MANAGING HUMAN

RESOURCES

12

12 - 1
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 LEARNING OBJECTIVES
1. Explain the importance of the human resource
management process and the external influences that
might affect that process.
2. Discuss the tasks associated with identifying and
selecting competent employees.
 Know how to be a good interviewee.
 Develop your skill at being a good interviewer.
3. Explain the different types of orientation and training.
4. Describe strategies for retaining competent, high-performing
employees.
5. Discuss contemporary issues in managing human resources.

12 - 2
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 MANAGING HUMAN RESOURCES

 With the organization’s structure in place, managers have to find people

to fill the jobs that have been created or to remove people from jobs if
business circumstances require.
 It’s an important task of human resource management (HRM) that
involves having the right number of the right people in the right place at
the right time.
 A major HRM challenge for managers is ensuring that their company
has a high-quality workforce.
 Because getting and keeping competent and talented employees is
critical to the success of every organization
 If an organization doesn’t take its HRM responsibilities seriously,
performance may suffer.
 All managers engage in some HRM activities such as interviewing job
candidates, orienting new employees, and evaluating their employees
'work performance, even if there is a separate HRM department.
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N ,
INC.
 WHY IS HRM IMPORTANT?
HRM IS IMPORTANT FOR THREE REASONS.

 As a significant source of competitive

advantage:
– People-oriented HR creates superior shareholder
value
• As an important strategic tool
– Achieve competitive success through people by
treating employees an/as asset/partners
• To improve organizational performance
– High performance work practices lead to both high
individual and high organizational performance

12 - 3
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 WHY IS HRM IMPORTANT? (CONT.)
 High – performance work practices – work practices
that lead to both high individual and high organizational
performance.

12 - 4
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 EXHIBIT 12-1
HIGH-PERFORMANCE WORK PRACTICES

12 - 5
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 HRM PROCESS

12 - 6
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 EXTERNAL FACTORS THAT AFFECT THE HRM PROCESS

FACTORS INFLUENCING HRM PROCESS INCLUDES THE ECONOMY,

EMPLOYEE LABOR UNIONS, GOVERNMENTAL LAWS AND
REGULATIONS, AND DEMOGRAPHIC TRENDS.
 The Economy's Effect on HRM
– During economic downturn, among different negative
impact massive unemployment is one of the major peril.
– Many of permanent jobs turn into temporary or contract
positions, rather than full-time jobs with benefits.
– Employees in many industry end up with reduced work
hours, which affected their pay and their skill upgrades.
– Many workers have dramatically lowered their career
and retirement expectations for the foreseeable future.

12 - 7
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 EXTERNAL FACTORS THAT AFFECT
THE HRM PROCESS (CONT.)
Employee Labor Unions
–Labor union – an organization that represents workers and seeks to
protect their interests through collective bargaining.

–In unionized organizations, many HRM decisions are dictated by

collective bargaining agreements, such as recruitment sources; criteria
for hiring, promotions, and layoffs; training eligibility; and
disciplinary practices

–Work stops, labor disputes, and negotiations between management

and labor are just a few of the challenges organizations and managers
face when their workforce is unionized
12 - 8
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 EXTERNAL FACTORS THAT AFFECT
THE HRM PROCESS (CONT.)
 Legal Environment of HRM
An organization’s HRM practices are governed by a
country’s laws. Managers must know what they can and
cannot do by law.
– Many U.S. organizations have Affirmative action
programs –to ensure the status of members of protected
groups. That is, an organization refrains from discrimination.
– Two current U.S. laws that each have the potential to affect
future HRM practices:
• Protection and Affordable Care Act (PPACA; commonly
called the Health Care Reform Act)
• Social Networking Online Protection Act (SNOPA)

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 9
 EXHIBIT 12-3
MAJOR HRM LAWS

12 - 10
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 EXHIBIT 12-3
MAJOR HRM LAWS (CONT.)

12 - 11
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 EXHIBIT 12-3
MAJOR HRM LAWS (CONT.)

