*

* Chapter Eleven

Human

Resource

Management:

Finding and

Keeping the

Best

Employees

Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

*

* SALLY MAINQUIST

Certes Financial Pros

• Certes finds financial

professionals to fit

temporary, flexible work

environments.

• Besides receiving

outstanding benefits,

Mainquist’s workers gain a

very broad range of work

experience.

Profile

11-2

*

* HUMAN RESOURCE MANAGEMENT

Working with

People is Just

the Beginning

LG1

11-3

*

* HUMAN RESOURCE

MANAGEMENT (HRM)

• Human Resource Management -- The process

of determining human resource needs and then

recruiting, selecting, developing, motivating,

evaluating, compensating and scheduling employees

to achieve organizational goals.

• HRM’s role has grown because:

1. Increased recognition of employees as a

resource.

2. Changes in law that rewrote old workplace

practices.

LG1

Working with

People is Just

the Beginning

11-4

*

* DEVELOPING the FIRM’S

ULTIMATE RESOURCE

• Service and high-tech manufacturing requires

employees with highly technical job skills.

LG1

Developing the

Firm’s Ultimate

Resource

• Such workers are scarce,

making recruiting and

retention more important and

more difficult.

• The human resource job is

now the job of all managers

in an organization.

11-5

*

* CHALLENGES in FINDING

HIGH-LEVEL WORKERS

• A shortage of trained workers in key areas

• Worker shortage in skilled trades

• Changes in employee attitudes about work

• A declining economy with fewer full-time jobs

• Expanding global markets with low-wage workers

• Increasing benefit demands and benefit costs

• A decreased sense of employee loyalty

LG1

The Human

Resource

Challenge

11-6

*

* CIVIL RIGHTS ACT of 1964

• Title VII prohibits discrimination in hiring, firing,

compensation, apprenticeships, training, terms,

conditions or privileges of employment based on:

- Race

- Religion

- Creed

- Sex

- Age

- National Origin

LG2

Laws Affecting

Human Resource

Management

11-7

*

* 1972 EQUAL EMPLOYMENT

OPPORTUNITY ACT (EEOA)

• Strengthened the Equal Employment Opportunity

Commission (EEOC).

• Gave EEOC the right to issue workplace

guidelines for acceptable employer conduct.

• EEOC could mandate specific recordkeeping

procedures.

• EEOC was vested with the power of

enforcement.

LG2

Laws Affecting

Human Resource

Management

11-8

*

* CONTROVERSIAL PROCEDURES

of the EEOC

• Affirmative Action -- Policy designed to “right past

wrongs” by increasing opportunities for minorities and

women in the workplace.

• Reverse Discrimination -- Discrimination against

whites or males in hiring or promoting.

• This policy has been at the center of many

debates and lawsuits.

LG2

Laws Affecting

Human Resource

Management

11-9

*

* CIVIL RIGHTS ACT of 1991

and OFCCP

• Civil Rights Act of 1991

- Amended Title VII and gave victims of discrimination

the right to a jury trial and possible damages.

• Office of Federal Contract Compliance Programs

(OFCCP)

- Ensures that employers doing business with the

federal government comply with the

nondiscrimination and affirmative action laws.

LG2

Laws Affecting

Human Resource

Management

11-10

*

* LAWS PROTECTING

EMPLOYEES with DISABILITIES

• Americans with Disabilities Act of 1990 (ADA)

- Requires employers to give applicants with physical or

mental disabilities the same consideration for employment as

people without disabilities.

LG2

Laws Protecting

Employees with

Disabilities and

Older Employees

- Also requires “reasonable

accommodations” for employees with

disabilities.

- Passage in 2008 of Americans with

Disabilities Amendments Act

expanded protection.

11-11

*

* AGE DISCRIMINATION in

EMPLOYMENT ACT (ADEA)

• Age Discrimination in Employment Act (ADEA)

LG2

Laws Protecting

Employees with

Disabilities and

Older Employees

- Protects workers 40 and

over from employment and

workplace discrimination in

hiring, firing, promotion,

layoff, compensation,

benefits, job assignments

and training.

11-12

*

* MINDING the LAW in HRM

• Employers must know the law

and act accordingly.

• Legislation affects all areas of

HRM.

• Court cases highlight that

sometimes it’s proper to go

beyond providing equal rights.

• Changes in law and legislation

occur regularly.

