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Human Resource Management: An International Perspective

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Title: Human Resource Management: An International Perspective


1
Human Resource Management An International
Perspective
  • Fachhochschule Ludwigshafen am Rhein
  • Dr. Yvonne Stedham

2
Course Materials available on
  • http//www.scsr.nevada.edu/ystedham/

3
Introductions
  • Instructor
  • Students Table Tents
  • Name
  • Expected graduation
  • Work Experience
  • Traveling and Languages
  • Interest in HR
  • Aspirations

4
Relevance of this Course
  • What is HRM? HRM Functions?
  • What is the relationship between HR and
    organizational performance?
  • Why would HR practices differ from country to
    country? HR trends and practices in the U.S.

5
Course Overview
  • This course was designed to introduce students to
    the issues that emerge from performing the human
    resource management function in an international
    context.
  • The focus of the course is on the relevance of
    the human resource management function to the
    performance of an organization.
  • The relationship between the external environment
    of an organization and human resource management
    (HRM) will be explored with a particular emphasis
    on the effect of cultural differences on
    management processes.
  • Current HRM trends and practices in the U.S. will
    be reviewed. Relevant legal conditions, as well
    as trends and developments in Employee Staffing
    and Selection and Compensation will addressed.

6
HR and Organizational Performance
  • What is an organization?
  • What is organizational effectiveness?
  • How does HR contribute?

7
HR and Organizational Performance
  • What is an organization? Why do organizations
    exist?
  • Organizations People
  • Mission, goals, objectives --- concerted effort
    efficiency effectiveness.
  • When is an organization effective?
  • Distinguish between efficiency and effectiveness.
    Distinguish effectiveness measures for the short,
    intermediate, and long run.

8
Measurement of organizational effectiveness
  • Long run?
  • Intermediate run?
  • Short run?
  • A contingency approach

9
The Organization
10
Strategic Planning
  • Scanning the environment SWOT
  • Vision
  • Mission
  • Goals
  • Objectives
  • Strategies and Tactics
  • Performance Indicators

11
The International Organization
12
HR and Org. Performance
  • Individual effectiveness is the foundation for
    organizational effectiveness.
  • Individual effectiveness depends on .

13
HR and Org. Performance
  • Individual effectiveness f(Ability,Motivation)
  • Individual effectiveness Ability Motivation

14
HR and Org. Performance
  • Match
  • Individuals
  • (Knowledge, Skills, Abilities and Needs)
  • with
  • Jobs
  • (Requirements and Rewards)

15
The HRM Framework
16
Course Format
  • Syllabus

17
HR and Org. PerformanceStrategic HRM
  • Political Development and the Role of HR
  • Reading September 11
  • Economic Development and the Role of HR
  • Agriculture/LandIndustrial/Capital-Information/Kn
    owledge
  • Jeffrey Pfeffer
  • What CEOs want from HR
  • HR Leaders
  • Case Sun Micro Systems
  • Globalization

18
Reasons for becoming international
  • Groups of four
  • Why do companies internationalize?
  • List specific reasons and purposes.
  • At least three

19
Reasons for becoming international
  • Profit Revenue Cost (VolumePrice) Cost
  • A desire for continued growth.
  • Domestic market saturation
  • The potential to now exploit a new technological
    advantage
  • Preferable suppliers (quality, cost)
  • Labor market (supply, quality, cost)
  • Government involvement/restrictions
  • Reducing distance to customers (cost)
  • Tariff barriers
  • Increased foreign competition in home country
  • Reduce general business risk by diversifying
    into other countries

20
Types of "international" organizations
  • International organizationAny organization that
    exports to/imports from organizations in other
    countries with primarily domestic production
    -Multidomestic.
  • Multinational organization An organization with
    operations in different countries but each is
    viewed as a relatively separate enterprise.
  • Global organization An enterprise structured so
    that national boundaries become blurred. The best
    people are hired irrespective of national origin.
    Transnational

21
Globalization
  • European Training and Development Journal Article
    Engle/Stedham et al.

22
HR and Org. PerformanceStrategic HRM
  • HR Management Roles
  • Administrative record keeping, processing, ST,
    Examples?
  • Operational support, IT, Examples?
  • Strategic org-wide, LT, Examples?
  • HR as a strategic partner Involvement in
    strategic planning, decision-making on mergers,
    acquisitions, and downsizing, redesigning
    organizations and work processes, ensuring
    financial accountability for HR results,
    attracting and retaining human resources,
    developing human resource capabilities and
    competencies, identifying and rewarding
    performance
  • HR Planning
  • KSAs requirements vs KSA availabilities
  • Filling the gap
  • International Issues
  • Staffing and Compensation

23
Country Specific External Conditions for HR
  • List external conditions and trends that affect
    the HR function. Specify which function is
    affected.
  • Create such a list first for Germany and then for
    the U.S.
  • Groups of four
  • Appoint a spokesperson and share with the class.

24
External EnvironmentCulture and Ethics
International HRM
  • Why different answers for different countries?

25
External EnvironmentCulture and Ethics
International HRM
  • Cultural differences
  • What is culture?
  • Cultural characteristics
  • Social stratification, religion, education,
    language, political system, economic system
  • Where do cultural differences come from?
  • Kluckhohn and Strodbeck
  • Six Values Orientation Dimensions

26
Cultural dimensions
  • All peoples have common life problems (?)
    choose different solutions
  • Six basic dimensions describe the cultural
    orientations of societies
  • What is the nature of people?
  • What is a person's relationship to nature?
  • What is a person's relationship to other people?
  • What is the primary mode of activity?
  • What is the conception of space?
  • What is the temporal orientation?

