BUS 101, HKM, North South University CHAPTER 9: HUMAN RESOURCE MANA EMENT, MOT!"AT!

ON, AN# $ABOR%MANA EMENT RE$AT!ONS !NTRO#UCT!ON Most organizations devote considerable attention to human resource management, the function of attracting, developing, and retaining enough qualified employees to perform the activities necessary to accomplish organizational objectives. Human resource managers are responsible for developing specific programs and activities as well as creating a work environment that generates employee satisfaction and efficiency. Relations between employees and firms have changed over the years. oday, fle!ibility and comple!ity characterize the relationship. Managers must develop programs and policies that satisfy an increasingly diverse employee population while monitoring a growing number of employment"related laws. #arger organizations create human resource departments that systemically handle the tasks of attracting, training, and retaining workers. $ growing number of companies are outsourcing human resource management to professional employer organizations %&'(), who help firms with hiring and training employees, administering payroll and benefits programs, handling workers* compensation and unemployment insurance, and ensuring compliance with labor laws. +ecause the &'( typically negotiates benefits for a large number of business clients, it can shop for better deals. hese are especially beneficial for smaller firms. Human resource management can be viewed in two ways. ,n a narrow sense, it includes the functions performed by human resource professionals. +ut in a broader sense, it involves the entire organization, even when a staff department assumes those responsibilities or a firm outsources the functions. Many companies consider workforce diversity to be a source of competitive advantage in serving various customer groups and thinking creatively. he core responsibilities of human resource management include planning for staffing needs, recruitment and selection, training and evaluating performance, compensation and benefits, and employee separation.

HUMAN RESOURCE P$ANN!N Human resource managers develop staffing plans based on the organization*s competitive strategies. hey forecast the number of employees their firm will need and determine the skills necessary t implement its plans. Human resource managers are responsible for adjusting their company*s workforce to meet the requirements of e!panding in new markets. reducing costs, which may require laying off employees. or adapting to new technology. hey formulate both long" and short"term plans to provide the right number of qualified employees. Human resource managers also must plan how to attract and keep good employees with the right combination of pay, benefits, and working conditions. $t rilogy /oftware, this aspect of human resource planning is at the core of the company*s strategy. rilogy develops software that handles information processing related to sales and marketing, an industry in which only fast" moving, highly sophisticated companies can succeed. /o the company has a strategy to continually e!pand its staff of software developers. RECRU!TMENT AN# SE$ECT!ON ,n recruiting and selecting employees, human resource managers strive to match applicants* skills with those the organization needs. /ee fig. 0.1

,dentify 3ob Requirements

4hoose /ources of 4andidates including internet, colleges, referrals, internal promotion

Review $pplications and 45s

,nterview 4andidates

4onduct 'mployment ests and check references

4onduct 6ollow"up ,nterview

/elect a 4andidate and 7egotiate an (ffer 4ompensation and +enefits 3ob &erformance '!pectations $ccommodations for disabilities

&in'in( )u*+i,ie' -*n'i'*tes: Human resource managers must be creative in their search for qualified employees. 6irms access both internal and e!ternal sources to find the best candidates for specific jobs. ,nternal recruiting is less e!pensive than e!ternal methods, and it helps boost employee morale. Many firms are using the internet as a recruiting tool. (nline recruiting has become a common method of finding qualified job candidates. Se+e-tin( *n' Hirin( E./+oyees: Human resource managers must follow the laws in hiring and selection. hese include civil rights laws, anti"discrimination laws and equal opportunities policies. 6ailure to comply with equal employment opportunity legislation can e!pose an employer to fines and other penalties. ,ncreases in protected employees and discrimination lawsuits have elevated the importance of human resource managers in the hiring process. Recruitment and selection are e!pensive processes because a firm incurs costs for advertising job openings, interviewing applicants, and conducting background checks, employment tests, and medical e!ams. $ bad hiring decision is even more e!pensive. OR!ENTAT!ON, TRA!N!N , AN# E"A$UAT!ON (nce hired, employees need information about what is e!pected of them and how well they are performing. 4ompanies provide this information through orientation, training and evaluation. $ newly hired employee often completes an orientation program administered jointly by the human resource department and the department in which the employee will work.

