11 Human Resources Management

Chapter 11
Human Resources Management
Chapter 11, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Eighth Canadian Edition.
Copyright © 2005 Pearson Education Canada Inc. 1
LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter.
• Why Human Resources Is Important

– Explain how an organization’s human resources can be a
significant source of competitive advantage.
– List the eight activities necessary for staffing the
organization and sustaining high employee performance.
• The Human Resources Management Process
– Discuss the environmental factors that most directly
affect the HRM process.
LEARNING OUTLINE (cont’d)
• Human Resources Planning

– Contrast job analysis, job description, and job
specification.
• Staffing the Organization
– Discuss the major sources of potential job candidates.
– Describe the different selection devices and discuss
which ones work best for different jobs.
– Explain what a realistic job preview is and why it’s
important.
• Orientation and Skill Development

– Describe the different types of training and how that training
can be provided.
• Managing and Rewarding Performance
– Describe the different performance appraisal methods.
• Compensation and Benefits
– Discuss the factors that influence employee compensation and
benefits.
– Describe skill-based pay systems.
• Career Development
– Describe career development for today’s employees.
• Current Issues in Human Resources Management
– Explain how managers can manage downsizing.
– Discuss how managers can manage workforce diversity.
– Explain what sexual harassment is and what managers need to
know about it.
– Describe how organizations are dealing with work-life
balances.
The Importance of Human
Resources Management (HRM)
• Necessary part of the organizing function of
management
– Selecting, training, and evaluating the workforce
• An important strategic tool
– HRM helps establish an organization’s sustainable
competitive advantage.
• Adds value to the firm
– High performance work practices lead to both high
individual and high organizational performance.
Exhibit 11.1 Examples of High-
Performance Work Practices
• Self-directed work teams • Implementation of employee
• Job rotation suggestions
• High levels of skills training • Contingent pay based on
performance
• Problem-solving groups
• Coaching and mentoring
• Total quality management
procedures and processes • Significant amounts of
information sharing
• Encouragement of innovative
and creative behaviour • Use of employee attitude surveys
• Extensive employee involvement • Cross-functional integration
and training • Comprehensive employee
Sources: Based on M. Huselid, “The Impact of Human Resource
Management Practices on Turnover, Productivity, and Corporate
recruitment and selection
Financial Performance,” Academy of Management Journal, June 1995,
p. 635; and B. Becker and B. Gerhart, “The Impact of Human Resource
procedures
Management on Organizational Performance: Progress and Prospects,”
Academy of Management Journal, August 1996, p. 785.
Human Resources for Non-HR
Managers
• Small vs. large organizations
– Large organizations have HR function.
– Smaller organizations may rely on managers to
handle HR issues.
• All managers need to be aware of federal and
provincial legislation and company policies.
The HRM Process
• Functions of the HRM Process

– Identifying and selecting competent employees
– Providing employees with up-to-date knowledge
and skills to do their jobs
– Ensuring that the organization retains competent
and high-performing employees
Exhibit 11.2 The Human
Resources Management Process
Environment
Human
Identification and Selection
Resource Recruitment Selection
of Competent Employees
Planning
Decruitment
Adapted and competent

Orientation Training employees with up-to-date
skills and knowledge
Compensation Competent and high-performing employees who

Performance Career are capable of sustaining high performance over
and
Management Development the long term
Benefits
Environment
Environmental Factors Affecting
HRM
• Labour Union
– An organization that represents workers and
seeks to protect their interests through collective
bargaining
• Collective Bargaining Agreement
– A contractual agreement between an organization
and a union, covering:
• Wage, hours, and working conditions
Environmental Factors Affecting
HRM (cont’d)
• Legislation Affecting Workplace Conditions
– Canada Labour Code
– Occupational Health and Safety Act
– Workplace Hazardous Materials Information System
(WHMIS)
– Employment standards legislation
• Antidiscrimination Legislation
– The Charter of Rights and Freedoms and the Canadian
Human Rights Act
– The Employment Equity Act
Managing Human Resources
• Human Resources (HR) Planning

