Chapter 10 Flashcards
STRATEGIC HUMAN RESOURCES MANAGEMENT
Three stages of HR planning process
- Planning : HR managers need to know the organization’s business plans to ensure that the right number and types of people are available - where a company is headed, and what businesses it plans to be, what future growth is expected, and so forth. Few actions are more damaging to morale than having to lay off recently hired college graduates because of an adequate planning for future needs.
- Programming : conducts programming of specific human resources activities, such as recruitment, training, and layoffs. And this stage, the company’s plans are implemented.
- Evaluating : human resources activities are evaluated to determine whether they are producing the results needed to contribute to the organization’s business plans.
STRATEGIC HUMAN RESOURCES MANAGEMENT
human capital
- the knowledge, skills, and abilities of employees that have economic value
- also known as intellectual capital
INTRODUCTION
human resources management (HRM)
- formal systems for the management of people within an organization
STRATEGIC HUMAN RESOURCES MANAGEMENT
Impact of human resources
- Creates value: people can increase value through their efforts to decrease costs or provide something unique to customers or some combination of the two. Empowerment programs, total quality initiatives, and continuous improvement efforts at companies such as Corning and Xerox are intentionally designed to increase the value that employees bring to the bottom line.
- Is rare: people are a source of competitive advantage when their skills, knowledge, and abilities are not equally available to all competitors. Top companies invest a great deal to hire and train the best and the brightest employees to gain advantage over there competitors, Dow Chemical to court to stop General Electric hiring away it’s engineers. This case shows that companies recognize both the value and the rarity of certain employees.
- Is difficult to imitate: people are a source of competitive advantage when their capabilities and contributions cannot be copied by others. Disney, Southwest Airlines, and Whole Foods are known for creating unique cultures that get the most from employees (through teamwork) and are difficult to imitate.
- Is organized: people are a source of competitive advantage when organization know how to deploy them as needed based on their experience, skills, and potential. Johnson & Johnson, Colgate, and other companies have formal systems for identifying future management needs and high potential employees so that the company can promote from within. This way, they fill openings with people who are well acquainted with the company’s culture, customers, and industry.
STRATEGIC HUMAN RESOURCES MANAGEMENT
job analysis
- a tool for determining what is done on a given job and what should be done on that job
- does two things :
1. Tells the HR manager about the job itself: the essential task, duties, and responsibilities involved involved and performing the job. This information is called a job description. The job description for an accounting manager might specify that the position will be responsible for monthly, quarterly, annual financial reports, getting bills issued and paid, preparing budgets, ensuring the company’s compliance with laws and regulations, working closely with line managers on financial issues, and supervising and accounting department of 12 people.
2. Job analysis describes the skills, knowledge, abilities, and other characteristics needed to perform the job. This is called the job specification. For our accounting manager example, the job requirement might include a degree in accounting or business, knowledge of computerized accounting systems, prior managerial experience, and excellent communication skills. - provide the information required by virtually every human resources activity. It assists with the essential HR programs: recruitment, training, selection, appraisal, and reward systems.
- it may also help organizations defend themselves in lawsuits involving employment practices – for example, by clearly specifying what a job requires if someone claims unfair dismissal.
- ultimately, job analysis helps increase the value added by employees to the organization because it clarifies what is really required to perform effectively.
STAFFING THE ORGANIZATION
recruitment
- The development of a pool of applicants for jobs in an organization
- recruitment may be internal (considering current employees for promotions and transfers) or external
- Internal recruiting :
- Advantages : employer know their employees, and employee know their organization. External candidates who are unfamiliar with the organization may find they don’t like working there. Also, the opportunity within the organization may encourage employees to remain with the company, work hard, and succeed. Recruiting outside the company can be demoralizing to employees.
- Disadvantages : if existing employee lack skills or in talent, internal recruitment yields a limited applicant pool, leading to poor selection decisions. Internal recruitment policy can inhibit a company that wants to change the nature or goals of the business by bringing in outside candidate.
- Many companies that rely heavily on internal recruiting use a job posting system. A job posting system is a mechanism for advertising open position, Typically on a bulletin board or the company intranet. If lawyer complete a request form indicating interest in a post good job. The posted job description includes a list of duties and the minimum skills and experience required.
External Recruiting : - Bring in the new blood to a company and can inspire innovation. Among the most frequently used sources of outside applicants are Internet job boards, companies websites, employee referrals, newspaper advertisements, and college campus recruiting.
STAFFING THE ORGANIZATION
selection
- choosing from among qualified applicants to hire into an organization
STAFFING THE ORGANIZATION
structured interview
- selection technique that involves asking all applicants the same questions and comparing their responses to a standardized set of answers
- two types :
1. Situational interview - focuses on hypothetical situations
2. Behavioral description interview - explores what candidates have actually done in the past; because behavioral questions are based on real events, they often provide useful information about how the candidate actually perform on the job.