27
External EnvironmentCulture and Ethics
International HRM
  • Self-Assessment
  • Global Readiness Index and Personal Values
  • Understanding your own values
  • If you understand others you are learned, if you
    understand yourself you are wise!

28
External EnvironmentCulture and Ethics
International HRM
  • Measuring Culture
  • Geert Hofstede IBM
  • Cultures Consequences
  • Survey

29
Hofstede Publications
  • Hofstede, Geert (1980) Cultures Consequences
  • Hofstede, Geert (1991) Cultures and
    Organizations
  • Hofstede, Geert (1984) Cultures Consequences
    International Differences in Work-Related Values
  • Hofstede, Geert and Michael Harris Bond (1984)
    The Confucius Connection from cultural roots to
    economic growth. Organizational Dynamics, 16, 4,
    4-21

30
Hofstede Publications
  • Hofstede, Geert (2001) Cultures Consequences
    Comparing Values, Behaviors, Institutions, and
    Organizations Across Nations.
  • Hofstede, Geert (1994) VSM94 Values Survey
    Module 1994 Manual. Tilberg, Netherlands IRIC.
  • Hofstede, Geert and Bond, M.H. (1984)
    Hofstedes Culture Dimensions An Independent
    Validation Using Rokeachs Value Survey.
    Journal of Cross-Cultural Psychology 15(4)
    417-433.
  • ___

31
Hofstedes Cultural Dimensions
  • Individualism/Collectivism
  • Individualistic society self and immediate
    family
  • Collectivistic group give up freedom for
    security
  • Masculinity/Femininity
  • Masculine aggressive achievement materialistic
  • Feminine emphasis is on relationships and
    quality of life
  • Uncertainty Avoidance
  • Acceptance of ambiguity and uncertainty need for
    strict rules and regulations
  • Power Distance
  • Acceptance of unequal distribution of power and
    other attributes
  • Confucian Dynamism or LT/ST
  • ST instant gratification
  • LT discipline and perseverance

32
Compare Germany, the U.S. and Japan
  • Ind hi, mod, low?
  • Masc vs Fem?
  • Uncertainty A hi, mod, low?
  • Power distance - hi, mod, low?
  • LT vs ST?

33
Cultural Differences and HR Management
  • Japan has the following cultural characteristics
    .
  • Japan is known for the following management
    approaches .
  • The U.S. has the following cultural
    characteristics .
  • The U.S. is known for the following management
    approaches .
  • Germany has the following cultural
    characteristics .
  • Germany is known for the following management
    approaches .

34
  • U.S. Japan Germany
  • Individualism 91 46 67
  • Power distance 40 54 35
  • Uncertainty
  • avoidance 46 92 65
  • Masculinity 62 95 66
  • ST/LT 29 80 25

35
Cultural Differences and HR Management
  • Japan hi UNC, hi POW, Coll, MAS, LT
  • Consensus, group based, long dm, lack of risk
    taking and creativity, life time employment
  • U.S. low UNC, low POW, Ind, MAS, ST .
  • Delegation, participative management, emphasis on
    individual performance, creativity and risk
    taking
  • Germany moderately hi UNC, low POW, Ind, ST
  • Expert based, need for education and
    certification, delegation, participative
    management, extensive employee protection,
    somewhat risk averse

36
André Laurents Research
  • Main reason for a hierarchical structure is so
    that everybody knows who has authority over
    whom.
  • In order to have efficient work relationships,
    it is often necessary to bypass the hierarchical
    line.
  • It is important for managers to have at hand the
    precise answers to most questions their
    subordinates may raise about their work.

37
Laurents Research
  • Main reason for a hierarchical structure is so
    that everybody knows who has authority over
    whom.
  • Germany 26 agree
  • US 17 agree
  • Japan 50 agree
  • France, Italy, Spain 43, 42, 34
  • In order to have efficient work relationships,
    it is often necessary to bypass the hierarchical
    line.
  • Germany 45 disagree
  • US 32 disagree
  • France, Italy, Spain 43, 56, 74
  • It is important for managers to have at hand the
    precise answers to most questions their
    subordinates may raise about their work.
  • Germany 46 agree
  • US 18 agree
  • Japan 78 agree
  • France, Italy, Spain 53, 66, 77

38
External EnvironmentCulture and Ethics
International HRM
  • Ethics Questionnaire

39
External EnvironmentCulture and Ethics
International HRM
  • What is ethics?
  • Relevance?
  • Different across cultures?
  • Beekun/Stedham/Yamamura Papers
  • Nikes Voice
  • Personnel demands attention overseas

40
External EnvironmentCulture and Ethics
International HRM
  • Ethics Philosophies
  • Consequentialist vs Non-consequentialist
  • Consequentialist Utilitarianism, Egoism
  • Non-consequentialist Justice, Inherent Morality

41
International HRM The Expatriate Assignment
  • Numbers
  • 37,000 MNCs worldwide
  • Control 200,000 foreign affiliates
  • 73 million employees
  • In the U.S., MNCs employ 3 mill Americans, 10
    of the U.S. manufacturing workforce
  • 80 of mid- and large-size U.S. companies send
    managers abroad
  • 300,000 U.S. expatriates are on assignment at any
    given time
  • Optimal level of internationalization?

