Managing Human Resources

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Chapter 8

• Managing Human Resources

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The Foundations of Human Resource Management (HRM)

• Human Resource Management (HRM)  
• Set of organizational activities directed at
  attracting, developing, and maintaining an
  effective workforce

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The Strategic Importance of HRM

• HRMs importance has grown dramatically in the
  last two decades. This new importance stems from
  
• Increased legal complexities
• The recognition that human resources are a
  valuable means for improving productivity
• The awareness today of the costs associated with
  poor human resource management

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Human Resource Planning

• HR planning involves job analysis and forecasting
  the demand for and supply of labor.
• Job Analysis
• Systematic analysis of jobs in an organization
• Job Description 
• Systematic evaluation of the duties, working
  conditions, tools, materials, and equipment
  related to the performance of a job
• Job Specification  
• Description of the skills, abilities, and other
  credentials required by a job

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The Human Resource Planning Process
Perform Job Analysis
Forecast Demand for Labor
Forecast Internal Supply of Labor
Forecast External Supply of Labor
Develop Plan to Match Demand with Supply
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Forecasting HR Demand Supply

• Forecasting the supply of labor is really two
  tasks
• Forecasting Internal Supply
• The number and type of employees who will be in
  the firm at some future date
• Forecasting External Supply
• The number and type of people who will be
  available for hiring from the labor market at
  large

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Forecasting HR Demand Supply

• Replacement Charts
• Listing of each managerial position, who occupies
  it, how long that person will likely stay in the
  job, and who is qualified as a replacement
• Employee Information System (or Skills Inventory)
• Computerized system containing information on
  each employees education, skills, work
  experiences, and career aspirations

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Matching HR Supply Demand

• After comparing future demand and internal
  supply, managers can make plans to manage
  predicted shortfalls or overstaffing.
• If a shortfall is predicted
• New employees can be hired.
• Present employees can be retrained and
  transferred into understaffed areas.
• Individuals approaching retirement can be
  convinced to stay on.
• Labor-saving or productivity-enhancing systems
  can be installed .

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Staffing the Organization

• External Staffing
• The process of acquiring staff from outside the
  company
• Internal Staffing
• The process of promoting staff from within the
  company

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Recruiting Human Resources

• Recruiting
• Process of attracting qualified persons to apply
  for open jobs
• Internal Recruiting
• Practice of considering present employees as
  candidates for job openings
• External Recruiting
• Practice of attracting people outside an
  organization to apply for jobs

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Selecting Human Resources

• Application Forms (Blanks)
• Tests
• Interviews
• Other Techniques
• Validation  
• Process of determining the predictive value of
  information

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Developing Human Resources

• Orientation 
• Process of introducing new employees to the
  organization so that they can become effective
  contributors more quickly.

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Assessing Training Development Needs

• Needs Analysis
• Determines the organizations true needs and the
  training programs necessary to meet them

What knowledge, skills, and abilities does the
organization need to compete? What skills must
its workforce possess in order to perform the
organizations work effectively?
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Training Development Techniques Methods

• Work-Based Program  
• Training technique that ties training and
  development activities directly to task
  performance

• On-the-Job Training Work-based training,
  sometimes informal, conducted while an employee
  is in actual work situation
• Vestibule Training Worked-based training
  conducted in a simulated environment away from
  the work site
• Systematic Job Rotation Transfer Work-based
  training in which employees are systematically
  moved from one job to another so that they can
  learn a wider array of tasks and skills

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Training Development Techniques Methods

• Instructional-Based Program  
• Training designed to impart new knowledge and
  information

• Lecture or Discussion Approach
  Instructional-based training in which knowledge
  and information are descriptively presented
• Computer-Assisted Training Instruction-based
  training in which is knowledge and information
  are presented via computer

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Training Development Techniques Methods

• Training Technology

Video Teleconferencing Trainers in centralized
locations deliver material live by satellite
hookup to remote sites Interactive
Video Material is presented via video technology
on a monitor from a central serving mechanism, a
video disk, CD-ROM, or web site
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Training Development Techniques Methods

• Team Building Group-Based Training
• More and more organizations are using teams as a
  basis for doing their jobs.
• Many of the same companies are developing
  training programs specifically designed to
  facilitate intragroup cooperation among members
  of teams.

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Evaluating Employee Performance

• Performance Appraisal
• Formal evaluation of an employees job
  performance in order to determine the degree to
  which the employee is performing effectively

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The Performance Appraisal Process

• Conducting the Performance Appraisal
• Who should conduct the performance appraisal?
• What sources of information should be used?
• Providing Feedback
• 360 Feedback Performance appraisal system in
  which information is provided from all
  sourcessupervisors, employees, peers, and so
  forth

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The Performance Appraisal Process

• Methods for Appraising Performance
• Ranking Methods

Simple Ranking Method Performance appraisal
method that ranks employees from best to
worst Forced Distribution Method Performance
appraisal method that classifies employees into
different performance categories based on a
predetermined distribution
Rating Methods
Graphic Rating Scale Performance rating method
using a numerical scale to rate performance along
a set of dimensions Critical Incident Method
Performance rating method based on stated
examples that reflect especially good or poor
performance
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Providing Compensation Benefits

• Compensation 
• Set of rewards that organizations provide to
  individuals in return for their willingness to
  perform various jobs and tasks

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Determining Basic Compensation

• Basic Compensation
• The base level of wages or salary paid to an
  employee
• Wages Compensation in the form of money paid for
  time worked
• Salary Compensation in the form of money paid
  for discharging the responsibilities of a job

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Determining Basic Compensation

• Pay Surveys in Compensation
• Method used to obtain information about
  compensation paid to employees by other employers
  
• Job Evaluation
• Methods for determining the relative worth of
  jobs in order to set compensation levels
• Establishing a Pay Structure
• Compensation for different jobs is based on the
  organizations assessment of the relative value
  to the organization of each job class.

