We discussed the importance of motivation in Chapter nine and its focus on employees. In chapter ten we turn our attention to the management of human resources in organizations. We will discuss the functions of human resource management that include recruiting, hiring and training employees. We will look at different compensation systems and will discuss the importance of diversity in the workforce.
HR managers are concerned with maximizing the satisfaction of employees and motivating them to achieve organizational objectives.
HR managers must be aware of the issues that arise from increasingly diverse workforces.
In recessionary times, or the time immediately following a recession when the economy is still recovering, managers must focus on retaining the best workers. Morale may be low, and managers must work to maintain a positive work atmosphere, provide adequate compensation and benefits, and opportunities for recognition. Communication and adequate rewards are important things that managers can do to retain good employees.
HR managers seek to match appropriate human resources with job assignments. The job analysis is used to develop the job description and job specification.
Many firms have a policy of first conducting in-house recruiting for positions. This often helps organizations improve employee morale through giving them an opportunity for promotion. In-house hiring is cheaper than external recruiting as well.
Selecting the right person for the job is very important. The selection process can be long and expensive, and choosing people who are committed to the organization and are a good fit can save the organization time and money in recruiting and training replacements.
The goal of this stage of the process is to get acquainted with applicants and to weed out those who are not qualified. The application may also provide subtle clues about an applicant’s appropriateness for a position.
Interviews help management obtain additional detailed information about qualified employees. This is a chance for management to get more detailed answers about a person’s experience and skills, his/her attitude, and whether the person would fit with the company culture. A candidate can also ask questions about job requirements, compensation and working conditions. Managers should pay attention to the applicant’s questions, as they can be revealing as well.
Not all organizations use testing as part of the hiring process, but testing can help an HR manager determine whether an applicant has the skills needed for the job, his/her aptitude, and in candidate’s ability to fit into the organization. Illegal drug and alcohol abuse can cost organizations through loss of productivity, healthcare and absenteeism. It is an important consideration.
This is a very important step because applicants frequently misrepresent themselves on their applications. Many organizations will only confirm than an employee worked there, not provide clues to the quality of his/her work.
To avoid legal issues during the recruitment and hiring process, managers must be aware of laws and regulations related to hiring practices. Title VII of the Civil Rights Act is a major law that pervades all areas of HRM.
These are other laws affecting HRM. To avoid lawsuits, HR managers must be familiar with these laws and how they affect their organization.
Once qualified candidates are chosen, they must be introduced to the organization and its policies and procedures. Orientation also involves socializing the new workers into the ethics and culture of their new organization.
Managers should be careful with subjective appraisal systems and those that involve ranking employees because of the risk of discrimination lawsuits.
Layoffs due to downsizing have become an increasingly prevalent fact of life in many industries. Layoffs can be temporary and employees may be brought back when business picks back up. A high turnover rate can be very expensive and can signal problems within an organization and should be investigated by the HR manager.
Determining how much to pay employees for their work can be a complex issue. Getting wages right is essential because it represents a large portion of organizations’ overall expenses. Managers must find the correct balance of wages and benefits to keep employees satisfied without paying them too much. Excessively high wages result in high-priced products. Low wages result in low morale and high turnover.
The federal government sets a minimum wage ($7.25 at the writing of this book), and many states also set their own minimum wages, which are higher than the federal minimum.
Profit sharing has the advantage of making employees feel invested in the organization for which they work. ESOPs are an increasingly popular way for organizations to make employees feel invested in their jobs. Working harder means that they will see their stocks increase in value.
Employee assistance programs are increasingly widely offered by organizations. They offer employees counseling and other forms of help to assist with addictions, psychological problems, or other personal issues that may affect their work.
Soft benefits are not offered by every employer and tend to vary dramatically between organizations. They usually are offered to help employees find a better work/life balance. Many organizations have found that these soft benefits are very appealing to employees and potential employees and help workers remain with the organization.
Unions help to give employees power that individual workers do not have. Union growth has been stagnant or declining for decades.
Not all industries have unions, although they remain strong in some sectors.
