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This document contains Chapters 1 to 3 CHAPTER 1 - Critical Thinking Applications Critical Thinking Application 1-A What Do You Know about HRM?1 1. Why is there such a discrepancy between what academic research finds (and recommends) and what is actually practiced? How could this gap be closed more quickly? The lack of education and training in the HR field has been shown in several studies. Most MBAs never even have to take a single HRM course. Even HR professionals that were given a 35-item test that assessed the extent of their HR knowledge received an average grade of a “D” and on numerous items, over 50 percent of the HR professionals got the answer wrong! There is a great deal of carefully crafted academic research that is highly relevant to HRM practice HRM professionals should possess up-to-date knowledge about the relative effectiveness of the various programs and activities related to HR planning, training and development, compensation, performance management, selection, information systems, equal employment opportunity/diversity, labor relations, recruitment, and health and safety issues. HRM professionals also should be capable of conducting their own research to evaluate their programs and program alternatives. 2. Pick at least one question where you were (and perhaps still are) surprised by the correct answer. Do a search of some of the research that was cited to justify the correct answer and make a determination if more recent research either corroborates the correct answer or disputes it. Write a short summary of this research and make sure you record the entire citation for the research.
Item & Correct Answer Supporting evidence
Questions Pertaining to Management Practices
1. F___ Leadership training is ineffective because good leaders are born, not made. Studies show that leadership behaviors are only weakly predicted by personality (Judge & Bono, 2000), and that leadership behavior and effectiveness increase after training (Barling, et al., 1996)
2. F___ The most important requirement for an effective leader is to have an outgoing, enthusiastic personality. While there is a moderate connection between extraversion and leader effectiveness (Judge, et al., 2002), there is an even better connection between effective leadership and intelligence (Lord, et al., 1986).
3. F___ Once employees have mastered a task, they perform better when they are told to “do their best” than when they are given specific, difficult performance goals. People work best when given difficult but attainable goals (Locke & Latham, 1990; 1986).
4. T___ Companies with vision statements perform better than those without them. Companies that have clear vision statements tend to be successful and have higher growth rates (Baum et al, 1998; Hoch et al., 1999)
5. F___ Companies with very low rates of professional turnover are less profitable than those with moderate turnover rates. Evidence suggests that lower turnover results in increased profitability (Bain & Company, in Reichheld, 1996), but this may be industry or company specific (Rynes et al., 2002).
6. T___ If company feels it must downsize employees, the most profitable way to do it is through targeted cuts rather that attrition. Companies that downsized employees instead of selling assets have been found to continue to have similarly poor return on assets after 2 years (Morris, Cascio, & Young, 1999)
7. T___ In order to be evaluated favorably by line managers, the most important competency for HR managers is ability to manage change. Ulrich et al. (1995) found that line managers and peers consider management of change to be 76% more important than HR knowledge and delivery, as well as 119% more important than knowledge of the business, when evaluating the performance of HR professionals.
8. T___ On average, encouraging employees to participate in decision making is more effective for improving organizational performance than setting performance goals. The effects of goal setting are considerably higher and more stable than the effects of participation in decision making (Locke et al., 1980; Locke & Latham, 1990).
Questions Pertaining to General Employment Practices
9. F___ Most managers give employees lower performance appraisals than they objectively deserve. Leniency in appraisals, where ratings are significantly higher than they should be, is considerably more common than severity (Jawahar & Williams, 1997).
10. F___ Poor performers are generally more realistic about their performance than good performers are. Poor performers are less realistic (Kruger & Dunning, 1999).
11. T___ Teams with members from different functional areas are likely to reach better solutions to complex problems than teams from a single area. Several studies have found that the use of cross-functional teams results in positive outcomes (Keller, 2001; Lutz, 1994; Northcraft et al., 1995; Pelled et al., 1999).
12. F___ Despite the popularity of drug testing, there is no clear evidence that applicants who score positive on drug tests are any less reliable Individuals who test positive for drugs are significantly higher levels of absenteeism and involuntary turnover (Normand, et al., 1990), as well as higher disciplinary actions (Parish, 1989), vehicular accidents and medical costs (Winkler & Sheridan, 1989).
13. T___ Most people over-evaluate how well they perform on the job. Self-ratings do have higher means than peer and supervisor ratings (Brown, 1986; Harris & Shaubroek, 1988; Mabe & West, 1982; Thornton, 1980).
14. F___ Most errors in performance appraisals can be eliminated by providing training that describes the kinds of errors managers tend to make and suggesting ways to avoid them. Training for performance appraisal errors generally does not change the behavior (Lathan & Wexley, 1994), can introduce new errors (Bernardin & Pence, 1980), and may be irrelevant since most people are aware of the errors they are making yet refuse to change (Longenecker et al., 1987).
Questions Pertaining to Training & Employee Development
15. F___ Lecture-based training is generally superior to other forms of training delivery. Active techniques, where learning occurs through experiences, are generally more effective (Clark, 1983; Gagne & Medsker, 1996; Kulik & Kulik, 1991).
16. F___ Older adults learn more from training than younger adults. Age is negatively related to learning outcomes (Colquitt et al., 2000).
17. F___ The most important determinants of how much training employees actually use on their jobs is how much they learned during training. How much training is actually used on the job is more strongly related to transfer of training climate, in an organizational setting (Tracey et al., 1995).
18. F___ Training for simple skills will be more effective if it is presented in one concentrated session than if it is presented in several sessions over time. Training for simple skills is more effective when spread out over several sessions (Donovan & Radosevich, 1999; Lee & Genovese, 1988).
Questions Pertaining to Staffing
19. F___ The most valid employment interviews are designed around each candidate’s unique background. Structured interviews where all candidates receive the same questions and more valid than unstructured interviews (Schmidt & Hunter, 1998; Weisner & Cronshaw, 1988).
20. F___ Although people use many different terms to describe personalities, there are really only four basic dimensions of personality, as captured by the Myers-Briggs Type Indicator (MBTI). There are five basic dimensions to personality (Digman, 1990), which, with the exception of extroversion, are not assessed by the MBTI.
