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  1. 1. Chapter 12 HUMAN RESOURCE MANAGEMENT (HRM) © Prentice Hall, 2002 12-1
  2. 2. Learning Objectives • You should learn to: – Explain the strategic importance of human resource management (HRM) – Describe the HRM process – Differentiate between job descriptions and job specifications – Contrast recruitment and derecruitment options – Describe the selection devices that work best with various kinds of jobs © Prentice Hall, 2002 12-2
  3. 3. Learning Objectives (cont.) • You should learn to: – Identify the various training categories – Explain the various approaches to performance appraisal – Describe what an organization’s compensation system should include – Discuss the current issues affecting HRM © Prentice Hall, 2002 12-3
  4. 4. Why HRM Is Important • All Managers Must Engage in Some HRM Activities – interview job candidates – orient new employees – evaluate work performance • HRM Policies and Practices Have a Positive Impact on Performance – high performance work practices • • • • commit to improving knowledge and skills increase motivation retain quality employees encourage nonperformers to leave © Prentice Hall, 2002 12-4
  5. 5. Examples of High-Performance Work Practices © Prentice Hall, 2002 12-5
  6. 6. The HRM Process • HRM Process – necessary for staffing the organization and sustaining high employee performance • identify and select competent employees • provide up-to-date knowledge and skills • retain competent, high performing employees – influenced by the external environment – labor union - represents workers and protects their interests through collective bargaining • HRM decisions regulated by the terms of collective agreements © Prentice Hall, 2002 12-6
  7. 7. The HRM Process Environment Human Resource Planning Recruitment Selection Identification and selection of competent employees Derecruitment Orientation Training Performance Management Career Development © Prentice Hall, 2002 Adapted and competent employees with up-to-date skills and knowledge Compensation and Benefits Environment Competent employees who are capable of sustaining high performance over the long term 12-7
  8. 8. • HRM Process (cont.) Process (cont.) The HRM – expanding influence of federal regulations to assure equal employment opportunities – affirmative action - ensures that decisions and practices enhance the employment, upgrading, and retention of members from protected groups • organization: –refrains from discrimination –actively seeks to enhance the status of members of protected groups © Prentice Hall, 2002 12-8
  9. 9. Major U.S. Federal Laws and Regulations Related to HRM © Prentice Hall, 2002 12-9
  10. 10. Human Resource Planning • Ensures: – that organization has the right number and kind of people in the right places and at the right time – employees are capable of effectively and efficiently performing their assigned tasks • Current Assessment – human resource inventory - review of organization’s human resource status • sophisticated databases contain background information on each employee © Prentice Hall, 2002 12-10
  11. 11. • Current Assessment (cont.) Planning (cont.) Human Resource – job analysis - defines jobs and the behaviors necessary to perform them • information developed in job analysis reported in: – job description - statement of what job holder does, how it is done, and why it is done » focus is job content, environment, and conditions of employment – job specification - statement of the minimum qualifications that a person must possess to perform a given job » focus is employee knowledge, skills, and attitudes © Prentice Hall, 2002 12-11
  12. 12. Job Analysis Procedures Direct observation of the worker Filming workers on the job Interviewing employees in groups Job ‘experts’ identify major job characteristics © Prentice Hall, 2002 Structured questionnaire Job Analysis Interviewing employees individually Employee diaries 12-12
  13. 13. Human Resource Planning (cont.) • Meeting Future Human Resource Needs – determined by the organization’s goals and strategies – demand for employees is a result of demand for the organization’s products and services – comparison of current HR capabilities and future needs permits: • estimation of employee shortages, both in number and type • determination of areas in which the organization is overstaffed © Prentice Hall, 2002 12-13
  14. 14. Recruitment • Recruitment And Derecruitment – process of locating, identifying, and attracting capable applicants – choice of recruiting source determined by: • local labor market • type or level of position • size of the organization – employee referrals typically produce the best applicants • applicants are prescreened by current employees • current employee’s reputation is at stake © Prentice Hall, 2002 12-14