12 - 12
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 GLOBAL HRM LAWS
• Managers from other countries must know the
specific laws of the host countries.
two most common forms of representative
participation:
• Work councils – groups of nominated or
elected employees must be consulted when
management makes decisions involving
personnel.
• Board representatives – employees who sit on
a company’s board of directors and represent
the interests of the firm’s employees.
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 13
 EXTERNAL FACTORS THAT AFFECT THE
HRM PROCESS (CONT.)
 Demographic Trends in USA
– The oldest, most experienced workers (those born
before 1946) make up 6 percent of the workforce.
– The baby boomers (those born between 1946 and
1964) make up 41.5 percent of the workforce.
– Gen Xers (those born 1965 to 1977) make up almost
29 percent of the workforce.
– Gen Yers (those born 1978 to 1994) make up almost
24 percent of the workforce.
– Gen Z (born after 1994) are now entering work field

12 - 14
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 HUMAN RESOURCE PLANNING
 Human resource planning – ensuring that the
organization has the right number and kinds of capable
people in the right places and at the right times.
 Through planning, organizations avoid sudden people
shortages and surpluses.
 HR planning entails two steps: (1) assessing current
human resources and (2) meeting future HR needs.
• Job analysis – an assessment that defines jobs and
the behaviors necessary to perform them. (To
identify a job’s specific characteristics.)
• Information for a job analysis is gathered by directly observing
individuals on the job, interviewing employees individually or in a
group, having employees complete a questionnaire or record daily
activities in a diary, or having job “experts” (usually managers) identify
a job’s specific characteristics.
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
12 - 15
 HUMAN RESOURCE PLANNING
(CONT.)
• Job description – a written statement that
describes a job in functional details.(typically job
content, environment, and conditions of
employment.)

• Job specification – a written statement of the

minimum qualifications a person must possess to
perform a given job successfully.

12 - 16
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 RECRUITMENT AND DECRUITMENT

 Recruitment – locating, identifying, and

attracting capable applicants.
 Decruitment – reducing an organization’s
workforce.

12 - 17
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 RECRUITING SOURCES: MANAGERS CAN USE TO FIND POTENTIAL JOB CANDIDATES.

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 18
 DECRUITMENT OPTIONS

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 19
 SELECTION

 Selection – screening job applicants to ensure

that the most appropriate candidates are hired.
• A valid selection device is characterized by
a proven relationship between the selection
device and some relevant criterion.
• A reliable selection device indicates that it
measures the same thing consistently.

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 20
 SELECTION DECISION OUTCOMES

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 21
 PROBLEMS OF SELECTING WRONG
CANDIDATES
 A decision is correct when the applicant was predicted to be
successful and proved to be successful on the job, or

 when the applicant was predicted to be unsuccessful and was not

hired. In the first instance, we have successfully accepted; in the
second, we have successfully rejected.

 Problems arise when errors are made in rejecting candidates who

would have performed successfully on the job (reject errors) or
accepting those who ultimately perform poorly (accept errors).

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N ,
INC.
 PROBLEMS OF SELECTING WRONG
CANDIDATES
 The major emphasis of any selection activity
should be reducing the probability of reject
errors or accept errors while increasing the
probability of making correct decisions.
 Managers do this by using selection
procedures that are both valid and reliable.

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N ,
INC.
 SELECTION TOOLS

12 - 22
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 SELECTION TOOLS (CONT.)

COPYRIGHT © 2016 PEARSON 12 - 23

E D U C AT I O N , I N C .
 SELECTION TOOLS (CONT.)

12 - 24
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 SELECTION (CONT.)

 To increase employee job satisfaction and

reduce turnover, managers should consider:

 Realistic Job Preview (RJP) – a preview of a

job that provides both positive and negative
information about the job and the company.

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 25
 PROVIDING EMPLOYEES WITH NEEDED
SKILLS AND KNOWLEDGE

 Orientation – introducing a new employee to

his or her job and the organization.
 There are two types of orientation:
 Work unit orientation familiarizes the employee with the goals of
the work unit, clarifies how his or her job contributes to the unit’s
goals, and includes an introduction to his or her new coworkers.
 Organization orientation informs the new employee about the
company’s goals, history, philosophy, procedures, and rules. It
should also include relevant HR policies and maybe even a tour of
the facilities.
• Employee Training is an important HRM activity.
• In 2011, U.S. business firms spent more than $59 billion on
formal employee training.
12 - 26
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 EXHIBIT 12-8
TYPES OF TRAINING

12 - 27
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 TRADITIONAL TRAINING METHODS

12 - 28
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 TRADITIONAL TRAINING METHODS (CONT.)

