CH-11-13 Choosing and Hiring Candidates – Strategic Staffing : Book Guide

This Document Contains Chapters 11 to 13 Chapter 11: Choosing and Hiring Candidates LEARNING OBJECTIVES After studying this chapter, you should be able to: • Describe different ways of combining candidates’ scores on different assessment methods to calculate an overall score. • Describe three different ways of making a final choice of whom to hire. • Discuss the factors that influence the content of a company’s job offer. • Describe the four different job offer strategies. • Describe different types of fairness and explain why candidates’ perceptions of fairness are important to staffing. TAKEAWAY POINTS 1. Candidates’ scores on different assessment methods can be combined in two different ways. One way is to use a multiple hurdles approach whereby candidates must receive a passing score on an assessment before being allowed to continue on in the selection process. The second way is to use a compensatory approach whereby a candidate’s high scores on some assessments can compensate for low scores on other assessments. 2. A final choice can be made using cut scores, which establish a minimum score candidates must exceed; rank ordering, which orders candidates from the highest to lowest depending on their scores; or banding, which assigns candidates to groups based on their overall scores. (After being banded, all candidates in each group are considered to have performed the same on the assessments.) 3. The factors that influence the content of a company’s job offer include the type of job as well as the organization, applicant, and external and legal factors. 4. The three compensation strategies firms can choose from are a low strategy (below-market compensation), competitive strategy (at-market compensation), and high strategy (above-market compensation). A maximum strategy (compensation that is non-negotiable) can be used with any of these three compensation strategies to present a company’s best offer. 5. Applicants’ perceptions of the distributive, procedural, and interactional fairness of the selection process will influence how they will react when they are offered jobs and rejected for jobs. This can affect whether or not they accept the job offers, recommend the company to others, continue patronizing the company, or file a discrimination, or other, lawsuit. DISCUSSION QUESTIONS 1. Which approach to combining candidates’ assessment scores would you favor for choosing candidates? Why? Answer: Responses differ, and explanations should be given. The regression method is the most valid. I would favor a weighted average approach for combining candidates' assessment scores, as it allows assigning different importance levels to various assessment criteria based on their relevance to the job. This method ensures that key competencies are prioritized and provides a more nuanced evaluation, balancing overall performance with specific job requirements. 2. Is it ethical for some new hires to receive different levels of pay and benefits than other new hires? Why or why not? Answer: Again, responses differ. If there are good reasons for the differences, this is generally more acceptable than if some people just negotiated harder than others. It is ethical for new hires to receive different levels of pay and benefits if the variations are based on objective factors such as experience, qualifications, or specific role requirements. Transparency and fairness in how these decisions are made and communicated are crucial to maintain ethical standards and avoid perceptions of unfair treatment. 3. If you received a job offer via e-mail, with no phone or personal contact, how would you feel? Would it influence your decision to accept the offer? Answer: This can be a good conversation starter about how applicant reactions are important and can be influenced by many different things. E-mail job offers for lower-level positions tend to be more acceptable than for higher-level jobs. When companies are hiring hundreds of people at the same time, e-mail offers are also more acceptable but are generally not preferred to personal contact. 4. If you received a very appealing job offer one week after accepting a different job offer with another company, what would you do? Answer: Students often start by saying they wouldn’t renege, but then start identifying temptations that might make them reconsider. This can be a useful starter to a discussion of how important it is to make ethical decisions as both a candidate and a manager. I would first evaluate the new offer's benefits, growth potential, and alignment with my career goals compared to the initial offer. If the new opportunity significantly outweighs the first, I would professionally communicate my situation to the first employer, explaining my decision and offering to assist with the transition. Ensuring transparency and courtesy helps maintain professionalism and integrity. 5. Think about different job offers you have received. What made some of them better than others? Answer: Answers vary, but higher pay and benefits, and offers for more desirable jobs are often identified as better. When pushed to identify what about the job offer process was better, the opportunity to ask questions and being made to feel valued and wanted are often identified. The ability to negotiate is often viewed both positively and negatively depending on students’ comfort level with negotiating. Some job offers were better than others due to factors like higher compensation, more comprehensive benefits, better work-life balance, and opportunities for career advancement. Additionally, a positive company culture, clear growth pathways, and alignment with personal career goals significantly influenced their attractiveness. EXERCISES 1. Strategy Exercise: Imagine that you are the manager of a McDonald’s restaurant. You are pursuing a low-cost, high-quality service strategy. You believe that the assistant manager you hire is critical to executing your strategy because the person will have a great deal of contact with both your employees and customers. You have just finished interviewing the five finalists for the position. One candidate really stands out: Pat Edwards has three years of relevant work experience, and a collaborative and service-oriented style that will fit your restaurant’s culture very well. She also scored high on the interview, job knowledge, and simulation assessments. Your previous assistant manager had been hired with no job experience and had not done nearly as well during the assessment process. He had been hired six months ago for an annual salary of $26,000 with two weeks paid vacation, a standard health benefits package, and a $1,000 sign-on bonus. You had to let him go last week after his disappointing performance failed to improve. You would like Edwards to accept your offer and start work as soon as possible. Your assignment is to write a job offer letter to Edwards using what you have learned in this chapter. Answer: The letter should ideally reinforce the students’ enthusiasm for hiring her, outline the terms of the offer, and reinforce McDonalds’ employer brand. What Edwards must do to formally accept the offer should also be specified. The level of pay and benefits offered to Edwards should be at least what the previous assistant manager received due to her greater qualifications. [Your Name] McDonald’s Restaurant Manager [Restaurant Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date] Pat Edwards [Pat’s Address] [City, State, ZIP Code] Dear Pat Edwards, We are pleased to extend an offer for the Assistant Manager position at our McDonald’s restaurant. Your salary will be $28,000 annually, with two weeks of paid vacation, a comprehensive health benefits package, and a $1,500 sign-on bonus. We are excited about your start date of [Proposed Start Date] and confident that your experience and collaborative style will significantly contribute to our team. Sincerely, [Your Name] 2. Develop Your Skills Exercise: This chapter’s Develop Your Skills feature provided several tips on negotiating a job offer. In this exercise, you will role-play a job offer negotiation. When you have finished, switch roles and negotiating partners so that you each have a chance to be the company representative, or the finalist with someone else. Your instructor will provide you each with more information and goals for your role. OPTION 1: Working with a partner, use these tips to negotiate the following job offer for a store manager position at Sweet Treats, a national candy store chain. Referring to your personal experience and credentials, negotiate the following initial job offer with your partner: • A $50,000 annual salary • A $2,000 sign-on bonus • Standard health and dental benefits • Seven personal days per year, including sick and vacation days • An annual bonus of up to 5 percent of salary based on performance Answer: The goals you provide for each role should be for the candidate to negotiate the best offer possible, but to write down in advance of negotiating what his/her personal goals are for important job offer characteristics (e.g., at least what salary, how many vacation days, bonus amount, time to first performance review, etc.). The company representative should be given specific goals regarding a maximum salary, sign-on bonus, etc., and specific maximums. It is a good idea to vary these goals for the two rounds of negotiating so that the candidate does not know the company’s negotiating goals. Have students review the Develop Your Skills feature before starting the exercise. Asking students to identify their negotiation outcome goals in advance, and switching partners helps keep students focused on the negotiating task. The experience of playing both roles is helpful and the experience is generally appreciated by students with limited negotiation experience. Class discussion can focus on what was easier or more difficult than expected, what tactics were most and least effective, and what students learned about job offer negotiation. OPTION 2: Print out the following Ivey case that is provided with our book and can be used in courses in which you are using Strategic Staffing free of charge. Two different job offer negotiation scenarios are provided, allowing students to participate in the exercise once as the candidate and once as the company representative. Allow ~45 minutes for each negotiation. The teaching note is provided at the end. Answer: Job Offer Negotiation Scenarios Exercise Objective: Engage in two distinct job offer negotiation scenarios, one as a candidate and one as a company representative. This exercise aims to develop negotiation skills and understand the perspectives of both parties in job offer discussions. Instructions: 1. Print and Distribute: Print out the provided Ivey case from the book, including the two job offer negotiation scenarios. 2. Role Assignment: Divide the class into pairs or small groups. Assign each group to participate in one scenario as a candidate and in the other as a company representative. Each role will be played for approximately 45 minutes. 3. Scenario Overview: • Scenario 1 (Candidate Role): Negotiate salary, benefits, and job responsibilities with the company representative. • Scenario 2 (Company Representative Role): Negotiate with the candidate on their proposed terms while adhering to company policies and constraints. 4. Conduct Negotiations: Allow 45 minutes for each negotiation scenario. Ensure students take notes and reflect on strategies and outcomes. 5. Discussion: After completing both scenarios, hold a class discussion to review key negotiation tactics, challenges faced, and insights gained from the exercise. 6. Teaching Note: Review the teaching note at the end of the case for additional guidance on discussing and analyzing the negotiation exercise. Preparation Time: Allocate time for students to prepare for their roles and review the provided materials before starting the exercise. JOB OFFER NEGOTIATION EXERCISE (A): MAXIMUM MOTIVATION CANDIDATE INSTRUCTIONS Eric Weinberg and Jean Phillips wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected]. (Publisher) and Richard Ivey School of Business Foundation authorize adopters of (Textbook) to make print copies of this exercise for distribution to their students.” Copyright © 2012, Richard Ivey School of Business Foundation It is the beginning of your final semester of undergraduate study, and you have been on the job market seeking a management consulting position. Two weeks ago, you received a job offer from PerformanceMax, detailed below. While it is a fair offer, you have not yet responded because you would prefer to work for Maximum Motivation — a smaller, local, family-owned company known for treating its employees well and its positive work atmosphere. You have the opportunity to negotiate with Maximum Motivation to try to obtain an offer more attractive to you than the one you have from PerformanceMax. You are, however, pressed for time; PerformanceMax needs to know by tomorrow whether or not you will accept their offer, so you need to negotiate the best offer you can with Maximum Motivation today. Here are the terms of the job offer that were included in your PerformanceMax offer letter: 1. $61,000 base salary. 2. Flexibility to choose four days to work in office and one at home. 3. $10,000 sign-on bonus. 4. Start date: June 1 (three weeks after graduation). 5. Five paid personal days in addition to standard paid time off package. PerformanceMax’s salary offer of $61,000 is low, and you believe it is below the market average. The sign-on bonus is above what you have heard is common for this type of position ($7,500). The additional paid personal days off combined with some flexibility to choose one day per week to work from home are extremely attractive features of the offer and will enable you to better balance work and life. Your ideal situation is to work locally for Maximum Motivation with a high salary and a lot of vacation time. In addition to future vacation time, you would like to have a month or more to relax (and celebrate) after finishing your degree and before starting work. You would consider accepting less flexibility and a lower sign-on bonus from PerformanceMax if they would raise your salary and if you could move your start date out further. Look over the payoff matrix on the next page to identify your priorities and their relative values to you. Both companies offer comparable health benefit packages; similar 401(k) plans; and 10 personal days. These items are non-differentiating factors between the two companies and are non-negotiable. After reviewing the point schedule and preparing to negotiate, let the representative know that you are ready. Allow the company representative to open the discussion by presenting an initial offer. Remember, you would prefer to get the job with Maximum Motivation but you do have an acceptable alternative. Although all of the details of the PerformanceMax offer are not known, you have estimated the overall value of working there to be at least 2000 points. If you cannot negotiate a deal with Maximum Motivation worth more than 2000 points to you, you will accept the job at PerformanceMax instead. Do not let your negotiation partner see your point schedule, on the next page. Use the scenario and information above and your own creativity to play your role in this negotiation. MAXIMUM MOTIVATION CANDIDATE POINT SCHEDULE (A) *CONFIDENTIAL* DO NOT SHOW THIS TO YOUR NEGOTIATION PARTNER! Your individual point total must be at least 2000 points to reach an agreement Base Salary Flextime $75,000 2500 2 days/week, Hire Choice 1250 $70,000 2000 2 days/week, Firm Choice 750 $65,000 1500 1 day/week, Hire Choice 750 $60,000 -500 1 day/week, Firm Choice -750 $55,000 -1750 None Can’t Accept $50,000 Can’t Accept Additional Paid Time Off (Personal Days) Time Between Graduation and Start Date 6 days 800 3 