Collective bargaining is the negotiation process through which management and unions reach an agreement about compensation, working hours and working conditions for the bargaining unit. The objective of negotiations is to reach agreement about a labor contract, the formal, written document that spells out the relationship between the union and management for a specified period of time.
The objective of collective bargaining. Many labor contracts have cost-of-living adjustment (COLA) clause in them that calls for automatic wage increases as the cost of living goes up. This is notable given that wages as a whole have been stagnant or even declined in most industries in the U.S.
Disputes arise when management and unions cannot come to an agreement on a contract. The above slide outlines various ways that union workers and employers deal with labor disputes.
There are three main ways for disputing workers and their employers to resolve problems and come to an agreement: Conciliation, mediation, and arbitration.
As the nation becomes more diverse, so should the workforce. Laws and regulations exist to ensure that different minority groups are adequately represented in many industries.
Affirmative action laws seek to ensure that workplaces and universities reflect the diversity present in society. Legislation passed in 1991 reinforced affirmative action, but prohibits organizations from setting hiring quotas that could result in reverse discrimination.
part Creating the Human 4 Resource Advantage CHAPTER 9 Motivating the Workforce CHAPTER 10 Managing Human ResourcesFHF 10-2
Human Resource Management (HRM)[ ] All the activities involved in determining the organizations needs for human resources and acquiring, training and compensating people to fill those needs FHF 10-3
Human Resource ManagementIncreasing in importanceEmployee Concerns: • Compensation • Job satisfaction • Personal performance • Leisure • Environment • Opportunities for advancement …continued on next page FHF 10-4
Managing the Workforce During Slow Economic Times Managers must be aware of employee concerns/needs • Do not ignore/neglect top performers • Even during a recession, high-performers will quit The most important things a top manager can do: • Transparent and honest communication • Non-monetary rewards; flexibility programs FHF 10-5
Planning for HR NeedsJob AnalysisSystematically determining pertinent information about ajob (tasks, abilities, knowledge, skills)Job DescriptionFormal & written specifications of the job (title, tasks, relationships, skills,duties, responsibilities)Job SpecificationDescription of the job qualifications (education, experience,personal/physical characteristics) FHF 10-6
Employee RecruitingRecruitingThe formation of a pool of qualified job candidatesfrom which management selects employeesInternal Sources • Current employees • Promotion from withinExternal Sources • Advertising • Employment agencies • Online • Interns FHF 10-7
Employee SelectionSelectionThe process of collecting information about applicantsand using information to make hiring decisions • Application • Interviewing • Testing • Reference Checking FHF 10-8
Employee Selection: The Selection ProcessApplicationFirst stage of the selection process • Name, address, telephone • Education, previous work experience, references • Qualifications for the position • Level of interest in the position …continued on next page FHF 10-9
Employee Selection: The Interview The interview is the second phase of selection Detailed information on candidate • Is candidate a good fit for the job? • Attitudes toward job FHF 10-10
Top 10 Mistakes Made in Interviewing 1. Not taking the interview seriously 2. Not dressing appropriately (dressing down) 3. Not appropriately discussing experience and education 4. Being too modest about one’s accomplishments 5. Talking too much 6. Too much concern about compensation 7. Speaking negatively of a former employer 8. Not asking enough or appropriate questions 9. Not showing the proper enthusiasm level 10. Not engaging in appropriate follow-up to interview FHF 10-11
Testing Ability and performance testing Aptitude, IQ, Personality tests Psychological exams Illegal drug screening Applicant assessment Goodness of “fit” FHF 10-12
Legal Issues in Recruiting and SelectingLegal restraints are present at every stage of therecruitment and selection processTitle VII of the Civil Rights Act Pervades all areas of HRM Prohibits discrimination in employment Equal Employment Opportunity Commission (EEOC) Tests must be validated FHF 10-14
Laws Affecting HRM Americans with Disabilities Act (ADA) Age Discrimination in Employment Act Equal Pay Act FHF 10-15
Developing the WorkforceOrientationFamiliarizing new hires with fellow workers, companyprocedures and the physical properties of the companyTrainingTeaching employees to do specific job tasks through classroom developmentor on-the-job experienceDevelopmentTraining that augments the skills and knowledge of managers andprofessionals FHF 10-16
