a recruitment process that can be executed with relatively low cost. the best yields of qualified applicants with the desired skills from each of its targeted sources.

Selecting and Placing Human Resources
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Selecting and Placing Human Resources CHAPTER 7 PowerPoint Slides by Charlie Cook

Steps in the Selection Process
The recruiting process Gather information about pool of qualified applicants Evaluate qualifications of each applicant Make decisions about employment offers

Responsibilities for Selection
Hiring new employees in the organization is the jointly shared responsibility of human resource managers and operating (line) managers. Human resource departments design and manage the selection system and gather basic selection data on applicants. Operating managers interview applicants and make decisions about their “fit” in the organization. Coworkers and team members may interview and make their recommendations about applicants. Hire?

A Sample Selection System
Applications and background checks Unqualified Qualified Employment tests Perform poorly Perform well Interviews Poor impression Good impression References and recommendations Negative feedback Positive feedback Physical examination Poor impression Selection decision /job offer

Basic Selection Criteria
Education refers to the formal classroom training in an academic setting. Education may be general or specific. Degrees and certifications are assumed to be indicators of training and educational level. Competencies are relatively broad capabilities that are necessary for effective job performance. Competency goes beyond education and deals with whether or not a person can actually do something.

Experience is the amount of time the individual may have spent working, in either a general capacity or a specific field. Skills and abilities relate to the specific qualifications and capabilities of an individual to successfully perform a job.

Personal characteristics reflect an individual’s personality and can be important to success on the job. The “big five” five personality (behavioral) traits are neuroticism, extraversion, openness to experience, agreeableness, and conscientiousness. The issue of hiring for “fit” versus skills Beliefs differ among HR managers about whether they should hire persons with the best job-specific skills rather than those who best “fit” into the organization.

Popular Selection Techniques
Employment applications ask for personal information having a bearing on the applicant’s suitability for the job: name, educational background, career goals, and experience. cannot ask non job-related questions such as gender, age, or marital status. Weighted application blanks Various personal characteristics can be assigned numerical indices reflecting specific levels of factors (e.g., education and experience) related to performing a job effectively. Biodata applications Personal background information is used to assess applicants and predict their future performance.

Employment Tests Cognitive ability tests Psychomotor ability tests
Measures of cognitive (mental) abilities such as general intelligence (g) expressed as IQ scores. Psychomotor ability tests Measures of physical abilities such as strength, eye-hand coordination, and manual dexterity. Personality tests Measures of personal traits, or tendencies to act, which are relatively stable personal characteristics. Self-report inventories Measures of applicant’s responses to statements that may or may not apply to that person. Projective technique Measures applicant’s subjective response to an ambiguous stimulus (inkblot). Integrity tests Attempt to assess an applicant’s moral character and honesty.

Work Simulations Work simulations
(sometimes referred to as work samples) ask the prospective employee to perform tasks or job-related activities that simulate or represent a sampling of the work for which the person is being considered. In baskets are special forms of work simulations for prospective managers and consist of collections of hypothetical memos, letters, and notes that require responses. In

Personal Interviews Structured interview
A standardized list of job-related questions asked of all applicants is used for consistency in gathering information about the applicant. Answer scoring is based on how well an applicant’s responses match a predefined key. Semistructured interview An initial set of major or key questions requiring applicant responses is used; follow-up questions are used to expand on specific applicant answers to the primary questions. Unstructured Interview The interview is spontaneous and wide-ranging with no set of prepared questions. Less valid than a structured interview in predicting subsequent job performance.

Common interviewer errors
Personal Interviews Common interviewer errors First- impression error Contrast error Similarity error Nonrelevancy error Job-knowledge error Errors can be eliminated or reduced through proper training of interviewers to make them more aware of personal behaviors and biases that influence their assessments of applicants.

References and Recommendations
Problems Lack of credibility in self-selected reference sources. Legal liability associated with negative recommendations or assumption of liability by the provider for providing an incorrect reference. Reluctance of organizations to provide subjective or assessment information on former employees. Verification of information is restricted to objective factors (i.e., dates of employment, salary history, and job title).

Physical Examinations
Examinations are used to determine if the applicant is physically healthy enough to perform the job. has any serious communicable diseases. has the stamina and physical conditioning to perform a hazardous or strenuous job. Americans with Disabilities Act The Act prohibits discrimination against applicants on the basis of physical disabilities. Examinations now typically occur after job offers are made. Drug testing can be required as a condition of employment. must be conducted under rigorously controlled conditions and the results must be true and verifiable.

Special Selection Methods for Managers
Assessment centers An approach to selecting managers that focuses on measuring and evaluating critical work behaviors. Typically used to assess managers under review for promotions to higher organizational levels. Networks and contacts Informal contacts and interpersonal relationships that yield information not available through other means. Caution should be taken to avoid biased and discriminatory actions.

Selection Technique Reliability
refers to the consistency of a selection device in measuring what it purports to measure, without random error. Assessing reliability Test-retest reliability (correlating a selection technique’s results at two points in time) establishes the strength of the technique’s reliability over time. Alternative-form reliability uses multiple forms of the same instrument that are administered to various individuals. To the extent to which the scores on alternative forms are consistent, reliability across various forms can be inferred.

