Chapter 5 - Human Resources Flashcards
Recruitment and Selection Process
Core Characteristics - traits that are part of the individual’s genetic makeup or learned very early in life. Difficult/Impossible to change by training.
Skills - Can be learned/changed by everyday activities/training programs.
Motivation - What the individual is willing to do under any circumstances, has nothing to do with ability.
Motivational Theories
Frederick Herzberg’s Hygiene theory
Maslow’s Hierarchy of Needs
Equity Theory
Other Motivating Factors - Recognition
Frederick Herzberg’s Hygiene theory
Hygiene Factors - Organizational policy and rules, the kind of supervision people receive, working conditions, interpersonal relations, salary, status, and security.
Motivational Factors - Opportunities for employees
- to have a sense of achievement;
- to receive managerial recognition of their achievements;
- to perform interesting tasks;
- to advance to higher-level tasks.
Maslow’s Hierarchy of Needs
- Basic Survival Needs (food, clothing, shelter)
- Safety and Security Needs (protection from deprivation, threats)
- Social Needs (sense of belonging)
- Need for Esteem (independence, challenges, recognition)
- Need for Self-Fulfillment or Self-Actualization (realize full potential)
Equity Theory
Process motivational theory useful when managing teams. Employees compare the outcomes received by others in similar positions. If the employee believes his or her rewards are less than those of others who have performed at the same level, he or she will decrease the quality or quantity of work to compensate for the difference.
Other Motivating Factors
Recognition
Know Empolyees - find out their interests
Assess Employees’ Strengths & Weaknessess - Plan employee succession, cross train
Involve Staff - Decisions, views, potential changes, delegate interesting or exciting tasks.
Types of Teams
Formal or Informal
Formal - Marketing Department, Accounting Department
Informal - marketing specialists discussing strategies to cope with a hard/soft market
Creating Teams
Requires skill and sensitivity and balance. Its an art. Share aims, common working language, and ability to manage relationships and tasks.
Financial Incentive Plans
The use of financial incentive plans to reward or compensate employees is often a key component in performance management. Most incentive plans reward employees for high levels of performance and loyalty, which in turn boosts morale and lowers staff turnover.
Equity Ownership Plans Stock Purchase Plans Profit Sharing Plans Employee Benefit Plans Group Insurance Plans Individual Life and Disability Plans Retirement Plans
Equity Ownership Plans
Giving employees “a piece of the action” can create an invigorating business environment, and equity incentives can be used to reduce payroll costs.
Ownership of Book of Business
A more common variant of equity ownership is the option for producers to earn full or part ownership of the business they write. Producer has the option to take the business with him if he leaves the brokerage, or selling back to the brokerage or another brokerage.
Profit Sharing Plans
Under a profit sharing plan, an employer pays selected employees sums based on the profits of the business. Performance bonus. While most frequently seen in the form of an annual bonus if the brokerage meets its objectives throughout the year, the closer to actual performance a cash bonus is paid, the more motivating it is. Monthly payments are generally more effective.
Stock Purchase Plans
Take a variety of forms including phantom, restricted, and direct purchase plans. While stock option plans typically give the employee five years in which to purchase stock at a set price, stock purchase plans must be exercised when granted.
Phantom Plan - allows an employee to benefit from increases in the brokerage’s share price without actually owning stock in the company. Employee is credited with a number of shares at a specified value that can be “sold”.
Restricted Plan - brokerage gives the employee stock, but retains first right of purchase when the employee wishes to sell.
Direct Purchase Plan - allows employees to purchase stock outright with all of the rights, benefits, and tax obligations of any stockholder in any firm.
Employee Benefit Plans
A brokerage may provide its employees with benefits including insurance and retirement plans. Generally speaking, unless allowed by statute, the benefits employees and/or their families receive are taxable as employee income if the employee did not pay for them from taxed earnings.
Group Insurance Plans
Available for as few as two to an unlimited number of employees. These plans usually offer the employee life insurance, payment on accidental death or dismemberment, and small amounts of life insurance for the employee’s spouse and children. May offer assistance with medical services not included in provincial plans and with dental expenses.
Individual Life and Disability Plans
May stand alone or in addition to similar benefits under a group plan. Bearing in mind that employee benefits are taxable as income, it is possible to pass on savings to key employees and their families. One method of doing so is by splitting the premium for a life insurance policy between the brokerage and the employee. If the brokerage is a corporation and taxed at a lower rate than the employee, the resulting savings can be passed on to the employee.
