CH-17 Human Resource Policies and Practices – Organizational Behavior : Chapter Notes

Chapter 17 Human Resource Policies and Practices LEARNING OBJECTIVES After studying this chapter, students should be able to: Describe the value of recruitment methods. Specify initial selection methods. Identify the most useful substantive selection methods. Compare the main types of training. List the methods of performance evaluation. Describe the leadership role of HR in organizations. INSTRUCTOR’S RESOURCES Instructors may wish to use the following resources when presenting this chapter. Text Exercises Career Objectives: How Do I Fire Someone? An Ethical Choice: HIV/AIDS and the Multinational Organization Myth or Science?: “The 24-Hour Workplace Is Harmful” Personal Inventory Assessment: Positive Practices Survey Point/Counterpoint: Employers Should Check Applicant Criminal Backgrounds Questions for Review Experiential Exercise: Designing an Effective Structured Job Interview Ethical Dilemma: Are On-Demand Workers Really Employees? Text Cases Case Incident 1: Who Are You? Case Incident 2: Indentured Doctors Instructor’s Choice This section presents an exercise that is NOT found in the student's textbook. Instructor's Choice reinforces the text's emphasis through various activities. Some Instructor's Choice activities are centered on debates, group exercises, Internet research, and student experiences. Some can be used in class in their entirety, while others require some additional work on the student's part. The course instructor may choose to use these at any time throughout the class—some may be more effective as icebreakers, while some may be used to pull together various concepts covered in the chapter. Web Exercises At the end of each chapter of this Instructor’s Manual, you will find suggested exercises and ideas for researching OB topics on the Internet. The exercises “Exploring OB Topics on the Web” are set up so that you can simply photocopy the pages, distribute them to your class, and make assignments accordingly. You may want to assign the exercises as an out-of-class activity or as lab activities with your class. Summary and Implications for Managers An organization’s human resource (HR) policies and practices create important forces that greatly influence organizational behavior (OB) and important work outcomes. HR departments have become increasingly integral in shaping the composition of the organization’s workforce. First, as more organizations have turned to internal recruitment methods, HR departments have taken the lead in creating online portals and other easy-access methods for candidates to learn about the organization and be attracted to apply. Second, HR departments are involved in all phases of selection: initial selection, substantive selection, and contingent selection. The greatest increase in the involvement of HR in selection may be in the initial selection phase, wherein HR professionals develop, monitor, and screen the great numbers of applications that are submitted. However, HR involvement has increased in all areas of selection, and HR professionals are responsible for understanding the applicable laws and guidelines to serve as an informed, up-to-date resource for managers. In effective organizations, HR remains present throughout an employee’s time with the organization. HR departments create and administer training and development programs, and they set policies and practices with top management that govern the performance evaluation system. HR serves in a leadership capacity with responsibilities including the need to regularly communicate practices to employees, design and administer benefit programs, manage work-life conflicts, and conduct mediations, terminations, and layoffs. HR should bring an awareness of ethical issues to all stages of an individual’s experience with the organization. Knowledgeable HR professionals are therefore a great resource to all levels of the organization, from top management to managers to employees. Specific implications for managers are below: An organization’s selection practices can identify competent candidates and accurately match them to the job and the organization. Consider assessment methods that are most likely to evaluate the skills directly needed for jobs you are looking to fill. Use training programs for your employees to achieve direct improvement in the skills necessary to successfully complete the job. Employees who are motivated will use those skills for greater productivity. Training and development programs offer ways to achieve new skill levels and thus add value to your organization. Successful training and development programs include an ethical component. Use performance evaluations to assess an individual’s performance accurately and as a basis for allocating rewards. Make sure the performance evaluations are as fair as possible. As demonstrated in Chapter 7 in our discussion of equity theory, evaluations perceived as unfair can result in reduced effort, increases in absenteeism, or a search for another job. Give your employees the opportunity to participate in their evaluations so they understand the performance criteria and engage with the improvement process. This chapter begins with a discussion of Starbucks’ commitment to reimburse employees for their college courses. The message of this chapter is that human resource (HR) policies and practices—such as employee recruitment, selection, training, and performance management—influence an organization’s effectiveness. Studies show that managers—even HR managers—often don’t know which HR practices work and which don’t, so they constantly experiment with techniques ranging from free tuition to stress-based interviews. Let’s discuss both new and tried-and-true methods, and their effect on OB, beginning with the recruitment function. BRIEF CHAPTER OUTLINE Recruitment Practices The first stage in any HR program is recruiting, closely followed