26
CHAPTER 2: CHALLENGES IN STAFFING HUMAN RESOURCE MANAGEMENT Copyright © 2005 South-Western. All rights reserved.

SHRM N ch02

Embed Size (px)

Citation preview

CHAPTER 2:

CHALLENGES IN STAFFING HUMAN RESOURCE MANAGEMENT

Copyright © 2005 South-Western. All rights reserved.

Copyright © 2005 South-Western. All rights reserved. 1–2

Major Factors Affecting HRMMajor Factors Affecting HRMMajor Factors Affecting HRMMajor Factors Affecting HRM

StrategicStrategicHRMHRM

TechnologicalTechnologicalAdvancementAdvancement

DemographicsDemographicsand Diversityand Diversity

GlobalizationGlobalization

Copyright © 2005 South-Western. All rights reserved. 1–3

Exhibit 2-1Exhibit 2-1

Issues for Integrating New Issues for Integrating New TechnologiesTechnologies

Exhibit 2-1Exhibit 2-1

Issues for Integrating New Issues for Integrating New TechnologiesTechnologies

Copyright © 2005 South-Western. All rights reserved. 1–4

Exhibit 2-2Exhibit 2-2

Impact of Technology on Impact of Technology on OrganizationsOrganizations

Exhibit 2-2Exhibit 2-2

Impact of Technology on Impact of Technology on OrganizationsOrganizations

Copyright © 2005 South-Western. All rights reserved. 1–5

Technology Challenges for HRMTechnology Challenges for HRMTechnology Challenges for HRMTechnology Challenges for HRM

• TelecommutingTelecommuting

• Employee surveillance & monitoringEmployee surveillance & monitoring

• e-HRe-HR

• Ethical behaviorEthical behavior

• TelecommutingTelecommuting

• Employee surveillance & monitoringEmployee surveillance & monitoring

• e-HRe-HR

• Ethical behaviorEthical behavior

Copyright © 2005 South-Western. All rights reserved. 1–6

TelecommutingTelecommutingTelecommutingTelecommuting

• Dramatic growth in Dramatic growth in number of Americans number of Americans working from homeworking from home

– 3.4 million in 19903.4 million in 1990– 19.6 million by beginning 19.6 million by beginning

of 2000of 2000

• Dramatic growth in Dramatic growth in number of Americans number of Americans working from homeworking from home

– 3.4 million in 19903.4 million in 1990– 19.6 million by beginning 19.6 million by beginning

of 2000of 2000

• Issues affecting success of Issues affecting success of telecommuting programstelecommuting programs

– Clear performance Clear performance measurement system is keymeasurement system is key

– Deciding which employees Deciding which employees will be offered participationwill be offered participation

– Equipment expenseEquipment expense– Some managers Some managers

uncomfortable having uncomfortable having direct reports away from direct reports away from officeoffice

• Issues affecting success of Issues affecting success of telecommuting programstelecommuting programs

– Clear performance Clear performance measurement system is keymeasurement system is key

– Deciding which employees Deciding which employees will be offered participationwill be offered participation

– Equipment expenseEquipment expense– Some managers Some managers

uncomfortable having uncomfortable having direct reports away from direct reports away from officeoffice

Copyright © 2005 South-Western. All rights reserved. 1–7

Employee Surveillance and Employee Surveillance and MonitoringMonitoring

Employee Surveillance and Employee Surveillance and MonitoringMonitoring

• More than 80% of large employers utilize More than 80% of large employers utilize monitoring technologymonitoring technology

– Internet usageInternet usage– E-mailsE-mails– Computer filesComputer files– Voice-mailVoice-mail– Telephone usageTelephone usage

• Under Electronic Communications Privacy Act Under Electronic Communications Privacy Act (ECPA) employees have only limited privacy (ECPA) employees have only limited privacy rightsrights

• More than 80% of large employers utilize More than 80% of large employers utilize monitoring technologymonitoring technology

– Internet usageInternet usage– E-mailsE-mails– Computer filesComputer files– Voice-mailVoice-mail– Telephone usageTelephone usage

• Under Electronic Communications Privacy Act Under Electronic Communications Privacy Act (ECPA) employees have only limited privacy (ECPA) employees have only limited privacy rightsrights

