CH-10 Human Resources Management – Management: Leading and Collaborating in a Competitive World : Chapter Notes

Chapter 10 Human Resources Management LEARNING OBJECTIVES 1 Discuss how companies use human resources management to gain competitive advantage. 2 Give reasons why companies recruit both internally and externally for new hires. 3 Identify various methods for selecting new employees. 4 Evaluate the importance of spending on training and development. 5 Discuss options for who appraises an employee’s performance. 6 Describe the fundamental aspects of a reward system. 7 Summarize how unions and labor laws influence human resources management. CHAPTER OUTLINE Strategic Human Resources Management The HR Planning Process Staffing Recruitment Selection Workforce Reductions Developing the Workforce Training and Development Performance Appraisal What Do You Appraise? Who Should Do the Appraisal? How Do You Give Employees Feedback? Designing Reward Systems Pay Decisions Incentive Systems and Variable Pay Executive Pay and Stock Options Employee Benefits Legal Issues in Compensation and Benefits Health and Safety Labor Relations Labor Laws Unionization Collective Bargaining What Does the Future Hold? CHAPTER RESOURCES Experiential Exercises 1. The Legal Interview 2. The Pay Raise Cases Invincibility Systems Social Enterprise Are Business School Graduates Willing to Work for Social Enterprises? Lecturettes 1. EO/AAP 2. The Pros and Cons of Employee Turnover KEY STUDENT QUESTIONS Most students are very interested in Human Resources Management (HRM) because they have personal experience with HR policies or practices that they feel are unfair. Downsizing, performance management, and legal issues are especially likely to create conversation. Questions you might hear include: 1. “How do companies decide whom to lay off during a downsizing? 2. “Is (insert a human resource practice here) legal?” 3. “What should I do if I’m asked an illegal question during an interview?” How you answer these questions depends on whether your class needs more specific examples to understand concepts, or if you want to move away from the individual situation, and get the class to consider a broader, more strategic approach to Human Resources. •To get more specific examples, ask the student asking the question if they will be willing to tell the class a little more about why they are asking the question. Have them elaborate on the situation and background, and then ask the class what they think. When answering the question, be careful to explain to the student that you are not a lawyer, and if you don’t have an answer for the question, be open about that, as well. If you believe a student has a legitimate complaint with an employer, direct the student to the National Labor Relations Board or Equal Employment Opportunity Commission office in your area. You can find your local offices by going to the following websites: http://www.nlrb.gov/who-we-are/regional-offices http://www.eeoc.gov/ •When trying to get students to look at the bigger question from the perspective of either corporate strategy or general laws, ask them to take a step back and consider the question they are asking from another perspective. For example, students who ask the question “How do companies decide who to lay off during a downsizing?” are likely to have been laid off themselves. You can redirect these students from their own concerns by asking them to describe: 1) what kinds of situations cause managers to think about downsizing; 2) the various downsizing options available to managers; and 3) the pros and cons of different approaches, based on the situation. By helping the students to view the situation from a broader perspective, they develop a better understanding of HRM principles. The third question (“What should I do if I’m asked an illegal question during an interview?”) deserves special mention. One response to this question is, “Answer the question, proceed with the interview, hope they offer you the job, then turn them down, and tell them why.” A company which asks illegal questions during the interview process is probably not a company for which students want to work, and it is only when companies start losing good candidates (and know why) that they will stop asking these kinds of questions. Students may or may not feel that this is a practical answer, but they will see it as an empowering one. Teaching Tip The Nolo Press in Berkeley offers an excellent collection of articles and books that summarize the laws pertaining to today’s employment relationships. Before teaching this class, go to http://www.nolo.com to check out what’s new under “Human Resources.” The Employer’s Legal Handbook offers a quick overview of current employment law on a state by state basis. CLASS ROADMAP POWERPOINTS Slide 1 Human Resource Management Slide 2 Chapter Introduction Quote Slide 3 Learning Objectives Slide 4 Human Resource Management (HRM) MANAGEMENT IN ACTION How Google Lands the Best Employees in a Tough Job Market We continue to hear that U.S. universities are not preparing enough software developers and engineers to meet employers’ demands, yet Google receives about 2 million job applications a year and hires the best of the best. What is their secret? Part of the answer is found in how the company treats its workers. They are paid well, and Google tries to make the workplace comfortable with benefits such as exercise facilities, extended time off to pursue passions, permission to bring pets to work, and free food. It also provides onsite child care and options for job sharing and telecommuting. Year after year, Google is near the top of Fortune’s 100 Best Companies to Work For. Employees see Google as being involved in something that matters, and they are eager to be part of a company that is making the Internet a powerful tool for its users. Because Google is an attractive employer, it can be picky about whom it hires. I. STRATEGIC HUMAN RESOURCES MANAGEMENT POWERPOINTS Slide 5 Strategic Human Resource Management Slide 6 An Overview of the HR Planning Process Slide 7 The HR Planning Process Slide 8 Social Enterprise LO 1: Discuss how companies use human resources management to gain competitive advantage. A. Human Resources Management (HRM) deals with formal systems for managing people at work. B. People and management policies, like other resources, become a competitive advantage for a