Chapter 15 WORKING WITH EMPLOYEES. Management Talk What makes us stand out is our heritage as a cooperative and commitment to providing a great work environment.

Chapter 15

WORKING WITH EMPLOYEES

“Management Talk”

“What makes us stand out is our heritage as a cooperative and commitment to providing a

great work environment. While we work hard to create a challenging and enjoyable work

environment, it takes great people to be a best company.”

– Wally Smith, REI, President and CEO

Objectives

• Understand the methods that organizations use to select employees

• Explain the difference between a transfer, promotion, and separation

• Identify different methods of training employees• Understand the methods that organizations use

to measure performance• Explain the process of Management By

Objectives• Understand the importance of rewarding

employees

Understanding ManagementREI (Recreational Equipment Inc.) has repeatedly been named to Fortune magazine’s list of “100 best companies to work for in America.”

The outdoors and sporting goods retailer has earned this distinction by offering employees a unique set of benefits, including flexible health, life, and disability insurance plans, an employee profit-sharing plan, and a “challenge grant” program that encourages employees to test REI products on wilderness adventures.

Management Skills

• Why would employee enthusiasm be important to a company like REI?

• If you were publishing a list of the 10 best companies to work for in your town, what things would you take into consideration?

Sec. 15.1: Meeting Personnel Needs

• What kind of experiences have you had applying for jobs?

What You’ll Learn

How companies use methods such as interviewing and testing to select employees

How the human resources department handles employees leaving positions

What training techniques companies develop to teach new concepts

Why is this important?

A successful manager must develop effective processes to select, train, and maintain

employees”

How Companies Select Employees

Human Resources (HR)• A department that recruits employees, manages training

and compensation, and plans for future personnel

HR Functions• Advertise positions, select from applicants, fill positions• Develop employee plan in respect to company goals and

business environment• Create a Job Description

– Written statement identifying the type of work and necessary qualifications for a job

– Sets the standards against which applicants can be rated

Online Source: www.workforceinfo.state.il.us (Career Click)

How Companies Select EmployeesTHINGS LISTED ON A

JOB DESCRIPTION:

1) Essential job functions2) Knowledge and critical skills3) Physical demands4) Environmental factors5) Any information that may be

necessary to clarify job duties or responsibilities

SAMPLE:Title: ReceptionistDuties and responsibilities:Receives and directs phone calls, greetsvisitors, receives and sorts mail andpackages, orders office and kitchen supplies, key documents when requiredQualifications: High school graduate. Needs good communication skills and ability to get along with people. Keying speed of 45 wordsper minute. Experience desirable but not necessary.Salary: $20,000- $25,000, depending on experience

Alternatives to Adding Alternatives to Adding StaffStaff

Freelancers

*

Interns

*

Temporary Workers

FreelancersFreelancers

• Provide services to business by hourly basis or by the job

• Used when full time employment is not needed

• Examples: Bookkeepers, accountants, lawyers, graphic designers, window display artists, advertising copywriters, and photographers

InternsInterns

• Students, who will work for little or no pay in order to gain experience in a particular field

• Found in community, local colleges, and high schools

Temporary WorkersTemporary Workers

• Can be used for long periods of time as an alternative to full time hiring

• Paid a workers salary plus a fee to the agency who supplies the worker

• Ex: Seasonal, substitute for injured or sick workers on leave

How Companies Recruit Employees

Get the readers attention Stimulate the reader’s interest Present a solid specific fact End ad with a call to action

Find employees for businesses and other institutionsTry to match people with jobs their looking for to the right businessCharge a fee when they are successful

Most college and universities have themCollect info on career and employment opportunitiesMake them available to students or graduatesNo fee is chargedAsk college to make you business listed at their placement center

How Companies Recruit Employees

Often businesses except referrals from reliable sources on a good applicant for a job their offering

On the world wide web mostly all companies use their business web sites to post job availability and have online applications

Also businesses can mention their location for people to apply

Online Job Search Databases

Post Classified Ads and Resumes

www.monster.com

www.careerpath.com

www.careerbuilder.com

The Selection ProcessStandard Selection Procedures

1. Preliminary screening

• HR Department will sort out hundreds of letters and resumes in response to one classified ad

• I.E. – Southwest Airlines receives 129,000 resumes and hires approximately 3,411 people every two years

• Applicant pool is narrowed and input from team members is given

• Check applicant’s references and credentials

• Call for an interview

The Selection ProcessStandard Selection Procedures

2. Testing

Used to differentiate applicants with similar credentials

Provides a uniform evaluation of the qualifications of a prospective employee

Predictive Index (PI)

