1. Business Essentials, 7th Edition Ebert/Griffin
Human Resource Management and Labor Relations
Business Essentials, 7th Edition Ebert/Griffin
PowerPoint Presentation prepared by
Carol Vollmer Pope Alverno College
© 2009 Pearson Education, Inc.

2. The Foundations of Human Resource Management
Human Resource Management (HRM)
Activities directed at attracting, developing, and maintaining an effective workforce
The Strategic Importance of HRM
Human resources has a substantial impact on a firm’s bottom-line performance
Many firms are developing strategic HR plans
Chief officer reports to CEO
First let’s look at the foundations of human resource management.
What is human resource management? Human resource management includes activities directed at attracting, developing, and maintaining an effective workforce.
What is the strategic importance of HRM? The strategic importance of HRM include the following points:
Human resources has a substantial impact on a firm’s bottom-line performance.
Many firms are developing strategic HR plans.
Many chief HR officers report to the CEO of the organization.
Teaching Tips:
In your student teams, please make a list of three key activities that human resources personnel are engaged in that are directed at attracting, developing and maintaining an effective workforce. For example, what types of activities do they do? We will share our examples with the class.
Answers will vary but should include key areas such as interviewing, hiring, managing employee benefits, etc.
© 2009 Pearson Education, Inc.

3. Figure 10.1 The HR Planning Process
Let’s examine the HR planning process.
First the HR department will conduct a job analysis.
Second, they will forecast a demand for labor.
This forecast will address the internal and external supplies of labor.
Finally they will develop a plan to match demand with supply.
Teaching Tips:
In your student teams, please think of an example of how this model might be applied within an organization that produces toys in a recession economy. We will share our examples with the class.
Besides forecasting a demand for labor, the HR job analysis will examine the steps in the production process, as well as the current economic conditions. This should be reflected in the student answers. In a recession, people will not spend as much money on toys, thus the HR team should conclude that the forecast for the supply of labor will go down.
© 2009 Pearson Education, Inc.

4. © 2009 Pearson Education, Inc.
HR Planning
Job Analysis
A systematic analysis of jobs within an organization
Job Description
Lists the duties and responsibilities of a job; its working conditions; and the tools, materials equipment, and information used to perform it
Job Specification
Lists the skills, abilities, and other credentials and qualifications needed to perform the job effectively
Let’s focus more specifically on job analysis. Job analysis is a systematic analysis of jobs within an organization.
First there is the job description.
This lists the duties and responsibilities of a job; its working conditions; and the tools, materials, equipment and information used to perform the job.
Second is the job specification.
This lists the skills, abilities and other credentials and qualifications needed to perform the job effectively.
Teaching Tips:
In your student teams, please develop a job description for a customer service representative for a large toy manufacturer. Be sure to address the elements included in the job description we just discussed. Then please prepare the job specification for the same position, listing the skills, abilities and other credentials and qualifications one might need to perform the customer service job effectively.
Answers will vary, but should reflect back on the elements of the job description and job specification listed above.
© 2009 Pearson Education, Inc.

5. © 2009 Pearson Education, Inc.
Forecasting HR Demand and Supply
Forecasting internal supply (number/type of people who will be in the firm at a future date)
Replacement charts: List of each management position, who occupies it, how long that person will likely stay in the job, and who is qualified as a replacement.
Employee information systems: Computerised system containing information on each employee’s education, skills, work experiences and career aspirations.
Let’s discuss forecasting the demand and supply factors in Human Resources.
Forecasting internal supply—or the number/type of people who will be employed in the firm at a future date. To do this, HR uses replacement charts and employee information systems.
Replacement charts list which positions are anticipated to be open in the next months and years.
Employee information systems contain skills inventories of the current employees in the firm.
Forecasting external supply—or the number/type of people who will be available for hiring from the labor market at large. This process should include examining information available from:
State employment commissions.
Government reports.
College information.
Teaching Tips:
Let’s revisit, in our teams of students, our example of a large toy manufacturer. How might the toy manufacturer forecast internal supply? What about getting information about the external supply of available employees? What issue might they face in a recessionary economy?
Answers will vary but should address the items reviewed in this slide, such as replacement charts and what they include and information from employee information systems. The answers should also address external supply by contacting state employment commissions, government reports and college information on graduates. In a recessionary economy, the firm may be looking at how they can retain employees or how they will function once the economy returns to growth with the employees within their employee information systems.
© 2009 Pearson Education, Inc.

