Chapter 7 - Human Resource Management

Human Resources Management

Learning Outcomes
List the four parts of the human resources management process.
Distinguish between a job description and a job specification, and explain why job analysis is needed.
Describe recruiting sources for candidates for jobs and the selection process.
Describe hypothetical questions and probing questions.
Explain what orientation and training and development of employees involve.
List the steps in job instructional training.
Explain the two types of performance appraisal.
Explain the concept “You get what you reward.”
After studying this chapter, you should be able to:

Learning Outcomes (cont’d)
Identify the major components of compensation.
Describe the difference between job analysis and job evaluation.
Explain why most organizations do not have to address labor relations.
Define the key terms listed at the end of the chapter.
After studying this chapter, you should be able to:

IDEAS ON MANAGEMENT at Scitor
How does Scitor view its human resources management process?
What effect does Scitor’s approach to human resources management have on attracting employees?
What types of training and appraisal does Scitor provide its employees?
How does Scitor use its compensation and benefits package to retain employees?

Exhibit 7 – 1 ● The Human Resources Management Process

Exhibit 7 –2 ● Human Resource Management Resources Sources : Information taken from Administaff Inc.’s company profile on the Yahoo! Finance Web site at http://finance.yahoo.com/q/pr?s=ASF, accessed July 16 , 2007; Vurv Technology’s company profile on the Yahoo! Finance Web site at http://biz.yahoo.com/ic/127/127188 . html , accessed July 16, 2007; and CCH Incorporated’s Web site at http://www.cch.com , accessed July 16, 2007. A leading provider of research, compliance, and management tools for human resources professionals. Its services cover a wide range of topics, including human resources management and law relating to performance management, employment policy and safety, workers’ compensation, and employee benefits. CCH’s resources for HR professionals include the Human Resources Management Library , the HRAnswersNow Web site, and the HR How-To Book Series. CCH Incorporated (http://hr.cch.com) Develops software for executive recruiters, temp agencies, and other types of staffing and human resources organizations. Its Web-based software helps companies analyze their workforces and attract, hire, and retain employees more efficiently. Vurv offers its software in versions that target the needs of corporate human resources departments and staffing agencies, and it offers applications for monitoring skills and competency levels throughout an organization. The company also offers consulting, global deployment, and technology integration services. Vurv Technology ( http://www.vurv.com) The nation’s leading professional employer organization (PEO), serving as a full-service human resources department for small and medium-sized businesses throughout the United States. Its personnel management system offers various services, including benefits and payroll administration, health and workers’ compensation insurance programs, personnel records management, employer liability management, employee recruiting and selection, employee performance management, and employee training and development services. The company’s services also include drafting and reviewing personnel policies and employee handbooks; designing job descriptions; performing perspective employee screening and background investigations; designing performance appraisal processes and forms; professional development and issues-oriented training; employee counseling; substance abuse awareness training; drug testing; outplacement services; and compensation guidance. Among the company’s products are online applications such as HRTools.com, PersonnelPolicy.com, JobDescription.com, and PerformanceReview.com. Administaff, Inc. ( http://www.administaff.com )

Exhibit 7 –3 ● Federal Laws Related to HRM

The Legal Environment
Equal Opportunity Employment (1972)
Civil Rights Act of 1964 amended
Prohibits employment discrimination on the basis of sex, religion, race or color, or national origin.
Applies to private and public organizations that employ 15 or more persons.
Protected classes of minorities:
Hispanics, Asians, African Americans, Native Americans, and Alaskan natives
Disadvantaged young people, disabled individuals, and persons over 40

Preemployment Inquires
To Avoid Asking Discriminatory Questions:
All questions asked must be job-related.
Any general question that you ask should be asked of all candidates.
Bona Fide Occupational Qualification (BFOQ)
An occupational qualification that may be discriminatory but that is reasonably necessary to normal operation of a particular organization.
Example: Casting only females for the leading actress’s part in a play.