by selection. A selection system can only be as good as the individuals who apply in the first place. Strategic recruiting has become a cornerstone for many companies, in which recruiting practices are developed in alignment with long-term strategic goals. As for defining “success” in recruiting, most research suggests that the best system attracts candidates who are highly knowledgeable about the job and the organization. Such candidates are likely to have a better fit between their skills and job requirements, and to be more satisfied in the jobs they take. Consistent with these findings, some of the most effective recruiting techniques include internal referrals, internship programs, and other methods that give potential applicants enough information to adequately evaluate the roles they may be occupying. Companies are increasingly turning away from outside recruiting agencies and relying on their own executives and HR professionals for talent searches. The most effective recruiters—internal or external—are well informed about the job, are efficient in communicating with potential recruits, and treat recruits with consideration and respect. They also use a variety of online tools, including job boards and social media, to bring in applications. Selection Practices Introduction The objective of effective selection is to match individual characteristics with the requirements of the job. How the Selection Process Works (Exhibit 17-1) Applicants go through several sections: initial, substantive, and contingent. Initial Selection Initial selection devices are the first information applicants submit and are used for preliminary rough cuts to decide whether the applicant meets the basic qualifications for a job. Application form Not a good predictor of performance. Good initial screen. Apply online. Care should be exercised on the questions included in an application to avoid conflict with legal and ethical limitations. Background checks 80% of employees check references. Rarely is useful information gained. Letters of recommendation are another form of background check. Many employers will now search for candidates online through a general Internet search or through a targeted search on social networking sites. Finally, some employers check credit histories or criminal records. Despite the trend, because of the invasive nature of such checks, employers need to be sure there is a need for them. To further complicate matters, not checking can carry a legal cost. Substantive and Contingent Selection Introduction Heart of the selection process. Used after passing initial screening. Written tests Typical written tests are tests of intelligence or cognitive ability, personality, and integrity. Long popular as selection devices, they declined in use because between the late 1960 and mid-1980s they were characterized as discriminating, and they were not validated. Intelligence or Cognitive Ability Tests Tests in intellectual ability, spatial and mechanical ability, perceptual accuracy, and motor ability have shown to be moderately valid predictors for many semiskilled and unskilled operative jobs. Intelligence tests are particularly good predictors for jobs that require cognitive complexity. Personality Tests Personality tests are inexpensive and simple to administer, and their use has grown. However, concern about applicants faking responses remain, partly because it’s fairly easy to claim to be hard-working, motivated, and dependable when asked in a job application setting even if it’s not accurate, and partly because applicants aren’t always aware they are faking. Integrity Tests As ethical problems have increased in organizations, integrity tests have gained popularity. These paper-and-pencil tests measure dependability, carefulness, responsibility, and honesty. They have proven to be powerful predictors of supervisory ratings of job performance and of theft, discipline problems, and excessive absenteeism. Performance simulation tests Although they are more complicated to develop and administer than written tests, performance-simulation tests have higher face validity (which measures whether applicants perceive the measures to be accurate), and their popularity has increased. The three best-known performance simulation tests are work samples, assessment centers, and situational judgment tests. Work sample tests Hands-on simulations of part or the entire job that must be performed by applicants. Work samples are increasingly used for all levels of employment. Assessment centers Assessment centers use a more elaborate set of performance simulation tests, specifically designed to evaluate a candidate’s managerial potential. Situational judgment tests To reduce the costs of job simulations, many organizations have started to use situational judgment tests, which ask applicants how they would perform in a variety of job situations and compare their answers to those of high-performing employees. Realistic job previews These job tryouts are given as a way to assess talent versus experience. They decrease turnover because both employers and new hires know what they are getting into ahead of time. Interviews The interview continues to be the device most frequently used. It seems to carry a great deal of weight. The candidate who performs poorly in the employment interview is likely to be cut, regardless of his/her experience, test scores, or letters of recommendation, and vice versa. This is important because of the unstructured form of most selection interviews. The unstructured interview—short in duration, casual, and made up of random questions—is an ineffective selection device. Without structure, interviewers tend to favor applicants who share their attitudes, give undue weight to negative information, and allow the order in which applicants are interviewed to influence their evaluations. To reduce bias, managers should adopt a standardized set of questions, a uniform method of