CHAPTER 5 HUMAN RESOURCE

MANAGEMENT
Finding and Keeping the Best Employees

Recruitment
Labor Law & Selection

Training,
Development
&
Performance
Appraisals
McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
 LEARNING GOALS
1. Explain the importance of human resource
management, and describe current issues in
managing human resources.

2. Illustrate the effects of legislation on human

resource management.

3. Summarize the five steps in human resource

planning.

4. Outline the six steps in selecting employees.

McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
 LEARNING GOALS
5. Illustrate employee training and development
methods.

6. Trace the six steps in appraising employee

performance.

7. Summarize the objectives of employee

compensation programs, and evaluate pay
systems and fringe benefits.

8. Scheduling Plans and Moving through an

organization
McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
11-3
Human Resource Management - HRM

Overview of the components of HRM:

Recruitment and selection

Training and development

Performance appraisal and

feedback
Pay and benefits
Decision usually made by upper

management

12-4
 145

Why is HRResource
Human Management Important?
Management (HRM)
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.
Why is HRM Important?
Firms realize that people can improve productivity and profit.
HR planning is now part of the strategic planning process.
Increased recognition of employees as a resource the shift
to a service economy & more high-tech skills.
Changes in laws rewrote old workplace practices.
What are some of the challenges
facing HR today?
Shortage of trained workers in growth areas: computer
technology, biotechnology, green energy
Shortage of workers in skilled trades due to retirement of
baby boomers
Baby boomers who delay retirement
Single Parent and two income families: job sharing,
maternity leave, etc.,.
Increasing number of skilled and unskilled workers from
declining industriesUnderemployed
A decreased sense of employee loyalty
What else?
The Legal Environment of HRM: 4 Major Categories of Laws
Equal Employment Compensation Labor Health
Opportunity and Benefits Relations and Safety

Title VII of Civil Fair Labor National Labor

Rights Act of 1964 Standards Act of Relations Act of Occupational
1938 (FLSA) 1935 (Wagner Act) Safety and
Equal Employment
Opportunity Act Health Act of
(EEOA)1972 Equal Pay Act 1970 (OSHA)
of 1963 Labor Management
Pregnancy Relations Act
Discrimination - 1978 of 1947
Employee
Age Discrimination in (Taft-Hartley Act)
Retirement
Employment Act Income Security
1967
Act of
1974 (ERISA) These laws were passed because
Americans with many businesses did not exercise fair
Disabilities Act 1990 labor practices effectively
Family and
Civil Rights Act Medical Leave Act
of 1991 of 1993 (FMLA)
Table 12.1Major EEO Laws Affecting HRM

12-8
MINDING the LAW in HRM

Employers must know the law

and act accordingly.
Legislation affects all areas of
HRM.
Court cases highlight that
sometimes its proper to go
beyond providing equal rights.
Changes in law and legislation
occur regularly.
11-9
 1410

THE LEGAL ENVIRONMENT OF HRM What

You Need To Know

If working in large corporations, need to be familiar with all of

these laws, however, have HR departments to counsel you on
any issue:
o when recruiting, when firing, when lay-off occurs
o Large corporations also have seminars on an annual basis to
update managers who supervise personnel.
o In addition, will have legal counsel internally, that
specializes in Human Resources

If working for small companies or start your own company, most

of these laws are applicable for > 40 employees.
o NEED to know these laws until you can hire someone for HR.
HUMAN RESOURCE PLANNING PROCESS
5 Steps
1) Preparing a human resource
inventory of employees.
2) Preparing a job analysis.
3) Assessing future human
resource demand.
4) Assessing future labor
supply.
5) Establishing a strategic plan.

11-11
 1412

Whats a Job Analysis

A systematic analysis of jobs within
Job Analysis an organization. what is done by each
job title

A listing of the jobs duties; its working

Job Description conditions; and the tools, materials, and
equipment used to perform the job.

A listing of the knowledge, skills, abilities,

Job Specification and other credentials the incumbent
jobholder will need to do a job.
 Job Analysis

Job analysis- Identifying tasks, duties

& responsibilities of job &
knowledge, skills, and abilities
needed to perform the job (done for
every job in the org)

Job analysis methods

Observing what current workers do
Having workers and managers fill
out questionnaires

Very time consuming but worthwhile

exercise, not needed annually

12-13
Recruitment and Selection from Diverse
Population
Recruitment: Activities that managers engage in to develop a
pool of candidates for open positions

Objective: obtaining the right number of qualified people at the right

time.

Human resource managers use both internal and external

sources to recruit employees.

12-14
 Recruiting Sources : encourages Diversity
External search methods Internal search methods
Internet (public) Transfers/Lateral moves
Company website for experience
Web job sources (Monster, Promotions
Career Builder) Executive
Management Consultants recommendation
Employment agencies Employee
Advertisements recommendations
Independent contractors Dept./ Co.
Temporary help services Reorganizations
Employee referrals Internal Posting
Campus: job fairs, interns* Management selection
Business associates
Competing organizations
Former Employees
Selecting
Employees Who
Will be
Productive SELECTION

Selection -- The process

of gathering information
and deciding who should
be hired, under legal
guidelines, to serve the
best interest of the
organization and the
individual.
Involves differentiating
between applicants to
identify those with highest
likelihood of success
11-16
COMMON STEPS in the SELECTION PROCESS

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

11-17
Selecting employees
Selecting and training employees can be extremely
expensive: (Eg: Sales force in Pharma)
Advertising or recruiting fees
Interview time of manager
Medical Exams
Background Checks
Development and Training Costs
Time spent learning the job (3-4 months)
Travel & moving expenses (based on level of employee)
Company Car or Transportation reimbursement
All other requirements to support employees out in the field
Can be 1.5x to 2x annual salary!

