*

Chapter Eleven

*
Human
Resource
Management:
Finding and
Keeping the
Best
Employees

McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
 *
SALLY MAINQUIST Profile

Certes Financial Pros

*
• Certes finds financial
professionals to fit
temporary, flexible work
environments.

• Besides receiving
outstanding benefits,
Mainquist’s workers gain a
very broad range of work
experience.

11-2
 *Working with
HUMAN RESOURCE MANAGEMENT People is Just
the Beginning
LG1
*

11-3
 *Working with
HUMAN RESOURCE People is Just
the Beginning
MANAGEMENT (HRM) LG1
*
• Human Resource Management -- The process
of determining human resource needs and then
recruiting, selecting, developing, motivating,
evaluating, compensating and scheduling employees
to achieve organizational goals.

• HRM’s role has grown because:

1. Increased recognition of employees as a
resource.
2. Changes in law that rewrote old workplace
practices.
11-4
 *Developing the
DEVELOPING the FIRM’S Firm’s Ultimate
Resource
ULTIMATE RESOURCE LG1
*
• Service and high-tech manufacturing requires
employees with highly technical job skills.
• Such workers are scarce,
making recruiting and
retention more important and
more difficult.

• The human resource job is

now the job of all managers
in an organization.
11-5
 *The Human
CHALLENGES in FINDING Resource
Challenge
HIGH-LEVEL WORKERS LG1
*
• A shortage of trained workers in key areas
• Worker shortage in skilled trades
• Changes in employee attitudes about work
• A declining economy with fewer full-time jobs
• Expanding global markets with low-wage workers
• Increasing benefit demands and benefit costs
• A decreased sense of employee loyalty
11-6
 *Laws Affecting
CIVIL RIGHTS ACT of 1964 Human Resource
Management

LG2
*
• Title VII prohibits discrimination in hiring, firing,
compensation, apprenticeships, training, terms,
conditions or privileges of employment based on:
- Race
- Religion
- Creed
- Sex
- Age
- National Origin

11-7
 *Laws Affecting
1972 EQUAL EMPLOYMENT Human Resource
Management
OPPORTUNITY ACT (EEOA) LG2
*
• Strengthened the Equal Employment Opportunity
Commission (EEOC).
• Gave EEOC the right to issue workplace
guidelines for acceptable employer conduct.
• EEOC could mandate specific recordkeeping
procedures.
• EEOC was vested with the power of
enforcement.

11-8
 *Laws Affecting
CONTROVERSIAL PROCEDURES Human Resource
Management
of the EEOC LG2
*
• Affirmative Action -- Policy designed to “right past
wrongs” by increasing opportunities for minorities and
women in the workplace.

• Reverse Discrimination -- Discrimination against

whites or males in hiring or promoting.

• This policy has been at the center of many

debates and lawsuits.

11-9
 *Laws Affecting
CIVIL RIGHTS ACT of 1991 Human Resource
Management
and OFCCP LG2
*
• Civil Rights Act of 1991
- Amended Title VII and gave victims of discrimination
the right to a jury trial and possible damages.
• Office of Federal Contract Compliance Programs
(OFCCP)
- Ensures that employers doing business with the
federal government comply with the
nondiscrimination and affirmative action laws.

11-10
 *Laws Protecting

LAWS PROTECTING Employees with

Disabilities and
Older Employees
EMPLOYEES with DISABILITIES LG2
*
• Americans with Disabilities Act of 1990 (ADA)
- Requires employers to give applicants with physical or
mental disabilities the same consideration for employment as
people without disabilities.
- Also requires “reasonable
accommodations” for employees with
disabilities.
- Passage in 2008 of Americans with
Disabilities Amendments Act
expanded protection.

11-11
 *Laws Protecting

AGE DISCRIMINATION in Employees with

Disabilities and
Older Employees
EMPLOYMENT ACT (ADEA) LG2
*
• Age Discrimination in Employment Act (ADEA)
- Protects workers 40 and
over from employment and
workplace discrimination in
hiring, firing, promotion,
layoff, compensation,
benefits, job assignments
and training.