recording information, and standardized ratings of applicants’ qualifications. Interview effectiveness also improves when employers use behavioral structured interviews, probably because these assessments are less influenced by interviewer biases. They require applicants to describe how they handled specific problems and situations in previous jobs, based on the assumption that past behavior offer the best predictor of future behavior. Panel interviews also minimize the influence of individual biases and have higher validity. Most organizations use interviews as more than a prediction of performance device. Contingent Selection Tests Once an applicant has passed substantive selection (such as background checks, interviews, etc.), the person is ready to be hired subject to a final check. One common contingent method is a drug test. Under the Americans with Disabilities Act, firms may not require employees to pass a medical exam before a job offer is made. Training and Development Programs Introduction Skills deteriorate and can become obsolete. U.S. corporations with 100 or more employees spent more than $125 billion on formal training in a recent year. Types of Training Introduction There are four general skill categories for training—basic, technical, interpersonal, and problem solving skills—and civility and ethics training. Basic skills One survey of more than 400 human resources professionals found that 40 percent of employers believe high school graduates lack basic skills in reading comprehension, writing, and math. Organizations find they must provide basic reading and math skills for their employees. Technical skills Most training is directed at upgrading and improving an employee’s technical skills. Technical training is important for two reasons—new technology and new structural designs. Indian companies have faced a dramatic increase in demand for skilled workers in areas like engineering for emerging technologies, but many recent engineering graduates lack up-to-date knowledge required to perform these technical tasks. As organizations flatten their structures, expand their use of teams, and break down traditional departmental barriers, employees need mastery of a wider variety of tasks and increased knowledge of how their organization operates. Problem-solving skills Problem-solving training for managers and other employees can include activities to sharpen their logic, reasoning, and problem defining skills as well as their abilities to assess causation, develop and analyze alternatives, and select solutions. Problem-solving training has become a part of almost every organizational effort to introduce self-managed teams or implement quality-management programs. Interpersonal skills Almost all employees belong to a work unit. Their work performance depends on their ability to effectively interact with their coworkers and bosses. Civility training As human resource managers have become increasingly aware of the effects of social behavior in the workplace, they have paid more attention to the problems of incivility, bullying, and abusive supervision in organizations. Examples of incivility include being ignored, being excluded from social situations, having your reputation undermined in front of others, and experiencing other actions meant to demean or disparage. Researchers have shown that these forms of negative behavior can decrease satisfaction, reduce job performance, increase perceptions of unfair treatment, increase depression, and lead to psychological withdrawal from the workplace. Managers can try to minimize incivility, bullying, and abusive supervision using specifically targeted training. Following a training intervention based on these principles, coworker civility, respect, job satisfaction, and management trust have increased, while supervisor incivility, cynicism, and absences decreased. Thus, the evidence suggests that deliberate interventions to improve the workplace climate for positive behavior can indeed minimize the problems of incivility. Ethics training It is common for employees to receive ethics and values guidance incorporated in new-employee orientations, developmental programs, or as periodic reinforcements of ethical principles. Critics argue that ethics are based on values, and value systems are fixed at an early age. Supporters of ethics training argue that values can be learned and changed after early childhood. Even if it could not, it helps employees to recognize ethical dilemmas, become more aware of the ethical issues underlying their actions, and reaffirms an organization’s expectations. Ethic training also reaffirms an organization’s expectations that members will act ethically. Training Methods Historically, training meant formal training. It is planned in advance and has a structured format. Organizations are increasingly relying on informal training. Unstructured, unplanned, and easily adapted to situations and individuals. Most informal training is nothing other than employees helping each other out. Job Training. On-the-job training includes job rotation, apprenticeships, understudy assignments, and formal mentoring programs. The most popular is live classroom lectures. Computer-Based Training. Recently, e-training (computer-based training) is the fastest growing training delivery mechanism. Evaluating Effectiveness The effectiveness of a training program can refer to the level of student satisfaction, the amount students learn, the extent to which they transfer the material from training to their jobs, or the financial return on investments in training. The success of training also depends on the individual. The climate also is important: when trainees believe there are opportunities and resources to let them apply their newly learned skills, they are more motivated and do better in training programs. After-training support from supervisors and coworkers has a strong influence on whether employees transfer their learning