Copyright © 2005 South-Western. All rights reserved. 1–8

E-HRE-HRE-HRE-HR

• Opportunity to deliver transactional types Opportunity to deliver transactional types of services onlineof services online– PayrollPayroll– Employee benefitsEmployee benefits– SchedulingScheduling– RecruitingRecruiting– TrainingTraining– Career developmentCareer development

• Opportunity to deliver transactional types Opportunity to deliver transactional types of services onlineof services online– PayrollPayroll– Employee benefitsEmployee benefits– SchedulingScheduling– RecruitingRecruiting– TrainingTraining– Career developmentCareer development

Copyright © 2005 South-Western. All rights reserved. 1–9

Ethical BehaviorEthical BehaviorEthical BehaviorEthical Behavior

• Majority of jobs are Majority of jobs are considered to be “at-considered to be “at-will”will”

• Movement toward Movement toward greater protection for greater protection for employees in regard to employees in regard to off-duty behavioroff-duty behavior

• Ownership of workOwnership of work• Fairness of Fairness of

noncompete clausesnoncompete clauses

• Majority of jobs are Majority of jobs are considered to be “at-considered to be “at-will”will”

• Movement toward Movement toward greater protection for greater protection for employees in regard to employees in regard to off-duty behavioroff-duty behavior

• Ownership of workOwnership of work• Fairness of Fairness of

noncompete clausesnoncompete clauses

• Sarbanes-Oxley Act Sarbanes-Oxley Act of 2002of 2002

– Eliminates deception in Eliminates deception in accounting & accounting & management practices management practices by increasing by increasing government oversightgovernment oversight

– Holds senior executives Holds senior executives more directly responsible more directly responsible for violationsfor violations

– Protects “whistle-Protects “whistle-blowers”blowers”

• Sarbanes-Oxley Act Sarbanes-Oxley Act of 2002of 2002

– Eliminates deception in Eliminates deception in accounting & accounting & management practices management practices by increasing by increasing government oversightgovernment oversight

– Holds senior executives Holds senior executives more directly responsible more directly responsible for violationsfor violations

– Protects “whistle-Protects “whistle-blowers”blowers”

Copyright © 2005 South-Western. All rights reserved. 1–10

Workforce Demographic Changes: Workforce Demographic Changes: “Graying” of Workforce“Graying” of Workforce

Workforce Demographic Changes: Workforce Demographic Changes: “Graying” of Workforce“Graying” of Workforce

• Negative aspects of Negative aspects of older workersolder workers

– Perceived resistance to Perceived resistance to change by older workers.change by older workers.

– Increased health-care Increased health-care costs for senior workerscosts for senior workers

– Blocking advancement Blocking advancement opportunities for younger opportunities for younger workersworkers

– Higher wage & salary Higher wage & salary costs for senior workerscosts for senior workers

• Negative aspects of Negative aspects of older workersolder workers

– Perceived resistance to Perceived resistance to change by older workers.change by older workers.

– Increased health-care Increased health-care costs for senior workerscosts for senior workers

– Blocking advancement Blocking advancement opportunities for younger opportunities for younger workersworkers

– Higher wage & salary Higher wage & salary costs for senior workerscosts for senior workers

• Positive aspects of Positive aspects of older workersolder workers

– As productive or more As productive or more productive than younger productive than younger workersworkers

– Have more Have more organizational loyalty organizational loyalty than younger workersthan younger workers

– Possess broader Possess broader industry knowledge & industry knowledge & professional networksprofessional networks

• Positive aspects of Positive aspects of older workersolder workers

– As productive or more As productive or more productive than younger productive than younger workersworkers

– Have more Have more organizational loyalty organizational loyalty than younger workersthan younger workers

– Possess broader Possess broader industry knowledge & industry knowledge & professional networksprofessional networks

Copyright © 2005 South-Western. All rights reserved. 1–11

Workforce Demographic ChangesWorkforce Demographic ChangesWorkforce Demographic ChangesWorkforce Demographic Changes

• Baby Boomers (1945Baby Boomers (1945––1962)1962)– In excess supply in middle management ranksIn excess supply in middle management ranks– HR challenge is to manage “plateaued” workersHR challenge is to manage “plateaued” workers

• Baby Busters (1963Baby Busters (1963––mid-1970s)mid-1970s)– Are career bottlenecked by BoomersAre career bottlenecked by Boomers– Who have skills in high demand are doing & will do Who have skills in high demand are doing & will do

wellwell

• Baby Boomers (1945Baby Boomers (1945––1962)1962)– In excess supply in middle management ranksIn excess supply in middle management ranks– HR challenge is to manage “plateaued” workersHR challenge is to manage “plateaued” workers

