Chapter 11 Prepared by Deborah Baker Texas Christian University Managing Human Resource Systems Management 4th Edition Chuck Williams

What Would You Do? Domino’s annual turnover is 158 percent, making consistency difficult Unhappy customers may not do business again—and that hurts profits It costs $2,500 to replace each hourly worker, and $20,000 to replace a store manager Domino’s Pizza Headquarters, Detroit, Michigan. How do you find qualified applicants? What do you do to encourage managers to stay? What would you do?

Domino’s annual turnover is 158 percent, making consistency difficult

Unhappy customers may not do business again—and that hurts profits

It costs $2,500 to replace each hourly worker, and $20,000 to replace a store manager

The Human Resource Management Process Adapted From Exhibit 11.1 Recruiting Selection Attracting Qualified Employees Determining Human Resource Needs Human Resource Planning Compensation Employee Separation Keeping Qualified Employees Developing Qualified Employees Training Performance Appraisal

Determining Human Resource Needs After reading these sections, you should be able to: describe the basic steps involved in human resource planning. explain how different employment laws affect human resource practice.

describe the basic steps involved in human resource planning.

explain how different employment laws affect human resource practice.

Human Resource Planning 1 Supply and Demand of Human Resources Human Resource Information Systems

Forecasting Demand and Supply Internal forecasts External forecasts Direct managerial input Best guess Statistical / historical ratios Work Force Forecasting Forecasting Methods 1.1

Internal forecasts

External forecasts

Direct managerial input

Best guess

Statistical / historical ratios

Forecasting Demand and Supply 1.1 Internal Factors Work Force Forecast External Factors

Internal Forecast Factors New positions New equipment and technology Eliminated positions Terminations Retirements Resignations Turnover Transfers Deaths Promotions Organization’s mission Productivity of current employees Skills/education of current employees 1.1 Adapted from Exhibit 11.2

New positions

New equipment and technology

Eliminated positions

Terminations

Retirements

Resignations

Turnover

Transfers

Deaths

Promotions

Organization’s mission

Productivity of current employees

Skills/education of current employees

External Forecast Factors Demographics of labor supply Geographic population shifts Manufacturing-to service-to information-based economy shift Economic conditions Unemployment rate Labor unions Availability of applicants Technological advances Competitors Growth of businesses Adapted from Exhibit 11.2 1.1

Demographics of labor supply

Geographic population shifts

Manufacturing-to service-to information-based economy shift

Economic conditions

Unemployment rate

Labor unions

Availability of applicants

Technological advances

Competitors

Growth of businesses

Forecast Methods 1.1 Direct Managerial Input Best Guess Statistical/ Historical Ratios Based on projections of cash flows, expenses, or financial measures Based on managers’ assessment of current head count, plus a guess on relevant internal/external factors Based on statistical methods, such as multiple regression, in combination with historical data

Human Resource Information Systems Computerized employee information systems Uses transaction processing employee self-service decision support 1.2

Computerized employee information systems

Uses

transaction processing

employee self-service

decision support

Human Resource Information Systems HRIS Adapted from Exhibit 11.3 1.2 Work History Performance Appraisal Personal Data Educational Data Company Employment History Promotion Data

Employment Legislation 2 Federal Employment Laws Adverse Impact and Employment Discrimination Sexual Harassment Laws

Federal Employment Laws 2.1 Adapted from Exhibit 11.4 Equal Pay Act of 1963 Civil Rights Act of 1964 Age Discrimination in Employment Act of 1967 Pregnancy Discrimination Act of 1978 prohibits unequal pay for males and females doing similar work prohibits discrimination on basis of race, color, religion, gender, origin prohibits discrimination against persons age 40 and over prohibits discrimination in employment against pregnant women

Federal Employment Laws (cont.) 2.1 Adapted from Exhibit 11.4 Americans with Disabilities Act of 1990 Civil Rights Act of 1991 Family & Medical Leave Act of 1993 prohibits discrimination on the basis of physical or mental disabilities strengthened the Civil Rights Act of 1964 permits workers to take up to 12 weeks of unpaid leave for pregnancy, etc. Adapted from Exhibit 11.4 Uniformed Services Employment & Reemployment Rights Act prohibits discrimination against those serving in the Armed Forces

Adverse Impact and Employment Discrimination 2.2 Four-Fifths Rule Adverse Impact Disparate Treatment Intentional discrimination that results in equally qualified people being treated differently Unintentional discrimination that works to the disadvantage of member of protected groups Comparison of selection rates of a protected to a nonprotected group, to determine if adverse impact has occurred

Sexual Harassment 2.3 Hostile Work Environment Quid Pro Quo unwelcome and demeaning sexually related behavior creates an intimidating and offensive work environment employee outcomes depend on whether an individual submits to sexual harassment