company when they: 1. create value 2. are rare 3. are difficult to imitate 4. are organized C. Because employee skills, knowledge, and abilities are among the most distinctive and renewable resources upon which a company can draw, their strategic management is more important than ever. Human capital is often used today to describe the strategic value of employee skills and knowledge. Example 10.1 Human capital Over the years, HR professionals have increasingly demanded that they be allowed to work with other corporate executives in setting the strategic direction for their company. Today, more and more HR executives are being invited to help set talent-related strategy, but with their new visibility comes the expectation that they will be able to deliver value. Some senior HR professionals, like Randy McDonald of IBM, focus on metrics. As he says, “If I’m going to make an investment in people, I ought to be able to measure that level of investment.” Others, like Scott Mannis at the apparel firm Kellwood, only keep track of the most basic measures, like turnover or the number of successors in place for key jobs. As he says, “It can go too far.” D. The HR planning process (Exhibit 10.1) 1. The HR planning process occurs in three stages: a. Planning ensures that the right number and types of people are available, where the company is headed, in what businesses it plans to be, what future growth is expected, and so forth. b. Programming of specific human resources activities such as recruitment, training, or layoffs. The company’s plans are implemented. c. Evaluating determines whether they are producing the results needed to contribute to the organization’s business plans. 2. Demand forecasts a. Determine how many and what types of people are needed. b. Demand forecasts for people needs are derived from organizational plans. c. The number of labor-hours required operating a plant, selling the product, distributing it, and service customers can be calculated. 3. Labor supply forecasts a. Estimates of how many and what types of employees the organization actually will have. b. In performing a supply analysis, the organization estimates the number and quality of its current employees as well as the available external supply of workers. c. Forecasts of a diverse workforce have become fact. 4. Reconciling supply and demand a. Once managers have a good idea of both the supply and demand for various types of employees, they can start developing approaches for reconciling the two. b. Organizations may find that they need more people than they currently have. c. Organizations may find that they have more people than they need. 5. Job analysis a. It tells the HR manager about the job itself: the essential tasks, duties, and responsibilities involved in performing the job. b. It describes the skills, knowledge, ability and other characteristics needed to perform the job. c. It provides the information that virtually every human resources activity requires. II. STAFFING POWERPOINTS Slide 9 Staffing the Organization Slide 10 Interviews Slide 11 Tests, Reliability and Validity Slide 12 Exhibit 10.2 Screening Tools Used Most Often Slide 13 Workforce Reductions Slide 14 Advice on Termination Slide 15 Legal Issues and Equal Employment Opportunity Slide 16 Major U.S. Equal Employment Laws LO 2: Give reasons companies recruit both internally and externally for new hires. A. Recruitment 1. Recruitment activities help to increase the pool of candidates that might be selected for a job. 2. Internal recruitment advantages – employers know their employees, and employees know their organization. 3. External recruiting brings in “new blood” to a company and can inspire innovation. Example 10.2 – External recruiting: When Hewlett Packard needed a new CEO to replace Carly Fiorina, they looked outside the company and found Mark Hurd, the CEO of NCR. According to the company, Hurd brought “proven execution skills, his ability to lead top-performing teams and his track record in driving shareholder value were important factors contributing to his selection.” What is interesting is that HP passed over two internal candidates in their search—Vyomesh Joshi, executive vice president of the HP Imaging and Personal Systems Group, and Ann Livermore, executive vice president of the HP Technology Solutions Group—which includes enterprise hardware and services. Both of these internal candidates run businesses that are bigger than NCR. Fortunately for HP, both of these executives stayed with the company after the transition. LO 3: Identify various methods for selecting new employees. B. Selection 1. Selection builds on recruiting and involves decisions about whom to hire. (See Exhibit 10.2.) 2. Applications and resumes provide basic information to prospective employers. Typically include information about the applicant’s name, educational background, citizenship, work experience, certifications, and the like. 3. Interviews are the most popular selection tool. Structured interviews conduct the same interview with each applicant. a. Situational interview focuses on hypothetical situations. b. Behavioral description interview explores what candidates have actually done in the past. 4. Reference checks are another commonly used screening device. 5. Background checks provide a higher level of scrutiny. 6. Personality tests are less popular for employee selection, largely because they are hard to defend in court. 7. Drug testing has become more complicated for employers in the growing number of states that have legalized the use of marijuana for legal purposes. However, most state medical marijuana laws do not include employment protections for workers. 8. Cognitive ability tests measure a range of intellectual abilities, including verbal comprehension and numerical aptitude. (Exhibit 10.4) 9. Performance tests are procedures in which the test taker performs a sample of the job. 10. An assessment center is a managerial performance test in which candidates participate in a variety of exercises and situations 11. Integrity tests are used to assess job candidate’s honesty. Two forms are polygraphs and paper-and-pencil honesty tests. 12. Reliability refers to the consistency of test scores over time and across alternative measurements. 