12-18
HIRING CONTINGENT WORKERS

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.

Majority of contingent
workers are under 25.
Source:
https://upload.wikimedia.org/wikipedia/co
mmons/d/df/Ski_resort_Bo%C3%AD- 11-19
Ta%C3%BCll.jpg
Training and Development
Training and Development Includes all attempts to improve
productivity by increasing an employees ability to perform.

o Needs assessment: who needs Training & Development &

type of skills or knowledge they need

o Training: Teach employees how to do current jobs & help them

acquire knowledge for the position

o Development: Building the knowledge & skills of employees

so they can take on new responsibilities & challenges

12-20
 MOST COMMONLY USED TRAINING
and DEVELOPMENT ACTIVITIES
Classroom/Vestibule Training
Can take
Orientation
place on or off site
Can include videos, role-plays
On-the-Job
lectures Training
and group discussion
Newcomers have a fresh approach to
problems and may be up to date on
Apprenticeships
the latest technology

Off-the-Job Training
On the Job Training
Online
Learning occurs inTraining
work setting
Can be provided by boss or
experienced co-workers
Vestibule Training
Used on a continuing basis to
ensure employees keep up-to-date
withchanges
Job Simulation
in goals, technology,
products, or customer needs
11-21
Activity
ASDA Case
APPRAISING PERFORMANCE on the JOB

Performance Appraisal -- An evaluation that

measures employee performance against established
standards in order to make decisions about
promotions, compensation, training or termination.

11-23
 SIX STEPS of PERFORMANCE APPRAISALS

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. Feedback, training
needs
6. Using the results to make decisions.
 Performance Appraisal
Reasons for:
Validates selection process Feedback
Aids in making decisions. In Private by boss
Provides feedback to workers
Just the Facts
Reduce liability risk

360 degree Feedback

Evaluated by everyone
around them
Provides a richer array of
performance information
Best Practices for Performance Evaluation
Traditional Format 1427
COMPENSATION PROGRAMS

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. -Think about your labor
compensation mix in Glo-Bus 11-28
 TYPES of PAY SYSTEMS
Salary
Hourly Wage/Day Work
Piecework System
Commission Plans
Bonus Plans Extra pay for
accomplishing objectives
Profit Sharing Plans fixed %
based on company profits
Gain-Sharing Plans An. bonus Source: http://www.authentichistory.com/1930-1939/1-
hoover/2-
for hitting specific goals esp. teams bonusarmy/1922_SM_Ive_Got_Those_Bonus_Blues.html

Stock Options right to purchase

stock 11-29
COMPENSATING TEAMS

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.)

11-30
FRINGE BENEFITS on the JOB

Fringe Benefits -- Sick leave, vacation pay,

pension and health plans that provide additional
compensation to employees beyond base wages.

Also can include company car, recreation facilities,

day care, cafeteria-style pick your own etc.

In 1929, fringe benefits accounted for less than

2% of payroll cost. Today its about 30%.

Healthcare has been the most significant

increase in fringe benefit cost.
11-31
FLEXIBLE SCHEDULING PLANS

Flextime Plan -- Gives employees some freedom to

choose which hours to work as long as they work the
required number of hours or complete their tasks.

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.

11-32
A FLEXTIME CHART

11-33
USING FLEXTIME PLANS

Most flextime plans require Core Time -- When all

employees are expected to be at their job stations.

Drawbacks:

Flextime is difficult 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.
11-34
COMPRESSED WORK WEEKS

Employees enjoy long

weekends after working long
days.

Productivity is a concern.

Nurses and firefighters often

work compressed work
weeks.

11-35
HOME-BASED WORK
LG9

About 10 million Americans telecommute at least

several days a month.
12% of U.S. businesses use some home-based
work.
Bank of America has
My-Work (60% time
remote work) that
saves an estimated
$5,500 per enrolled
employee every year.
11-36
VIRTUALLY THERE
Tools to Help You Work From Home

Communication:
- Google Apps
- Skype
- Yammer

Collaboration:
- Google Docs
- GoToMeeting
- Dropbox
- Collaboration tool on Canvas.
Glo-Bus
Source: Entrepreneur, January 2011.

11-37
JOB SHARING BENEFITS

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.

11-38
UNCOVERING the SECRETS of HRM
Things Your HR Manager Doesnt Tell You

Were short-staffed and under pressure too.

Were not always going to be able to help in the

way you hope.

We can help you move up the career ladder.

What you post on Facebook can get you fired.

Source: Smart Money, May 2010.

11-
Getting & Keeping a Job
Reality:
Hard, competition is major
Competition is fierce
What are some ways to deal with this:
Dont just send a resume blindly
Attend job fairs, network, hand out your resume,
strike conversations
Work for free as an intern, you may be hired
If you feel you are weak at a skill, get training,
formal or informal i.e. shy, speaking in public, etc.,.
Take a public speaking class at school, join a club
12-40