into new behavior. An effective training program requires not just teaching the skills but also changing the work environment to support the trainees. Performance Evaluation What Is Performance? In the past, most organizations assessed only how well employees performed the tasks listed on a job description, but today’s less hierarchical and more service-oriented organizations require more. Researchers now recognize three major types of behavior that constitute performance at work: Task performance Citizenship Counter productivity Most managers believe good performance means doing well on the first two dimensions and avoiding the third. Purposes of Performance Evaluation Management uses evaluations for general human resource decisions, such as promotions, transfers, and terminations. Evaluations identify training and development needs. They pinpoint employee skills and competencies needing development. They provide feedback to employees on how the organization views their performance and are often the basis for reward allocations including merit pay increases. We will emphasize performance evaluation in its role as a mechanism for providing feedback and as a determinant of reward allocations. What Do We Evaluate? Introduction The criteria or criterion used to evaluate performance has a major influence on performance. The three most popular sets of criteria are individual task outcomes, behaviors, and traits. Individual task outcomes If ends count, rather than means, then management should evaluate an employee’s task outcomes. Behaviors It is difficult to attribute specific outcomes to the actions of employees in advisory or support positions or employees whose work assignments are part of a group effort. We may readily evaluate the group’s performance, but if it is hard to identify the contribution of each group member, management will often evaluate the employee’s behavior. Measured behaviors needn’t be limited to those directly related to individual productivity. Traits Traits may or may not be highly correlated with positive task outcomes, but only the naive would ignore the reality that such traits are frequently used in organizations for assessing performance. Who Should Do the Evaluating? By tradition, the task has fallen to managers, because they are held responsible for their employees’ performance. But others may do the job better. A recent survey found that about half of executives and 53 percent of employees now have input into their performance evaluations. In most situations, in fact, it is highly advisable to use multiple sources of ratings. Any individual performance rating may say as much about the rater as about the person being evaluated. The latest approach to performance evaluation is 360-degree evaluations. These provide performance feedback from the employee’s full circle of daily contacts, from mailroom workers to customers to bosses to peers. (Exhibit 17-2) The number of appraisals can be as few as 3 or 4 or as many as 25. Most organizations collect 5 to 10 per employee. Some allow employees to choose the peers and subordinates who evaluates them, which can artificially inflate feedback. There is clear evidence that peers tend to give much more lenient ratings that supervisors or subordinates, and peers also tend to make more errors in appraising performance. Methods of Performance Evaluation Written essays The simplest method of evaluation is to write a narrative describing an employee’s strengths, weaknesses, past performance, potential, and suggestions for improvement. No complex forms or extensive training is required, but the results often reflect the ability of the writer. Critical incidents Critical incidents focus on those behaviors that are key in making the difference between executing a job effectively and executing it ineffectively. The appraiser writes down anecdotes that describe what the employee did that was especially effective or ineffective. A list of critical incidents provides a rich set of examples to discuss with the employee. Graphic ratings scales Graphic rating scales refer to a set of performance factors, such as quantity and quality of work, depth of knowledge, cooperation, loyalty, attendance, honesty, and initiative. The evaluator then goes down the list and rates each on incremental scales. The scales typically specify five points. Popular because they are less time-consuming to develop and administer and allow for quantitative analysis and comparison. Behaviorally anchored rating scales (BARS) BARS combine major elements from the critical incident and graphic rating scale approaches. The appraiser rates the employees based on items along a continuum, but the points are examples of actual behavior. To develop the BARS, participants first contribute specific illustrations of effective and ineffective behavior, which are translated into a set of performance dimensions with varying levels of quality. Forced comparisons Forced comparisons evaluate one individual’s performance against the performance of one or more. It is a relative rather than an absolute measuring device. The two most popular are group order ranking and individual ranking. The group order ranking requires the evaluator to place employees into a particular classification, such as top one-fifth or second one-fifth. This method is often used in recommending students to graduate schools. The individual ranking approach rank-orders employees from best to worst. This approach assumes that the difference between the first and second employee is the same as that between the twenty-first and twenty-second. This approach allows for no ties. One parallel to forced ranking is forced distribution of college grades. Why would universities do this? As shown in Exhibit 17-3, the average GPA of a Princeton University undergraduate has gotten much higher over time. Improving Performance Evaluations Introduction The performance evaluation process is a potential