• Baby Busters (1963Baby Busters (1963––mid-1970s)mid-1970s)– Are career bottlenecked by BoomersAre career bottlenecked by Boomers– Who have skills in high demand are doing & will do Who have skills in high demand are doing & will do

wellwell

Copyright © 2005 South-Western. All rights reserved. 1–12

Workforce Demographic ChangesWorkforce Demographic ChangesWorkforce Demographic ChangesWorkforce Demographic Changes

• Generation “X”ers (late 1970sGeneration “X”ers (late 1970s–early 1980s)–early 1980s)– Have life-long exposure to technology & constant changeHave life-long exposure to technology & constant change– Seek self-control, independence, personal growth, creativitySeek self-control, independence, personal growth, creativity– Not focused on job security or long-term employmentNot focused on job security or long-term employment

• Generation “Y”: “Baby Boom Echo” (after 1979)Generation “Y”: “Baby Boom Echo” (after 1979)– High comfort level with technologyHigh comfort level with technology– Global & tolerant outlook on lifeGlobal & tolerant outlook on life– Highly entrepreneurialHighly entrepreneurial– Shorter attention spanShorter attention span– Opting for more transient & variable project workOpting for more transient & variable project work

• Generation “X”ers (late 1970sGeneration “X”ers (late 1970s–early 1980s)–early 1980s)– Have life-long exposure to technology & constant changeHave life-long exposure to technology & constant change– Seek self-control, independence, personal growth, creativitySeek self-control, independence, personal growth, creativity– Not focused on job security or long-term employmentNot focused on job security or long-term employment

• Generation “Y”: “Baby Boom Echo” (after 1979)Generation “Y”: “Baby Boom Echo” (after 1979)– High comfort level with technologyHigh comfort level with technology– Global & tolerant outlook on lifeGlobal & tolerant outlook on life– Highly entrepreneurialHighly entrepreneurial– Shorter attention spanShorter attention span– Opting for more transient & variable project workOpting for more transient & variable project work

Copyright © 2005 South-Western. All rights reserved. 1–13

Workforce Demographic ChangesWorkforce Demographic ChangesWorkforce Demographic ChangesWorkforce Demographic Changes

• Sexual orientationSexual orientation– More than 200 Fortune 500 employers offer full benefits for More than 200 Fortune 500 employers offer full benefits for

domestic partnersdomestic partners– Sexual orientation issues can impact bottom lineSexual orientation issues can impact bottom line

• DisabilitiesDisabilities– 54 million Americans with disabilities54 million Americans with disabilities– Often not included in diversity initiativesOften not included in diversity initiatives– Many supervisors do not understand needs of employees Many supervisors do not understand needs of employees

with disabilitieswith disabilities– StereotypesStereotypes

• Sexual orientationSexual orientation– More than 200 Fortune 500 employers offer full benefits for More than 200 Fortune 500 employers offer full benefits for

domestic partnersdomestic partners– Sexual orientation issues can impact bottom lineSexual orientation issues can impact bottom line

• DisabilitiesDisabilities– 54 million Americans with disabilities54 million Americans with disabilities– Often not included in diversity initiativesOften not included in diversity initiatives– Many supervisors do not understand needs of employees Many supervisors do not understand needs of employees

with disabilitieswith disabilities– StereotypesStereotypes

Copyright © 2005 South-Western. All rights reserved. 1–14

New Employee/Workplace DynamicsNew Employee/Workplace DynamicsNew Employee/Workplace DynamicsNew Employee/Workplace Dynamics

• Emphasis on management of professionalsEmphasis on management of professionals– Establishment of separate career tracksEstablishment of separate career tracks

• Technical/Professional, Managerial /AdministrativeTechnical/Professional, Managerial /Administrative

– Use of project teamsUse of project teams

• Less employee loyalty, more loyal to selfLess employee loyalty, more loyal to self– Staying with employers for shorter periods; Staying with employers for shorter periods;

demanding more meaningful work & involvement in demanding more meaningful work & involvement in organizational decisionsorganizational decisions

• Emphasis on management of professionalsEmphasis on management of professionals– Establishment of separate career tracksEstablishment of separate career tracks

