7-1McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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Learning ObjectivesL01: HRM & Competitive advantageL02: Recruitment - internal and externalL03: Selection methods L04: Training and developmentL05: Appraisal methods L06: Reward systemsL07: Unions and labor laws

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Strategic Human Resources Management1. People create value

2. Talent is rare

3. A group of well-chosen, motivated people is difficult to imitate

4. People can be organized for success

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The puzzle of HR Attracting talent Maintaining a well-trained, highly motivated and

loyal workforce Managing diversity Devising effective compensation systems Managing layoffs Containing health care and pension costs

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HR Planning Process

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Job Analysis Tools for determining what is done on a given job

and what should be done on that job1. Job description describes job itself

essential tasks, duties, and responsibilities involved in performing job

2. Job specification prescribes skills, knowledge, abilities, and other characteristics

needed to perform job

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Staffing the Organization Recruitment

development of a pool of applicants for jobs in an organization

Selection choosing from among qualified applicants to hire into

an organization Outplacement

process of helping people who have been dismissed from the company to regain employment elsewhere

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Advantages & Disadvantages of Internal RecruitmentKnowledge of company

and employeesEmployee motivationOutsiders may

demoralize employees

• Limited applicant pool• Inhibits company

changes – cultures, goals, etc.

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External RecruitmentBrings in new bloodCan inspire motivationSources

Internet job boards, company Web sites, employee referrals, newspaper advertisements and college campus recruiting

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Selection InstrumentsApplications and resumesInterviewsReference checksBackground checksPersonality testsDrug testingCognitive ability testsPerformance testsIntegrity tests

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Interviews1. Structured interviews

Interviewer asks all applicants the same questions and compares responses to standardized set of answers

Types Situational (hypothetical) Behavioral (SAR)

2. Unstructured interviews interviewer asks different interviewees different

questions

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Hiring Checks ReferenceContact references or former employers and

educational institutions

BackgroundSSN verification, past employment/ education

verification, criminal records and credit checksInternet searches (e.g. Google, MySpace,

Facebook)

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Termination MethodsDownsizing laying off large numbers of managerial and other

employees Termination

dismissal of employees for poor performance or other reasons

Employment-at-will legal concept that an employee may be terminated

for any reason Termination interview

discussion between a manager and an employee about the employee’s dismissal.

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Termination Interview Do’s-Give as much warning as

possible for mass layoffs-Sit down one on one with

the individual, in a private office

-Complete a termination session within 15 minutes

-Be sure the employee hears about his or her termination from a manager, not a colleague

Don’ts-Leave room for confusion

when firing-Allow time for debate

during a termination session

-Make personal comments when firing someone

-Rush a fired employees offsite unless security is an issue

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Training and DevelopmentTraining

Teaching lower-level employees how to perform their present jobs.

Developmentteaching managers and professional employees broad

skills needed for their present and future jobs.

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Types of Training Orientation

familiarizes new employees with their jobs, work units, and organization in general

Team training teaches employees skills they need to work together

and helps them interactDiversity training

identifying and reducing hidden biases against people with differences and developing skills needed to manage a diversified workforce

Management training improving managers’ people skills

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Performance AppraisalAssessment of employee’s job performanceAdministrativeprovides managers with information to make

salary, promotion, and dismissal decisionshelps employees understand and accept basis

of those decisionsDevelopmental identify and plan training, experience, or other

improvement that employees require

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Types of Performance AppraisalsTrait appraisal

involves judgments about employee performance traits such as initiative, leadership and attitude

Behavioral appraisalfocuses on observable aspects of performance

Results appraisalfocuses on quantitative data such as sales volume,

units produced or profits

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Guidelines for Performance AppraisalsBase performance standards on job analysisCommunicate performance standards to

employeesEvaluate employees on specific performance-

related behaviors rather than on a single global or overall measure

Document the performance appraisal process carefully

Use more than one raterTake legal considerations into account

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Who should do the appraisal?Managers and supervisorsPeers and team membersSubordinatesInternal and external customersSelf appraisals

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Designing Reward SystemsEffective reward systems take into account:

OrganizationPositionIndividual

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Pay Plan Factors Internal

organization’s compensation policy, worth of each job, employee’s relative worth, and employer’s ability to pay

Externalconditions of labor market, area wage rates, cost of

living, use of collective bargaining (union negotiations) and legal requirements

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Employee Incentives Individual incentive plan

Compares worker’s performance against objective standard, with pay determined by employee’s performance.

