*

Chapter Eleven

*
Human Resource Management: Finding and Keeping the Best Employees
McGraw-Hill/Irwin Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

*
SALLY MAINQUIST
Certes Financial Pros
Profile

Certes finds financial professionals to fit temporary, flexible work environments.

Besides receiving outstanding benefits, Mainquists workers gain a very broad range of work experience.
11-2

HUMAN RESOURCE MANAGEMENT People is Just

the Beginning LG1

*Working with

11-3

HUMAN RESOURCE MANAGEMENT (HRM)

*Working with
People is Just the Beginning LG1

Human Resource Management -- The process

of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational goals.

HRMs role has grown because:

1. Increased recognition of employees as a resource. 2. Changes in law that rewrote old workplace practices.
11-4

DEVELOPING the FIRMS ULTIMATE RESOURCE

*Developing the
Firms Ultimate Resource LG1

Service and high-tech manufacturing requires employees with highly technical job skills. Such workers are scarce, making recruiting and retention more important and more difficult.

The human resource job is now the job of all managers in an organization.
11-5

CHALLENGES in FINDING HIGH-LEVEL WORKERS

*The Human
Resource Challenge LG1

A shortage of trained workers in key areas

Worker shortage in skilled trades Changes in employee attitudes about work A declining economy with fewer full-time jobs Expanding global markets with low-wage workers Increasing benefit demands and benefit costs A decreased sense of employee loyalty
11-6

*
CIVIL RIGHTS ACT of 1964

Laws Affecting Human Resource Management

LG2

Title VII prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions or privileges of employment based on:
Race Religion Creed Sex Age National Origin

11-7

1972 EQUAL EMPLOYMENT OPPORTUNITY ACT (EEOA)

Laws Affecting Human Resource Management

LG2

Strengthened the Equal Employment Opportunity Commission (EEOC). Gave EEOC the right to issue workplace guidelines for acceptable employer conduct. EEOC could mandate specific recordkeeping procedures.

EEOC was vested with the power of enforcement.

11-8

CONTROVERSIAL PROCEDURES of the EEOC

Laws Affecting Human Resource Management

LG2

Affirmative Action -- Policy designed to right past

wrongs by increasing opportunities for minorities and women in the workplace.

Reverse Discrimination -- Discrimination against

whites or males in hiring or promoting.

This policy has been at the center of many debates and lawsuits.

11-9

CIVIL RIGHTS ACT of 1991 and OFCCP

Civil Rights Act of 1991

Laws Affecting Human Resource Management

LG2

- Amended Title VII and gave victims of discrimination the right to a jury trial and possible damages.

Office of Federal Contract Compliance Programs (OFCCP)

- Ensures that employers doing business with the federal government comply with the nondiscrimination and affirmative action laws.

11-10

LAWS PROTECTING EMPLOYEES with DISABILITIES

Laws Protecting Employees with Disabilities and Older Employees

LG2

Americans with Disabilities Act of 1990 (ADA)

- Requires employers to give applicants with physical or mental disabilities the same consideration for employment as people without disabilities. - Also requires reasonable accommodations for employees with disabilities.

- Passage in 2008 of Americans with Disabilities Amendments Act expanded protection.

11-11

AGE DISCRIMINATION in EMPLOYMENT ACT (ADEA)

Laws Protecting Employees with Disabilities and Older Employees

LG2

Age Discrimination in Employment Act (ADEA)

- Protects workers 40 and over from employment and workplace discrimination in hiring, firing, promotion, layoff, compensation, benefits, job assignments and training.

11-12

*
MINDING the LAW in HRM
Employers must know the law and act accordingly.
Legislation affects all areas of HRM. Court cases highlight that sometimes its proper to go beyond providing equal rights. Changes in law and legislation occur regularly.

Effects of Legislation LG2

11-13

*
PROGRESS ASSESSMENT
Whats human resource management?

Progress Assessment

*
What did Title VII of the Civil Rights Act of 1964 achieve?

