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*Chapter Eleven

HumanResource

Management:Finding andKeeping the

BestEmployees

Copyri ght © 2010 by the McGraw-Hil l Companies, Inc. All ri ghts reserved. McGraw-Hill/Irwin

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SALLY MAINQUISTCertes Financial Pros

• Certes finds financialprofessionals to fittemporary, flexible work

environments.

• Besides receivingoutstanding benefits,

Mainquist’s workers gain avery broad range of workexperience.

Profile

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http://www.certespros.com/

http://www.certespros.com/

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*HUMAN RESOURCE MANAGEMENT

Working with

People is Just

the Beginning

LG1

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*HUMAN RESOURCE

MANAGEMENT (HRM)

• Human Resource Management -- The process

of determining human resource needs and then

recruiting, selecting, developing, motivating,

evaluating, compensating and scheduling employees

to achieve organizational goals.

• HRM’s role has grown because:

1. Increased recognition of employees as aresource.

2. Changes in law that rewrote old workplacepractices.

LG1

Working with

People is Just

the Beginning

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*DEVELOPING the FIRM’S

ULTIMATE RESOURCE

• Service and high-tech manufacturing requiresemployees with highly technical job skills.

LG1

Developing the

Firm’s Ultimate

Resource

• Such workers are scarce,making recruiting andretention more important andmore difficult.

• The human resource job isnow the job of all managersin an organization.

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*CHALLENGES in FINDINGHIGH-LEVEL WORKERS

• A shortage of trained workers in key areas

• Worker shortage in skilled trades

• Changes in employee attitudes about work

• A declining economy with fewer full-time jobs

•Expanding global markets with low-wage workers

• Increasing benefit demands and benefit costs

• A decreased sense of employee loyalty

LG1

The Human

Resource

Challenge

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*CIVIL RIGHTS ACT of 1964

• Title VII prohibits discrimination in hiring, firing,compensation, apprenticeships, training, terms,conditions or privileges of employment based on:

- Race- Religion

- Creed

- Sex

- Age

- National Origin

LG2

Laws Affecting

Human Resource

Management

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*1972 EQUAL EMPLOYMENTOPPORTUNITY ACT (EEOA)

• Strengthened the Equal Employment OpportunityCommission (EEOC).

• Gave EEOC the right to issue workplaceguidelines for acceptable employer conduct.

• EEOC could mandate specific recordkeeping

procedures.• EEOC was vested with the power of

enforcement.

LG2

Laws Affecting

Human Resource

Management

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*CONTROVERSIAL PROCEDURES

of the EEOC

• Affirmative Action -- Policy designed to “right past

wrongs” by increasing opportunities for minorities and

women in the workplace.

• Reverse Discrimination -- Discrimination against

whites or males in hiring or promoting.

• This policy has been at the center of manydebates and lawsuits.

LG2

Laws Affecting

Human Resource

Management

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*CIVIL RIGHTS ACT of 1991

and OFCCP

• Civil Rights Act of 1991

- Amended Title VII and gave victims of discrimination

the right to a jury trial and possible damages.• Office of Federal Contract Compliance Programs

(OFCCP)

- Ensures that employers doing business with thefederal government comply with thenondiscrimination and affirmative action laws.

LG2

Laws Affecting

Human Resource

Management

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*LAWS PROTECTING

EMPLOYEES with DISABILITIES

• Americans with Disabilities Act of 1990 (ADA)

- Requires employers to give applicants with physical or

mental disabilities the same consideration for employment aspeople without disabilities.

LG2

Laws Protecting

Employees with

Disabilities and

Older Employees

- Also requires “reasonable

accommodations” for employees with

disabilities.

- Passage in 2008 of Americans withDisabilities Amendments Actexpanded protection.

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*AGE DISCRIMINATION in

EMPLOYMENT ACT (ADEA)

• Age Discrimination in Employment Act (ADEA)

LG2

Laws Protecting

Employees with

Disabilities and

Older Employees

- Protects workers 40 and

over from employment andworkplace discrimination inhiring, firing, promotion,layoff, compensation,

benefits, job assignmentsand training.

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*MINDING the LAW in HRM

• Employers must know the lawand act accordingly.

•

Legislation affects all areas ofHRM.

