Presentation Chapter 12.ppt - Notes for Students CHAPTER 12 Human Resource Management LEARNING OBJECTIVES To explain why strategic human resource management can help an organization

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CHAPTER 12

Human Resource Management

LEARNING OBJECTIVES

To explain why strategic human resource management can help anorganization gaingain aa competitivecompetitive advantageadvantageorganization gaingain aa competitivecompetitive advantageadvantage.To describe the stepssteps managersmanagers taketake toto recruitrecruit andand selectselect organizational

members.To discuss the trainingtraining andand developmentdevelopment options that ensure

organization members can effectively perform their jobs.To explain why performanceperformance appraisalappraisal andand feedbackfeedback is such a crucial

activity, and list the choices managers must make in designing effective

MGT-101 Yiannos Rossides2

activity, and list the choices managers must make in designing effectiveperformance appraisal and feedback procedures.To explain the issues managers face inin determiningdetermining levelslevels ofof paypay andand

benefitsbenefits..

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1. Definitions of HRM and SHRM

• Human Resource Management (HRM) A ti iti th t i t tt t d t i l Activities that managers engage in to attract and retain employees

and to ensure that they perform at a high level and contribute to theaccomplishment of organizational goals. It has five majorcomponents:

• HRM activities (or components) Recruitment and selection


Training and development

Performance appraisal and feedback

Pay and benefits

Labor relations

• Strategic Human Resource Management

1. Definitions of HRM and SHRM

g gThe process by which managers design the components of

a human resource system to be consistent with each other,with other elements of organizational structure, and withthe organization’s strategy and goals. The objective of strategic HRM is the development of an HRM


j g psystem that enhances the organization’s efficiency, quality,innovation, and responsiveness to customers.

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Fig. 12-1 Components of HRM System


2. The Legal Environment of HRM

• Local, state and national laws and regulations such as:• Equal Employment Opportunity (EEO)

The equal right of all citizens to the opportunity to obtain employment regardless The equal right of all citizens to the opportunity to obtain employment regardlessof their gender, age, race, country of origin, religion, or disabilities.

Equal Employment Opportunity Commission (EEOC) enforces employment laws. Management of diversity is crucial Managers must take steps to ensure discrimination does not occur. In Cyprus during the last 4 years we had a major transformation of our labor laws due

to the harmonization with the EU laws. (example annual leave, parental leave, OSHetc)

• Contemporary challenges for managers


p y g g How to eliminate sexual harassment How to make accommodations for employees with disabilities How to deal with employees who have substance abuse problems How to manage HIV-positive employees and employees with AIDs

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3. The Components of HRMA. Recruitment and Selection

• Note: Even though in your text book HR Planning and Job Analysis arementioned as part of the recruitment and selection process, I’d prefer todiscuss them before dealing with recruitment and selection in order to reflectth lit f i th i d t d b i S th d tthe reality managers face in their day-to-day business. So, they need toengage in two important activities: HR Planning and job analysis.

i. Human Resource Planning (HRP) Refers to all the activities that managers engage in to forecast their current

and future needs for human resources. HRP must be done prior to recruitment and selection Demand forecasts Estimates of the number and qualifications of employees the firm will

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need. Supply forecasts Estimates of the availability and qualifications of current workers and

those in the labor market.

Fig. 12-2 The Recruitment and Selection System

The figure 12-2 of your book shows that managers perform first HR l i d j b l i d th d t i thHR planning and job analysis and then determine the

recruitment and selection needs.


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• OutsourcingUsing outside suppliers and manufacturers to produce goods and


Using outside suppliers and manufacturers to produce goods andservices

Using contract workers rather than hiring them. Outsourcing is more flexible for the firm. Outsourcing provides human capital at a lower cost.

• Problems with Outsourcing Loss of control over output; outsource contractors are not committed


Loss of control over output; outsource contractors are not committedto the firm.

Unions are against outsourcing because of potential to eliminatemember’s jobs.

ii. Job analysis The process through which managers identify the job description


The process through which managers identify the job descriptionmeaning the tasks, duties and responsibilities of a job (i.e. travel toLimassol twice a week, prepare budgets etc.) and the jobspecifications meaning the knowledge, skills, and abilities (KSAs)needed to perform the job (i.e. driver’s license, Bachelor degree, workexperience). A job analysis should be done for each job in the organization. Job analysis methods:

Observing what current workers do


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

Current trend is toward flexible jobs where tasks and duties are not easily definedin advance.

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• Recruitment


Activities that managers engage in to develop a pool ofcandidates for open positions (find and attract qualifiedcandidates).

