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Managing Human Resources and Diversity • 209
CHAPTER 9
CHAPTER OUTLINE
Are You Ready to Be a Manager?
I. The Strategic Role of HRM is to Drive Organizational Performance
A. The Strategic Approach
B. Building Human Capital to Drive Performance
V. Managing Talent
A. Training and Development
B. Performance Appraisal
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
210 • Chapter 9
The term human resource management (HRM) refers to activities undertaken to attract an
effective workforce, develop the workforce to its potential, and maintain the workforce over the
long term. These goals take place within the larger organizational environment including
competitive strategy, federal legislation, and societal trends. The organization’s competitive
strategy may include mergers and acquisitions, downsizing to increase efficiency, international
operations, or the acquisition of automated production technology. These strategic decisions
determine the demand for skills and employees. The human resource strategy, in turn, must
include the correct employee makeup to implement the organization’s strategy.
2. Explain what the changing social contract between organizations and employees means for
workers and human resource managers.
Not since the advent of mass production and modern organizations has a redefinition of work
and career been so profound. Under the emerging social contract, each person must take care of
herself or himself. Particularly in learning organizations, everyone is expected to be a self-
motivated worker who has excellent interpersonal relationships and is continuously acquiring
new skills. Employees take more responsibility and control in their jobs, becoming partners in
business improvement rather than cogs in a machine. Organizations provide challenging work
assignments as well as information and resources to enable workers to continuously learn new
skills. HRM departments can help organizations develop a mix of training, career development
opportunities, compensation packages, and rewards and incentives. They can provide career
information and assessment, combined with career coaching to help employees determine new
career directions.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Managing Human Resources and Diversity • 211
3. Show how organizations determine their future staffing needs through human resource
planning.
Human resource planning is the forecasting of human resource needs and the projected matching
of individuals with expected vacancies. Human resource planning begins with several questions:
What new technologies are emerging, and how will these affect the work system? What is the
volume of the business likely to be in the next five to ten years? What is the turnover rate, and
how much, if any, is avoidable? By anticipating future HRM needs, the organization can prepare
itself to meet competitive challenges more effectively than organizations that react to problems
only as they arise.
5. Understand the pervasive demographic changes occurring in the domestic and global
marketplace and how corporations are responding.
The importance of cultural diversity and employee attitudes that welcome cultural differences
will result from the inevitable changes taking place in the workplace, in our society, and in the
economic environment. These changes include globalization and the changing workforce. In the
past, the United States was a place where people of different national origins, ethnicities, races,
and religions came together and blended to resemble one another. Opportunities for
advancement were limited to those workers who fit easily into the mainstream of the larger
culture. Now organizations recognize that everyone is not the same and that the differences
people bring to the workplace are valuable. Companies are learning that these differences enable
them to compete globally and to acquire rich sources of new talent. Most organizations must
undertake conscious efforts to shift from a monoculture perspective to one of pluralism.
Management activities required for a culturally diverse workforce starts with top managers who
can help shape organizational values and employee mindsets about cultural differences. In
addition training programs can promote knowledge and acceptance of diverse cultures and
educate managers on valuing the differences.
6. Recognize the complex attitudes, opinions, and issues that employees bring to the workplace,
including prejudice, discrimination, stereotypes, and ethnocentrism.
Prejudice is the tendency to view people who are different as being deficient. Discrimination
occurs when people act out their prejudicial attitudes toward other people who are targets of their
prejudice. Although blatant discrimination is not as widespread as in the past, bias in the
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
212 • Chapter 9
workplace often shows up in subtle ways. A stereotype is a rigid, exaggerated, irrational belief
associated with a particular group of people. To be successful managing diversity, managers
need to eliminate harmful stereotypes from their thinking, shedding any biases that negatively
affect the workplace.
Stereotype threat describes the psychological experience of a person who, usually engaged in a
task, is aware of a stereotype about his or her identity group suggesting that he or she will not
perform well on that task. People most affected by stereotype threat are those we consider as
disadvantaged in the workplace due to negative stereotypes–racial and ethnic minorities,
members of lower socioeconomic classes, women, older people, gay and bisexual men, and
people with disabilities.
Ethnocentrism is the belief that one’s own group and subculture are inherently superior to other
groups and cultures, thus making it difficult to value diversity. The business world tends to
reflect values, behaviors, and assumptions based on the experiences of a homogeneous, white,
middle-class, male workforce. Most management theories presume workers share similar values,
beliefs, motivations, and attitudes about work and life in general.
7. Recognize the factors that affect women’s opportunities, including the glass ceiling, the opt-
out trend, and the female advantage.