• Court cases highlight thatsometimes it’s proper to go

beyond providing equal rights.

• Changes in law and legislationoccur regularly.

LG2

Effects of

Legislation

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*PROGRESS ASSESSMENT

• What’s human resource management?

• What did Title VII of the Civil Rights Act of 1964

achieve?

• What’s the EEOC and what was the intention of

affirmative action?

• What does “accommodations” mean in the

Americans with Disabilities Act of 1990?

Progress

Assessment

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*HUMAN RESOURCE PLANNING

PROCESS

Determining a

Firm’s Human

Resource Needs

LG3

• Preparing a human resourceinventory of employees.

• Preparing a job analysis.

• Assessing future humanresource demand.

• Assessing future labor

supply.

• Establishing a strategic plan.

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*WHAT’S a JOB ANALYSIS?

Determining a

Firm’s Human

Resource Needs

LG3

• Job Analysis -- A study of what employees who

holds various job titles do.

• Job Description -- Specifies the objectives of the

job, the type of work, the responsibilities and duties,

working conditions and relationship to other jobs.

• Job Specifications -- A summary of the minimal

education and skills needed to do a particular job.

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*RECRUITING EMPLOYEES

Recruiting

Employees from

a Diverse

Population

LG4

• Recruitment -- The set of activities for obtaining the

right number of qualified people at the right time.

• Human resource managers use both internal andexternal sources to recruit employees.

• Small businessesoften make use of

web sources likeCareerBuilder andMonster to recruitemployees.

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IT’S NOT EASY BEING SMALL (Spotlight on Small Business)

• To survive, small businesses must recruit andretain qualified workers.

• Unfortunately, they lack the resources of largercompanies to compete for employees.

• Small businesses need innovations like:

- Letting staff help recruit and select candidates.- “Test-Drive” an employee.

- Seek out publicity through local media.

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*EMPLOYEE SOURCES

LG4

Recruiting

Employees from

a Diverse

Population

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*SELECTION

Selecting

Employees Who

Will be

Productive

LG5

• Selection -- The process of gathering information

and deciding who should be hired, under legal

guidelines, to fit the needs of the organization and

individuals.

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*STEPS in the

SELECTION PROCESS

Selecting

Employees Who

Will be

Productive

LG5

1. Obtaining complete application forms

2. Conducting initial and follow-up interviews

3. Giving employment tests

4. Conducting background investigations

5. Obtaining results from physical exams

6. Establishing trial (probationary) work periods

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OOPS!Areas Where Job Applicants Make Mistakes

Source: USA Today, www.usatoday.com.

Selecting

Employees Who

Will be

Productive

LG5

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http://www.usatoday.com/

http://www.usatoday.com/

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*HIRING CONTINGENT WORKERS

Hiring

Contingent

Workers

LG5

• Contingent Workers -- Include part-time and

temporary workers, seasonal workers, independent

contractors, interns and co-op students.

• There are about 5.7million contingentworkers in the U.S.

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*WHY HIRE

CONTINGENT WORKERS?

Hiring

Contingent

Workers

LG5

• Companies hire contingent workers:

- When full-time workers are on leave

- During periods of peak demand

- In uncertain economic times

- To save on employee benefits

- To screen candidates for future employment

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*MOTIVATING TEMPORARY

EMPLOYEES(Making Ethical Decisions)

• Contingent workers perform well if the promise offull-time employment is a possibility.

• Highbrow’s has no intention of hiring any

temporary workers full-time.

•But the company feels if they imply two workerswill be hired full time, it may improve employeeperformance. What is the ethical thing for themto do?

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*PROGRESS ASSESSMENT Progress

Assessment

• What are the five steps in human resourceplanning?

•

What factors make it difficult to recruit qualifiedemployees?

• What are the six steps in the selection process?

• Who is considered a contingent worker and whydo company hire such workers?

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*TRAINING and DEVELOPING

EMPLOYEES

Training and

Developing

Employees for

Optimum

Performance

LG6

• Training and Development -- All attempts to

improve productivity by increasing an employee’s

ability to perform.

• Training focuses on short-term skills.

• Development focuses on long-term abilities.