21. T___ On average, applicants who answer job advertisements are likely to have higher turnover than those referred by other employees. Referrals tend to have lower turnover rates (Conard & Ashworth, 1986).
22. F___ Being very intelligent is actually is actually a disadvantage for performing well on low-skilled job. Intelligence predicts performance for all jobs, even low-skilled ones (Hunter, 1986; Schmidt & Hunter, 1998).
23. F___ There is very little difference among personality inventories in terms of how well they predict an applicant’s likely job performance. This is dependent upon which “big five” characteristics are measured in the personality inventory (Gardner & Martinko, 1996).
24. F___ Although there are “integrity tests” that try to predict whether someone will steal, be absent, or otherwise take advantage of an employer, they don’t work well in practice, because so many people lie on them. Even with distortion, integrity tests predict both counterproductive behavior and performance well (Ones et al., 1993; Ones et al., 1996).
25. F___ One problem with using integrity tests is that they have high degrees of adverse impact on racial minorities. Very small levels of adverse impact exist for these assessments (Ones & Viswesvaran, 1998).
26. F___ On average, conscientiousness is a better predictor of job performance than is intelligence. Intelligence is the best predictor of job performance (Schmidt & Hunter 1998).
27. F___ Companies that screen job applicants for values have higher performance than those the screen for intelligence. Not only is intelligence the best predictor of job performance (Schmidt & Hunter, 1998), but the connection between values and performance is unclear (Ravlin & Meglino, 1987)
Questions Pertaining to Compensation & Benefits
28. F___ When pay must be reduced or frozen, there is little a company can door say to reduce employee dissatisfaction and dysfunctional. Providing explanations for pay cuts that are procedurally just can reduce dissatisfaction and dysfunction (Greenberg, 1990; 1993).
29. T___ Most employees prefer to be paid on the basis of individual performance rather than on team or organizational performance. Many studies have found that individuals do not prefer team-based pay (BNA, 1988; Cable & Judge, 1994).
30. F___ Merit pay systems cause so many problems that companies without them tend to have higher performance then companies with them. Merit pay does increase organization-level performance (Kopelman & Reinharth, 1982; Kopelman, Rovenpor, & Cayer, 1991; Heneman, 1992).
31. T___ There is a positive relationship between the proportion of managers receiving organizationally based pay incentives and company profitability. Gerhart & Milkovich (1990) found higher return on assets in companies when managers had significantly higher eligibility for stock options.
32. T___ New companies have a better chance of surviving if all the employees receive incentives based on organizational-wide performance. According to Welbourne & Andrews (1996), new companies that had both high levels of organization-wide performance incentives and placed a high value on employees had a much higher five-year survival rate.
33. F___ Talking about salary issue during performance appraisals tends to hurt morale and future performance. Salary discussions during performance appraisals have been found to have a positive effect on attitudes (Prince & Lawler, 1986).
34. F___ Most employees prefer variable pay systems (e.g., incentive schemes, gain sharing, stock options) to fixed pay systems. Several studies have indicated that employees prefer fixed pay, followed by individual incentives, and finally organization-wide incentives (BNA, 1988; Cable & Judge, 1994).
35. F___ Surveys that directly ask employees how important pay is to them are likely to overestimate pay’s true importance in actual decisions. Pay is a very important factor in decisions, but due to social desirability and lack of insight people tend to discount how much it affects their decisions (Feldman & Arnold, 1978;Slovic & Lichtenstein, 1971; Rynes et al, 1983; Jurgensen, 1978)
References for correct answers. 1. Barling, J.E., Weber, T., & Kelloway, E.K. (1996). Effects of transformational leadership training on attitudinal and financial outcomes: A field experiment. Journal of Applied Psychology, 81, 827-833. Judge, T.A., & Bono, J.E. (2000). Five-factor model of personality and transformational leadership. Journal of Applied Psychology, 85, 751-765. 2. Judge, T.A., Bono, J.E., Ilies, R., & Werner, M. (in press). Personality and leadership: A qualitative and quantitative review. Journal of Applied Psychology. Lord, R.G., Devader, C.L., & Alliger, G.M. (1986). A meta-analysis of the relationship between personality traits and leadership perceptions -An application of validity generalization procedures. Journal of Applied Psychology, 71, 402-410. 3. Locke, E.A., & Latham, G.P. (1990). A theory of goal-setting and task performance. Upper Saddle River, NJ. Locke, E.A., Schweiger, D.M., & Latham, G.P. (1986). Participation in decision making: When should it be used? Organizational Dynamics, 14, 65-79. 4. Baum, J.R., Locke, E.A., & Kirkpatrick, S.A. (1998). A longitudinal study of the relation of vision and vision communication to venture growth in entrepreneurial firms. Journal of Applied Psychology, 83, 43-54. Hoch, D.J., Roeding, C., Purkert, G., & Lindner, S.K. (1999). Secrets of software success: Management insights from 100 software firms around the world. Boston: HBR Press. 5. Reichheld, F.F. (1996). The loyalty effect. Boston: Harvard Business School Press. 6. Morris, J.R., Cascio, W.F., & Young, C.E. (1999). Downsizing after all these years: Questions and answers about who did it, how many did it, and who benefited from it. Organizational Dynamics, 27 (3), 78-87. 7. Ulrich, D., Brockbank, W., Yeung, A.K., & Lake, D.G. (1995). Human resource competencies: An empirical assessment. Human Resource Management, 34, 473-495. 8. Locke, E.A., Feren, D.B., McCaleb, V.M., Shaw, K.N., & Denny, A.T. (1980). The relative effectiveness of four methods of motivating employee performance. In K.D. Duncan, M.M. Gruneberg, & D. Wallis (Eds.), Changes in working life (pp. 363-388). London: Wiley. Locke & Latham, 1990, op. cit., note 3. Locke, E.A., Schweiger, D.M., & Latham, G.P. (1986). Participation in decision making: When should it be used? Organizational Dynamics, 14, 65-79. Wagner, J.A., III. (1994). Participation's effect on performance and satisfaction: A reconsideration of the research evidence. Academy of Management Review, 19, 312-330. 9. Jawahar, I.M., & Williams, C.R. (1997). Where all the children are above average: The performance appraisal purpose effect. Personnel Psychology, 50, 905-926. 10. Kruger, J., & Dunning, D. (1999). Unskilled and unaware of it: How difficulties in recognizing one's own incompetence lead to inflated self-assessments. Journal of Personality and Social Psychology, 77, 1121-1134. 