• 10-minute personality test is used for effectively hiring and working with employees

• Identifies an individual’s strengths and weaknesses

• Over 3,000 companies use it (IKEA, Budget Rent-A-Car, colleges, professional sports teams)

Validity and Reliability of Test

• Factors relevant to the job

• Group of people taking test under similar circumstances get similar results

• Remove the element of chance

The Selection ProcessCommon Employment Tests

Aptitude TestMeasures capacity to learn a particular subject or skill

Psychomotor TestMeasures strength, dexterity, and coordination

Job Knowledge TestMeasures knowledge related to a particular job

Proficiency TestMeasures performance on a sample of the work required in the job

Interest TestCategorizes applicant’s interests relative to the job

Psychological TestAttempts to define personality traits

Polygraph TestRecords changes in physical response as a person responds to questions to determine whether responses are truthful

The Selection ProcessStandard Selection Procedures

3. Employment interview

Allow the employer to learn more about the applicant than can be conveyed in a resume or cover letter

Preparing for an Interview

• Setting aside space - Privacy

• Putting the applicant at ease – Small talk, Refreshment, Interviewer should be outgoing trained in interviewing skills

• Taking control over the interview – take notes to record important points, encourage applicant to talk, but control the direction of discussion

The Selection ProcessStandard Selection Procedures

3. Employment interview

Structured Interview

Prepare a list of questions when interviewing many applications for one position

Provides uniform information for each applicant

Remind the applicant to cover each question

• Where do you want to be in five years?

• What are your strengths in working with others?

Unstructured Interview

A conversation between employer and applicant in a relaxed environment

Ask open-ended questions

Why did you leave your previous job?

Tell me about yourself

Applicant has the opportunity to ask questions about the organization

Not always reliable interviews

Pertinent questions may not be covered and bias is a possibility

The Selection Process

Standard Selection Procedures

3. Employment interview

First Impressions on personal attributes can be taken into consideration

Halo Effect

Single characteristic dominates the interviewer’s impression of the applicant

(I.E.) - Pleasant Personality dominates the perception of the applicant and other concerns are overlooked

Doesn’t indicate if the candidate is qualified

Applicant with a pleasant personality in an interview is common

The Selection ProcessStandard Selection Procedures

4. Personal judgment

Choosing which individual gets the job

Employer must make a value judgment as to which applicant would be most successful

Follow the selection procedures for effective decision

What if no applicants are qualified?

Offer a higher salary or better benefits to attract more applicants

Re-advertise in a different newspaper or Web site

Legal Considerations in SelectionThe Wrong Questions

Due to federal law, certain questions cannot be asked of job candidates.

Questions to avoid when interviewing candidates include:

1. Age (may ask if they are older than a certain age if it is a requirement to of the job [i.e.-school bus driver, forklift operator]

2. Date of birth

3. Religion or church affiliation

4. Father's surname or mother's maiden name

5. Marital status

6. What languages they speak (unless it is a job requirement)

7. How many children they have, their children's ages and who will care for the children while applicant is working

8. Financial information not related to compensation

9. If they served in the military of any foreign country 10. If they have ever been arrested? (may ask if they have been convicted of a

felony/misdemeanor)

Legal Considerations in Selection

Griggs v. Duke Power Company African American employees at a power-generating plan

objected to the requirement of a high-school diploma or passing an intelligence test as conditions of employment in or transfer to jobs at the plant

Court decided if a test negatively impacts female or minority group applicants, then company must prove validity and prevalence to job requirements

Even if a company does not mean to discriminate, if may unintentionally select an unfair test

Findlaw.com source: GRIGGS v. DUKE POWER CO., 401 U.S. 424 (1971)

Legal Considerations in Selection

Albemarle Paper Company v. Moody North Carolina paper mill was seeking the reversal of a Court of Appeals

decision that eliminated its testing program and awarded back pay to a group of African American employees

Managers argued that in addition to creating diversity programs, they had statistical proof that their testing was job-related

Lower court noted that they had made efforts to deal with segregation

Supreme Court agreed with Court of Appeals that the intentions of the company were not the main issue

It held that it was not enough to show that the best workers did well on the tests, or that a testing program improved the overall quality of the work force.

Any tests had to be specifically related to performing the job in question.