6. © 2009 Pearson Education, Inc.
HR Planning (cont’d)
Matching HR Supply and Demand
Alleviating Shortfalls
Seeking new hires
Retraining and transferring present employees
Retaining retirees
Installing more productive systems
Managing Overstaffing
Transferring extra employees
Not replacing employees who quit (attrition)
Encouraging early retirement
Laying off personnel
In addition, the HR department must consider matching HR supply with demand.
They must address alleviating shortfalls, which includes taking the following steps:
Seeking new hires.
Retraining and transferring present employees.
Retaining retirees.
Installing more productive systems.
They must also manage overstaffing. In this situation, HR managers must think about the following:
Transferring extra employees.
Not replacing employees who quit (attrition).
Encouraging early retirement.
Laying off personnel.
Teaching Tips:
Let’s focus back on our large toy manufacturer. In a recessionary economy, please discuss in your teams which of these two methods might the firm employ to match HR supply and demand? We will share our answers with the class.
Answers should include the items under managing overstaffing noted above.
© 2009 Pearson Education, Inc.

7. Staffing the Organization
Recruiting
Attracting qualified persons to apply for the jobs that are open
Internal Recruiting
Considering present employees as candidates for openings
Promotion from within
Union contracts and job bidding
External Recruiting
Attracting people outside of the organization to apply for jobs
State employment agencies
Private employment agencies
Advertisements
As an HR manager staffs the organization, there are a couple different types of recruiting that he or she may undertake.
First, let’s define recruiting as attracting qualified persons to apply for the jobs that are open.
Internal recruiting involves considering present employees as candidates for openings. These can include the following methods:
Promotion from within the employees already working for the company.
Union contracts and job bidding.
External recruiting includes attracting people outside of the organization to apply for a job with the organization. These sources can include:
State employment agencies.
Private employment agencies.
Advertisements.
Teaching Tips:
In your student teams, please choose either internal or external recruiting. Then please provide two examples of how a large firm would go about the type of recruitment your team chose. We will share our answers with the class.
Answers should focus around the items reviewed on this slide.
© 2009 Pearson Education, Inc.

8. © 2009 Pearson Education, Inc.
Selecting Human Resources
Application forms—no illegal questions
Tests—ability, skills, aptitude, knowledge, attitude
Interviews—validity is increased by:
Training interviewers to reduce individual bias
Using a structured interview format with job-related questions to improve consistency, reduce bias, and eliminate illegal questioning of applicants
Other Techniques
Polygraph tests
Physical examinations
Drug tests
Reference checks
Validation- Process of determining the predictive value of a selection technique
As an HR manager goes about selecting the human resources, or employees, he or she will need to staff the organization, the following are items that can be used by the manager to accomplish the task:
Application forms; however, make sure the forms do not ask illegal questions such as one’s age, marital status, etc.
Using a structured interview format with job-related questions to improve consistency, reduce bias and eliminate illegal questioning of applicants.
Other techniques that can be used:
Polygraph, or lie detector test. These are not used that frequently anymore.
Physical exams, but employers must be aware of the Americans with Disabilities Act, which forbids denying someone employment based on physical disability alone.
Drug tests.
Reference checks.
Teaching Tips:
In your student teams, please select two of the techniques that can be used by an HR manager. Please come up with examples of what those techniques might look like. We will share our answers with the class.
Answers will vary but should include the techniques listed in the slide above.
© 2009 Pearson Education, Inc.

9. Developing the Workforce
TRAINING
On-the-job training
Training, sometimes informal, conducted while an employee is at work.
Off-the-job training
Training conducted in a controlled environment away from the work site.
Vestibule training
Off the job training conducted in a simulated environment.
Developing the workforce once it is hired requires training of employees. This can include:
On-the-job training: Working side-by-side as the employee learns the tasks required of the position.
Off-the-job training: Providing a separate training program for employees while they are away from their jobs.
Vestibule training: Also called “the teachable moment,” vestibule training occurs when a supervisor or manager discusses a training issue with an employee while they are walking in the office after encountering a specific situation.
Teaching Tips:
In your student teams, please choose one of the forms of training. Then please provide two example scenarios as to how the chosen type of training can be conducted. We will share our responses with the class.
Answers will vary.
© 2009 Pearson Education, Inc.

10. © 2009 Pearson Education, Inc.
Performance Appraisal
Defining performance standards
Observing performance
Writing up the assessment
Discussing the appraisal
Performance appraisals are another important part of human resources. Performance appraisals include:
Defining performance standards.
Observing performance.
Writing up the assessment.
Discussing the appraisal.
Teaching Tips:
In your student teams, please role play a brief performance appraisal. One of you will be the employee and the other the manager. Create your own scenario and company. Try to use one of each of the elements we have just discussed. We will share our experiences with the class. I am going to now put up a sample employee appraisal form for you to use in your teams.
Answers will vary. Let the students try to do this. Go to the next slide and let them work for 5 minutes.
Performance Appraisal
Evaluating job performance
© 2009 Pearson Education, Inc.

11. FIGURE 10.2 Sample Performance Evaluation Form
Teaching Tips:
As I just mentioned, you are working in your teams to perform a sample performance evaluation. Feel free to use elements of this form. When you have finished, switch roles so you each have a chance to be the employee and the manager. We will share our results in five minutes.
© 2009 Pearson Education, Inc.