minefield. Evaluators can unconsciously inflate evaluations (positive leniency), understate performance (negative leniency), or allow the assessment of one characteristic to unduly influence the assessment of others (the halo error). Some appraisers bias their evaluations by unconsciously favoring people who have qualities and traits similar to their own (the similarity error). And, of course, some evaluators see the evaluation process as a political opportunity to overtly reward or punish employees they like or dislike. A review of the literature and several studies on performance appraisals demonstrates that many managers deliberately distort performance ratings in order to maintain a positive relationship with their subordinates. Although no protections guarantee accurate performance evaluations, the following suggestions can make the process more objective and fair. Use multiple evaluators As the number of evaluators increases, the probability of attaining more accurate information increases. A set of evaluators judges a performance, the highest and lowest scores are dropped, and the final performance evaluation is made up from the cumulative scores of those remaining. If an employee has had ten supervisors, nine having rated her excellent and one poor, we can discount the value of the one poor evaluation. Evaluate selectively Evaluate only those areas in which you have some expertise. Appraisers should be as close as possible, in terms of organizational level, to the individual being evaluated. Train evaluators There is substantial evidence that training evaluators can make them more accurate raters. Most rater training courses emphasize changing the raters’ frame of reference by teaching them what to look for, so everyone in the organization defines good performance in the same way. Provide employees with due process The concept of due process increases the perception that employees are treated fairly. Three features characterize due process systems: Individuals are provided with adequate notice of what is expected of them. All relevant evidence is aired in a fair hearing so individuals affected can respond. The final decision is based on the evidence and is free from bias. One technique organizations might consider to enhance due process is posting appraisals online so employees can see their own performance scores exactly as the supervisor enters them. One company that did so found employees believed rater accountability and employee participation were higher when appraisal information was available online prior to appraisal interviews. It might be that raters were more sensitive to providing accurate ratings when they knew employees would be able to see their own information directly. Providing Performance Feedback Managers are often uncomfortable discussing weaknesses with employees. In fact, unless pressured by organizational policies and controls, managers are likely to ignore this responsibility. The solution to the problem is not to ignore it but to train managers to conduct constructive feedback sessions. An effective review—in which the employee perceives the appraisal as fair, the manager as sincere, and the climate as constructive—can leave the employee feeling upbeat, informed about areas needing improvement, and determined to correct them. Appraisals should also be as specific as possible. International Variations in Performance Appraisal Let’s examine performance evaluation globally in the context of four cultural dimensions: individualism/collectivism, a person’s relationship to the environment, time orientation, and focus of responsibility. Individual-oriented cultures such as the United States emphasize formal performance evaluation systems more than informal systems. In Korea, Singapore, and even Japan, the use of performance evaluation has increased dramatically in the past decade, though not always smoothly or without controversy. One survey of Korean employees revealed that a majority questioned the validity of their performance evaluation results. One recent study focused on the banking industry found significant differences across countries in performance appraisal practices. Formal performance appraisals were used more frequently in countries that were high in assertiveness, high in uncertainty avoidance, and low in in-group collectivism. Another study found that individuals who were high in power distance and high in collectivism tend to give more lenient performance appraisals. The Leadership Role of HR Introduction HR also plays a key leadership role in nearly all facets of the workplace environment, from designing and administering benefit programs to conducting attitude surveys to drafting and enforcing employment policies. HR is on the front lines in managing adversarial employment conditions such as work-life conflicts, mediations, terminations, and layoffs. HR is on the scene when an employee joins and leaves, and all along the way. HR departments uniquely represent both the employee’s and the company’s perspective as needed. Companies have only recently begun to recognize the potential for HR to influence employee performance. Because employers and employees alike benefit from strong human resource practices, let’s consider some of the leadership functions of human resources. Communicating HR Practices Leadership by HR begins with informing employees about HR practices and explaining the implications of decisions that might be made around these practices. It is not enough to simply have a practice in place; HR needs to let employees know about it. When a company successfully communicates how the whole system of HR practices has been developed and what function this system serves, employees feel they can control and manage what they get out of work. The evidence supporting the contribution of communication and perception to HR effectiveness is considerable. For example, one study of different business units within a large food-service organization