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McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

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CHAPTER 10 Managing Human Resources

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CHAPTER 9 Motivating the Workforce

Creating the HumanCreating the HumanResource AdvantageResource Advantage

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Human Resource Management Human Resource Management (HRM)(HRM)

All the activities involved in determining the organization's needs for human

resources and acquiring, training and compensating people to fill those needs

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Human Resource ManagementHuman Resource ManagementHuman Resource ManagementHuman Resource Management

Increasing in importanceEmployee Concerns:

• Compensation

• Job satisfaction

• Personal performance

• Leisure

• Environment

• Opportunities for advancement

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Managing the Workforce Managing the Workforce During Slow Economic TimesDuring Slow Economic Times

Managing the Workforce Managing the Workforce During Slow Economic TimesDuring Slow Economic Times

Managers must be aware of employee concerns/needs

• Do not ignore/neglect top performers

• Even during a recession, high-performers will quit

The most important things a top manager can do:

• Transparent and honest communication

• Non-monetary rewards; flexibility programs

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Planning for HR NeedsPlanning for HR NeedsPlanning for HR NeedsPlanning for HR Needs

Job Analysis Systematically determining pertinent information about a job (tasks, abilities, knowledge, skills)

Job DescriptionFormal & written specifications of the job (title, tasks, relationships, skills, duties, responsibilities)

Job SpecificationDescription of the job qualifications (education, experience, personal/physical characteristics)

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Employee RecruitingEmployee RecruitingEmployee RecruitingEmployee Recruiting

Recruiting The formation of a pool of qualified job candidates from which management selects employeesInternal Sources

• Current employees

• Promotion from within

External Sources

• Advertising

• Employment agencies

• Online

• Interns

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Employee SelectionEmployee SelectionEmployee SelectionEmployee Selection

SelectionThe process of collecting information about applicants and using information to make hiring decisions

• Application

• Interviewing

• Testing

• Reference Checking

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Employee Selection:Employee Selection:The Selection ProcessThe Selection ProcessEmployee Selection:Employee Selection:

The Selection ProcessThe Selection Process

ApplicationFirst stage of the selection process

• Name, address, telephone

• Education, previous work experience, references

• Qualifications for the position

• Level of interest in the position

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Employee Selection:Employee Selection:The InterviewThe Interview

Employee Selection:Employee Selection:The InterviewThe Interview

The interview is the second phase of selection

Detailed information on candidate

• Is candidate a good fit for the job?

• Attitudes toward job

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Top 10 Mistakes Made in Top 10 Mistakes Made in InterviewingInterviewing

Top 10 Mistakes Made in Top 10 Mistakes Made in InterviewingInterviewing

1. Not taking the interview seriously

2. Not dressing appropriately (dressing down)

3. Not appropriately discussing experience and education

4. Being too modest about one’s accomplishments

5. Talking too much

6. Too much concern about compensation

7. Speaking negatively of a former employer

8. Not asking enough or appropriate questions

9. Not showing the proper enthusiasm level

10.Not engaging in appropriate follow-up to interview

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TestingTestingTestingTesting

Ability and performance testing

Aptitude, IQ, Personality tests

Psychological exams

Illegal drug screening

Applicant assessment

Goodness of “fit”

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Reference CheckingReference CheckingReference CheckingReference Checking

Verify education

Previous work experience

Privacy issues

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Legal Issues in Recruiting Legal Issues in Recruiting and Selectingand Selecting

Legal Issues in Recruiting Legal Issues in Recruiting and Selectingand Selecting

Legal restraints are present at every stage of the recruitment and selection process

Title VII of the Civil Rights Act Pervades all areas of HRM

Prohibits discrimination in employment

Equal Employment Opportunity Commission (EEOC)

Tests must be validated

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Laws Affecting HRMLaws Affecting HRMLaws Affecting HRMLaws Affecting HRM

Americans with Disabilities Act (ADA)

Age Discrimination in Employment Act

Equal Pay Act

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Developing the WorkforceDeveloping the WorkforceDeveloping the WorkforceDeveloping the Workforce

OrientationFamiliarizing new hires with fellow workers, company procedures and the physical properties of the company

TrainingTeaching employees to do specific job tasks through classroom development or on-the-job experience

DevelopmentTraining that augments the skills and knowledge of managers and professionals

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Assessing PerformanceAssessing PerformanceAssessing PerformanceAssessing Performance

Can be a difficult job for managers• Strengths

• Weaknesses

Is crucial because it provides employees with feedback• Appraisals may be

Objective or subjective

Quantitative or qualitative

• Managers must discuss results with the employee

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Developing the WorkforceDeveloping the WorkforceDeveloping the WorkforceDeveloping the Workforce

