Chapter 13 - Managing human resource systems Flashcards
Human Resource Management
The process of finding, developing, and keeping the right people to form a qualified work force.
Four parts of the human resource management process:
- determining human resource needs
- attracting qualified employees
- developing qualified employees
- keeping qualified employees
Determining human resource needs
Human resource planning
Attracting qualified employees
- Recruiting
- Selection
Developing qualified employees
- Training
- Performance assessment
Keeping qualified workers
- Compensation
- Employee seperation
Human Resource Planning (HRP)
Using an organization’s goals and strategy to forecast the organization’s human resource needs in attracting, developing, and keeping a qualified work force.
Work-Force Forecasting
The process of predicting the number and kind of workers with specific skills and abilities that an organization will need in the future.
Two types of work-force forecasting
- internal forecasting
- external forecasting
Internal forecasting
projections about factors within the organization that affect the supply and demand for human resources.
- financial performance of the organization
- productivity
- the organization’s mission
- changes in technology or the way work is performed
- the termination, promotion, transfer, retirement, resignation and death of current employees
External forecasting
projections about factors outside the organization that affect the supply and demand for human resources.
- labour supply for specific types of workers
- the economy (unemployment rate)
- labour unions
- demographics of the labour force (proportion of labour force in various age groups)
- geographic movement of the labour force
- strength of competitors
- growth in particular businesses and markets
Three types of forecasting methods
- direct managerial input
- best guesses
- statistical/historical ratios
Direct managerial input
Forecasting method that is based on straightforward projections of cash flows, expenses, or financial measures, such as return on capital.
Best guesses
forecasting method based on manager’ assessment of current head count, plus a best guess of how internal factors and external factors would affect that head count.
Statistical/historical ratios
forecasting method uses statistical methods, such as multiple regression, in combination with historical data, to predict the number and kinds of workers a company should hire.
Human Resource Information Systems (HRIS)
Computerized systems for gathering, analyzing, storing, and disseminating information related to the HRM process. (attracting, developing, and keeping a qualified workforce.)
Transaction processing
A centralized computer system, often a mainframe, that records the thousands of routine daily transactions involved in running a business.
Data commonly used in HR information systems
- personal and educational data
- company employment history
- performance appraisal information
- work history
- promotions
Decision Support Systems (DSS)
Systems that help managers understand problems and potential solutions by acquiring and analyzing information with sophisticated models and tools.
Employment Legislation Challanges
- There is a lot of legislation that an employer has to comply with
- Legislation and how it is enforced changes often
Bona fide occupational qualification or requirement (BFOQ or BFQR)
The only time it is acceptable to hire someone based on gender, age, religion, and so on.
Employment relationship is regulated by:
Federal and provincial governments
Federal government has jurisdiction over:
Federally regulated industries such as banking, airlines, shipping and telecommunications
Provincial government has jurisdiction over:
Most companies that operate in a province. If they operate in more than one province, they would have to comply with legislation in each province.
Canadian Human Rights Act
Employers may not discriminate in employment decisions on the basis of gender, age, religion, color, national origin, race or disability.
Employment decisions should be based on factors that are:
- Job related
- Reasonably necessary
- A business necessity
Human rights laws don’t apply to just hiring and promotions; they cover:
all training and development activities, performance appraisals, terminations, and compensation decisions.
Canadian Labor Code - Part I
Guarantees the right to form and join unions.
Canadian Labor Code - Part II
Occupational health and safety - requires that employers provide employees with a place of employment that is free from recognized hazards that are causing or are likely to cause death or serious physical injury.
Canadian Labor Code - Part III
Laws concerning minimum wage, parental leave, hours of work, vacation entitlements
Responsibilities of federal and provincial human rights commissions
- investigatory
- enforcement
- informational
They investigate charges of discrimination, enforce the provisions of these laws, and publish guidelines that organizations can use to ensure they are in compliance with the law.
One key issue that human rights commissions must deal with
ensuring that all hiring, promotion, or other employment decisions are based on bona fide occupational requirements. This is best done by ensuring the *reliability and *validity of all selection techniques and qualifications required for a job.
Reliability
The degree to which a measure (test) is free from random error and is consistent.
Validity
The degree to which a measure (selection technique) is shown to accurately predict what it is expected to measure (job performance).