  15. 15. Major Sources of Potential Job Candidates © Prentice Hall, 2002 12-15
  16. 16. • Recruitment And Derecruitment Derecruitment (cont.) – process of reducing the size of the organization’s workforce or restructuring its skill base – used to meet the demands of a dynamic environment – firing - permanent involuntary separation – layoff - temporary involuntary termination – attrition - workers who voluntarily resign are not replaced – transfer - lateral or downward job change – reduced workweek - fewer hours/week or part-time work – early retirement - incentives offered to resign – job sharing - more than one employee shares one fulltime position © Prentice Hall, 2002 12-16
  17. 17. • Selection Process Selection – screening job applicants to ensure that the most appropriate candidates are hired • What Is Selection? – prediction exercise to determine which applicants will be successful if hired • success defined by good performance on criteria used to evaluate employees – selection decisions may be correct or incorrect • reject errors - reject candidates who would have performed the job successfully • accept errors - hire candidates who perform poorly © Prentice Hall, 2002 12-17
  18. 18. © Prentice Hall, 2002 Reject Successful Later Job Performance Accept Correct Decision Reject Error Unsuccessful SelectionSelection Decision Decision Outcomes Accept Error Correct Decision 12-18
  19. 19. • Validity Selection (cont.) – degree to which there is a proven relationship between the selection device and some relevant criterion – law prohibits the use of selection devices unless there is evidence that, once on the job, individuals with high test scores outperform those with low test scores – organization has burden to provide evidence of validity • Reliability – degree to which a selection device provides consistent measures – no selection device can be effective if it has low reliability © Prentice Hall, 2002 12-19
  20. 20. • Types of Selection Devices Selection (cont.) – each device has strengths and weaknesses • See Exhibit 12.7 – written tests - measure intelligence, ability, and interest • subject of frequent legal challenges – performance-simulation tests - made up of actual job behaviors • work sampling - presents a miniature model of a job – applicants perform tasks central to the job • assessment center - used to evaluate managerial potential by simulating problems confronted on the job © Prentice Hall, 2002 12-20
  21. 21. Suggestions For Interviewing 1. Structure a fixed set of questions for all applicants 2. Have detailed information about the job 3. Minimize any prior knowledge about the applicant 4. Ask questions that require detailed answers about actual job behaviors 5. Use a standardized evaluation form 6. Take notes during the interview 7. Avoid short interviews that encourage premature decision making © Prentice Hall, 2002 12-21
  22. 22. Quality of Selection Devices as Predictors © Prentice Hall, 2002 12-22
  23. 23. • Realistic Job Preview (RJP) Selection (cont.) – includes both positive and negative information about the job and the company • intended to reduce problems created when applicant receives information that is inflated – mismatched applicants are less likely to withdraw from the selection process – new employees likely to be dissatisfied and leave – new employees’ disillusionment results in lower commitment • engenders more realistic expectations – results in increased job satisfaction and lower turnover © Prentice Hall, 2002 12-23
  24. 24. Orientation • Work Unit Orientation – familiarizes new employee with goals of the work unit • clarifies how job contributes to work unit’s goals • introduces her/him to new coworkers • Organization Orientation – informs new employee about the organization’s objectives, history, procedure, and rules • Successful Orientation – may be formal or informal – makes new member feel comfortable, lowers likelihood of poor performance and resignations © Prentice Hall, 2002 12-24
  25. 25. Employee • Skill Categories Training – as jobs change, employee skills have to be updated – technical skills - basic and job-specific competencies – interpersonal skills - ability to interact effectively • listening skills • communication skills • conflict management skills – problem-solving skills - useful in nonroutine jobs • sharpening logic, reasoning, and problem definition • assessing causation and developing alternatives • analyzing alternatives and selecting solutions © Prentice Hall, 2002 12-25
  26. 26. Training Methods Sample On-the-Job Training Methods Job rotation - lateral transfers allowing work at different jobs Understudy assignment - work with seasoned veteran, coach, or mentor to provide encouragement Sample Off-the-Job Training Methods Classroom lectures - designed to convey specific technical, interpersonal, and problem-solving skills Films and videos - demonstrate technical skills Simulation exercises - learning by actually performing the work Vestibule training - simulated work environment containing actual equipment used on the job © Prentice Hall, 2002 12-26