– The process by which managers ensure that they have the
right number and kinds of people in the right places, and
at the right times, who are capable of effectively and
efficiently performing their tasks
– Helps avoid sudden talent shortages and surpluses
– Steps in HR planning:
• Assessing current human resources
• Assessing future needs for human resources and developing a
program to meet those future needs
Current Assessment
• Human Resources Inventory
– A review of the current makeup of the organization’s
resources status
– HR Management Information Systems (HRMIS)
• Tracks employee information for policy and strategic needs
– Job analysis
• An assessment that defines a job and the behaviours necessary
to perform the job:
– Knowledge, skills, and abilities
• Requires conducting interviews, engaging in direct
observation, and collecting the self-reports of employees and
their managers
Current Assessment (cont’d)
• Job Description
– A written statement of what the jobholder does,
how it is done, and why it is done
• Job Specification
– A written statement of the minimum
qualifications that a person must possess to
perform a given job successfully
Exhibit 11.3 Meeting Future
Human Resources Needs
Supply of Employees Demand for Employees
Factors Affecting Staffing

Strategic Goals
Forecast demand for products and services
Availability of knowledge, skills, and abilities
Staffing the Organization
• Recruitment
– The process of locating, identifying, and
attracting capable applicants to an organization
• E-recruiting
– Recruitment of employees through the Internet
• Organizational web sites
• Online recruiters
• Decruitment
– The process of reducing a surplus of employees in
the workforce of an organization
Exhibit 11.4 Major Sources of
Potential Job Candidates
Exhibit 11.5 Decruitment Options
Selection
• Selection Process
– The process of screening job applicants to ensure that the
most appropriate candidates are hired
• Selection
– An exercise in predicting which applicants, if hired, will
be (or will not be) successful in performing well on the
criteria the organization uses to evaluate performance
– Selection errors:
• Reject errors for potentially successful applicants
• Accept errors for ultimately poor performers
Exhibit 11.6 Selection Decision
Outcomes
Selection Decision
Accept Reject
Successful
Correct Reject
Later Job Performance
decision error
Unsuccessful
Accept Correct
error decision
Validity and Reliability
• Validity (of Prediction)

– A proven relationship between the selection device used
and some relevant criterion for successful performance in
an organization
• High test scores equate to high job performance; low scores to
poor performance
• Reliability (of Prediction)
– The degree of consistency with which a selection device
measures the same thing
• Individual test scores obtained with a selection device are
consistent over multiple testing instances
Types of Selection Devices
• Application Forms
• Written Tests
• Performance Simulations
• Interviews
• Background Investigations
• Physical Examinations
Exhibit 11.7
Selection
Devices
Written Tests
• Types of Tests
– Intelligence: how smart are you?
– Aptitude: can you learn to do it?
– Ability: can you do it?
– Interest: do you want to do it?
• Legal Challenges to Tests
– Lack of job-relatedness of test to job requirements
– Discrimination against members of areas protected by the
Employment Equity Act
Performance Simulation Tests
• Testing an applicant’s ability to perform actual

job behaviours, use required skills, and
demonstrate specific knowledge of the job
– Work sampling
• Requiring applicants to actually perform a task or set of
tasks that are central to successful job performance
– Assessment centres
• Dedicated facilities in which job candidates undergo a
series of performance simulation tests to evaluate their
managerial potential
Other Selection Approaches
• Situational Interviews
– Interviews in which candidates are evaluated on how well
they handle role play in mock scenarios
• Background Investigations
– Verification of application data
– Reference checks:
• Lack validity because self-selection of references ensures only
positive outcomes
• Physical Examinations
– Useful for physical requirements
Questions Not to Ask Job
Candidates
• About name changes; maiden name
• For birth certificate, baptismal records, or about age in general
• About pregnancy, child bearing plans, or child care arrangements
• Whether applicant is single, married, divorced, engaged, separated, widowed, or
living common-law
• About birthplace, nationality of ancestors, spouse, or other relatives
• Whether born in Canada
• For photo to be attached to application or sent to interviewer before interview
• About religious affiliation, church membership, frequency of church attendance
• Whether the applicant drinks or uses drugs
• Whether the applicant has ever been convicted
• Whether the applicant has ever been arrested
• Whether the applicant has a criminal record
• About the applicant’s sexual orientation
Sample Questions Taken from Exhibit 11.8