• Selection The process that managers use to determine the relative


qualifications of job applicants and their potential forperforming well in a particular job.

i. External Recruiting S ki t id th fi f l h h t k d t th


Seeking outside the firm for people who have not worked at thefirm previously. Newspapers advertisements, open houses, on-campus recruiting, employee

referrals, and through the Internet.

External recruitment is difficult since many new jobs have specificskill needs. A multiple means approach to external recruiting works best


A multiple-means approach to external recruiting works best.

BenefitsBenefits include large applicant pool, attract people with thenecessary KSAs, attract people up-to-date with technology andwith new ideas.

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ii. Internal Recruiting


Seeking to fill open positions with current employeesfrom within the firm.

Benefits of internal recruiting: Job candidates, their qualifications, and availability are already

known.

C l k h fi ’ l d f ili i h


Current employees know the firm’s culture and are familiar withthe organization.

Internal advancement (promotion from within) can serve tomotivate employees.

Fig. 12-3 Selection Tools


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• The selection process refers to a process through whichmanagers determine which of the applicants are qualified


for the position and are more likely to perform better in theparticular job than others.

• Managers try to determine this through several selection tools:Background information

Education, prior employment, and college major

Interviews Structured interviews where managers ask each applicant the same job-related


Structured interviews where managers ask each applicant the same job-relatedquestions.

Unstructured interviews that resemble normal conversations. Usually structured interviews preferred; bias is possible in unstructured

interviews.

Physical ability tests Measures of physical strength and stamina for physically


Measures of physical strength, and stamina for physicallydemanding jobs.

Measures must be job related to avoid discrimination.

Paper-and-Pencil Tests Ability tests assess if applicants have the right skills for the job.

Personality tests seek to determine if applicants possess traits


Personality tests seek to determine if applicants possess traitsrelevant to job performance.

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Performance TestsT t th t li t’ t bilit t f th


Tests that measure an applicant’s current ability to perform thejob or part of the job such as requiring an applicant to take atyping speed test.

Assessment centers are facilities where managerial candidatesare assessed on job-related activities over a period of a fewdays.


References Obtaining relevant information can be difficult due to legal

liability and privacy issues.

• Selection tools must be reliable and valid. R li bilit i th d t hi h th t l th thi


Reliability is the degree to which the tool measures the same thingeach time it is used. Example: scores should be similar for the same person taking the same test

over time.

Validity is the degree to which the test measures what it issupposed to measure Example: how well a physical ability test predicts the job performance of a


Example: how well a physical ability test predicts the job performance of afirefighter.

Managers have both an ethical obligation and a legal duty todevelop good selection tools.

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3. The Components of HRMB. Training and Development

• TrainingTeaching organizational members how to perform current jobs andTeaching organizational members how to perform current jobs and

helping them to acquire the knowledge and skills they need to beeffective performers.

• DevelopmentBuilding the knowledge and skills of organizational members to

enable them to take on new duties and challenges.

• Training is used more often at lower levels of firm;


• Training is used more often at lower levels of firm;development is more common with managers.

• Needs Assessment (Fig. 12-4) An assessment of which employees need training or development and


An assessment of which employees need training or development andwhat type of skills or knowledge they need to acquire.


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• Types of Trainingi Cl I i


i. Classroom Instruction Employees acquire skills in a classroom setting.

Includes use of videos, role-playing, and simulations.

ii. On-the-Job Training Employee learning occurs in the work setting as new worker does

the job


the job. Training is given by co-workers and can be done continuously to update

the skills of current employees.

• Types of Developmenti V i d W k E i


i. Varied Work Experiences Top managers have need to and must build expertise in many

areas. Employees identified as possible top managers are assigned different tasks

and a variety of positions in an organization.

ii. Formal Education


Tuition reimbursement is common for managers taking classes forMBA or job-related degrees. Long-distance learning can also be used to reduce travel and other expenses

for managerial training.

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• Performance Appraisal Refers to the evaluation of employees’ job performance and contributions to their

3. The Components of HRMC. Performance Appraisal &

Feedback

p y j porganization.

• Performance Feedback The process through which managers share performance appraisal information

with subordinates, give them the opportunity to reflect on their own performance,and develop, with subordinates, plans for the future.

• Importance of Performance Appraisal & Feedback: facilitates decisionsabout pay raises, bonuses, promotions, transfers, training, terminations.Feedback encourages employee motivation and performance


Feedback encourages employee motivation and performance.• Who appraises performance? Supervisors, self, peers, subordinates and

clients. The trend is the 360-degree appraisal which refers to aperformance appraisal by peers, subordinates, superiors, and clients whoare in a position to evaluate a manager’s performance.

Fig. 12-6 Who Appraises Performance


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• Types of Performance Appraisals


Feedback

i. Trait Appraisals Assessing subordinates on personal characteristics that are

relevant to job performance.