months 2500 5 days 600 2 months 1500 4 days 400 1.5 months 1125 3 days 200 1 month 750 2 days 0 3 weeks 375 1 day -200 2 weeks 0 0 days -400 Time Until First Performance Review Office 2 months 1000 Corner, windows, high floor 500 3 months 750 Own office with window 400 4 months 200 Own office without window 200 6 months -100 Shared office 100 12 months -500 Cubicle -250 Cash Sign-On Bonus Computer $15,000 2250 New, top of the line 250 $12,000 1350 New, moderate quality 100 $10,000 750 Refurbished -100 $7,500 0 $5,000 -800 Cell Phone $2,000 -1700 New smartphone, with data plan 1000 $1,000 -2000 New smartphone, no data plan 800 $0 Can’t Accept Refurbished smartphone, with data plan 450 Refurbished smartphone, no data plan 100 Date Sign-On Bonus Paid No Phone -500 All in 1st paycheck 1500 ½ in 1st paycheck; ½ in 1 year 200 All in 1 year -500 JOB OFFER NEGOTIATION EXERCISE (B): MAXIMUM MOTIVATION REPRESENTATIVE INSTRUCTIONS Eric Weinberg and Jean Phillips wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected]. (Publisher) and Richard Ivey School of Business Foundation authorize adopters of (Textbook) to make print copies of this exercise for distribution to their students.” Copyright © 2012, Richard Ivey School of Business Foundation Version: 2012-09-20 You are the job offer negotiation representative for Maximum Motivation. Your company would really like to hire your top candidate, who you are about to meet with to negotiate a job offer. You are aware that the candidate has another job offer from your rival, PerformanceMax. You will need to negotiate effectively to keep the offer in your company’s best interest, but still hire your top choice. Although you do not know the details of PerformanceMax’s offer, you do know that their strategy is low salaries and high sign-on bonuses. Maximum Motivation is a smaller, family-owned company that must avoid financial risks such as high sign-on bonuses and paying the sign-on bonus up front. Offering additional time off and reasonable flexible working arrangements are more in line with its motivation strategy and talent philosophy. You have some negotiating flexibility, but are still bound by company policies, reflected by the options on the point schedule. The person who is in charge of approving final hiring decisions is intent on preventing risk and managing costs, including payroll. Industry data you have available estimates the market rate for this position to be approximately $64,000. In addition, you are unable to offer more than $70,000 and you should keep in mind that a salary lower than $55,000 is not preferable since the employee will likely feel underpaid and either leave or demand a raise within a few months. Your company needs to replace a consultant who is leaving for another opportunity on May 20, just over one week after this candidate’s graduation. You would prefer to minimize the time that the position is left open, and you are not willing to wait past the end of June for a replacement. Maximum Motivation has a very cooperative and flexible atmosphere. You have developed a culture in which employees are happy to cover for each other and help with each other’s clients. Partly for this reason, you very much prefer to have employees in the office every day. However, you have learned that allowing employees to work from home one day per week of their choice drastically improves morale and their commitment to the organization. Note Maximum Motivation offers all new hires for this type of role the same 401(k) and health benefits package. The law requires you to offer a minimum of 10 personal vacation days. All three of these items are non-negotiable, and your compensation department has informed you these benefits for both Maximum Motivation and PerformanceMax are practically the same. Look over the payoff matrix on the next page to identify your priorities and their relative values to your company. Use as many of these items as you choose to put together a starting job offer to open the negotiation discussion. When you are both ready, present your job offer and start negotiating. Remember, this candidate is your first choice. However, the terms of the final agreement must be worth at least 2000 points to your company. If you cannot negotiate a deal worth more than 2000 points with the candidate, the agreement will not be approved. Any combination of job offer terms worth less than 2000 points to Maximum Motivation is invalid. Do not let your negotiation partner see your point schedule, on the next page. Use the scenario and information above and your own creativity to play your role in this negotiation. MAXIMUM MOTIVATION REPRESENTATIVE POINT SCHEDULE (B) *CONFIDENTIAL* DO NOT SHOW THIS TO YOUR NEGOTIATION PARTNER! Your individual point total must be at least 2000 points to reach an agreement Base Salary Flextime $50,000 1000 None 1000 $55,000 1500 1 day/week, Hire Choice 750 $60,000 1000 1 day/week, Firm Choice 500 $65,000 -500 2 days/week, Firm Choice -250 $70,000 -1250 2 days/week, Hire Choice -750 $75,000 Can’t Accept Additional Paid Time Off (Personal Days) Time Between Graduation and Start Date 0 days 800 2 weeks 1500 1 day 600 3 weeks 1125 2 days 400 1 month 750 3 days 200 1.5 months 375 4 days 0 2 months 0 5 days -200 3 months Can’t Accept 6 days -400 Time Until First Performance Review Office 12 months -500 Cubicle 500 6 months 600 Shared office 400 4 months 750 Own office without window 200 3 months 250 Own office with window 100 2 months Can’t Accept Corner, windows, high floor -250 Cash Sign-On Bonus Computer $0 3750 Refurbished 250 $1,000 2750 New, moderate quality -100 $2,000 2000 New, top of the line -500 $5,000 0 $7,500 -750 Cell Phone $10,000 -1500 No Phone 1000 $12,000 -2500 Refurbished smartphone, no data plan 500 $15,000 -4000 Refurbished smartphone, with data plan -100 New smartphone, no data plan -300 Date Sign-On Bonus Paid New smartphone, with data plan -500 All in 1 year 750 ½ in 1st paycheck; ½ in 1 year -100 All in 1st paycheck -1000 JOB OFFER NEGOTIATION EXERCISE (C): PEOPLE POWER CANDIDATE INSTRUCTIONS Eric Weinberg and Jean Phillips wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected]. (Publisher) and Richard Ivey School of Business Foundation authorize adopters of (Textbook) to make print copies of this exercise for distribution to their students.” Copyright © 2012, Richard Ivey School of Business Foundation Version: 2012-09-20 It is the beginning of your final semester of undergraduate study, and you have been on the job market seeking a management consulting position. Two weeks ago, you received a job offer from PerformanceMax, detailed below. While it is a fair offer, you have not yet responded because you would prefer to work for People Power — a larger, better performing, and faster growing company with a reputation in the industry for offering variety and skill development in its entry-level positions. You have the opportunity to negotiate with People Power to try to obtain an offer more attractive to you than the one you have from PerformanceMax. You are, however, pressed for time; PerformanceMax needs to know by tomorrow whether or not you will accept their offer, so you need to negotiate the best offer you can with People Power today. Here are the terms of the job offer that were included in your PerformanceMax offer letter: 1. $68,000 base salary. 2. Located in the Midwest. 3. $1,000 sign-on bonus paid at the time of signing. 4. $3,000 relocation assistance. 5. Annual Target Bonus: 8 per cent of base pay. PerformanceMax’s salary offer of $68,000 is very generous and you are aware that it is above market average. Eligibility in their annual bonus program is also a valuable added incentive. However, the sign-on bonus and relocation assistance are not as generous, and you would prefer not to work in the Midwest. You would like to live in the Northeast, near your family, and do not want to relocate internationally or live in the cold and snowy Midwest. You would really like a cash sign-on bonus of at least $7,500 paid as quickly as possible to enable you to spruce up your wardrobe and pay off your student loans. You have also heard $7,500 is a common sign-on bonus for this type of position. You would consider accepting a lower salary offer from People Power if some of your other interests can be better met compared to the offer from PerformanceMax. Look over the payoff matrix on the next page to identify your priorities and their relative values to you. Both companies offer comparable health benefit packages, similar 401(k) plans, and 10 personal vacation days. These items are non-differentiating factors between the two companies and are non-negotiable. After reviewing the point schedule and preparing to negotiate, let the representative know that you are ready. Allow the company representative to open the discussion by presenting an initial offer. Remember, you would prefer to get the job with People Power but you do have an acceptable alternative. Although all of the details of the PerformanceMax offer are not known, you have estimated the overall value of working there to be at least 2000 points. If you cannot negotiate a deal with Maximum Motivation worth more than 2000 points to you, you will walk away and accept the more attractive job at PerformanceMax. Do not let your negotiation partner see your point schedule, on the next page. Use the scenario and information above and your own creativity to play your role in this negotiation. PEOPLE POWER CANDIDATE POINT SCHEDULE (C) *CONFIDENTIAL* DO NOT SHOW THIS TO YOUR NEGOTIATION PARTNER! Your individual point total must be at least 2000 points to reach an agreement Base Salary Location $75,000 2500 Northeast 1250 $70,000 2000 West Coast 750 $65,000 1500 South 750 $60,000 -500 Midwest -750 $55,000 -1750 Mexico City -1500 $50,000 Can’t Accept London Can’t Accept Annual Bonus Target Relocation Assistance 10% of Base Pay 1500 $10,000 1000 8% of Base Pay 1125 $7,000 700 5% of Base Pay 750 $5,000 500 2% of Base Pay 375 $3,000 -100 None 0 $2,000 -500 $1,000 -650 Time Until First Performance Review $0 -750 2 months 1000 3 months 750 Office 4 months 200 Corner, windows, high floor 500 6 months -100 Own office with window 400 12 months -500 Own office without window 200 Shared office 100 Cash Sign-On Bonus Cubicle -250 $15,000 2250 $12,000 1350 Computer $10,000 750 New, top of the line 250 $7,500 0 New, moderate quality 100 $5,000 -800 Refurbished -100 $2,000 -1700 $1,000 -2000 Cell Phone $0 Can’t Accept New smartphone, with data plan 1000 New smartphone, no data plan 800 Date Sign-On Bonus Paid Refurbished smartphone, with data plan 450 All in 1st paycheck 1500 Refurbished smartphone, no data plan 100 ½ in 1st paycheck; ½ in 1 year 200 No Phone -500 All in 1 year -500 JOB OFFER NEGOTIATION EXERCISE (D): PEOPLE POWER REPRESENTATIVE INSTRUCTIONS Eric Weinberg and Jean Phillips wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected]. (Publisher) and Richard Ivey School of Business Foundation authorize adopters of (Textbook) to make print copies of this exercise for distribution to their students.” Copyright © 2012, Richard Ivey School of Business Foundation Version: 2012-09-20 You are the job offer negotiation representative for People Power. Your company would really like to hire your top candidate, who you are about to meet with to negotiate a job offer. You were recently made aware that the candidate has another job offer from your rival, PerformanceMax. You will need to negotiate effectively to keep the offer in your company’s best interest, but still hire your top choice. Although you do not know the details of PerformanceMax’s offer, you do know their strategy is to offer high salaries at the expense of other benefits. People Power’s business and talent strategy, on the other hand, centers on developing and investing in its people while offering competitive and fair market rates. You have some negotiating flexibility, but are still bound by company policies (reflected by the options on the point schedule). The hiring manager is also concerned about internal equity, and would prefer the salary be kept close to the market value which your compensation department has estimated to be approximately $64,000 based on external survey data. In addition, you are unable to offer more than $68,000 and you should keep in mind that a salary below $55,000 is not preferable since the employee will likely feel underpaid and either leave or demand a raise within a few months. Your company has paid sign-on bonuses in the past, but is trying to eliminate this practice as it does not feel that it is necessary in the current economic climate. People Power also believes in developing its employees and would like to give employees their first performance review and opportunity for a raise within four to six months of their starting date. The company also believes in pay for performance, although it tries to limit the variable component of a person’s salary to a reasonable level. People Power doesn’t generally see a need for entry-level consultants to use a cell phone for work very often, and feels that most employee cell phone use is of a personal rather than business nature. Note People Power offers all new hires for this type of role the same 401(k) and health benefits package. In addition, all employees receive 10 personal days. All three of these items are non-negotiable, and your compensation department has informed you these benefits for both People Power and PerformanceMax are virtually identical. Look over the payoff matrix on the next page to identify your priorities and their relative values to your company. Then, put together a starting job offer to open the negotiation discussion. It is not necessary to include all 10 items when presenting your offer. When you are both ready, present your job offer to the job candidate and start negotiating. Remember, this candidate is your first choice. However, the terms of the final agreement must be worth at least 2000 points to your company. If you cannot negotiate a deal worth more than 2000 points with the candidate, the agreement will not be approved by the compensation department. Any combination of job offer terms worth less than 2000 points to People Power is invalid. Do not let your negotiation partner see your point schedule, on the next pages. Use the scenario and information above and your own creativity to play your role in this negotiation. PEOPLE POWER REPRESENTATIVE POINT SCHEDULE (D) *CONFIDENTIAL* DO NOT SHOW THIS TO YOUR NEGOTIATION PARTNER! Your individual point total must be at least 2000 points to reach an agreement Base Salary Location $50,000 1000 London 1000 $55,000 1500 Mexico City 1000 $60,000 1000 West Coast 750 $65,000 -500 Midwest 500 $70,000 -1250 South -250 $75,000 Can’t Accept Northeast -750 Annual Bonus Target Relocation Assistance None 1500 $0 1000 2% of Base Pay 1125 $1,000 700 5% of Base Pay 750 $2,000 400 8% of Base Pay 375 $3,000 100 10% of Base Pay 0 $5,000 0 $7,000 -300 Time Until First Performance Review $10,000 -750 12 months -500 6 months 600 Office 4 months 750 Cubicle 500 3 months 250 Shared office 400 2 months Can’t Accept Own office without window 200 Own office with window 100 Cash Sign-On Bonus Corner, windows, high floor -250 $0 3750 $1,000 2750 Computer $2,000 2000 Refurbished 250 $5,000 0 New, moderate quality -100 $7,500 -750 New, top of the line -500 $10,000 -1500 $12,000 -2500 Cell Phone $15,000 Can’t Accept No Phone 1000 Refurbished smartphone, no data plan 500 Date Sign-On Bonus Paid Refurbished smartphone, with data plan -100 All in 1 year 750 New smartphone, no data plan -300 ½ in 1st paycheck; ½ in 1 year -100 New smartphone, with data plan -500 All in 1st paycheck -1000 Teaching Note JOB OFFER NEGOTIATION EXERCISE NOT FOR DISTRIBUTION TO STUDENTS Eric Weinberg and Jean Phillips wrote this teaching note as an aid to instructors in the classroom use of the cases Job Offer Negotiation Exercise (A), (B), (C) and (D), Nos. 9B12C036A, 9B12C036B, 9B12C036C and 9B12C036D. This teaching note should not be used in any way that would prejudice the future use of the case. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected]. Copyright © 2012, Richard Ivey School of Business Foundation Version: 2012-09-20 The purpose of this role play activity is to give participants the opportunity to experience a job offer negotiation as both the job candidate and the employer. Materials are available to conduct two unique job offer negotiations, allowing participants the opportunity to play both roles and to practice and apply concepts and skills learned in the first negotiation session. If desired, only one of the two exercises can be done if only one hour is available for the activity. The exercise addresses a variety of topics and skills related to negotiation, influence, persuasion, communication, emotional intelligence, planning and conflict resolution skills. The activity also gives participants the opportunity to practice negotiating the details of a job offer. The activity is useful in staffing, human resource management, principles of management, organizational behavior, and negotiation classes and workshops. It has been used successfully at both the undergraduate and graduate levels. It takes approximately one hour for participants to complete one role play and 20 minutes to conduct the debriefing and discussion. This can be cut to 50 minutes for the exercise and 10 minutes for the discussion if necessary. If both scenarios are used to give participants the opportunity for additional practice and to apply concepts learned in the first session, the discussion should ideally be held twice to maximize learning and skill development. EXERCISE SYNOPSIS The exercise contains two distinct negotiation scenarios. One scenario occurs for a job with a company called People Power and the other is for a job with a company called Maximum Motivation. The exercise’s authors recommend facilitating both scenarios, especially for human resource management and staffing courses. However, each scenario has been designed as an effective tool when used alone in order to meet time constraints. If facilitating both role play scenarios, they may be used in any order. If facilitating one, select only one of the two scenarios for all participants to use (either People Power or Maximum Motivation). Participants work in pairs, with one playing the role of the job candidate and the other the role of the company representative. In both scenarios, the company considers the candidate to be the top applicant and would very much like to finalize the hire. In both scenarios, the job candidate has an acceptable alternative — another job offer from a rival company called PerformanceMax — and needs to accept or decline the PerformanceMax offer the next day. It is important that both sides reach an acceptable employment arrangement during this negotiation, or the candidate will not be hired. When the two sides have negotiated an acceptable agreement, or when either the candidate or the company representative decides to end the negotiation, the negotiation is over. Participants must negotiate a deal worth at least a specified minimum number of points to each party in order to reach a deal. When the negotiation has ended, both partners record their final individual and joint point totals for later group discussion and give each other feedback. After the group discussion of the first negotiation session, participants find a different partner who last played the opposite role, switch roles, and complete the other negotiation scenario with a different partner while playing the opposite role. It is also possible to conduct the two role play sessions on different days, giving participants instructions to prepare their offers, set goals, and plan negotiation strategies before the next session. SUGGESTED TEACHING APPROACH Your role as facilitator of this exercise begins with creating an environment for negotiation and explaining a set of basic boundaries. Next, you will take a step back to enable the participants to have the freedom and flexibility to be creative in this activity and practice their skills. After delivering an initial set of instructions, you will be minimally involved in the negotiation, but after the activity completes, you should conduct a discussion highlighting some key points of interest and lessons that can be learned from the activity to facilitate learning and skill development. After pairing negotiation partners together, ensure the pairs have the opportunity to spread out around the room. This activity tends to involve lively, active discussion. It is better if participants are not distracted or influenced by conversations or negotiations going on right next to them. Help the participants “get into character” by explaining to them the relevance and importance of the activity. If possible, embellish the given scenario to relate to the participants’ current situation. Make the hypothetical situation seem as realistic and relatable as possible. Remind the participants the objective is not necessarily to score the most individual points, because in order to “win” the other party must feel that he/she “won” as well. Then explain the rules and boundaries of the activity. • Participants have a limited set of information and detail available to them, and are free to be creative and embellish their stories and interests as appropriate. • Explain that not all negotiations will be successful — and this is okay. Remind participants to pay attention to their BATNA’s (best alternative to a negotiated agreement). The point levels related to each participant’s BATNA are provided as part of each scenario. These numbers are fixed; any deal in which either party has lower than their BATNA number is invalid. It is as if they never came to an agreement. • Participants may not share their point schedules or current point totals, but are encouraged to share other information as they choose based on what they feel is appropriate or the best negotiation strategy. • Give the participants 10 minutes to prepare and 30-40 minutes to come to an agreement, or the deal is off. Participants must be sure to take the time to confirm, review and finalize all terms of the deal in writing before informing the facilitator of their final scores. At the beginning of the activity both the job candidate and company representative are given a confidential role description for their role and a payoff matrix that should not be shared with the negotiating partner. The role description identifies the negotiation priorities for each person. The payoff matrix reflects the points awarded for different levels of each negotiation factor (salary, sign-on bonus, relocation assistance, etc.) for that role. The point values differ for each partner. Each side must negotiate a job offer worth at least 2,000 points to them (4,000 combined points) in order to secure a final deal. If the minimum 2,000 point value is not met by both parties, the candidate is not hired. If there are no questions, participants should read their personal scenarios, familiarize themselves with their point schedules, and take a few minutes to set goals and think of a negotiation strategy before beginning. If time constraints are an issue, encourage participants to spend five minutes preparing and 20-30 minutes negotiating (Note: the preparation step of negotiation is important to learning about the importance of planning and should not be skipped). Avoid answering questions that may come up and point the participants back to the limited information they have for an answer; if it isn’t in there, it is up to them to be creative. Give participants regular reminders of the time remaining, the minimum acceptable point score, and each side’s BATNA constraint. Time Needed for Activity • Set-up and Instructions: 5-10 minutes • Participants’ Individual Preparation Time: 5-10 minutes • Negotiation (and collect results as groups finish) 40-50 minutes • Debrief Discussion 10-20 minutes Total 60-90 minutes for one; 120-180 minutes for both SUGGESTED DISCUSSION QUESTIONS The following is a sample of lessons learned and key takeaways provided by this activity. Often, participants will recognize many if not all of these points and will bring them up during the discussion. This sample list of possible discussion questions is included as a guide to just some of the points you may want to highlight or emphasize: 1. Which individuals negotiated the highest individual payoffs? Which partners negotiated the highest joint payoff? Why do you feel these outcomes occurred? Answer: Collaborative (integrative) negotiation should result in higher joint payoffs than competitive (distributive) negotiation. Negotiating an employment arrangement requires both partners to work together to achieve a mutually optimized agreement. Asking the partners of the participants who received the highest individual payoffs how they felt during and after the negotiation can help to illustrate the benefits of a collaborative negotiation strategy. Did these partners feel taken advantage of, betrayed, or tricked due to the competitive strategy of their partners? Discussing which negotiation tactics led to the higher individual and joint payoffs can also illuminate the processes that lead to different negotiation outcomes and help participants reflect on what were the most and least successful negotiation, persuasion and influence tactics. Identifying whether these tactics would be equally successful across all partners also highlights the importance of strategy and flexibility in negotiations. During this discussion, it is valuable to mention that the highest possible combined payoff is 8,000. Joint scores close to this number are quite rare, but are more likely with pairs who engage in a post-negotiation collaborative review. That is, after coming to a preliminary agreement, both parties agree to take a few minutes to consider if slight modifications would be mutually desirable. When this strategy is exercised, both sides obtain not just a higher point total, but also reinforce trust and optimism toward a future relationship with each other. 2. Describe your approach to the first negotiation. How did you plan your strategy? Why did it work or not work? Answer: Personal style differences in offer planning, negotiation strategy, and influence and persuasion tactics can illustrate how negotiation skills can be improved with training and practice. Differences in how participants identified the most/least important points of negotiation for the other party to maximize each side’s “wins” can illustrate the importance of communication skills. Linking answers to this question with participants’ answers to the previous question can highlight the importance of planning and strategy to negotiation outcomes. Participants who start with more extreme positions typically end up with higher payoffs. It is often worthwhile to have an extreme initial offer, even if it seems unrealistic. Otherwise, the negotiation zone (range between initial offer and BATNA) is prematurely cut short. Further, there is a chance the other side might not think it is unfair or unrealistic, and might agree to it. Another often effective tactic is to act as if some issues that are not as important actually are significant, using these minor issues to gain concessions on more important concerns. Volunteering information to establish trust, asking directly what the most important issue is for the other side, and waiting for the other side to make the first offer are also strategic approaches that participants found to be successful. Discussing how participants adapted their strategy to the negotiation style of their partner can illustrate the importance of collaboration and flexibility. One additional key tactic is threatening to walk away. When used at the right time, this is a common and very powerful strategy that capitalizes on the other side’s escalation of commitment (continuously increasing commitment and desire to come to a deal that results from a person’s desire not to “give up” after all the time and effort that has already been invested and feel as if he or she failed the exercise). 3. What influence tactics did you try? How well did they work and why? Answer: Asking participants to indicate which of the following influence tactics they tried and how each worked can illustrate the appropriate and inappropriate usage of each: • Personal appeals: asking for a personal favor. • Rational persuasion (or reason): using logic and facts to persuade the partner. • Coalition tactics: referring to the support of others to convince the partner to agree to a proposal or to change his or her attitude toward something, such as the benefits of flextime or a smart phone with a data plan. • Consultation: requesting the partner’s advice and being willing to modify the offer based on the person’s concerns and suggestions. • Exchange: offering to exchange something of value now or in the future for the partner’s cooperation • Pressure: using coercion or persistent follow-up or reminders to gain influence. • Ingratiation: flattering or praising the partner to put them in a good mood or make them more likely to want to help. • Inspirational appeals: appealing to the partner’s aspirations, values and ideals to gain their agreement. • Legitimating tactics: enhancing one’s formal authority to make a certain request by referring to rules, precedents or official documents. Participants often refer first to rational persuasion and exchange, but it is common for most of these tactics to have been tried during the negotiation session with different results for different people and situations. The potential negative effects of pressure can be discussed as well. 4. What conflict management strategies did you use when you and your partner reached an impasse? How well did they work and why? Answer: • Collaborating: reflects a high concern for your own interests and a high concern for the interests of the other party; this conflict management style emphasizes problem solving and pursues an outcome that gives both partners what they want. • Compromising: each side sacrifices something in order to end the conflict; this style reflects a moderate concern for your own interests and a moderate concern for the interests of the other party. • Competing: reflects a high concern for your own interests and low concern for the other party (e.g., “If you don’t accept this offer the deal is off”); since one party is trying to dominate the other this conflict management style can escalate the conflict and the loser may try to retaliate. • Accommodating: reflects a low concern for your own interests and a high concern for the interests of the other party; this conflict management style is generally used when the issue is more important to the other party than it is to you. • Avoiding: ignoring the conflict or denying that it exists; this style reflects a low concern for your own interests and a low concern for the interests of the other party; the primary drawback to this style is that the decision may not be optimal to you and your interests. Across a group of participants at least one example of each strategy can usually be discussed. As there is no single best conflict management strategy, this allows a rich discussion of the appropriate and inappropriate use of each strategy. 