13. Validity moves beyond reliability to assess the accuracy of the selection test. The criterion-related validity refers to the degree to which a test actually predicts or correlates with job performance. Content validity concerns the degree to which selection tests measure a representative sample of the knowledge, skills, and abilities required for the job. Example 10.3 Selection tests The Edmonton Police Service is struggling to attract a few good men and women. To join the force, Bill Gillespie, EPS Fitness Director, says you have first to pass a cognitive abilities test designed by a psychologist to identify people best suited for policing. You also have to pass a written communications evaluation. From there you step into the policy gym for the fitness test. The fitness test consists of two parts: a Physical Abilities Readiness Evaluation (P.A.R.E.) and component testing. The P.A.R.E. is basically an obstacle course that mimics the pursuit and apprehension of a suspect. The component testing requires being able to do a set number of chin-ups; dips on parallel bars, a sit and reach test, two anaerobic powers and includes a body composition evaluation. Minimum fitness standards are set at the 40th percentile. C. Workforce Reductions 1. Layoffs are a result of the massive restructuring of American industry brought about by mergers and acquisitions, divestiture, and increased competition. Outplacement is the process of helping people who have been dismissed from the company to regain employment elsewhere. 2. Termination a. Employment-at-will is the legal concept that an employee may be terminated for any reason b. Termination interview, where the manager discusses the company’s position with the employee, is a stressful situation for both parties. (Exhibit 10.4) D. Legal Issues and Equal Employment Opportunity (See Exhibit 10.5) 1. Fair Labor Standards Act (1938) —Distinguishes between exempt and non-exempt employees, creates child labor laws. 2. Equal Pay Act (1963) —Prohibits gender-based discrimination. 3. Title VII of Civil Rights Act (1964) —Prohibits discrimination in employment based on race, sex, color, national origin, and religion. 4. Adverse impact describes when a seemingly neutral employment practice has a disproportionately negative effect on a protected group 5. Executive Orders 11246 and 11375 (1965) —Prohibits employment discrimination by federal contractors, created Office of Federal Contract Compliance Programs. 6. Age Discrimination in Employment Act (1967) —Prohibits employment discrimination against people older than 40. 7. Vocational Rehabilitation Act (1973) —Requires affirmative action by all federal contractors for persons with disabilities. 8. Americans with Disabilities Act (Amended 2008) —Extends affirmative action provisions of Vocational Rehabilitation Act to private employers. 9. Civil Rights Act (1991) —Shifts burden of proof to the employer, permits punitive damages and jury trials. 10. Family and Medical Leave Act (1991) —Requires 12 weeks’ unpaid leave for medical or family needs; paternity, family member illness. III. DEVELOPING THE WORKFORCE POWERPOINTS Slide 17 Training and Development Slide 18 Types of Training LO 4: Evaluate the importance of spending on training and development. A. Training and development annual spending by employers on formal training is over $164 billion. 1. Overview of the training process a. Training usually refers to teaching lower-level employees how to perform their present jobs. b. Development involves teaching managers and professional employees broader skills needed for their present and future jobs. i. Phase one of the training process should include needs assessment which is an analysis identifying the jobs, people, and departments for which training is necessary. ii. Phase two involves the design of training programs iii. Phase three involves decisions about the training methods to be used. iv. Phase four should evaluate the program’s effectiveness in terms of employee reactions, learning, behavior transferred to the job, and bottom-line results. 2. Types of the training process a. Orientation training is typically used to familiarize new employees with their new jobs, work units, and the organization in general b. Team training has taken on more importance as organizations reorganize to facilitate individuals working together c. Diversity training is offered by 50% of all U.S. organizations (See Exhibit 10.7) and focuses on building awareness of diversity issues and providing the skills employees need to work with others who are different from them. Multiple Generations at Work College Students Need Soft Skills. Too A recent study suggests that many college students expect their newly acquired hard skills, like the ability to design a website, develop a recruiting plan, or use the latest accounting software, to be enough to achieve success with employers. While these tangible skills are very important, two‐thirds of respondents (corporate recruiters, business leaders, college students, and so forth) in the study believe that hard and soft skills are equally important for success in the workplace. College students can take steps to acquire or refine their soft skills. For example, internships can provide them with exposure to professional organizational settings. Students who display excellent soft skills, combined with the requisite hard skills, will increase their chances of having promising careers. Example 10.4 Types of training IBM faces huge learning hurdles every day in helping new IBM employees, who are spread out across the globe, to understand IBM’s culture and decision-making process, not to mention gaining the technical skills they need to do their jobs. Fortunately, IBM@Play, a new Internet-based simulation, allows new IBM employees the opportunity to learn real-life working skills such as signing up for benefits, developing code as part of a global team, and ramping up sales skills before they meet IBM clients. The virtual worlds of IBM@Play are as effective in China and India as they are in the United States and the game. Management in Action – Progress Report How Google Hires and Trains Just as Google built its business on sorting through vast amounts of data to provide computer users the information they need, Google’s approach to hiring and training is based on analyzing data about employees. What does Google look for when hiring candidates? According to Laszlo Bock, Chief People Officer, it boils down to the following attributes: 1) ability to learn and apply knowledge to solve