Human Resources

Module 6

Human Resource Decision Making in Organizations

(Week 12 and 13)

Learning Outcomes:

1. Discuss the role of ethics in human resource decision making

2. Describe the concept of rightsizing and identify organizational strategies for rightsizing

3. Describe how to manage termination and retention

4. Describe the elements of voluntary turnover

5. Discuss the key human resource issues during mergers and acquisitions

Ethics and Human Resource Management

• Ethics: Individual’s beliefs about what is right and wrong and what is good and bad •

Formed by the societal context in which people and organizations function

• May or may not coincide with the law

• Business ethics is complicated in the global environment of business

• Different countries and different cultures have different values and norms

Rightsizing

• Monitoring and adjusting the composition of the organization’s workforce to its optimal
size

• Managing the workforce size involves:

• Layoffs or early-retirement programs

• Retention programs

• Using temporary workers as a bridge between the current state of affairs and growth or
reduction

Dealing with Increased Demand for Employees

• Ethics: Individual’s beliefs about what is right and wrong and what is good and bad •

Formed by the societal context in which people and organizations function

 • May or may not coincide with the law
• Business ethics is complicated in the global environment of business

• Different countries and different cultures have different values and norms

Dealing with Increased Demand for Employees - Employee Leasing

• Paying a fee to a leasing company to provide a pool of employees who are available on a
temporary basis

• Employees are:

• Required to handle most of the organization’s work needs in specific areas

• Temporarily available and cost more

• More likely to be less committed and attached to the fir

Dealing with Increased Demand for Employees - Part-Time Workers

• Individuals who are regularly expected to work less than 40 hours a week

• Usually do not receive benefits

• Provide scheduling flexibility to the organization that hires them

Dealing with a Declining Need for Employees

• Cutting back on the contingent workforce and retaining only permanent members •

Works best in cyclical industries

• Early retirement and natural attrition

• Provide incentives for other employees to retire early

• Plans must be voluntary

• Failure to do so could elicit legal actions

Strategies for Layoffs

• Layoffs lead some employees to:

• Sue the organization for wrongful termination

• React aggressively or violently toward those perceived responsible

• Employee’s perception of the justice involved in the layoff process is a critical

 determinant of his/her reaction
Types of Justice Related to Layoff Reactions

Critical Dimensions of Procedural Justice

Effectiveness of Downsizing
• Most studies suggest that downsizing is an ineffective strategy

• Strategy preferred by stockholders

• Downsizing results in negative effects on stock prices and other financial indexes
• Survivor syndrome

• Existing employees’ morale and commitment drop dramatically

• Alternatives to layoffs may result in job loss

Managing Involuntary Turnover

 • Involuntary turnover: Terminating employees whose services are no longer desired •

Represents a failure in the HR system

• Managers should always start with an effort to rectify the problem before termination •

Employee assistance programs (EAPs)

• Help employees and reduce the costs associated with lost workdays and poor productivity

Progressive Discipline

• Designed to try to improve performance through the use of punishment and discipline •

Progressive disciplinary plans: Severity of punishment increases over time or across the problem •

Steps involved include verbal warnings, written warnings, suspension, and termination

Employment at Will

• Employer can terminate any employee, at any time, for any reason, or for no reason at
all

• Key to successful termination is documentation

• Some firms use positive discipline

• Emphasizes positive changes instead of punishment

Employee Retention

• Ways of reducing the voluntary turnover of desired employees

• HR analytics plays an important role

• Regular employee satisfaction survey and exit interviews provide valuable information
A Model of the Turnover Process
Job Dissatisfaction

• Feelings of being unhappy with one’s job •

Major cause of voluntary turnover

• Increasing job satisfaction is complicated •

Economy and labor market play a role •

Causes

• Nature of work

• Pay and benefits

• Supervisors and co-workers

Effects of Job Dissatisfaction

Measuring and Monitoring Job Satisfaction

• Attitude surveys

• Job descriptive index (JDI) - Assesses satisfaction with specific job aspects

• Usage of instruments that include questions about desired versus experienced levels of
satisfaction

• Example - Faces scale

Retention Strategies

• Job enrichment

• Making work meaningful and giving more autonomy and opportunity to use skills

• Realistic job previews: Pre-employment previews that provide accurate and realistic information
to the job applicant

• Stock options: Rights given to employees to purchase a certain number of shares of stock at a
given price
• Employees are concerned with job security
 • Mergers and acquisition threaten a worker’s self-identity and core beliefs •

HR managers can serve as the center of communication

• Important to build employee identification with the new corporate identity

Key terms

• Discipline

• Distributive justice

• Employee leasing

• Employment at will

• Ethics

• Interactional justice

• Involuntary turnover

• Job dissatisfaction

• Job embeddedness

• Organizational citizenship behaviors (OCBs)

• Organizational commitment

• Overtime

• Part-time workers

• Procedural justice

• Progressive disciplinary plans

• Punishment

• Realistic job previews (RJPs)

• Rightsizing

• Stock options

• Suspension

• Termination
• Verbal warnings
 • Written warnings

Summary

• Ethics refers to an individual’s beliefs about what is right and wrong and what is good and bad •

Workforce size must be adjusted to fit the changing needs of the business

• Mergers and acquisitions cause most stress to employees due to imminent layoffs

Reference: Denisi, A, & Griffin, R (2019). Human Resource Management, 4th edition, Philippines: Cengage
Learning Asia Pte Ltd

Assigned Task:

1. Reflection paper: Focus on the top three things that you learned about the lessons and write an essay
on what did you feel when you learned about these things, when was the first time you learned about it
and how did the lesson change or validate what you know about these topics. Also, explain how you
intend to use this new knowledge. Be specific and widen your perspective in writing your essay.

Guidelines

This is an individual written assignment. Kindly submit a maximum of one-page reflection paper, short
bond paper size. Observe the following guidelines:

1. Put your Name, Student Number, Section, and Date of Submission in the Header

2. Font size: 14 for headings, 12 for content

3. Spacing: single space to 1.5 spacing depending on the length. Limit to one page

4. Font Color: You may choose other dark colors for headings and highlights but use black for
content

5. You may add images if necessary

6. Cite your sources.

7. Submit in this link :

2. Online Quiz: Check your G Classroom for the schedule of the Online Quiz