Tips for Managers:
Some Suggestions for Interviewing
• Structure a fixed set of questions for all applicants.
• Have detailed information about the job for which applicants
are interviewing.
• Minimize any prior knowledge of applicants’ background,
experience, interests, test scores, or other characteristics.
• Ask behavioural questions that require applicants to give
detailed accounts of actual job behaviours.
• Use a standardized evaluation form.
• Take notes during the interview.
• Avoid short interviews that encourage premature decision
making.
Source: Based on D.A. DeCenzo and S.P. Robbins, Human
Resource Management, 7th ed. (New York, Wiley: 2002, p. 200)
Exhibit 11.9 Quality of Selection
Devices as Predictors
Other Selection Approaches
(cont’d)
• Realistic Job Preview (RJP)
– The process of relating to an applicant both the
positive and the negative aspects of the job
• Encourages mismatched applicants to withdraw
• Aligns successful applicants’ expectations with actual
job conditions, reducing turnover
Orientation and Skill
Development
• Bringing a new employee into the organization
– Work-unit orientation
• Familiarizes new employee with work-unit goals
• Clarifies how his or her job contributes to unit goals
• Introduces employee to his or her co-workers
– Organization orientation
• Informs new employee about the organization’s
objectives, history, philosophy, procedures, and rules
• Includes a tour of the entire facility
Exhibit 11.10 Types of Training
• Interpersonal skills
• Technical
• Business
• Mandatory
• Performance management
• Problem solving/decision making
• Personal
Exhibit 11.11 Employee Training
Methods
• Traditional • Technology-based
Training Methods Training Methods
– On-the-job – CD-ROM/
DVD/videotapes/
– Job rotation
audiotapes
– Mentoring and coaching – Videoconferencing/
– Experiential exercises teleconferencing/
satellite TV
– Workbooks/manuals
– E-learning or other
– Classroom lectures interactive modules.
Exhibit 11.12a Occupations of
Employees Who Receive Training
100
90
80
70
60
50
40
30
20
10
Professional and managerial white collar occupations
Clerical, sales, and service white collar occupations
Blue collar occupations
Exhibit 11.12b How Employees Train
Themselves
100
90
80
70
60
50
40
30
20
10
Sought advice from someone
Used the Internet or computer software
Observed someone perform a task
Consulted books/manuals/other documents
Taught themselves by trying different methods
Managing and Rewarding
Performance
• Performance Management System
– A process establishing performance standards
and appraising employee performance in order to
arrive at objective HR decisions and to provide
documentation in support of those decisions
Performance Appraisal Methods
• Written Essays
• Critical Incidents
• Graphic Rating Scales
• Behaviourally Anchored Rating Scales
(BARS)
• Multiperson Comparisons
• Management by Objectives (MBO)
• 360-Degree Feedback
Exhibit 11.13 Advantages and
Disadvantages of Performance
Appraisal Methods
Compensation and Benefits
• Benefits of a Fair, Effective, and Appropriate

Compensation System
– Helps attract and retain high-performance employees
– Impacts on the strategic performance of the firm
• Types of Compensation
– Base wage or salary
– Wage and salary add-ons
– Incentive payments
– Skill-based pay
Exhibit 11.14 Factors That Influence
Compensation and Benefits How long has employee
been with company and
how has he or she performed?
How large is the Does job require

company? Employee’s Tenure high levels of skills?
and Performance
How profitable is the Size of Kind of What industry is job in?