problems, 2) willingness to lead and follow others, 3) humility when faced with new or opposing information, and 4) desire to take ownership and defend ideas. • Discuss why you think Google wants to hire people who possess the four attributes mentioned above. Google needs employees who are quick to learn and apply problem-solving skills. In a world of consistently changing technology, it is important for tech firms to hire employees who are on the cutting edge of innovation. Moreover, these employees need the ability to lead and follow when necessary in order to increase competitive advantage based on human capital. This includes the ability to take seriously new or opposing information in order to assist in the innovation process at the organization. Lastly, those individuals contributing new ideas should take ownership of them and defend them as they may very well be the ideas that will change the future. • How could Google’s approach to management training address the training needs of its nonmanagement employees? For management employees, Google studied data from employee surveys, managers’ performance appraisals, and nominations for best-manager awards to identify management behaviors associated with success. The trainers then developed programs to teach each of the behaviors identified and recommended programs to managers based on their individual performance. The company could segment employees by type of job or function and compile similar information from performance appraisals and coworker feedback about the kinds of employees who contribute most. It could use the data to create training programs teaching the skills most important for particular jobs and functions. IV. PERFORMANCE APPRAISAL POWERPOINTS Slide 19 Performance Appraisal Slide 20 Exhibit 10.6 Example of BARS for Evaluating Quality Slide 21 MBO and 360-degree Methods Slide 22 Useful PA Interview Format LO 5: Explain alternatives for who appraises an employee’s performance. o Performance appraisal is the assessment of an employee’s job performance. o Performance appraisal has two basic purposes: •Administrative purposes •Developmental purposes. A. What do you appraise? 1. Trait appraisals involve subjective judgments about employee performance. They contain dimensions such as initiative, leadership, and attitude, and ask raters to indicate how much of each trait the employee possesses. 2. Behavioral appraisals focus more on observable aspects of performance. They focus on specific, prescribed behaviors, which can help ensure that all parties understand what the ratings are really measuring. (Exhibit 10.6). 3. Results appraisals focus on production data such as sales volume, units produced, or profits. Management by objectives (MBO) involves a subordinate and a supervisor agreeing in advance on specific performance goals. 4. In choosing an appraisal method, the following guidelines may prove helpful: a. Base performance standards on job analysis. b. Communicate performance standards to employees. c. Evaluate employees on specific performance-related behaviors rather than on a single global or overall measure. d. Document the PA process carefully. e. If possible, use more than one rater. f. Develop a formal appeal process. g. Always take legal considerations into account. B. Who should do the appraisal? 1. Managers and supervisors are the traditional sources of appraisal information since they are often in the best position to observe an employee’s performance. 2. Peers and team members see different dimensions of performance. 3. Internal and external customers are also used as sources of performance appraisal information. 4. Self-appraisals help increase the employee’s involvement in the review process and are a starting point for establishing future goals. 5. A 360-degree appraisal is a process of using multiple sources of appraisal to gain a comprehensive perspective on one’s performance. Example 10.5 360-degree appraisal Wright & Wright architectural partners, Clare and Sandy Wright set out to adapt the 360-degree feedback method for their 15-strong practice. To prepare for the appraisal, staff members write a review of their own performance, choose two colleagues to do the same. These are then discussed in the review. Together they set five goals to be achieved during the next six months and agree on training or other needs. C. How do you give employees feedback? 1. Providing growth and development requires understanding and support; however, the manager must be impersonal and be able to make tough decisions. 2. A useful PA interview format to use when an employee is performing below acceptable standards is as follows: a. Summarize the employee’s specific performance. b. Describe the expectations and standards, and be specific. c. Determine the causes for the low performance; get the employee’s input. d. Discuss solutions to the problem, and have the employee play a major role in the process. e. Agree to a solution. f. Agree to a timetable for improvement. g. Document the meeting. 3. Follow-up meetings may be needed. Guidelines for giving feedback to an average employee: a. Summarize the employee’s performance, and be specific b. Explain why the employee’s work is important to the organization. c. Thank the employee for doing the job. d. Raise any relevant issues, such as areas for improvement. e. Express confidence in the employee’s future good performance. CONNECT Click and Drag: Employee Selection, Training, and Appraisal (Keyboard navigable alternate version available.) SUMMARY Human Resource (HR) activities are varied and impactful! Meeting an organization’s staffing needs requires human resources planning based on the overall plans of the organization. After recruitment efforts, selection is a critical HR activity. Applicants must be screened and decisions made to ensure that people hired are a “good fit” for their jobs. In today’s competitive and rapidly changing business world, the skills a person is hired with are likely to become obsolete. Ongoing training is critical, as is developing employees in other areas such as teamwork and diversity. Assessing an employee’s performance is known as performance appraisal. This is another critical task, and there are several modern approaches to this, among them is a 360-degree appraisal. ACTIVITY In this exercise, students match employee descriptions with the HR functions of selection, training, and appraisal. CLASS