Whats the EEOC and what was the intention of affirmative action?
What does accommodations mean in the Americans with Disabilities Act of 1990?

11-14

*
HUMAN RESOURCE PLANNING PROCESS
Preparing a human resource inventory of employees. Preparing a job analysis. Assessing future human resource demand.

Determining a Firms Human Resource Needs

LG3

Assessing future labor supply.

Establishing a strategic plan.
11-15

WHATS a JOB ANALYSIS?

Determining a Firms Human Resource Needs

LG3

Job Analysis -- A study of what employees who

holds various job titles do.

Job Description -- Specifies the objectives of the

job, the type of work, the responsibilities and duties, working conditions and relationship to other jobs.

Job Specifications -- A summary of the minimal

education and skills needed to do a particular job.

11-16

*
RECRUITING EMPLOYEES

Recruiting Employees from a Diverse Population

LG4

Recruitment -- The set of activities for obtaining the

right number of qualified people at the right time.

Human resource managers use both internal and external sources to recruit employees. Small businesses often make use of web sources like CareerBuilder and Monster to recruit employees.
11-17

*
ITS NOT EASY BEING SMALL
(Spotlight on Small Business)

To survive, small businesses must recruit and retain qualified workers. Unfortunately, they lack the resources of larger companies to compete for employees. Small businesses need innovations like:
- Letting staff help recruit and select candidates. - Test-Drive an employee. - Seek out publicity through local media.
11-18

*
EMPLOYEE SOURCES

Recruiting Employees from a Diverse Population

LG4

11-19

*
SELECTION

Selecting Employees Who Will be Productive

LG5

Selection -- The process of gathering information

and deciding who should be hired, under legal guidelines, to fit the needs of the organization and individuals.

11-20

STEPS in the SELECTION PROCESS

1. Obtaining complete application forms

Selecting Employees Who Will be Productive

LG5

2. Conducting initial and follow-up interviews 3. Giving employment tests 4. Conducting background investigations 5. Obtaining results from physical exams 6. Establishing trial (probationary) work periods
11-21

*
OOPS!
Areas Where Job Applicants Make Mistakes

Selecting Employees Who Will be Productive

LG5

Source: USA Today, www.usatoday.com.

11-22

*Hiring
HIRING CONTINGENT WORKERS
Contingent Workers LG5

Contingent Workers -- Include part-time and

temporary workers, seasonal workers, independent contractors, interns and co-op students.

There are about 5.7 million contingent workers in the U.S.

11-23

WHY HIRE CONTINGENT WORKERS?

Companies hire contingent workers:
- When full-time workers are on leave

*Hiring
Contingent Workers LG5

- During periods of peak demand

- In uncertain economic times - To save on employee benefits

- To screen candidates for future employment

11-24

MOTIVATING TEMPORARY EMPLOYEES

(Making Ethical Decisions)

* *

Contingent workers perform well if the promise of full-time employment is a possibility.

Highbrows has no intention of hiring any temporary workers full-time. But the company feels if they imply two workers will be hired full time, it may improve employee performance. What is the ethical thing for them to do?
11-25

*
PROGRESS ASSESSMENT
What are the five steps in human resource planning?

Progress Assessment

What factors make it difficult to recruit qualified employees? What are the six steps in the selection process?

Who is considered a contingent worker and why do company hire such workers?
11-26

TRAINING and DEVELOPING EMPLOYEES

Training and Developing Employees for Optimum Performance

LG6

Training and Development -- All attempts to

improve productivity by increasing an employees ability to perform.

Training focuses on short-term skills.

Development focuses on long-term abilities.

11-27

THREE STEPS of TRAINING and DEVELOPMENT

Training and Developing Employees for Optimum Performance

LG6

1. Assessing organization needs and employee skills to develop appropriate training needs. 2. Designing training activities to meet identified needs.