5. (If applicable) Which ideas or tactics that you learned after completing this activity the first time were you able to apply the second time? How did they improve the results of the negotiation? Answer: Participants often mention the importance of planning, creating a first offer with room for negotiation, and better communication with their partner. Performing the exercise a second time gives participants the opportunity to improve their tactics and negotiation skills and often leads to additional insights. The importance of the planning stage can be discussed here, in terms of gathering the information needed to create a good first offer, understanding one’s BATNA, and strategizing how best to persuade and influence one’s partner. Attempts to implement some of the strategies mentioned above, such as threatening to walk away, often have mixed results with a group that has engaged together in discussing it. However, pairs that choose to engage in a post-negotiation collaborative review consistently achieve higher scores. Emotional intelligence skills and emotion management skills are often focused on more in the second negotiation session than the first as the importance of interpersonal skills often becomes clear during the first session. Asking what participants did when they felt their partner was getting frustrated can stimulate a good discussion of the importance of emotional regulation and emotional intelligence in negotiations as well as appropriate tactics to manage this situation. Asking participants if they tried any tactics that worked in one negotiation but not the other can stimulate a discussion of how it is not just the content of a negotiation, but also the interpersonal process that influences negotiation outcomes. 6. What would have helped you negotiate more effectively? More time? More information? What would you do differently if you were to do the negotiation again? Answer: The discussion around this question often focuses on the importance of planning, strategy development, and better understanding the partner’s needs and negotiating position. The information typically requested includes more planning time and additional negotiation factors to use to create a mutually acceptable agreement. Creating a good first offer with negotiation room is often identified as important to maximizing the joint payoff. More information about the market rate and the specific needs of the position would have helped me negotiate more effectively. I would also benefit from more time to evaluate the offer thoroughly and compare it with other opportunities. In future negotiations, I would gather comprehensive data on compensation benchmarks and prepare a clear rationale for any counteroffers. SUMMARY OF KEY DISCUSSION POINTS AND LESSONS LEARNED • The difference between an integrative, collaborative approach versus a distributive, competitive (fixed pie) focus and how it was reflected in different negotiating pairs’ interactions. • The importance of recognizing BATNA, identifying the negotiation zone, and obtaining information from the negotiation partner. • The value of re-visiting issues as well as the “final” deal (through a post-negotiation collaborative review) to see if any last minor changes can be made that are beneficial to both sides. • The importance of planning, communication, influence, persuasion, conflict management and emotional intelligence skills during a negotiation. • The impact of threatening to walk away as well as understanding and detecting escalation of commitment. 3. Opening Vignette Exercise: In this chapter’s opening vignette, you learned how MarineMax tries to tailor its job offers to specific candidates. Working in a group of three to five students, reread the vignette and be prepared to share with the class your answers to the following questions: a. Do you think that it is ethical for MarineMax to give different new hires for the same job different amounts of pay and benefits? b. Should MarineMax use a low, competitive, high, or maximum job offer? Why? Should the company present a maximum job offer or leave room to negotiate? Why? c. What can MarineMax do to increase the likelihood that the top sales candidates it recruits will accept its job offers? Answer: a. This is often controversial. Once employees start performing differently it tends to be more acceptable to pay them differently. b. Given the company’s strategy and need for high customer service skills, as well as the benefits of retaining top performers to develop long-term relationships with customers, a high job offer is generally identified as appropriate. Leaving negotiating room is up to the students, and often links to their answers to the previous question. c. Targeted recruiting and consistently recruiting candidates throughout the hiring process to increase their enthusiasm for the company would help. Maintaining a competitive base pay package with the potential for generous bonuses if performance targets are met should also appeal to top salespeople. Offering continuing training and development, clear goals and feedback, and a clear career progression path might also be appealing. This question can be used to reinforce the message in Chapter 1 that all of the functional areas of HR should be aligned when it comes to successfully attracting and hiring talent. ADDITIONAL EXERCISE Developing and Evaluating a Selection System Thank you to Barbara Rau for providing this exercise. Dynamo Industries 1111 Packerland Drive Madison, WI 53714 September 5, 2008 Staffing Consultants of Oshkosh, WI P.O. Box 9999 Algoma Boulevard Oshkosh, WI 54901 DEAR PROJECT COORDINATOR: Thank you for helping us with a review of our selection process. Dynamo Industries is a medium-sized manufacturer of small electrical motors headquartered in Madison, Wisconsin. Our firm employs 9,800 people. Dynamo Industries has plants throughout the U.S., all of which are unionized. The power of the unions varies greatly from plant to plant. Recently the company has been trying to hire a new plant manager (see job description in Exhibit 1) for the Pittsburgh plant (plant managers report directly to the vice president of production). Although Dynamo Industries has experienced slightly above average growth and profit compared to its competitors, the Pittsburgh plant has been a trouble spot. Over the past three years, production costs there have been extremely high and labor-management relations have been strained (e.g., numerous work slow-downs, an excessive number of grievances filed). The most recent Pittsburgh plant manager was terminated although by mutual agreement the company stated he left for a better job with another company. Because of the importance of the plant manager position, Dynamo Industries has used several expensive selection devices that are described below. After a thorough recruitment effort (both within and outside the company) and some initial screening, the list of job candidates has been reduced to five names. Exhibits 2-6 contain extensive information on each of the five candidates and Table 1 summarizes the data. Dynamo Industries does not have an established philosophy for filling job openings. In the past, it has favored promotion from within the company. However, the vice president of production was hired externally. Dynamo has no policy on lateral transfers and in the recent past, such transfers have been rare. The key issue seems to be whether the company benefits from the transfer. Looking at the data we have collected on these candidates, the selection committee cannot reach an agreement as to who to hire, and there are significant differences in our opinions. This is not the first time this has happened at Dynamo, and because the process seems to be becoming more disruptive, we collectively decided it would be a good idea to bring in an external consultant to help evaluate our procedures and provide suggestions. We would like you to do the following: 1. Determining Criteria for Selection: Examine the job description provided in Exhibit 1. Based on this information and what you know about the plant conditions described in the background, make a list of the knowledge, skills, abilities and other characteristics (KSAO’s) that you consider “must haves” for this position (in other words, those KSAO’s that the candidate absolutely must have in order to qualify for this position) and then make a second list of those KSAO’s that you would like the candidate to possess (but are not absolutely necessary for hiring). Provide a brief written rationale for your lists. 2. Critique Our Selection Tools: Examine the information provided in Exhibit 2-6. Create a table that lists each of the tests we use, whether you would use it or not, and a brief written rationale describing why you believe the information is either usable or not usable in making the selection decision. Then provide us with some recommendations for how the process should be changed when hiring plant managers in the future (e.g., what additional selection devices should be used, additional information gathered, sources to drop or change, people involved in the selection decision making process)? Also, we know our interview process is problematic. Please provide us with some recommendations to improve the process, and include an attachment with a structured interview format that you believe would be useful to use. 3. Make a Selection Decision: Make a recommendation as to which candidate we should hire using one of the methods discussed in class (e.g., multiple hurdles, compensatory approach, or one of the other approaches discussed.) Provide an in-depth discussion of the process used to make this decision, how it was applied, and why you used this process. Be sure to explain any assumptions such as what weights were applied to the various criteria, etc. Please submit your report with an appropriate cover letter to me by September 30th and try to keep it under 8 pages including tables and references. Also, remember to properly cite any outside sources you use in writing your report and include a list of references so my HR staff can use them in their own research. Sincerely, Susan M. Jones, Vice-President Human Resources Management Enc. INSTRUCTOR’S ADDENDUM Please note: • Use student identification numbers only – NO NAMES PLEASE! This allows me to minimize bias in grading. Use interesting, fun bogus (but keep it clean, please) names to sign your cover letter or just put your student id numbers on the cover letter as a signature. • Your report must be accompanied by an appropriate cover letter to the VP of HR describing the contents of your report. • Properly cite any outside sources you use in writing your report using APA style of referencing. (See guidelines posted on Blackboard). Sources must be cited within the body of the text where appropriate, include at the bottom of tables, and included in a list of references at the end of the report. References should be put on a separate sheet. • Submit your unstapled paper in a pocket folder. • Please see the grading sheet posted on Blackboard for additional information about the expectations for this project. • EXHIBIT 1 PLANT MANAGER JOB DESCRIPTION The plant manager (PM) is ultimately responsible for the operating efficiency of the entire plant. In fulfilling his/her responsibilities, the PM regularly consults with subordinate supervisory personnel (the PM frequently delegates duties). A plant manager must be somewhat knowledgeable of the production methods and the capabilities of equipment. Some of the activities the plant manager is directly or indirectly involved in include: 1. procuring materials 2. maintaining the plant 3. controlling quality 4. using manpower 5. establishing budgets 6. revising production schedules because of equipment failure or operation problems 7. consulting with engineering personnel concerning the modification of machinery to improve production quantity, the quality of products, and employee safety 8. conducting hearings to resolve employee grievances 9. participating in union-management contract negotiations 10. ensuring safety 11. establishing community relations EXHIBIT 2 BACKGROUND INFORMATION ON THE CANDIDATES 1. George Martin - age 44. Education: B.A., University of Wisconsin; M.A. (Industrial Relations), Cornell University. He is employed by one of Dynamo’s competitors as a plant manager of a relatively small (580 nonunion employees) plant located in Cleveland. Martin has held that job for the past six years. He has been with that company for 14 years. No reference information was gathered because Martin was concerned about his present employer’s reaction. 2. Tony Caciopo - age 59. Education: high school graduate. He has been an assistant plant manager in Providence for the past 10 years. Caciopo has been with Dynamo for 24 years. He had a severe heart attack four years ago but appears to have recovered. Ten years ago, he was offered a job as plant manger by Dynamo but turned it down because of his wife’s health problems. 3. Kathy Joyce - age 36. Education: B.A., Indiana University. She is currently plant manger of the Little Rock plant. She desires a lateral transfer because it would enhance job opportunities for her husband. Joyce has been with Dynamo for five years. She has been plant manager at Little Rock for two years. 4. Ron Jackson - age 33. Education: B.A., Howard University; M.B.A., Northwestern. He is currently an assistant plant manager at the Pittsburgh plant. He has been with the company for four years; he has been assistant plant manager for two years. He has served as acting plant manager at Pittsburgh for the past two months. 5. Frank Hall - age 58. Education: B.S. (chemistry), Duke University. He is currently vice president for production for one of Dynamo’s major competitors. He says he seeks a demotion so that he is required to travel less. He has been vice president of production for six years. Before that, he was a plant manager for 12 years. The plant was organized by a union. No reference information is available but he has received outstanding reviews in trade publications for his performance VP. A psychiatrist examined each of the five candidates. She utilized personality tests (e.g., 16PF, the Myers-Briggs Type Indicator, and the Thematic Apperception Test) in drawing the following conclusions. EXHIBIT 3 PERSONALITY PROFILE CANDIDATES’ RATINGS HIGH MEDIUM LOW Ability to handle stress Martin Caciopo Joyce Jackson Hall Ability to resolve conflict Joyce Caciopo Martin Hall Jackson Interpersonal skills Martin Joyce Caciopo Jackson Hall Mostly likely to succeed as plant manager Martin Caciopo Joyce Jackson Hall Each of the interviewers went through a one-day interview training program. The vice president of production’s interviews averaged three hours in length. The other interviews averaged 60 minutes in length. Each interview was asked to rate the candidates on a seven point scale (1 = poor candidate...7 = excellent candidate) based on their impressions of the candidates during the interview. All interviews were unstructured and the interviewers asked whatever questions they wanted of the candidate. EXHIBIT 4 INTERVIEWERS’ RATINGS VICE PRESIDENT PRODUCTION VICE PRESIDENT PERSONNEL COLUMBUS PLANT MANAGER ATLANTA PLANT MANAGER George Martin Tony Caciopo Kathy Joyce Ron Jackson Frank Hall 6.5 5.0 6.0 5.0 6.5 6.0 5.5 6.5 5.5 7.0 5.5 4.5 5.0 4.5 3.5 4.0 6.0 5.5 5.0 4.0 The intelligence test (Wechsler Adult Intelligence Scale) given by Dynamo Industries is commonly used for selecting candidates for management. Individuals scoring below 115 do not tend to do well in managerial jobs. Standard error equals 3.5. The handwriting analyst rated the plant manager candidates in terms of their likelihood of success as the Pittsburgh plant manager (-3 = very poor prospect... +3 = very strong prospect). EXHIBIT 5 INTELLIGENCE TESTS AND HANDWRITING ANALYSES CANDIDATE INTELLIGENCE TEST HANDWRITING RATING George Martin Tony Caciopo Kathy Joyce Ron Jackson Frank Hall 119 116 141 114 112 +3 +1 -1 +2 +3 A promotability rating was made as part of the annual performance review (7 = ready for immediate promotion... 1 = should not be promoted). The performance rating ranges from 1 = poor performance... 