• Technical/Professional, Managerial /AdministrativeTechnical/Professional, Managerial /Administrative

– Use of project teamsUse of project teams

• Less employee loyalty, more loyal to selfLess employee loyalty, more loyal to self– Staying with employers for shorter periods; Staying with employers for shorter periods;

demanding more meaningful work & involvement in demanding more meaningful work & involvement in organizational decisionsorganizational decisions

Copyright © 2005 South-Western. All rights reserved. 1–15

New Employee/Workplace DynamicsNew Employee/Workplace DynamicsNew Employee/Workplace DynamicsNew Employee/Workplace Dynamics

• Increased personal & family dynamic Increased personal & family dynamic effectseffects– More single-parent families, dual-career couples, & More single-parent families, dual-career couples, &

domestic partnersdomestic partners

• Increased nontraditional work relationshipsIncreased nontraditional work relationships– Part-time, consulting, & temporary employment Part-time, consulting, & temporary employment

flexibilityflexibility– Outsourcing & entrepreneurial opportunitiesOutsourcing & entrepreneurial opportunities

• Increased personal & family dynamic Increased personal & family dynamic effectseffects– More single-parent families, dual-career couples, & More single-parent families, dual-career couples, &

domestic partnersdomestic partners

• Increased nontraditional work relationshipsIncreased nontraditional work relationships– Part-time, consulting, & temporary employment Part-time, consulting, & temporary employment

flexibilityflexibility– Outsourcing & entrepreneurial opportunitiesOutsourcing & entrepreneurial opportunities

Copyright © 2005 South-Western. All rights reserved. 1–16

EthnicityEthnicityEthnicityEthnicity

• By 2050By 2050– Close to 50% of US Close to 50% of US

population will be population will be non-Caucasiannon-Caucasian

• By 2005By 2005– Ethnic minority Ethnic minority

share of workforce share of workforce will be 28%will be 28%

– Up from 22% in Up from 22% in 1990 & 18% in 19801990 & 18% in 1980

• By 2050By 2050– Close to 50% of US Close to 50% of US

population will be population will be non-Caucasiannon-Caucasian

• By 2005By 2005– Ethnic minority Ethnic minority

share of workforce share of workforce will be 28%will be 28%

– Up from 22% in Up from 22% in 1990 & 18% in 19801990 & 18% in 1980

• By 2025By 2025– African-Americans will African-Americans will

represent 14% of populationrepresent 14% of population– Up from 12% in 1994Up from 12% in 1994– Hispanics will represent 17% Hispanics will represent 17%

of populationof population– Up from 10% in 1994Up from 10% in 1994– Asians & Pacific Islanders Asians & Pacific Islanders

will represent 8% of will represent 8% of populationpopulation

– More than double from 1994More than double from 1994

• By 2025By 2025– African-Americans will African-Americans will

represent 14% of populationrepresent 14% of population– Up from 12% in 1994Up from 12% in 1994– Hispanics will represent 17% Hispanics will represent 17%

of populationof population– Up from 10% in 1994Up from 10% in 1994– Asians & Pacific Islanders Asians & Pacific Islanders

will represent 8% of will represent 8% of populationpopulation

– More than double from 1994More than double from 1994

Copyright © 2005 South-Western. All rights reserved. 1–17

Managing Workplace DiversityManaging Workplace DiversityManaging Workplace DiversityManaging Workplace Diversity

• Understanding & Understanding & appreciating diversityappreciating diversity

– Critical to effectively Critical to effectively marketing to ethnic & minority marketing to ethnic & minority groupsgroups

– Promoted by having diverse Promoted by having diverse workforce at all levelsworkforce at all levels

– Helps ensure hiring & Helps ensure hiring & promotion decisions are promotion decisions are unbiased by person unbiased by person differencesdifferences

• Understanding & Understanding & appreciating diversityappreciating diversity

– Critical to effectively Critical to effectively marketing to ethnic & minority marketing to ethnic & minority groupsgroups

– Promoted by having diverse Promoted by having diverse workforce at all levelsworkforce at all levels

– Helps ensure hiring & Helps ensure hiring & promotion decisions are promotion decisions are unbiased by person unbiased by person differencesdifferences

• Diversity management Diversity management programs or initiativesprograms or initiatives

– Must be integrated with Must be integrated with organization’s mission & organization’s mission & objectivesobjectives

– Help key decision makers Help key decision makers identify diversity’s benefits to identify diversity’s benefits to organizationorganization

– Make critical decisions about Make critical decisions about implementing optimal implementing optimal program/initiative contingent program/initiative contingent on organization & its people, on organization & its people, mission & culture.mission & culture.