  27. 27. • Employee Performance Performance Management System Management – process of establishing standards and appraising employee performance • Performance Appraisal Methods – each method has advantages and disadvantages • See Exhibit 12.12 – written essay - written description of employee’s strengths and weaknesses • discusses employee’s potential and suggests performance improvements – critical incidents - focus is behavior that defines effective and ineffective performance © Prentice Hall, 2002 12-27
  28. 28. • Employee Performance Performance Appraisal Methods (cont.) Management (cont.) – graphic rating scale - list of performance factors • employee rated on each factor with incremental scale – behaviorally anchored rating scale (BARS) - critical incident and graphic rating scale approaches combined – multiple comparisons - compares one person’s performance with that of one or more others • relative, not absolute, measuring device – group order ranking – individual ranking – paired comparison - compare each worker with every other worker © Prentice Hall, 2002 12-28
  29. 29. Employee Performance Management (cont.) • Performance Appraisal Methods (cont.) – objectives - employees evaluated by how well they accomplish a specific set of goals • Management By Objectives (MBO) preferred method of appraising managers and professional employees – 360 degree feedback - utilizes feedback from supervisors, employees, and coworkers © Prentice Hall, 2002 12-29
  30. 30. • Goals Compensation And Benefits of Compensation Programs – attract and retain competent and talented individuals – positively impact organization’s strategic performance – adapt to changing nature of work and the workplace • Skill-Based Pay – rewards employees for their job skills and competencies – job title doesn’t define pay category – mesh nicely with the changing nature of jobs • Trends in Compensation – make pay systems more flexible – reduce the number of pay levels © Prentice Hall, 2002 12-30
  31. 31. Factors That Influence Employee’s Company Compensation/Benefits tenure and profitability performance Size of company Geographical location Management philosophy © Prentice Hall, 2002 Kind of job performed Level of Compensation and Benefits Kind of business Unionization Labor- or capital-intensive 12-31
  32. 32. • Career Career Development – sequence of positions held by a person during her/his lifetime • The Way It Was – employees advanced their work lives within a single organization – career development was a way to attract and retain quality employees – uncertainty brought organizational changes that undermine principles of traditional career development © Prentice Hall, 2002 12-32
  33. 33. Career Development (cont.) • You and Your Career Today – boundaryless career - individual, not organization, responsible for career • employee defines progression, organizational loyalty, and marketplace value – career choice - optimally offers the best match between person’s aspirations and her/his abilities and market opportunities © Prentice Hall, 2002 12-33
  34. 34. Some Suggestions for a Successful Management Career © Prentice Hall, 2002 12-34
  35. 35. • Managing Workforce Diversity Current Issues In HRM – recruitment - recruiting net must be widened • use nontraditional recruitment sources • outreach will broaden applicant pool – selection - process must not discriminate • must accommodate needs of diverse applicants – orientation and training - transition often more challenging for some groups • workshops to raise diversity awareness issues © Prentice Hall, 2002 12-35
  36. 36. • Sexual Harassment Current Issues In HRM (cont.) – any unwanted activity of a sexual nature that affects an individual’s employment – harassment creates an unpleasant work environment and undermines workers’ ability to perform their jobs – illegal behavior includes: • verbal or physical conduct toward an individual that: – creates an intimidating, offensive, or hostile environment – unreasonably interferes with a person’s work – adversely affects a person’s employment opportunities © Prentice Hall, 2002 12-36
  37. 37. • Work-Life Balance Issues In HRM (cont.) Current – employees can’t (and don’t) leave their families and personal lives when they walk into work – managers can’t be sympathetic with every detail of an employee’s family life – family-friendly benefits - provide some help in dealing with family problems – dual-career couples - both partners have occupations • HRM policies should reflect the special needs this situation creates © Prentice Hall, 2002 12-37