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*THREE STEPS of TRAINING and

DEVELOPMENT

Training and

Developing

Employees for

Optimum

Performance

LG6

1. Assessing organization needs and employeeskills to develop appropriate training needs.

2. Designing training activities to meet identifiedneeds.

3. Evaluating thetraining’s

effectiveness.

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*MOST COMMONLY USED TRAINING

and DEVELOPMENT ACTIVITIES

Training and

Developing

Employees for

Optimum

Performance

LG6

• Orientation

• On-the-Job Training

• Apprenticeships

• Off-the-Job Training

•

Online Training• Vestibule Training

• Job Simulation

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*DEVELOPING EFFECTIVE

MANAGERS

Management

Development

LG6

• Management Development -- The process of

training and educating employees to become good

managers and tracking the progress of their skills

over time.

• Management training includes:

- On-the-job coaching

- Understudy positions

- Job rotation

- Off-the-job courses and training

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*WHY GOOD EMPLOYEES QUIT

LG6

Management

Development

Source: Robert Half International

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*USING NETWORKS and

MENTORING

Networking

LG6

• Networking -- Establishing and maintaining

contacts with key managers in and out of the

organization and using those contacts to develop

relationships.

• Mentors -- Managers who supervise, coach and

guide selected lower-level employees by acting as

corporate sponsors.

• Networking and mentoring go beyond the workenvironment.

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*APPRAISING PERFORMANCE

on the JOB

Appraising

Employee

Performance to Get

Optimum Results

LG7

• Performance Appraisal -- An evaluation that

measures employee performance against established

standards in order to make decisions about

promotions, compensation, training or termination.

• A 360-degree reviewgives managers

opinions from people atdifferent levels to get amore accurate idea ofthe worker’s ability.

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*SIX STEPS of PERFORMANCE

APPRAISALS

Appraising

Employee

Performance to Get

Optimum Results

LG7

1. Establishing performance standards that areunderstandable, measurable and reasonable.

2. Clearly communicating those standards.

3. Evaluating performance against the standards.

4. Discussing the results with employees.

5. Taking corrective action.

6. Using the results to make decisions.

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*MAJOR USES of

PERFORMANCE APPRAISALSLG7

Appraising

Employee

Performance to Get

Optimum Results

• Identify training needs

• Use as a promotion tool

• Recognize worker’s achievements

• Evaluate the firm’s hiring process

• Judge the effectiveness of the firm’s orientation

process• Use as a basis for possible termination of a

worker

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*PERFORMANCE APPRAISAL

MISTAKESCommon Problems Made While Reviewing Employees

• Contrast Effect - Comparing one employee to

another.

• Halo/Horn Effect - Allowing performances in specific

areas to unfairly influence overall performanceevaluation.

• Similar-to-Me Effect - Generosity to those you feel

are more like you.

Appraising

Employee

Performance to Get

Optimum Results

LG7

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*PROGRESS ASSESSMENT Progress

Assessment

• Name and describe four training techniques.

•

What’s the primary purpose of a performanceappraisal?

• What are the six steps in a performance

appraisal?

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*COMPENSATION PROGRAMS

Compensating

Employees:

Attracting and

Keeping the Best

LG8

• A managed and competitive compensationprogram helps:

- Attract the kinds of employees the business needs.

- Build employee incentive to work efficiently andproductively.

- Keep valued employees from going to competitors orstarting their own firm.

- Maintain a competitive market position by keeping costslow due to high productivity from a satisfied workforce.

- Provide employee financial security through wages andfringe benefits.

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*TYPES of PAY SYSTEMS Pay Systems

LG8

• Salary

• Hourly Wage/Day Work

• Piecework System

• Commission Plans

• Bonus Plans

•

Profit Sharing Plans• Gain-Sharing Plans

• Stock Options

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*COMPENSATING TEAMS Compensating

Teams

LG8

• Team-based pay programs are more challengingthan individual pay systems.

• The two most common methods for teamsinvolve:

- Skill-Based: Pay is increased as skill increases.(Eastman Chemical uses this system.)

- Gain-Sharing: Pay is increased as performanceincreases. (Nucor Steel uses this system.)

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http://www.eastman.com/Company/Careers/Why_Work_at_Eastman/Benefits.htm

http://www.nucor.com/careers/benefits/





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*FRINGE BENEFITS on the JOB Fringe Benefits

LG8

• Fringe Benefits -- Sick leave, vacation pay,

pension and health plans that provide additional

compensation to employees beyond base wages.

