CH12 Human Resource Management Revised Spring 2020

CHAPTER 12
Human
Resource
Management:
Finding and
Keeping the Best
Employees
Prepared by Michael Wade, Seneca College
Understanding Canadian Business, 10th Edition Copyright © 2019 McGraw-Hill Education Limited 1
Learning Objectives
LO1 Explain the importance of human resource
management as a strategic contributor to organizational
success, and summarize the five steps in human resources
planning.
LO2 Describe methods that companies use to recruit new
employees, and explain some of the issues that make
recruitment challenging.
LO3 Outline the five steps in selecting employees, and
illustrate the use of various types of employee training and
development methods.
Learning Objectives cont’d.
LO4 Trace the six steps in appraising employee
performance, and summarize the objectives of employee
compensation programs.
LO5 Describe the ways employees can move through a
company: promotion, reassignment, termination, and
retirement.
LO1 Working with People is
Just the Beginning
• Human Resource Management (HRM): the process of
determining human resource needs and then:
o recruiting
o selecting
o developing
o motivating
o evaluating
o compensating
o scheduling employees to achieve organizational goals
Human Resource Management
Developing the
Ultimate Resource
• Human resource management is gaining importance, as
Canada’s economy is shifting from manufacturing to service
and high-tech manufacturing industries.
• This requires highly skilled workers.
• Many workers require retraining.
• There is a shortage of qualified workers, increasing the
importance of the role of human resource management.
• It is now the responsibility of all managers.
Human Resource Challenges
• There is a shortage of trained workers.
• There is also a large number of workers requiring retraining.
• There is a shortage of workers in skilled trades due to Baby
Boomer retirement.
• Due to economic downturns, some Baby Boomers are staying
in the workforce, blocking promotion of younger workers.
Some will take lower-lever jobs, increasing available workers.
• Due to single-parent and two-income families, there is a
demand for job sharing, parental leave and career
advancement for women.
Challenges, cont’d.
• There are changes in attitudes toward work, increasing the
demand for flextime and a shorter workweek.
• The declining economy and the use of temporary and part-
time workers, results in lowered employee morale.
• Many jobs are being outsourced due to lower wages, and lax
labour laws in other jurisdictions.
• There is an increased demand for individual benefits that may
not be cost effective for the company.
• There is a decrease in employee loyalty causing an increase
in employee turnover, which increases the company’s costs
for replacing these workers.
Determining Your Human Resource Needs
The five steps in human resource management process

are:
1. Preparing a human resource inventory of the organization’s
employees.
2. Preparing a job analysis.
3. Assessing future human resource demand.
4. Assessing future human resource supply
5. Establishing a strategic plan
Determining Human Resource Needs,
cont’d.
• Job analysis: a study of what is done by employees who
hold various job titles.
• Job description: a summary of the objectives of a job, the
type of work to be done, the responsibilities and duties, the
working conditions, and the relationship of the job to other
functions.
• Job specifications: a written summary of the minimum
qualifications required of workers to do a particular job.
Job Analysis
Job Analysis
Observe current sales representatives doing the job.

Discuss job with sales managers.
Have current sales representatives keep a diary of their activities.
Job Description Job Specifications

(about the job) (about the person)
Primary objective is to sell the company’s products Characteristics of the ideal person qualifying for this
to stores in Territory D. Duties include servicing job include:
accounts and maintaining positive relationships with • bilingual
clients. Responsibilities include: • self-motivated
• introducing the new products to store managers • positive attitude
in the area • strong written and communication skills
• helping the store managers estimate the volume • have a valid driver’s licence
to order • two years of sales experience
• negotiating prime shelf space • a diploma or degree in Business
• explaining sales promotion activities to store
managers
• stocking and maintaining shelves in stores that
wish such service
LO2 Recruiting Employees from a
Diverse Population
Recruiting the Right Employees
• Recruitment: the set of activities used to obtain a sufficient
number of the right people at the right time.
• There may be policies of hiring internally wherever possible.
• There are legal guidelines that surround hiring practices.
• In addition to desired skill sets, corporate culture, teamwork
and participative management are important criteria to be
considered when hiring.
• If people with the necessary skills are not available, training
internally may be an option.
LO3 Selecting Employees Who Will Be
Productive
A typical selection process involves five steps:
1. Obtain complete application forms.
2. Conduct initial and follow-up interviews.
3. Give employment tests.
4. Conduct background investigations.
5. Establish trial (probationary) periods.
• Labour agreements must be considered if employees are
unionized.
• Contingent workers: workers who do not have regular full-time
employment.
Training and Developing Employees
for Optimum Performance
• Orientation
• On-the-job training
• Apprenticeship programs
• Off-the-job training
• Online training
• Vestibule training
• Job simulation
Management Development
• Management development: the process of training and
educating employees to become good managers and
then monitoring the progress of their management skills
over time.
• Most management training programs include several of
the following:
o on-the job coaching
o understudy positions
o job rotation
o off-the-job courses and training
Management Development, cont’d.
• Empowering workers: giving employees the authority (the
right to make a decision without consulting a manager) and
the responsibility (the requirement to accept the
consequences of one’s actions).
• Networking: the process of establishing and maintaining
contacts with key managers in and outside the organization
and using those contacts to weave strong relationships that
serve as informal systems.
• Diversity in management includes a strategy for hiring
women, those with disabilities, visible minorities, Aboriginal
people etc.
LO4 Appraising Employee Performance
to Get Optimum Results
• Performance appraisal process includes:
1. Establishing performance standards.
2. Communicating standards.
3. Evaluating performance.
4. Discussing results.
5. Taking corrective action.
6. Using results to make decisions.
Conducting Effective Appraisals and Reviews
DOS DON’T
• DO allow sufficient time, without • DON’T attack the employee
distractions, (e.g., close the office personally. Critically evaluate his
door), for the appraisal. or her work.
• DO end the appraisal with positive • DON’T make the employee feel
suggestions for employee uncomfortable or uneasy. Never
improvement. conduct an appraisal where other
employees are present.
• DO include the employee in the • DON’T wait until the appraisal to