Selection Technique Validity
refers to the extent to which a measure or an indicator is a reliable and real reflection of what is assumed to be. Content validity is the extent to which the selection technique measures KSAs necessary to perform the job. Construct validity is the extent to which a relationship exists between the test scores and an underlying trait (e.g., honesty testing). Criterion-related validity is the extent to which a selection technique (predictor) can accurately predict an element of performance (criterion).

Single- versus Multiple-Predictor Approaches
Advantages of multiple- predictor approaches Validity and reliability of the overall selection process is enhanced. Measurement error in a single predictor is counterbalanced by other selection techniques. A wider variety and greater depth of information about each applicant is available.

The Selection Decision
Banding involves creating clusters of job applicants who do not differ substantially from one another. Banding allows the organization to select an applicant from an underrepresented group in the organization without compromising high performance standards. Job Offer and Negotiation Offer of employment may be immediate, firm, or subject to negotiation, depending on the applicant’s desirability and level-of-hire in the organization. Determining Initial Job Assignments Placements of newly hired personnel should consider the needs of both the firm and the new employees.

Performance Management
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Performance Management CHAPTER 8 PowerPoint Slides by Charlie Cook

Performance Appraisal
is the specific and formal evaluation of an employee in order to determine the degree to which the employee is performing his or her job effectively. Performance management is the general set of activities carried out by the organization to change (improve) employee performance.

Why Organizations Conduct Performance Appraisals
Importance and goals of performance appraisal Provides a benchmark for recruiting and selection processes Identifies training needs and verifies training effectiveness Provides guidance in structuring compensation and rewards Documents the merit basis of organization’s selection process Gives feedback for motivating and developing employees Provides information for use in human resource planning

A Typical Performance Management Process
Establish job duties Establish and communicate performance standards Inspect/observe performance Document/record observed performance Rate performance Set up meeting with employee Provide feedback, coaching or counseling as needed Is Performance Improving? Yes Additional feedback, coaching or counseling may be utilized Recognize/reward performance, foster further development No Has Performance Improved? Implement performance improvement plans Transfer/demote/terminate employee No Performance managed (repeat performance cycle) Yes

Sources of Information for Performance Appraisal
Supervisor Peers The Ratee Self-appraisal Customers Subordinates

Roles in the Performance Appraisal Process
The organization’s role is to develop the general appraisal process and define its purposes (development and compensation), frequency, performance standards, and the use of appraisal results. The role of raters in the appraisal process is to assist in the development of performance standards, collect information, communicate the appraisal results, and engage in performance management. Ratees must have access to performance appraisal information in order to develop clear and unbiased views of their work performance and be receptive to changing their behaviors.

3600 Performance Appraisal
Supervisor Team Peers Self Customers Subordinates

Ranking Methods Simple ranking Paired- comparison Forced- distribution
The manager ranks from top to bottom or best to worst each member of a particular work group. Paired- comparison The manager compares each employee with every other employee, one at a time. Forced- distribution The manager groups employees into predefined frequencies of performance ratings.

Rating Methods Graphic rating scale Critical- incident
The manager selects a point on a scale that consists of a statement or question about some aspect of an individual’s performance. Critical- incident Managers are required to recall, or consult a log of, instances of good or bad employee performance when evaluating performance and giving feedback. Behaviorally Anchored Rating Scales BARS are a combination of graphic rating scales and the critical-incident method that define various dimensions of performance. The scales place work behaviors in a hierarchy of importance.

Rating Methods Behavioral Observation Scale Management by Objectives
A BOS is developed from critical incidents, like BARS, but uses more critical incidents to define effective performance measures and to indicate their frequency of occurrence. Management by Objectives A goal-based appraisal system that focuses on collective goal setting by subordinates and their managers. Goals are periodically reviewed for progress and attainment.

Examples of Graphic Rating Scales
Please rate the target subordinate on the following characteristics: Attitude 1 2 3 4 5 Poor Below Average Average Above Average Outstanding Working with Others 1 2 3 4 5 6 7 Poor Average Outstanding Meeting Deadlines ____ Needs improvement ____ Meets expectations ____ Exceeds expectations Quality of Work Poor Outstanding

Deficiencies and Weaknesses of Performance Appraisals
Projection The tendency to see in others characteristics that we have, which we think contribute to effectiveness. Contrast error An error that occurs when comparing people against one another rather than to an objective standard. Distribu-tional error An errors of severity, leniency, or central tendency made when a rater uses only one part of the scale. Halo error One positive performance characteristic causes the manager to rate all performance aspects positively. Horns error A manager downgrades all performance because of a single negatively viewed performance dimension.

Behaviorally Anchored Rating Scales
Performance Dimension 1. Interpersonal skills: Instructor’s ability to establish rapport with students in and out of the classroom. 7 Instructor encourages students to ask questions. 6 Instructor comes down to level of students. Instructor maintains an informal relationship with the students 5 4 Instructor doesn’t draw out students who don’t ask questions. 3 2 Instructor “puts down” students who ask questions. Instructor lowers students’ self-esteem. 1

Management by Objectives (MBO)
Supervisor Subordinate Collectively set goals Feedback Goals review Periodic review Annual review

Performance Management and Providing Feedback
Improving the performance feedback interview Provide timely and ongoing feedback to employees. Have individuals appraise their own performance. Encourage participation and two-way communication. Balance negative and postive feedback during the interview. Maintain a developmental and problem-solving orientation. Set clear and specific goals for improving performance.