11. Keller, R.T. (2001). Cross-functional project groups in research and new product development: Diversity, communications, job stress and outcomes. Academy of Management Journal, 44, 547-555. Lutz, R.A. (1994). Implementing technological change with cross-functional teams. Research Technology Management, 37 (2), 14-18. Northcraft, G., Polzer, J., Neale, M., & Kramer, R. (1995). Diversity, social identity, and performance: Emergent social dynamics in cross-functional teams. In S. Jackson & M. Ruderman (Eds.), Diversity in work teams (pp. 69-96). Washington, DC: APA Press. Pelled, L.H., Eisenhardt, K.M., & Xin, K.R. (1999). Exploring the black box: An analysis of work group diversity, conflict, and performance. Administrative Science Quarterly, 44, 1-28. 12. Normand, J., Salyards, S.D., & Mahoney, J.J. (1990). An evaluation of pre-employment drug testing. Journal of Applied Psychology, 75, 629-639. Parish, D.C. (1989). Relation of the pre-employment drug testing result to employment status: A one-year follow-up. Journal of General Internal Medicine, 4, 44-47. Winkler, H., & Sheridan, J. (1989, September). An examination of behavior related to drug use at Georgia Power Company 13. Brown, J.D. (1986). Evaluations of self and others: Self-enhancement biases in social judgment. Social Cognition, 4, 353-376. Kruger & Dunning (1999), op. cit., note 10. Harris, M.M., & Schaubroeck, J. (1988). A meta-analysis of selfboss, self-peer, and peer-boss ratings. Personnel Psychology, 41, 43-62. Mabe, P.A., III, & West, S.G. (1982). Validity of self-evaluation of ability: A review and meta-analysis. Journal of Applied Psychology, 67, 280-296. Thornton, G.C. (1980). Psychometric properties of self-appraisals of job performance. Personnel Psychology, 33, 263-271. 14. Latham, G.P., & Wexley, K.N. (1994). Increasing productivity through performance appraisal. Reading, MA: Addison-Wesley. Bernardin, H.J., & Pence, E.G. (1980). The effects of rater training: Creating new response sets and decreasing accuracy. Journal of Applied Psychology, 65, 6066. Longenecker et al. (1987), op. cit., note 9. 15. Clark, R.E. (1983) Reconsidering research on learning from media. Review of Educational Research, 53, 445-459. Kulik, C.C., & Kulik, J.A. (1991). Effectiveness of computer-based instruction: An updated analysis. Computers in human behavior, 7, 75-94. Gagne, R.M., & Medsker, K.L. (1996). The conditions of learning: Training applications. Fort Worth, TX: Harcourt Brace. Simonson, M., Schlosser, C., & Hanson, D. (1999). Theory and distance education: A new discussion. The American Journal of Distance Education, 13, 60-75. 16. Colquitt, J.A., LePine, J.A., & Noe, R.A. (2000). Toward an integrative theory of training motivation: A meta-analytic path analysis of 20 years of research. Journal of Applied Psychology, 85, 678707. 17. Tracey, J.B., Tannenbaum, S.I., & Kavanaugh, M.J. (1995). Applying trained skills to the job: The importance of the work environment. Journal of Applied Psychology, 80, 239-252. 18. Donovan, J.J., & Radosevich, D.J. (1999). A meta-analytic review of the distribution of practice effect: Now you see it, now you don't. Journal of Applied Psychology, 84, 795-805. Lee, T.D., & Genovese, E.D. (1988). Distribution of practice in motor skill acquisition: Learning and performance effects reconsidered. Research Quarterly, 59, 277-287. 19. McDaniel, M.A., Whetzel, D.L., Schmidt, F.L., & Maurer, S.D. (1994). The validity of employment interviews: A comprehensive review. Journal of Applied Psychology, 79, 599-616. Wiesner, W.H., & Cronshaw, S.F. (1988). The moderating impact of interview format and degree of structure on the validity of the employment interview. Journal of Occupational Psychology, 61, 275-290. 20. Digman, J.M. (1990). Personality structure: Emergence of the five-factor model. Annual Review of Psychology, 41, 417-440. Gardner, W., & Martinko, M. 1996. Using the MBTI to study managers: A literature review and research agenda. Journal of Management, 22, 45-83. 21. Conard, M.A., & Ashworth, S.D. (1986). Recruiting source effectiveness: A meta-analysis and reexamination of two rival hypotheses. SIOP annual meeting. 22. Hunter, J.E. (1986). Cognitive ability, cognitive aptitudes, job knowledge, and job performance. Journal of Vocational Behavior, 29, 340-362. Schmidt, F.L., & Hunter, J.E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124, 262-274. 23.Barrick, M.R., &Mount, M.K. (1991). The big five personality dimensions and job performance: A meta-analysis. Personnel Psychology, 44, 1-26. Gardner, W.L., & Martinko, M.J. (1996). Using the Myers-Briggs type indicator to study managers: A literature review and research agenda. Journal of Management, 22, 45-83. 24. Ones, D.S., Viswesvaran, C., & Schmidt, F.L. (1993). Comprehensive meta-analysis of integrity test validities: Findings and implications for personnel selection and theories of job performance. Journal of Applied Psychology, 78, 679703. Ones, D.S., Viswesvaran, C., & Reiss, A.D. (1996). Role of social desirability in personality testing for personnel selection: The red herring. Journal of Applied Psychology, 81, 660-679. 25. Ones, D.S., & Viswesvaran, C. (1998). Gender, age, and race differences on overt integrity tests: Results across four large-scale job applicant data sets. Journal of Applied Psychology, 83, 35-42. 26. Schmidt, F.L. & Hunter, J.E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124, 262-274. 27. Ibid. Adkins, C.L., Ravlin, E.C., & Meglino, B.M. (1996). Value congruence between co-workers and its relationship to work outcomes. Group and Organization Management, 21, 439-460. Meglino, B.M., & Ravlin, E.C. (1998). Individual values in organizations: Concepts, controversies, and research. Journal of Management, 24, 351389. Ravlin, E.C., & Meglino, B.M. (1987). Effect of values on perception and decision making: A study of alternative work values measures. Journal of Applied Psychology, 72, 666-673. 28. Greenberg, J. (1990). Employee theft as a reaction to under-payment inequity: The hidden cost of pay cuts. Journal of Applied Psychology, 75, 561-568. Greenberg, J. (1993). Stealing in the name of justice: Informational and interpersonal moderators of theft reactions to underpayment inequity. Organizational Behavior and Human Decision Processes, 54, 81-103. 29. Cable, D.M., & Judge, T.A. (1994). Pay preferences and job search decisions: A person-organization fit perspective. Personnel Psychology, 47, 317-348. 30. Kopelman, R.E., & Reinharth, L. (1982). Research results: The effect of merit-pay practices on white collar performance. Compensation Review, 14 (4), 30-40. Heneman, R.L. (1992). Merit pay: Linking pay increases to performance ratings. Reading, MA: Addison-Wesley. Kopelman, R.E., Rovenpor, J.L., & Cayer, M. (1991). Merit pay and organizational performance: Is there an effect on the bottom line? National Productivity Review, 299-307. 31. Gerhart, B., & Milkovich, G.T. (1990). Organizational differences in managerial compensation and firm performance. Academy of Management Journal, 33, 663-691. Welbourne, T.M., & Andrews, A.O. (1996). Predicting the performance of initial public offerings: Should human resource management be in the equation? Academy of Management Journal, 39, 891-919. 32. Welbourne & Andrews (1996), op. cit., note 31. 33. Prince, J.B., & Lawler, E.E., III. (1986). Does salary discussion hurt the developmental performance appraisal? Organizational Behavior and Human Decision Processes, 37, 357-375. 34. Bureau of National Affairs. (1988). Changing pay practices: New developments in employee compensation. Washington, DC: Author. Cable, D.M., & Judge, T.A. (1994), op. cit., note 29. 