7 = exceptional performance. As part of the selection process, all applicants went through a series of work sample tests (i.e., in-basket, leaderless group discussion, and production planning exercise). Scoring was done by trained raters from the personnel department (20 = highest possible score). EXHIBIT 6 PROMOTABILITY RATINGS, PERFORMANCE RATINGS, AND WORK SAMPLE SCORES CANDIDATE PROMOTABILITY PERFORMANCE WORK SAMPLE George Martin Tony Caciopo Kathy Joyce Ron Jackson Frank Hall Not available 6.0 5.0 5.5 Not available Not available 5.0 6.0 6.0 Not available 19.5 15.5 18.5 18.0 19.0 aRace/Ethnicity is coded as follows: W = White; B = Black bSelection tests are coded as follows: 1 = Ability to Handle Stress (1=low, 2=medium, 3=high) 2 = Ability to Resolve Conflict (1=low, 2=medium, 3=high) 3 = Interpersonal Skills (1=low, 2=medium, 3=high) 4 = Likelihood of Success (1=low, 2=medium, 3=high) 5 = Interview (Average Score) (1=poor candidate…7=excellent candidate) 6 = Intelligence Test 7 = Handwriting Rating (-3=very poor prospect … +3=very strong prospect) 8 = Promotability (7=ready for immediate promotion…1=should not be promoted) 9 = Performance (1=poor performance…7=exceptional performance) 10 = Work Sample (20 = highest possible score) GRADING CRITERIA Cover Letter (10 points) – A cover letter or memo was included with the report. Cover letter was descriptive of the contents of the report and professional in exposition. 0 6 7 8 9 10 KSAO’s (10 points) – KSAO’s identified in the table were consistent with the job description and division of “musts” versus “wants” was reasonable and rationalized. Rationale for the KSAO’s selected was clear and concise. A good explanation of the selection and classification of KSAO’s was provided. 0 6 7 8 9 10 Selection Tools (10 points) – Choices of selection tools was clearly rationalized using existing knowledge on validity of the various tools and their appropriateness to the job description. 0 6 7 8 9 10 Recommendations (10 points) – Critique of selection tools was thorough and recommendations for changes to be made to the entire selection process were logical and supported by a strong rationale. 0 6 7 8 9 10 Interview Recommendations (10 points) – Recommendations for improving the interview process were comprehensive and derived from research on interviewing; a convincing rationale; the new structured interview process and questions were clearly connected to the KSAO’s identified in previous sections. 0 6 7 8 9 10 Decision-Making (15 points) – The decision-making process chosen was clearly and thoroughly explained and was reasonable and supported by a clear rationale for its use. The final selection decision was clearly derived from the application of this process. 0 9 10 11 12 13 14 15 Presentation (10 points) –Presentation was professional, free of typographical and grammatical errors, tables were clearly presented, and references were cited completely. 0 6 7 8 9 10 TOTAL POINTS: _______ / 75 points Grading Codes: Did not complete requirements Does not meet expectations Meets expectations Exceeds expectations Greatly exceeds expectations – Superior performance CASE STUDY Hiring FBI Agents The FBI is one of the six bureaus of the U.S. Department of Justice and the primary criminal investigative agency of the federal government. The special agents who work for the FBI investigate people and organizations that violate federal statutes. These violations can be related to organized crime, white-collar crime, financial crime, civil rights violations, bank robberies, kidnapping, terrorism, foreign counterintelligence, and fugitive and drug trafficking matters. Special agents also work with other federal, state, and local law enforcement agencies. The work performed by special agents has a daily impact on the country’s security and the quality of life of all U.S. citizens. The FBI has validated a series of assessment methods for its special agent positions. To effectively utilize the assessments, it uses a combination of multiple hurdles and cut scores to make its hiring decisions: 1. Online Application for the Special Agent Position: A preliminary online application submitted through an FBI Field Office is used to determine if applicants meet the minimum qualifications of the position, including citizenship, age, education, work experience, and geographic mobility. 2. Phase I Testing: Applicants passing the second hurdle are given three tests: A biodata inventory, a logical reasoning test, and a situational judgment test. Candidates whose scores exceed a predetermined cut score advance to the next phase. 3. Phase II Testing: Only the most competitive applicants, based on the hiring needs of the FBI, are scheduled for Phase II Testing. Candidates’ performance on a structured interview and a written exercise are compared to a cut score. If the applicant’s score is at or higher than the cut score, he or she passes Phase II. Candidates who pass this hurdle are sent a letter informing them that they passed and that they might also receive a conditional letter of appointment, based on the determination of their competitiveness and the needs of the FBI. The final offer of employment is contingent upon successfully completing the physical fitness test, background investigation, and medical examination. 4. Physical Fitness Test: To pass the physical fitness test candidates must perform a maximum number of sit-ups in one minute, perform a timed 300-meter sprint, perform a maximum number of push-ups, and perform a timed 1½ mile run. Candidates have a total of three opportunities to pass the physical fitness test. 5. FBI Background Investigation: Candidates receiving a conditional letter of employment are subjected to a background investigation including a polygraph test, credit and arrest checks, interviews with associates as well as personal and business references and past employers, and verification of educational achievements. Receiving an FBI Top Secret security clearance is necessary to be eligible for a FBI Special Agent position. 6. Medical Examination: A thorough medical examination is given to assess whether any medical issue could negatively affect the candidate’s ability to perform basic Special Agent job functions. Candidates passing all pases of the hiring process are scheduled for a Special Agent class at the FBI Academy. Questions: 1. What are the advantages and disadvantages of the FBI using a multiple hurdles approach to select special agents? Answer: Lower costs from putting fewer people through the later assessments, and not wasting the time of people who wouldn’t ultimately pass the hurdles are often identified. Not giving people a chance to make up for an uncharacteristically low performance on the early assessments is sometimes perceived as unfair. 2. Would such a lengthy selection process appeal to you or turn you off to working at the FBI? Answer: Given the importance and nature of the FBI agent’s work, students generally feel that the length is acceptable. Putting candidates through a lengthy assessment process can also weed out those applicants who are not serious about the position. 3. What might the FBI do to increase the chances that the applicants it wants to hire accept the job offers extended to them? Answer: Use targeted recruiting to ensure that only interested people apply in the first place. Continually reinforce the FBI’s employer image and the job rewards that appeal to the candidates. Give job offer receivers the opportunity to ask a current agent questions before having to decide, and train that agent in persuading candidates to accept offers. Signing bonuses might also improve acceptance rates. ADDITIONAL HANDOUT Cut and paste the “Salary Negotiation Tips” to a separate document to create a double-sided two-page handout. Salary Negotiation Tips You will have the greatest power to negotiate when you enter an organization so effective negotiation upon entry is critical. Remember, your starting pay level will often determine the amounts of employer retirement contributions, future raises, and future bonuses you will receive because they are often determined based on a percentage of your current salary. 1. Decide to negotiate! A Society for Human Resource Management survey found that 8 out of 10 recruiters were willing to negotiate salary and benefits with job offer recipients. But only 33% of the applicants surveyed reported feeling comfortable negotiating. If you don’t ask for something, you won’t get it! 2. Practice! The more you practice, the more comfortable you will be negotiating. Enlist the help of friends and family members and tell them to be as realistic as possible. 3. Do your homework! Visit the company’s website, learn where the company and its industry are heading, and learn the value of your skills and experience. Stress what you can give the employer and why you’re worth what you’re asking for. It is easier to ask for a higher salary when you genuinely feel that you’re worth it and have data to support it. 4. Be realistic! Remember, you’re planning to work with this company and don’t want to get off on the wrong foot. Asking for twice the offered salary, extra vacation time, a corner office, and a company car are likely to generate negative feelings. You want to negotiate for what is reasonable for the company to provide. 5. Thoroughly read the offer first! Be sure you understand what the employer is offering before you negotiate for more. You don’t want to ask for something the company has already offered! You also want to be sure you know what isn’t included in your offer. 6. Be creative! If an employer can’t give you more of something you want, offer to give up something you don’t want or need to make it possible. Assume an employer says “no” to your request for a signing bonus but offers a $1,000 reimbursement of relocation costs. If you don’t need to be relocated, ask if you can have the relocation bonus as a signing bonus. 7. Be enthusiastic! Let the employer know that you are interested in joining the company if certain requests of yours are met. This can speed up the negotiation process. But, if you say you’ll accept the job offer if certain conditions are met, you must follow through! 8. Identify leverage points! If the employer wants to hire quickly and you can start right away, use this to your advantage. If your skills are in short supply, you will also likely have more room to negotiate than if the company can easily hire someone else if you decline. 9. Don’t be overly emotional! Most deals require both parties to feel comfortable with the outcome. Remain calm and approachable and patiently explain your position, even if the other person seems upset. Be positive and enthusiastic and avoid generating anger or anxiousness for either party. 10. “No” is OK! Employers usually can’t give new hires everything they want. In fact, a common piece of advice is for people to ask for more than they expect to get. If you ask for something and are declined, don’t take it personally. Some employers have a policy of providing the same pay and benefits package to all new hires for some jobs and really can’t negotiate your job offer further. Still, it’s good to have asked! 11. Know your BATNA!. Know their BATNA! Know your best alternative if you face an unsuccessful negotiation. What is your fall-back position? What is theirs? This information can influence the negotiation process. 12. Know your fundamental needs or goals! What are you trying to achieve in the negotiations? What is critical to you? It is always important to know your bottom line. This will prevent over-negotiation, which can block resolution and it prevents you from agreeing to outcomes that don’t meet your needs. 13. Listen! If you want to be a good negotiator then you must be a good communicator. Good communicators are also good listeners. Try to understand the position of others, attend to behavior and body language, and think about how you can further the negotiation conversation. Ask open-minded questions and listen to the answers. By engaging in active listening and responding with empathy, you will have a better chance of reaching an agreement. 14. Get it in writing! Don’t assume a negotiation is complete until you get it in writing. Although oral contracts are binding, they are also difficult to prove. 15. Restate your position! At times, the key to effective negotiation is to restate your key position so the other party understands the importance of a particular factor to you. 16. Instead of working for a 50-50 solution work for a 60-40 solution! The 60-40 solution doesn’t mean you get 60 and the other side gets 40. It means both of you get 60. In a 50-50 solution, both parties split the outcome and both leave partially dissatisfied. In a 60-40 solution, you find what is important to the other party, know what is important to you, and ensure that both parties get a majority of what is important to them…thus, the 60/40 solution. SEMESTER-LONG ACTIVE LEARNING PROJECT Describe how candidates’ assessment scores will be combined into a single score that can be used to compare candidates. Describe how you will reduce the candidate pool to a group of finalists and how you will decide which of your finalists will receive a job offer. Using what you learned in Chapter 4, identify how your decision-making plan will enable the company to comply with EEO and other legal requirements. Chapter 12: Managing Workforce Flow LEARNING OBJECTIVES After studying this chapter you should be able to: • Discuss ways to make socialization more effective. • Describe the six different types of turnover. • Discuss employee retention strategies. • Discuss various ways of downsizing a company’s workforce. • Describe how to effectively terminate an employee. TAKEAWAY POINTS 1. Orientation and socialization work together to acclimate new hires to an organization. 2. The socialization process can be improved by socializing new employees as a group, using formal activities and materials in a predetermined order within a specified time frame, giving new employees access to role models or mentors, and providing them with social support. 3. The six different types of turnover are voluntary, involuntary, avoidable, unavoidable, functional, and dysfunctional. Voluntary turnover is when the separation occurs when an employee chooses to leave the firm of his or her own accord. Involuntary turnover is when the separation is due to the organization asking the employee to leave. Functional turnover is the departure of poor performers. Dysfunctional turnover is the departure of effective performers the company would have liked to retain. Avoidable turnover is turnover that the employer could have prevented by addressing the cause of the turnover. Unavoidable turnover is turnover that could not have been prevented by the employer. 4. A firm’s employee retention strategies can range from increasing employees’ pay and benefits, challenging them on the job, developing better managers to supervise them, offering the employees work flexibility, creating accountability among managers for retaining valued talent, and locating the company in a desirable area or in an area where there are few firms competing for the same talent. 5. Reducing a firm’s headcount so as to trim the company’s labor costs can be accomplished via downsizing, layoffs, attrition and hiring freezes, by offering employees early retirement and buyout incentives or leaves without pay, creating flexible work arrangements for them, redeploying employees, reducing their work hours and/or pay so that all employees share the pain of a cutback but no one loses his or her job, and relying on temporary and contract workers. 6. Discharging an employee requires clearly communicating the message that the person’s employment is being terminated and attempting to lessen the person’s desire to pursue any legal action against the company. Asking the employee to sign a severance agreement that includes a release is one measure that can be taken. It is important for the firm to treat the employee with respect, hold the termination meeting in a private place, clearly communicate the reasons for the termination and any severance package being offered, and give the employee a termination letter. 