Training, Development, and Organizational Learning
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Training, Development, and Organizational Learning CHAPTER 9 PowerPoint Slides by Charlie Cook

The Nature of Training and Development
Employee training is a planned attempt by an organization to facilitate employee learning of job-related knowledge, skills, and behaviors. is intended to help the organization function more efficiently. is aimed at improving employee productivity. is used to accommodate changes in the workplace. Development refers to teaching managers and professionals the skills needed for both present and future jobs. helps managers better understand and solve problems, make decisions, motivate employees, and capitalize on opportunities. New Stuff

Learning Theory and Employee Training
is a relatively permanent change in behavior or behavioral potential that results from direct or indirect experience. A learning organization is one whose employees continuously attempt to learn new things and to use what they learn to improve product or service quality. The bottom line All managers should understand the basic purposes and processes of both training and development. Moreover, managers should also recognize the role of learning theory in training and development and be familiar with how the aspects of learning relate to training and development.

Learning and Employee Training and Development
Motivation to learn Learning reinforced by the organization Practice and activity Behaviors seen as meaningful Content effectively communicated Content transferable to job setting Training and development Meaningful learning

Goals of Orientation Orientation Program
Reduce anxiety and uncertainty for new employees Help new employees get acquainted and integrated into their work group Orientation Program Provide favorable initial job experiences for new employees

Basic Issues in Orientation
Issues to consider when planning an orientation The content of the orientation program: basic understandings of organizational policies and procedures hours of work, compensation, and vacation schedules general overview and introduction to the business work rules, disciplinary and grievance procedures The length of the orientation period: the more material included, the longer the orientation period whether to use a single orientation period or an initial period with a follow-up session at a later date The choice of who will conduct the orientation: HR managers, operating mangers, and operating employees union officials and retired employees

Sample New Employee Orientation Schedule

Assessing Training and Development Needs
Needs analysis Organization’s job-related needs Capabilities of the existing workforce Setting training and development goals Determining approach In-house programs Outsourced programs

Developing a Training Program Outline
Objectives of Training Training Program Outline Intended Audience Proposed Content of Training Time Estimates for Training In-House or Outsource Training Cost Estimates

Selecting Training and Development Instructors
Effective instructors facilitate learning Ineffective instructors create learning barriers In-house experts don’t always make good instructors Professional trainers may lack expertise

Gagne’s Learning Categories
Source: Robert M. Gagne, “Learning Outcomes and Their Effects: Useful Categories of Human Performance,” American Psychologist, Vol. 39, 1984, pp

Training and Development Techniques and Methods
Work-Based Programs On-the-job training Apprenticeship Vestibule training Systematic job rotations and transfers Instructional-Based Programs Lecture or discussion approach Computer-assisted instruction Programmed instruction

Training Technology New technologies Video teleconferencing
Interactive video Team-building and Group-based Methods Outdoor training exercises Cooking classes

Special Techniques for Management Development
In basket exercise Individuals are confronted with a hypothetical in basket of letters, memos, reports, and notes. Feedback is given on how to improve trainee’s time management and prioritization skills Leaderless group exercise Trainees are put in a group setting and told to make a decision or to solve a problem. The group must appoint a leader who then takes action to help the group accomplish its goal.

Organization Development (OD)
is the planned systemwide effort that is managed from the top of the organization to increase the organization’s overall performance through interventions that rely heavily on behavioral science technology. OD assumes that employees desire to grow and to develop, and have a strong need to be accepted by others in the organization. OD is used to foster collaboration between managers and employees to take advantage of the skills and abilities of employees and to eliminate aspects of the organization that limit employee growth, development, and group acceptance.

Organization Development (OD) Techniques
Survey feedback Third-party peacemaking Diagnostic activities Process consultation

Evaluating Training and Development
Pre-test and post-test of trainee performance Trainee evaluations of training/development program Sources of evaluation information Measurements of change in organizational performance

Human Resource Management Angelo S. DeNisi & Ricky W. Griffin
Basic Compensation CHAPTER 11 PowerPoint Slides by Charlie Cook

Compensation Compensation
is the set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within the organization. Internal equity in compensation refers to comparisons that employees make to other employees within the same organization. External equity in compensation refers to comparisons employees make to others performing similar jobs in different organizations.

Basic Purposes of Compensation
Internal equity External equity Expense control Compensation Legal compliance Reward and motivate

Wages versus Salaries Wages
generally refer to hourly compensation paid to operating employees; the basis for wages is time. Salary is income that is paid an individual not on the basis of time, but on the basis of performance.

