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CH 6 BSAD 310 Fall 2019
1.
Chapter 6 Human Resource Decision-Making in
Organizations Copyright ©2020 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2.
LEARNING OUTCOMES 2 Copyright ©
2020 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 1. Discuss the role of ethics in human resource decision-making 2. Describe the concept of rightsizing, and identify organizational strategies for rightsizing 3. Describe how to manage termination and retention 4. Describe the elements of voluntary turnover 5. Discuss the key human resource issues during mergers and acquisitions
3.
3 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Ethics and Human Resource Management • Ethics: Individual’s beliefs about what is right and wrong and what is good and bad • Formed by the societal context in which people and organizations function • May or may not coincide with the law • Business ethics is complicated in the global environment of modern business • Nations and cultures differ in what they see as acceptable behaviors relative to corruption, exploitation of labor, and environmental impact LO 1
4.
4 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Rightsizing • Monitoring and adjusting the composition of an organization’s workforce to its optimal size • Managing the workforce size involves: • Layoffs or early-retirement programs to reduce the size of the workforce • Retention programs to maintain the size of the workforce • Use of temporary workers as a bridge between the current state of affairs and growth or reduction LO 2
5.
5 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Dealing with Increased Demand for Employees • Overtime: Hours worked above the normal 40-hour workweek, for which there is usually a pay premium • The Fair Labor Standards Act stipulates compensation at a rate of one and a half times the normal hourly rate for employees who work overtime • Unionized organizations have contracts that specify decision rules to be followed while offering overtime • Could lead to increased fatigue and anxiety LO 2
6.
6 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Dealing with Increased Demand for Employees (Continued 1) • Temporary employees • Organizations can hire someone for only a specific period of time • Advantages - Paid a lower rate - Provide flexibility because an organization can terminate their employment as work demands mandate • Disadvantage: Likely to be less productive than permanent full-time employees of an organization LO 2
7.
7 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Dealing with Increased Demand for Employees (Continued 2) • Employee Leasing • Paying a fee to a leasing company to provide a pool of employees who are available on a temporary basis • Employees are: - Required to handle most of the organization’s work needs in specific areas - Temporarily available and may cost more than employees who are hired directly by the firm - Likely to be less committed and attached to the firm LO 2
8.
8 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Dealing with Increased Demand for Employees (Continued 3) • Part-time workers: Individuals who are regularly expected to work less than 40 hours a week • Do not usually receive benefits • Provide scheduling flexibility to the organization that hires them LO 2
9.
9 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Dealing with a Declining Need for Employees • Cutting back on the contingent workforce and retaining only permanent members • Works best in cyclical industries • Early retirement and natural attrition • Organizations can try to provide incentives for other employees to retire early, not replace workers who leave voluntarily, or both • Plans must be voluntary or the organizations may encounter legal problems LO 2
10.
10 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Strategies for Layoffs • Layoffs lead some employees to: • Sue the organization for wrongful termination • Develop negative feelings toward their former employer • React aggressively or violently toward those perceived to be responsible LO 2
11.
11 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Types of Justice Related to Reactions to Layoffs • Employees’ perception of the justice involved in the layoff process is a critical determinant of their reactions • Distributive justice: Perceptions that the outcomes a person faces are fair when compared to the outcomes faced by others • Procedural justice: Perceptions that the process used to determine the outcomes were fair • Interactional justice: Quality of the interpersonal treatment people receive when a decision is implemented LO 2
12.
12 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Critical Dimensions of Procedural Justice • Voice: Perception that the person had some control over the outcome or some voice in the decision • Consistency: Perception that the rules were applied the same way to everyone involved • Free from bias: Perception that the person applying the rules had no vested interest in the outcome of the decision • Information accuracy: Perception that the information used to make the decision was accurate and complete LO 2
13.
13 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Critical Dimensions of Procedural Justice (Continued) • Possibility of correction: Perception that some mechanism exists to correct flawed or inaccurate decisions • Ethicality: Perception that the decision rules conform to personal or prevailing standards of ethics and morality • Representativeness: Perception that the opinions of the various groups affected by the decision have been considered in the decision LO 2
14.