found that employee perceptions of HR practices, rated at the workgroup level, were significant predictors of OCB, commitment, and intention to remain with the company, but the HR practices led to these positive outcomes only if employees were aware they were in place. The effectiveness of HR practices also depends on employee attitudes. One review found that HR practices were more likely to lead to positive outcomes when employees felt motivated. Practices tend to be perceived differently in various business cultures. For example, the use of educational qualifications in screening candidates seems to be a universal practice, but aside from this, different countries emphasize different selection techniques. Structured interviews are popular in some countries and nonexistent in others. Communication is the bridge for HR to demonstrate fairness intentions. Designing and Administering Benefit Programs The responsibility for designing and administering an organization’s benefit program falls to the HR department, with input from executive management. Ideally, a benefit program should be uniquely suited to the organizational culture, reflect the values of the organization, demonstrate economic feasibility, and be sustainable in the long term. Such benefits will likely improve employees’ psychological well-being and therefore increase organizational performance. Drafting and Enforcing Employment Policies Employment policies that are informed by current laws but go beyond minimum requirements will help define a positive organizational culture and set high standards for performance. Policies differ from benefits in that they provide the guidelines for the behavior, not just the working conditions. Any policy must have enforcement to be effective. Human resource managers are responsible for setting the organizational consequences of infractions, and often for enforcing the policies as well. Sometimes, human resource managers will need to take action even when the employee’s direct manager may not agree, especially if compliance with the law is at issue. Managing Work-Life Conflicts Work-life conflicts grabbed management’s attention in the 1980s, largely as a result of the growing number of women, with dependent children, entering the workforce. In response, most major organizations took actions to make their workplaces more family friendly. They introduced on-site childcare, summer day camps, flextime, job sharing, leaves for school functions, telecommuting, and part-time employment. But organizations quickly realized work-life conflicts were not limited to female employees with children. Male workers and women without children were also facing this problem. Heavy workloads and increased travel demands, for instance, made it increasingly hard for many employees to meet both work and personal responsibilities. Organizations are modifying their workplaces with scheduling options and benefits to accommodate the varied needs of a diverse workforce. Employees at Nestlé Purina can bring their dogs into the office; SAS Institute has on-site child care, a health care center, and a fitness center; and other firms offer perks ranging from on-site laundry to food services and free child care. Exhibit 17-4 lists some initiatives to help employees reduce work-life conflicts. Time pressures aren’t the primary problem underlying these conflicts. It’s the psychological incursion of work into the family domain and vice versa when people are worrying about personal problems at work and thinking about work problems at home. This suggests organizations should spend less effort helping employees with time-management issues and more helping them clearly segment their lives. Keeping workloads reasonable, reducing work-related travel, and offering on-site quality childcare are examples of practices that can help in this endeavor. Not surprisingly, people differ in their preference for scheduling options and benefits. Some prefer organizational initiatives that better segment work from their personal lives, as flextime, job sharing, and part-time hours do by allowing employees to schedule work hours less likely to conflict with personal responsibilities. Others prefer ways to integrate work and personal life, such as on-site childcare, gym facilities, and company-sponsored family picnics. Mediations, Terminations, and Layoffs Human resource departments often take center stage when unpleasant events such as disputes, substandard performance, and downsizing occur. Employees need to be able to trust their human resource professionals to maintain appropriate confidentiality and a balanced perspective. Managers need to be able to trust HR, too, to know the laws and represent the company’s perspective. The HR human resource professional should be well trained in mediation techniques and rely upon company policies to seek positive resolution. Sometimes, human resource managers are integral to the termination process, when employees are not able to resolve issues with management. Termination processes are subject to union labor contracts and laws, which can confound the situation. In Spain, for instance, labor laws have traditionally protected older workers with near-guaranteed employment. For departing employees, the HR department is often the last stop on their way out the door. HR managers are thus in charge of leaving a favorable impression with the employee and collecting helpful input from the exit interview. This is never truer than when organizations terminate employees in layoffs. Employees who think the layoff process was handled fairly are more apt to recommend the company to others and to return to work if asked. Employees who survive a layoff and stay employed with the company also evaluate the fairness of the downsizing process, according to another study, particularly in individualistic countries. In sum, the role of HR is increasing for organizations worldwide, and top management is realizing