1. Managing Human Resources
Chapter 13

2. Learning Goals
Explain the strategic importance of managing human resources effectively
Describe several important laws and government regulations that affect how organizations manage their human resources
Explain the objective of human resources planning and describe how organizations respond to the unpredictability of future business needs
(continued)

3. Learning Goals Describe the hiring process
(cont'd)
Describe the hiring process
Describe several types of training and development programs
Describe several principles for improving the accuracy of managers’ appraisals of employee performance
Describe the basic elements of a monetary compensation package

4. Strategic Importance
Human resources management (HRM): the philosophies, policies, and practices that an organization uses to affect the behaviors of people who work for the organization
Strategic use of HRM activities can improve organizational effectiveness

5. Shared Responsibilities for Managing
Human Resources: Planning Activity
Line Managers
HR Professionals
Employees
Include HR professionals in the formulation and implementation of business strategy and discussions of its HR implications
Stay informed of the latest technical principles for managing human resources
Accept responsibility for managing their own behavior and careers in organizations

6. Shared Responsibilities for Managing Human Resources:Recruitment and
Selection Activity
Line Managers
HR Professionals
Employees
Help disseminate information about open positions to all potentially qualified internal applicants
Understand and abide by all legal regulations
Develop a recruiting plan to guarantee a diverse pool of applicants
Participate in recruiting by making referrals and answering questions about the organization

7. Shared Responsibilities for Managing Human Resources: Training
and Development Activity
Line Managers
HR Professionals
Employees
Work with employees to identify their training and development needs
Provide on-the-job socialization and training
Develop and administer training and development programs
Inform employees of opportunities for training and development
Identify own training and development needs
Actively seek out and participate in activities that help build own competencies
Assist in socialization and training of other employees

8. Shared Responsibilities for Managing Human Resources: Performance
Appraisal Activity
Line Managers
HR Professionals
Employees
Help develop performance measures
Conduct performance appraisals
Develop performance appraisal tools and train managers to use them
Train managers in how to conduct performance review sessions
Candidly appraise the performance of others when asked to participate in 360-degree appraisals

9. Shared Responsibilities for Managing Human Resources: Performance
Appraisal Activity
(cont’d)
Line Managers
HR Professionals
Employees
Use performance information to make decisions about pay raises, promotions, firing etc
Provide feedback to employees to help them improve future performance
Monitor managers’ decisions to be sure they are performance-based
Seek and use honest feedback to improve own performance

10. Shared Responsibilities for Managing
Human Resources: Compensation Activity
Line Managers
HR Professionals
Employees
Assist in developing incentive and bonus plans
Establish appropriate rates of base pay in compliance with legal requirements
Work with managers to design and develop incentives and bonus plans
Work with accounting and financial staff to monitor compensation costs
Develop an accurate understanding of all elements of the organization’s pay practices
Be alert to dysfunctional and possible unethical attempts to “game” performance-based pay practices

11. Conditions for Gaining a Sustainable Competitive Advantage Through HRM
Competitors must not be able to easily copy the company’s approach to HRM
Employees must be “rare” or unique in some way
Employees must be a source of added value

12. Changes in HR Practices at GE to Encourage Innovation
Recruiting more managers from outside the company
Hiring more employees from the countries where GE sells its products and services
Setting goals for managers to develop creative new business ideas and tying compensation to meeting these goals
Rewarding managers for revenue growth and customer satisfaction
Urging people to stay in their jobs longer so they can develop deeper knowledge of their industry

13. Social Consequences of HRM: Snapshot
“Our aim is to treat our job candidates as well as we treat our customers, to do something memorable for them. You can’t treat people shabbily, especially in a world where there are far more open jobs than there is available talent to fill them. We strive to put the humanity back into the recruiting experience.”
Jason S. Warner, Director of North American Recruiting, Starbucks Corporation

14. Legal and Regulatory Environment: Equal Employment Opportunity [EEO]
Job applicants and employees should be:
Judged on characteristics that are related to the work that they are being hired to do
2. Judged on their job performance after being hired
3. Protected from discrimination based on their personal background characteristics, such as gender, race, ethnicity, religion, and so forth

15. Title VII of the Civil Rights Act
(1964 with amendments in 1978 and 1991)
Prohibits discrimination by employers, employment agencies, and unions with 15 or more employees on the basis of:
Race
Color
Religion
Sex
National origin
Pregnancy (Pregnancy Discrimination Act, 1978)
Identifies pregnancy as a disability and entitles the woman to the same benefits as any other disability
1991 Amendment clarifies how cases brought under the act should proceed

16. Equal Employment Opportunity Commission (EEOC)
Enforcement of U.S. EEO Laws
Makes rules to implement and interpret EEO laws
Conducts investigations and may file lawsuits in federal courts
Equal Employment Opportunity Commission (EEOC)
Imposes sanctions
Makes judgments about guilt, which may be appealed to federal courts

17. EEO in the Global Arena: Who’s Protected Where by Legislation?
Country
United States
India
Canada
China
United Kingdom
Mexico
Race or Color
Sex
Religion
Age No
(continued)

18. EEO in the Global Arena: Who’s Protected Where by Legislation?
Country
United States
India
Canada
China
United Kingdom
Mexico
Disability No
Sexual Orientation No
Political Ideology No
National Origin No
Marital or Family Status No

19. Legal and Regulatory Environment: Compensation and Benefits
Fair Labor Standards Act (1938)
Establishes a minimum wage, which may be raised by individual states
Controls hours through premium pay for overtime
Controls working hours for children
Applies to most nonmanagerial employees in private industry
Equal Pay Act (1963)
Requires men and women to be paid equally when they are doing equal work (in terms of skill, effort, responsibility, and working conditions) in the same organization