11-12
 *Effects of
MINDING the LAW in HRM Legislation

LG2
*
• Employers must know the law
and act accordingly.
• Legislation affects all areas of
HRM.
• Court cases highlight that
sometimes it’s proper to go
beyond providing equal rights.
• Changes in law and legislation
occur regularly.
11-13
 *Progress
PROGRESS ASSESSMENT Assessment

*
• What’s human resource management?
• What did Title VII of the Civil Rights Act of 1964
achieve?
• What’s the EEOC and what was the intention of
affirmative action?
• What does “accommodations” mean in the
Americans with Disabilities Act of 1990?

11-14
 *
Determining a
HUMAN RESOURCE PLANNING Firm’s Human
Resource Needs
PROCESS LG3
*
• Preparing a human resource
inventory of employees.
• Preparing a job analysis.
• Assessing future human
resource demand.
• Assessing future labor
supply.
• Establishing a strategic plan.
11-15
 * Determining a
WHAT’S a JOB ANALYSIS? Firm’s Human
Resource Needs

LG3
*
• Job Analysis -- A study of what employees who
holds various job titles do.

• Job Description -- Specifies the objectives of the

job, the type of work, the responsibilities and duties,
working conditions and relationship to other jobs.

• Job Specifications -- A summary of the minimal

education and skills needed to do a particular job.

11-16
 *Recruiting

RECRUITING EMPLOYEES Employees from

a Diverse
Population
LG4
*
• Recruitment -- The set of activities for obtaining the
right number of qualified people at the right time.
• Human resource managers use both internal and
external sources to recruit employees.
• Small businesses
often make use of
web sources like
CareerBuilder and
Monster to recruit
employees.
11-17
 *
IT’S NOT EASY BEING SMALL
(Spotlight on Small Business)
*
• To survive, small businesses must recruit and
retain qualified workers.
• Unfortunately, they lack the resources of larger
companies to compete for employees.
• Small businesses need innovations like:
- Letting staff help recruit and select candidates.
- “Test-Drive” an employee.
- Seek out publicity through local media.

11-18
 *
Recruiting

EMPLOYEE SOURCES Employees from

a Diverse
Population
LG4
*

11-19
 * Selecting

SELECTION Employees Who

Will be
Productive
LG5
*
• Selection -- The process of gathering information
and deciding who should be hired, under legal
guidelines, to fit the needs of the organization and
individuals.

11-20
 * Selecting
STEPS in the Employees Who
Will be
SELECTION PROCESS Productive
LG5
*
1. Obtaining complete application forms

2. Conducting initial and follow-up interviews

3. Giving employment tests

4. Conducting background investigations

5. Obtaining results from physical exams

6. Establishing trial (probationary) work periods

11-21
 *
Selecting
Employees Who
OOPS! Will be
Areas Where Job Applicants Make Mistakes Productive
LG5
*

Source: USA Today, www.usatoday.com.

11-22
 *Hiring
HIRING CONTINGENT WORKERS Contingent
Workers
LG5
*
• Contingent Workers -- Include part-time and
temporary workers, seasonal workers, independent
contractors, interns and co-op students.

• There are about 5.7

million contingent
workers in the U.S.

11-23
 *Hiring
WHY HIRE Contingent
Workers
CONTINGENT WORKERS? LG5
*
• Companies hire contingent workers:
- When full-time workers are on leave
- During periods of peak demand
- In uncertain economic times
- To save on employee benefits
- To screen candidates for future employment

11-24
 MOTIVATING TEMPORARY
*
EMPLOYEES
(Making Ethical Decisions) *
• Contingent workers perform well if the promise of
full-time employment is a possibility.

• Highbrow’s has no intention of hiring any

temporary workers full-time.

• But the company feels if they imply two workers

will be hired full time, it may improve employee
performance. What is the ethical thing for them
to do?
11-25
 *Progress
PROGRESS ASSESSMENT Assessment

*
• What are the five steps in human resource
planning?

• What factors make it difficult to recruit qualified

employees?

• What are the six steps in the selection process?

• Who is considered a contingent worker and why

do company hire such workers?

11-26
 * Training and
Developing
TRAINING and DEVELOPING Employees for
Optimum

EMPLOYEES Performance
LG6
*
• Training and Development -- All attempts to
improve productivity by increasing an employee’s
ability to perform.
• Training focuses on short-term skills.
• Development focuses on long-term abilities.

11-27
 * Training and
Developing
THREE STEPS of TRAINING and Employees for
Optimum

DEVELOPMENT Performance
LG6
*
1. Assessing organization needs and employee
skills to develop appropriate training needs.