Strategic Options for Compensation
Anticipation of setting pay level Determination of market pay Pay below market rate Pay above market rate Pay market rate

Organizational Pay Rates
Disadvantages Advantages Attracts better employees Minimizes voluntary turnover Fosters strong culture and competitive superiority Additional compensation costs Sense of entitlement Pay above market rate Higher quality of human resources at midrange of market-driven compensation costs Does not attract higher performers Turnover will vary with labor demands of competing firms Pay at market rate Lower compensation costs Useful in labor markets where unemployment is high Lower-quality employees Low morale/job satisfaction Higher turnover; especially among high performers Pay below market rate

Determinants of Compensation Strategy
Factors contributing to a firm’s compensation strategy Relationship of overall strategy to compensation strategy Growth rate of firm and demand for human resources Financial condition of the firm (i.e., ability to pay) Overall attractiveness of firm (i.e., location, culture) Legal context of federal, state, and local labor regulations Union influence and presence in labor market

Pay Surveys and Compensation
are surveys of compensation paid to employees by other employers in a particular geographic area, an industry, or an occupational group. assist firms in avoiding problems of external equity when attempting to set compensation strategy for themselves.

Determining a Wage and Salary Structure
Job ranking method Classification system Regression- based system Job Evaluation Point system Factor comparison method

Job Evaluation and Job Worth
Job Ranking Point System

Job Evaluation and Job Worth
Factor comparison method assesses jobs on a factor-by-factor basis, using a factor comparison scale as a benchmark. Regression-based system uses a statistical technique called multiple regression to develop an equation that establishes the relationship between different dimensions of the job and compensation.

Factor Comparison Method of Job Evaluation
Six steps: Comparison factors are selected and defined. Benchmark or key jobs are identified. Benchmark jobs are ranked on each compensation factor. A part of each benchmark job’s wage rate is allocated to each job factor. Two sets of ratings are prepared, based on the ranking and the assigned wages, to determine the consistency demonstrated by the evaluators. A job comparison chart is developed to display the benchmark jobs and the monetary values that each job receives for each factor.

A Sample Wage Structure
Maximum Maximum Midpoint Maximum Midpoint Salary (in dollars) Minimum Maximum Midpoint Minimum Midpoint Maximum Minimum Midpoint Minimum Minimum | 1 ABC | 2 DEF | 3 GHI | 4 JKLM 5 NOP Grade (class): Containing jobs:

Wage and Salary Administration
Managing compensation allows the organization to control compensation costs and to maintain a compensation structure that fits the needs of both the organization and its employees. As organizational circumstances change, it may become necessary to modify or change the compensation strategy. Determining individual wages has its basis in the organization’s awarding differential compensation to employees on the basis of qualifications, seniority, or other job-related factors.

Wage and Salary Administration
Pay secrecy refers to the extent to which an individual’s compensation in an organization is secret. Arguments for pay secrecy An individual’s compensation is a private matter and not for public knowledge. Knowing pay levels fosters jealousy and resentment. Argument against pay secrecy Public knowledge about an open-pay system creates proper perceptions of equity and motivates performance. Pay compression occurs when individuals of substantially different levels of experience or seniority are paid similar wages or salaries.

Incentives and Performance-Based Rewards
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Incentives and Performance-Based Rewards CHAPTER 12 PowerPoint Slides by Charlie Cook

Rewards and Motivation in Organizations
Perception that motivated behavior will result in rewards aligned with needs and goals Personal needs and goals Motivated effort and behavior

Expectancy Theory Environment Motivation Effort Performance Outcome
Ability

Reinforcement Theory Behavior
Positive consequence (reinforced by reward) Negative consequence (no reward) Repeated Behavior Not repeated

Agency Theory Owners Agents Compensation Risk Time horizon
Minimize costs as a way of maximizing personal wealth Compensation Spend resources (incur costs) to operate business Accept more risk to maximize wealth (return) Risk Take fewer risks to guarantee success (income) Focus on longer time frame for performance Time horizon Easier to maximize performance in the short term Agency theory is concerned with the diverse interests and goals held by the organization’s stakeholders, including its employees and managers, and the methods through which the organization’s reward system can be used to align these diverse interests and goals.

Rewards, Motivation, and Performance in Organizations
Ability Motivated effort and behavior Environmental context Performance

Rewards and Other Employee Behaviors
Turnover Absenteeism Rewards Attendance

Merit Compensation Systems
Merit pay is awarded to employees on the basis of the relative value of their contributions to the organization. Merit pay plans are compensation plans that formally base at least some meaningful portion of compensation on merit. Limitations of merit compensation systems Focus on individual performance, which may be affected by factors outside the control of the individual. Rely on potentially erroneous appraisal systems. Based on a period of performance that is too lengthy. Result in permanent increase to base pay.

Incentive Compensation Systems
Piece-rate incentive plans involve the organization paying an employee a certain amount of money for every unit she or he produces 50¢ pay per piece produced x 15 pieces per hour (standard) $7.50 hourly wage

Incentive Pay Plans Individual incentive plans
reward individual performance on a real-time basis for meeting a goal or hitting a target. Sales commission plans reward individuals engaged in sales work. Incentive pay is typically a percentage of the total volume of sales. $100,000 sales for period x 15% commission rate $15,000 commission pay

Team and Group Pay Systems
Gainsharing is a team- and group-based incentive system designed to share with employees the cost savings from productivity improvements. Gainsharing begins with a clear and measurable standard for team- or group-level productivity. The gains from cost savings or productivity improvements are allocated between the organization and the employees. The Scanlon plan is a type of gainsharing plan in which the distribution of rewards for cost savings gains is tilted toward employees and spread across the entire organization. The Scanlon plan focuses on improvements in productivity (cost reductions) and not on profitability.

