copyright © 2010 pearson education, inc. publishing as prentice hall5-1 human resource management...

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-1

Human Resource Management

Chapter Five

Workforce Planning


Steps in Recruitment and Selection Process

The recruitment and selection process is a series of hurdles aimed at selecting the best candidate for the job.


Importance of Workforce Planning

Having the right number of employees with the right skill sets will enable a firm to take advantage of business opportunities

Excess staffing is an inefficient use of financial resources

A company’s effectiveness is directly affected by the quality of workforce planning decisions


Definition of Workforce Planning

Making sure individuals with the right skills sets are where they need to be at the right time to meet current and future needs

Labor demand— number and types of employees the company needs

Labor supply— current or potential employees to perform jobs

Labor shortage— when demand for labor exceeds available supply

Labor surplus—when supply of labor is greater than demand


Workforce

Planning

Internal Considerations•Turnover•Employee Movement•Productivity•Company performance•Strategic direction

External Considera-tions•Turnover•Economic conditions•Industry trends

Labor SupplyLabor Demand

Labor supply exceeds

labor demand

Labor SupplyEquals

Labor Demand

Labor Demand Exceeds

Labor Supply

Labor Surplus Tactics•Layoffs•Attrition and HiringFreezes•Early Retirement•Promotions, Transfers, Demotions

Status Quo –Maintain the firm’s employment levels

Labor Shortage Tactics•Overtime•Contingent Labor•Employe retention•Promotions, Transfers, Demotions•New Hires


Forecasting Labor Supply & Demand:Internal Factors

Turnover: voluntary and involuntary termination of employees

Creates stress on co-workers who must pick up the slack

Adds costs and time demands associated with filling open positions


Internal Factors (cont’d)

Employee Movements: Promotions—moving to higher level positions Transfers—moving to jobs with similar

responsibility Demotions—moving to lower-level positions


Tracking Employee Movements Replacement charts—identifying potential

replacement employees for positions that could open up within the organization

Succession planning—identifying employees who might be viable successors for top managerial positions

Transition matrix—model for tracking movement of employees throughout the organization to plan for the future


Replacement Card Sample


Transition Matrix


Employee Productivity

Productivity is the level of a firm’s output (products or services) relative to inputs (employees, equipment, materials, etc.) O/I

Productivity ratio—the number of employees needed to achieve a certain output level

Managers can calculate the number of employees needed once they have productivity ratios


Tactics for Labor Shortages

Overtime—quick solution for short duration but will be costly and may lead to stress, burnout, turnover

Outsourcing—sending work to other companies (payroll, cafeteria, maintenance)

Contingent labor—hiring employees on a temporary or contractual basis


Tactics for Labor Shortages (cont’d)

Numerical flexibility—adjusting number of employees quickly to meet seasonal demands

Functional flexibility—modifying composition of workforce by using workers with different knowledge and skills


Employee Retention

Lowering turnover lowers a firm’s costs of recruiting, selecting, and training new employees

Employee satisfaction is a key predictor of turnover


Labor Surplus Tactics

Layoffs—quickly reducing the number of workers employed

Used to quickly adjust the size and composition of the workforce

Focused on short-term cost containment Can produce feelings of job insecurity and lead to

lower commitment and higher turnover

Attrition—decision not to fill vacant positions


Labor Surplus Tactics (cont’d)

Hiring Freeze— ban on all hiring for a period of time

Early Retirement—financial incentive to have employees retire early (can result in mass exodus)

Promotions, transfers, demotions—can move people to other areas of the firm facing shortages


Company Characteristics and Workforce Planning

Companies focused on cost will deal with labor surplus quickly (layoffs)

Companies focused on differentiation may have more ability to absorb costs of surplus and will be reluctant to outsource certain positions

Smaller companies will feel a greater impact of shortages or surpluses


Who Conducts Workforce Planning

Larger companies use HR department and technology to track labor force

Smaller companies look to managers and supervisors

Companies in early development often require managers to “wear many hats”