Findlaw.com source: ALBEMARLE PAPER CO. v. MOODY, 422 U.S. 405 (1975)

Transfers, Promotions, and Separations

HR Department must account for employees leaving positions, as well as new employees being hired

Transfers Moves an employee into another position within the

company Generally maintains the same level of responsibility and

pay Employee can learn different functions within

organization

Transfers, Promotions, and SeparationsPromotions

Moving to a position of greater responsibility with higher status and pay

Merit-based and encourage performance

Considerations: Merit, seniority, or length of service Performance in current job How they will adapt to new job (aptitudes and interest)

Peter Principle – possible for employees to be promoted until they reach a level at which they can no longer perform

Employee has “risen to her level of incompetence” Will gain a mediocre employee and lose a competent one through

inappropriate promotion

Transfers, Promotions, and SeparationsSeparations - Final way in which an employee leaves a position

Voluntary – employee resignso Exit Interview – pinpoints reasons why an employee is leaving

Involuntary – employee is laid-off or terminatedo Layoffs – there is not enough work for all employees

o Result of downsizing to increase efficiencyo Employee can be called back

o Termination – employee is asked to leave because of poor performance or failure to follow company rules

o Failures from previous actions of training, counseling, and/or disciplinary action

o Last resulto Possible reassignment to a less stressful job will eliminate the waste of

company resources and time invested in hiring and training that individual

Training Employees A way for employees to learn new concepts, gain new

skills, or update existing ones

Training can be to entire organization if a new way of operating a business function is implemented (I.E. - District 211 Online Gradebook)

Provide meaningful training Positive reinforcement

Feedback regarding progress

Encourage learning by setting standards and measuring performance

Outback Steakhouse, the Australian-themed franchise

Monthly video conference meetings to all kitchen staff

Forum to discuss cooking and menus

Serving techniques to food handling

Training Employees

On-the-Job Training Employee works and trains under close supervision until he or she

understands the task and performs it correctly

Job Rotation Cross-Training: a form of on-the-job training that exposes employees to

several jobs within an organization Perform each job for a fixed period Allows employee to master many skills

Training Employees

Vestibule Training Training area is set up with equipment similar to that

used in the actual job Employees learn and practice in a simulated work

environment Used to train cashiers, bank tellers, clerks, and

technicians Creating training area can be expensive Can the employee adapt to working in the “real”

environment, with all its pressures, when training end?

Training Employees

Apprenticeship Training Time-tested form of on-the-job training Experienced worker (mentor) passes on skills to an

assistant Skilled occupations

Carpentry Mechanics Physicians

Training Employees

Classroom Training Presents general information about the organization,

rules, safety, and job concepts in a classroom setting Lectures, Q & R, Open Discussion Allows for information to be shared with large groups

at low cost 2-hour Bus Driving Re-fresher Courses (Mandatory)

Training EmployeesComputer-based Training Internet Training in the classroom or on an individual

basis, contributes to employee development at a low cost

View material at computer workstations and answer questions at their own pace

Electronic learning will grow to approx. $23.7 billion by this year (Source: International Data Corporation)

Percentage of Organizations Using Various Methods for Employee Training

92% 90%

79%

62%54%

51%

46%43%

41%27%

17%

11%10%

3%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Percentage

Video

Lectures

One-on-One Instruction

Role Plays

Simulations/Games

Audio

Slides

Films

Case Studies

Self Assessment

Self-Study Programs

Multimedia

Teleconferencing

Video Teleconferencing

Computer Conferencing

Source: Adapted by B. Filipczak, “What Employers Teach,” Training 29, no. 10 (1992) p. 46. 1992 Lakewood Publications, Minneapolis, MN.

Extension Activity!!!

• Have students interview personnel directors (at the school or in a business) about what types of interviews they conduct and what general traits they look for in new hires.

• Have students use the Internet to research and compare career tests

15. 1: Chapter Summary

The employee selection procedure includes screening, testing, and interviewing

Employees may leave a position through transfers, promotions, or separations

Methods of employee training include on-the-job training, vestibule training, apprenticeship, classroom training, and computer-based training

Sec. 15.2: Rewarding Performance

• What types of rewards will you work for and why?

• Predict what are the most effective rewards and what their importance is in the business world.

What You’ll Learn Four different methods of evaluation employee

performance Why is it important to provide feedback to

employees How to connect a reward system to

performance evaluation

Why is this Important?

“Reward systems are developed to maintain employee motivation. It is necessary to evaluate performance and provide feedback to produce positive

results.”

How is Performance Measured?

• Rewarding employees motivates them to do their best

• Employers must show appreciation to retain qualified employees

• America West Airlines– Offers employees a $50 bonus for every month in which

the company ranks in the top three major airlines in either on-time performance or lack of customer complaints

• Performance Assessments– Identify problem areas and guides employee’s future

efforts

How is Performance Measured?