12 - 29
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 RETAINING COMPETENT,
HIGH PERFORMING EMPLOYEES

 Performance management system –

establishes performance standards used to
evaluate employee performance.
Payment methods:
• Skill-based pay – a pay system that
rewards employees for the job skills they can
demonstrate.
• Variable pay – a pay system in which an
individual’s compensation is contingent on
performance.
12 - 30
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 PERFORMANCE APPRAISAL METHODS

12 - 31
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 EXHIBIT 12-10:
PERFORMANCE APPRAISAL METHODS
(CONT.)

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 32
 WHAT DETERMINES PAY AND BENEFITS

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 33
 CONTEMPORARY ISSUES IN MANAGING
HUMAN RESOURCES
 Downsizing – the planned elimination of jobs in an
organization.
 When an organization has faced with an economic recession,
declining market share, too aggressive growth, or poorly
managed operations—one option for improving profits is to
eliminate some of excess workers.
 Sexual harassment – any unwanted action or activity of a
sexual nature that explicitly or implicitly affects an
individual’s employment, performance, or work environment.

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 34
 TIPS FOR MANAGING DOWNSIZING

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 35
 CONTEMPORARY ISSUES IN MANAGING
HUMAN RESOURCES (CONT.)
 Family - friendly
benefits – benefits that
accommodate
employees’ needs for
work–life balance.
They’ve introduced programs such
as on-site child- care, summer
day camps, flextime, job sharing,
time off for school functions,
telecommuting, and part-time
employment.

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 36
 CONTEMPORARY ISSUES IN MANAGING
HUMAN RESOURCES (CONT.)
 Employee Health Care Costs – since 2002, health
care costs have risen an average of 15 percent a
year and are expected to double by the year 2016
from the $2.2 trillion spent in 2007.
 Employee Pension Plan Costs – pension
commitments have become such an enormous
burden that companies can no longer afford them.
In fact, the corporate pension system has been
described as “fundamentally broken.”

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 37
 REVIEW LEARNING OBJECTIVE 12.1
• Explain the importance of the human resource
management process and the external influences
that might affect that process.
- HRM is important for three reasons:
1. It can be a significant source of competitive advantage.
2. It’s an important part of organizational strategies.
3. The way organizations treat their people has been
found to significantly impact organizational
performance.

12 - 38
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 REVIEW LEARNING OBJECTIVE 12.2
• Discuss the tasks associated with identifying
and selecting competent employees.
– A job analysis is an assessment that defines a job
and the behaviors necessary to perform it.
– A job description is a written statement describing a
job.
– A job specification specifies the minimum
qualifications a person must possess to successfully
perform a given job.

12 - 39
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 REVIEW LEARNING OBJECTIVE 12.2 (CONT.)

• Major sources of potential job candidates include:

– The Internet
– Employee referrals
– Company Web site
– College recruiting
– Professional recruiting organizations

12 - 40
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 REVIEW LEARNING OBJECTIVE 12.2 (CONT.)

• Different selection devices include: application

forms, written tests, work sampling, assessment
centers, background investigations, reference
checks, and physical exams.

• A realistic job preview gives an applicant more

realistic expectations about the job, and should
increase employee job satisfaction and reduce
turnover.

12 - 41
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
 REVIEW LEARNING OBJECTIVE 12.3

• Explain the different types of orientation

and training.
– Orientation results in an outsider-insider
transition that makes the new employee feel
comfortable and fairly well-adjusted.
– The two types of training are general and
specific.

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 42
 REVIEW LEARNING OBJECTIVE 12.4
• Describe strategies for retaining competent, high-
performing employees.
- Performance appraisal methods are written essays,
critical incidents, graphic rating scales, BARS, multi-
person comparisons, MBO, and 360-degree appraisals.
- Skill-based pay systems reward employees for
demonstrated job skills and competencies.
- Variable pay system, an employee’s compensation is
contingent on performance.

C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C . 12 - 43
 REVIEW LEARNING OBJECTIVE 12.5
• Discuss contemporary issues in managing
human resources.
– Managers can manage downsizing by communicating openly
and honestly.
– Sexual harassment is any unwanted action or activity of a
sexual nature that explicitly or implicitly affects an individual’s
employment, performance, or work environment.
– Organizations are dealing with work–family life balance issues.
– Organizations are controlling HR costs by controlling employee
health care costs and pensions.

12 - 44
C O P Y R I G H T © 2 0 1 6 P E A R S O N E D U C AT I O N , I N C .
COPYRIGHT © 2016 BY PEARSON
E D U C AT I O N , I N C . 12 - 45