Stress and Work/Life Balance

Layoffs create stress on employees who lose jobs but also on families and communities where they live

Current employees have to work harder, put in more hours or work in new areas and feel insecure


Perceptions of Justice It is important that employees understand the

rationale behind the decisions (distributive justice)

Even if employees agree with decision, they may disagree with how the practice is implemented (procedural justice)

Key is open lines of communication to maximize employee involvement and acceptance


Labor Force Trends and Workforce Planning

Stay current on emerging labor force trends that affect company (occupational and demographic trends)

Many companies are increasingly competing with other companies for limited supply of workers


Selecting Tactics to Use

Actively retain employees to prepare for labor shortages

Modify the nature of the job

Actively recruit older employees


Determining Number of Employees Needed

Automation—machines performing tasks that could otherwise be performed by people

Technological improvements help companies redesign processes and improve productivity ratios

Technology also changes types of skills employees need to service customers


Workforce Planning Forecasts

Companies can track skill sets of employees and identify potential matches for jobs

Succession planning increases ability to identify and track future replacements

Globalization has fueled trend toward offshoring and global opportunities (IT jobs, call centers)


Globalization Benefits include access to a large labor

supply Wages are a fraction of what they are in the

United States Opportunities to operate a firm “24/7” without

any downtime Risks include maintaining product and

service quality


Case Study: East Cost Bank Paula Mason’s position is created to provide administrative support for the

regional manager in charge of the southwest region. Each region has 8 to 12 bank branches Each branch consists of 4 primary positions

Branch managers Assisstant managers Loan officers Tellers/customer service agents

On average, each bank has 1 Branch manager 3 Assisstant managers 4 Loan officers 15 Tellers/customer service agents

Questions1. Based on the transition matrix for ECB which positions are experiencing

a labor surplus or a labor shortage?2. What tactics would you use to address the labor shortages? Why?3. What tactics would you use to address the labor surpluses? Why?4. Do you see any areas that are of particular concern?5. What plan would you recommend for the future to prevent excess

surpluses and shortages?


Transition Matrix for Southwest Region

2009

2008Branch

ManagersAssistant

Managers

Loan Officers

Tellers/Cust Srv Agts Exit the Company

8 Branch Managers 6 (75 %) 2 (25 %)

24 Assistant Managers 2 (8 %) 16 (67 %) 1 (4 %) 1 (4 %) 4 (17 %)

36 Loan Officers 2 (6 %)26 (72

%) 8 (22 %)

120 Tellers/Customer Srv. Agents 14 (12 %) 2 (2 %) 64 (53 %) 40 (33 %)

Anticipated Labor Supply 8 32 29 6526 % (54 out

of 204)



Chapter Six

Recruitment

6-1


Purpose of Recruitment

Activities that will identify potential employees, communicate job and organizational attributes to them and convince them to apply

Key to success is finding qualified individuals who have knowledge, skills and abilities (competencies) to do the job

Effective recruiting will free managers to spend more time and effort on other management activities

6-2


Recruitment Process

1. Decide on the objective for the recruiting process (quick hiring with few applicants or recruit a large number of applicants for best match)

2. Identify the best sources for recruitment

3. Craft the recruitment message

4. Familiarize oneself with the job duties and requirements of the position

In small business, managers are involved in all stages. In large businesses, recruiters take the lead

6-3


Internal Recruitment Gives opportunities for promotion to

employees Word of mouth is simplest, but not always

most effective Job posting is most common formal method:

posting note on bulletin board, note in company newsletter, or on company intranet

Succession planning and replacement charts Rehiring

6-4


Other Methods of Sourcing Internal Candidates

Performance appraisals or supervisor feedback on candidates

Special programs like Deloitte’s Career Connections provide Information about other job and career opportunities internally Intranet based one-on-one career coaching and development

information Career management tools, self assessments, a resume

builder, information on seeking jobs internally

Program provided savings about $ 14 millions in few years.