STAFFING THE ORGANIZATION
assessment center
- A managerial performance test in which candidates participate in a variety of exercises and situations
- assessment center consists of 10 to 12 candidates who participate in a variety of exercises or situations; some of the exercises involve group interactions, and others are performed individually.
- Each exercise taps a number of critical managerial dimensions, such as leadership, decision-making skills, and communication ability.
- assessors, why manager from the organization, observe and record information about the candidates performance in each exercise.
STAFFING THE ORGANIZATION
reliability
- the consistency of test scores over time and across alternative measurements
- For example, if Three interviewers talked to the same job candidate but drew very different conclusions candidate abilities, we might suspect that there were problems with the reliability of one or more of the selection tests or interview procedures.
STAFFING THE ORGANIZATION
validity
- the degree to which a selection test predicts or correlates with job performance
- the most common form of validity is criterion related validity : refers to the degree to which a test actually predicts or correlates job performance.
- in general, validity is usually established through studies comparing test performance and job performance for a large enough sample of employees to enable a fair conclusion to be reached.
- content validity: concerns the degree to which selection test measure a representative sample of the knowledge, skills, and abilities required for the job. However, to be completely content valid, the selection process also should measure other skills, such as answering the telephone, duplicating and faxing documents, and dealing with the public. Content validity is more subjective (less statistical) than evaluations of criterion related validity but is no less important, particularly when one is defending employment decisions in court.
STAFFING THE ORGANIZATION
outplacement
- the process of helping people who have been dismissed from the company regain employment elsewhere
STAFFING THE ORGANIZATION
termination interview
- A discussion between a manager and an employer about the employee’s dismissal
- stressful situation for both parties; most experts believe that the immediate superior should be the one to deliver the bad news to employees.
- however, it is a wise precaution to have a third-party, such as an HR manager, present to provide guidance and take notes on the meeting.
- because announcing a termination is likely to upset the employee and occasionally leads to a lawsuit, the manager should prepare carefully.
- preparation should include knowing all the facts of the situation and reviewing any documents to make sure they are consistent with the reason for the termination.
- during the termination interview, Ethics and commonsense dictate that the manager be truthful but respectable, stating the facts and avoiding arguments.
STAFFING THE ORGANIZATION
adverse impact
- when a seemingly neutral employment practice has a disproportionately negative affect on a group protected by the Civil Rights Act
- for example, if equal numbers of men and women apply for job but a particular employment test results in far fewer women being hired, the test may be considered to cause an adverse impact and, therefore, be subject to challenge on that basis.
- many companies have established procedures to ensure compliance with labor and equal opportunity laws.
- written policy can also help ensure fair and legal practices in the workplace, although the company may also demonstrate a record of actually following those procedures and making sure they are implemented.
DEVELOPING THE WORKFORCE
training
- teaching lower level employees how to perform their present job
- Phase 1 : usually starts with a needs assessment
- Phase 2 : involves the design of training programs. Based on needs assessment, training objectives and content can be established.
- Phase 3 : decision about the training methods to be used and whether the training will be provided on or off the job. Common training methods include lectures, role-playing, business simulation, behavior modeling (watching a video and imitating what is observed), conferences, vestibule training (practicing in a simulated job environment), and apprenticeships. Should be well-suited to the objectives defined in phase 2.
- Phase 4 : evaluate the program effectiveness. measures of affected include employee reactions (surveys), learning (tests), improved behavior on the job, and bottom-line results (e.g., an increase Or reduction in defect rates following the training program).
STAFFING THE ORGANIZATION
employment-at-will
- the legal concept that an employee may be terminated for any reason
- The logic is that the employee may quit at any time, the employer is free to dismiss at any time.
- an employee cannot be fired for such actions as refusing to break the law, taking time off for jury duty, or whistleblowing to report illegal company behavior.
DEVELOPING THE WORKFORCE
development
- helping managers and employees learn skills needed for their present and future jobs
DEVELOPING THE WORKFORCE
orientation training
- training designed to introduce new employee to the company and familiarize them with policy, procedures, culture, and the like
- done well, orientation training has a number of benefits, including lower employee turnover, increased morale, better productivity, and lower recruiting and training costs.
DEVELOPING THE WORKFORCE
team training
- training that provides employees with the skills and perspectives they need to collaborate with others
DEVELOPING THE WORKFORCE
diversity training
- program focused on identifying and reducing hidden biases against people with differences and developing the skills to manage a diversified workforce
PERFORMANCE APPRAISAL
performance appraisal
- assessment of an employee’s job performance
- done well, it can help an employee improve their performance, pay, and chances for promotion; foster communication between managers and employees; and increase the employees and the organizations effectiveness.