Tr*inin( Pro(r*.s: here are three types of training programs like on"the"job training, computer" based training and management development program. (n"the"job training prepares employees for job duties by allowing them to perform tasks under the guidance of e!perienced employees. 4lassroom and computer"based training is becoming popular. (ff"the"job training frequently involves use of the internet. $ management development program provides training designed to improve the skills and broaden the knowledge of current and potential e!ecutives. he content of management development programs may involve reviews of issues facing the company, as well as benchmarking, or learning the best practices of the best companies so they can serve as performance standards to strive for. Per,or.*n-e A//r*is*+s: $ performance appraisal is an evaluation of an employee*s job performance by comparing actual results with desired outcomes. +ased on this evaluation, managers make objective decisions about compensation, promotions, additional training needs, transfers, or terminations. &erformance appraisals are not confined to business. 8overnment agencies, not"for"profit organizations, and academic institutions also conduct them. COMPENSAT!ON Human resource costs represent a sizeable percentage of any firm*s total product costs, e!cessive wage rates may make its goods and services too e!pensive to compete effectively in the marketplace. ,nadequate wages, however, lead to difficulty in attracting qualified people, high turnover rates, poor morale, and inefficient production. he terms wages and salary are often used interchangeably, but they refer to different types of pay systems. 9ages represent compensation based on an hourly pay rate or the amount of output produced. 6irms pay wages to production employees, maintenance workers, and sometimes retail salespeople. /alaries represent compensation calculated periodically, such as weekly or monthly. (ffice personnel, e!ecutives, and professional employees usually receive salaries. Most firms base their compensation policies on the following five factors: -. /alaries and wages paid by other companies that compete for the same people 2. 8overnment legislation, including the federal, state, or local minimum wage

1. he cost of living ;. he firm*s ability to pay <. 9orker productivity $ living wage is generally defined as one that allows a worker to support a family of four without having to receive any form of public assistance. Many employers balance rewarding workers with maintaining profits by linking more of their pay too superior performance. hey try to motivate employees to e!cel by offering some type of incentive compensation in addition to salaries or wages. hese include the following: profit sharing %bonuses based on company profits) gain sharing %bonuses based on surpassing predetermined performance goals) lump"sum bonuses and stock options %can buy stock in company) pay for knowledge %pay increase as new job tasks mastered) E./+oyee Bene,its: 'mployee benefits are rewards such as retirement plans, health and disability insurance, sick leave, child care and elder care, and tuition reimbursement, provided entirely or in part at the company*s e!pense. (ne increasingly used, but highly controversial, technique involves collecting data about employees* weight, smoking and alcohol consumption rates, e!ercise habits, and medical test results to use as inputs in creating employee wellness programs. 'uropeans, on average, get si! weeks of paid vacation = double or triple what their $merican counterparts receive. $ 1<"hour workweek is commonplace in 8ermany, ,taly and 6rance. 401(k) plans are retirement savings plans for which employees can make pretax contributions to retirement accounts. &+e0i1+e Bene,its: $lso known as cafetaria plans, such a benefit system offers employees a range of options from which they can choose including different types of medical insurance, dental and vision plans, and life and disability insurance. 4ontributions to cafetaria accounts are commonly made by both employees and employers. /ome employers give employees a bank of paid time off %& () = days from which can be used without e!plaining reasons.

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&+e0i1+e 2or3: hese are benefits that allow employees to adjust their working hours and places of work to accommodate personal needs. hese include fle!time, compressed work"weeks, job sharing, and home"based work. his practice is more common in 'urope but growing number of $merican firms are offering fle!time to workers. he compressed workweek is an option that allows employees the ability to work weekly hours in fewer days. 6or e!ample working ; ten"hour days and three days off. $ job sharing program allows two or more employees to divide the tasks of one job. 3ob sharing requires a high degree of cooperation and communication between the partners. $ home"based work program allows employees to perform their jobs from home instead of at the work place. Home"based workers are also known as teleworkers or telecommuters because they >commute* to work via telephones, email, computers and fa! machines. $lmost 1? million teleworkers in @/$ are employed and growing. EMP$O4EE SEPARAT!ON 'ither employer or employee can take the initiative to terminate employment. 'mployees decide to leave firms to start their own business, take jobs with other firms, move to another city, or retire. 'mployers sometime terminate employees because of poor job performance, negative attitudes toward work and coworkers, or misconduct such as dishonesty. (ther reasons for terminating employees include downsizing, outsourcing and contingency workers. #o5nsi6in(: Aownsizing is the process of reducing the number of employees within a firm by eliminating jobs. Many firms have offered early retirements, voluntary severance and internal reassignment to different jobs. 4ompanies downsize for many reasons. he two most common objectives of downsizing are to cut overhead costs and streamline the organizational structure. Aownsizing can lead to increased profits, productivity and better customer service levels. he bad effects of downsizing are lower morale, less job security and more work loads. Outsour-in(: ,n the face of domestic and international competition, many firms are holding down costs by evolving into leaner organizations. $ number of functions that were performed previously by company employees may be contracted to other firms whose employees will perform them in a practice called outsourcing. (utsourcing started on a small scale, with firms contracting out services like