6-6


Pros and Cons of Internal Recruitment

Pros: Most cost-effective Existing employees already familiar with

company and its culture Employees motivated by opportunities for

advancement Managers have access to applicants’ past

performance

Cons: Sometimes companies want new ideas Need for diversity 6-7


External Recruitment

1

2

3

4

5

Advertising

Recruiting via the Internet

Employment Agencies

Temp Agencies and Alternative Staffing

6

7

8

Executive Recruiters

College Recruiting

Referrals and Walk-ins

Locating Outside Candidates

Sourcing


External Recruitment

Source should be dictated by nature of the job, location, and skill level needed

Relevant labor market: location in which one can reasonably expect to find a sufficient supply of qualified applicants

6-8


External Recruitment: Recruiting via the Internet

Kariyer net etc. Company Web sites may contain a “Careers” link

design and content of these sites are important because they convey information about the culture of the organization.

Detail job descriptions, information about career paths lead to favorable perceptions


Outstanding Employer Web Site

State Farm® Career CenterFOUND: A great place to work!You have the skills. We have the opportunity, character, and strength you demand. Let's talk about your future with State Farm®

Meet Our PeopleShyam,Actuarial Analyst Learn More

DiversityAt State Farm, diversity isn't a program, it's a state of mind.Learn More

http://www.statefarm.com/about/careers/careers.asp

6-10

Provide information about•Career paths•Sample interview questions•List of recruiting events•Benefits, work/life balance, compensation•Recruiter link


External Recruitment: Recruiting via the Internet

Advantages Cost-effective way to publicize job openings More applicants attracted over a longer period Immediate applicant responses Online prescreening of applicants Links to other job search sites Automation of applicant tracking and evaluation

Disadvantages Excessive number of unqualified applicants Personal information privacy concerns of applicants


Advertising The Media Choice

Selection of the best medium depends on the positions for which the firm is recruiting. Should use multiple sources and keep them up-to-date Newspapers (most popular): local and specific labor

markets (Sunday vs. weekday) Downside is expense On-line job posting on bulletin boards at colleges, or

professional organizations Trade and professional journals: specialized employees

Internet job sites: global labor markets


College Recruiting

Sending recruiters to college campuses to attract employees right out of college

Recruiters usually have multiple openings May speak to student organizations or alumni

groups Internships are sometimes offered to

evaluate performance and allow student to get to know organization

Business- College joint projects6-11


Employment Agencies and Search Firms

May benefit small HR departments to make recruiting process more efficient

Public employment agency???? Private employment agencies provide job

search assistance for a fee Contingency recruiting agencies are paid a

fee or percentage of new hire’s salary (% 20 – 30)upon completion of search and placement. 90 days to one year guarantee is given

6-12


Search Firms (cont’d)

Retained agencies paid a retainer by employer to conduct job search (also called executive search firms or headhunters). There is upfront payment and the rest is paid at different times

On-demand recruiting services charge based on time spent (weekly, monthly) recruiting rather than per hire for large number of recruitment needs

6-13


Other Recruitment Sources (cont’d)

Temporary Employees may often become permanent employee (temp to hire)

Employee Referrals—employees can receive a bonus if their referral is hired and many referrals tend to have lower turnover and greater job satisfaction

6-15


Pros and Cons of External Recruitment

More costly than internal recruitment May upset existing employees if internal

applicants don’t get the job Give firm the opportunity to bring in

employees with fresh perspective Allows company to target specific

competencies that current employees may not possess

6-17


Preparing Recruitment Advertisements

Creating a value proposition will help applicants differentiate one company from another

Recruitment value proposition should include: Information about job’s duties, working environment, rewards Company’s corporate image and values Level of compensation and leadership development

opportunities Social responsibility

Helps an applicant understand what day-to-day life in the firm will be like

6-18


Writing the Recruitment Message Starting point is to answer “why a highly talented

person would want to work at the company?” Individuals are attracted to jobs for which they have

more information Little information in the ads imply that company does not

value its employees highly enough Convey the value proposition and company-related

information Include brief description of job and its minimum

requirements Gear a high quality message to target audience Effective Ads

Create attention, interest, desire, and action (AIDA). Create a positive impression of the firm.