42
International HRM The Expatriate Assignment
  • Staffing Philosophies
  • Ethnocentric Key positions are filled with
    PCNs (parent country nationals), e.g., Procter
    Gamble Associate with higher incidence of IHRM
    problems
  • Polycentric Key positions are filled with HCNs
  • Geocentric or global Best managers are
    recruited from within or outside the company
    regardless of nationality, TCNs used by
    European MNCs, transpatriates, some U.S.
    companies (Philips, Heinz, Unilever, IBM)
  • Regiocentric Recruiting on a regional basis

43
International HRM The Expatriate Assignment
  • Expatriate Selection
  • Relevant KSAs?
  • Technical, Managerial
  • Adaptiveness
  • Measurement
  • SMILE Speciality management ability
    international flexibility language facility
    endeavor (Matsushita)
  • Spouse and Family
  • Failure rates
  • 40 on average lower for European and Japanese
  • Rosalie Tung

44
International HRM The Expatriate Assignment
  • Expatriate Selection
  • Failure rates
  • 40 on average lower for European and Japanese
  • Rosalie Tung Reasons
  • Selection is based on headquarter criteria
  • Lack of training, preparation, orientation
  • Alienation/lack of support from headquarters
  • Inability to adapt to local culture/work enviro
  • Problems with spouse,family
  • Compensation
  • Poor programs fro career support/repatriation

45
International HRM The Expatriate Assignment
  • Training
  • Cultural toughness China, Brazil, India, Japan,
    Russia, Mexico, Saudi Arabia, South Korea, France
  • Less than 1/3 of expatriates receive training
  • Pre-departure training, postarrival training,
    reentry training
  • Culture, language, everyday matters
  • Cross-cultural training to ease the adjustment to
    the new environment by reducing culture shock
    a state of disorientation and anxiety about not
    knowing how to behave in an unfamiliar culture

46
International HRM The Expatriate Assignment
  • Training
  • Four stages of culture shock
  • Honeymoon
  • Irritation and hostility
  • Gradual adjustment
  • Biculturalism
  • Training techniques and Rigor of training
  • Area studies
  • Culture assimilators
  • Language training
  • Sensitivity training
  • Field experiences
  • Colgate In-country training

47
International HRM The Expatriate Assignment
  • Training Examples
  • ABB (Asea Brown Bovari) rotates 500 managers
    around the world .. Every two to three years
  • PesiCo orientation program for foreign managers
    one year at U.S. bottling division plants
  • Honda of America Japanese language, culture,
    lifestyle training .. Tokyo up to 3 years
  • GE engineers and managers must have global
    perspective .. Regular language and
    cross-cultural training

48
International HRM The Expatriate Assignment
  • Compensation
  • 100,000 manager in U.S. -gt 300,000 in London,
    1mill in Tokyo or Stockholm
  • Equity and goodwill
  • Purchasing power and standard of living
  • Tax differentials and tax equalization
  • Balance sheet approach
  • Allowances Cost of living, housing, education,
    home leave, shipping and storage
  • Repatriation

49
International HRM The Expatriate Assignment
  • You have been assigned the mentor to an employee,
    John Smith, from the U.S. who will be working
    with you in your department for the next three
    years. His family, wife who is a computer
    programmer and two sons (13 and 15 years old), is
    coming with him.
  • You are writing to John telling him about what to
    expect on the job and in the community. Tell
    him about some of the cross-cultural conflicts he
    may run into with his co-workers and how he
    should handle them. You also want to give advice
    to each family member.
  • Groups of four make a list of relevant issues.

50
International HRM The Expatriate Assignment
  • Nancy Adler Paper Female Expatriates
  • Asia Pacific Journal of Human Resource Management
    Stedham/Nechita paper Comparing Theory and
    Practice of Expatriate Assignments

51
HR Trends and Practices in the U.S.
  • The Legal Environment
  • Staffing and Selection
  • Compensation and Benefits

52
HR Trends and Practices in the U.S.
  • The Legal Environment
  • The employment relationship
  • Discrimination legislation

53
Legal Conditions in the U.S.
  • The Employment Relationship Equitable Exchange
  • Psychological Contract
  • Employment Contract
  • Formal agreement, voluntary Defines and governs
    the terms and conditions of the employment
    relationship promises and expectations change
    with time
  • Written or oral, both are legally enforceable

54
Sources of Laws and Regulations
  • Common Law England Court-made Law Case-by-case
    decisions ? Precedence (Germany and other country
    code-based law) States develop and administer
    own common law.
  • Constitutional Law Supersedes Prohibits
    deprivation of employment right without due
    process.

55
Employment at Will
  • Right of both parties to terminate the
    employment relationship at any time, for any
    reason
  • (Tennessee Court in late 1900s)
  • If set-term contract Termination for
  • Just cause
  • Failure to perform
  • If indeterminate-term contract --- employment
    at will (common law) most are at-will

56
Workplace Torts
  • Breaches of legal duty by ER when establishing
    or modifying the initial relationship (common
    law)
  • Tort
  • Civil wrong violation of a duty by the ER that
    leads to harm or damages suffered by others -
    Examples
  • 1. Fraud or misrepresentation lie/mislead
    applicant when communicating conditions and terms
    -gt ER violates a duty to be truthful in the
    presentation of information
  • 2. Negligent hiring ER violates duty to protect
    Ees and customers against unreasonable and
    foreseeable risk of harm

57
Fair Labor Standards Act 1938
  • Minimum Wage 5.75
  • Lower for tipped employees
  • Child Labor
  • Age 16 no restrictions
  • Age 18 harzardous occupations
  • Age 14-15 limitations on hours

