Chapter 12 Managing Human Resources © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Role of HRM HR must drive organizational performance; it’s the competitive edge Matching process Integrate strategy HR builds culture The right people: To become more competitive on a global basis For improving quality, innovation, and customer service To retain during mergers and acquisitions To apply new information technology for e-business 2 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12.1 Top Three Factors for Maintaining Competitive Success 3 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12.2 Strategic Human Resource Management 4 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Building Human Capital to Drive Performance Strategic decisions are related to human decisions More companies rely on information, creativity, knowledge, and service Human Capital is the economic value of the combined knowledge, experience, skills, and capabilities of employees 5 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12.3 The Role and Value of Human Capital Investments 6 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Impact of Federal Legislation on HRM HR managers must stay on top of legal and regulatory environment Many laws exist to ensure equal opportunity and stop discrimination Discrimination – The hiring or promotion of applicants based on criteria that are not job relevant 7 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Impact of Federal Legislation on HRM Affirmative action – Requires employers to take positive steps to guarantee equal employment opportunities for people of protected groups Sexual harassment is a growing concern that is a violation of the Civil Rights Act 8 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12.4 Major Federal Laws Related to Human Resource Management 9 © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Changing Nature of Careers Employees operate under a new social contract Downsizing, outsourcing, rightsizing, and restructuring have ...

1. Chapter 12
Managing Human Resources
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
The Strategic Role of HRM
HR must drive organizational performance; it’s the competitive
edge
Matching process
Integrate strategy
HR builds culture
The right people:
To become more competitive on a global basis
For improving quality, innovation, and customer service
To retain during mergers and acquisitions
To apply new information technology for e-business
2
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
12.1 Top Three Factors for Maintaining Competitive Success
3

2. © 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
12.2 Strategic Human Resource Management
4
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Building Human Capital to Drive Performance
Strategic decisions are related to human decisions
More companies rely on information, creativity, knowledge, and
service
Human Capital is the economic value of the combined
knowledge, experience, skills, and capabilities of employees
5
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
12.3 The Role and Value of Human Capital Investments
6
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible

3. website, in whole or in part.
The Impact of Federal Legislation on HRM
HR managers must stay on top of legal and regulatory
environment
Many laws exist to ensure equal opportunity and stop
discrimination
Discrimination – The hiring or promotion of applicants based on
criteria that are not job relevant
7
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
The Impact of Federal Legislation on HRM
Affirmative action – Requires employers to take positive steps
to guarantee equal employment opportunities for people of
protected groups
Sexual harassment is a growing concern that is a violation of
the Civil Rights Act
8
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
12.4 Major Federal Laws Related to Human Resource
Management
9
© 2016 Cengage Learning. All Rights Reserved. May not be

4. scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
The Changing Nature of Careers
Employees operate under a new social contract
Downsizing, outsourcing, rightsizing, and restructuring have
left little stability
Subsidized benefits are decreasing
Employees are expected to be self-motivated
Organizations must be creative with training and development
New performance appraisal processes are required
10
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
12.5 The Changing Social Contract
11
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Innovations in HRM
Becoming an Employer of Choice
Organizations that are highly attractive to potential employees
because of HR practices
Using Temporary and Part-Time Employees
Contingent workers are not permanent, maintain flexibility, and
keep costs low
Acquiring Start-ups to Get the Talent
Acqui-hiring- buying an early-age start-up

5. 12
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Finding the Right People
Using the matching model, the organization and the individual
attempt to match the needs, interests, and values that they offer
each other
13
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
12.6 Attracting an Effective Workforce
14
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Human Resource Planning
What new technologies are emerging?
What is the volume of the business likely to be in the next 5 to
10 years?
What is the turnover rate?
What types of engineers will we need?
How many administrative personnel will we need to support

6. additional engineers?
Can we use temporary, part-time, or virtual workers?
15
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Recruiting (Talent Acquisition)
Assessing Organizational Needs:
Job analysis: Systematic process of gathering information about
the responsibilities of a job
Job description: Summary of the duties of a job
Job specification: Characteristics required to perform the job
16
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Recruiting (Talent Acquisition)
Realistic Job Previews – Provide pertinent information; positive
and negative
Legal Considerations – Recruiting practices must be legal
Innovations in Recruiting:
eRecruiting through Twitter, LinkedIn, and other social media
Internships – Student exchanges low cost labor for valuable
work experience
17
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.