35. Feldman, D.C., & Arnold, H.J. (1978). Position choice: Comparing the importance of organizational and job factors. Journal of Applied Psychology, 63, 706-710. Jurgensen, C.E. (1978). Job preferences: What makes a job good or bad? Journal of Applied Psychology, 63, 267-276. Rynes, S.L., Schwab, D.P., & Heneman, H.G., III. (1983). The role of pay and market pay variability in job application decisions. Organizational Behavior and Human Performance, 31, 353-364. Slovic, P., & Lichtenstein, S. (1971). Comparison of Bayesian and regression approaches to the study of information processing in judgment. Organizational Behavior and Human Performance, 6, 649-744. Critical Thinking Application 1-B Corporate Social Responsibility and Human Resource Management *Contributed by Richard Peters. Most people regard corporate social responsibility in the straight business sense; that is, CSR must be linked to the “bottom line” or corporate financial performance. Do you agree with this position? Explain your answer. As potential and existing stockholders, most people regard the social responsibility issue with straight business sense; it must be linked to the bottom line. If it makes fiscal sense to do then do it, if not, don’t. Wal-Mart, for example, is visible with its socially responsible programs advertising the ways its employees are involved in their communities through their national television advertisements. CEOs are more than ever looking at being socially responsible as being good for the bottom line. To have a reputation of being socially irresponsible can affect market share and profits thereby decreasing value to shareholders. Research on corporate social responsibility and corporate performance indicates an increased importance attached to corporate image on consumer behavior, corporate financial performance and investment. CEOs are now increasingly looking for ways in which social performance and reputation can benefit the organization financially , either through lowered costs and/or increased sales revenue. For example, firms use their rankings on lists like Forbes’s annual “100 Best Companies to Work For” to attract and retain great employees. CSR has also become a marketing tool for many businesses eager to sell themselves to a socially conscious public which rewards good ethics, employee relations, and environmental management with increased purchasing and brand loyalty. Buoyed by recent evidence that suggests effective Corporate Social Performance leads to financial growth, firms are attempting to leverage the value of social responsibility by creating CSR strategies that target all operations and functions of the organization, including Human Resources Management (HRM). Interestingly, most students want to work for socially responsible corporations. Most “employers of choice” are those that have foundations established for corporate gift giving and have other social programs working to help the communities in which the organizations reside. 2. Conduct research related to CSR and corporate performance since Orlitzky, Schmidt, and Rynes (2003). Does the new research support the conclusions of their meta-analysis? Mackey, A.; Mackey, T.m Barney, J. (2007). Corporate Social Responsibility and Firm Performance: Investor Preferences and Corporate Strategies .The Academy of Management Review (AMR) Issue: Volume 32, Number 3 / 2007 Pages: 817 - 835 We address the debate about whether firms should engage in socially responsible behavior by proposing a theoretical model in which the supply of and demand for socially responsible investment opportunities determine whether these activities will improve, reduce, or have no impact on a firm's market value. The theory shows that managers in publicly traded firms might fund socially responsible activities that do not maximize the present value of their firm's future cash flows yet still maximize the market value of the firm Callan, S. & Thomas, J. (2009). Corporate financial performance and corporate social performance: an update and reinvestigation. Corporate Social responsibility and Environmental Management. p 61-78. This paper responds to the criticism of past CSR research with an updated study of the CSP-CFP relationship, testing two approaches to measuring CSP, controlling for key variables identified in the literature, and testing for nonlinearity of certain independent variables. Chief among our findings is a positive CSP-CFP relationship, which supports proponents of stakeholder theory. We also determine that empirical models specifying two CSP component measures are stronger than those using a fully aggregated measure. Lastly, we find that control variables must be properly specified to avoid bias and that some of these measures are quadratically related to CFP 3. Did your responses to the questionnaire approximate the mean data from other students? If there were significant differences (about 2 points higher or lower), in what areas were these differences? Do you have any theories These data were compiled from business undergraduates and graduate students (n=146). Please note that the descriptors on the scale in the book are wrong. As described in the directions, the “Somewhat agree” rating should be a “5" and the “Agree” should be a “6." The means and standard deviations from items 1-15 are as follows:
Item Mean SD
1. 4.7 1.7
2. 5.3 1.8
3. 5.0 1.9
4. 2.4 2.2
5. 5.4 1.4
6. 3.8 1.7
7. 6.0 1.1
8. 4.2 2.3
9. 5.6 1.5
10. 3.2 2.0
11. 4.2 1.9
12. 5.3 1.6
13. 5.1 1.8
14. 5.9 1.9
15. 5.2 1.5
Critical Thinking Application 1-C Resolution: Close Down the Human Resources Department Generate a list of reasons why there may be another side to this story. What key questions would you want to ask Mr. Stewart and Mr. Hammonds regarding outsourcing? Compile a list of advantages and disadvantages to outsourcing that could help a company make thoughtful decisions regarding HR. Some of the reasons listed will include: Outsourcing will not be as personal as in-house services. Outsourcing will not know the company philosophy intimately (how it works on a daily basis). Outsourcing will not have first hand knowledge of the company culture. Outsourcing will not have knowledge if the organizational chart is “just on paper only” (more may get done through the informal networks). Key questions to ask Mr. Stewart: What are the individual per unit costs associated with outsourcing each function? What are the individual per unit costs associated with providing services in-house? What are the total costs associated with outsourcing each function? What are the total costs associated with providing services in-house? What is the quality (retention rate of hirees, payroll problems, and training discrepancies) of the service provided by outsourcing? What is the quality (retention rate of hirees, payroll problems, training discrepancies) of the service provided by personnel in-house? To what extent will the outsourcing be used (100%, 75%, 50% etc.)? At what levels of the corporation will these services be used and to what degree (separate services for base compensation, merit compensation, commissions, bonuses, for hourly, salaried, non-managerial, managerial, and executive pay)? Advantages to outsourcing HR functions Disadvantages to outsourcing HR functions More objective Less personal - “boiler-plate approach” Less emotional Can shop price Loss of consistency Specialist could provide superior products “Up-selling” by consulting firms Do PEOs Save Time, Hassles, and Money?