The glass ceiling is an invisible barrier that separates women and minorities from top
management positions. They can look up through the ceiling and see top management, but
prevailing attitudes and stereotypes are invisible obstacles to their own advancement. Women
and minorities are often excluded from informal manager networks and don’t get access to the
type of general and line management experience required for moving to the top. Glass walls
serve as invisible barriers to important lateral movement within the organization.
Many women choose to get off the fast track long before they hit the glass ceiling. In this opt-
out trend, highly-educated, professional women are deciding that corporate success isn’t worth
the price in terms of reduced family and personal time. Some are opting out to be stay-at-home
moms, while others want to continue working, but just not in the kind of fast-paced, competitive,
aggressive environment that exists in most corporations. Critics argue that this is just another
way to blame women themselves for the dearth of female managers at higher levels.
Some people think women might actually be better managers, partly because of a more
collaborative, less hierarchical, relationship-oriented approach that is in tune with today’s global
and multicultural environment. As attitudes and values change with changing generations, the
qualities women seem to possess may lead to a gradual role reversal in organizations. Women of
all races and ethnic groups are outpacing men in earning bachelor’s and master’s degrees. Over
all, women’s participation in both the labor force and civic affairs has steadily increased since
the mid-1950s, while men’s participation has slowly but steadily declined.
A successful diversity plan leads to a workforce that demonstrates cultural competence in the
long run. Cultural competence is the ability to interact effectively with people of different
cultures. There are five steps to implementing a diversity plan.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Managing Human Resources and Diversity • 213
• Uncover diversity problems in the organization. Organizations can’t assess their progress
toward cultural competence without first investigating where the culture is right now. A
cultural audit is a tool that identifies problems or areas needing improvement in a
corporation’s culture.
• Demand results and revisit the goals. Diversity performance should be measured by
numerical goals to ensure solutions are being implemented successfully.
• Maintain momentum to change the culture. Use success in the previous four steps as fuel
to move forward and leverage for more progress.
LECTURE OUTLINE
This questionnaire helps students determine their understanding of human resources practices
and attitudes toward diversity.
INTRODUCTION
The term human resource management (HRM) refers to the design and application of formal
systems in an organization to ensure the effective and efficient use of human talent to accomplish
organizational goals. Over the past decade, human resource management has shed its old
“personnel” image and gained recognition as a vital player in corporate strategy. Increasingly,
large corporations are outsourcing routine HR administrative activities, freeing HRM staff from
time consuming paperwork and enabling them to take on more strategic responsibilities. Human
resources tops Gartner Inc.’s list of the most commonly outsourced business activities. All
managers need to be skilled in the basics of human resource management. Flatter organizations
often require that managers throughout the organization play an active role in recruiting and
selecting the right employees, developing effective training programs, or creating appropriate
performance appraisal systems. HRM professionals act to guide and assist line managers in
managing human resources to achieve the organization’s strategic goals.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
214 • Chapter 9
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3. HRM is a matching process, integrating the organization’s strategy and goals with the
correct approach to managing the firm’s human resources.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Managing Human Resources and Diversity • 215
As new managers, students must learn to get the right people into their organizations. Most new
managers are shocked at the large amount of time, effort, and skill required to recruit, place, and
retain the right people. The right people can make an organization great; the wrong people can
be catastrophic. This exercise helps students better understand their ability to get the right
people in their organizations.
1. Human capital refers to the economic value of the combined knowledge, experience,
skills, and capabilities of employees. To build human capital, HRM develops
strategies for finding the best talent, enhancing their skills and knowledge with
training programs and opportunities for personal and professional development, and
providing compensation and benefits that support the sharing of knowledge and
appropriately reward people for their contributions to the organization.
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
216 • Chapter 9
Several federal laws have been passed to insure equal employment opportunity (EEO). The
purpose of these laws is to stop discriminatory practices that are unfair to specific groups and
define enforcement agencies for these laws. EEO legislation attempts to balance the pay given to
men and women and provide employment opportunities without regard to race, religion, national
origin, sex, age, or disability. The Civil Rights Act of 1964 created the Equal Employment
Opportunity Commission (EEOC), the major agency involved with employment discrimination.
Discrimination occurs when some applicants are hired or promoted based on criteria that are not
job relevant. When discrimination is found, remedies include back pay and affirmative action.
Affirmative action requires an employer to take positive steps to guarantee equal employment
opportunities for people within protected groups. Failure to comply with equal employment
opportunity legislation can result in substantial fines and penalties for employers.