Common Managerial Mistakes in Sexual Harassment Laws That the victim and harasser must be of the opposite sex That harassment can only occur between coworkers or supervisors and subordinates That only victims can file complaints Assuming: 2.3

That the victim and harasser must be of the opposite sex

That harassment can only occur between coworkers or supervisors and subordinates

That only victims can file complaints

Company Responsibilities Respond immediately to make sure sexual harassment laws are followed Write a clear, understandable sexual harassment policy Establish clear reporting procedures Be in compliance with federal, state, and local sexual harassment laws 2.3

Respond immediately to make sure sexual harassment laws are followed

Write a clear, understandable sexual harassment policy

Establish clear reporting procedures

Be in compliance with federal, state, and local sexual harassment laws

Finding Qualified Workers After reading these sections, you should be able to: explain how companies use recruiting to find qualified job applicants. describe the selection techniques and procedures that companies use when deciding which applicants should receive job offers.

explain how companies use recruiting to find qualified job applicants.

describe the selection techniques and procedures that companies use when deciding which applicants should receive job offers.

Recruiting 3 Job Analysis and Recruiting Internal Recruiting External Recruiting

Job Analysis and Recruiting 3.1 work activities tools and equipment used to do the job context in which the job is performed personnel requirements for performing the job Information Collected by a Job Analysis

work activities

tools and equipment used to do the job

context in which the job is performed

personnel requirements for performing the job

Job Analysis and Recruiting Adapted From Exhibit 11.6 3.1 Job Description Job Specification HR Subsystems Recruiting Selection Training Performance Appraisal Separation Job Analysis

Job Analysis and Recruiting 3.1 Job Description written description of the basic tasks, duties, and responsibilities required of an employee holding a particular job Job Specification a written summary of the qualifications needed to successfully perform a job

Internal Recruiting A pool of applicants who already work for the company “ Promotion from within” Improves employee morale and motivation Reduces employer time and cost Job posting is the procedure for internal advertising Career path is a planned sequence of jobs 3.2

A pool of applicants who already work for the company

“ Promotion from within”

Improves employee morale and motivation

Reduces employer time and cost

Job posting is the procedure for internal advertising

Career path is a planned sequence of jobs

Methods for External Recruiting Advertising Employee referrals Walk-ins Outside organizations Employment services Special events Internet job sites 3.3

Advertising

Employee referrals

Walk-ins

Outside organizations

Employment services

Special events

Internet job sites

Selection Selection Tests Interviews Application Forms and R é sum é s References and Background Checks 4

Topics Employers Should Avoid Adapted from Exhibit 11.7 4.1 1. Children 2. Age 3. Disabilities 4. Physical Characteristics 5. Name 6. Citizenship 7. Lawsuits 8. Arrest records 9. Smoking 10. AIDS/HIV

Doing the Right Thing 4.1 Don’t Embellish Your R é sum é Embellishing your résumé is wrong. The information is legally binding— and misrepresenting information is breaking the law. If what you put on your résumé feels wrong, don’t do it. Don’t embellish. Tell the truth on your résumé. DOING THE RIGHT THING

Don’t Embellish Your R é sum é

Embellishing your résumé is wrong.

The information is legally binding— and misrepresenting information is breaking the law.

If what you put on your résumé feels wrong, don’t do it.

Don’t embellish. Tell the truth on your résumé.

References and Background Checks References or background checks are not always provided by previous employers Making background checks more effective dig deeper for more information get permission in writing document all checks consider hiring private investigators 4.2

References or background checks are not always provided by previous employers

Making background checks more effective

dig deeper for more information

get permission in writing

document all checks

consider hiring private investigators

Selection Tests 4.3 Work Sample Biographical Data Personality Assessment Centers Cognitive Ability Specific Ability Selection Tests

Doing the Right Thing 4.3 Don’t Use Psychics, Lie Detectors, or Handwriting Analysis to Make HR Decisions Companies may use these methods, but they don’t work There is no scientific evidence that handwriting analysis works Lie detectors are not accurate Polygraphs are not allowed Stay away from fads and use reliable procedures DOING THE RIGHT THING

Don’t Use Psychics, Lie Detectors, or

Handwriting Analysis to Make HR Decisions

Companies may use these methods, but they don’t work

There is no scientific evidence that handwriting analysis works

Lie detectors are not accurate

Polygraphs are not allowed

Stay away from fads and use reliable procedures

Interviews Unstructured Interviews free-flow of questions Structured Interviews interviewer uses standard set of prepared questions Semi-structured Interviews some structure combined with interviewer judgement 4.4

Unstructured Interviews

free-flow of questions

Structured Interviews

interviewer uses standard set of prepared questions

Semi-structured Interviews

some structure combined with interviewer judgement

Questions in Structured Interviews 4.4 Situational Questions Behavioral Questions Background Questions Job-Knowledge Questions