* The use of PEOs (Professional Employer Organizations) has increased dramatically. PEOs help companies by outsourcing HRM functions. Since the industry began in the early 1980s annual revenue growth rates have been 25 percent to 30 percent. Experts are predicting that the pace will continue. The majority of the PEOs’ clients are companies with staffs of less than 20 people. Small businesses continue to grow in the U.S. according to the Small Business Administration. While better known now than a few years ago, they are used by just 2 percent to 3 percent of companies with 100 or fewer workers, says National Association of Professional Employer Organizations (NAPEO) executive vice president Milan P. Yager. Today over 2,000 PEOs oversee 2 million to 3 million American workers, according to NAPEO in Alexandria, Va. Industry revenues exceed $51 billion. Small firms face increasing pressure to be competitive--all the more reason for them to focus on "the business of business” and hire PEOs. Bigger employers have entered the PEO fold in part because their HR executives are more concerned with corporate strategy than with the mundane but necessary details of payroll and benefits, says Steven A. Tessler, president of New York operations for EPIX Holdings Corp., based in Tampa, Fla., and Woodbridge, N.J.
While most clients believe that using a PEO is a cost savings in both time and money, there is little in the way of valid metrics in assessing the actual value of their offered services. In a recent survey sponsored by NAPEO and SHRM, more than 500 clients were polled from 52 NAPEO members. The average client in the study reported a net annual savings of $12,000 from using a PEO and saved the average client nine hours per week in time. Links: National Association of Professional Employer Organizations website., an online, searchable database of PEOs located throughout the world. CHAPTER 2 - CRITICAL THINKING APPLICATIONS Critical Thinking Application 2-A What is the Origin of Your University Apparel? * Contributed by Mike Ryan Take a position on whether FSU should have joined the WRC. Conduct a web search to determine the current state of the controversy. Assuming your instructor doesn’t provide the information, conduct research on your campus to find out where most of your campus paraphernalia is produced and what companies have the licensing agreements. Find out whether the supplier is cleared by the FLA and/or the WRC. Is your school affiliated with either the FLA or the WRC? Is there a USAS chapter active on your campus? Go into the web sites of the USAS and the WRC and review their mission statements and past accomplishments. What is your opinion about the intervention of such organizations as the FLA, WRC, and USAS? Would you consider joining the USAS? Do you think your university should join the WRC if it doesn’t belong already? According to information received from various sources: Relevant organizations with web addresses: USAS: WRC: FLA: Global Human Rights Watch: International Labor Organization:; Sweatshop Watch:; Verité: Critical Thinking Application 2-B International HR: How about a Cuppa? * Contributed by Mary E. Wilson So what are the critical HR issues with regard to Starbucks’ international goals? Critical HR issues include: The host country’s employment regulations. Knowledge of how decisions are made in country both formally and informally. Knowledge of how the Starbucks philosophy will be communicated to the local workers. Making sure compensation is in line with local market and perception of what Starbucks should pay. Training and geographic (if necessary) relocation of personnel. Knowledge of potential familial problems and career problems once assignment begins and ends. Knowledge of possible cultural differences regarding work, quality, etc. Making sure Starbucks can supply infrastructure for “national” manager support of all issues. What are the key questions that must be asked once research has determined the market is going to be profitable in a particular country? Key questions: How will the Starbucks be staffed? Will the line workers be locals? Will the managers be locals? Will there be partnership opportunities in the country? What are the local customs regarding work? What are the local customs regarding number of hours worked in a day, a week, etc.? What are the local customs regarding dress at work? What are the local customs regarding transportation to work? How will employees get to and from work? What are the local services that can help with employee support (such as laundry facilities, day care, etc.)? Who owns the employees’ wages? Is it the state? Is the owner the father? Can minors work? What is a minor by the country’s standard? Can women work? What about elders? What are the employment regulations? Are there special taxes employees must pay because they are working? Will this be a local Starbucks with its own ethnic beverages/food? Or will it try to incorporate the U.S. menu as the staple? In terms of the eight HR domains discussed in Chapter 1, what answers are required before getting too far along in plans to open another location? Note: Many more questions will be derived from listing them in terms of the eight HR domains. Before moving forward with plans to open another location, it's crucial to address several key aspects within the eight HR domains: 1. Strategic Management: Understand the strategic objectives behind expanding to a new location, including market analysis, competition assessment, and alignment with organizational goals. 2. Workforce Planning and Employment: Determine the workforce needs for the new location, including staffing requirements, job roles, skills, and recruitment strategies. 3. Human Resource Development: Plan for training and development programs to ensure that employees at the new location are equipped with the necessary skills and knowledge to perform their roles effectively. 4. Total Rewards: Design a competitive compensation and benefits package that attracts and retains top talent at the new location, considering factors such as local market rates and cost of living. 5. Employee and Labor Relations: Establish policies and procedures for managing employee relations and resolving conflicts, including compliance with labor laws and regulations specific to the new location. 6. Risk Management: Identify potential risks associated with opening a new location, such as legal, financial, or operational risks, and develop mitigation strategies to address them. 7. HR Technology: Implement HR systems and technology infrastructure to support HR processes at the new location, including payroll, performance management, and employee communication tools. 