Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Contemporary Management by Waddell, Devine, Jones & George By John Dugas 9-1 Chapter 9 Managing

Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Contemporary Management by Waddell, Devine, Jones & GeorgeBy John Dugas

9-1

Chapter 9

Managing human resources


9-2

Learning objectivesAfter studying the chapter, you should be able to:• Explain why strategic human resource management

can help an organisation gain a competitive advantage• Describe the steps managers take when determining

organisational needs, including planning, recruiting and selecting organisational members

• Discuss the role of managers in developing staff for performance through training and development options that ensure organisational members can effectively perform their jobs


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Learning objectives (cont.)

• Explain why performance appraisal and feedback is such a crucial activity, and list the choices managers must make in designing effective performance appraisal and feedback procedures

• Explain the issues managers face in maintaining worker effectiveness when determining elements such as wages and conditions, occupational health and safety and career development


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Strategic human resource management• Human Resource Management (HRM)

– Activities that managers engage in to attract and retain employees and to ensure that they perform at a high level and contribute to the accomplishment of organisational goals

• HRM activities– Planning, recruitment and selection– Training, development, performance appraisal and feedback– Wages and conditions, industrial relations, occupational

health and safety, career development and managing change


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Strategic human resource management (cont.)• The process by which managers design the

components of a human resource system to be consistent with each other, with other elements of organisational structure and with the organisation’s strategy and goals

• The objective of strategic HRM is the development of an HRM system that enhances the organisation’s efficiency, quality, innovation and responsiveness to customers


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Components of a human resource management system

Each component of an HRM system influences the others and all must fit together

Recruitment& selection

Industrial relations

Wages &conditions

Training &development

Performance appraisal &

feedback


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HRM components• Recruitment and selection

– Developing a pool of qualified applicants– Determining relative qualifications of applicants and their potential for a job

• Training and development– Developing, on an ongoing basis, employees’ abilities and skills as necessitated by changes

in technology and the competitive environment

• Performance appraisal and feedback– Providing information about how to train, motivate and reward workers such that managers

can evaluate and then give feedback to enhance worker performance


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HRM components (cont.)• Wages and conditions

– Rewarding high-performing employees with raises, bonuses and recognition

Increased pay provides additional incentive Benefits and conditions, such as health insurance, reward membership in firm

• Industrial relations– Creating and maintaining effective working relationships with unions that

represent workers Unions seek to participate, through collective bargaining, in the determination of

pay rates and the setting of workingconditions


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The legal environment of HRM

• Equal Employment Opportunity (EEO)– The equal right of all citizens to the opportunity to obtain

employment regardless of their gender, age, race, country of origin, religion or disabilities

– Commonwealth and State legislation covers employment laws and includes Age Discrimination Act 2004, Disability Discrimination Act 1992, Occupational Health and Safety (Commonwealth Employment) Act 1991

– Australian Human Rights and Equal Opportunity Commission (HREOC) enforces most EEO laws and handles complaints

Management of diversity is crucial Managers must take steps to ensure discrimination does not occur


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Human resource planning (HRP)

• Activities that managers engage in to forecast their current and future needs for human resources

• HRP must be done prior to recruitment and selection• Demand forecasts

– Estimates of the number and qualifications of employees the firm will need

• Supply forecasts– Estimates of the availability and qualifications of current workers

and those in the labour market


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Human resource planning: outsourcing• Using outside suppliers and manufacturers to produce

goods and services• Using contract workers rather than hiring them

– Outsourcing is more flexible for the firm– Outsourcing provides human capital at a lower cost

• Problems with outsourcing– Loss of control over output; outsource contractors are not

committed to the firm– Unions are against outsourcing that has the potential to eliminate

members’ jobs


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Job analysis• The process of identifying tasks, duties and

responsibilities that make up a job (job description)– Knowledge, skills and abilities needed to perform the job (job

specifications)

• Needs to be done for each position in the organisation• Methods

– Observing what current workers do– Having workers and managers fill out questionnaires


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Recruitment and selection

• Recruitment– Activities that managers engage in to develop a pool of

candidates for open positions• Selection

– The process that managers use to determine the relative qualifications of job applicants and their potential for performing well in a particular job


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The recruitment and selection system


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Recruitment

• External recruiting– Seeking outside the firm for people who have not worked

at the firm previously Newspapers advertisements, open houses, on-

campus recruiting, employee referrals, and through the Internet

– External recruitment is difficult since many new jobs have specific skill needs.