company? Company Job Performed
Company Level of Kind of

Profitability Compensation Business
and Benefits
Geographical
Unionization
Location
Where is organization Management Labour- or

located? Is business unionized?
Philosophy Capital-Intensive
What is management’s Is business labour- or

philosophy toward pay? capital-intensive?
Sources: Based on R.I. Henderson, Compensation Management, 6th ed. (Upper Saddle River, NJ: Prentice Hall,
1994), pp. 3–24; and A. Murray, “Mom, Apple Pie, and Small Business,” Wall Street Journal, August 15, 1994, p. A1
Public Sector Vs. Private Sector
• Governments pay about 9% more compared to

private sector.
• Public sector employees: better benefit plans,
likelihood of pension plans
– Public sector pay rates: labour union equity
initiatives
– Private sector pay rates: “market wages”
Career Development
• Career Defined
– A sequence of positions held by a person during his or her
lifetime
• Career Development
– Provides for information, assessment, and training
– Helps attract and retain highly talented people
• Boundaryless Career
– A career in which individuals, not organizations, define
career progression, organizational loyalty, important
skills, and marketplace value
Top 10 Job Factors for College Graduates
(ranked in order of importance)
1. Enjoying what they do
2. Opportunity to use skills and abilities
3. Opportunity for personal development
4. Feeling what they do matters
5. Benefits
6. Recognition for good performance
7. Friendly co-workers
8. Job location
9. Lots of money
10. Working on teams Source: Based on V. Frazee.
“What’s Important to College Grads
in Their First Jobs?” Personnel
Journal, July 1996, p. 21.
Tips for
Managers:
Some
Suggestions for
a Successful
Management
Career
Contemporary HRM Issues
• Managing Downsizing
– The planned elimination of jobs in an
organization
• Provide open and honest communication
• Reassure survivors
Contemporary HRM Issues (cont’d)
• Managing Workforce Diversity

– Recruitment for diversity
– Selection without discrimination
– Orientation and training that is
effective
(cont’d)
• Sexual Harassment
– An unwanted activity of a sexual nature that affects an
individual’s employment
• The Supreme Court of Canada definition: Unwelcome
behaviour of a sexual nature in the workplace that negatively
affects the work environment or leads to adverse job-related
consequences for the employee
• There continues to be disagreement as to what specifically
constitutes sexual harassment.
– An offensive or hostile environment
• An environment in which a person is affected by elements of a
sexual nature
(cont’d)
• Work-Life Balance
– Employees have personal lives that they don’t leave
behind when they come to work.
– Organizations have become more attuned to their
employees by offering family-friendly benefits:
• On-site child care
• Summer day camps
• Flextime
• Job sharing
• Leave for personal matters
• Flexible job hours

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Chapter 11

Human Resources Management

• Why Human Resources Is Important

• Human Resources Planning

• Orientation and Skill Development

• Functions of the HRM Process

Adapted and competent

Compensation Competent and high-performing employees who

• Human Resources (HR) Planning

Factors Affecting Staffing

• Validity (of Prediction)

• Testing an applicant’s ability to perform actual

Sample Questions Taken from Exhibit 11.8

Professional and managerial white collar occupations

Clerical, sales, and service white collar occupations

Blue collar occupations

Sought advice from someone

Used the Internet or computer software

Observed someone perform a task

Consulted books/manuals/other documents

Taught themselves by trying different methods

• Benefits of a Fair, Effective, and Appropriate

How large is the Does job require

How profitable is the Size of Kind of What industry is job in?

Company Level of Kind of

Where is organization Management Labour- or

What is management’s Is business labour- or

• Governments pay about 9% more compared to

• Managing Workforce Diversity

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