8. Diversity and Inclusion: Foster a culture of diversity and inclusion at the new location, promoting equal opportunities and respect for all employees regardless of background or identity. Addressing these areas comprehensively will help ensure a smooth and successful expansion to a new location while effectively managing human resource aspects. Write down what you regard as the top five most important questions for which you need answers. Top Five Questions(Assuming there is no market potential): What are the customs, culture, and regulations regarding this business and its workers in this country that are or will become important? Who will do what? (Addressing the specifics of job analyses). Who will do what? (Addressing the specifics of staffing, nationals or imported management?). How will this Starbucks look to the local employees? - To corporate Starbucks? How will Starbucks as a corporation look at this particular restaurant in this particular country? How will the HR department and management of this restaurant measure the essential functions concerning its human resources to determine if the bottom line is being enhanced by its practices? Select a country that you believe would be a good opportunity for a Starbucks location. Then think about the variables you considered in selecting that country. Write down those variables Possible recommendations are Asia (China & India); Former European Communist Countries (ie. Russia) Italy Columbia CHAPTER 3 - CRITICAL THINKING APPLICATIONS Critical Thinking Application 3-A Are Dreadlocks Protected under Title VII? Should Mr. Polk and others be allowed to violate a grooming policy on the basis of a religious proclamation on the sanctity of dreadlocks? Why or why not? If you answer "yes," is there any point where you would draw the line in terms of company policy regarding appearance and the religious implications of dress? Does FedEx have a right to impose a reasonable grooming policy based on customer reactions to personnel appearances? As of June 3, 2002, a Maryland court upheld the employer’s right to require the dreadlocks cut. In Booth v. Maryland, the district judge determined that guards "with dreadlocks might be confused with prisoners during an uprising or attempted breakout." Because of the safety argument, the court deemed that good grooming was job-related. There have been no more recent or contradictory decisions. Hoppenstein, L. (July 2, 2002). Employer can dictate hairstyles - - no dreadlocks allowed. Quick Clips for July 2002. accessed July 31, 2002. EEOC v. Greyhound Lines Inc. (2002) found in favor of a job applicant based on religious reasons when he was not hired because of his dreadlocks. In 1997, in Robinson v. District of Columbia, a policeman was ordered back on the job after being fired for his dreadlocks. In this case, the employee kept his dreadlocks short and under his hat. Charles Eastman sued UPS in 1995 because he failed to keep his dreadlocks under wraps. Mr. Eastman lost because he could not prove that UPS’s business-like manner hair policy intentionally discriminated against African Americans. He could not claim religious reasons since he admitted that the dreadlocks were a personal choice. Customer preferences cannot be taken into consideration unless the preference constitutes the “essence of the business” (Diaz v. Pan American World Airways). FedEx’s essence of their business is getting packages to recipients on time. Polk et al. contend that they would hide their hair under hats and keep them neat. Unlike Mr. Eastman, Polk et al. are claiming religious reasons and have already agreed to some restrictions on their appearance. It will be interesting to see how this case progresses. As of June 2002, New York State Attorney General Eliot Spitzer joined the EEOC suit citing inadequate laws for all religious practices. New York State Department of Law. (2002). Fed Ex named in religious accommodation suit. Press Release. accessed July 31, 2002. Critical Thinking Application 3-B Allegations of Religious Discrimination Title VII of the Civil Rights Act of 1964 prohibits workplace discrimination based on religion, ethnicity, country of origin, race and color. Such discrimination is prohibited in any aspect of employment, including recruitment, hiring, promotion, benefits, training, job duties, and termination. Workplace harassment is also prohibited by Title VII. In addition, an employer must provide a reasonable accommodation for religious practices unless doing so would result in undue hardship. The law prohibits retaliation against an individual because s/he has engaged in protected activity, which includes filing a charge, testifying, assisting, or participating in any manner in an investigation, or opposing a discriminatory practice. Employers with 15 or more employees are required to comply with Title VII. Title VII also prohibits discrimination by most unions and employment agencies. Since the attacks of September 11, 2001, the Equal Employment Opportunity Commission (EEOC) and state and local fair employment practices agencies have recorded a significant increase in the number of charges alleging discrimination based on religion and/or national origin. Many of the charges have been filed by individuals who are or are perceived to be Muslim, Arab, South Asian, or Sikh. These charges most commonly allege harassment and discharge. While employers have an ongoing responsibility to address workplace discrimination, reaction to the events of September 11, 2001 and the “war on terror” may demand increased efforts to prevent discrimination. This assignment provides examples of related incidents and what steps an employer can take to meet these legal responsibilities. The Commission has also prepared a companion fact sheet that answers questions about employee rights. For additional information, visit the EEOC's website at Consider the four scenarios below and answer the questions after each one. Scenario 1: Muhammad, who is Arab American, works for XYZ Motors, a large used car business. Muhammad meets with his manager and complains that Bill, one of his co-workers, regularly calls him names like “camel jockey,” “the local terrorist,” and “the ayatollah,” and has intentionally embarrassed him in front of customers by claiming that he is incompetent. How should the superior respond? Answer: Managers and supervisors who learn about objectionable workplace conduct based on religion or national origin are responsible for taking steps to correct the conduct by anyone under their control. Muhammad's manager should relay Muhammad's complaint to the appropriate manager if he does not supervise Bill. If XYZ Motors then determines that Bill has harassed Muhammad, it should take disciplinary action against Bill that is significant enough to ensure that the harassment does not continue. Workplace harassment and its costs are often preventable. Clear and effective policies prohibiting ethnic and religious slurs, and related offensive conduct, are needed. Confidential complaint mechanisms for promptly reporting harassment are critical, and these policies should be written to encourage victims and witnesses to come forward. When harassment is reported, the focus should be on action to end the harassment and correct its effects on the complaining employee. Scenario 2: Three of the 10 Muslim employees in XYZ’s 30-person template design division approach their supervisor and ask that they be allowed to use a conference room in an adjacent building for prayer. Until making the request, those employees prayed at their workstations. What should XYZ do? Answer: XYZ should work