• Diversity management Diversity management programs or initiativesprograms or initiatives

– Must be integrated with Must be integrated with organization’s mission & organization’s mission & objectivesobjectives

– Help key decision makers Help key decision makers identify diversity’s benefits to identify diversity’s benefits to organizationorganization

– Make critical decisions about Make critical decisions about implementing optimal implementing optimal program/initiative contingent program/initiative contingent on organization & its people, on organization & its people, mission & culture.mission & culture.

Copyright © 2005 South-Western. All rights reserved. 1–18

Exhibit 2-6Exhibit 2-6

Individual Dimensions of DiversityIndividual Dimensions of DiversityExhibit 2-6Exhibit 2-6

Individual Dimensions of DiversityIndividual Dimensions of Diversity

Copyright © 2005 South-Western. All rights reserved. 1–19

Strategic Management of DiversityStrategic Management of DiversityStrategic Management of DiversityStrategic Management of Diversity

• Determine why diversity is important Determine why diversity is important

• Articulate how diversity relates to mission & strategic Articulate how diversity relates to mission & strategic objectivesobjectives

• Define diversity & determine how inclusive its efforts will Define diversity & determine how inclusive its efforts will bebe

• Make a decision as to whether special efforts should be Make a decision as to whether special efforts should be extended to attract diverse workforceextended to attract diverse workforce

• Assess how existing employees, customers, & other Assess how existing employees, customers, & other constituencies feel about diversityconstituencies feel about diversity

• Determine specific types of diversity initiatives that will Determine specific types of diversity initiatives that will be undertakenbe undertaken

• Determine why diversity is important Determine why diversity is important

• Articulate how diversity relates to mission & strategic Articulate how diversity relates to mission & strategic objectivesobjectives

• Define diversity & determine how inclusive its efforts will Define diversity & determine how inclusive its efforts will bebe

• Make a decision as to whether special efforts should be Make a decision as to whether special efforts should be extended to attract diverse workforceextended to attract diverse workforce

• Assess how existing employees, customers, & other Assess how existing employees, customers, & other constituencies feel about diversityconstituencies feel about diversity

• Determine specific types of diversity initiatives that will Determine specific types of diversity initiatives that will be undertakenbe undertaken

Copyright © 2005 South-Western. All rights reserved. 1–20

Reading 2.1Reading 2.1

Five Challenges to Virtual Team Five Challenges to Virtual Team SuccessSuccess

Reading 2.1Reading 2.1

Five Challenges to Virtual Team Five Challenges to Virtual Team SuccessSuccess

• Virtual teams:Virtual teams:– Groups of people who work interdependently with shared Groups of people who work interdependently with shared

purpose across space, time, & organization boundaries purpose across space, time, & organization boundaries using technology to communicate & collaborateusing technology to communicate & collaborate

• Types of virtual teamsTypes of virtual teams– Global virtual teamsGlobal virtual teams– Teams assigned to accomplish specific projectsTeams assigned to accomplish specific projects– Cross-functional teamsCross-functional teams

• Challenge: Recognize obstacles confronting teams Challenge: Recognize obstacles confronting teams that are both cross-functional & virtualthat are both cross-functional & virtual

• Virtual teams:Virtual teams:– Groups of people who work interdependently with shared Groups of people who work interdependently with shared

purpose across space, time, & organization boundaries purpose across space, time, & organization boundaries using technology to communicate & collaborateusing technology to communicate & collaborate

• Types of virtual teamsTypes of virtual teams– Global virtual teamsGlobal virtual teams– Teams assigned to accomplish specific projectsTeams assigned to accomplish specific projects– Cross-functional teamsCross-functional teams

• Challenge: Recognize obstacles confronting teams Challenge: Recognize obstacles confronting teams that are both cross-functional & virtualthat are both cross-functional & virtual