- done poorly it can actually have a negative effect – it can cause resentment, reduce motivation, diminish performance, and even expose the organization to legal action.
- two basic purposes
1. Appraisal serves an administrative purposes. they provide managers with the information they need to make salary, promotion, and dismissal decisions; helps employees understand and accept the basis of this decision; and, if necessary, provides documentation that can justify those decisions in court.
2. Appraisal serves a developmental purpose. The information Gathered in the appraisal can be used to identify and plan the additional training, learning, experience, or other improvements employees require. - in addition, managers feedback and coaching based on the appraisal help employees improve their day-to-day performance and can help prepare them for greater responsibility in the future.
DESIGNING REWARD SYSTEMS
Internal and external factors that influence wages
- Internal :
- compensation policy of the organization
- Worth of job
- employees relative worth
- employers ability to pay
- External :
- condition of the labor market
- Area wage rates
- cost of living
- collective bargaining
- legal requirements
DESIGNING REWARD SYSTEMS
Three types of decisions for designing an effective pay plan
- Pay level
- refers to the choice of whether to be a high-, average-, or low- paying company
- compensation is a major cost for any organization, so low wages can be justified on a short-term financial basis.
- but being the high-wage employer – the highest paying company in the region – ensures that the company will attract many applicants.
- being a wage leader may be important during times of low unemployment or intense competition. - Pay structure :
- is the choice of how to price different jobs within an organization.
- Jobs that are similar in worth usually are grouped into job families.
- A pay grade, with a floor and a ceiling, is established for each job family. - Individual pay :
- concern different pay rates for jobs of similar worth within the same family.
- differences in pay within job families are decided in two ways.
- first, some jobs are occupied by individuals with more seniority than others.
- Second, some people may be better performers who are therefore deserving of a higher level of pay.
- Setting an individual pay lower than that of coworkers – like choosing an overall low pay level – may become more difficult for employers to sustain in the future as more employees use online resources such as salary.com and PayScale to check whether their pay is above or below The average amount or similar job titles.
DEVELOPING THE WORKFORCE
needs assessment
- and analysis identify the job, people, and departments for which training is necessary
- Job analysis and performance measurements are useful for this purpose
PERFORMANCE APPRAISAL
360-degree appraisal
- process of using multiple sources (peers, subordinates, superiors) of appraisal to gain a comprehensive perspective on one’s performance
- often the person being rated can select the appraisers, subject to a manager’s approval, with the understanding that the individual appraisals are kept confidential; returned forms might not include the name of the appraiser, for example, and the results may be consolidated for each level.
- advantages : it provides a much fuller picture of the employees strengths and weaknesses, and it often captures qualities other appraisal methods miss. The approach can lead to significant improvement, with employees often very motivated to improve their ratings.improvement in management performance following 360° appraisals have been observed in various countries, but cultural differences can affect the impact of this method.
- researchers found that 360° appraisals were most effective with managers in cultures that were individualistic and had relatively low power distance.
- Disadvantages : employees are often unwilling to rate their colleagues harshly, so a certain uniformity of ratings may result. In addition, 360 degree appraisal is less useful than more objective criteria, such as financial targets, and measuring performance. It’s objective it’s usually the employees development, not to provide a basis for administrative decisions such as raises. For those, appraisal methods like MBO are more appropriate.
PERFORMANCE APPRAISAL
management by objectives (MBO)
- A process in which objectives set by a subordinate and the supervisor must be reached within a given time.
- The aim is to agree on a set of objectives that are clear, specific and reachable.
- several important advantages : avoid the biases and measurement difficulties of trait and behavioral appraisals. At the end of the review period, for the employee either has or has not achieved the specified objective. The employee is judged on actual job performance. Second, because the employee and manager have agreed on the objective at the outset, the employee is likely to be more committed to the outcome, and there is less chance for misunderstanding. Third, because The employee is directly responsible for achieving the objective, MBO can be useful when the managers want to empower employees to adapt their behavior to achieve the desired results.
- Disadvantages : can result in unrealistic objectives being set, frustrating the employee and the manager. The objectives can also be too rigid, leaving the employee with insufficient flexibility should circumstances change. Finally, MBO focuses too much on short-term achievement at the expense of long-term goals.
DESIGNING REWARD SYSTEMS
cafeteria benefit program
- an employee benefit program in which employees choose from a menu of options to create a benefit package tailored to their needs
- in this type of program, employees are given credit that they spend on benefits they desire. Then employees use their credits toward individualized packages of benefits – medical and dental insurance,dependent care, life insurance, and so on.
DESIGNING REWARD SYSTEMS
comparable worth
- principle of equal pay for different jobs of equal worth