closely with the employees to find an appropriate accommodation that meets their religious needs without causing any undue hardship for XYZ. Whether a reasonable accommodation would impose undue hardship and therefore not be required depends on the particulars of the business and the requested accommodation. When the room is needed for business purposes, XYZ can deny its use for personal religious purposes. However, allowing the employees to use the conference room for prayers likely would not impose an undue hardship on XYZ in many other circumstances. Similarly, prayer often can be performed during breaks, so that providing sufficient time during work hours for prayer would not result in an undue hardship. If going to another building for prayer takes longer than the allotted break periods, the employees still can be accommodated if the nature of the template design division's work makes flexible scheduling feasible. XYZ can require employees to make up any work time missed for religious observance. In evaluating undue hardship, XYZ should consider only whether it can accommodate the three employees who made the request. If XYZ can accommodate three employees, it should do so. Because individual religious practices vary among members of the same religion, XYZ should not deny the requested accommodation based on speculation that the other Muslim employees may seek the same accommodation. If other employees subsequently request the same accommodation and granting it to all of the requesters would cause undue hardship, XYZ can make an appropriate adjustment at that time. For example, if accommodating five employees would not cause an undue hardship but accommodating six would impose such hardship, the sixth request could be denied. Like employees of other religions, Muslim employees may need accommodations such as time off for religious holidays or exceptions to dress and grooming codes. Scenario 3: Susan is an experienced clerical worker who wears a hijab (head scarf) in conformance with her Muslim beliefs. XYZ Temps places Susan in a longterm assignment with one of its clients. The client contacts XYZ and requests that it notify Susan that she must remove her hijab while working at the front desk, or that XYZ assign another person to Susan’s position. According to the client, Susan’s religious attire violates its dress code and presents the “wrong image.” Should XYZ comply with its client’s request? Answer: XYZ Temps may not comply with this client request without violating Title VII. The client would also violate Title VII if it made Susan remove her hijab or changed her duties to keep her out of public view. Therefore, XYZ should strongly advise against this course of action. Notions about customer preference real or perceived do not establish undue hardship, so the client should make an exception to its dress code to let Susan wear her hijab during front desk duty as a religious accommodation. If the client does not withdraw the request, XYZ should place Susan in another assignment at the same rate of pay and decline to assign another worker to the client. Scenario 4: Anwar, who was born in Egypt, applies for a position as a security guard with XYZ Corp., which contracts to provide security services at government office building. Can XYZ require Muhammad to undergo a background investigation before he is hired? Answer: XYZ may require Anwar to undergo the same pre-employment security checks that apply to other applicants for the same position. As with its other employment practices, XYZ may not perform background investigations or other screening procedures in a discriminatory manner. In addition, XYZ may require a security clearance pursuant to a federal statute or Executive Order. Security clearance determinations for positions subject to national security requirements under a federal statute or an Executive Order are not subject to review under the equal employment opportunity statutes. WHERE TO GO FOR GUIDANCE The EEOC is available to provide employers with useful information on how to address workplace problems relating to discrimination based on religion, national origin, race or color. They conduct various types of training, and can help with a format that is right for the employer. Small businesses are faced with unique challenges in promoting effective workplace policies that prevent discrimination. The EEOC Small Business Liaisons are located in each of the District, Local and Area offices to assist employers in compliance with EEO laws. Relevant Material from the EEOC Website QUESTIONS AND ANSWERS ABOUT THE WORKPLACE RIGHTS OF MUSLIMS, ARABS, SOUTH ASIANS, AND SIKHS UNDER THE EQUAL EMPLOYMENT OPPORTUNITY LAWS Since the attacks of September 11, 2001, the Equal Employment Opportunity Commission (EEOC) and state and local fair employment practices agencies have documented a significant increase in the number of charges alleging workplace discrimination based on religion and/or national origin. Many of the charges have been filed by individuals who are or are perceived to be Muslim, Arab, South Asian, or Sikh. These charges most commonly allege harassment and discharge. In order to help people better understand their rights, EEOC has posted detailed information on its website about national origin and religious discrimination, as well as information on how to file a charge. If you think that you, or someone you know, has been discriminated against because of national origin or religion and want to learn more about exercising your legal rights, please read the information provided or go to The scenarios described below are based on charges EEOC has received over the past few months. The following questions and answers are meant to provide guidance on what constitutes illegal discrimination and positive steps you can take to exercise your rights in the workplace. INTRODUCTION Title VII of the Civil Rights Act of 1964 prohibits workplace discrimination based on religion, ethnicity, country of origin, race and color. Such discrimination is prohibited in any aspect of employment, including recruitment, hiring, promotion, benefits, training, job duties, and termination. Workplace harassment is also prohibited by Title VII. In addition, an employer must provide a reasonable accommodation for religious practices unless doing so would result in undue hardship. Title VII prohibits retaliation against someone who complains about a discriminatory practice, files a charge, or assists in an investigation of discrimination in any way. Employers with 15 or more employees are required to comply with Title VII. Most unions and employment agencies are also covered. HIRING AND DISCHARGE I am a South Asian woman from Bangladesh. I applied for a job at a bakery and had a phone interview with the manager. She seemed to like me a lot and she offered me the job over the phone. When I came in to work the first day, she appeared to be startled by my appearance. I have dark skin and wear a hijab. She brusquely stated that she had found someone "better suited to the job" and sent me home. I don't know what to do about this. An employer may not refuse to hire someone because of his or her religion, national origin, race or color. However, it is often difficult to find out exactly why a person was not hired for a job. In