Guidelines for Conducting Effective Structured Interviews Identify and define the KSAO needed for job Develop key behavioral questions for each KSAO For each KSAO , develop a list of things to look for in applicant’s responses Planning the Interview KSAO: Knowledge, skills, abilities, and other characteristics 4.4 Adapted from Exhibit 11.10

Identify and define the KSAO needed for job

Develop key behavioral questions for each KSAO

For each KSAO , develop a list of things to look for in applicant’s responses

Guidelines for Conducting Effective Structured Interviews Create a relaxed interview atmosphere Review the applicant’s information Allocate adequate time Put the applicant at ease Tell the applicant what to expect Obtain job-related information (refer to KSAO) Describe the job and organization Conducting the Interview 4.4 Adapted from Exhibit 11.10

Create a relaxed interview atmosphere

Review the applicant’s information

Allocate adequate time

Put the applicant at ease

Tell the applicant what to expect

Obtain job-related information (refer to KSAO)

Describe the job and organization

Guidelines for Conducting Effective Structured Interviews Review your notes immediately Evaluate the applicant on each KSAO Determine each applicant’s probability of success and make a hiring decision After the Interview 4.4 Adapted from Exhibit 11.10

Review your notes immediately

Evaluate the applicant on each KSAO

Determine each applicant’s probability of success and make a hiring decision

What Really Works Cognitive Ability Tests 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 76% Work Sample Tests 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 77% Using Selection Tests to Hire Good Workers

What Really Works Assessment Centers 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 69% Structured Interviews 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 76% Using Selection Tests to Hire Good Workers

What Really Works Using Selection Tests to Hire Good Workers Cognitive Ability + Work Sample Tests 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 82% Cognitive Ability + Integrity Tests 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 83% Cognitive Ability + Structured Interviews 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 82%

Developing Qualified Workers After reading these sections, you should be able to: describe how to determine training needs and select the appropriate training methods. discuss how to use performance appraisal to give meaningful performance feedback.

describe how to determine training needs and select the appropriate training methods.

discuss how to use performance appraisal to give meaningful performance feedback.

Training 5 Training Needs Training Methods Training Evaluation

Determining Training Needs 5.1 Conducting Needs Assessments Identify Performance Deficiencies Test Employee Skills and Knowledge Survey Employers and Managers Listen to Customer Complaints

Work Keys Needs Assessment Adapted From Exhibit 11.11 5.1 Step 1 Step 2 Step 3 Job Analysis Test Employee Skills Compare Employee Skills to Required Skills

Work Keys Needs Assessment Exhibit 11.11 5.1

Training Methods Adapted From Exhibit 11.12 5.2 Impart Information and Knowledge Develop Analytical and Problem-Solving Skills Practice, Learn, or Change Job Behaviors All of the above films and videos lecture planned readings case studies coaching and mentoring group discussions on-the-job training role-playing simulations and games vestibule training Computer-based learning

films and videos

lecture

planned readings

case studies

coaching and mentoring

group discussions

on-the-job training

role-playing

simulations and games

vestibule training

Computer-based learning

Evaluating Training Reactions Learning Behavior Results how satisfied trainees were with the program how much employees improved their knowledge or skills how much employees actually changed their on-the-job behavior how much training improved job performance 5.3

Computer-Based Training

Performance Appraisal 6 Measuring Job Performance Sharing Performance Feedback

Measuring Job Performance: Common Rating Errors Central tendency all workers are rated as being “average” Halo error all workers are rated as performing at the same level in all parts of their jobs Leniency error all workers are rated as performing at a high level 6.1

Central tendency

all workers are rated as being “average”

Halo error

all workers are rated as performing at the same level in all parts of their jobs

Leniency error

all workers are rated as performing at a high level

Measuring Job Performance Improving Job Performance Measurements Improve Performance Appraisal Measures Train Performance Raters 6.1

Improving Performance Appraisal Measures Objective performance measures quantifiable outcomes (output, scrap, waste, sales, customer complaints, or rejection rates) Subjective performance measures trait rating scales behavioral observation scales (BOS) 6.1

Objective performance measures

quantifiable outcomes (output, scrap, waste, sales, customer complaints, or rejection rates)

Subjective performance measures

trait rating scales

behavioral observation scales (BOS)

Subjective Performance Appraisal Scales 6.1 Exhibit 11.13

Rater Training Teach raters how to avoid errors Improve rating accuracy Video training and role playing often used 6.1

Teach raters how to avoid errors

Improve rating accuracy

Video training and role playing often used

Sharing Performance Feedback Managers often fail to effectively give employees performance feedback 360-degree feedback boss, subordinates, peers, and the employee best for employee development 6.2