6-19


Minimum Requirements for a Job AdContent Job title Brief description of duties Minimum education, experience and skill levels required Special criteria like extensive tavel or relocation Brief overview of the company Benefits providedWriting Start with an attention-getter (Looking for a great place to work?) Use proper grammer and punctuation Minimize the use of abbreviations Keep it focused Avoid discriminatory language (young and energetic employees sought)Applying How to apply Where to apply Deadline Privacy promise


Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5–48

Ineffective and Effective Web Ads


Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5–49

Help Wanted Ad that Draws Attention


Recruiters

Includes professional recruiters and managers involved in identifying and attracting employees

Personality of recruiter (warmer) and knowledge about job and company are important

Need to be trained on value proposition, and issues about false representation

6-20


Realistic Job Preview Balanced recruitment (both favorable and not

favorable) message will have the best long-term results

Realistic job preview (RJP) will enable applicants to screen themselves out of application process

RJP will help decrease turnover and increase satisfaction of new hires

Shadowing (observing someone doing the job) can be used as an effective RJP

6-21


Recruitment Follow Up Maintaining communication with prospective

employees conveys your company’s interest in them

The way you communicate affects company image

Let each applicant know their status by sending a personalized letter

Measure effectiveness of recruitment effort with yield ratio (ratio of number selected to number applied)cost-per-hire, time to fill, and managers’ feedback

6-22


Content of Recruitment Message

Advantages of working for the organization Competencies sought Positive “story” about why employees would

want to work for company Cost leadership strategy: message may

focus on efficiencies and cost reductions (BİM)

Differentiation strategy: message may focus on customer experience (Tiffany & Co.)

6-23


Choice of Recruitment Methods

Word-of-mouth (employee referrals) is low-cost

Trade publications and Web sources target individuals with specific backgrounds or skills

More established firms have more formal recruitment processes

6-24


Managing Recruitment

Smaller companies require managers take lead in recruitment process

Larger companies will have staffing departments

Companies should focus on specific job information, reputation of company, and compensation and benefits package


Internal vs. External Recruiting Many companies attempt to fill position

internally before recruiting externally Too much focus on internal recruiting may

make the company too insular Too much focus on external recruiting will

make employees feel less valued and lead to turnover

6-26


Appeal of the Recruitment Message

Not all applicants will focus on same things when seeking a new job:

Company’s culture Development of their careers Opportunities to create innovative products Values of work/life balance Tasks of the job itself Benefits and compensation level

6-27


Value Proposition Offered

Fortune’s list of 100 best companies to work for include: those that stress work/life

balance and corporate social

responsibility

6-31


Challenges to Truth-in-Hiring

Employers trying to aggressively attract employees in tight labor market may mislead

Employees who are terminated may seek recourse against former employers

Job candidates may be lured away from existing job with promises that fail to materialize

6-32


Ethics and Regulatory Issues Code of ethics should be shared with applicants

during recruitment process Poaching (taking employees from competitors) may

backfire when new employees leave for the next best offer

Recruitment activities cannot discriminate, firms should use multiple sources for applicants

Recruiters should be trained on behavior and what questions to ask job applicants

Careful attention to recordkeeping of resumes and applications

6-34


Classwork: Writing an Ad

Find or write a job description for a job of interest to you and prepare a recruitment message and recruitment plan:

Write the advertisement Where would you place the ad and why? What aspect of the ad do you think is most

important? Discuss your decision. What information other than the job description

would you use to decide what to include in the ad?