Copyright © 2005 South-Western. All rights reserved. 1–21

Reading 2.1Reading 2.1

Five Challenges to Virtual Team Five Challenges to Virtual Team SuccessSuccess

Reading 2.1Reading 2.1

Five Challenges to Virtual Team Five Challenges to Virtual Team SuccessSuccess

• Building trust within virtual teamsBuilding trust within virtual teams• Maximizing process gains & minimizing process Maximizing process gains & minimizing process

losses on virtual teamslosses on virtual teams• Overcoming feelings of isolation & detachment Overcoming feelings of isolation & detachment

associated with virtual teamworkassociated with virtual teamwork• Balancing technical & interpersonal skills among Balancing technical & interpersonal skills among

virtual team membersvirtual team members• Assessment & recognition of virtual team Assessment & recognition of virtual team

performanceperformance

• Building trust within virtual teamsBuilding trust within virtual teams• Maximizing process gains & minimizing process Maximizing process gains & minimizing process

losses on virtual teamslosses on virtual teams• Overcoming feelings of isolation & detachment Overcoming feelings of isolation & detachment

associated with virtual teamworkassociated with virtual teamwork• Balancing technical & interpersonal skills among Balancing technical & interpersonal skills among

virtual team membersvirtual team members• Assessment & recognition of virtual team Assessment & recognition of virtual team

performanceperformance

Copyright © 2005 South-Western. All rights reserved. 1–22

Reading 2.2Reading 2.2

Impact of the Sarbanes-Oxley ActImpact of the Sarbanes-Oxley ActReading 2.2Reading 2.2

Impact of the Sarbanes-Oxley ActImpact of the Sarbanes-Oxley Act

• New whistleblower protectionsNew whistleblower protections– No public company may discriminate against No public company may discriminate against

employee because of any lawful actemployee because of any lawful act– Retaliation against employee because of any lawful Retaliation against employee because of any lawful

act done to assist a proceeding relating to alleged act done to assist a proceeding relating to alleged violation is prohibitedviolation is prohibited

– If DOL determines that violation has occurred, If DOL determines that violation has occurred, employer may be ordered to reinstate employee & employer may be ordered to reinstate employee & provide compensatory damagesprovide compensatory damages

• New whistleblower protectionsNew whistleblower protections– No public company may discriminate against No public company may discriminate against

employee because of any lawful actemployee because of any lawful act– Retaliation against employee because of any lawful Retaliation against employee because of any lawful

act done to assist a proceeding relating to alleged act done to assist a proceeding relating to alleged violation is prohibitedviolation is prohibited

– If DOL determines that violation has occurred, If DOL determines that violation has occurred, employer may be ordered to reinstate employee & employer may be ordered to reinstate employee & provide compensatory damagesprovide compensatory damages

Copyright © 2005 South-Western. All rights reserved. 1–23

Reading 2.2Reading 2.2

Impact of the Sarbanes-Oxley ActImpact of the Sarbanes-Oxley ActReading 2.2Reading 2.2

Impact of the Sarbanes-Oxley ActImpact of the Sarbanes-Oxley Act

• The Act dramatically affects officer compensation The Act dramatically affects officer compensation programs programs

– Executive bonuses subject to forfeiture under ActExecutive bonuses subject to forfeiture under Act– Personal loans to executives are regulated by ActPersonal loans to executives are regulated by Act– SEC can remove or temporarily freeze payments to SEC can remove or temporarily freeze payments to

executives & directorsexecutives & directors– Public accounting firms are precluded from auditing Public accounting firms are precluded from auditing

company if highly placed executive was employed by company if highly placed executive was employed by auditing firm & participated in company’s prior year’s auditauditing firm & participated in company’s prior year’s audit

– Attorneys have new rules of professional responsibilityAttorneys have new rules of professional responsibility

• The Act dramatically affects officer compensation The Act dramatically affects officer compensation programs programs

– Executive bonuses subject to forfeiture under ActExecutive bonuses subject to forfeiture under Act– Personal loans to executives are regulated by ActPersonal loans to executives are regulated by Act– SEC can remove or temporarily freeze payments to SEC can remove or temporarily freeze payments to

executives & directorsexecutives & directors– Public accounting firms are precluded from auditing Public accounting firms are precluded from auditing

company if highly placed executive was employed by company if highly placed executive was employed by auditing firm & participated in company’s prior year’s auditauditing firm & participated in company’s prior year’s audit

– Attorneys have new rules of professional responsibilityAttorneys have new rules of professional responsibility

Copyright © 2005 South-Western. All rights reserved. 1–24

Reading 2.2Reading 2.2

Impact of the Sarbanes-Oxley ActImpact of the Sarbanes-Oxley ActReading 2.2Reading 2.2