14 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Downsizing • Most studies suggest that downsizing is an ineffective strategy • Firms should consider reducing plants and assets rather than their workforce • Can result in negative effects on stock prices and other financial indexes • Survivor syndrome can result in a drop in the morale and commitment of employees • Some alternatives to layoffs may result in job loss LO 2
15.
15 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Managing Involuntary Turnover • Involuntary turnover: Terminating employees whose services are no longer desired • Represents a failure in the HR system • Managers should always start with an effort to rectify the problem before termination • Employee assistance programs (E A P s) • Help employees and reduce the costs associated with lost workdays and poor productivity LO 3
16.
16 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Progressive Discipline • Designed to try to improve performance through the use of punishment • Progressive disciplinary plans • Organizational disciplinary programs where the severity of punishment increases over time or across the problem • Steps involved include verbal warnings, written warnings, suspension, and termination LO 3
17.
17 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Employment at Will • Employer can terminate any employee, at any time, for any reason, or for no reason at all • Key to successful termination is documentation • Some firms use positive discipline • Emphasizes positive changes instead of punishment • Somewhat progressive in nature, with warnings leading to eventual termination if the problem is not corrected LO 3
18.
18 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Employee Retention • Ways of reducing the voluntary turnover of desired employees • HR analytics plays an important role in predicting why people leave and then doing something to retain them • Regular employee satisfaction survey and exit interviews provide valuable information LO 3
19.
19 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Job Dissatisfaction • Feelings of being unhappy with one’s job • Major cause of voluntary turnover • HR manager plays a major role in ensuring that employees remain reasonably satisfied with their jobs • Increasing job satisfaction is complicated • Economy and labor market play a role • Causes: Nature of the work, pay and benefits, and supervisors and coworkers LO 4
20.
20 Figure Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 6.1 A Model of the Turnover Process LO 4
21.
21 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Effects of Job Dissatisfaction • Organizational commitment • Degree to which an employee identifies with an organization and is willing to exert effort on behalf of the organization • Organizational citizenship behaviors (O C B’s) • Employee behaviors that are beneficial to the organization but are not formally required as part of an employee’s job LO 4
22.
22 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Measuring and Monitoring Job Satisfaction • Attitude surveys • Job descriptive index (J D I): Assesses satisfaction with specific job aspects such as pay, the work itself, and supervision - Does not have a single overall measure of job satisfaction • Instruments that include questions about desired versus experienced levels of satisfaction • Example: Faces scale LO 4
23.
23 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Retention Strategies • Job enrichment • Making work meaningful and giving more autonomy and opportunity to use skills • Realistic job previews (RJP’s) • Preemployment previews that provide accurate and realistic information to the job applicant • Stock options • Rights given to employees to purchase a certain number of shares of stock at a given price LO 4
24.
24 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 Managing HR during Mergers and Acquisitions • Employees become concerned with job security • Mergers and acquisition threaten a worker’s self-identity • Important to build employee identification with the new corporate identity • HR managers can serve as the center of communication LO 5
25.
KEY TERMS 25 Copyright ©
2020 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 • Ethics • Rightsizing • Overtime • Employee leasing • Part-time workers • Distributive justice • Procedural justice • Interactional justice • Involuntary turnover • Punishment • Discipline • Progressive disciplinary plans • Verbal warnings • Written warnings • Suspension • Termination • Employment at will • Job dissatisfaction • Job embeddedness
26.
KEY TERMS 26 Copyright ©
2020 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 • Organizational commitment • Organizational citizenship behaviors (O C B’s) • Realistic job previews (RJP’s) • Stock options
27.
SUMMARY 27 Copyright © 2020
Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HR5 | CH6 • Ethics is an important aspect of decision- making that is separate from the law • Size of a firm’s workforce must be adjusted to fit the changing needs of the business • HR plays an important role in employee terminations and retention • To manage voluntary turnover, it is important to understand why people leave • Mergers and acquisitions cause most stress to employees due to imminent layoffs
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