7. Supervisors need to be able to spot the warning indicators for employee violence, including anger, depression, paranoia, withdrawal or isolation, drug or alcohol abuse, and so forth, on the part of employees. Many companies now conduct training to help supervisors recognize these signs. DISCUSSION QUESTIONS 1. Think of the time you first joined an employer. In what ways did the company and your coworkers socialize you? What could have been done to enhance your socialization experience? Answer: Students’ stories generally illustrate chapter content. There are usually at least some stories of no socialization, which can be used to discuss the effects of being left to fend for oneself and being socialized by coworkers. Ideas for enhancing socialization often include the opportunity to meet people who will be important for job performance and learning the company’s values, business strategy and goals. Students often like the idea of making socialization active through scavenger hunts and requiring new hires to meet with certain people by the end of a certain period of time to build their network. When I first joined, the company and coworkers helped socialize me through team meetings, informal lunches, and mentorship programs. These interactions facilitated a smoother transition and helped me understand the company culture. To enhance the experience, a structured onboarding program with detailed role expectations and regular check-ins could have been beneficial. 2. How do you think technology can be used best to socialize new employees and get them productive as quickly as possible? When would using technology not be a good way to socialize employees? Answer: Putting general company and job information on the Internet, including benefits and work policies, can be an effective way of communicating it. Technology is seen as less effective for building relationships, teaching company values, and learning how one will fit into a new workgroup. Technology can best socialize new employees through virtual onboarding platforms, interactive training modules, and online collaboration tools, allowing them to integrate quickly and efficiently. However, relying solely on technology might not be ideal for building personal relationships or understanding nuanced company culture, where face-to-face interactions are more effective. 3. What are the factors that would make you most likely to quit your current job (assuming you are currently working)? What could your organization do to retain you? Answer: Reasons for leaving often include career advancement and higher pay, not getting along with supervisors or coworkers, wanting greater respect, and getting a degree that enables a career change. Reasons for staying also vary, but often include pay and benefits, learning and development opportunities, career advancement, and friends in the workplace. Answers can be used to start a broader discussion of retention strategies. 4. What downsizing targeting methods do you feel are the most effective? Which are the least effective, and why? Answer: Targeting poor performers is often seen as fair and effective, as is self-selection. Across-the-board downsizing, requiring all units to downsize a certain percentage, is often seen as ineffective as some high performing units that need the headcount are compromised. 5. If you had to discharge an employee who you thought had the potential for violence, what would you do? Answer: Having multiple people, including security, discreetly and respectfully present, having the discussion in a private office, and treating the employee with respect, can help keep the situation under control. Ensuring that the employee has the opportunity to say what is on his or her mind can help diffuse some of the tension, and taking all requests made by the individual seriously and promising to follow up with him or her, can improve perceptions of procedural and interactional justice which can decrease feelings of anger. EXERCISES 1. Strategy Exercise: California-based IndyMac Bank, the largest savings and loan in Los Angeles and the ninth-largest mortgage originator in the United States, focuses on building customer relationships and pursues a growth strategy. The overall turnover rates at the Pasadena, California, office are 5 to 10 percentage points above industry benchmarks, ranging from over 40 percent for sales and operations to the low teens for professionals and management. Traditional turnover analysis suggests that IndyMac should be hemorrhaging money. Instead, the company substantially outperforms its competitors. How can this be true? The answer lies in the bank’s understanding of the costs and benefits of different types of turnover. In fact, the company calculates the break point where the financial benefits of the firm’s turnover outweigh the costs. For example, higher turnover is acceptable for low-impact, nonexempt operating positions. When an employee leaves one of these jobs, IndyMac pockets the savings when other employees pick up the workload for the 30 to 60 days that the average position is open, plus additional savings when an annual bonus is not paid out to the person who left, or when a replacement employee is brought in at a slightly lower salary level. On the other hand, turnover among the firm’s high-impact professional and managerial employees can cause a six-month delay on a multimillion-dollar project and cost IndyMac millions of dollars. Optimal turnover rates are measured within a green-yellow-red range and differ for each job category and for performance levels within each category. The turnover rates in the green band are financially beneficial for the firm; the turnover rates within the yellow band (the broadest band) are cost-neutral and have minimal impact on the company. By contrast, turnover rates that climb into the red band begin to significantly hurt the organization. After calculating the break point of turnover for different job categories, IndyMac turned its attention to understanding the drivers of turnover and analyzed data on many of its 5,000 employees to identify what matters most to specific segments of its workforce. It plans to use the results of these analyses to better retain top performers. The bank also uses steep performance-based pay differentials to maintain desired turnover rates among its high and low performers. a. What financial benefits does IndyMac Bank receive as a result of its turnover? b. What are some of the financial costs of turnover for IndyMac? c. What will be the long-term consequences of the bank’s turnover strategy? d. If you were in charge of improving the retention of IndyMac’s bank managers, what process would you use to do this? Answer: a. Losing low performers saves money, and retaining high performers makes money. Maintaining turnover rates that enable the firm to do its work without excessive headcount also saves the bank money. b. Losing knowledgeable employees and employees who had developed relationships with customers are costs. The costs of hiring replacement employees can also be high. c. If the bank develops a reputation for being understaffed, it might have difficulty attracting top talent for those jobs in the future. Focusing on the retention of top performers in key jobs should enable IndyMac to maintain high performance in these jobs. d. Identifying why managers are likely to leave is an important first step. This can be done through employee surveys to identify areas in which managers are dissatisfied, and by exit interviewing or surveying departing or recently departed managers to identify why they left. After the causes of turnover are identified, action plans can be identified to address the specific issues. 2. Develop Your Skills Exercise: This chapter’s Develop Your Skills feature presented you with some tips on how to terminate an employee. Identify a partner and choose who will be the first to be terminated. Imagine that the person being terminated has been a front desk manager for Sunrise Hotel for three years. After performing very well the first year, the manager earned mediocre performance reviews last year, and even lower reviews this year. After going to two development programs in the last year to improve the front desk manager’s customer service skills, his or her performance continued to worsen and the company has decided to terminate the manager. The termination is effective immediately, and the hotel is willing to offer two weeks of pay as severance if the manager is willing to sign a release of his or her legal rights to sue for wrongful discharge. The person doing the firing is the hotel’s general manager and has been the front desk manager’s supervisor for the entire three years. In fact, the two of you have become friends. Using the additional background information your instructor gives you and the tips in this chapter’s Develop Your Skills feature, conduct the termination interview. The person getting fired should resist the news and try to make the termination interview as realistic as possible. Don’t make it too easy for the general manager! When you are finished, the person being fired should give the person doing the firing feedback on what he or she did well, what could have improved the termination interview, and how you were made to feel during the process. Now switch partners with another group and do the exercise again playing the other role. Answer: Students should be encouraged to give the manager a hard time and not accept dismissal easily. The exercise is usually well received by students and complements the experiential interviewing and job offer negotiating exercises of earlier chapters. The following two pages should be copied separately and given to the students playing each role. In conducting the termination interview, start by clearly stating the purpose of the meeting and acknowledging the manager's past contributions. Explain the performance issues and the decision to terminate, while offering the severance package and the release agreement. Address any resistance with empathy and provide support resources. After the role-play, review the feedback to identify strengths, areas for improvement, and the emotional impact of the conversation. Termination Interview Role for the Hotel General Manager Doing the Firing (NOT to be read by the Front Desk Manager) Today you have an unpleasant job. You must terminate X, who has been a Front Desk Manager for Sunrise Hotel for three years. She or he performed well the first year, but earned mediocre reviews last year and even worse reviews this year. You have sent him or her to two development programs in the last year to improve his or her customer service skills, but X has not improved. You have spoken with him or her many times about his or her customer service skills, and don’t feel that he or she will improve. He or she promises to work on it but never seems to change his or her behaviors for more than a day or two. Some of your conversations and the training programs helped a little, but only temporarily. You don’t want to repeat your past discussions today: you want to terminate the Front Desk Manager. Your goals for the meeting are: 1. Let X know that this is his or her last day at work. There is no chance for an appeal, X is terminated. 2. Follow Sunrise Hotel’s policies and procedures regarding termination. These are: 1. The day of termination notification is the employee’s last day at the hotel. This policy exists to prevent terminated employees from damaging morale. He/she should be instructed to turn in all keys and hotel identification to you immediately. The employee will be paid through the end of his or her regularly scheduled shift that day. 2. In lieu of notice, he/she will also receive two weeks’ full pay. This is the company’s standard policy. 3. After the two weeks’ full pay, the terminated employee will receive the company’s regular severance of one week’s pay for every year of service. In this manager’s case, that means 5 total weeks of full pay. The checks will continue to be deposited directly in the person’s checking account per company policy. 4. The company’s portion of health insurance premiums will be paid until X accepts a new, full-time position or until the end of the 5 weeks, whichever comes first. 5. If X has any questions about these severance arrangements, he/she may phone human resources at 555-1234 or make an appointment to visit the human resource director in her office. 3. Prepare yourself as best you can to deal with whatever X may say. He or she may be mad at you, the company, or the world. He or she may yell or cry. You have some ideas on resumes, interviewing, and the whole job search process. You have known X for three years, and have a friendly relationship. You really want to help him or her find a job with which he or she is a better fit. When you have an idea of what you need to say, call the Front Desk Manager into your (imaginary) office and discuss the termination. Limit the meeting to less than 10 minutes. Address X by his or her real first name. Termination Interview Role for the Front Desk Manager Being Fired (NOT to be read by the Hotel General Manager) You have been a Front Desk Manager with Sunrise Hotel for 3 years. You are about to meet with your boss, the Hotel General Manager, and know you may get fired. You’ve been warned a lot about your customer service skills, but you just don’t agree with the company’s liberal policy. You were sent to a couple of different courses to work on your customer service skills, and have tried to incorporate what you learned into your job performance. You just don’t agree with the company’s policy that guests are always right, and hate to see the hotel taken advantage of by guests. You would hate to be fired. Your spouse is out of work, and you are the sole supportor for your three kids. You have always enjoyed working for the hotel. You don’t know any other kind of work. You have no idea what you might do for a job if you lose this one. If the Hotel General Manager does talk about firing you, you plan to try to talk him/her out of it. You feel that you have been doing a good job, and have always acted in the best interests of the hotel. If they would really prefer that you give guests privileges and discounts to which you don’t feel they are really entitled, you are willing to start doing so. You have only been looking out for the company. If the Hotel General Manager finally does fire you, you’re not going to take it easily and should try to negotiate a generous severance package. After all, the company owes you something for your 3 years of loyal service. And you thought you and the General Hotel Manager were friends! Call the Hotel General Manager by his/her real first name. 3. Opening Vignette Exercise: This chapter’s opening vignette illustrated how Hilton socializes its new call center reservations and customer care employees. Reread the vignette, and answer the following questions: a. What are the strengths of Hilton’s socialization program and why? New hires’ mentors and new leaders’ “assimilation buddies” complement the formal new hire program and provide individualized socialization. The New Leader Assimilation Program helps clarify expectations and provide early feedback to help new hires stay on track. b. Do you think that it is appropriate for Hilton to hold supervisors accountable for employee retention during the first 90 days? Why or why not? To the extent that supervisors are responsible for employees’ choices to stay or leave, this is fair. If employees quit because of uncontrollable factors such as spousal relocation, transportation issues, or family or health issues it may not be appropriate to hold supervisors accountable for employee retention. c. What additional ideas do you have to quickly socialize new employees into a company focused on innovation and customer service? Students can be very creative here. Answers should reflect chapter content and reinforce the company’s innovation and customer service strategies. ADDITIONAL EXERCISE Turnover Thank you to Barbara Rau for providing this exercise. Use the following table to answer questions 1-4: 1. Calculate the average employment level for each department. Answer: Machining = (47+47+50+49+51+51+52+51+51+50+52+53)/12 = 50.33 Shipping = (24+23+25+25+25+23+24+24+24+24+24+24)/12 = 24.08 Welding = (30+31+34+34+33+32+32+33+33+38+43+43)/12 = 32.17 Paint/Assembly = (26+30+30+30+29+36+34+33+36+37+36+35)/12 = 32.67 2. Calculate the average employment level for the organization. Answer: (50.33)+(24.08)+(32.17)+(32.67) = 139.25 3. Calculate the average monthly rate of turnover for the Machining Department. Answer: 4. Calculate the annual rates of voluntary, involuntary, and total turnover. Answer: Total: 42/139.25 = 30.16% Voluntary: 24/139.25 = 17.23% Involuntary: 18/139.25 = 12.93% (Some students may not have counted “no reason given” in either voluntary or involuntary turnover calculations and that will be okay—give full credit for that.) 5. Which department has the highest turnover rate? DEPT. AVG. EMPLOYMENT TURNOVER TO RATE MACHINING 50.33 18 18/50.33 = 35.76% SHIPPING 24.08 6 6/24.08 = 24.92% WELDING 32.17 7 7/32.17 = 21.76% PAINT/ASSEMBLY 32.67 11 11/32.67 = 33.67 Machining has the highest turnover rate at 35.76%. 