58
Fair Labor Standards Act 1938
  • Exempt vs Non-exempt Employees
  • Exempt executive, administrative, professional,
    outside sales ER does not have to pay overtime
  • Non-exempt must be paid overtime
  • Overtime
  • Hours worked in excess of 40 hours must be
    compensated 1.5 the regular rate of pay
  • Compensatory time off
  • Illegal in private sector unless given at 1.5 rate

59
Statutory Laws
  • Derived from written statutes that are passed by
    legislative bodies such as Federal Congress
    State Legislature/Assemblies Local
    Municipal/Councils
  • Agencies Interpret, administer, enforce law and
    publish rules and regulatory guidelines that are
    given great deference by courts.
  • . DOL Department of Labor OFCCP Office for
    Contract Compliance Programs EEOC Equal
    Employment Opportunity Commission

60
Discrimination Legislation EEO Framework -
Specific Laws
  • U.S. Constitution
  • 5th Amendment Due Process of law --- Prohibition
    upon federal government no person shall be
    deprived of life, liberty, or property does not
    speak directly to specific subjects such as
    employment ? Courts prefer to defer to existing
    statutory laws because it they are more
    specific!!
  • 14th Amendment Prohibition for States to enacts
    any law that does not guarantee equal
    protection for all.

61
Statutory Laws
  • Civil Rights Act 1866
  • Right to make and enforce contracts for
    employment for all citizens as enjoyed by white
    citizens.
  • Civil Rights Act of 1871
  • Right to sue if deprived of any rights or
    privileges guaranteed by the Constitution and
    laws for ALL citizens. Must show intention.
  • Equal Pay Act 1963
  • Equal pay for equal work regardless of SEX
    (female employees only) amendment to FLSA .

62
Equal Pay Act
  • Equal Work
  • Substantially similar in terms of skill, effort,
    responsibilities, working conditions.
  • Exceptions
  • Seniority Merit Quantity of production
  • Note If in violation of EPA, ER may not LOWER
    wages.

63
Title VII of CRA 1964
  • Coverage ERs with 15 or more employees Federal,
    State, Local governments Educational
    Institutions Employment Agencies Labor Unions
  • Not covered Until recently Congress Private
    Clubs Religious Organizations.
  • CRA 1964 Several Titles each focusing on
    discrimination in a different sectors of
    society (education, right to vote, ) Title VII
    focuses on discrimination in employment.

64
Title VII
  • 703 (a)
  • Employer may not discriminate on the basis of
    race, color, national origin, sex, and religion
    in any employment decision.

65
Title VII
  • Color White, black, yellow, brown, red.
  • Race Local geographic or global human population
    distinguished by genetically transmitted physical
    characteristics Caucasian Negro Hispanic
    Oriental Indian.
  • National Origin Citizenship Heritage Any
    country, nation.
  • Religion All kinds not associated with any of
    the other characteristics Christian, Hindu,
    Muslim, Buddhist.

66
Title VII
  • 703 (b) . Nondiscriminatory apprenticeship
    program
  • 704 (a) . Unlawful to discriminate if opposed
    unlawful employment practice assisted in TVII
    investigation.
  • 704 (b) . Prohibits ads concerning employment
    indicating preference for any of the prohibited
    factors.
  • 1978 Amendment
  • Pregnancy Discrimination Act --- prohibits
    discrimination on the basis of pregnancy,
    childbirth, or related condition. Reinstatement
    right for similar position no loss of seniority
    coverage of disability insurance.

67
Title VII
  • Exemptions that are written into the law
  • Discrimination on the basis of the protected
    factors is permissible when such qualification
    is a bona-fide occupational qualification (BFOQ)
    reasonably necessary to the operation of that
    particular business or enterprise burden of
    proof is with ER very narrowly interpreted ---
    preferences of ER, coworkers, clients are
    irrelevant.
  • Seniority Systems Bona fide seniority or merit
    systems are lawful if no intention to
    discriminate job or departmental systems are not
    seen as bona fide, plant or company-wide
    systems are seen as bona fide.

68
Exemptions to TVII
  • Testing Employer may give and act upon
    professionally developed ability tests if they
    are not used to discriminate on the basis of the
    protected factors.
  • Preferential Treatment It is unlawful to
    interpret TVII as requiring preferential
    treatment of individuals of protected groups -
    reverse discrimination
  • National Security Discrimination is permitted

69
Further TVII Issues
  • Fetal Protection -- Johnson Controls 1991 An
    employers exclusion of fertile women, but not
    fertile men, could not be justified on grounds
    that the rule protected the womans reproductive
    capacity and the physical welfare of the fetus.
    The safety qualification is limited to those
    instances where sex or pregnancy presents danger
    to customers or third parties. A fetus is not a
    third party whose safety is essential to the
    operation of the employers business, and thus
    cannot be the basis of a BFOQ.

70
Sexual Harassment
  • Quid pro quo
  • Hostile work environment sexual harassment.
  • Unwelcome sexual advances in exchange for a
    favorable employment condition.
  • Employer is liable. ER liable even if the
    employer had no knowledge of the harassment.
  • Pattern of behavior. Reasonable person standard.
  • Training, Policy, and Complaint and Investigation
    Process.

71
Sexual Harassment
  • Examples
  • Office Romance
  • Stedham/Mitchell paper

72
Executive Order 11246
  • Contractors doing business with federal
    government ( amount of contract specified). Same
    provisions as TVII AND requires contractors to
    develop affirmative action plans Formal,
    specific personnel programs that are designed to
    increase the participation of protected groups.