maintenance and delivery. 7owadays, services commonly outsourced include housekeeping, architectural design, and security. oday, outsourcing has e!panded to include outside contracting of many tasks once considered fundamental internal functions. Hewlett"&ackard for e!ample, now outsources the manufacturing of many of the computers it sells. (utsourcing allows firms to focus on what they do best, while hiring other companies to do many non"core tasks. Usin( Contin(ent 5or3ers: 4ontingent workers are employees who work part"time, temporarily, or only the time required to fulfill a specific contract. $mong highly skilled workers, contingent work may be a profitable alternative to traditional employment, as these workers can negotiate contracts that include benefits coverage or secure salaries large enough to cover self"paid benefits. /ome people enjoy the variety and fle!ibility that can accompany contingent work. MOT!"AT!N EMP$O4EES

Morale is the mental attitude of employees toward their employer and jobs. High morale is a sign of a well"managed organization because workers* attitudes toward their jobs affect the quality of their work. &oor morale lurks behind absenteeism, employee turnover, and lower productivity. ,n contrast, high employee morale occurs in organizations where employees feel valued and heard and where they are able to contribute what they do best. High morale also results from an organisation*s understanding of human needs and its success at satisfying those needs in ways that reinforce organizational goals. 'ach person is motivated to take action designed to satisfy needs. (nce the need becomes important enough, it produces tension. he individual is then moved to reduce the tension and return to a condition of equilibrium. /ee 6igure 0.< which show the principle behind this process. he process of motivation:
7eed %produces) Motivation %which leads to) 8oal" directed behaviour 7eed /atisfaction

M*s+o57s hier*r-hy o, nee's theory: &sychologist $braham Maslow studied how companies can motivate employees. He proposed that only unsatisfied needs can influence behaviour, and that there is a hierarchy of needs that need satisfaction. He identified five types of needs:

Physio+o(i-*+ nee's " +asic needs such as food, shelter and clothing. ,n the workplace, employers satisfy these needs by paying salaries and wages and establishing comfortable working environments. S*,ety nee's = refers to physical and economic protection. 'mployers satisfy these needs by providing benefits such as retirement plans, job security, and safe workplaces. So-i*+ 81e+on(in(ness9 nee's = &eople want to be accepted by family and groups. $t work, employees want to maintain good relationships with other workers and managers and to participate in group activities. Estee. nee's = &eople like to receive attention, recognition and appreciation from superiors and coworkers for a good job work. Se+,%*-tu*+is*tion nee's = hese needs drive people to seek fulfillment, realizing their own potential and fully using their talents and capabilities. 'mployers can satisfy these needs by offering challenging and creative work assignments and opportunities for advancement based on individual merit. /ee 6igure 0.B %page 1-;) :o1 #esi(n *n' Motiv*tion: wo ways employers are applying motivational theories to restructure jobs are job enlargement and job enrichment. 3ob enlargement is a job design that e!pands an employee*s responsibilities by increasing the number and variety of tasks they entail. 3ob enrichment is a change in job duties to increase employees* authority in planning their work, deciding how it should be done, and learning new skills that help them grow. M*n*(ers7 Attitu'es *n' Motiv*tion: Maslow*s theory has helped managers to understand that employees feel needs beyond those satisfied by monetary rewards. &sychologist Mc8regor, a student of Maslow, studied motivation from the perspective of how managers view employees. He proposed heory D and heory E. heory D assumes employees dislike work and try to avoid it whenever possible. he result is that managers must force or control workers or punish them to achieve goals. However, heory E assumes that the typical person likes work and learns, under proper conditions, to accept and seek responsibilities to fulfill social,