Disadvantages of trait appraisals Employees with a particular trait may choose not to use that particular trait

on the job.


on the job.

Traits and performance are not always obviously linked.

It is difficult to give feedback on traits.

ii. Behavior Appraisals A h k f th i j b th t l ti d


Feedback

Assesses how workers perform their jobs—the actual actions andbehaviors that exhibit on the job.

Focuses on what a worker does right and wrong and providesgood feedback for employees to change their behaviors.

iii. Results appraisals Assesses what a worker accomplishes or the actual results they


Assesses what a worker accomplishes or the actual results theyobtain from performing their jobs.

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• Irrespectively of the type of assessment managers choose, thef h d b h b b


Feedback

information gathered can be either objective or subjective.• Objective appraisals Assesses performance based on facts (e.g., sales figures).

• Subjective appraisals Assessments based on a manager’s perceptions of traits, behavior,

or results.


Graphic rating scales Behaviorally anchored rating scales (BARS) Behavior observation scales (BOS) Forced ranking systems

Fig. 12-5 Subjective Measures of Performance


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• In order to encourage and motivate employees, managers must provideeffective performance feedback through:

• Formal appraisals


Feedback

Formal appraisals An appraisal conducted at a set time during the year and based on performance

dimensions that were specified in advance.• Informal appraisals

An unscheduled appraisal of ongoing progress and areas for improvement. Effective Feedback Tips

Be specific and focus on behaviors or outcomes that are correctable and within aworker’s ability to improve.

Approach performance appraisal as an exercise in problem solving and solutionfi di t iti i i


finding, not criticizing. Express confidence in a subordinate ability to improve. Provide performance feedback both formally and informally. Praise instances of high performance and areas of a job in which a worker excels. Avoid personal criticisms and treat subordinates with respect. Agree to a timetable for performance improvements.

3. The Components of HRMD. Pay and Benefits

• Pay Includes employees’ base salaries, pay raises, and bonuses Determined by characteristics of the organization and the job and levels of

performance Benefits are based on membership in an organization

• Pay level The relative position of an organization’s incentives in comparison with those

of other firms in the same industry employing similar kinds of workers Managers can decide to offer low, average or high relative wages. High wages attract and retain high performers but raise costs; low wages


High wages attract and retain high performers but raise costs; low wagescan cause turnover and lack of motivation but provide lower costs.

• Factors affecting level of compensation are:a) What competitors pay b) Government laws c) Cost of livingd)Firm’s ability to pay e) Employee performance

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• Pay Structure The arrangement of jobs into categories based on their relative importance to the

3. The Components of HRMD. Pay and Benefits

g j g porganization and its goals, level of skills, and other characteristics.

• Benefits Legally required: social security, workers’ compensation

Voluntary: health insurance, retirement, day care

Cafeteria-style benefits plans allow employees to choose the best mix of benefits forthem; can be hard to manage.

To make things easier to understand:


To make things easier to understand:

• Compensation refers to every type of direct or indirect reward employeesreceive in exchange for their work.

• Direct rewards or pay includes base salaries, pay raises, and bonuses.

• Indirect rewards or benefits include sick days, vacation days, medical and lifeinsurance and others. They can also be mandatory or voluntary.

3. The Components of HRME. Labor Relations

• Labor Relations The activities managers engage in, to ensure they have effective workings g s g g , s y g

relationships with the labor unions that represent their employees interests.

There are many laws regulating areas of employment.• Unions

Represent worker’s interests to management in organizations. The power that managers has over an individual worker causes workers to join

together in unions to try to prevent this. Not all workers want unions Union membership costs money in dues and


Not all workers want unions. Union membership costs money in dues andworkers might not want to strike.

Union membership is lower today than 40 years ago.

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3. The Components of HRME. Labor Relations

• Collective bargaining is negotiation between labor and management to resolve conflicts

and disputes about issues such as working hours, wages, benefits,working conditions, and job security.

M di tM di t ( t l thi d t th t h l t h t) MediatorMediator (neutral third party that helps to reach an agreement). ArbitratorArbitrator (neutral third party that helps resolve disagreements and

conflicts over the interpretation of the contract. Decisions are bindingto both parties).

GrievanceGrievance ProcedureProcedure refers to the process (included in the contract)that unions and management go through to resolve conflict, overmanagement’s administration of the contract.

Review Questions


Review Questions1. State and briefly discuss the three types of performance appraisals

using examples where appropriate to support your answer.2. Define and briefly discuss the five major components of a human

resource management system, using examples where appropriate tosupport your answer.

Documents

Presentation Chapter 12.ppt - Notes for Students CHAPTER 12 Human Resource Management LEARNING OBJECTIVES To explain why strategic human resource management can help an organization