Other Types of Team and Group Rewards
Group and team incentives are paid as they are earned, rather than being added to employees’ base salaries. Profit sharing is an incentive system in which, at the end of the year, some portion of the company’s profits is paid into a profit-sharing pool, which is then distributed to all employees. Employee stock ownership plan (ESOP) is a group-level reward system in which the employees are gradually given a major stake in ownership of a corporation. The company uses a loan to purchase a block of its own stock to be held in trust for the employees and then repays the loan from its profits.

Executive Compensation
Bonus Stock options Chief Executive Officer Base salary Perquisites

Employee Benefits and Services
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Employee Benefits and Services CHAPTER 13 PowerPoint Slides by Charlie Cook

Typical Employee Compensation

Differences in Social Contracts
Efficiency wage theory: Firms can save money and become more productive because their higher compensation attracts better employees.

Indirect Compensation and Employee Benefits
Meet employee expectations Improve satisfaction/ decrease turnover Respond to external forces Attract better employees Indirect compensation and employee benefits

Types of Employee Benefits
Benefits refer to rewards, incentives, and other things of value that an organization provides its employees beyond their wages, salaries, and other forms of direct financial compensation. Mandated by Law Optional Social Security Health Care Unemployment Insurance Time Not Worked Pay Workers’ Compensation Life & LT Care Insurance Unpaid Leave (FMLA) Retirements & Pensions 6

Legal Considerations Tax Reform Act 1997
Created Roth IRA, increased deductible for self-employed health insurance premiums; relaxed home office deduction rules. Tax Reform Act 1986 and Revenue Reconciliation Act 1993 Limited contributions to tax-exempt pensions; stipulated that top executive pay over $1 million a year cannot be tax exempt. Family and Medical Leave Act 1993 FMLA requires organizations with 50 or more employees to grant up to 12 weeks of unpaid leave for childbirth and health-related problems.

Legal Considerations Economic Recovery Tax Act 1981
Allowed tax-deductible employee contributions ($2,000 limit) to individual retirement accounts (IRAs); eased company requirements on ESOP financing. Pregnancy Discrimination Act 1978 Protects women from discrimination due to pregnancy (i.e., firing). Employee Retirement Income Security Act 1974 ERISA set rules for employee vesting, pension portability, and requirements for qualified retirement plans to ensure funds for retirees.

Unemployment Insurance
Intent: Provide basic subsistence payment to employees who are between jobs Act covers employees who have worked a minimum number of weeks who are involuntarily unemployed (e.g., laid off) who must be willing to accept a suitable position 5

Social Security Insurance (1935)
Intent: Provide limited supplemental income to retired individuals Coverage and eligibility Survivors’ insurance for underage children Provides long-term disability and related Medicare benefits Must be at least 62 and have worked forty quarters Benefits paid are determined by individual’s lifetime average monthly earnings 5

Workers’ Compensation Insurance
Intent: Provide compensation to employees who suffer a job-related illness or accident Covers Employers Covers Employees Assumed Employment Risk Cost of Injury Negligent Co-Workers Temporary, Permanent, Partial, or Total Disability Contributory Negligence Survivors’ Insurance 6

Optional Protection Plans
Insurance coverage Health insurance is provided through group plans. Health maintenance organizations (HMOs) are medical organizations that provide medical and health services on a prepaid basis. Private Pension Plans Defined benefit plans provide a predetermined level of benefit based on a formula. Defined contribution plan benefits depend on how much money was contributed to the plan and its growth.

Paid Time Off Paid vacations Sick leave Paid holidays Personal leave

Minimum Annual Vacation in Different Countries
Source: Reprinted from G. Milkovich and J. Newman, Compensation, 5th ed. (Chicago: Richard D. Irwin, 1996). Copyright © 1996 by The McGraw-Hill Companies. Reprinted with the permission of The McGraw-Hill Companies.

Life Cycle-Based Benefits
Life cycle benefits are based on a person’s stage of life and include childcare and elder-care benefits. Childcare benefits are becoming increasingly popular. “Family-friendly” organizations offer this benefit plan in the form of referrals, reimbursement, or company-paid or on-site childcare. Elder care benefits are provided in the form of referral to approved facilities and the availability of long-term health-care insurance to provide for nursing homes or at-home care.

Other Types of Benefits
Wellness programs are special benefits programs that concentrate on keeping employees from becoming sick, rather than simply paying expenses when they become sick. Employee assistance plans (or EAPs) assist employees who have chronic problems with alcohol or drugs or serious domestic or personal problems. Perquisites “Perks” are extra benefits that may have no direct financial value but are considered important rewards by employees.

Trends in New Benefit Offerings
* Not Applicable * Source: “What about benefits?” Time, November 9, © Time Inc. Reprinted by permission.

Cafeteria-Style Benefit Plans
allow employees to choose the benefits they really want. maximize the effectiveness of the benefit program for the organization and the employees. can lead to increased satisfaction and reduced turnover. can be used to encourage employees to chose more cost-effective benefits (e.g., HMO versus traditional medical plans). can entail significant administrative costs. mean that costs of some benefits cannot be amortized across less-intense users (adverse selection). must be monitored to ensure that employees make rational choices about benefits.