73
Age Discrimination in Employment Act 1967
  • Amended 1986. Protects EEs and applicants who are
    40 years old and above (no upper limit).
  • No mandatory retirement age (except law
    enforcement officers, firefighters, tenured
    professors, executive under certain conditions,
    top policy makers).
  • No reverse discrimination.

74
Americans with Disabilities Act 1990
  • Since 1994 covers ERs with 15 or more EEs.
  • 43 mill. disabled Americans.
  • Protects
  • Physical or mental impairment that substantially
    limits one or more life activities (walk, see,
    ..)
  • Record of impairment
  • Regarded as having impairment
  • about 1,000 disabilities incl. affective
    disorders, biochemically based disorders - AIDS,
    Cancer, Anxiety Disorders, Eating Disorders,
    Infertility, Epilepsy
  • Disability evaluated with adjustive equipment
    (glasses)

75
Americans with Disabilities Act
  • How it protects
  • .Punitive damages
  • .Essential job functions
  • .Reasonable accommodations
  • .Restructuring of physical facilities
  • .Perceptual restructuring
  • 1994 5,500 complaints (25 more than were
    expected)
  • Sample Job Description

76
Family and Medical Leave Act 1993
  • Employers with more than 50 employees have to
    provide 12 weeks of unpaid leave for family or
    medical emergencies.
  • Employer must guarantee the employee the same or
    a comparable job. The employer must also pay the
    health-care coverage for the EE --- which the EE
    has to be back if he/she fails to return to work.
    ERs are allowed to exempt key employees
    defined as the highest paid 10 of their work
    force whose leave would cause substantial
    economic harm to the employer. Also exempt are
    EEs who have not worked at least 1,250 hours (25
    hrs a week) in the previous 12 months.

77
Enforcement of Laws and Court Process
  • Filing a Discrimination Complaint
  • Local EEO Agency
  • NERC (Nevada Civil Rights Commission)
  • EEOC
  • Investigation
  • Right to sue letter

78
Evidence of Discrimination
  • Intentional Discrimination
  • Disparate Treatment different standards applied
    to various groups
  • Adverse or Disparate Impact same standards are
    applied but disproportionately less minority
    applicants are selected

79
Federal Court Process
  • Presentation of evidence in TVII
  • Burden of Proof shifts
  • Plaintiff ? Defendant ? Plaintiff
  • Prima Facie Evidence
  • 1. Disparate Treatment 1. Job-based/legitimate 1.
    Defendant explanation pretext true
    McDonnell Rule 4 conditions reason was
    rejection for prejudice
  • 2. Adverse Impact 2. Business Necessity, 2.
    Other method
  • 80 or 4/5 Rule BFOQ, Validation

80
Disparate Treatment 4 Conditions- McDonnel Rule
  • Plaintiff must show
  • belongs to protected class
  • applied and was qualified for the job
  • despite the qualifications - was rejected
  • position remained open and the employer continued
    to seek applications from persons with the
    complainants qualifications
  • -gtApplied also in ADEA cases

81
Adverse Impact 80 or 4/5 Rule
  • Selection Ratios
  • Number of nonminority applicants selected
  • DIVIDED BY
  • Number of nonminority applicants applied
  • THIS IS
  • Nonminority selection ratio
  • Number of minority applicants selected
  • DIVIDED BY
  • Number of minority applicants applied
  • THIS IS
  • Minority selection ratio

82
Adverse Impact
  • Compare the two selection ratios
  • If the ratio for nonminorities is smaller there
    may be evidence of discrimination
  • If the ratio is less than 80 or 4/5 of the
    nonminority ratio, then there is evidence of
    adverse impact (because the difference in the
    ratios is statistically significant)

83
Adverse Impact - Example
  • 100 White applicants
  • 100 African American applicants
  • 20 of the White applicants are selected
  • 5 of the African Americans are selected
  • 20100 .2 Nonminority Selection Ratio
  • 5100 .05 Minority Selection Ratio
  • .05 .2 .25 This does not meet the 80
    rule!

84
Adverse Impact - Example
  • 100 White applicants
  • 100 African American applicants
  • 20 of the White applicants are selected
  • 16 of the African Americans are selected
  • 20100 .2 Non-minority ratio
  • 16100 .16 Minority ratio
  • .16 .2 .80 meets the 80 rule

85
HR Trends and Practices in the U.S.
  • Staffing and Selection
  • Measurement Principles
  • Reliability and Validity
  • Selection Methods
  • Application forms and resumes
  • Interview
  • Assessment Centers

86
Staffing and Selection
  • The most important HR function
  • Definitions
  • Recruitment Creating a pool of qualified
    applicants
  • Staffing
  • Mutual process by which
  • the individual and the organization become
    matched to
  • form the employment relationship.
  • Mutual Process Series of interrelated activities
    - R, S, DM, job offers, hiring.

87
Selection
  • Selection
  • The process of obtaining
  • and using information
  • about job applicants
  • to determine who should be hired.
  • Focus here is on how to collect relevant info on
    applicants KSAs.