Managers often fail to effectively give employees performance feedback

360-degree feedback

boss, subordinates, peers, and the employee

best for employee development

Performance Feedback 6.2 Separate developmental feedback from administrative feedback Base performance appraisal feedback sessions on self-appraisals Have people discuss the feedback they received with executive coaches or the people who provided it Recommendations for Sharing Performance Feedback

Separate developmental feedback from administrative feedback

Base performance appraisal feedback sessions on self-appraisals

Have people discuss the feedback they received with executive coaches or the people who provided it

Performance Feedback 6.2 Adapted From Exhibit 11.14 Overall progress Problems encountered in meeting job requirements Opportunities to improve performance Long-range plans and opportunities General discussion of possible plans and goals for the coming year What to Discuss in Performance Appraisal Feedback Sessions

Overall progress

Problems encountered in meeting job requirements

Opportunities to improve performance

Long-range plans and opportunities

General discussion of possible plans and goals for the coming year

Keeping Qualified Workers After reading these sections, you should be able to: describe basic compensation strategies and explain how they affect human resource practice. discuss the four kinds of employee separations: termination, downsizing, retirements, and turnover.

describe basic compensation strategies and explain how they affect human resource practice.

discuss the four kinds of employee separations: termination, downsizing, retirements, and turnover.

Compensation 7 Compensation Decisions Employment Benefits

Compensation Decisions 7.1 Job evaluation Piecework Commission Profit sharing Employee stock ownership plans Stock options Hierarchical Compressed Pay Level Pay Variability Pay Structure Cafeteria plans Flexible plans Payroll deductions Adapted from Exhibit 11.15 Employment Benefits

Job evaluation

Piecework

Commission

Profit sharing

Employee stock ownership plans

Stock options

Hierarchical

Compressed

Cafeteria plans

Flexible plans

Payroll deductions

Pay-Level Decisions Job evaluation is used to determine the worth of jobs pay the “going rate” Should workers be paid at, below, or above current market wage? attracts a larger, more qualified pool of applicants increases the rate of job acceptance decreases the time it takes to fill positions increases the time that employees stay 7.1

Job evaluation is used to determine the worth of jobs

pay the “going rate”

Should workers be paid at, below, or above current market wage?

attracts a larger, more qualified pool of applicants

increases the rate of job acceptance

decreases the time it takes to fill positions

increases the time that employees stay

Pay-Variability Decisions Piecework Commission Profit sharing Employee stock ownership plans (ESOPs) Stock options 7.1

Piecework

Commission

Profit sharing

Employee stock ownership plans (ESOPs)

Stock options

Pay-Structure Decisions Hierarchical pay structures big differences from one pay level to another work best for independent work Compressed pay structures fewer pay levels with smaller differences in pay between pay levels work best for interdependent work 7.1

Hierarchical pay structures

big differences from one pay level to another

work best for independent work

Compressed pay structures

fewer pay levels with smaller differences in pay between pay levels

work best for interdependent work

Employment Benefits Compensation other than direct wages Employee benefits are legally mandated: Social Security worker’s compensation unemployment insurance Cafeteria benefit plans employees can select from optional benefits Payroll deductions 7.2

Compensation other than direct wages

Employee benefits are legally mandated:

Social Security

worker’s compensation

unemployment insurance

Cafeteria benefit plans

employees can select from optional benefits

Payroll deductions

Employee Separations 8 Terminations Downsizing Turnover Retirements

Terminating Employees Often mismanaged Minimize problems in firing employees firing should not be the first option firing should be for a good reason “ employment at will” wrongful discharge firing should be done in private 8.1

Often mismanaged

Minimize problems in firing employees

firing should not be the first option

firing should be for a good reason

“ employment at will”

wrongful discharge

firing should be done in private

Downsizing Provide clear reasons for the layoffs. Get information to avoid laying off employees with critical skills. Training managers in how to tell employees. Give employees the bad news early in the day. Provide outplacement services and counseling. Communicate with survivors. 8.2 Adapted From Exhibit 11.16

Provide clear reasons for the layoffs.

Get information to avoid laying off employees with critical skills.

Training managers in how to tell employees.

Give employees the bad news early in the day.

Provide outplacement services and counseling.

Communicate with survivors.

Retirement Offer financial benefits to encourage employees to retire Are attractive to many employees Are difficult to predict which or how many employees will use the program May cause the company to lose valuable employees Early Retirement Incentive Programs… 8.3

Offer financial benefits to encourage employees to retire

Are attractive to many employees

Are difficult to predict which or how many employees will use the program

May cause the company to lose valuable employees

Employee Turnover Loss of employees who voluntarily choose to leave the company Functional turnover (encouraged) the loss of poor-performing employees Dysfunctional turnover (discouraged) the loss of high performing employees 8.4

Loss of employees who voluntarily choose to leave the company

Functional turnover (encouraged)

the loss of poor-performing employees

Dysfunctional turnover (discouraged)

the loss of high performing employees