One issue of concern is sexual harassment, which is a violation of Title VII of the Civil Rights
Act. The EEOC guidelines specify that behavior such as unwelcome advances, requests for
sexual favors, and other verbal and physical conduct of a sexual nature becomes sexual
harassment when submission to the conduct is tied to continued employment or advancement, or
when the behavior creates an intimidating, hostile, or offensive work environment.
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1. In the old social contract, the employee contributed ability, education, loyalty, and
commitment in return for the company providing wages and benefits, work,
advancement, and training.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Managing Human Resources and Diversity • 217
The HR department typically is responsible for monitoring compliance with federal laws, and it
provides detailed and specific employee procedures and records for an organization. Every new
manager is involved in HR activities for his or her direct reports. This exercise helps students
understand their orientations concerning day-to-day work issues.
2. The new social contract is based on the concept of employability rather than lifetime
employment.
a. Individuals manage their own careers; the organization no longer takes care of
them or guarantees them employment.
b. Employees take more responsibility and control in their jobs, becoming partners
in business improvement rather than cogs in a machine.
3. Many employees are not prepared for new levels of cooperation or responsibility on
the job.
Imagine getting a minimum-wage job at Walmart, and a temporary one at that. It is the day after
Thanksgiving, often the heaviest retail day of the year. You are standing, ready to greet all the
enthusiastic customers. Instead, you get trampled to death. This happened to Jdimytai Damour
at a Walmart on Long Island in 2008. Walmart spent $2 million fighting OSHA’s $7,000 fine,
causing federal employees to spend more than 4,700 hours in legal work. In March 2011, Judge
Covette Rooney upheld the fine. Why did Walmart fight the fine? They said that OSHA wanted
to define “crowd trampling” as an occupational hazard retailers are responsible to prevent.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
218 • Chapter 9
B. Innovations in HRM
a. Contingent workers are becoming a larger part of the workforce both in the
United States and Europe. Contingent workers are people who work for an
organization, but not on a permanent or full-time basis. They do everything from
data entry to becoming the interim CEO.
b. The temporary staffing industry doubled between 2002 and 2007 and is projected
to grow into a $200 billion industry by 2010. Many companies depend on part-
time or temporary employees to maintain flexibility.
c. Work-life initiatives have become a critical retention strategy with benefits such
as on-site gym facilities, arranging child- and eldercare, and paid leaves.
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Managing Human Resources and Diversity • 219
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The first goal of HRM is to attract individuals who show signs of becoming valued, productive,
and satisfied employees. The first step in attracting a workforce is planning, predicting the need
for new employees based on the types of vacancies that exist. The second step is to
communicate with potential applicants. The third step is to select those with the best potential.
Finally, the new employee is welcomed to the organization.
In the matching model, the organization and the individual attempt to match the needs, interests,
and values they offer each other. The idea is that people can fulfill deep-seated needs and
interests on the job, which will induce them to stay with the organization.
1. Human resource planning is the forecasting of human resource needs and the
projected matching of individuals with expected job vacancies. Human resource
planning begins with several questions.
a. What new technologies are emerging, and how will these affect the work system?
B. Recruiting
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
220 • Chapter 9
2. Assessing Jobs
b. A job description is a clear and concise summary of the specific tasks, duties,
and responsibilities of a job.
a. A realistic job preview (RJP) gives applicants all pertinent and realistic
information, positive and negative, about the job and the organization.
4. Legal Considerations
a. EEO laws require that recruiting and hiring decisions cannot discriminate on the
basis of race, national origin, religion, and gender.
b. The Americans with Disabilities Act underscored the need for job descriptions
and specifications that reflect the job’s mental and physical specifications to
prevent discrimination against people with disabilities.
5. E-cruiting
6. Innovations in Recruiting
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Managing Human Resources and Diversity • 221
C. Selecting
2. The application form collects information about the applicant’s education, previous
job experience, and other background characteristics.
3. The interview serves as a two-way communication channel that allows both the
organization and the applicant to collect information that would otherwise be difficult
to obtain. Employers cannot ask questions that violate EEO guidelines. The
interview is not generally a good predictor of job performance.
Exhibit 9.8: Employment Applications and Interviews: What Can You Ask?
Understanding common blunders that tick off interviewers can make you more successful as
both a job candidate and an interviewer. According to CareerBuilder.com, most interview
blunders fall into five key categories:
Communication skills. Managers often cite poor communication skills, such as inappropriate
body language, talking too much or too little, not making eye contact, or using profanity or
street slang.
Performance. Professionalism during the interview plays an important part in the hiring decision
for most managers.
Attitude. People who show arrogance and disrespect toward the interviewer are a huge turn-off.
Appearance. In most cases, people should wear traditional, professional attire for an interview.
Proper grooming, cleanliness, and good manners are also essential.