88
Recruitment
  • How can we mess up?
  • Recruitment Planning
  • Relevant market
  • Number of contacts
  • Yield ratios

89
Recruitment
  • Recruitment Sources and Channels - Effectiveness
  • Internal vs external recruitment
  • Peter Principle
  • Walk-ins
  • Referrals
  • College
  • Employment Agencies and Professional Societies
  • Advertising
  • Temporary Employees
  • Internet
  • Realistic Job Previews

90
Measurement in Selection
  • Selection decisions are based on what
    information? Purpose is to ..

91
Measurement in Selection
  • How can we mess up?
  • Measure irrelevant KSAs
  • Measure KSAs inaccurately

92
Definition of Measurement
  • Application of rules for assigning numbers to
    objects to represent quantities of attributes.
  • Differences between applicant scores are due to
    actual differences in KSAs.
  • Rules
  • Specified algorithms to assign numbers (She is a
    10) same results by different users

93
Quality of Measures Reliability
  • How good a measure is my test? To what extent
    does the measure accurately capture the KSA we
    are interested in?
  • The scores obtained on a measure are
  • X obtained X true X error
  • If there was no error in the measure, every time
    we apply the measure to the same person we should
    get the same score.
  • A reliable measure is a consistent measure.
  • The reliability of a measure reflects the
    measures consistency.

94
Reliability
  • Three methods to evaluate the reliability of a
    measure
  • Each method focuses on a different source of
    measurement error. Measurement error are those
    factors that impact the obtained score but are
    not at all related to the attribute that is being
    measured.
  • The methods
  • Test-Retest Reliability
  • Parallel or Equivalent Forms Reliability
  • Internal Consistency Reliability
  • Split-Half and Odd-Even Cronbach Alpha
  • Spearman-Brown Adjustment

95
Spearman-Brown Formula to Correct a Split-Half
Reliability Coefficient

96
Reliability
  • The conclusion that a measure is reliable can
    only be drawn if, and only if, the reliability
    coefficient (a correlation coefficient) is
    statistically significant (as determined by a
    t-test.

97
Standard Error of Measurement

98
Reliability
  • Important
  • The difference in the score between two
    applicants is only significant if it is at least
    two times the standard error of measurement.
  • Example The standard error of measurement for a
    test is 1.5. Candidate A scores 18, candidate B
    scores 24 - does candidate B really have more of
    the attribute that is being measured?

99
Quality of MeasuresValidity
  • Validity in Selection concerns the following
    question How appropriate is it to make
    inferences from the scores on a measure to
    performance?
  • Is the score a good predictor of performance? Is
    the score actually related to future performance?
  • Relationship between reliability and validity

100
Validity
  • Three methods to evaluate the validity of a
    measure.
  • Content Validity
  • Criterion-Related (Empirical) Validity Validity
    Coefficient
  • Predictive Validity
  • Concurrent Validity

101
Content versus Face Validity
  • Content Validity deals with the representative
    sampling of the content domain of a job by a
    selection measure
  • Face Validity concerns the appearance of whether
    a measure is measuring what is intended

102
Utility Analysis
  • Using dollar-and-cents terms as well as other
    measures
  • such as percentage increase in output,
  • it shows the degree to which the use of a
    selection measure improves the quality of
    individuals selected
  • over what would have happened if the measure had
    not been used.

103
An Equation for Calculating the Utility of a
Selection Program
  • Expected Dollar Gain from Selection
  • NsrxySDyZx-NT(C)
  • Expected Dollar Gain from Selectionreturn in
    dollars to the organization for having a valid
    selection program

104
Utility
  • Nsnumber of job applicants selected
  • rxyvalidity coefficient of the selection
    procedure
  • SDystandard deviation of job performance in
    dollars
  • Zxaverage score on the selection procedure of
    those hired expressed in z or standardized score
    form as compared to the applicant pool
  • NTnumber of applicants assessed with the
    selection procedure
  • Ccost of assessing each job applicant with the
    selection procedure

105
Strategies for Selection Decision-Making
  • Compensatory Model
  • Multiple Hurdles
  • Combination
  • Profile Matching

106
Application Forms and Resumes
  • Information about the applicants background and
    present status -- brief and general OR long and
    detailed??
  • Based on .. Past behavior is a good predictor of
    future behavior
  • To determine minimum qualifications and general
    suitability for job permanent record
  • Determine relative strengths and weaknesses
  • It is assumed that all data collected are used
  • Training and Experience Requirements
  • Job-related training - formal and informal
  • Type of training length quality

107
Application Form
  • Specific job-related experience and
    accomplishments
  • Minimum qualifications
  • Maintained Filing System YES NO
  • Used computer and Microsoft Word for Windows 2000
    word processor to type letters and reports
  • Used a Dictaphone to transcribe correspondence
  • TE Evaluation Form
  • Specific tasks are listed indicate YES NO
  • For YES, describe experience

108
Application
  • Likely candidate for Adverse Impact -- Why?
  • Current forms -- 100 had at least 1
    inappropriate question on average 7
    inappropriate questions.
  • Are these questions acceptable? What do you
    really want to know?
  • What was your maiden name?
  • What is your date of birth? What is your age?
  • What is your height and weight?
  • What language do you commonly use?
  • What is your religious faith?
  • List the number and ages of your children?
  • Do you have any physical or mental disabilities?
  • List your birthplace.
  • Have you ever been arrested?
  • Do you own your car/residence?

109
Application Forms ...
  • Adverse Impact High
  • Validity On average .1 -- corrected for
    attenuation .13
  • Select content
  • Job-related - Job-related language
  • Usefulness
  • Fairness -- Face Validity

110
Resumé
  • U.S. Short and concise dates job related
    achievements
  • Groups
  • Compare to German resumé

111
References and Recommendations
  • To verify information
  • Assess applicants job experience
  • Assess applicants effectiveness in those jobs --
    what done and how well??