Employee Awareness of Their Benefits
Source: Andrew Muonio, “How Aware Are Employees of Their Benefits?” HRMagazine, May 1997, p. 53; Danehower and Lust, Benefits Quarterly, Fourth Quarter 1996.

Managing Labor Relations
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Managing Labor Relations CHAPTER 14 PowerPoint Slides by Charlie Cook

The Role of Labor Relations in Organizations
is the process of dealing with employees who are represented by a union. A labor union is a legally constituted group of individuals working together to achieve shared job-related goals, including higher pay and shorter working hours. Collective bargaining is the process by which managers and union leaders negotiate acceptable terms and conditions of employment for workers represented by unions. Unfair Strike Vote

A Historical Time Line of Unionization in the U.S.
United Auto Workers (1935) International Longshoreman’s Union (1937) National Federation of Federal Employees (1917) American Federation of Labor (1886) Congress of Industrial Organizations (1938) National Education Association (1857) Many small craft unions United Cigarmakers (1856) AFL-CIO (1955) National Trades Union (1834) 1750 1775 1800 1825 1850 1875 1900 1925 1950 International Brotherhood of Teamsters (1903) National Typographical Union (1852) Iron Molders (1859) International Ladies Garment Workers Union (1900) Knights of Labor (1869) United Mine Workers (1890) Source: Ricky Griffin and Ronald Ebert, Business, 3rd ed.. © Reprinted by permission of Prentice-Hall, Inc., Upper Saddle River, N.J.

Legal Context of Unions
Cordwainer Doctrine Local Philadelphia courts declared cordwainers an illegal conspiracy in restraint of trade and subject to injunction. Commonwealth v. Hunt 1843 Massachusetts Supreme Court ruled that unions were not a restraint of trade, but it offered no protection for union organizers from firing. Sherman Antitrust Act 1890 Businesses returned to using injunctions against unions for restraint of trade. National Labor Relations Act (Wagner Act) 1935 Established rights of workers to organize unions and to concerted actions (e.g., strike); required employers to recognize and to collectively bargain with unions and refrain from unfair labor practices. Set up the National Labor Relations Board (NLRB) to administer labor law (oversee union elections and collective bargaining).

Legal Context of Unions
Labor Management Relations Act (Taft-Hartley) 1947 Passed in response to public outcry over strikes after WWII. Curtailed and limited union power. Outlawed closed shops, and gave states the option to restrict union security clauses (right-to-work). Empowered the U.S. president to invoke a 60-day “cooling off” period in labor disputes that threaten nation interests. Landrum-Griffin Act (Labor Management Reporting and Disclosure Act) 1959 Focused on eliminating various unethical, illegal, and undemocratic union practices. Union officials must stand for election, and no felons may hold national office.

The Basic Structure of a Union
National or international union Local union Shop steward Source: Ricky Griffin and Ronald Ebert, Business, 3rd ed.. © Reprinted by permission of Prentice-Hall, Inc.

Trends in Union Membership
Union or Association Members as Percent of Wage and Salary Employment (percent) Source: Wall Street Journal Almanac 1999, p Reprinted by permission of Dow Jones, Inc. via Copyright Clearance Center, Inc. © 1999 Dow Jones and Company, Inc. All Rights Reserved.

Reasons for declining union membership Lack of success in union organizing campaigns Change in the the composition of the workforce Management’s use of aggressive anti-union strategies Increases in employee-friendly work environments

Decertification of Union
The process for decertifying a union: The previous labor contract must have expired and no new contract have been approved. The union must have served as the official bargaining agent for at least one year. 30% of the bargaining unit members must sign decertification cards. If the majority of voters in a decertification election favor decertification, the union is removed as the official bargaining representative.

Significant Labor Relations Trends
Shifts in the overall economy The economy is changing to more knowledge workers and downsizing to fewer workers in the smokestack industries from which unions have traditionally drawn their strength. Union-management relations Labor unions, weakened due to loss of membership, have become less confrontational and adopt a more conciliatory approach to union-management relations. Bargaining perspectives Unions have shifted away from wage demands to focus their bargaining efforts on maintaining current benefits and job security issues.

Steps Employees Use to Form a Union
Generate union interest among employees If less than 30% of bargaining unit members sign cards, process ends Collect signed authorization cards Petition NLRB to hold election If union is rejected by majority vote, process ends Secret ballot election held Union signs up members, elect officers Collective bargaining over first contract Labor contract signed Grievance procedure used to resolve disputes during the life of the contract Source: Ricky Griffin, Management, 6th ed. (Boston: Houghton Mifflin, 1999), p Copyright © 1999 by Houghton Mifflin Company. Reprinted with permission.

The Collective Bargaining Process
Mandatory items Items (e.g., wages, working hours, and benefits) that must be included in the collective bargaining process if either party expresses a desire to negotiate over one or more of them. Mandatory items can be bargained to impasse. Permissive items Items that may be included in collective bargaining if both parties agree to their inclusion. Permissive items cannot be bargained to impasse. Impermissible (illegal/non-permissive) items Items that are illegal or discriminatory or that violate federal, state, or local laws are not permitted in collective bargaining.