20. Compensation and Benefits:
Comparable Worth
Some states extend the Equal Pay Act by requiring employers to assess the worth of all jobs and ensure that jobs of comparable worth are paid similarly

21. Human Resource Planning
Involves forecasting the organization’s human resources needs and developing the steps to be taken to meet them
Contingent workers: employees who are hired by companies for specific tasks or short periods of time with the understanding that their employment may be ended at any time
Layoffs: a strategy of last resort. Potential negative effects of layoffs:
More gossip
Lower morale
More resignations
Less employee loyalty
More charges of discrimination
More workplace violence

22. Historical Trend in Growth Rate of the U. S
Historical Trend in Growth Rate of the U.S. Workforce (adapted from Figure 13.1)

23. Effects of Layoffs as Reported by Human Resource Managers in Companies That Reduce Their Workforce (adapted from Figure 13.2)
-60
-40
-20 20 40 60
Percent
Percent reporting an increase or decrease after layoffs
More profits
More gossip
Lower morale
More resignations
Less employee loyalty
More charges of discrimination
More workplace violence

24. Human Resource Planning (cont’d)
Competency inventory: a detailed file maintained for each employee that lists level of education, training, experience, length of service, current job title and salary, and performance history
Purpose of competency models
To keep track of the talent in the organization so that it can be nurtured and used effectively

25. Hiring Process
Activities related to the recruitment of applicants to fill open positions in an organization and the selection of the best applicants for a position
Vacancies stimulate the hiring process through:*

26. Vacancies Stimulate the Hiring Process (adapted from Figure 13.3)
Organizational
Growth
Internal
Movement
Promotion
Demotion
Transfer
Vacancy
Created
Recruitment
Selection
Exit from
Organization
(Turnover)

27. Problems Encountered When Applying for Jobs on the Internet (adapted from Figure 13.4)
Percent reporting problems
Percent 10 20 30 40 50 60
Difficult to navigate site
Difficult to use
Wanted more personal contact
Concerns about security of personal data
Lack of relevant information about the company
Not enough jobs listed to make it worth the effort
Slow feedback and follow-up

28. Hiring Process: Recruitment
Organization web site
Internal job positions, paper-based and Intranet
Common
recruitment
methods
Announcements in newspapers, magazines, employment websites, etc.
Employee referrals

29. Hiring Process: Employee Selection Common information sources
A process that involves deciding which of these recruits should actually be hired and for which positions
Résumés
Reference checks
Common information sources
Tests
Interviews

30. Hiring Process: Examples of Questions to Use in a Structured Interview
Competency Being Assessed: Teamwork
Sketch out two or three key strengths you have in working as part of a work team. Can you illustrate the first strength with a recent example? [repeat this question and the following probes for each strength]:
Probes:
When did this example take place?
What possible negative outcomes were avoided by the way you handled the situation?
How often do situations like this happen?
What happened in the next time it came up?
(continued)

31. Hiring Process: Examples of Questions to Use in a Structured Interview
(cont’d)
Competency Being Assessed: Teamwork
2. Tell me about a time when you used your teamwork competency to solve a problem with a customer
Probes:
Where did this take place?
What did the customer say?
What did you tell your teammates?
Did the team have any problems dealing with the situations? Explain
How did the customer respond?

32. Training and Development Common training approaches
Training: activities that help employees overcome limitations and improve performance in their current jobs
Orientation training
Basic skills training
Common training approaches
E-learning
Team training

33. Training and Development Core development approaches
(cont'd)
Development: practices that help employees gain the competencies they will need in the future in order to advance in their careers
Career development
Core development approaches
Coaching
Mentoring

34. Performance Appraisal
A formal, structured system for evaluating an employee’s job performance
Common uses of performance appraisal
To make decisions about who will be promoted, demoted, transferred, or dismissed
To make decisions about pay raises
To improve future performance of employees

35. Performance Appraisal: Performance
Feedback Sessions
Managers and their subordinates meet to exchange performance information and discuss how to improve future performance
Performance information increasingly includes:
Employee’s own assessment of performance
Assessment by teammates
Information from customers

36. Performance Appraisal Accuracy
Difficult for managers to accurately assess performance of subordinates
Two approaches to improve accuracy:
Use appropriate rating scales that provide specific descriptions of what each level of performance means
Use multiple raters
One example. 360-degree appraisal—measures performance by obtaining assessments of the employee from a variety of sources: supervisors, subordinates, colleagues inside the company, people outside the organization with whom the employee does business, and even a self-appraisal by the employee

37. Performance Appraisals for Teams
Some teams may have full responsibility for constructing and conducting their own performance appraisals of each other
Team self-appraisal of each member is difficult
Manager to whom the team reports is often responsible for collecting performance information from the team and discussing it with each team member privately

38. Compensation: Two Components
Nonmonetary compensation: the many forms of social and psychological rewards, such as recognition and respect from others and opportunities for self-development
Monetary compensation: the direct payments such as salary, wages, and bonuses, as well as benefits such as covering the costs of insurance plans
bonus

39. Compensation: Pay Fairness
What people believe they deserve to be paid in relation to what others deserve to be paid
However, compensation must be externally competitive to attract qualified applicants
Components of pay system employees consider in evaluating fairness
Base pay—perceived fairness increases if at or above market average
Incentive pay—such as commissions, bonuses, and profit sharing
Employee benefits—some required by law and others are voluntary

40. Average Annual Monetary Benefits and Earnings (adapted from Figure 13

41. Vacationing Around the World (adapted from Figure 13.7)
Italy
France
Germany
Brazil
Britain
Canada
South Korea
Japan
U.S. 5 10 15 20 25 30 35 40 45
Days
Average annual vacation days