DISCUSSION IDEAS Instructors may wish to spark further discussion and understanding by having students debate that a particular function (selection, training or appraisal) is the most important of the three. As with all HR activities, the discussion can also take into account legal and ethical expectations. CONNECT Sequencing: Putting HR Planning in Perspective (Keyboard navigable alternate version available.) SUMMARY The Human Resources (HR) planning process occurs in three stages: planning, programming, and evaluating. HR managers need to know the organization’s business plans to ensure that the right number and types of people are available—where the company is headed, in what businesses it plans to be, what future growth is expected, and so forth. Also, the organization conducts programming of specific human resources activities, such as recruitment, training, and layoffs. In this stage, the company’s plans are implemented. And, human resources activities are evaluated to determine whether they are producing the results needed to contribute to the organization’s business plans. ACTIVITY In this activity, students place the components of the HR planning process in sequential order and identify the activities that occur at each stage. CLASS DISCUSSION IDEAS Asking students what, if any, legal expectations impact the identified activities could expand on this exercise. Alternatively, groups could present the importance of each of the planning steps. V. DESIGNING REWARD SYSTEMS POWERPOINTS Slide 23 Exhibit 10.8 Factors Affecting the Wage Mix Slide 24 Exhibit 10.9 Pay Structure Slide 25 Incentive Systems and Variable Pay Slide 26 Employee Benefits Slide 27 Legal Issues in Compensation and Benefits LO 6: Describe the fundamental aspects of a reward system. A. Pay decisions (See Exhibits 10.8 & 10.9) 1. Pay level refers to the choice of whether to be a high-, average-, or low-paying company. 2. Pay structure decision is the choice of how to price different jobs within the organization. 3. Individual pay decisions concern different pay rates for jobs of similar worth within the same family. B. Incentive systems and variable pay 1. Individual incentive plans consist of an objective standard against which a worker’s performance is compared. It is the most common type of incentive plan. 2. Gainsharing plans concentrate on saving money. 3. Profit-sharing plans give employee incentives based on unit, department, plant, or company productivity. 4. Merit pay systems are used when objective performance measures are not available, but the company still wants to base pay on performance. Example 10.6 Incentive pay systems Many people bemoan the lack of pay for teachers, but one school in Lafayette, California is doing something about it. After losing many of her best teachers because of low pay and high housing costs, Dorothy Stewart asked the parents of the children at the New Firehouse Day Care Center for $1,000 extra in tuition each year. That money is given directly to teachers who stay for the entire educational progression of the children, typically about five years. Teachers who stay get a lump sum of around $30,000—often enough to help with a down payment on a house. C. Executive Pay and Stock Options 1. The gap between the executive pay and the average pay of employees has widened considerably. 2. The fasted growing part of executive compensation comes from stock options. D. Employee benefits 1. Three basic required benefits are: a. Workers’ compensation b. Social security c. Unemployment insurance 2. A large number of benefits are not required but employer-provided: a. Pension plans b. Medical and hospital insurance 3. The Affordable Care Act is changing requirements for employers, in that health insurance is now required to be offered to employees or companies will face fees to offset the cost of government subsidies for employees who must purchase their own insurance. 4. The cafeteria benefit program is an employee benefit program in which employees choose from a menu of options to create a benefits package tailored to their needs. 5. The flexible benefits program is a benefit program in which employees are given credits to spend on benefits that fit their unique needs E. Legal Issues in Compensation and Benefits 1. The Fair Labor Standards Act (FLSA) of 1938 set minimum wages, maximum hours, child labor standards, and overtime pay provisions. 2. The Equal Pay Act (EPA) of 1963 prohibits unequal pay for men and women who perform equal work. 3. Comparable worth doctrine implies that women who perform different jobs of equal worth, as men should be paid the same wage. 4. The Pregnancy Discrimination Act of 1978 states that pregnancy is a disability and qualifies a woman to receive the same benefits that she would with any other disability. 5. The Employee Retirement Income Security Act (ERISA) of 1974 protects private pension programs from mismanagement. F. Health and safety The Occupational Safety and Health Act (OSHA) of 1970 requires employers to pursue workplace safety. CONNECT Video Case: Strategic Human Resources Management at Best Buy SUMMARY Human resources management (HRM) has assumed a vital strategic role in recent years as organizations attempt to compete through people. Firms can create a competitive advantage when they possess or develop human resources that are valuable, rare, inimitable, and organized. New approaches to the management of people may be needed to unlock employee potential and maximize the organization’s competitive position. The video case features Best Buy’s innovative approach to HR. Their ROWE system allows for work from home and the elimination of set hours. While there have been naysayers, the system has increased productivity. ACTIVITY After viewing the three-minute video, students are directed to answer a series of multiple-choice questions that identify the HR areas of activities that the Best Buy system impacts. CLASS DISCUSSION IDEAS Post the following questions to the class: Will the ROWE system work at other organizations? Are there other cost savings that ROWE can contribute to? The video only highlights advantages, what if any issues might a system such as ROWE generate? Teaching Tip Before starting class, look up the minimum wage and labor laws for your state by going to http://www.dol.gov/dol/topic/wages/ CONNECT Manager’s Hot Seat: Workplace Aggression SUMMARY The nine-plus