2. Designing training activities to meet identified

needs.
3. Evaluating the
training’s
effectiveness.

11-28
 * Training and
Developing
MOST COMMONLY USED TRAINING Employees for
Optimum
and DEVELOPMENT ACTIVITIES Performance
LG6
*
• Orientation
• On-the-Job Training
• Apprenticeships
• Off-the-Job Training
• Online Training
• Vestibule Training
• Job Simulation
11-29
 *Management
DEVELOPING EFFECTIVE Development

MANAGERS LG6
*
• Management Development -- The process of
training and educating employees to become good
managers and tracking the progress of their skills
over time.

• Management training includes:

- On-the-job coaching
- Understudy positions
- Job rotation
- Off-the-job courses and training
11-30
 *Management
WHY GOOD EMPLOYEES QUIT Development

LG6
*

Source: Robert Half International

11-31
 *Networking
USING NETWORKS and
MENTORING LG6
*
• Networking -- Establishing and maintaining
contacts with key managers in and out of the
organization and using those contacts to develop
relationships.

• Mentors -- Managers who supervise, coach and

guide selected lower-level employees by acting as
corporate sponsors.

• Networking and mentoring go beyond the work

environment.
11-32
 * Appraising

APPRAISING PERFORMANCE Employee

Performance to Get
Optimum Results
on the JOB LG7
*
• Performance Appraisal -- An evaluation that
measures employee performance against established
standards in order to make decisions about
promotions, compensation, training or termination.

• A 360-degree review
gives managers
opinions from people at
different levels to get a
more accurate idea of
the worker’s ability.
11-33
 *
Appraising

SIX STEPS of PERFORMANCE Employee

Performance to Get
Optimum Results
APPRAISALS LG7
*
1. Establishing performance standards that are
understandable, measurable and reasonable.
2. Clearly communicating those standards.
3. Evaluating performance against the standards.
4. Discussing the results with employees.
5. Taking corrective action.
6. Using the results to make decisions.

11-34
 * Appraising
Employee
MAJOR USES of Performance to Get
Optimum Results
PERFORMANCE APPRAISALS LG7
*
• Identify training needs
• Use as a promotion tool
• Recognize worker’s achievements
• Evaluate the firm’s hiring process
• Judge the effectiveness of the firm’s orientation
process
• Use as a basis for possible termination of a
worker

11-35
 PERFORMANCE APPRAISAL
* Appraising
Employee
Performance to Get

MISTAKES Optimum Results

Common Problems Made While Reviewing Employees LG7

*
• Contrast Effect - Comparing one employee to
another.

• Halo/Horn Effect - Allowing performances in specific

areas to unfairly influence overall performance
evaluation.

• Similar-to-Me Effect - Generosity to those you feel

are more like you.

11-36
 *Progress
PROGRESS ASSESSMENT Assessment

*
• Name and describe four training techniques.

• What’s the primary purpose of a performance

appraisal?

• What are the six steps in a performance

appraisal?

11-37
 * Compensating
Employees:
COMPENSATION PROGRAMS Attracting and
Keeping the Best

LG8
*
• A managed and competitive compensation
program helps:
- Attract the kinds of employees the business needs.
- Build employee incentive to work efficiently and
productively.
- Keep valued employees from going to competitors or
starting their own firm.
- Maintain a competitive market position by keeping costs
low due to high productivity from a satisfied workforce.
- Provide employee financial security through wages and
fringe benefits.
11-38
 *
TYPES of PAY SYSTEMS Pay Systems

LG8
*
• Salary
• Hourly Wage/Day Work
• Piecework System
• Commission Plans
• Bonus Plans
• Profit Sharing Plans
• Gain-Sharing Plans
• Stock Options
11-39
 *
COMPENSATING TEAMS Compensating
Teams

LG8
*
• Team-based pay programs are more challenging
than individual pay systems.
• The two most common methods for teams
involve:
- Skill-Based: Pay is increased as skill increases. (
Eastman Chemical uses this system.)
- Gain-Sharing: Pay is increased as performance
increases. (Nucor Steel uses this system.)

11-40
 *
FRINGE BENEFITS on the JOB Fringe Benefits

LG8
*
• Fringe Benefits -- Sick leave, vacation pay,
pension and health plans that provide additional
compensation to employees beyond base wages.

• In 1929, Fringe benefits accounted for less than

2% of payroll cost. Today it’s about 30%.