esteem and self"actualisation needs. heory E emphasizes self"control and self" direction. $nother perspective on management proposed by management professor 9illiam (uchi has been labeled heory G. (rganisations structured on heory G concepts attempt to blend the best of $merican and 3apanese management practices. UN!ON%MANA EMENT RE$AT!ONS oday, the people who head organizations that provide needed goods and services, the people who do the work, and the government organizations that maintain societies make up various industrial relationships that stretch across the globe. #eve+o/.ent o, $*1or Unions: $ labor union is a group of workers who have banded together to achieve common goals in the key areas of wages, hours and working conditions. #abor unions can be found at the local, national and international levels. $lthough only about -?H of workers in the private sector are unionized, over ;?H of government workers belong to unions in the @/. $fter thousands of layoffs during the recent recession, interest in labor unions is growing among white"collar and service workers. $*1or $e(is+*tion: (ver the last hundred years in the @/$, many laws have been enacted that affect labor legislation: 7orris"#a 8uardia $ct -012: Reduced management*s ability to obtain court injunctions to halt union activities. +efore this act, employers could easily obtain decrees = called injunctions = forbidding strikes, peaceful picketing, and even membership drives. 7ational #abor Relations $ct -01< %9agner $ct): legalized collective bargaining and required employers to negotiate with elected representatives of their employes. 'stablished the 7ational #abor Relations +oard %7#R+) to supervise union elections and prohibit unfair labor practices such as firing workers for joining unions. 6air #abor /tandards $ct of -01F: /et the initial federal minimum wage and ma!imum basic workweek for workers employed in industries engaged in interstate commerce. (utlawed child labor.

aft"Hartley $ct -0;C %labor"management relations act): #imited unions* power by prohibiting such practices as coercing employees to join unions. coercing employers to discriminate against employees who are not union members #andrum"8riffin act -0<0: $mended aft"Hartley act to promote honesty and democracy in running union*s internal affairs. Required unions to set up a constitution and bylaws and to hold regularly scheduled elections of union officers by secret ballot. /et forth a bill of rights for members. &lant"closing notification act -0FF: Required employers with more than -?? employes to give workers and local elected officials B? days* warning of a shutdown or mass layoff. 4reated worker readjustment program to assist displaced workers. The -o++e-tive B*r(*inin( Pro-ess: #abor unions work to increase job security for their members and improvement of wages, hours and working conditions. hese goals are achieved primarily through collective bargaining, the process of negotiation between management and union representatives for the purpose of arriving at mutually acceptable wages and working conditions for employees. Sett+in( Union%M*n*(e.ent #is/utes: he courts are the most visible and familiar vehicle for dispute settlement, but most disputes are settled by negotiations. he union contract serves as a guide to relations between the firm*s management and its employees. he rights of each party are stated in the agreement. ,n the event of disagreement, there is a grievance = a complaint by workers that management is violating some part of union contract. Me'i*tion is the process of settling union"management disputes through recommendations of an impartial third party. 9hen disputes cannot be solved voluntarily through mediation, the parties can turn to *r1rit*tion = bringing in an impartial third party who renders a binding decision. Co./etitive t*-ti-s: @nion tactics: he chief tactics of unions are strikes, picketing and boycotts. he strike is one of the most effective tools of the labor union. ,t involves a temporary work stoppage by employees until a dispute has been settled or a contract signed. &icketing is workers marching at the entrances of the employer*s business as a

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public protest against some management practice. $ boycott is an organized attempt to keep the public from purchasing the products of a firm. Management tactics: Management also has tactics for dealing with organized labor. ,n the past it has used the lockout = a management strike to bring pressure on union members by closing the firm. Many companies replace striking workers with strikebreakers = nonunionised workers who cross picket lines to fill the jobs of striking workers. /ome employers have formed employers* associations to cooperate in their efforts and present a united front in dealing with labor unions. E./+oyee%M*n*(e.ent Re+*tions in Nonunion or(*ni6*tions: /ome industries have been slow for organizing workers such as high"tech and electronics and service industries like finance, but interest in organizing labor is growing in these industries. riev*n-e /ro(r*.s ,or nonunion e./+oyees: 9orkers who believe they have suffered discrimination, se!ual harassment, dismissal without cause, or inadequate promotion opportunities can file lawsuits against their employers.

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