process as much as possible. (For address problems with the
example and if applicable, let the employee’s work that have been
employee prepare a self- developing for some time.
improvement program.)
Compensating Employees:
Attracting and Keeping the Best
• Pay systems: systems that compensate employees fairly.
• Compensating teams: compensating the team as a whole as
well as the employees as individuals.
• Fringe benefits: benefits such as sick-leave pay, vacation
pay, pension plans, and health plans that represent additional
compensation to employees beyond base wages.
• Cafeteria-style benefits (flexible benefits) plans: benefit
plans that allow employees to choose which benefits they
want up to a certain dollar amount.
Pay Systems
Salary Fixed compensation computed on weekly, bi-weekly, or monthly pay periods (e.g., $400 per week or $1,500 per
month). Salaried employees do not receive additional pay for any extra hours worked.
Hourly wage or Wage based on number of hours or days worked. Used for most blue-collar and clerical workers. Often employees
daywork must punch a time clock when they arrive at work and when they leave. Hourly wages vary greatly. This does not
include benefits such as retirement systems, which may add 30 percent or more to the total package.
Piecework system Wage based on the number of items produced rather than by the hour or day. This type of system creates powerful
incentives to work efficiently and productively.
Commission plans Pay based on some percentage of sales. Often used to compensate salespeople, commission plans resemble
piecework systems.
Bonus plans Extra pay for accomplishing or surpassing certain objectives. There are two types of bonuses: monetary and cashless.
Money is always a welcome bonus. Cashless rewards include written thank-you notes, appreciation notes sent to the
employee’s family, movie tickets, flowers, time off, gift certificates, shopping sprees, and other types of recognition.
Profit-sharing Annual bonuses paid to employees based on the company’s profits. The amount paid to each employee is based on a
plans predetermined percentage. Profit-sharing is one of the most common forms of performance-based pay.
Gain-sharing Annual bonuses paid to employees based on achieving specific goals such as quality measures, customer satisfaction
plans measures, and production targets.
Cost-of-living Annual increase in wages based on increases in the Consumer Price Index. This is usually found in union contacts.
allowances
(COLAs)
Stock options Right to purchase shares in the company at a specific price over a specific period of time. Often this gives employees
the right to buy shares cheaply despite huge increases in the price of the share. For example, if over the course of his
employment a worker received options to buy 10 000 shares of the company stock at $10 each and the price of the
share eventually grows to $100, he can use those options to buy the 10 000 shares (now worth $1 million) for
$100,000.
Pay systems: What system do you
work within?
Competitive compensation and benefit programs can have

a tremendous impact on employee efficiency and
productivity. Sometimes businesses reward exceptional
performance by handing out bonuses. Does your
employer ever award bonuses for exceptional
performance in the workplace?
For those that have not worked before, have your parents
or family members handed out award bonuses for
exceptional performance?
Scheduling Employees to Meet
Organizational and Employee Needs
• Flextime plan: work schedule that gives employees freedom
to choose when to work, as long as they work the required
number of hours.
• Compressed workweek: work schedule that allows an
employee to work a full number of hours per week but in
fewer days.
• Telecommuting: providing employees with the ability to
choose their work location.
• Job-sharing: an arrangement whereby two part-time
employees share one full-time job.
A Flextime Chart
Scheduling Employees
Telework, also known as telecommuting:
• Occurs when paid workers reduce their commute by carrying
out all, or part, of their work away from their normal place of
business.
• Changing gas prices,
leading-edge technology,
and pushes for work–life
flexibility have all
contributed.
LO5 Career Management
Up, Over, and Out
• Promoting and reassigning employees
• Terminating employees
• Retiring employees
• Losing valued employees
Summary
LO1 HRM is the process of determining HR needs, hiring

the best people, and getting the best work from all.
LO2 Recruiting is the set of activities used to obtain the
right people at the right time; sources include both internal
and external recruits.
LO3 Selecting employees includes gathering and
interpreting information in order to decide which applicants
should be hired.
Summary, cont’d.
LO4 The six steps in appraising employees are:
establishing performance standards, communicating those
standards, evaluating performance, discussing results,
taking corrective action, and using the results for making
decisions regarding promotion, compensation, additional
training, or firing.
LO5 Employees can move through a company by
promotion, reassignment, termination, and retirement.

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CHAPTER 12

Prepared by Michael Wade, Seneca College

The five steps in human resource management process

Observe current sales representatives doing the job.

Job Description Job Specifications

• DO include the employee in the • DON’T wait until the appraisal to

Competitive compensation and benefit programs can have

LO1 HRM is the process of determining HR needs, hiring

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