Turnover Employees voluntarily leave (quit); involuntary

leave (fired); management must replace workers

Promotion Advancement to higher-level job with increased authority,

responsibility, and pay

Transfer Move to another job within the company usually at same or

similar level and wage rate

Separations Employment changes involving resignation, retirement,

termination, or layoff

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Compensating the WorkforceCompensating the WorkforceCompensating the WorkforceCompensating the Workforce

Developing compensation plans is complexEmployee wages comprise a large portion of organizational expenses

Wage/Salary SurveyStudy indicating how much compensation comparable firms are paying for specific jobs that firms have in common

Helps in designing fair compensation packages

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Financial CompensationFinancial CompensationFinancial CompensationFinancial Compensation

Wages

Financial rewards based on hours worked and/or level of output achievedTime Wages

• Used when quality is more important than quantity– no incentive to increase production

Piece Wages

• Based on level of output achieved. Motivate employees to increase output– little incentive to improve quality

Commission

• Incentive system that pays a fixed dollar amount or a percentage of the employee’s sales. Motivates employees to sell as much as possible

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CompensationCompensationCompensationCompensation

Salary Financial reward calculated on weekly, monthly, or annual basis

Associated with white collar employees, executives, professionals

Bonuses Monetary rewards provided by firm for exceptional performance or incentive to increase productivity

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CompensationCompensationCompensationCompensation

Profit Sharing A percentage of company profits distributed to employees, sometimes in the form of stock

Employee Stock Ownership Plan (ESOP)Company distributes shares to employees as a form of compensation

Gaining in popularity

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BenefitsBenefitsBenefitsBenefits

Non-financial forms of compensation

• Pension plans

• Insurance (health, disability, life)

• Child & elder care

• Employee Assistance Programs

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BenefitsBenefitsBenefitsBenefits

Traditional Fringe BenefitsSick leave

Pension plans

Health plans

Extra compensation (Bonuses)

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BenefitsBenefitsBenefitsBenefits

Soft Benefits/PerksEmphasize work-life balance

On-site child care

Spas

Food service

Hair salons

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Unionized EmployeesUnionized EmployeesUnionized EmployeesUnionized Employees

Labor Union Employee organization formed to deal with employers for

achieving better pay, hours and working conditions

Collective Bargaining Negotiation process where management and unions reach

agreement on wages, hours and working conditions for the bargaining unit (employees represented by union)

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Unionized EmployeesUnionized EmployeesUnionized EmployeesUnionized Employees

12% of workforce

Unionized workers often earn higher wages

Concentrated in certain industries Automotive manufacturing

Steel production

Construction

Public-sector (government)

Sports and acting unions

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Collective Bargaining ProcessCollective Bargaining ProcessCollective Bargaining ProcessCollective Bargaining Process

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The formal written document that stipulates the relationship between union and

management for a specific time period. The outcome of collective bargaining

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Labor ContractLabor Contract

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Resolving DisputesResolving DisputesResolving DisputesResolving Disputes

Pickets Public protests against the actions of the company or

management

Strike Employee walkouts; work stoppage. Most effective economic weapon

for unions in private sector

Boycott Attempt to keep people from purchasing the company’s products

Lockout Management’s version of the strike. Worksite is closed to prevent

employees from working

Strikebreakers Hired by management to continue operations and reduce losses during

a strike

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Third-Party Dispute ResolutionThird-Party Dispute ResolutionThird-Party Dispute ResolutionThird-Party Dispute Resolution

Conciliation 3rd party intervention so that management & labor continue talks

Mediation 3rd party helps to bring labor and management together to resolve

disputes

Arbitration 3rd party settles dispute by imposing solution that is legally binding

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The participation of different ages, genders, races, ethnicities,

nationalities and abilities in the workplace

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Workforce Diversity InvolvesWorkforce Diversity Involves

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Why is Diversity Important?Why is Diversity Important?Why is Diversity Important?Why is Diversity Important?

Increasingly diverse workforce reflects increasingly diverse customer base

Diversity brings multiple perspectives to issues and improves problem solving and decision making

Organizations should work to improve their workforce diversity

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Valuing Workforce DiversityValuing Workforce DiversityValuing Workforce DiversityValuing Workforce Diversity

More productive use of human resources

Reduced conflict among employees

More productive working relationships

Increased commitment to organizational goals

Increased innovation and creativity

Increased ability to serve the needs of diverse customers

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Affirmative ActionAffirmative ActionAffirmative ActionAffirmative Action

Legally mandated plans that try to increase job opportunities for minority groups by:Analyzing the current pool of workers

Identifying areas where women and minorities are underrepresented

Establishing specific hiring and promotion goals to resolve the discrepancy

Prohibits organizations from setting hiring quotas that might result in reverse discrimination

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