6. Assume the cost of advertising, selection, interviewing, and orientation is $200 per employee who leaves, the average cost of training is $1000 per employee who leaves, and $1260 is lost in productivity for each employee who leaves. Severance pay for any discharged employee is the equivalent of 2 weeks pay and the average annual base pay for terminated employees was $36,400. What is the estimated total cost of turnover for Seat of Knowledge this year? How much does turnover cost per employee? Answer: $200*42 + $1000*42 + $2000*42 + 4*(36,400/52)*2 = $8400 + $42,000 + $84,000 + $5600 = 140,000 cost/ turnover = 140,000/42 = $3,333 per employee 7. Seat of Knowledge projected an employment level of 150 employees this year. With an unemployment tax of 3.2%, what was the company’s expected unemployment tax bill assuming taxes are paid on the first $10,500 earned by an employee and every employee at the company earns more than $10,500 per year? Answer: (.032)($10,500)(150) = $50,400 CASE STUDY Tuition Assistance at Garden Gate During the past 14 years, Garden Gate Inc. has grown from a small local garden supply company into a diversified corporation with stores in 36 states and net sales of almost $1.4 billion. The company currently employs 26,500 people and has been expanding at a 12 percent annual rate. Garden Gate expects to continue this pace of growth for at least five more years. The company has a talent philosophy of treating its employees as investors and spends heavily on their training and development. The firm also has a generous tuition-aid program that allows qualified employees to pursue bachelor’s and master’s degrees part time if the degree they are pursuing is consistent with their career plans established in conjunction with their supervisors. Last year the company spent $350,000 on tuition aid and recently decided to more closely evaluate the program’s effectiveness. The evaluation was prompted by the recent departure of Jill Ises, who stated that her reason for leaving was that she had not been promoted in the year since she had received her MBA degree. Her career plan had been to become a senior accountant in one of the company’s regional offices, and she received high performance appraisal evaluations while earning good grades in the accounting program. Five regional accounting manager positions (the job in between Jill’s current job and her desired senior accountant position) had been filled in the past year, and Jill had not been contacted about any of them. Further investigation identified 17 other tuition-aid beneficiaries who had left in the past year. Like Ises, these people said that their lack of being promoted after earning their degrees was the primary reason for their leaving. The following table describes the 18 employees who received tuition aid but left the company because they had not been promoted. Degree Earned Position Taken Name Gender Race* Age Last Job Held with Tuition Aid Outside Garden Gate 1 Joe Bandy M C 42 Data Processor BS, Accounting Accountant 2 Camryn Donley F C 33 Administrative Assistant BS, Management Sales Manager 3 Lauren Sciano F B 35 Brand Manager MBA Regional Manager 4 Hui Shi F A 31 Legal Assistant MBA Financial Analyst 5 Jose Diaz M H 39 Administrative Assistant MBA Marketing Manager 6 Therese Day F B 28 Customer Service Manager BS, Accounting Management Trainee 7 Ida Crowe F H 33 Administrative Assistant BS, Marketing Brand Manager 8 Ron Brown M B 27 Project Manager MBA Plant Manager 9 Maria Cortina F H 45 Compensation Analyst MS, HR HR Manager 10 Deb Sandy F H 24 Data Processor BS, Accounting Accountant 11 Linda Winter F B 28 Trainer MS, Adult Education Training Director 12 Danny Chen M C 24 Customer Service Manager BS, Finance Financial Analyst 13 Mia Bandy F B 33 Administrative Assistant BS, Marketing Creative Director 14 Dana Elison F C 38 Marketing Analyst MBA Financial Analyst 15 Zhana Ames F H 30 Sales Manager BS, Advertising Account Manager 16 Jill Ises F B 41 Accountant MBA Accounting Director 17 Alec Smith M B 26 Administrative Assistant BS, Finance Management Trainee 18 Sally Masino F C 28 Payroll Clerk BS, Management Store Manager *For race, A = Asian, B = Black, C = Caucasian, H = Hispanic The company’s review of its internal hiring policy identified three primary sources for identifying internal talent, and some problems with them: 1. Supervisors are asked to nominate employees they feel are qualified for openings in the company, but there are often dozens of open positions, and many supervisors do not regularly review the internal job postings. 2. The firm’s HR professionals try to match open positions with employees who fit the criteria for them by looking at the company’s skills inventory database. Unfortunately, the information in the database is often outdated or incomplete. 3. The departments that have openings recommend employees they feel are promotable. Garden Gate’s management is concerned that it is not realizing a sufficient return on its considerable investment in its tuition-aid program, and is considering discontinuing the program. Questions: 1. Describe the key problems with the tuition-aid program. Answer: Employees’ educational achievements are not consistently recorded in the skills inventory, and the system used to identify internal candidates is not allowing employees to self-nominate. The current system for identifying internal candidates is not effective at identifying the most promising employees, and employees in the process of earning degrees or other credentials are not consistently tracked. 2. Does the information in the table indicate any special problems or issues? What do you suggest Garden Gate do about them? Answer: Women are disproportionately leaving the company after using the tuition aid program. This could be particularly problematic if the company is trying to recruit and retain more women. 3. Should Garden Gate discontinue its tuition-aid program? Answer: Not necessarily, but it needs to make more effective use of it to realize a return on its investment. Garden Gate should carefully evaluate the tuition-aid program's impact on employee retention and satisfaction before deciding to discontinue it. If the program has significantly contributed to employee growth and loyalty, it may be worth maintaining or modifying rather than discontinuing. Analyzing cost versus benefits and employee feedback will help make an informed decision. 4. Create a plan to improve the retention of tuition-aid recipients. Answer: Tracking the courses employees are taking and not just those completing degrees can be useful in the skills inventory. Maintaining the skills inventory with educational as well as other relevant information, and consistently using it to identify candidates for open positions would also help. Working with employees using the tuition-aid program to develop a career plan would also help them see a future career path with Garden Gate. ADDITIONAL HANDOUT Cut and paste the “Termination Interview Tips” to a separate document to create a two-page, two-sided handout. Termination Interview Tips Terminating an employee is sometimes necessary, but it can be a stressful and difficult experience for both you and the employee. How you handle it will influence the reactions of the terminated employee and his or her coworkers. It also communicates how well you can handle a tough assignment. It is best to keep emotions such as anger, disappointment, or regret in check. Here are some tips to make the termination interview more effective and enable it to go more smoothly. 1. Be prepared! Review the performance history, discipline history, and any other information relevant to the decision to terminate the employee. Know exactly why you are terminating the individual and have your facts straight. Consult the Human Resources department and manager to discuss the process and review what you need to know. Have your legal department or an outside employment lawyer review each termination situation prior to your meeting. If any type of severance package or outplacement is being offered, you need to understand what you can and cannot say about it. Don’t make any promises you can’t keep. 2. Plan! Where will the meeting be held? Privacy is critical. The best place is in a neutral location rather than in either one of your offices to help the person feel more comfortable. This also allows you to leave at the end of the meeting even if the employee is not yet ready to go. Try not to hold the meeting at the end of the day, near holidays, or near birthdays if possible to reduce the employee’s distress. 3. Don’t do it alone! It is a good idea to have a third party from management or from Human Resources at the meeting as a witness to what was said, or promised. The third party can also take notes and document the meeting. Having another person present can also enhance safety. If you have any concerns about how an employee will react to the termination, take appropriate precautions. Emotional and even violent reactions are possible, so be prepared. 4. Communicate what happens next! The terminated employee will want to know what this means to him or her. Be clear about what they need to do, such as turning in their keys, employee ID, and other company property, and if there will be a security escort off the property. If the employee wants to challenge the decision, tell them that you are unable to discuss it right now, but that they can follow the company’s grievance procedure, or write you a letter in a couple of days. 5. Be clear and ensure the message comes across! Believe it or not, some termination interviews end with the employee not understanding that they have been separated. This is not news the employee wants to hear, and you need to be certain they understand what is happening to them and that they are not to report for work any more. Be empathetic to the employee’s concerns and be a good listener, but don’t say anything that could reflect that a mistake is being made. Be sure that you maintain control over the interview and follow company procedures exactly. 6. Beware of casual comments! Saying “I’m sorry” or “I didn’t mean for this to happen” can imply your error, or your personal responsibility for the negative outcome. Be understanding but make sure you know what is, and is not, appropriate to say. 7. Anticipate possible reactions! Think about the possible reactions of the employee, ranging from the likely, to the very unlikely, and plan for such contingencies. For example, what will you do if the employee cries, gets angry, refuses to sign paperwork, demands to speak to your manager, leaves the office, threatens you, breaks down, etc.? 8. Don’t surprise employees! Employees should not be surprised when entering a termination interview. Terminations should be carefully considered in advance and based on good business logic. If the termination is due to layoffs or restructuring, then information about impending changes should be communicated in advance, even if such communications do not explicitly target specific employees or working units. If the termination is due to performance issues, then the employee should have received clear feedback during the performance management process, and he or she should have had ample opportunity to address performance concerns. 9. Provide information and answer questions but don’t prolong the meeting! Ensure that the meeting remains focused on the facts. If HR and the manager have been fulfilling their responsibilities, then the employee shouldn’t be surprised by the termination. Prolonging meetings can create an impression that the termination is open for discussion or negotiable. You can be fair and respectful without prolonging the meeting. Don’t spend a lot of time on casual conversation but keep it respectful. Some experts suggest 5 to 15 minutes is the optimal amount of time. 10. Avoid termination near weekends or holidays! If you offer outplacement services to help employees find a job, then avoid terminations on Fridays or holidays. This will give the employee time to meet with the outplacement consultant and allow them to help the employee deal with any emotional or stress issues resulting from the termination. Also, this will allow employees to initiate job search efforts and focus on positive progress rather than having to wait to get started. 11. Be respectful! Monitor your tone of voice, look the employee in the eye, and treat the employee with respect. If the terminated employee needs a few minutes to collect him- or herself, or doesn’t want to walk past their previous coworkers, try to respect these wishes. If it is possible, arrange to allow the person to collect his or her personal items after hours, or on the weekend, if it is preferred. Being terminated for any reason is stressful and potentially embarrassing. It is important to always treat terminated employees with dignity. This is the time when separated employees often decide to sue the company for wrongful termination, and considerate and respectful treatment goes a long way in decreasing this desire. Help the departing employee leave with as much dignity and pride as possible, and be helpful if you have the resources and organizational support to provide assistance. 12. Follow up! Send a letter with the effective date of termination, specific action, and cause. Provide information on length of salary and benefits continuation, COBRA, and any other outplacement or support services you can provide. Let the employee know when and how they are to be paid, and whom they should contact if they have questions. Remember to collect equipment, keys, identification, passes, and credit cards. Change passwords and security procedures. If the employee can use company assets (e.g., company car, calling card, etc.), inform the employee of restrictions, and final date of access. At a later date, speak with other members of the department to answer questions. SEMESTER-LONG ACTIVE LEARNING PROJECT Develop a socialization plan for the person hired for your chosen position based on the socialization choices presented in Table 12-1. Justify your recommendations. Be sure to reflect on the company’s culture when developing your socialization plan. Also recommend appropriate staffing technologies that you feel would benefit the plan. Chapter 13: Staffing System Evaluation and Technology LEARNING OBJECTIVES After studying this chapter, you should be able to: • Describe the effects staffing activities have on applicants, new hires, and organizations. • Explain the different types of staffing metrics and how each is used best. • Describe a balanced staffing scorecard. • Explain how digital staffing dashboards can help managers monitor and improve the staffing process. • Describe how staffing technology can improve the efficiency and effectiveness of the staffing function. TAKEAWAY POINTS 1. A firm’s staffing activities can affect the willingness of applicants to stay in the hiring process and accept job offers as well as their willingness to recommend the employer to others. Staffing can also affect new hires’ job expectations, motivation and job engagement, performance, and retention, and influence the organization’s performance, strategy execution, and leadership capabilities. 