A multi-prong approach to external recruiting works best


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Recruitment (cont.)

• Internal recruiting– Seeking to fill open positions with current employees from

within the firm– Benefits of internal recruiting

Job candidates, their qualifications and availability are already known

Current employees know the firm’s culture and are familiar with the organisation

Internal advancement (promotion from within) can serve to motivate employees


9-17

Honesty in hiring

• The temptation to overrate and oversell the attractiveness of the job and firm

– Managers may feel that if they are honest, an applicant may not be willing to work there

Research indicates this is a poor strategy

• Realistic job preview– Providing an honest assessment of the advantages and

disadvantages of a job and organisation Avoids hiring, training and then losing an employee

because as applicants, they misperceived the job before agreeing to come to work


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Selection tools


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The selection process

• Determining an applicant’s qualifications related to the job requirements

– Background information Education, prior employment and study emphasis

– Interviews Structured interviews where managers ask each applicant

the same job-related questions Unstructured interviews that resemble normal conversations Usually structured interviews preferred; bias is possible in

unstructured interviews


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The selection process (cont.)


– Paper-and-pencil tests Ability tests assess if applicants have the right skills for the

job Personality tests seek to determine if applicants possess

traits relevant to job performance

– Physical ability tests Measures of dexterity, strength and stamina for physically

demanding jobs Measures must be job-related to avoid discrimination


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The selection process (cont.)


– Aptitude or performance tests Tests that measure an applicant’s current ability to perform

the job or part of the job such as requiring an applicant to take a typing speed test

Assessment centres are facilities where managerial candidates are assessed on job-related activities over a period of a few days

– References Obtaining relevant information can be difficult to due to legal

liability and privacy issues


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Reliability and validity• Selection tools must be reliable and valid.

– Reliability is the degree to which the tool measures the same thing each time it is used

Example: scores should be similar for the same person taking the same test over time

– Validity is the degree to which the test measures what it is supposed to measure

Example: how well a physical ability test predicts the job performance of a firefighter


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Training and development: developing people for performance

• Training– Teaching organisational members how to perform current

jobs and helping them to acquire the knowledge and skills they need to be effective performers

• Development– Building the knowledge and skills of organisational

members to enable them to take on new duties and challenges


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Training and development

• Needs assessment– An assessment of which employees need training or

development and what type of skills or knowledge they need to acquire


9-25

Training and development (cont.)


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Types of training

• Classroom instruction– Employees acquire skills in a classroom setting

Includes use of videos, role-playing and simulations

• On-the-job training– Employee learning occurs in the work setting as new

worker does the job Training is given by coworkers and can be done continuously

to update the skills of current employees


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Types of development

• Varied work experiences– Top managers have need and must build expertise in

many areas Employees identified as possible top managers are assigned

different tasks and a variety of positions in an organisation

• Formal education– Tuition reimbursement is common for managers taking

classes for an MBA or job-related degrees and diplomas Flexible learning can also be used to reduce travel and suit

time-challenged managers, e.g. Internet and print-based learning that has no or minimal attendance requirements


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Performance appraisal and feedback• Performance appraisal

– The evaluation of employees’ job performance and contributions to their organisation

• Performance feedback– The process through which managers share performance

appraisal information, give subordinates an opportunity to reflect on their own performance and develop, with subordinates, plans for the future


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Performance appraisal cycle


9-30

Who appraises performance?


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Who appraises performance? (cont.)