• In 1929, Fringe benefits accounted for less than2% of payroll cost. Today it’s about 30%.

•

Healthcare has been themost significant increasein fringe benefit cost.

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*The RANGE of

FRINGE BENEFITS

Fringe Benefits

LG8

• Fringe benefits include incentives like:

- Company cars

- Country club memberships

- Recreation facilities

- Special home mortgage rates

- Paid and unpaid sabbaticals

- Day-care and elder care services

- Dental and eye care

- Legal counseling

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LG8

SPECIAL PERKS atDREAMWORKS

Fringe Benefits

• Free DVDs and screenings ofcurrent films.

• Free breakfast and lunch plusdinner when working late.

• Free snack rooms on everyfloor.

• Profit sharing.

• Ping-Pong and pokertournaments during workhours.

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*CAFETERIA-STYLE and

SOFT BENEFITS

Fringe Benefits

LG8

• Cafeteria-Style Fringe Benefits -- Allow

employees to choose the benefits they want (up to a

certain dollar amount).

• Soft Benefits include:

- Onsite haircuts and shoe repair

- Concierge services

- Free meals at work

- Doggie daycare

- Onsite farmer’s markets

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*LG8

CHANGING TIMES,CHANGING EMPLOYEE BENEFITS

Fringe Benefits

EmployerBenefits

1998 2008

Provide Pension

Plans

48% 29%

Offer WellnessPrograms

51% 60%

Retirement Plan

Contribution

91% 81%

Permit SomeFlexible Work

Hours68% 80%

Source: National Study of Emplyees (2008), Family & Work Institute.

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LET’S GO to the BEACH! Average Vacation Days by Country

Fringe Benefits

LG8

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WORKING WORLDWIDE(Reaching Beyond Our Borders)

• Managers need to understand the businessneeds of each country they operate in.

- Compensation: Conversion to foreign currencies and

special allowances often are needed.- Health and Pension Standards: Benefits are different

country-by-country.

- Paid Time Off: Vacation time, sick and personal leave

vary.- Taxation: Tax policies vary.

- Communication: Employees can feel disconnected inother countries.

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FLEXIBLE SCHEDULING PLANSScheduling

Employees to Meet

Organizational and

Employee Needs

LG9

• Flextime Plan -- Gives employees some freedom to

choose which hours to work as long as they work the

required number.

• Compressed Work Week -- Employees work the

full number of work hours, but in fewer than the

standard number of days.

• Job Sharing -- Lets two or more part-time

employees share on a full-time job.

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USING FLEXTIME PLANS Flextime Plans

LG9

• Most flextime plans require Core Time -- When all

employees are expected to be at their job stations.

• Flextime is hard to incorporate into shift work andmanagers have to work longer hours.

• Communication among employees can also be

difficult under flextime and managers have to bealert to any system abuses.

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A FLEXTIME CHART Flextime Plans

LG9

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COMPRESSED WORK WEEKS Flextime Plans

LG9

• Employees enjoy longweekends after working longdays.

• Productivity is a concern.

• Nurses and firefighters oftenwork compressed workweeks.

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JOB SHARING BENEFITS Job Sharing

Plans

LG9

• Provides employment opportunities for manypeople who cannot work full time.

• Workers tend to be enthusiastic and productive.

• Absenteeism and tardiness are reduced.

• Employers can schedule part-time workers inpeak demand periods.

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MOVEMENT of EMPLOYEESMoving

Employees Up,

Over and Out

LG9

• Employees arepromoted or reassigned.

• Employees areterminated due toperformance oreconomic situations.

• Employees retire.

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TERMINATING EMPLOYEESTerminating

Employees

LG10

• As the economic crisis grew, more and moreemployers have had to layoff employees.

• Even when the economy is booming, employers

are hesitant to hire full-time workers because ofthe cost of termination.

• Firing employees is more

difficult for employersbecause of laws preventingtermination for certain acts.

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PROGRESS ASSESSMENT Progress

Assessment

• Name and describe five alternative compensationtechniques.

• What advantages do compensation plans suchas profit sharing offer an organization?

•

What are the benefits and challenges of flextime?Telecommuting? Job sharing?

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