7. Selecting
Employment Tests
Cognitive ability tests
Physical ability tests
Personality tests
Brain teasers
Assessment Center
Work sample tests
Online Checks
18
Application Form
Avoid irrelevant questions
Avoid questions with adverse impact
Interview; cannot violate EEO guidelines
Structured interviews
Biographical interviews
Behavioral interviews
Situational interviews
Panel interviews
Employers assess applicants for a “fit”
HR professionals us a combination of devices:
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
12.8 Employment Applications and Interviews: What Can You
Ask?
19
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible

8. website, in whole or in part.
12.9 Interview Brain Teasers
20
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Developing Talent
Training and Development
On-the-Job Training
Social Learning
Corporate Universities
Promotion from Within
Mentoring and Coaching
Performance Appraisal
Evaluating performance, recording assessment, and providing
feedback
21
Development involves teaching broader skills
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
12.10 Methods and Goals of Training
22

9. © 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Performance Appraisal
Assessing Performance Accurately – system should evaluate
relevant performance
Performance-review ranking systems pit employees against each
other
360-degree Feedback – Uses multiple raters, including self-
rating to appraise employees and development
23
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Performance Appraisal
Performance Evaluation Errors
Stereotyping – Placing an employee into a class or category
based on a few characteristics
Behaviorally Anchored Rating Scale (BARS) – Rating technique
that relates an employee’s performance to specific job-related
incidents
24
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
12.11 - Example of a Behaviorally Anchored Rating Scale
25

10. © 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Compensation
All monetary payments and all goods or commodities used to
reward employees
Wage and Salary Systems
Job-based pay
Skill-based pay
Competency-based pay
Compensation Equity – Fairness and equity
Pay for Performance – Raise productivity and cut labor costs in
competitive environment
26
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Benefits
Social security, unemployment compensation, and workers’
compensation are required by law
Cafeteria-plan benefits packages allow employees to select
benefits for themselves
Benefits have been cut due to the recession
Companies are not planning to renew benefits to prerecession
levels
27
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible

11. website, in whole or in part.
Appreciation or recognition for a job well done
Being in the know about company matters
An understanding attitude from the management
Job security
Good wages
Interesting work
Career advancement opportunities
Loyalty from management
Good working conditions
Tactful discipline
28
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Rightsizing the Organization
Reducing the company’s workforce to the “right” size; also
called downsizing
Makes company stronger and more competitive
HR must effectively and humanely manage the process
Many organizations use communication and provide assistance
to address emotional needs
29
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Termination

12. Employees leave voluntarily, retire, are rightsized, and are fired
for poor performance
Poor performing employees can be disruptive and cause
problems for morale
Exit interviews can be used to learn about dissatisfaction and
reason for departure
30
© 2016 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Managing Human Resources
1. Explain the strategic role of human resource management.
The term human resource management (HRM) refers to
activities undertaken to attract an effective workforce, develop
the workforce to its potential, and maintain the workforce over
the long term. These goals take place within the larger
organizational environment including competitive strategy,
federal legislation, and societal trends. The organization’s
competitive strategy may include mergers and acquisitions,
downsizing to increase efficiency, international operations, or
the acquisition of automated production technology. These
strategic decisions determine the demand for skills and
employees. The human resource strategy, in turn, must include
the correct employee makeup to implement the organization’s
strategy.
2. Describe federal legislation and societal trends that influence
human resource management.
Several federal laws have been passed to ensure equal
employment opportunity (EEO). The point of the laws is to stop
discriminatory practices that are unfair to specific groups and to
define enforcement agencies for these laws. EEO legislation
attempts to balance the pay given to men and women; provide