Employment Equity Act
The act compels federally regulated employers to remove employment barriers against persons in designated groups, make reasonable accommodation for designated groups and set goals for the hiring of designated groups, where they are under-represented in an employer’s work force. (Designated groups are woman, Aboriginals, persons with disabilities, and visible minorities)
Sexual harassment
form of discrimination in which unwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature occur while performing one’s job.
Two kinds of sexual harassment
- quid pro quo sexual harassment
- hostile work environment
Quid pro quo sexual harassment
form of sexual harassment in which employment outcomes, such as hiring, promotions, or simply keeping one’s job, depend on whether an individual submits to sexual harassment
Hostile work environment
form of sexual harassment in which unwelcome and demeaning sexually related behaviour creates an intimidating and offensive work environment.
Common mistakes managers make when it comes to sexual harassment laws
- sexual harassment can occur between people of the same sex and men are often victims.
- sexual harassers can also include agents of employers (e.g. consultants) and can include non employees such as customers (the key is not employee status but whether the harassment takes place while conducting company business)
- anyone affected by offensive conduct can file a complaint
What should companies do to make sure that sexual harassment laws are followed and not violated?
- respond immediately when sexual harassment is reported. A quick response encourages victims to report problems to management rather than lawyers or the human rights commission. A quick and fair investigation may serve as a deterrent to future harassment.
- write a clear, understandable sexual harassment policy that is strongly worded, gives specific examples of what constitutes as sexual harassment, spells out sanctions and punishments, and is widely publicized within the company.
- Have clear reporting procedures that indicate how, where, and to whom incidents of sexual harassment can be reported.
Recruiting
The process of developing a pool of qualified job applicants
Job analysis
A purposeful, systematic process for collecting information on the important work-related aspect of a job.
A job analysis collects four kinds of information:
- work activities, such as what workers do and how, when, and why they do it.
- the tools and equipment used to do the job.
- the context in which the job is performed, such as the actual working conditions or schedule.
- the personnel requirement for performing the job, meaning the knowledge, skills, and abilities needed to do a job well.
Job analysis information can be collected by:
- having job incumbents and/or supervisors complete questionnaires about their jobs
- by direct observation
- by interviews
- by filming employees as they perform their jobs
Job Description
A written description of the basic tasks, duties, and responsibilities required of an employee holding a particular job.
Job Specifications
A written summary of the qualifications needed to successfully perform a particular job.
Job analysis’ should be:
completed before beginning to recruit job applicants
Job analysis, job description, and job specifications:
- are the foundation on which all critical human resource activities are built
- help companies meet the legal requirements that their human resource decisions be job related
Job related decisions
recruitment, selection, training, performance appraisals, and employee separations must be valid and be directly related to the important aspects of the job, as identified by a careful job analysis
Internal Recruiting
The process of developing a pool of qualified job applicants from people who already work in the company.
Internal recruiting improves:
- employee commitment, morale, and motivation.
- reduces recruitment start-up time and costs
- increases workers’ chances of success in new jobs
Two methods of internal recruiting:
- job posting
- career paths
Job posting
A procedure for advertising job openings within the company to existing employees.
Job posting helps organizations
- discover hidden talent
- allows employees to take responsibility for career planning
- makes it easier for companies to retain talented workers who are dissatisfied in their current jobs and would otherwise leave the company
Career path
A planned sequence of jobs through which employees may advance within an organization.
Career paths help employees
focus on long-term goals and development while also helping companies do succession or replacement planning.
One disadvantage of internal recruitment
it sets off a domino effect of job changes. When an internal employee changes jobs within a company, it automatically creates another job opening.
External Recruiting
The process of developing a pool of qualified job applicants from outside the company.
External recruitment methods include:
- advertising
- employee referrals
- walk-ins
- outside organizations
- employment services
- special events
- Internet job sites
Internet recruitment advantages
- can reach millions of applicants worldwide
- companies can advertise 100’s of job openings
Internet recruitment disadvantages
- unlikely to reach applicants who don’t use or have access to the internet
- companies may receive hundreds or thousands of applications from unqualified applicants
- if proper security isn’t taken, there is a danger of violating employee/applicant privacy
Selection (of applicants)
The process of gathering information about job applicants to decide who should be offered a job.