minute Hot Seat video features an employee discussing a personal safety concern. Glenn Lamar, Managing Director of PaperKlip Office Supplies, is conducting a grievance meeting with Gloria Westfield, a senior executive who has reported feeling physically threatened by a male subordinate. During the meeting various things occur: the male subordinate, John DiMaggio, knocks on the door and requests permission to participate having learned the meeting was about him. The video touches on the concept of employee safety and hints at sexual harassment and insubordination. ACTIVITY After viewing the video, students are directed to answer a series of multiple-choice questions that point to motivation, justice, and procedure. CLASS DISCUSSION IDEAS Ask students what they would do if they were Glenn. While Glenn is supportive in the discussion, are there any hints that he will not address the issue? CONNECT Self-Assessment: Performance Appraisal Characteristics Questionnaire SUMMARY This self-assessment looks at the potential for legal exposure from an appraisal methodology. This exercise may be challenging for students that have limited organizational experience. Students may need to consult an acquaintance or classmate with assessment experience to complete the exercise. ACTIVITY Students are instructed to consider a specific appraisal situation and answer a series of 15 multiple-choice questions. Questions are scored, and compliance concerns regarding the assessment are be highlighted. CLASS DISCUSSION IDEAS To facilitate classroom discussion, ask students to discuss how even the appearance of having an inappropriate appraisal system can be harmful to on an organization. CONNECT Self-Assessment: The Prediction of Rating Error—Part A SUMMARY Research indicates that the people who commit leniency bias tend to commit the error across rating situations (e.g., no matter whom they are rating). In essence, some people feel relatively more discomfort in giving negative feedback than others. The PADS is an instrument that assesses the level of discomfort in giving performance feedback and taking performance-related action. Because of the anticipated discomfort, raters are more likely to take steps to avoid the anticipated discomfort if they can do so. Thus, as supervisors, they are more likely to rate in a lenient manner in order to avoid the discomfort that may result from giving a more accurate but more critical review. The first of two PADS rating instruments are presented in this exercise. ACTIVITY Students are asked to consider their level of discomfort in particular situations across 12 multiple-choice questions and then calculate their performance appraisal discomfort scale score. CLASS DISCUSSION IDEAS The instructor may extend the discussion by asking if students feel the PADS instrument is reliable and valid. Alternatively, a class discussion may be conducted to develop actions that may lessen appraisal discomfort. CONNECT Self-Assessment: The Prediction of Rating Error—Part B SUMMARY This self-assessment presents an alternative form of the PADS instrument introduced in the previous assessment. ACTIVITY Students answer ten questions in which they must select one of two answers. Responses are scored to calculate their PADS score. CLASS DISCUSSION IDEAS The instructor may extend the discussion by asking if students feel the PADS instrument is reliable and valid. Alternatively, a class discussion may be conducted to develop actions that may lessen appraisal discomfort. If both PADS self-assessments are assigned, students may be asked to discuss which format is “better” and why. VI. LABOR RELATIONS POWERPOINTS Slide 28 Labor Relations Slide 29 Exhibit 10.10 Determinants of Union Voting Behavior Slide 30 Right to Work Slide 31 Exhibit 10.11 Decline in Union Membership—1948 to 2013 Slide 32 Management in Action Slide 33 In Review LO 7: Summarize how unions and labor laws influence human resources management. A. Labor relations is the system of relations between workers and management B. Labor laws 1. The National Labor Relations Act ushered in an era of rapid unionization by: a. Declaring labor organizations legal. b. Establishing five unfair employer labor practices. c. Creating the National Labor Relations Board (NLRB). 2. The Labor-Management Relations Act protected employers; free-speech rights defined unfair labor practices by unions and permitted workers to decertify a union as their representative. 3. The Labor-management Reporting and Disclosure Act swung the public policy pendulum midway between organized labor and management and was designed to curb abuses by union leadership and rid unions of corruption. C. Unionization 1. Through a union organizer or local union representative, workers learn what benefits they may receive by joining. 2. Why do workers vote for a union? a. Economic factors. b. Job dissatisfaction. c. Can obtain desired benefits can generate a pro-union vote. d. Image can determine whether a dissatisfied worker will seek out the union. D. Collective bargaining 1. Arbitration uses a neutral third party to resolve a labor dispute. 2. Union shop is an organization with a union and union security clause specifying that workers must join the union after a set period of time. 3. Right-to-work states that workers have a right to work without joining a union. Example 10.7 Collective bargaining In 2012 there were 19 major work stoppages (strikes or lockouts involving 1,000 or more people) in the United States. Overall, 148,000 workers were involved in work stoppages during this period. E. What does the future hold? 1. In recent years, union membership has declined to about 11 percent of the U.S. labor force. 2. Elimination of inefficient work rules, the introduction of profit sharing, and a guarantee of no layoffs were seen as a big step toward a fundamentally different, cooperative long-term relationship. 