Group incentive planpay is based on group performance.

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Group Incentive PlansGainsharing plans

reward employees for increasing productivity or saving money in areas under their direct control.

Profit-sharing plansimplemented in division or organization although some

incentives may be tailored to unit performanceMerit pay systems

pay raises and bonuses are based on the merit rating received from their boss

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CEO Pay ControversyCEOs earned 500 times the average worker’s payMedian salary of $2.5 million for CEOs of companies

in the Standard and Poor’s stock indexStock options are the fastest-growing part of

executive compensation

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What do You think?Are CEOs paid too much? Why? Why not?

Should CEOs be given stock options as part of their compensation package? Why? Why not?

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Employee BenefitsBenefits required by law

Worker’s CompensationSocial SecurityUnemployment

insurance

Optional benefits

- Pension plans- Medical insurance- Hospital insurance

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Legal Requirements of Pay SystemsEqual Pay Act of 1963

prohibits unequal pay for men and women who perform equal work.

Pregnancy Discrimination Act of 1978 Pregnancy is a disability and qualifies a woman to

receive the same benefits that she would with any other disability

Employment Income Security Act of 1974protects private pension programs from

mismanagement.

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What is OSHA?Occupational Safety and Health Act of 1970

Requires employers to pursue workplace safetyEmployers must maintain records of injuries and

deaths caused by workplace accidents and submit to on-site inspection

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Labor RelationsThe system of relations between workers and

managementLabor unions established to ensure that

employees are treated fairly with respect to wages, working condition, and other issues

National Labor Relations Act – declared labor organizations legal, established five unfair employer labor practices, and creating the National Labor Relations Board (NLRB)

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Other Labor Relations LawsLabor-Management Relations Act protected

employersLabor-Management Reporting and Disclosure

Act established a Bill of Rights for union members, control over dues increases, and imposed reporting requirements for unions.

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Four factors play a significant role1. Economic factors

2. Job dissatisfaction

3. Belief that the union has power to obtain desired benefits can generate a pro-union vote

4. The image of the union

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Collective Bargaining AgreementsSecurity clauseWage componentIndividual rightsGrievance procedure

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Review Slides

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Values for HR Leaders1. Strategic

2. Ethical

3. Legal

4. Financial

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YOU should be able toL01: Discuss how companies use human resources

management to gain competitive advantageL02: Give reasons why companies recruit both

internally and externally for new hiresL03: Identify various methods for selecting new

employees

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YOU should be able toL04: Evaluate the importance of spending on

training and developmentL05: Explain alternatives for who appraises an

employee’s performanceL06: Describe the fundamental aspects of a reward

system.L07: Summarize how unions and labor laws

influence human resources management

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Practice and apply your knowledge by going online at

www.mhhe.com/batemanM

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Test Your Knowledge

Which of these methods has been found to be the way most job positions get filled?

A) Want ads

B) Employee referrals

C) Private employment agencies

D) Unions

E) None of the above.

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Test Your Knowledge

Hammond University requires all applicants to their Masters of Business Administration Program to take the G.M.A.T. exam. This exam measures the test taker's aptitude for management by measuring things like verbal comprehension, mathematical calculations, and other necessary management skills. This type of test is classified as a(n): A) personality test. B) performance test. C) integrity test. D) cognitive ability test. E) none of the above.

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Test Your Knowledge

Companies invest in training to enhance individual performance and organizational productivity. Which of the following is NOT a typical training exercise? A) Orientation training B) Team training C) Personality training D) Diversity training E) All of the above

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Test Your Knowledge

Explain the alternatives for who should appraise an employee’s performance.

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Test Your Knowledge

Describe the fundamental aspects of a reward system

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Test Your Knowledge

Summarize how unions and labor laws influence human resources managementWhat are the major labor laws that influence

human resources management?How do unions influence human resources

management?