LG2

Effects of

Legislation

11-13

*

* PROGRESS ASSESSMENT

• What’s human resource management?

• What did Title VII of the Civil Rights Act of 1964

achieve?

• What’s the EEOC and what was the intention of

affirmative action?

• What does “accommodations” mean in the

Americans with Disabilities Act of 1990?

Progress

Assessment

11-14

*

* HUMAN RESOURCE PLANNING

PROCESS

Determining a

Firm’s Human

Resource Needs

LG3

• Preparing a human resource

inventory of employees.

• Preparing a job analysis.

• Assessing future human

resource demand.

• Assessing future labor

supply.

• Establishing a strategic plan.

11-15

*

* WHAT’S a JOB ANALYSIS?

Determining a

Firm’s Human

Resource Needs

LG3

• Job Analysis -- A study of what employees who

holds various job titles do.

• Job Description -- Specifies the objectives of the

job, the type of work, the responsibilities and duties,

working conditions and relationship to other jobs.

• Job Specifications -- A summary of the minimal

education and skills needed to do a particular job.

11-16

*

* RECRUITING EMPLOYEES

Recruiting

Employees from

a Diverse

Population

LG4

• Recruitment -- The set of activities for obtaining the

right number of qualified people at the right time.

• Human resource managers use both internal and

external sources to recruit employees.

• Small businesses

often make use of

web sources like

CareerBuilder and

Monster to recruit

employees.

11-17

*

* IT’S NOT EASY BEING SMALL

(Spotlight on Small Business)

• To survive, small businesses must recruit and

retain qualified workers.

• Unfortunately, they lack the resources of larger

companies to compete for employees.

• Small businesses need innovations like:

- Letting staff help recruit and select candidates.

- “Test-Drive” an employee.

- Seek out publicity through local media.

11-18

*

* EMPLOYEE SOURCES

LG4

Recruiting

Employees from

a Diverse

Population

11-19

*

* SELECTION

Selecting

Employees Who

Will be

Productive

LG5

• Selection -- The process of gathering information

and deciding who should be hired, under legal

guidelines, to fit the needs of the organization and

individuals.

11-20

*

* STEPS in the

SELECTION PROCESS

Selecting

Employees Who

Will be

Productive

LG5

1. Obtaining complete application forms

2. Conducting initial and follow-up interviews

3. Giving employment tests

4. Conducting background investigations

5. Obtaining results from physical exams

6. Establishing trial (probationary) work periods

11-21

*

* OOPS!

Areas Where Job Applicants Make Mistakes

Source: USA Today, www.usatoday.com.

Selecting

Employees Who

Will be

Productive

LG5

11-22

*

* HIRING CONTINGENT WORKERS

Hiring

Contingent

Workers

LG5

• Contingent Workers -- Include part-time and

temporary workers, seasonal workers, independent

contractors, interns and co-op students.

• There are about 5.7

million contingent

workers in the U.S.

11-23

*

* WHY HIRE

CONTINGENT WORKERS?

Hiring

Contingent

Workers

LG5

• Companies hire contingent workers:

- When full-time workers are on leave

- During periods of peak demand

- In uncertain economic times

- To save on employee benefits

- To screen candidates for future employment

11-24

*

* MOTIVATING TEMPORARY

EMPLOYEES (Making Ethical Decisions)

• Contingent workers perform well if the promise of

full-time employment is a possibility.

• Highbrow’s has no intention of hiring any

temporary workers full-time.

• But the company feels if they imply two workers

will be hired full time, it may improve employee

performance. What is the ethical thing for them

to do?

11-25

*

* PROGRESS ASSESSMENT Progress

Assessment

• What are the five steps in human resource

planning?

• What factors make it difficult to recruit qualified

employees?

• What are the six steps in the selection process?

• Who is considered a contingent worker and why

do company hire such workers?

11-26

*

* TRAINING and DEVELOPING

EMPLOYEES

Training and

Developing

Employees for

Optimum

Performance

LG6

• Training and Development -- All attempts to

improve productivity by increasing an employee’s

ability to perform.

• Training focuses on short-term skills.

• Development focuses on long-term abilities.

11-27

*

* THREE STEPS of TRAINING and

DEVELOPMENT

Training and

Developing

Employees for

Optimum

Performance

LG6

1. Assessing organization needs and employee

skills to develop appropriate training needs.