112
References
  • Sources of and methods to collect Reference Data
  • Methods In-person Mail Letter of R Phone
  • Sources Former ER Personal Investigative
    agencies Public record
  • Usefulness of reference data
  • Reliability .4 or less
  • Validity .16-.26
  • Reference giver-better if immediate supervisor
  • Old and new jobs are very similar?
  • Adverse Impact ??

113
References ..
  • Validity -- not much evidence -- favorable info
    -- job related
  • better if content of the new and old job are very
    similar
  • low validity because low reliability and
    restricted range
  • Defamation of character
  • Recommendations
  • dont use subjective info
  • written consent by applicant
  • ask only specific job-related info
  • development of reference checking system

114
Employment Interview
  • KSAs to be measured
  • Validity
  • Adverse Impact

115
Employment Interview
  • Research
  • Interview does not add to selecting the most
    qualified candidate because..

116
Interview
  • Sources of problems
  • impression formation
  • human perception

117
Improve the Validity of the Interview
  • 1. Decide on location and seating
  • 2. More than one interviewer Panel
  • 3. KSAs to be measured Measure interpersonal,
    communication skills
  • 4. Job-related questions only - Multiple
    Questions (Behavioral Interview Questions)
  • 5. Limit pre-interview info
  • 6. Use a rating format
  • 7. Train the interviewer

118
Interview Simulation
  • Role Play

119
HR Trends and Practices in the U.S.
  • Staffing and Selection - Selection Methods
  • Assessment Centers
  • Managerial positions
  • Battery of tests
  • Management, interpersonal, soft skills
  • Physical Attractiveness
  • Notion of Fit
  • Emotional Intelligence

120
Judge and Ferris (1992) The Elusive Criterion
of Fit in HR Staffing
  • The practice of selection strongly emphasizes a
    less tangible notion of fit
  • between job applicant and the organization.
  • How could fit be measured?
  • Definition of fit The degree to which the
    goals and values of an
  • applicant or employee match those of employees
    considered successful in
  • the organization.
  • The notion of liking an applicant
  • Why fit control mechanism, homogeneity,
    job-related ,
  • predictability of public behavior
  • The employment interview and fit
  • Impression Management

121
Emotional Intelligence
  • Daniel Goleman
  • Developing emotional intelligence
  • Five dimensions
  • Self-awareness Realistic self assessment-how
    does this fir with my values analyze gut feeling
  • Managing emotions anger, anxiety, sadness
    controlling ones impulses manage stress effect
    on ability to pay attention
  • Motivating other what moves us to action is
    emotion optimism
  • Showing empathy read emotions in others
    prevents acting in self interest
  • Staying connected emotions are not only
    contagious, they spread from the top down

122
HR Trends and Practices in the U.S.
  • Compensation and Benefits
  • Theory
  • Techniques
  • Benefits

123
Compensation and Benefits
  • Exchange relationship
  • Equity
  • Internal Equity
  • External Equity
  • Individual Equity

124
Internal Equity
  • Worth of a job?

125
Internal Equity
  • Worth of a job?
  • Input .. KSAs
  • Ouput
  • Attributes Complexity

126
Internal Equity
  • Develop of job hierarchy
  • Job Evaluation
  • Job Evaluation Methods
  • Compensable Factors
  • Ranking
  • Classification
  • Point Factor Method
  • The Hays System Know-How, Problem Solving,
    Accountability

127
External Equity
  • Myth of a market pay rate
  • Published data
  • Survey design
  • Benchmark jobs
  • Relevant market
  • Level and range
  • Administration
  • Benefits
  • Philosophy
  • Leveling

128
Integrating Internal and External Equity
  • Scatterplot
  • Regression Analysis JE points and Market pay
  • Market Pay Line
  • Follow, lead, lag
  • Pay grades Height and Width Overlap
  • Compa Ratio, Red and green circle employees
  • Pay Compression

129
Individual Equity
  • Money as a motivator?

130
Individual Equity
  • Motivation Theories
  • Variable Pay Systems
  • Individual Piece rate, sales commission,
    bonuses, special recognitions, safety awards,
    attendance bonus
  • Group (Team) Gainsharing, quality improvement
    awards, labor cost reduction payout
  • Organization Profit sharing, employee stock
    ownership options, executive stock options,
    deferred compensation
  • Merit Pay Systems - Design

131
Individual Equity
  • Performance measurement?
  • Size of reward Purchasing power and recognition
  • Type of reward
  • Linkage to performance
  • Pay Secrecy
  • Example Compensation at IBM

132
Individual Equity
  • Annual Pay Raises Exercise
  • Attached
  • Individually make decisions
  • Groups decide

133
Employee Benefits
  • Compensation Package
  • Direct vs Indirect
  • Direct Base Pay and Variable Pay
  • Indirect Benefits
  • Composition
  • 20 of direct pay in benefits
  • For each 1.00 in pay additional 20 cents in
    benefits

134
Employee Benefits
  • Types of Benefits
  • Government Mandated
  • Security Workers Compensation, Unemployment
    Compensation
  • Retirement Security Social Security
  • Health Care COBRA and HIPPA provisions
  • Family Oriented Family Medical Leave Act
  • Time off Military reserve, Jury, Election
  • Employer Voluntary

135
Employee Benefits
  • Employer Voluntary
  • Security Supplemental UE benefits, Severance pay
  • Retirement Security Early retirement options,
    Pension plans, IRAs, 401 (k) plans
  • Health Care Medical, Dental, Vision,
    Prescription Drugs, EAPs, Wellness Programs,
    HMOs
  • Financial, Insurance Life, Disability,
    Educational assistance
  • Family Oriented Dependent Care, Child Care,
    Alternative work arrangements
  • Time off Lunch and rest breaks, holidays and
    vacations, funeral and bereavement leaves
  • Social and recreational