13. employment opportunities without regard to race, religion,
national origin, and sex; ensure fair treatment for employees of
all ages; and avoid discrimination against disabled individuals.
More recent legislation pertains to illegal aliens.
3. Explain what the changing social contract between
organizations and employees means for workers and human
resource managers.
Not since the advent of mass production and modern
organizations has a redefinition of work and career been so
profound. Under the emerging social contract, each person
must take care of herself or himself. Particularly in learning
organizations, everyone is expected to be a self-motivated
worker who has excellent interpersonal relationships and is
continuously acquiring new skills. Employees take more
responsibility and control in their jobs, becoming partners in
business improvement rather than cogs in a machine.
Organizations provide challenging work assignments as well as
information and resources to enable workers to continuously
learn new skills. HRM departments can help organizations
develop a mix of training, career development opportunities,
compensation packages, and rewards and incentives. They can
provide career information and assessment, combined with
career coaching to help employees determine new career
directions. The new social contract can benefit both employees
and organizations.
4. Show how organizations determine their future staffing needs
through human resource planning.
Human resource planning is the forecasting of human resource
needs and the projected matching of individuals with expected
vacancies. Human resource planning begins with several
questions:
What new technologies are emerging, and how will these affect
the work system? What is the volume of the business likely to
be in the next five to ten years? What is the turnover rate, and
how much, if any, is avoidable? By anticipating future HRM
needs, the organization can prepare itself to meet competitive

14. challenges more effectively than organizations that react to
problems only as they arise.
5. Describe the tools managers use to recruit and select
employees.
Recruiting involves practices that define the characteristics of
applicants to whom selection procedures are ultimately applied.
Today, much of the recruiting is done via the Internet and social
media sites such as LinkedIn, Facebook, and Meetup. Many
organizations use internal recruiting, or promotionfromwithin,
policies to fill their higherlevel positions. Internal recruiting
has several advantages because it is less costly, generates
higher employee commitment, development, and satisfaction
and offers opportunities for career advancement to employees
rather than outsiders. External recruiting is recruiting
newcomers from outside the organization. A variety of outside
sources provide applicants, including online recruiting services,
advertising, state employment services, private employment
agencies, job fairs, and employee referrals. Referrals are one of
the cheapest and most reliable methods of external recruiting.
6. Describe how organizations develop an effective workforce
through training and performance appraisal.
Training and development represent a planned effort by an
organization to facilitate employees’ learning of jobrelated
behaviors. Some authors use the term “training” to refer to
teaching lowerlevel or technical employees how to do their
present jobs, while development refers to teaching managers the
skills needed for both present and future jobs. For simplicity,
we will refer to both as training. Performance appraisal is
another technique for developing an effective workforce.
Performance appraisal comprises the steps of observing and
assessing employee performance, recording the assessment, and
providing feedback to the employee. Managers use performance
appraisal to describe and evaluate the employees’ performance.
7. Explain how organizations maintain a workforce through the
administration of wages and salaries, benefits, and terminations.

15. Compensation refers to all monetary payments and all goods or
commodities used in lieu of money to reward employees. An
organization’s compensation structure includes wages and/or
salaries and fringe benefits such as health insurance, paid
vacations, or employee fitness centers. A company’s
compensation structure is designed to fit company strategy and
to provide compensation equity. The wage and salary structure
is important in maintaining a productive workforce. Equally
important are the benefits offered by the organization. Benefits
were once called “fringe” benefits, but this term is no longer
accurate because they are now a central part of the
compensation package. Benefits comprise more than onethird
of labor costs and in some industries nearly twothirds.
Terminations are valuable in maintaining an effective
workforce. Employees who are poor performers can be
dismissed. Also, employers can conduct exit interviews with
departing employees. The exit interview is an excellent and
inexpensive tool for learning about pockets of dissatisfaction
within the organization and, hence, reduce future turnover.