Chapter Seven

Selection


Selection and Performance

Hiring manager has ultimate responsibility for selection of employees, not HR manager

Performance of company is directly correlated to employees hired and the competencies they bring to the job

Employees who are not a good fit tend to make mistakes and/or leave often resulting in lost customers and money


Why Careful Selection is Why Careful Selection is ImportantImportant

Organizational performance

Costs of recruiting and hiring

The Importance of Selecting the Right

Employees

Legal obligations and liability


Selection Systematic process of deciding which applicants to hire, promote or move to other jobs Prediction—selecting an applicant that can do the job or learn to do it well Internal selection is moving current employees into vacant positions


Person-Job Fit

A good match between applicant’s KSAs and interests with those of the job

Satisfied employees tend to be more productive

A strong fit maximizes the benefits for employees and the organizations for which they work


Selection Methods Initial screening involves reviewing the information

provided by applicants to decide which applicants are worthy of consideration Review application form answers and resumes Conduct screening interviews

Final screening is taking a more in-depth look at applicants. Final screening narrows down number of candidates to enable final selection Use employment tests Conduct interviews Conduct reference and backgroud checks Use “assessment centers” Drug tests, medical examinations


Guidelines for Application Questions

Applications and resumes are important to determine which applicants meet minimum job requirements (education, previous experience, etc.)

Guidelines for application questions: Keep questions job related Ask questions about relevant past work experience, skills, abilities, education, goals and interests Don’t ask personal questions. Even the following questions are regarded as personal in US

Are you married? What year did you graduate from high school?


Tips for Screening Resumes


Screening Interviews

Calling applicant and conducting a short telephone interview

Confirms person is still looking for a job

Provides clues about person’s oral communication skills


Use of Tests in Selection Process

Use tests as supplements Check the reliability and validity of the test

in Turkish Culture Ask other firms who uses these tests for

referance before you start to use one Use a certified people or rather a

psychologist for personality inventories


Basic Testing ConceptsBasic Testing Concepts

Reliability Describes the consistency of scores obtained by the

same person when retested with the identical or alternate forms of the same test.

Are test results stable over time?Validity

Indicates whether a test is measuring what it is supposed to be measuring.

Does the test actually measure what it is intended to measure?


Types of TestsTypes of Tests

Aptitude TestsMotor and physical abilities

Personality and interests

What Different Tests Measure

Currentachievement

Basic talents & abilitis

Endurance, strength or general fitness

Personality traits &

characteristics

Current knowledge or skill level


Types of TestsTypes of Tests

Cognitive abilities

Work sample test

Knowledge tests

What Different Tests Measure

Combined tests

Reasoning, memory,

comprehension

Sample of work

representative of the job

Mastery of subject matter


Measuring PersonalityMost common method: self-reporting surveysProblems:

Easy to fake deliberately Social desirability bias

Two dominant frameworks used to describe personality(primary traits that govern behavior):

Myers-Briggs Type Indicator (MBTI®)

Big Five Model


The Myers-Briggs Type Indicator Most widely used instrument in the world. Participants are classified on four axes to determine one of 16

possible personality types, such as ENTJ.

Flexible and Spontaneous

Sociable AssertiveOutgoing

Quiet and Shy

Unconscious ProcessesBig Picture

Uses Values & Emotions

PracticalOrderlyRoutine

Use Reasonand Logic

Want Order Structure&

Control


The Big Five Model of Personality Dimensions

Five basic dimensions underlie all others

Research has shown Big Five to be a better framework.