Assessing Performance Can be a difficult job for managers • Strengths • Weaknesses Is crucial because it provides employees with feedback • Appraisals may be Objective or subjective Quantitative or qualitative • Managers must discuss results with the employee FHF 10-17
Developing the WorkforceTurnover Employees voluntarily leave (quit); involuntary leave (fired); management must replace workersPromotion Advancement to higher-level job with increased authority, responsibility, and payTransfer Move to another job within the company usually at same or similar level and wage rateSeparations Employment changes involving resignation, retirement, termination, or layoff FHF 10-18
Compensating the WorkforceDeveloping compensation plans is complexEmployee wages comprise a large portion of organizational expensesWage/Salary SurveyStudy indicating how much compensation comparable firms are paying forspecific jobs that firms have in commonHelps in designing fair compensation packages FHF 10-19
Financial CompensationWagesFinancial rewards based on hours workedand/or level of output achievedTime Wages • Used when quality is more important than quantity– no incentive to increase productionPiece Wages • Based on level of output achieved. Motivate employees to increase output– little incentive to improve qualityCommission • Incentive system that pays a fixed dollar amount or a percentage of the employee’s sales. Motivates employees to sell as much as possible FHF 10-20
CompensationSalaryFinancial reward calculated on weekly, monthly, or annual basisAssociated with white collar employees, executives, professionalsBonusesMonetary rewards provided by firm for exceptional performance or incentiveto increase productivity …continued on next page FHF 10-21
CompensationProfit SharingA percentage of company profits distributed to employees, sometimes in theform of stockEmployee Stock Ownership Plan (ESOP)Company distributes shares to employees as a form of compensationGaining in popularity FHF 10-22
Benefits Non-financial forms of compensation • Pension plans • Insurance (health, disability, life) • Child & elder care • Employee Assistance Programs …continued on next page FHF 10-23
BenefitsTraditional Fringe BenefitsSick leavePension plansHealth plansExtra compensation (Bonuses) …continued on next page FHF 10-24
Unionized EmployeesLabor Union Employee organization formed to deal with employers for achieving better pay, hours and working conditionsCollective Bargaining Negotiation process where management and unions reach agreement on wages, hours and working conditions for the bargaining unit (employees represented by union) …continued on next page FHF 10-26
Unionized Employees 12% of workforce Unionized workers often earn higher wages Concentrated in certain industries Automotive manufacturing Steel production Construction Public-sector (government) Sports and acting unions FHF 10-27
Labor Contract[ ] The formal written document that stipulates the relationship between union and management for a specific time period. The outcome of collective bargaining FHF 10-29
Resolving DisputesPickets Public protests against the actions of the company or managementStrike Employee walkouts; work stoppage. Most effective economic weapon for unions in private sectorBoycott Attempt to keep people from purchasing the company’s productsLockout Management’s version of the strike. Worksite is closed to prevent employees from workingStrikebreakers Hired by management to continue operations and reduce losses during a strike FHF 10-30
Third-Party Dispute ResolutionConciliation 3rd party intervention so that management & labor continue talksMediation 3rd party helps to bring labor and management together to resolve disputesArbitration 3rd party settles dispute by imposing solution that is legally binding FHF 10-31
Workforce Diversity Involves[ The participation of different ages, genders, races, ethnicities, nationalities and abilities in the workplace ] FHF 10-32
Why is Diversity Important? Increasingly diverse workforce reflects increasingly diverse customer base Diversity brings multiple perspectives to issues and improves problem solving and decision making Organizations should work to improve their workforce diversity FHF 10-33
Valuing Workforce Diversity More productive use of human resources Reduced conflict among employees More productive working relationships Increased commitment to organizational goals Increased innovation and creativity Increased ability to serve the needs of diverse customers FHF 10-34
Affirmative ActionLegally mandated plans that try to increase jobopportunities for minority groups by:Analyzing the current pool of workersIdentifying areas where women and minorities are underrepresentedEstablishing specific hiring and promotion goals to resolve the discrepancyProhibits organizations from setting hiring quotas that might result in reversediscrimination FHF 10-35