Validation
The process of determining how well a selection test or procedure predicts future job performance. The better or more accurate the prediction of future job performance, the more valid a test is said to be.
Employment References
Sources such as previous employers or co-workers who can provide job-related information about job candidates.
Background Checks
Procedures used to verify the truthfulness and accuracy of information that applicants provide about themselves and to uncover negative, job-related background information not provided by applicants.
Specific Ability Tests (aptitude test)
Tests that measure the extent to which an applicant possesses the particular kind of ability needed to do the job well.
Cognitive Ability Tests
Tests that measure the extent to which applicants have abilities in perceptual speed, verbal comprehension, numerical aptitude, general reasoning, and spatial aptitude.
Biographical Data (biodata)
Extensive surveys that ask applicants questions about their personal backgrounds and life experiences.
Personality
the relatively stable set of behaviors, attitudes, and emotions displayed over time that makes people different from each other.
Personality Tests
Tests that measure the extent to which applicants possess different kinds of job-related personality dimensions.
Five major personality dimensions (The Big 5)
- extroversion
- emotional stability
- agreeableness
- conscientiousness
- openness to experience
Conscientiousness
the degree to which someone is organized, hard-working, responsible, persevering, thorough, and achievement oriented.
Work Sample Tests (performance tests)
Tests that require applicants to perform tasks that are actually done on the job.
Assessment Centres
A series of managerial simulations, graded by trained observers, that are used to determine applicants’ capabilities for managerial work.
Interviews
Selection tool in which company representatives ask job applicants job-related questions to determine whether they are qualified for the job
Basic kinds of interviews:
- structured
- semi-structured
- unstructured
Unstructured interviews
interviewers are free to ask applicants anything they want, and studies show that they do. They do about half as well as structured interviews in accurately predicting which applicant should be hired.
Structured Interviews
Interviews in which all applicants are asked the same questions, usually including situational, behavioral, background, and job-knowledge questions.
Situational questions (example)
which as applicants how they would respond in a hypothetical situation - (what would you do if…?)
Behavioral questions (example)
which ask applicants what they did in previous jobs that were similar to the job for which they are applying - (in your previous jobs, tell me about…?)
Background questions (example)
which ask applicants about their work experience. education, and other qualifications - (tell me about the training you received at….?)
Job-knowledge questions (example)
which ask applicants to demonstrate their job knowledge - (for nurses, give me an example of a time when one of your patients had a severe reaction to medication. How did you handle it?)
Advantages of structured interviews
- asking all the applicants the same questions makes comparing applicants a much easier process
- ensures that interviewers ask only for important, job-related information
Semi-structured interviews
A major part of the semi-structured interview is based on structured questions, however, some time is set aside for unstructured interviewing to allow interviewers to probe into ambiguous or missing information uncovered during the structured portion of the interview.
Training
Developing the skills, experiences, and knowledge employees need to perform their jobs or improve their performance.
Needs Assessment (determining training needs)
The process of identifying and prioritizing the learning needs of employees.
Needs assessments can be conducted by:
- identifying performance deficiencies
- listening to customer complaints
- surveying employees and managers
- formally testing employees’ skills and knowledge
Training methods
Impart information and knowledge - films and videos - lectures - planned reading - computer-based learning Develop analytical and problem-solving skills - case studies - coaching and mentoring - group discussions - computer-based learning Practice, learn, or change job behaviors - on-the-job training (OJT) - role playing - simulations and games - vestibule training - computer-based learning
Evaluating training can be done 4 ways:
- reactions - how satisfied trainees were with the program
- learning - how much employees improved their knowledge or skills
- behavior - how much employees actually changed their on-the-job behavior because of the training
- results - how much training improved job performance, such as increased sales or quality, or decreased costs.
Performance appraisal
The process of assessing how well employees are doing their jobs.
Avoid problems with performance appraisals by:
- accurately measuring job performance
- sharing performance feedback
Measuring job performance - three common errors of raters
- central tendency - error occurs when assessors rate all workers as average or in the middle of the scale
- halo error - occurs when assessors rate all workers as performing at the same level
- leniency error - occurs when assessors rate all workers as performing particularly well
Two ways to minimize raters errors and improve accuracy or job performance appraisals
- improving performance appraisal measures themselves
- training performance raters to be more accurate
Improving performance appraisal measures by:
using as many objective performance measures as possible
Objective Performance Measures
Measures of job performance that are easily and directly counted or quantified.