2. Staffing metrics can be short-term or long-term, and efficiency or effectiveness oriented. Short-term metrics can be used as leading indicators to gauge a company’s ability to have the right people in the right jobs at the right time. Long-term metrics are best for evaluating the effectiveness of the staffing system because they drive the financial impact of staffing on the organization. Staffing efficiency metrics assess the resources used in the staffing process, and staffing effectiveness metrics measure how well the staffing process meets the needs of a firm’s stakeholders and contributes to the company’s strategy execution and performance. 3. A balanced staffing scorecard is a tool for managing employees’ performance and for aligning their incentives with the firm’s key business objectives. The scorecard balances a firm’s strategic, operational, financial, and customer goals and helps managers monitor and assess the performance of employees so as to quickly take corrective action when needed. 4. Digital staffing dashboards are interactive computer displays of indicators of how the staffing function is meeting its goals, using whatever metrics the user chooses. By continually monitoring selected staffing metrics and alerting managers when goals are not being met, dashboards help managers monitor and improve the staffing process. 5. Staffing technology can improve the efficiency and effectiveness of the staffing function by creating a database of applicant and employee information and automating many of the steps of the staffing process. This can save firms time and money. Because technology allows data to be stored and reports to be generated automatically, it can also facilitate the staffing evaluation process. DISCUSSION QUESTIONS 1. What might prevent organizations from evaluating their staffing systems, and what can be done to remove these barriers? Answer: A lack of time, resources, or knowledge can all interfere with staffing evaluation. Using technology to streamline and even automate the process, and making the input of required new hire job success information part of managers’ performance evaluations can decrease some of the barriers. Demonstrating how staffing evaluations can increase the ROI of staffing systems, even if shown initially for only one job, can increase the resources devoted to them. Using staffing dashboards can present staffing evaluation information to managers in a way that is fast and easy to understand, increasing the chances that it will be understood and used. 2. In your opinion, what three metrics might a university use to evaluate the effectiveness of its efforts to fill instructor positions? Answer: Student evaluations of the instructors’ effectiveness, course enrollments, student learning, and instructor turnover are three possible ideas. A university might evaluate the effectiveness of its efforts to fill instructor positions using metrics such as the time-to-hire, which measures how quickly positions are filled, the quality of hires based on performance reviews, and the retention rate of new instructors to assess long-term success. These metrics provide insight into both the efficiency and impact of the hiring process. 3. If your manager was reluctant to invest in an applicant tracking system, how would you persuade him or her to make the investment? Answer: Explaining how the system would save the manager time, and speed up the hiring process could be persuasive. Showing how the system could help improve the staffing process and reduce costs by identifying the recruiting sources that are most effective might also be effective. 4. As an applicant, how would you feel knowing that technology was used to make an initial decision to screen you out of the hiring process? Answer: Most students would prefer to know that their application received full consideration, and don’t trust that technology would be as thorough as a human’s judgment. This discussion is a useful springboard into a broader discussion of how applicants might react to different types of staffing technology. As an applicant, knowing that technology was used to screen me out might feel impersonal and frustrating, especially if the decision was made without human context. I’d appreciate transparency about how the technology works and its criteria, as it could help me understand the process and possibly improve my future applications. 5. What information do you want to see when you visit the careers section of a potential employer’s Web site? Answer: Information about job openings, desired applicant qualifications, details of the hiring process, and a way to easily apply for jobs are usually mentioned. Information about the company’s products and services, talent philosophy, company performance, and business strategy are often named as well. EXERCISES 1. Strategy Exercise: Metrics are only information—it is up to you to interpret and use them. Interpret the following metrics and identify what they might mean by addressing the questions that follow them. a. Compare the following two recruiting sources: Answer: 1. Which program do you conclude is better? Answer: Because Source X has a lower cost per hire, students generally conclude that it is superior to Source Y. 2. If the hires from source X are retained for two years, and the hires from source Y are retained for five years, would your conclusion change? Answer: In this case, Source Y would be preferred. Because the turnover rate is two and a half times higher, keeping a position filled for five years with hires from Source X would be 2.5 times what they are for Source Y ($10,000 X 2.5 hiring cycles = $25,000). This makes Source X more expensive. 3. What additional information would you need to make a recommendation about the source that’s preferable? Answer: Source differences in new hire quality, diversity, performance, promotability, and other job success factors need to be considered in addition to cost per hire. b. The turnover rates of different employee subgroups of a firm are as follows: 1. In what ways is turnover a problem for this company? Answer: Turnover is highest for newer employees. This means that the company wastes a lot of money hiring people who don’t stay very long. Also, lower performers have the lowest turnover rate, and high performers have the highest turnover rate. Ideally these numbers would be reversed. 2. How could the company address the situation? Answer: It first needs to identify why turnover is highest for new hires and for top performers. Action plans can then be developed to address the causes of the high turnover. For example, the company might want to look at whether career opportunities are clear to new hires, whether new hire performance targets are unrealistic, or whether new hires’ expectations are being met. The company might also want to identify its optimal turnover rate for lower performers and manage turnover to that level. 2. Develop Your Skills Exercise: In this chapter’s Develop Your Skills feature, we gave you some tips for creating a digital staffing dashboard. Using this information, create a dashboard for Osram Sylvania (featured in this chapter’s opening vignette) reflecting the following metrics. Use color coding to indicate whether or not a metric is within the parameters Osram Sylvania desires. Metrics: • Top five staffing vendors • Job applicant quality • New hires’ time-to-contribution rates by recruiting source • Diversity by recruiting source • Osram Sylvania’s staffing efficiency ratio Answer: Students tend to have fun with this, and often identify creative and effective ways to present staffing metrics. Sharing each team’s ideas with the class can create some “aha” moments for other students who just wrestled with how to present the same information. Providing colored markers or pencils can be helpful during the exercise. Digital Staffing Dashboard for Osram Sylvania • Top Five Staffing Vendors: 1. Vendor A (Green) 2. Vendor B (Yellow) 3. Vendor C (Red) 4. Vendor D (Green) 5. Vendor E (Yellow) • Job Applicant Quality: High (Green) Medium (Yellow) Low (Red) • New Hires’ Time-to-Contribution Rates by Recruiting Source: Source A (Green) Source B (Yellow) Source C (Red) • Diversity by Recruiting Source: Source A (Green) Source B (Yellow) Source C (Red) • Staffing Efficiency Ratio: Ratio within target (Green) Ratio near target (Yellow) Ratio below target (Red) 3. Opening Vignette Exercise: This chapter’s opening vignette illustrated how Osram Sylvania evaluates used technology to improve its staffing system. Reread the vignette, and answer the following questions: a. In what ways did technology improve the company’s staffing function? b. Do you think it is appropriate for Osram Sylvania to rank-order applicants based on their answers to the online prescreening questions? Why or why not? c. If you were a hiring manager, what metrics would you most want to have available about your hires? Answer: a. Answers usually touch on efficiency, accurate data to inform future decisions, speed, and increased alignment between staffing and company goals. Technology improved Osram Sylvania’s staffing function by streamlining the recruitment process, enhancing candidate tracking, and analyzing data for better decision-making. b. Answers often reference the incompleteness of this information but acknowledge that it is job-relevant and of some use. The question of how much prescreening information and of what type is sufficient to acquire before making screening decisions usually arises. Ranking applicants based on online prescreening answers can be appropriate if the questions are well-designed to predict job fit, but it should be used alongside human judgment to ensure fairness and context. c. Job success metrics including job performance, turnover, and promotability are usually named. Students’ answers can inform a broader discussion of what metrics should be included on a staffing dashboard. As a hiring manager, I’d want metrics on new hires' performance, retention rates, time-to-productivity, and fit with team culture to assess the effectiveness of the hiring process. CASE STUDY Staffing Evaluation at Hallmark Hallmark, founded in 1910, is the largest u.s. Manufacturer of greeting cards and the owner of binney & smith, the maker of crayola crayons. The company pursues a differentiation and innovation strategy and uses creativity and emotion to help people connect to its products, including its stationery, party goods, photo albums, home decor, collectibles, a cable television channel, and books. Privately owned hallmark has annual revenues of over $4 billion and employs 3,200 individuals at its corporate headquarters in kansas city, missouri, and another 12,000 around the world. To hire quality people more consistently, Hallmark needed a tool to help it focus its staffing efforts on what is most relevant to the company—that is, on business-relevant criteria that would allow it to more consistently hire quality employees to best execute its strategy. However, Hallmark didn’t want the tool to be too complex. To launch the effort, Hallmark created a staffing index to evaluate the quality of the firm’s past hires so as to source and screen candidates more effectively. Upon hiring a new employee, the person’s line manager makes an immediate assessment of the employee’s intrinsic abilities and desirability. To avoid using complex formulas that require a specialized background to understand, the ratings are simple and focused on measuring the quality and timeliness of Hallmark’s hiring system. The possible new hire ratings are: 1=Average 2=Above Average 3=Good 4=Very Good 5=Walk-On-Water Good After six months, the hiring manager uses the same five-point scale to evaluate whether its initial expectations have been realized. The data are used to compare new hires that consistently get top ratings with those who don’t to identify any distinguishing factors that can be used to make the hiring process more effective. According to one expert, Hallmark is on the right track by keeping its system simple and not getting too wrapped up in the numbers, and by focusing on the end result of making good hires. Hallmark views the staffing index only as a means to an end and knows that ultimate staffing success will be gauged not by these metrics, but by the organization’s performance. Questions: 1. Critically evaluate Hallmark’s staffing index. What are its pros and cons? Answer: Although simplicity is generally an asset in evaluation systems, the single rating of quality and timeliness is insufficient. It is too general, and the ratings don’t inform decisions about how to improve. Tracking new hires at the point of entry, and after six months, is a good idea to check that initial candidate expectations and impressions were accurate. 2. What additional criteria do you think Hallmark should track, and how should it be measured? Answer: Students tend to identify job success criteria, including turnover rates and job performance as measured objectively if possible, and rated by the supervisor. Cost per hire, diversity, and strategy execution are other possibilities. Hallmark should track employee engagement and satisfaction, measured through regular surveys and feedback mechanisms. Additionally, tracking the impact of new hires on team dynamics and innovation can provide insights into their long-term success and contribution. These criteria help ensure a holistic view of hiring effectiveness and employee integration. 3. Why might an employee rated “walk-on-water good” at the time of hire not live up to expectations? What can a company do to help new employees realize their potential? Answer: Unsupportive hiring managers or coworkers, a lack of training or resources, and incorrect initial expectations can all be to blame. Providing adequate onboarding and socialization, setting clear goals and providing frequent feedback, and ensuring that hiring managers and coworkers are supportive can help. Training programs to develop needed skills is also important. SEMESTER-LONG ACTIVE LEARNING PROJECT Propose an evaluation system to assess the effectiveness of your recruiting and selection suggestions. How will you know if your new recruiting and selection system is working? Identify potential barriers to the effective implementation of your recruitment and selection system and propose strategies for coping with them. Federal Bureau of Investigation, “FBI Special Agent Selection Process: General Information,” Applicant Information Booklet, September 1997. Federal Bureau of Investigation, “Your Guide to Getting Started.” “Corporate Profile,” Indymac Bank, http://investors.indymacbank.com/phoenix.zhtml?c=118924&p=irol-irhome. Accessed December 29, 2006. Hansen, “The Turnover Myth.” Ibid. Ibid. Babcock, P., “Find What Workers Want,” HR Magazine, April 2005: 50. Hansen, “The Turnover Myth.” Ibid; Hallmark Card’s Staffing Index is available at http://www.workforce.com/tools/staffing_index.pdf. Dalton, A. “Hallmark’s Quality-of-Hire Initiative,” Workforce Management Online, May 2005. http://www.workforce.com/archive/article/news/hallmarks-quality-hire-initiative.php. Accessed July 4, 2006. Hallmark Card’s Staffing Index is available at http://www.workforce.com/tools/staffing_index.pdf. Dalton, “Hallmark’s Quality-of-Hire Initiative.” Ibid. Solution Manual for Strategic Staffing Jean M. Phillips, Stan M. Gully 9780133571769