3. Evaluating the trainings effectiveness.

11-28

*
MOST COMMONLY USED TRAINING and DEVELOPMENT ACTIVITIES
Orientation On-the-Job Training Apprenticeships Off-the-Job Training Online Training Vestibule Training Job Simulation

Training and Developing Employees for Optimum Performance

LG6

11-29

DEVELOPING EFFECTIVE MANAGERS

*Management
Development LG6

Management Development -- The process of

training and educating employees to become good managers and tracking the progress of their skills over time.

Management training includes:

- On-the-job coaching - Understudy positions - Job rotation - Off-the-job courses and training
11-30

WHY GOOD EMPLOYEES QUIT

*Management
Development LG6

Source: Robert Half International

11-31

USING NETWORKS and MENTORING

*Networking
LG6

Networking -- Establishing and maintaining

contacts with key managers in and out of the organization and using those contacts to develop relationships.

Mentors -- Managers who supervise, coach and

guide selected lower-level employees by acting as corporate sponsors.

Networking and mentoring go beyond the work environment.

11-32

APPRAISING PERFORMANCE on the JOB

Appraising Employee Performance to Get Optimum Results

LG7

Performance Appraisal -- An evaluation that

measures employee performance against established standards in order to make decisions about promotions, compensation, training or termination.

A 360-degree review gives managers opinions from people at different levels to get a more accurate idea of the workers ability.
11-33

SIX STEPS of PERFORMANCE APPRAISALS

Appraising Employee Performance to Get Optimum Results

LG7

1. Establishing performance standards that are understandable, measurable and reasonable. 2. Clearly communicating those standards.

3. Evaluating performance against the standards.

4. Discussing the results with employees.

5. Taking corrective action.

6. Using the results to make decisions.
11-34

*
MAJOR USES of PERFORMANCE APPRAISALS
Identify training needs

Appraising Employee Performance to Get Optimum Results

LG7

Use as a promotion tool

Recognize workers achievements Evaluate the firms hiring process Judge the effectiveness of the firms orientation process Use as a basis for possible termination of a worker
11-35

* PERFORMANCE APPRAISAL
MISTAKES
Common Problems Made While Reviewing Employees

Appraising Employee Performance to Get Optimum Results

LG7

Contrast Effect - Comparing one employee to

another.

Halo/Horn Effect - Allowing performances in specific

areas to unfairly influence overall performance evaluation.

Similar-to-Me Effect - Generosity to those you feel

are more like you.

11-36

*
PROGRESS ASSESSMENT

Progress Assessment

*
Name and describe four training techniques. Whats the primary purpose of a performance appraisal? What are the six steps in a performance appraisal?

11-37

*
COMPENSATION PROGRAMS
A managed and competitive compensation program helps:

Compensating Employees: Attracting and Keeping the Best

LG8

- Attract the kinds of employees the business needs. - Build employee incentive to work efficiently and productively. - Keep valued employees from going to competitors or starting their own firm.

- Maintain a competitive market position by keeping costs low due to high productivity from a satisfied workforce.
- Provide employee financial security through wages and fringe benefits.
11-38

*
TYPES of PAY SYSTEMS
Salary Hourly Wage/Day Work Piecework System
Pay Systems LG8

Commission Plans
Bonus Plans Profit Sharing Plans Gain-Sharing Plans Stock Options
11-39

*
COMPENSATING TEAMS
Compensating Teams LG8

Team-based pay programs are more challenging than individual pay systems.
The two most common methods for teams involve:
- Skill-Based: Pay is increased as skill increases.
(Eastman Chemical uses this system.)

- Gain-Sharing: Pay is increased as performance increases. (Nucor Steel uses this system.)