Exhibit 7 –4 ● Preemployment Inquiries

Exhibit 7 –4 ● Preemployment Inquiries (cont’d)

The Human Resources Department
Functions of the HR Department:
Recruits employees so that the line managers can select which employees to hire.
Orients employees and trains many of them to do their jobs.
Usually develops the performance appraisal system and forms used by managers throughout the organization.
Determines compensation for employees.
Is usually responsible for employee health and safety programs, labor relations, and the termination of employees.
Keeps employment records, and it is often involved with legal matters.

Human Resources Planning
Strategic Human Resources Planning
The process of staffing the organization to meet its objectives.
Job Analysis
The process of determining what the position entails and the qualifications need to fill the position.
Job description
Identifies the tasks and responsibilities of a position.
Job specifications
Identify the qualifications needed by the person who is to fill a position.

Exhibit 7 –5 ● Job Description DEPARTMENT: Plant Engineering JOB TITLE: Lead Sheet Metal Specialist JOB DESCRIPTION: Responsible for the detailed direction, instruction, and leading of sheet metal department personnel in the construction and repair of a wide variety of sheet metal equipment. Receives verbal or written instructions from foreperson as to sequence and type of jobs or special methods to be used. Allocates work to members of the group. Directs the layout, fabrication, assembly, and removal of sheet metal units according to drawings or sketches and generally accepted trade procedures. Obtains materials or supplies needed for specific jobs according to standard procedures. Trains new employees, as directed, regarding metal-working procedures and safe working practices. Checks all work performed by the group. Usually makes necessary contacts for the group with supervision or engineering personnel. May report irregularities to higher supervision but has no authority to hire, fire, or discipline other employees.

Exhibit 7 –6 ● Recruiting Sources

The Selection Process 1. Application form 2. Screening interviews 3. Testing 4. Background and reference checks 5. Interviewing 6. Hiring

Exhibit 7 –7 ● Types of Interviews and Questions

Exhibit 7 –8 ● Interview Preparation Steps

Exhibit 7 –9 ● Interviewing Steps

Selecting the Candidate
Problems to Avoid:
Rushing
Stereotyping
“Like me” syndrome
Halo and horn effect
Premature selection

Join the Discussion Ethics & Social Responsibility
Homeless Workers
Is Andre Jehan exploiting the homeless?
Is it ethical and socially responsible to give homeless people food for carrying signs?

Developing Employees
Orientation
The process of introducing new employees to the organization and their jobs.
Orientation Program Elements
Description of organization and department functions
Specification of job tasks and responsibilities
Explanation of standing plans
A facility tour
Introduction to coworkers

Developing Employees (cont’d)
Training
The process of teaching employees the skills necessary to do the job.
Development
Ongoing education to improve skills for present and future jobs.

Developing Employees (cont’d)
Off-the-Job Training
Vestibule training
Develops skills in a simulated setting.
On-the-Job Training
Done at the work site with the resources the employee uses to perform the job.

Exhibit 7 – 10 ● Job Instructional Training Steps

Exhibit 7 – 11 ● Training Methods

Performance Appraisal
Performance Appraisal
The ongoing process of evaluating employee performance.
Types of Performance Appraisal
Developmental performance appraisal
Make decisions and plans for performance improvements.
Evaluative performance appraisal
Make administrative decisions about pay raises, transfers, promotions, demotions, and terminations.
“You Get What You Reward”
People seek information concerning what activities are rewarded and then seek to do those things, often to the exclusion of activities not rewarded.

Exhibit 7 – 12 ● The Performance Appraisal Process

Exhibit 7 – 13 ● Performance Appraisal Measurement Methods

Performance Appraisal Measurement Methods
Critical Incidents File
A performance appraisal method in which a manager keeps a written record of positive and negative performance of employees throughout the performance period.
Management by Objectives (MBO)
A process in which managers and employees jointly set objectives for the employees, periodically evaluate performance, and reward according to the results.