Honesty. Candidates who lie or give the impression that they are dishonest don’t get a callback.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
222 • Chapter 9
6. Online checks. One of the newest ways of gauging whether a candidate is right for
the company is by seeing what the person has to say about him- or herself on social
networking sites such as Facebook and MySpace. Recruiters say that if an applicant’s
online presentation raises red flags, then the person isn’t likely to even get an
interview.
V. MANAGING TALENT
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Managing Human Resources and Diversity • 223
directing, instructing, and training a person with the goal to develop specific
management skills.
B. Performance Appraisal
a. Performance appraisal can reward high performers with merit pay, recognition,
and other rewards. Recent thinking is that linking performance appraisal to
rewards has unintended consequences, and that it should be ongoing rather than
once a year.
a. The appraisal system should require the rater to assess each relevant performance
dimension.
b. The 360-degree feedback is a process that uses multiple raters, including self-
rating, as a way to increase self-awareness of strengths and weaknesses and guide
employee development.
b. Halo effect refers to giving an employee the same rating on all dimensions of the
job even if performance is good on some dimensions and not good on others.
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
224 • Chapter 9
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A. Compensation
1. Compensation refers to all monetary payments and all goods or commodities used in
lieu of money to reward employees. An effective compensation system is for human
resource management because it helps attract and retain talented workers and affects
strategic performance.
Discussion Question #5: As a manager, how would you draw up a telecommuting contract with
a new employee? Include considerations such as job description, compensation and benefits,
performance measures, training, and grounds for dismissal.
3. Compensation Equity
b. Wage and salary surveys show what other organizations pay in jobs that match a
sample of “key” jobs selected by the organization.
b. Incentives are aligned with the behaviors that help the organization achieve its
strategic goals.
B. Benefits
1. Benefits make up 40 percent of labor costs in the U.S. because of rising health care
costs. Some benefits are required by law such as Social Security, unemployment
compensation, and worker’s compensation. Some firms offer cafeteria-plan benefit
packages that allow employees to select the benefits of greatest value to them.
2. The goal is to make the company stronger and more competitive by aligning the size
of the workforce with the company’s current needs.
3. Unless HRM departments carefully manage downsizing, layoffs can lead to decreased
morale and performance.
D. Termination
b. Managers can use exit interviews, conducted with departing employees, to learn
about dissatisfaction in the organization.
Discussion Question #6: What purpose do exit interviews serve for maintaining an effective
workforce?
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
226 • Chapter 9
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A. Managers are learning that the differences people bring to the workplace enable their
companies to compete globally and tap into rich sources of new talent. Moreover, vast
changes are occurring in today’s workplace and consumer base. The average worker is
older now, and many more women, people of color, and immigrants are seeking job and
advancement opportunities.
Trying to entice more Hispanic viewers in the United States, CNN’s Spanish-language branch is
adding new programs, new sets, a spiffy new studio in Miami, and a new logo. Though CNN en
Español boasts that it broadcasts from “Alaska to Patagonia,” the new focus will help North
American operations. Some estimates show the Latin population doubling again by mid-century.
New programs include a personal investment show called “CNN Dinero,” a light-night
“Conclusiones” with a news wrap-up, and three hours of news in the morning.
2. Aging workers. In 1986, the median age of the U.S. labor force was 35.4 years. It
increased to 40.8 years in 2006 and will increase to 42.1 years in 2016.
3. Growth in Hispanic and Asian workers. The number of Hispanics in the workforce
will increase by 7.3 million between 2008 and 2018, with Hispanics making up 17.6
percent of the workforce by 2018.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Managing Human Resources and Diversity • 227
1. For organizations operating globally, social and cultural differences may create more
difficulties and conflicts than any other sources. Foreign firms doing business in the
United States also face challenges understanding and dealing with diversity issues.
National cultures are intangible, pervasive, and difficult to comprehend. Many
companies have taken this challenge seriously and have experienced growth in the
global marketplace.
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A. What is Diversity?
1. Diversity is defined as all the ways in which employees differ. Many companies
once defined diversity in terms of race, age, gender, lifestyle, and disability. Today,
companies are embracing a more inclusive definition of diversity that recognizes a
spectrum of differences that influence how employees approach work, interact with
each other, derive satisfaction from their work, and define who they are as people in
the workplace.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
228 • Chapter 9
a. Better use of employee talent. Companies with the best talent are the ones with
the best competitive advantage.
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1. Prejudice is the tendency to view people who are different as being deficient.
Discrimination occurs when people act out their prejudicial attitudes toward other
people who are targets of their prejudice. Although blatant discrimination is not as
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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