The Big Five Model of Personality Dimensions


When to Use Employment Tests

1. Current selection process does not result in quality of employees desired

2. Turnover or absenteeism is high

3. Current selection methods do not meet professional or legal standards

4. Productivity is low

5. Errors made by employees could have safety, health, or financial consequences


Interviews Panel interview—several people interviewing applicant at

the same time Unstructured interviews—interviewer will ask job-related

questions but without defined format and uses different questions with different applicants

Structured interview—more accurate means of comparing responses across applicants, same questions asked to all applicants

Situational interview—interviewer poses hypothetical situations and asks how candidate would respond

Behavioral interview—interviewer asks how candidate has handled a situation in the past


Examples of Questions

Situational Questions

1. Suppose a more experienced coworker was not following standard work procedures and claimed the new procedure was better. Would you use the new procedure?

2. Suppose you were giving a sales presentation and a difficult technical question arose that you could not answer. What would you do?

Past Behavior Questions

3. Based on your past work experience, what is the most significant action you have ever taken to help out a coworker?

4. Can you provide an example of a specific instance where you developed a sales presentation that was highly effective?


Biases and Errors of Biases and Errors of InterviewInterviewersers

Impression management -self

promotion, ingratiation

Applicant’s personal

characteristics (gender,

attractiveness etc.)Interviewer’s inadvertent

behavior(demographic

similarity, playing the psychologist

etc.)

Factors Affecting An Interview’s

Usefulness

Halo effect- first impressions affect

the other attributes

Interviewer’smisunderstanding

of the job

Contrast Effect – Candidate order

affects the evaluation


Assessment Centers

Put candidates through a series of simulations designed to assess their ability to perform aspects of job they are seeking (example: communication, decisiveness, delegation, planning, etc.)

In-basket—candidates sort through and respond to letters, memos, reports within a specified time frame

Leaderless group discussion—candidates are given a problem to solve

Role plays—candidates play out job-related situations


Other Screening Techniques

Reference checks—potential employer can contact applicant’s references to verify information (applicants should sign release form granting permission)

Background checks—verifying information provided during the application process or to obtain additional information (education, criminal check, credit reports)


Drug and Medical Tests Drug testing is used extensively in some

countries Medical exams can only be required after

an offer of employment has been made


Choosing Among Selection Methods

Compensatory approach - a process for deriving a final score for each candidate in the selection process by weighting outcomes on multiple selection measures differentially so that some items are “weighted” more heavily than others and a high score on one part can offset a low score on another part

Multiple-hurdle—applicants have to successfully pass each step (hurdle) to continue on in the selection process

Multiple-cutoff—applicants have to reach a minimum score on each measure to remain in the running for a particular job


Selection in Practice


Factors Affecting Selection Practices

Company’s strategy and core competencies required of all employees

Low-cost strategy might focus on efficiency and productivity using simple application, short interview

Differentiation might focus on customer service using role plays, situational interviews, etc.

Larger companies use more formal and extensive selection process, smaller companies very informal, simplified process


Factors Affecting Selection Practices (cont’d)

Person-Organization fit—how well a person fits within the broader organizational culture (values)

Promotion-from-within policy—extent to which a company tends to promote current employees rather than look outside the organization

Efforts to reduce bias and treat applicants in fair and consistent manner

Labor market including skills of applicants and willingness of applicants to accept jobs

Globalization and need to modify selection process for language differences


Technology and Selection

Applications are completed at a computer kiosk

Computer based personality or situational judgment questionnaire used for screening interview

Applicants call in to respond to questions Reference and background checking may

now be done by companies online


Globalization and Selection

Hiring increasingly large numbers of international employees to work domestically

Selecting internal candidates to send to other countries

Hiring host-country nationals to work in host countries

Hiring international employees to work for company abroad


Privacy Concerns

Selection methods like background checks, credit reports, drug tests should be used only when job related and less invasive alternatives are not available

Rationale should be explained to applicants Reliability and validity should be

established Think through what information is ethical

and responsible to divulge to applicants

copyright © 2010 pearson education, inc. publishing as prentice hall5-1 human resource management...

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demand slide

jobs labor shortage

workforce planning slide

future slide

transition matrix slide

potential employees