2. Designing training activities to meet identified

needs.

3. Evaluating the

training’s

effectiveness.

11-28

*

* MOST COMMONLY USED TRAINING

and DEVELOPMENT ACTIVITIES

Training and

Developing

Employees for

Optimum

Performance

LG6

• Orientation

• On-the-Job Training

• Apprenticeships

• Off-the-Job Training

• Online Training

• Vestibule Training

• Job Simulation

11-29

*

* DEVELOPING EFFECTIVE

MANAGERS

Management

Development

LG6

• Management Development -- The process of

training and educating employees to become good

managers and tracking the progress of their skills

over time.

• Management training includes:

- On-the-job coaching

- Understudy positions

- Job rotation

- Off-the-job courses and training

11-30

*

* WHY GOOD EMPLOYEES QUIT

LG6

Management

Development

Source: Robert Half International

11-31

*

* USING NETWORKS and

MENTORING

Networking

LG6

• Networking -- Establishing and maintaining

contacts with key managers in and out of the

organization and using those contacts to develop

relationships.

• Mentors -- Managers who supervise, coach and

guide selected lower-level employees by acting as

corporate sponsors.

• Networking and mentoring go beyond the work

environment.

11-32

*

* APPRAISING PERFORMANCE

on the JOB

Appraising

Employee

Performance to Get

Optimum Results

LG7

• Performance Appraisal -- An evaluation that

measures employee performance against established

standards in order to make decisions about

promotions, compensation, training or termination.

• A 360-degree review

gives managers

opinions from people at

different levels to get a

more accurate idea of

the worker’s ability.

11-33

*

* SIX STEPS of PERFORMANCE

APPRAISALS

Appraising

Employee

Performance to Get

Optimum Results

LG7

1. Establishing performance standards that are

understandable, measurable and reasonable.

2. Clearly communicating those standards.

3. Evaluating performance against the standards.

4. Discussing the results with employees.

5. Taking corrective action.

6. Using the results to make decisions.

11-34

*

* MAJOR USES of

PERFORMANCE APPRAISALS LG7

Appraising

Employee

Performance to Get

Optimum Results

• Identify training needs

• Use as a promotion tool

• Recognize worker’s achievements

• Evaluate the firm’s hiring process

• Judge the effectiveness of the firm’s orientation

process

• Use as a basis for possible termination of a

worker

11-35

*

* PERFORMANCE APPRAISAL

MISTAKES Common Problems Made While Reviewing Employees

• Contrast Effect - Comparing one employee to

another.

• Halo/Horn Effect - Allowing performances in specific

areas to unfairly influence overall performance

evaluation.

• Similar-to-Me Effect - Generosity to those you feel

are more like you.

Appraising

Employee

Performance to Get

Optimum Results

LG7

11-36

*

* PROGRESS ASSESSMENT Progress

Assessment

• Name and describe four training techniques.

• What’s the primary purpose of a performance

appraisal?

• What are the six steps in a performance

appraisal?

11-37

*

* COMPENSATION PROGRAMS

Compensating

Employees:

Attracting and

Keeping the Best

LG8

• A managed and competitive compensation

program helps:

- Attract the kinds of employees the business needs.

- Build employee incentive to work efficiently and

productively.

- Keep valued employees from going to competitors or

starting their own firm.

- Maintain a competitive market position by keeping costs

low due to high productivity from a satisfied workforce.

- Provide employee financial security through wages and

fringe benefits.

11-38

*

* TYPES of PAY SYSTEMS Pay Systems

LG8

• Salary

• Hourly Wage/Day Work

• Piecework System

• Commission Plans

• Bonus Plans

• Profit Sharing Plans

• Gain-Sharing Plans

• Stock Options

11-39

*

* COMPENSATING TEAMS Compensating

Teams

LG8

• Team-based pay programs are more challenging

than individual pay systems.

• The two most common methods for teams

involve:

- Skill-Based: Pay is increased as skill increases. (Eastman Chemical uses this system.)

- Gain-Sharing: Pay is increased as performance

increases. (Nucor Steel uses this system.)

11-40

*

* FRINGE BENEFITS on the JOB Fringe Benefits

LG8

• Fringe Benefits -- Sick leave, vacation pay,

pension and health plans that provide additional

compensation to employees beyond base wages.

• In 1929, Fringe benefits accounted for less than

2% of payroll cost. Today it’s about 30%.