your situation, it appears that you were sent home because the employer had a negative reaction to your hijab, which you wear as part of your religious and/or cultural identity. But the only way to really know is to get more facts. You can ask the employer for an explanation of its business reasons. Let's assume that when the employer saw you wearing your hijab, she worried about how her customers would feel about it. Customer preference is never a justification for a discriminatory practice. Refusing to hire someone because customers or co-workers may be "uncomfortable" with that person's religion or national origin is just as illegal as refusing to hire that person because of religion or national origin in the first place. Similarly, an employer may not fire someone because of religion and/or national origin. This prohibition applies to other employment decisions as well, including promotion, transfers, work assignments and wages. Even though you have a gut feeling that the reason you were turned away is due to your religious identity or national origin, a fuller explanation of the employer's business reasons would be needed before determining whether the action was discriminatory. You may contact the EEOC or your state Fair Employment Practices Agency and file a charge. We will assess the allegation and conduct the appropriate investigation. HARASSMENT I am an Arab American man and have been a salesman at a large car retailer for five years. After September 11, my coworkers stopped talking to me, and there has been a lot of tension. One coworker started calling me names like "camel jockey" and "the local terrorist." I used to have a good relationship with my coworkers and enjoyed my job, but now I dread coming to work each day. What can I do about my situation? Racial and/or ethnic epithets and general workplace hostility can amount to unlawful harassment. While many employees feel powerless in this situation, the important thing to remember is that you have options. Even if your situation does not amount to illegal harassment, you can still take steps to try to improve the situation by communicating with your employer about it. Coming up with an acceptable solution to the problem depends on your specific circumstances. If you have had a good relationship with these coworkers in the past, perhaps the most effective approach would be to discuss the conduct directly with them. On the other hand, if you are uncomfortable talking with them about it, or if the harassment has continued for an extended period, you should notify your employer about the harassment. Your employer is legally required to take steps to end harassment. Follow the employer's complaint procedure, if it has one, or notify a manager or other company official. If you are worried that your coworkers might retaliate against you for complaining, you should know that your employer has a legal duty to protect you against retaliation. Employers can do different things to address these types of situations. The employer may decide to sit down with both you and your coworkers and explain why the comments are unacceptable. Since, in your situation, there is also overall workplace tension, another option would be training for all employees addressing harassment in the workplace. If there is no improvement in your coworkers' conduct, your employer may choose to punish the harassers for their behavior. The bottom line is that the employer must take action that effectively ends the harassment. It is possible that your employer may not be helpful to you, or might not see this as a problem at all. While most employers try to prevent workplace harassment, there are situations where an employer may condone or even perpetrate this type of behavior. In those situations, it is going to be very difficult to solve the workplace problems through dialogue. You can contact the EEOC for guidance or file a charge of discrimination at any time. If you decide to file a charge with EEOC, it is most helpful if you document any incidents that occur, including the dates on which they occurred, and the names of the harassers. There are strict deadlines for filing charges. A charge of employment discrimination must be filed with EEOC within 180 days or 300 days if the state has a fair employment practices agency of the date of the disputed conduct. See below for more information on filing a charge of discrimination. RELIGIOUS ACCOMMODATION I am a computer specialist at a software company downtown. As a devout Muslim, I am required to attend prayer services at my mosque for a short period on Friday afternoons. Obviously this conflicts with my work hours. Can I ask for the time off to attend services? You can ask your employer for permission to attend services. When an employer's workplace policies interfere with its employee's religious practices, the employee can ask for something called a "reasonable accommodation." A "reasonable accommodation" is a change in a workplace rule or policy to let you engage in a religious practice. Your employer is required to provide you with such an accommodation unless it would impose an undue hardship on the employer's business. This means the employer is not required to provide an accommodation that is too costly or difficult to provide. The key is that you should work closely with your employer in finding an appropriate accommodation. Whether your employer can accommodate your religious practices will depend upon the nature of the work and the workplace. Usually, your employer can allow you to use lunch or other break times for religious prayer. If you require additional time for prayer, your employer can require you to make up the time. There are many situations in which the accommodation of Islamic religious practices may not impose a monetary or administrative burden on the employer for example, allowing an employee to utilize appropriate space for prayer. However, each situation is different. If the accommodation would impose a burden on the employer that cannot be resolved, the employer is not required to allow the accommodation. If your employer is unsure of its obligations to provide you with religious accommodations, feel free to contact EEOC with your questions. I am a Sikh man and the turban that I wear is a religiously-mandated article of clothing. My supervisor tells me that my turban makes my coworkers "uncomfortable," and has asked me to remove it. What should I do? If a turban is religiously-mandated, you should ask your employer for a religious accommodation to wear it at work. Your employer has a legal obligation to grant your request if it does not impose a burden, or an "undue hardship," under Title VII. Claiming that your coworkers might be "upset" or "uncomfortable" when they see your turban is not an undue hardship. If you or your employer has questions about employer obligations to accommodate religious practices, feel free to contact EEOC for more detailed information. If your employer continues to insist that you remove your turban, or takes adverse action against you for refusing to remove it, you may want to contact EEOC to file a charge. Solution Manual for Human Resource Management John H. Bernardin, Joyce E. A. Russell 9780078029165, 9780071326186

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