Performance Appraisal Measurement Methods (cont’d)
Narrative Method
Requires a manager to write a statement about the employee’s performance.
Can vary as managers may be allowed to write whatever they want, or they may be required to answer questions about the employee’s performance.
Is often combined with another method.

Behaviorally Anchored Rating Scale (BARS)
Combines the rating scale and the critical incidents file.
Is more objective and accurate than either method used separately.
Has several statements that describe the employee’s performance, from which the manager selects the best one.
Standards are clear when a good BARS is developed.

Rating Scale
Is a performance appraisal checklist on which a manager simply rates the employee’s quantity of work, quality of work, dependability, judgment, attitude, cooperation, and initiative.
Ranking
Is used to evaluate employee performance from best to worst.
The manager compares an employee to other employees, rather than to a standard measurement.

Forced Distribution Method
Is similar to grading on a curve.
Predetermined percentages of employees are placed in various performance categories.
Example: excellent, 5%; above average, 15%; average, 60%; below average, 15%; and poor, 5%

Exhibit 7 – 14 ● The Evaluative Performance Appraisal Interview

Exhibit 7 – 15 ● The Developmental Performance Appraisal Interview

Compensation
Compensation
The total cost of pay and benefits to employees.
Pay Systems
Wages
Paid on an hourly basis.
Salary
Based on specific time period regardless of hours worked.
Incentives
Paid for performance as piece rates for production, commissions on sales, merit raises, bonuses for reaching/exceeding goals, and profit sharing.

Commissions
Offering higher commissions for different funds is not illegal. What is the ethical issue?
As a broker, would you intentionally sell more of the products that gave you a higher commission?

Compensation (cont’d)
Pay Determination
Externally market valuing the job on a pay level decision.
Job evaluation
Used internally to determine the worth of each job relative to the other jobs with in the organization.
Benefits
Legally required benefits (e.g., workers’ compensation, unemployment compensation, and Social Security)
Optional benefits (e.g., health insurance; paid sick days, holidays, and vacations; and pension plans)

Health and Safety
Occupational Safety and Health Act (OSHA)
Requires employers to pursue workplace safety by meeting OSHA safety standards, maintaining records of injuries and deaths due to workplace accidents, and submitting to on-site inspections.
The human resources department commonly has responsibility for ensuring the health and safety of employees.

Sweatshops
In your opinion, are companies that hire sweatshop workers helping these workers or exploiting them?
Should a global company compensate all employees at the same rates, or should compensation be based on the cost of doing business and the cost of living in a given country?
Is it possible for a company to apply the same health and safety standards that it follows in the United States to its operations in other countries and still compete globally with companies that don’t apply such standards?
Is it ethical and socially responsible to contract work with sweatshops?
What, if anything, should be done about sweatshops?

Labor Relations
Labor Relations
The interactions between management and unionized employees.
National Labor Relations Act (Wagner Act)
Oversees the labor relations process through the National Labor Relations Board.
Collective Bargaining
The negotiation process resulting in a contract that covers compensation, hours, and working conditions and other issues that employees and management agree to.

Exhibit 7 – 16 ● The Union-Organizing Process

Labor Relations (cont’d)
Mediator
A neutral party who helps management and labor settle their disagreements by compromise.
Arbitrator
A neutral party that can make a binding decision, one to which management and labor must adhere.

Loss of Employees
Organizations Lose Employees for Three Primary Reasons:
Through attrition — employees leave for other jobs, elect to stop working for a period of time, or retire.
Employees who break rules or do not perform to standards are fired.
Employees are laid off.
Exit Interviews
Help identify problem areas that lead to turnover.
Outplacement Services
Help laid-off employees find new jobs or learn new skills.

KEY TERMS
human resources management process
bona fide occupational qualification (BFOQ)
strategic human resources planning
job description
job specifications
recruiting
selection
assessment centers
orientation
training
development
vestibule training
performance appraisal
compensation
job evaluation
labor relations
collective bargaining

Chapter 7 - Human Resource Management

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