• Healthcare has been the

most significant increase

in fringe benefit cost.

11-41

*

* The RANGE of

FRINGE BENEFITS

Fringe Benefits

LG8

• Fringe benefits include incentives like:

- Company cars

- Country club memberships

- Recreation facilities

- Special home mortgage rates

- Paid and unpaid sabbaticals

- Day-care and elder care services

- Dental and eye care

- Legal counseling

- Short or compressed work weeks 11-42

*

*

LG8

SPECIAL PERKS at DREAMWORKS

Fringe Benefits

• Free DVDs and screenings of

current films.

• Free breakfast and lunch plus

dinner when working late.

• Free snack rooms on every

floor.

• Profit sharing.

• Ping-Pong and poker

tournaments during work

hours. 11-43

*

* CAFETERIA-STYLE and

SOFT BENEFITS

Fringe Benefits

LG8

• Cafeteria-Style Fringe Benefits -- Allow

employees to choose the benefits they want (up to a

certain dollar amount).

• Soft Benefits include:

- Onsite haircuts and shoe repair

- Concierge services

- Free meals at work

- Doggie daycare

- Onsite farmer’s markets

11-44

*

*

LG8

CHANGING TIMES, CHANGING EMPLOYEE BENEFITS

Fringe Benefits

Employer

Benefits 1998 2008

Provide Pension

Plans 48% 29%

Offer Wellness

Programs 51% 60%

Retirement Plan

Contribution 91% 81%

Permit Some

Flexible Work

Hours

68% 80%

Source: National Study of Emplyees (2008), Family & Work Institute.

11-45

*

* LET’S GO to the BEACH!

Average Vacation Days by Country

Fringe Benefits

LG8

11-46

*

* WORKING WORLDWIDE

(Reaching Beyond Our Borders)

• Managers need to understand the business

needs of each country they operate in.

- Compensation: Conversion to foreign currencies and

special allowances often are needed.

- Health and Pension Standards: Benefits are different

country-by-country.

- Paid Time Off: Vacation time, sick and personal leave

vary.

- Taxation: Tax policies vary.

- Communication: Employees can feel disconnected in

other countries.

11-47

*

* FLEXIBLE SCHEDULING PLANS

Scheduling

Employees to Meet

Organizational and

Employee Needs

LG9

• Flextime Plan -- Gives employees some freedom to

choose which hours to work as long as they work the

required number.

• Compressed Work Week -- Employees work the

full number of work hours, but in fewer than the

standard number of days.

• Job Sharing -- Lets two or more part-time

employees share on a full-time job.

11-48

*

* USING FLEXTIME PLANS Flextime Plans

LG9

• Most flextime plans require Core Time -- When all

employees are expected to be at their job stations.

• Flextime is hard to incorporate into shift work and

managers have to work longer hours.

• Communication among employees can also be

difficult under flextime and managers have to be

alert to any system abuses.

11-49

*

* A FLEXTIME CHART Flextime Plans

LG9

11-50

*

* COMPRESSED WORK WEEKS Flextime Plans

LG9

• Employees enjoy long

weekends after working long

days.

• Productivity is a concern.

• Nurses and firefighters often

work compressed work

weeks.

11-51

*

* JOB SHARING BENEFITS Job Sharing

Plans

LG9

• Provides employment opportunities for many

people who cannot work full time.

• Workers tend to be enthusiastic and productive.

• Absenteeism and tardiness are reduced.

• Employers can schedule part-time workers in

peak demand periods.

11-52

*

* MOVEMENT of EMPLOYEES

Moving

Employees Up,

Over and Out

LG9

• Employees are

promoted or reassigned.

• Employees are

terminated due to

performance or

economic situations.

• Employees retire.

11-53

*

* TERMINATING EMPLOYEES

Terminating

Employees

LG10

• As the economic crisis grew, more and more

employers have had to layoff employees.

• Even when the economy is booming, employers

are hesitant to hire full-time workers because of

the cost of termination.

• Firing employees is more

difficult for employers

because of laws preventing

termination for certain acts.

11-54

*

* PROGRESS ASSESSMENT Progress

Assessment

• Name and describe five alternative compensation

techniques.

• What advantages do compensation plans such

as profit sharing offer an organization?

• What are the benefits and challenges of flextime?

Telecommuting? Job sharing?

11-55