• Self– Self appraisals can supplement manager view

• Peer appraisal– Coworkers provide appraisal; common in team settings

• 360-degree– A performance appraisal by peers, subordinates,

superiors and clients who are in a position to evaluate a manager’s performance


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360-degree performance appraisals

• Used to improve motivation and performance• Variety of people involved including peers,

subordinates, supervisors, clients• Multiple sources of information• Has potential problems • Trust is critical to the process• Anonymity helpful• Can be used for self-development activities rather

than pay/reward decisions


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Effective performance feedback

• Formal appraisals– An appraisal conducted at a set time during the year and

based on performance dimensions that were specified in advance

• Informal appraisals– An unscheduled appraisal of ongoing progress and areas

for improvement


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Effective feedback tips

• Be specific and focus on correctable behaviour. Provide a suggested improvement

• Focus on problem-solving and improvement, not criticism

• Express confidence in worker’s ability to improve• Use both formal and informal feedback• Treat subordinates with respect and praise

achievements• Set a timetable for agreed changes


9-35

Performance appraisal and feedback• Trait appraisals

– Assessing subordinates on personal characteristics that are relevant to job performance

– Disadvantages of trait appraisals Employees with a particular trait may choose not to use that

particular trait on the job Traits and performance are not always obviously linked It is difficult to give feedback on traits


9-36

Performance appraisal and feedback (cont.)• Behaviour appraisals

– Assesses how workers perform their jobs—the actual actions and behaviours that they exhibit on the job

– Focuses on what a worker does right and wrong and provides good feedback for employees to change their behaviours

• Results appraisals– Assesses what a worker accomplishes or the results they

obtain from performing their jobs


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Performance appraisal and feedback (cont.)• Objective appraisals

– Assesses performance based on facts (e.g. sales figures)

• Subjective appraisals– Assessments based on a manager’s perceptions of traits,

behaviour or results Graphic rating scales Behaviourally anchored rating scales (BARS) Behaviour observation scales (BOS) Forced ranking systems


9-38

Subject measures of performance: graphic rating scale


9-39

Subject measures of performance:behaviourally anchored rating scale


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Subject measures of performance:behavioural observation scale


9-41

Wages, conditions and the role of industrial relations

• Pay level– The relative position of an organisation’s incentives in

comparison with those of other firms in the same industry employing similar kinds of workers

Managers can decide to offer low, average or high relative wages

High wages attract and retain high performers but raise costs; low wages can cause turnover and lack of motivation but provide lower costs

How employees are paid has a profound effect on motivation Wages include base salaries, pay rises and bonuses


9-42

Wages and conditions

• Managers use different kinds of pay plans to help an organisationachieve its goals and gain as well as maintain a competitiveadvantage.


9-43

Move from centrally based industry awards to Australian Workplace Agreements

• Reforms from 1993

• Dramatic federal industrial relations (IR) changes from 2005 with enterprise-level agreements instead of award-based agreements

• Certified (collective agreements) or Australian Workplace Agreements (AWAs) are only two options

• Work Choices legislation seals arrangements in 2005

• Awards replaced with Australian Fair Pay and Conditions standard


9-44

Occupational health and safety• Regulated by government legislation• Ensures a safe and healthy work environment• Injury and deaths in the workplace exceed road toll• Managers have a moral obligation• Lost time also a significant cost• Working in a safe environment is a right• Common hazards include manual lifting, chemicals,

noise, repetitive movements


9-45

Career development

• Opportunity to advance is highly motivational• Should be a lifelong, organisationally supported

endeavour; however, many employees are mobile in turbulent, changing times

• Career development is critical to equip staff with necessary knowledge, skills and understandings to work in ever-changing environments


9-46

Career development (cont.)

• Workforce and career-planning initiatives are being driven by the ageing workforce and altering attitudes to work–life balance issues

• Career planning provides tangible benefits for individuals and organisations, and managers should be proactive here


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Summary

• Strategic HRM activities work towards attracting, retaining and effectively using human resources

• HR needs have to be planned for with forecasts and job analysis

• Recruiting creates a pool of candidates that are then selected in the selection phase

• Training and development enhances performance for current and future tasks


9-48

Summary (cont.)• Performance appraisal evaluates employee’s job

performance and contribution to the organisation

• Feedback shares performance information, allows for reflection and generation of plans for further learning experiences benefiting individuals and firm

• Performance feedback encourages higher levels of motivation

• Wages and benefits are some tools used to attract and keep employees with levels based on job importance, employee skills and benchmarks


9-49

Summary (cont.)

• Industrial relations (IR) strive for effective working relationships with unions that represent employee interests

• Recent federal government legislation has altered the IR landscape dramatically since 2005 with the introduction of Certified Agreements or Australian Workplace Agreements

Documents

Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Contemporary Management by Waddell, Devine, Jones & George By John Dugas 9-1 Chapter 9 Managing