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Performance-Based Compensation

• Merit Pay Plan  
• Performance-based pay plan basing part of
  compensation on employee merit
• Skill-Based or Knowledge-Based Pay  
• Performance-based pay plan rewarding employees
  for acquiring new skills or knowledge

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Incentive Compensation Systems  

• Piece-Rate Incentive Plan  
• Incentive-based pay plan that provides payment
  for each unit produced
• Individual Incentive Plan  
• Incentive-based pay plan that rewards individual
  performance on a real-time basis
• Sales Commission  
• Individual incentive plan rewarding employees
  with a percentage of sales volume that they
  generate

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Team Group Incentive Systems

• Gainsharing Program  
• Group-based incentive plan that gives rewards for
  productivity improvements
• Profit Sharing  
• Group-based incentive plan in which employees are
  paid a share of company profits

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Indirect Compensation Benefits

• Benefits
• Compensation other than wages and salaries

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Mandated Protection Plans
Protect employees when their income is threatened
or reduced by illness, disability, death,
unemployment, or retirement.

• Unemployment Insurance Mandated coverage
  protecting employees who are laid off
• Social Security Mandated federal retirement
  program
• Workers Compensation Insurance Legally required
  insurance covering workers who are injured or
  become ill on the job

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Optional Protection Plans
Protect employees in the same manner as mandatory
plans, except companies can choose whether or not
to provide them.

• Private Pension Plan Prearranged company
  pensions provided to retired employees

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• Paid Time Off
• Paid holidays, paid vacations, sick leave,
  personal leave
• Other Types of Benefits
• Wellness Program Benefit in the form of programs
  designed to help employees from becoming sick
• Childcare These plans might include scheduling
  help, referrals to various types of services, or
  reimbursement accounts for childcare expenses. In
  many cases, they actually include company-paid
  day care.
• Cafeteria Benefit Plan Benefit plan that sets
  limits on benefits per employee, each of whom may
  choose from a variety of alternative benefits

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The Legal Context of Human Resource Management

• Equal Employment Opportunity
• Legally mandated nondiscrimination in employment
  on the basis of race, creed, sex, or national
  origin
• Illegal Discrimination
• Discrimination against protected classes that
  causes them to be unfairly differentiated from
  others
• Protected Class
• Set of individuals who by nature of one or more
  common characteristics are protected by law from
  discrimination on the basis of any of those
  characteristics

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Equal Employment Opportunity Legislation  

• Title VII of the Civil Rights Act of 1964
  Federal law forbidding employment discrimination
  on the basis of race, color, religious beliefs,
  sex, or national origin
• Equal Pay Act of 1963 Federal law requiring
  organizations to pay men and women the same pay
  for doing equal work
• Comparable Worth Principle that jobs which are
  worth the same should be compensated at the same
  level regardless of who performs them
• Age Discrimination and Employment Act (ADEA)
  Federal law prohibiting discrimination against
  people over 40 on the basis of age

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Equal Employment Opportunity Legislation  

• Pregnancy Discrimination Act of 1979 Federal law
  forbidding discrimination against women who are
  pregnant
• Civil Rights Act of 1991 Amendment that extends
  Title VII of the Civil Rights Act of 1964 and
  provides for compensatory and punitive damages
• Americans with Disabilities Act of 1990 (ADA)
  Federal law prohibiting discrimination on the
  basis of disability and requiring employers to
  make reasonable accommodation for disabled
  applicants and employees
• Family and Medical Leave Act of 1993 Federal law
  requiring employers to provide unpaid leave for
  specified family and medical reasons

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Enforcing Equal Employment Opportunity

• Equal Employment Opportunity Commission (EECO) 
• Agency created by Title VII to enforce
  discrimination-related laws
• Affirmative Action Program  
• Practice of recruiting qualified employees
  belonging to racial, gender, or ethnic groups who
  are underrepresented in an organization
• Reverse Discrimination  
• Practice of discriminating against
  well-represented groups by over-hiring members of
  underrepresented groups

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Legal Issues in Compensation

• Laws Affecting Total Compensation
• Fair Labor Standards Act Federal law setting
  minimum-wage and over-time pay requirements
• Laws Affecting Other Forms of Compensation
• Employee Retirement Income Security Act of 1974
  (ERISA) Federal law regulating private pension
  plans

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Contemporary Legal Issues in HR Management

• Occupational Safety and Health Act of 1970 (OSHA)
• Federal law setting and enforcing guidelines for
  protecting workers from unsafe conditions and
  potential health hazards in the workplace

• Emerging Areas of Discrimination Law
• AIDS in the Workplace
• Sexual Harassment
• Quid Pro Quo Harassment
• Hostile Work Environment
• Employment-at-Will

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New Challenges in the Changing Workplace

• Managing Workforce Diversity
• Range of workers attitudes, values, and
  behaviors that differ by gender, race, and
  ethnicity

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New Challenges in the Changing Workplace

• Managing Knowledge Workers
• Employee who is of value because of the knowledge
  that he or she possesses

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New Challenges in the Changing Workplace

• Contingent Worker  
• Employee hired on something other than a
  full-time basis to supplement an organizations
  permanent work force