• Healthcare has been the

most significant increase
in fringe benefit cost.

11-41
 *
The RANGE of Fringe Benefits

FRINGE BENEFITS LG8

*
• Fringe benefits include incentives like:
- Company cars
- Country club memberships
- Recreation facilities
- Special home mortgage rates
- Paid and unpaid sabbaticals
- Day-care and elder care services
- Dental and eye care
- Legal counseling
- Short or compressed work weeks
11-42
 *
SPECIAL PERKS at Fringe Benefits

DREAMWORKS LG8
*
• Free DVDs and screenings of
current films.
• Free breakfast and lunch plus
dinner when working late.
• Free snack rooms on every
floor.
• Profit sharing.
• Ping-Pong and poker
tournaments during work
hours.
11-43
 *
CAFETERIA-STYLE and Fringe Benefits

SOFT BENEFITS LG8

*
• Cafeteria-Style Fringe Benefits -- Allow
employees to choose the benefits they want (up to a
certain dollar amount).

• Soft Benefits include:

- Onsite haircuts and shoe repair
- Concierge services
- Free meals at work
- Doggie daycare
- Onsite farmer’s markets
11-44
 *
CHANGING TIMES, Fringe Benefits

CHANGING EMPLOYEE BENEFITS LG8

*
Employer
1998 2008
Benefits
Provide Pension
48% 29%
Plans
Offer Wellness
51% 60%
Programs
Retirement Plan
91% 81%
Contribution
Permit Some
Flexible Work 68% 80%
Hours
Source: National Study of Emplyees (2008), Family & Work Institute.
11-45
 *
Fringe Benefits
LET’S GO to the BEACH!
Average Vacation Days by Country
LG8
*

11-46
 *
WORKING WORLDWIDE
(Reaching Beyond Our Borders)
*
• Managers need to understand the business
needs of each country they operate in.
- Compensation: Conversion to foreign currencies and
special allowances often are needed.
- Health and Pension Standards: Benefits are different
country-by-country.
- Paid Time Off: Vacation time, sick and personal leave
vary.
- Taxation: Tax policies vary.
- Communication: Employees can feel disconnected in
other countries.
11-47
 * Scheduling

FLEXIBLE SCHEDULING PLANS Employees to Meet

Organizational and
Employee Needs

LG9
*
• Flextime Plan -- Gives employees some freedom to
choose which hours to work as long as they work the
required number.

• Compressed Work Week -- Employees work the

full number of work hours, but in fewer than the
standard number of days.

• Job Sharing -- Lets two or more part-time

employees share on a full-time job.

11-48
 *
USING FLEXTIME PLANS Flextime Plans

LG9
*
• Most flextime plans require Core Time -- When all
employees are expected to be at their job stations.

• Flextime is hard to incorporate into shift work and

managers have to work longer hours.

• Communication among employees can also be

difficult under flextime and managers have to be
alert to any system abuses.

11-49
 *
A FLEXTIME CHART Flextime Plans

LG9
*

11-50
 *
COMPRESSED WORK WEEKS Flextime Plans

LG9
*
• Employees enjoy long
weekends after working long
days.

• Productivity is a concern.

• Nurses and firefighters often

work compressed work
weeks.

11-51
 *Job Sharing
JOB SHARING BENEFITS Plans

LG9
*
• Provides employment opportunities for many
people who cannot work full time.

• Workers tend to be enthusiastic and productive.

• Absenteeism and tardiness are reduced.

• Employers can schedule part-time workers in

peak demand periods.

11-52
 *Moving
MOVEMENT of EMPLOYEES Employees Up,
Over and Out
LG9
*
• Employees are
promoted or reassigned.

• Employees are
terminated due to
performance or
economic situations.

• Employees retire.

11-53
 *Terminating
TERMINATING EMPLOYEES Employees

• As the economic crisis grew, more and more

LG10
*
employers have had to layoff employees.

• Even when the economy is booming, employers

are hesitant to hire full-time workers because of
the cost of termination.
• Firing employees is more
difficult for employers
because of laws preventing
termination for certain acts.

11-54
 *Progress
PROGRESS ASSESSMENT Assessment

*
• Name and describe five alternative compensation
techniques.

• What advantages do compensation plans such

as profit sharing offer an organization?

• What are the benefits and challenges of flextime?

Telecommuting? Job sharing?

11-55