Subjective Performance Measures
Measures of job performance that require someone to judge or assess a workers performance.
Trait Rating Scales
A rating scale that indicates the extent to which a worker possesses particular traits or characteristics.
Behavioural observation scales (BOS)
Rating scales that indicate the frequency with which workers perform specific behaviours that are representative of the job dimensions critical to successful job performance.
Rater Training
Training performance appraisal raters in how to avoid rating errors and increase rating accuracy.
360-degree feedback
A performance appraisal process in which feedback is obtained from the boss, subordinates, peers and co-workers, and the employees themselves.
Traditional performance appraisal feedback sessions can be improved by:
- Separating developmental and administrative feedback
- basing feedback discussions on employee self-appraisals
- eliminating the “grading” aspect
Compensation
The financial and non-financial rewards that organizations give employees in exchange for their work.
4 basic kinds of compensation decisions:
- pay level
- pay variability
- pay structure
- employment benefits
Pay-level decisions
Decisions about whether to pay workers at a level that is below, above, or at current market wage.
Job evaluation
A process that determines the worth of each job in a company by evaluating the market value of the knowledge, skills, and requirements needed to perform it.
Above-market wages can:
- attract a larger, more qualified pool of job applicants
- increase the rate of job acceptance
- decrease the time it takes to fill positions
- increase how long employees stay
Pay-variability decisions
Are decisions concerning the extent to which employee’s pay varies with individual and organizational performance.
Piecework
A compensation system in which employees are paid a set rate for each item they produce.
Commision
A compensation system in which employees earn a percentage of each sale they make.
Profit Sharing
A compensation system in which a percentage of company profits is paid to employees in addition to their regular compensation.
Employee Stock Ownership Plans (ESOPs)
A compensation system that awards employees shares of company stock in addition to their regular compensation.
Stock Options
A compensation system that gives employees the right to purchase shares of stock at a set price, even if the value of the stock increases above that price.
Pay-Structure Decisions
Are concerned with internal pay distributions, meaning the extent to which people in the company receive very different levels of pay.
Hierarchical Pay Structures
There are big differences from one pay level to another. The highest pay levels are for people near the top of the pay distribution.
Compressed Pay Structures
There are typically fewer pay levels and smaller differences in pay between pay levels. The basic idea is that similar pay levels should lead to higher levels of cooperation, feelings of fairness and a common purpose, and better group and team performance.
Problems with hierarchical pay structures:
- there appears to be little link between organizational performance and the pay of top managers
- it hurts the performance of teams and individuals
Employment Benefits
A method of rewarding employees that includes virtually any kind of compensation other than wages or salaries.
Three employee benefits are mandated by law:
- Canada Pension Plan
- worker’s compensation
- employment insurance
Organizations offer a wide variety of benefits such as:
- retirement plans and pensions
- paid holidays
- paid vacations
- sick leave
- health and/or insurance
- dental and/or eye care
- day care facilities
- paid personal days
- legal assistance
- physical fitness facilities
- educational assistance
- discounts on company products and services
Benefits affect
- job satisfaction
- employee decisions about staying or leaving the company
- the companies attractiveness to job applicants
Cafeteria Benefit Plans (flexible benefit plans)
Plans that allow employees to choose which benefits they receive, up to a certain dollar value.
Employee Separation
The voluntary or involuntary loss of an employee.
Involuntary separation
occurs when employers decide to terminate or lay off employees.
Voluntary separation
occurs when employees decide to quit or retire.
Wrongful Dismissal
A legal doctrine that requires employers to have a job-related reason to terminate employees.
Downsizing
The planned elimination of jobs in a company.
Downsizing is supposed to lead to:
higher productivity and profits, better stock performance, and increased organizational flexibility. (Many studies demonstrate that it doesn’t)
Outplacement Services
Employment counselling services offered to employees who are losing their jobs because of downsizing.
Early Retirement Incentive Programs (ERIPs)
Programs that offer financial benefits to employees to encourage them to retire early.
Employee Turnover
Loss of employees who voluntarily choose to leave the company.
Functional Turnover
Loss of poor performing employees who voluntarily choose to leave the company.
Dysfunctional Turnover
Loss of high-performing employees who voluntarily choose to leave the company.