3. Organizations are searching for ways to obtain, retain, and engage their most valuable resources: human resources. CONNECT Self-Assessment: Attitudes Towards Unions SUMMARY This exercise assesses attitudes toward unions in general and the extent to which these attitudes are grounded in fact. ACTIVITY Students answer 37 true-false questions. Each response provides feedback to help students understand if their beliefs are based on fact. CLASS DISCUSSION IDEAS A discussion could be centered on the question of why union perceptions may have been incorrect and if unions are still relevant today. A more general discussion could be had regarding how perceptions may be formed and their impact. Management in Action Onward Google Gears Up for More Labor Market Competition Google is now facing competition for hiring the best employees from other hot high-tech companies such as LinkedIn and Dropbox. How will Google keep its employees from leaving for these and other firms? One way Google has addressed this issue is through lucrative compensation, but tech workers care also about the excitement of helping to build something new. Google uses its expertise to analyze the working conditions and benefits that matter most to employees. The company also analyzed data about attrition among female employees to find out what would keep them onboard. • How is Google’s approach to employee benefits more effective than a simple decision to offer the biggest benefits package? Knowledge workers care about more than compensation. Simply piling on benefits would add to Google’s costs without necessarily making employees more likely to stay. Google’s approach ensures that what the company spends on benefits will deliver results in the form of highly engaged employees. • Do you think Google’s HR strategy will enable it to maintain a competitive advantage? Why or why not? Answers will vary. In explaining their opinion, students should consider the validity and reliability of Google’s measurements, the competition for labor, and the considerations that influence tech workers in deciding where they want to work. They also should consider whether Google’s use of data for HRM decisions is something it can do better than other firms trying to hire and keep the same kinds of employees. BOTTOM LINE How might an organization identify candidates with innovative ideas? Answers will vary, and thinking about this question introduces the relevance of selection methods, discussed next. It’s not enough simply to hire outside candidates, because not every outside candidate will be equally creative or have the necessary knowledge to apply innovation constructively. Some methods that could help would be to develop a culture and reputation as an organization that values and rewards creativity (which would attract candidates with this strength), to express in recruiting messages the value placed on creativity, and in selection interviews, to ask candidates to describe situations in which they have been creative or to answer questions about how they would solve a problem creatively. Especially for management jobs, candidates may be able to discuss issues they know the company is facing and provide some general ideas about how they would address that situation. How might you measure quality improvements from training salespeople? Answers will vary. This question applies an important point about training: it should be conducted not just to add to knowledge, but to give employees knowledge and skills they will use to deliver better performance. In the case of salespeople, the quality of their performance will be reflected in how much they sell, the extent to which sales growth is greatest in the company’s most profitable offerings, and the satisfaction and loyalty customers have after dealing with the salespeople. The first two quality measures readily show up in the company’s sales and expense reports. Customer satisfaction and loyalty could be measured with surveys or assumed from the level of repeat business. What kind of feedback is most likely to be effective? The text mentions feedback that is specific and constructive—that is, related to clear goals for behaviors and intended to help the employee improve. Also, feedback is more likely to be meaningful, and therefore effective, if the employee has a chance to respond to it and engage in a two-way discussion. Think about the activities of a store employee. What could a Walmart employee do to earn a bonus for meeting quarterly profit goals? Answers will vary. Some students will be more familiar than others with the work of a retail employee, but every student should have observed store workers at some point. Some hourly employees in a Walmart store might be able to meet profit goals by boosting sales, say, by helping customers locate products they are looking for, by helping them make a selection (say, in the electronics department), or even by projecting a positive attitude that makes the store a desirable destination for shoppers. Hourly employees also could help meet profit goals by minimizing costs—for example, by working efficiently in the checkout lanes, by handling merchandise carefully to avoid breakage, and by suggesting ways to minimize losses to theft. Students may have other ideas as well. The point is that incentive pay can give employees an additional reason to care about helping the company perform better in terms of all the value drivers. The assumption is that they will care, so they will look around to think of ways to improve. What benefits have you received from an employer? Did you ever consider the cost of those benefits? Answers will vary. The objective of this question is to raise students’ awareness of the extent of employee benefits, as well as the problem that employees don’t always give much thought to the cost of offering this type of compensation. SOCIAL ENTERPRISE Are Business School Graduates Willing to Work for Social Enterprises? The social enterprise industry in the United States is larger than one might imagine. One estimate suggests that it employs over 10 million people and generates annual revenues of $500 billion. To fuel additional growth, more individuals will be needed to work for organizations that use commercial strategies to support social initiatives. There is good news on this front. A study of MBA students found that over 97 percent of them were “willing to forgo financial benefits to work for an organization with a better reputation for corporate social responsibility and ethics.” On average, the MBAs were willing to give up 14 percent of their expected income. 