11-40

*
FRINGE BENEFITS on the JOB
Fringe Benefits -- Sick leave, vacation pay,
pension and health plans that provide additional compensation to employees beyond base wages.
Fringe Benefits LG8

In 1929, Fringe benefits accounted for less than 2% of payroll cost. Today its about 30%.
Healthcare has been the most significant increase in fringe benefit cost.
11-41

The RANGE of FRINGE BENEFITS

Fringe benefits include incentives like:
- Company cars - Country club memberships

*
Fringe Benefits LG8

- Recreation facilities
- Special home mortgage rates - Paid and unpaid sabbaticals

- Day-care and elder care services

- Dental and eye care - Legal counseling - Short or compressed work weeks
11-42

*
SPECIAL PERKS at DREAMWORKS
Free DVDs and screenings of current films.
Free breakfast and lunch plus dinner when working late. Free snack rooms on every floor.
Fringe Benefits LG8

Profit sharing.
Ping-Pong and poker tournaments during work hours.
11-43

CAFETERIA-STYLE and SOFT BENEFITS

Cafeteria-Style Fringe Benefits -- Allow

*
Fringe Benefits LG8

employees to choose the benefits they want (up to a certain dollar amount).

Soft Benefits include:

- Onsite haircuts and shoe repair - Concierge services

- Free meals at work

- Doggie daycare - Onsite farmers markets
11-44

*
Fringe Benefits CHANGING TIMES, CHANGING EMPLOYEE BENEFITS LG8

Employer Benefits
Provide Pension Plans

1998
48%

2008
29%

Offer Wellness Programs

Retirement Plan Contribution

51%
91% 68%

60%
81% 80%

Permit Some Flexible Work Hours

Source: National Study of Emplyees (2008), Family & Work Institute.

11-45

LETS GO to the BEACH!

Average Vacation Days by Country

*
Fringe Benefits LG8

11-46

*
WORKING WORLDWIDE
(Reaching Beyond Our Borders)

Managers need to understand the business needs of each country they operate in.
- Compensation: Conversion to foreign currencies and special allowances often are needed.

- Health and Pension Standards: Benefits are different country-by-country.

- Paid Time Off: Vacation time, sick and personal leave vary. - Taxation: Tax policies vary. - Communication: Employees can feel disconnected in other countries.
11-47

*
FLEXIBLE SCHEDULING PLANS

Scheduling Employees to Meet Organizational and Employee Needs

LG9

Flextime Plan -- Gives employees some freedom to

choose which hours to work as long as they work the required number.

Compressed Work Week -- Employees work the

full number of work hours, but in fewer than the standard number of days.

Job Sharing -- Lets two or more part-time

employees share on a full-time job.
11-48

*
USING FLEXTIME PLANS
Flextime Plans LG9

Most flextime plans require Core Time -- When all

employees are expected to be at their job stations.

Flextime is hard to incorporate into shift work and managers have to work longer hours.
Communication among employees can also be difficult under flextime and managers have to be alert to any system abuses.

11-49

*
A FLEXTIME CHART
Flextime Plans LG9

11-50

*
COMPRESSED WORK WEEKS
Flextime Plans LG9

Employees enjoy long weekends after working long days. Productivity is a concern.

Nurses and firefighters often work compressed work weeks.

11-51

*
JOB SHARING BENEFITS

Job Sharing Plans

LG9

Provides employment opportunities for many people who cannot work full time.

Workers tend to be enthusiastic and productive.

Absenteeism and tardiness are reduced.

Employers can schedule part-time workers in peak demand periods.

11-52

MOVEMENT of EMPLOYEES
Employees are promoted or reassigned.

*Moving
Employees Up, Over and Out LG9

Employees are terminated due to performance or economic situations.

Employees retire.

11-53

TERMINATING EMPLOYEES

*Terminating
Employees LG10

As the economic crisis grew, more and more employers have had to layoff employees. Even when the economy is booming, employers are hesitant to hire full-time workers because of the cost of termination. Firing employees is more difficult for employers because of laws preventing termination for certain acts.

11-54

*
PROGRESS ASSESSMENT

Progress Assessment

*
Name and describe five alternative compensation techniques.

What advantages do compensation plans such as profit sharing offer an organization? What are the benefits and challenges of flextime? Telecommuting? Job sharing?

11-55