• Performance measures:– An employee’s degree of accomplishment and results in

job-related tasks– Effort that an employee exerts on the job

• Role perception: – Employee must understand his or her part in an

organization

How is Performance Measured?

Management By Objectives (MBO)– Process often used in quality improvement and

goal setting for the whole organization as well as performance appraisal

– Empowers employees by involving them in personal goal setting

• Establishes well-defined job objectives• Develops an action plan• Allows employees to implement the action plan• Evaluates achieved performance-based objectives• Takes necessary corrective action• Establishes new objectives for the future

How is Performance Measured?

Management By Objectives (MBO)– Should be clear and straightforward– Challenging and incentives for improvement– Manager and employee should agree on objectives that

are fair and realistic

Sample Objectives• To answer all customer complaints in writing within three days of

receipt of complaint• To reduce order-processing time by two days within the next six

months• To implement the new computerized accounts receivable system by

August 1

How do these sample objectives meet that standard?

How is Performance Measured?

Production Standards– Used when something can be counted or

measured– Set an expected level of output– Employees compare their production with this

standard

How is Performance Measured?

Essay Appraisal– Manager describes the employee’s

performance in a written narrative– A form which includes questions such as:

• Describe, in your own words, this employee’s performance

• What are his or her strengths and weaknesses?

– Writing Skills are necessary– May be subjective and difficult to defend against

accusations of unfairness

How is Performance Measured?

Critical-Incident Appraisal– Manager records specific situations that reflect

the employee’s performance, behavior, and attitudes on the job

• Used as a basis for appraisal and feedback• Produces large volume of material and recording is time-

consuming• Problems of subjectivity based on the likeability of the

employee by the supervisor

Providing Feedback

Managers must explain results to employees, especially if there is negative feedback

The Successful Appraisal InterviewThe following factors contribute to the success of the appraisal interview:

– Employee involvement– Recognition and praise– Manager and employee work together to set improvement goals– Discussion of problems– Avoidance of heavy criticism– Encourage the employee to voice opinions– Opportunity for employee to prepare for interview– Perception that good performance will be rewarded

How could these factors help to achieve the goal of motivating an employee to improve?

Legal Considerations

Title VII of the Civil Rights Act

Requires that an organization’s performance appraisal system be “bona fide.”

System can’t have disproportionately negative effects upon minorities, women, or older employees

An appraisal system that is fair and legal should: Be based on Job Descriptions

Emphasize performance rather than personal traits

Communicate appraisal results to employees

Allow employee response

Train mangers in conducting proper evaluation

Ensure that appraisals are written and documentation is retained

Be consistent

Organizational Reward SystemIntrinsic Rewards

Intangible and internal to the individual

Extrinsic Rewards

Controlled and distributed by the organization Child Day Care

Basketball Courts

Weekly softball games

Fitness Center

Intrinsic Rewards Extrinsic Rewards

Sense of achievement Feelings of accomplishment Informal recognition Job Satisfaction Personal Growth Status

Formal Recognition Fringe Benefits Incentive Programs Base Wages Promotion Social Relationships

Relating Rewards to PerformanceFree Enterprise System

o Rewards should be related to performance

Merit-pay – salary increases are based on performance appraisals

Other rewards not based on performance

o Across-the-board pay – salary increases of a fixed percentage

o Insurance plans

o Paid leave

o Sick leave

o Personal Leave

o Emergency Leave

o Paid Vacation Leave

o Discounts

Online Source: 1998 InfoWorld Compensation Survey

15. 2: Chapter Summary

Performance is the degree of accomplishment in completing job-related tasks measured by results

Performance can be evaluated by MBO, production standards, essay appraisal, and critical-incident appraisal

Supervisors should provide feedback to employees

The organizational rewards system includes intrinsic and extrinsic rewards

Rewards should be based on performance

Writing Skills

• How would you use the Management By Objectives process to form an achievement plan for the rest of your school year?

Assessing Team Skills

• You are the head of human resources at a monthly teen magazine. The Midwest region needs a new fashion writer for its magazine. You posted an ad in local newspapers and have received resumes and writing samples from many qualified applicants. Still, the interviewing editor has turned down every potential employee that she has interviewed. Her interviewing style is informal, and you believe that his is the problem.

• With your team, explain the potential dangers of the informal interview, including sample interview questions. Then, propose the alternative of a more formal interview including sample interview questions. Finally, explain why you think this method may provide positive results in the search.

Internet Skills

• Using the Internet, read 10 to 15 job listings in an industry and career that interests you. Then make a list of the top 10 traits you find from the advertisements.