1. Assume you were the manager of a social enterprise like Greenling. How would you go about attracting individuals to work for your organization? It is important that individuals are found that believe in the mandate of Greenling, and are willing to forgo certain financial benefits in order to work for a social enterprise. This is why the mission of the organization should be widely publicized so that individuals are aware of what the mission is and can be attracted to that mission. Moreover, Greenling can also advertise to students at universities in order to provide them with a job in doing something good that may not have the highest pay for someone that may be inexperienced. 2. To what degree would you or your fellow students consider working for a social enterprise? Answers will vary here. Students should provide reasoning behind why they would consider working for a social enterprise. LECTURETTES LECTURETTE 10.1: EO/AAP EEO/AAP DEFINED 1. Equal Employment Opportunity (EEO) legislation makes it unlawful to discriminate on the basis of age, sex, race, color, religion, or national origin in all employment practices including hiring, firing, layoffs, promotions, wages, training, disciplinary action, and other terms, privileges, conditions, or benefits of employment. 2. Affirmative Action Programs (AAPS) are those positive, affirmative programs by which employers strive to achieve equal employment opportunities for all employees and prospective employees. 3. As a general rule, all jobs must be made available to all qualified applicants unless the employer can prove that age, sex, race, religion, or national origin is a Bona Fide Occupational Qualification (BFOQ), which is necessary to the operation of the enterprise. For example, in some cases, sex may be a BFOQ for reasons of authenticity (actress, actor) and moral standards (restroom attendant). MAJOR EEO LEGISLATION 1. Title VII of the Civil Rights Act of 1964, as amended in 1972, and the Equal Employment Act of 1978-outlawed discrimination in employment decisions based on race, color, sex, religion, and national origin for employers of 15 or more employees in both the public and private sectors. 2. Executive Orders 11141, 11246, and 11375 outlawed discrimination in employment decisions, based on age, sex, race, religion, and national origin for federal government contractors and subcontractors. 3. Equal Pay Act of 1963—outlaws wage discrimination on the basis of sex and requires equal pay for equal work. 4. Pregnancy Discrimination Act of 1978—amends Title VI and requires pregnancy/maturity to be treated as any other significant disability. 5. Age Discrimination Act of 1967, as amended in 1978, 1986, and 1988—outlaws employment discrimination on the basis of age (40 or older). 6. Rehabilitation Act of 1973 as amended in 1986—outlaws discrimination on the basis of employee physical and mental handicaps. 7. Vietnam-Era Veteran's Readjustment Act of 1974—requires affirmative action for Vietnam-era veterans and disabled veterans. 8. Americans with Disabilities Act of 1989—outlaws discrimination in employment of employees with a wide range of disabilities. LECTURETTE 10.2: The Pros and Cons of Employee Turnover A FRAMEWORK FOR ANALYZING EMPLOYEE TURNOVER 1. Employee turnover is inherently costly, and employers should carefully document those costs. 2. Employee turnover is a controllable and manageable challenge for today's manager. 3. Employee turnover has both positive and negative implications for leavers as well as stayers. 4. Employee turnover can have potentially positive implications, creating promotion and hiring opportunities, infusing new ideas and technology, and eliminating poor performers. 5. Lack of employee turnover can create its own unique problems, such career-blockage, to entrenching obsolete practices and accumulating poor performers. 6. Employee turnover has societal implications. 7. Employee turnover is an important factor to be included in corporate long-term planning. POSITIVE CONSEQUENCES OF EMPLOYEE TURNOVER 1. Positive Consequences for the Organization The opportunity to replace leavers with superior performers. The opportunity for the infusion of new knowledge and new technology through replacements. The stimulus for changes in policy and practice. Increased opportunity for internal mobility. Increased structural flexibility. Potential decrease in other "withdrawal" behaviors including absenteeism, tardiness, apathy, sabotage, and poor work quality. Opportunities for cost cuts, consolidation, and downsizing. Reduction of entrenched conflict. 2. Positive Consequences for Individual Leavers Increased earnings. Career advancement. Better person-organization “fit” – better use of skills/interests and less stress. Renewed stimulation in a new environment. Attainment of non-work values. Increased self-efficacy perception. Self-development. 3. Positive Consequences for Individual Stayers Increased opportunity for internal mobility. Stimulation and cross-fertilization from new coworkers. Increased satisfaction. Increased cohesion. Increased commitment. 4. Positive Consequences for Society Mobility to new emerging industries is essential to continued economic growth. Reduced income inequities. Reduced unemployment and welfare costs in a declining labor market. Decreased stress-related job costs. NEGATIVE CONSEQUENCES OF EMPLOYEE TURNOVER 1. Negative Consequences for the Organization Increased costs of recruitment, selection, hiring, assimilating, and training replacements. Out-processing costs include separation pay and the potential costs of group performance decline both prior to and after separation. Disruption of social and communication structures. Productivity loss during replacement and retraining. Loss of high performers. Decreased satisfaction among stayers. Negative PR from leavers. 2. Negative Consequences for Individual Leavers Loss of seniority and related perquisites. Loss of non-vested benefits. Disruption of family and social systems. The "Grass is Greener" phenomenon and subsequent disillusionment. Inflation-related costs (e.g., mortgage cost). Transition-related stress. Disruption of spouse's career path. Career path regression. 3. Negative Consequences for Individual Stayers Disruption of social and communication patterns. Loss of functionally valued coworkers. Decreased satisfaction. Increased workload during and immediately after a search for a replacement. Decreased cohesion. Decreased commitment. 4. Negative Consequences for Society Increased costs of production. Regional inability to keep or attract an industry. Instructor Manual for Management: Leading and Collaborating in a Competitive World Thomas S. Bateman, Scott A. Snell, Robert Konopaske 9781259927645, 9781259546945