136
Employee Benefits
  • Package design?

137
Employee Benefits
  • Employee preferences
  • Competition
  • Cost
  • Attraction and retention

138
Employee Benefits
  • Social Security Act 1935
  • Social Security Retirement employer and
    employee pay
  • Employer payroll tax to fund UE (3.5) of the
    first 6,000 earned by each worker
  • Employer pays Workers Comp, by State
  • Time off benefits most expensive 5 to 13 of
    total compensation

139
Employee Benefits
  • COBRA Consolidated Omnibus Budget
    Reconciliation Act require extended health care
    coverage for employers with 20 or more employees
  • HIPPAA Health Insurance Portability and
    Accountability Act
  • HMO Health Maintenance Organization

140
Employee Benefits
  • Flexible benefits plans Cafeteria-Style
    benefits plans
  • Work Life Balance Reading
  • Flexible Spending Accounts
  • Benefits Communication

141
HR Audit
  • Instructions for HR Audit Case Study
  • Teams of three students
  • You will be provided with some background
    information for the company you picked.
  • An HRM audit is a formal review of the outcomes
    of HRM functions. To conduct the audit, the HR
    department identified key functions and the key
    measures of business performance and customer
    satisfaction that would indicate each function is
    succeeding.

142
HR Audit
  • Business and Customer Satisfaction Indicators
  • Staffing Average days to fill open requisitions
    Ratio of acceptances to offers made Ratio of
    minority/women applicants to representation in
    local labor market Average years of
    experience/education per job family Anticipation
    of personnel needs Timeliness of referring
    qualified workers to line supervisors Treatment
    of applicants Skill in handling terminations
    Adaptability to changing labor market

143
HR Audit
  • Compensation Per capita average merit increases
    Percentage of overtime hours to straight time
    Ratio of average salary offers to average salary
    in community Fairness of existing job evaluation
    system Competitiveness in local labor market
    Relationship between pay and performance Employee
    satisfaction with pay
  • Benefits Average unemployment compensation
    payment Average workers compensation payment
    Benefit cost per payroll dollar Percentage of
    sick leave to total pay Promptness in handling
    claims Fairness and consistency in the
    application of benefit policies Communication of
    benefits to

144
HR Audit
  • Training Percentage of employees participating in
    training programs per job family Percentage of
    employees receiving tuition refunds Training
    dollars per employee Extent to which training
    programs meet the needs of employees and the
    company Communication to employees about
    available training opportunities Quality of
    introduction/orientation programs
  • Employee Appraisal and Development Distribution
    of performance appraisal ratings Appropriate
    psychometric properties of appraisal forms
    Assistance in identifying management potential
    Organizational development opportunities provided
    by HRM

145
HR Audit
  • Overall Effectiveness Ratio of HR staff to
    employee population Turnover rate Absenteeism
    rate Ratio of per capital revenue to per capita
    cost Net income per employee Unionization
    Accuracy and clarity of information provided to
    managers and employees Competence and expertise
    of staff Working relationship between
    organizational units and the HR department answer
    the questions that are provided with the
    background information in detail.

146
HR Audit
  • You need to conduct some research to gather
    additional information about the company. Since
    you do not have access to all the information
    required for an in-depth HR audit, you are asked
    to provide an analysis of the HR function in
    your company by also using the following
    questions
  • To what extent does your company emphasize the
    importance and value of the human resources of
    the company through the philosophy and beliefs of
    top management?
  • To what extent does your company invest time and
    money in improving human resource procedures and
    practices?

147
HR Audit
  • To what extent does your company develop, monitor
    and evaluate human resource practices?
  • To what extent does your company emphasize ensure
    uniform application of all human resource
    policies throughout the company?
  • To what extent does your company include the HR
    director/function in the development of strategic
    plans for the company?
  • Are the HR practices consistent with the
    companys mission?
  • Is this company considered an employer of choice
    (check The Most Admired Companies annual
    publication by Fortune Magazine)?
  • Is this company known for progressive and novel
    HR practices? Describe and explain.

148
HR Audit
  • Suggested (not required) structure for your
    report
  • Company Introduction
  • Industry and products Market Share Current
    Status
  • Revenue, Number of employees
  • Level of internationalization
  • History Positives and Setbacks
  • Business Strategy - Mission
  • HR Practices and their Success
  • Strategic Role of HR
  • Code of Ethics
  • Consistency between Strategy and HR Practices
  • Unique HR Aspects
  • The number one thing you should know about this
    company?
  • Why we would love (or not) to work for this
    company.
  • Recommendations

149
HR Audit
  • Appendix Answers to the questions that were
    provided with the background information.
  • The report should not be between 10 and 15 pages
    long. It is due the last day of class.
  • You have 20 minutes for your presentation and 10
    minutes for questions and answers. Each team
    member must participate in the presentation.
  • You presentation may, but does not have to,
    follow the structure of your report.
  • Company List
  • BP Amoco,
  • Motorola
  • GM
  • Johnson Johnson
  • American Airlines
  • Southwest Airlines
  • Ford
  • Arthur Anderson

150
Course Summary
  • Warren Bennis
  • List 10 things that you have learned in this
    course.
  • How will you be able to apply these things?
  • How will these things help you in your future
    career?
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