12. Compensation and Benefits
Compensation System
The total package of rewards that a company offers employees in return for their labor
Wages—money paid for time worked
Salary—money paid to perform a job
Factors affecting compensation
Competitors’ wage offerings
Internal wage and salary structure—job value, performance, and longevity
Compensation and benefits are important areas in human resources. A compensation system is the total package of rewards that a company offers employees in return for their labor. These include:
Wages, which is money paid for time worked.
Salary, which is money paid to perform a job.
Let’s review a few factors affecting compensation:
Competitors’ wage offerings. What the market salary level is impacts salaries you set within your own firm.
Internal wage and salary structure, which includes:
Job value.
Performance.
Longevity.
Teaching Tips:
In your teams, please discuss one of the factors affecting compensation. Please come up with two examples to share with the class.
Answers will vary, but should include the factors discussed above.
© 2009 Pearson Education, Inc.

13. Compensation and Benefits (cont’d)
Incentive programs
Special pay programs designed to motivate high performance
Individual incentives:
Bonuses
Merit salary systems
Pay for performance (variable pay)
Company-wide incentives:
Profit-sharing plans
Gain sharing plans
Pay-for-knowledge plans
Incentive programs are also an important part of compensation and benefits. Incentive programs are special pay programs designed to motivate high performance by an employee.
An incentive program can include individual incentives such as:
Bonuses.
Merit salary systems.
Pay for performance, which is also called variable pay.
Incentive programs also include company-wide incentives. These include:
Profit-sharing plans.
Gain sharing plans, which reward groups for their performance.
Pay-for-knowledge plans, which encourage employees to gain new knowledge or skills.
Teaching Tips:
In your student teams, assume you are working in the human resources department of the large toy company you discussed earlier. Please develop a basic incentive plan for the toy company workers based on either individual incentives or company-wide incentives.
Answers will vary.
© 2009 Pearson Education, Inc.

14. Compensation and Benefits (cont’d)
Benefits Programs
Mandatory (required by law)
Social Security retirement benefits
Workers’ compensation insurance
Discretionary (optional)
Health, life, and disability insurance
Vacations and holidays
Employee assistance programs
Retirement (pension) plans
Contain the costs of benefits
Cafeteria benefits plans
Benefit programs can be mandatory or discretionary.
Mandatory benefit programs, which are required by U.S. law, include:
Social Security retirement benefits: The employer pays 7.5% of your wages into Social Security and you, the employee, pay the same amount.
Worker’s compensation insurance: This insurance protects both you and the company in case you are hurt on the job.
Discretionary benefit programs are optional programs, but are provided by many employers. These plans include:
Health, life and disability insurance.
Vacations and holidays.
Employee assistance programs.
Retirement or pension plans, or, more likely, the ability to deposit funds into a 401K, which you control with a match from your employer if you participate.
There are also benefit programs that contain the costs of benefits.
These are called cafeteria benefits plans. These plans set aside a certain amount of money for benefits for each employee, and those employees choose how they wish to spend those funds.
Teaching Tips:
In your student teams, now assume you are members of the Human Resources department, and the CEO has just asked you to develop a discretionary benefit plan. Please draw up a simple plan. We will share our suggestions with the class.
Answers will vary, but should include the elements of a discretionary plan just discussed.
© 2009 Pearson Education, Inc.

15. The Legal Context of HRM
Equal Employment Opportunity Laws
Protect workers from unfair or inappropriate (non-job-related) discrimination in the workplace
Protected Classes in the Workplace
Individuals sharing common characteristics as defined by law
Race, color, religion, gender, age, national origin, disability status, and status as a military veteran
Equal Employment Opportunity Commission (EEOC)
Federal agency that enforces discrimination-related laws
Affirmative Action
Written plan for actively recruiting, hiring, and developing members of protected classes
Now we will look at the legal context of human resources management. First we will look at equal opportunity laws. These laws protect workers from unfair or inappropriate (non-job-related) discrimination in the workplace.
Second, there are protected classes in the workplace. These individuals share common characteristics as defined by the law, which can include:
Race.
Color.
Religion.
Gender.
Age.
National origin.
Disability status.
Status as a military veteran.
The Equal Employment Opportunity Commission (EEOC) is the federal agency that enforces discrimination-related laws. This bureau is responsible for enforcing the Americans with Disabilities Act.
Affirmative Action involves preparation of a written plan for actively recruiting, hiring and developing members of protected classes.
Teaching Tips:
In your student teams, please choose one of the four legal areas of HRM we have just discussed. Please list two examples that relate to the area your team chooses. We will share our examples with the class.
Answers will vary but should relate back to the four areas discussed in this slide.
© 2009 Pearson Education, Inc.