Negotiating Labor Agreements
Negotiation Preparation Develop a bargaining strategy from previous experience and current labor market conditions. Conducting Negotiations Meet, discuss, bargain over mandatory issues of wages, hours, working conditions. Both bargaining teams make proposals and counter-offers that lead to an agreement.

The Bargaining Zone Bargaining zone Employer’s maximum limit
Employer’s expectation Employer’s desired result Bargaining zone Union’s demand Union’s expectation Union’s minimum limit Source: Ricky Griffin and Ronald Ebert, Business, 5th ed. Reprinted by permission of Prentice-Hall, Inc., Upper Saddle River, N.J.

Striking Boycotting Picketing
Impasse Don’t Buy Here Unfair On Strike Locked Out Buy Union- Made Striking Boycotting Picketing

Resolving Impasses Mediation
A neutral third party (the mediator) reviews the information presented by both sides and then makes an informed recommendation and provides advice to both parties. The mediator does not decide the matter, but rather provides a channel through which negotiations can be revived after an impasse has been reached. Arbitration Both parties agree in advance that they will accept the recommendations made by the independent arbitrator. Final-offer arbitration The parties submit final offers to the arbitrator, who has to choose one of the offers as an imposed settlement.

Managing the Work Environment
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Managing the Work Environment CHAPTER 15 PowerPoint Slides by Charlie Cook

Employee Rights in the Workplace
Discrimination law Minimum wage Employment at Will Labor law Rights to privacy

The Role of Discipline in Organizations
is a formal organizational action taken against an employee as a result of a rules violation, subpar performance, or other dysfunctional behavior. Punishment is any behavior or action, formal or informal, that results in unpleasant effects or consequences for someone else.

The Dysfunctional Employee
Poor performance Substance abuse Criminal activity Rules violation

The Hot Stove Approach to Discipline
Gives Fair Warning Certainty of Application Uniformity of Discipline

Typical Progressive Discipline System
First Offense: Verbal Warning Second Offense: Written Warning Third Offense: Suspension Fourth Offense: Termination

An Alternative Approach to Discipline
First Conference Oral Reminder Second Conference Written Reminder Decision-Making Leave Decision Day Two general approaches to discipline are commonly used. Progressive Discipline, mentioned earlier under employee’s rights, is the right to receive corrective measures by increasing degrees. This approach is intended to administer only as much disciplinary action as is needed to solve the problem. When applied properly, progressive discipline can ensure three important things: Employees always know where they stand regarding offenses. Employees know what improvement is expected of them. Employees understand what will happen next if improvement is not made. On the other hand, Positive Discipline, or nonpunitive discipline, is a system of discipline that focuses on the early correction of employee conduct, with the employee taking responsibility for correcting the problem. As shown on the slide, this approach can be seen as a series of steps or conferences designed to help the employee recognize the problem and make a commitment to solving it. Steps include: First Conference. The purpose of this meeting is to find a solution to the problem through discussion, with oral agreement by the employee to improve performance. At this stage no reprimand or threat of punishment is used. Second Conference. If improvement does not occur, a second conference is held to determine why the agreed-upon solution did not work. At this stage, a written agreement is given with the affirmation that improvement is the responsibility of the employee and a condition of continued employment. Decision-Making Leave DecisionDay. If the second conference fails to lead to improvement, the employee is given a paid day of leave to consider whether or not he or she wishes to stay with the organization. Upon return, the employee either agrees to terms or leaves. If terms are agreed to, the employee must show improvement. Failure to improve results in termination. Commitment Managerial reinforcement or Termination 7

The Physical Environment
Hours of Work Circadian rhythms are natural cycles that indicate when a body needs to eat or sleep. Illumination, temperature, and office and work space design Have strong effects on employee attitudes, decision making, and job satisfaction.

Injury-Prone Businesses
Source: The Wall Street Journal Almanac 1999, p Republished by permission of Dow Jones, Inc. via Copyright Clearance Center, Inc. © 1999 Dow Jones and Company, Inc. All Rights Reserved.

Dangerous Occupations

Common Workplace Hazards and Threats

Organizations and OSHA
Occupational Safety and Health Act of 1970 (OSHA) authorized the U.S. government to create and enforce various standards regarding occupational safety and health. The Department of Labor enforces OSHA standards through on-site inspections of the workplace. Inspectors can issue citations and fines for major violations of the standards.

Job Design in the Workplace
Job specialization Job rotation Job enrichment Job Design Job enlargement Job characteristics

is the determination of an individual’s work-related responsibilities. Job specialization is the degree to which the overall task of the organization is broken down and divided into smaller parts. Job rotation involves systematically moving employees from one job to another.

Job enlargement was developed to increase the total number of tasks workers perform on the assumption that doing the same basic task over and over is the primary cause of worker dissatisfaction. Job enrichment attempts to increase both the number of tasks a worker does and the control the worker has over the job.