Impact of the Sarbanes-Oxley ActImpact of the Sarbanes-Oxley Act

• The Act requires new employment policies & The Act requires new employment policies & procedures procedures

– Procedures for receiving & handling complaints of corporate Procedures for receiving & handling complaints of corporate fraud have to be establishedfraud have to be established

– Compensation program bonus policies & stock option plans Compensation program bonus policies & stock option plans have to take account of new forfeiture provisionshave to take account of new forfeiture provisions

– Hiring & recruitment strategies & background checks will Hiring & recruitment strategies & background checks will have to be revamped to avoid hiring executives whose have to be revamped to avoid hiring executives whose employment is precluded by the Actemployment is precluded by the Act

– Training required to properly implement all Act’s mandatesTraining required to properly implement all Act’s mandates

• The Act requires new employment policies & The Act requires new employment policies & procedures procedures

– Procedures for receiving & handling complaints of corporate Procedures for receiving & handling complaints of corporate fraud have to be establishedfraud have to be established

– Compensation program bonus policies & stock option plans Compensation program bonus policies & stock option plans have to take account of new forfeiture provisionshave to take account of new forfeiture provisions

– Hiring & recruitment strategies & background checks will Hiring & recruitment strategies & background checks will have to be revamped to avoid hiring executives whose have to be revamped to avoid hiring executives whose employment is precluded by the Actemployment is precluded by the Act

– Training required to properly implement all Act’s mandatesTraining required to properly implement all Act’s mandates

Copyright © 2005 South-Western. All rights reserved. 1–25

Reading 2.3Reading 2.3

Employee SatisfactionEmployee SatisfactionReading 2.3Reading 2.3

Employee SatisfactionEmployee Satisfaction

• Potential impact of Potential impact of demographic changesdemographic changes

– Aging population increases Aging population increases emphasis on health care emphasis on health care benefits, retirement planning, benefits, retirement planning, & job security& job security

– Women are attaining higher Women are attaining higher proportion of professional proportion of professional qualificationsqualifications

– Future skills shortages may Future skills shortages may cause industrialized countries cause industrialized countries to compete for skilled to compete for skilled immigrant laborimmigrant labor

• Potential impact of Potential impact of demographic changesdemographic changes

– Aging population increases Aging population increases emphasis on health care emphasis on health care benefits, retirement planning, benefits, retirement planning, & job security& job security

– Women are attaining higher Women are attaining higher proportion of professional proportion of professional qualificationsqualifications

– Future skills shortages may Future skills shortages may cause industrialized countries cause industrialized countries to compete for skilled to compete for skilled immigrant laborimmigrant labor

• Industrial base shifting to Industrial base shifting to service & health care service & health care sectorssectors

• Wider political & Wider political & economic trends affecting economic trends affecting job satisfactionjob satisfaction

– Health care costsHealth care costs– Job securityJob security– PensionsPensions

• Industrial base shifting to Industrial base shifting to service & health care service & health care sectorssectors

• Wider political & Wider political & economic trends affecting economic trends affecting job satisfactionjob satisfaction

– Health care costsHealth care costs– Job securityJob security– PensionsPensions

Copyright © 2005 South-Western. All rights reserved. 1–26

Reading 2.3 Reading 2.3

Employee SatisfactionEmployee SatisfactionReading 2.3 Reading 2.3

Employee SatisfactionEmployee Satisfaction

• Two groups of issuesTwo groups of issues– Those depending on financial position of Those depending on financial position of

companycompany• BenefitsBenefits• WagesWages• Job securityJob security

– Those less costly to implement through changing Those less costly to implement through changing practices, processes, & culturepractices, processes, & culture

• Communication with managementCommunication with management• Work/life balanceWork/life balance• Employee’s relationship with immediate supervisorEmployee’s relationship with immediate supervisor• Career developmentCareer development

• Two groups of issuesTwo groups of issues– Those depending on financial position of Those depending on financial position of

companycompany• BenefitsBenefits• WagesWages• Job securityJob security

– Those less costly to implement through changing Those less costly to implement through changing practices, processes, & culturepractices, processes, & culture

• Communication with managementCommunication with management• Work/life balanceWork/life balance• Employee’s relationship with immediate supervisorEmployee’s relationship with immediate supervisor• Career developmentCareer development