The Job Characteristics Approach
is an alternative to job specialization that takes into account the work system and employee preferences; it suggests that jobs should be diagnosed and improved along five core dimensions: Skill variety: the number of things a person does in a job. Task identity: the extent to which the worker does a complete or identifiable portion of the total job. Task significance: the perceived importance of the task the worker does. Autonomy: the degree of control the worker has over how the work is performed. Feedback: the extent to which the worker knows how well the job is being performed.

Job Characteristics Model of Job Design
Core job dimensions Critical psychological states Personal and work outcomes Skill variety Experienced meaningfulness of the work High internal work motivation Task identity Task significance High-quality work performance Experienced responsibility for outcomes of the work Autonomy High satisfaction with the work Knowledge of the actual results of work activities Feedback Low absenteeism and turnover Strength of employee’s growth needs Source: J. R. Hackman and G. R. Oldham, “Motivation through the Design of Work: Test of a Theory,” Organizational Behavior and Human Performance, Vol. 16, 1976, pp Republished by permission of Academic Press via Copyright Clearance Center, Inc. © 1976 by Academic Press, Inc.

The Causes and Consequences of Stress in Organizations
Organizational stressors Individual consequences Task demands Occupation Security Overload Physical demands Temperature Office design Role demands Ambiguity Conflict Interpersonal demands Group pressures Leadership style Personalities Behavioral Alcohol and drug abuse Violence Psychological Sleep disturbances Depression Medical Heart disease Headaches Organizational consequences Decline in performance Absenteeism and turnover Decreased motivation and satisfaction Life stressors Life Change Life trauma Burnout Source: Reprinted from James C. Quick and Jonathan D. Quick, Organizational Stress and Preventive Management, McGraw-Hill, 1984, pp. 19, 44, and 76. Copyright © 1984 by The McGraw-Hill Companies. Reprinted with the permission of The McGraw-Hill Companies.

Most and Least Stressful Jobs

Managing the Diverse Workforce
Human Resource Management Angelo S. DeNisi & Ricky W. Griffin Managing the Diverse Workforce CHAPTER 16 PowerPoint Slides by Charlie Cook

The Meaning of Workforce Diversity
Race Gender Age Religion Workforce diversity Ethnicity Disability

Trends in Workforce Diversity
Changing demographics in the labor force more women more minorities Increased awareness of the competitive advantage and benefits of organizational diversity Legislation and laws that outlawed discrimination in the workplace Globalization of business, increasing the need for businessess to learn to deal with different customs, social norms, and mores

Immigration Trends into the United States
Immigration Rate Rises The immigration rate reached a high just after the turn of the twentieth century, when 11 of every 100 U.S. residents were immigrants. Today the rate is higher than at any time since the 1910s. The immigration rate per 100 U.S. residents: Source: USA TODAY, February 28, 1997, p. 7A. Copyright 1997, USA Today. Reprinted with permission.

Immigration Trends into the United States
1 Mexico is singled out because of the large number of immigrants from that country. * National origin of immigrants is changing. A hundred years age, the greatest number of immigrants were Europeans. Now they are Asians and Latin Americans. 2 Includes illegal immigrants granted amnesty. *Not reported Source: USA TODAY, February 28, 1997, p. 7A. Copyright 1997, USA Today. Reprinted with permission. 1 2

Diversity Management versus EEO
Diversity management places a much heavier role on recognizing and appreciating differences among people at work and attempting to accommodate those differences to the extent that is feasible and possible. Equal employment opportunity means treating people fairly and equitably and taking actions that do not discriminate against people in protected classes on the basis of some illegal criterion.

Age Distributions and the Workforce
Baby-boomers Declining birth rates Aging workforce Later retirements Improved health and medical care

Fatal Injuries (1992-1993 data*)
Age and Accident Rates Fatal Injuries ( data*) *Based on hours worked Source: Michael Moss, “For Older Employees, On-the-Job Injuries Are More Often Deadly,” Wall Street Journal, June, 17, 1997, pp. A1, A10. Reprinted by permission of Dow Jones Company via the Copyright Clearance Center.

Changing Composition of the U.S. Workforce
79.8% 75.3% 72.7% 2.8% 10.6% 6.9% 11.0% 9.5% 4.1% 10.7% 11.7% 4.9% 1986  Black  Hispanic  Asian and other  White 1996 2006 (projection) Source: The Wall Street Journal Almanac 1999, p. 226.

Diversity and Competitiveness
Resource acquisition argument Cost argument Creativity argument Competitive advantage Marketing argument Systems flexibility argument Problem-solving argument Source: Ricky W. Griffin, Management, 6th ed. Copyright © Houghton Mifflin Company, p Reprinted by permission.

Diversity and Conflict
Diversity status Inappropriate behaviors Gender differences Conflict Age differences Fear and mistrust Cultural insensitivity

Individual Strategies for Dealing with Diversity
Communication Understanding Empathy Tolerance

Organizational Strategies for Dealing with Diversity
Culture Policies Practices Diversity training

The Multicultural Organization
Pluralism Full structural integration Full integration of the informal network Absence of prejudice and discrimination No gap in organizational identification based on cultural identity group Low levels of intergroup conflict Source: Based on Taylor H. Cox, “The Multicultural Organization,” Academy of Management Executive, May 1991, pp Reprinted by permission of the Academy of Management via the Copyright Clearance Center. All rights reserved.

The Nature of Human Resource Management

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