human resource leadership is needed to create the cultures and positive business outcomes top corporations need to stay competitive. Summary and Implications for Managers An organization’s human resource (HR) policies and practices create important forces that greatly influence organizational behavior (OB) and important work outcomes. HR departments have become increasingly integral in shaping the composition of the organization’s workforce. First, as more organizations have turned to internal recruitment methods, HR departments have taken the lead in creating online portals and other easy-access methods for candidates to learn about the organization and be attracted to apply. Second, HR departments are involved in all phases of selection: initial selection, substantive selection, and contingent selection. The greatest increase in the involvement of HR in selection may be in the initial selection phase, wherein HR professionals develop, monitor, and screen the great numbers of applications that are submitted. However, HR involvement has increased in all areas of selection, and HR professionals are responsible for understanding the applicable laws and guidelines to serve as an informed, up-to-date resource for managers. In effective organizations, HR remains present throughout an employee’s time with the organization. HR departments create and administer training and development programs, and they set policies and practices with top management that govern the performance evaluation system. HR serves in a leadership capacity with responsibilities including the need to regularly communicate practices to employees, design and administer benefit programs, manage work-life conflicts, and conduct mediations, terminations, and layoffs. HR should bring an awareness of ethical issues to all stages of an individual’s experience with the organization. Knowledgeable HR professionals are therefore a great resource to all levels of the organization, from top management to managers to employees. Specific implications for managers are below: An organization’s selection practices can identify competent candidates and accurately match them to the job and the organization. Consider assessment methods that are most likely to evaluate the skills directly needed for jobs you are looking to fill. Use training programs for your employees to achieve direct improvement in the skills necessary to successfully complete the job. Employees who are motivated will use those skills for their greater productivity. Training and development programs offer ways to achieve new skill levels and thus add value to your organization. Successful training and development programs include and ethical component. Use performance evaluations to assess an individual’s performance accurately and as a basis for allocating rewards. Make sure the performance evaluations are as fair as possible. As demonstrated in Chapter 7 in our discussion of equity theory, evaluations perceived as unfair can result in reduced effort, increases in absenteeism, or a search for another job. Give your employees the opportunity to participate in their evaluations so they understand the performance criteria and engage with the improvement process. EXPANDED CHAPTER OUTLINE Recruitment Practices The first stage in any HR program is recruiting, closely followed by selection. A selection system can only be as good as the individuals who apply in the first place. Strategic recruiting has become a cornerstone for many companies, in which recruiting practices are developed in alignment with long-term strategic goals. As for defining “success” in recruiting, most research suggests that the best system attracts candidates who are highly knowledgeable about the job and the organization. Such candidates are likely to have a better fit between their skills and job requirements, and to be more satisfied in the jobs they take. Consistent with these findings, some of the most effective recruiting techniques include internal referrals, internship programs, and other methods that give potential applicants enough information to adequately evaluate the roles they may be occupying. Companies are increasingly turning away from outside recruiting agencies and relying on their own executives and HR professionals for talent searches. The most effective recruiters—internal or external—are well informed about the job, are efficient in communicating with potential recruits, and treat recruits with consideration and respect. They also use a variety of online tools, including job boards and social media, to bring in applications. Selection Practices Introduction The objective of effective selection is to match individual characteristics with the requirements of the job. How the Selection Process Works (Exhibit 17-1) Applicants go through several sections: initial, substantive, and contingent. Initial Selection Initial selection devices are the first information applicants submit and are used for preliminary rough cuts to decide whether the applicant meets the basic qualifications for a job. Application form Not a good predictor of performance. Good initial screen. Apply online. Care should be exercised on the questions included in an application to avoid conflict with legal and ethical limitations. Background checks 80% of employees check references. Rarely is useful information gained. Letters of recommendation are another form of background check. These also aren’t as useful as they may seem. Applicants select those who will write good things about them, so almost all letters of recommendation are positive. In the end, readers either ignore them or read “between the lines” to try to find hidden meaning there. Many employers will now search for candidates online through a general Internet search or through a targeted search on social networking sites. The legality of this practice has come into question, but there is no doubt that many employers include an electronic search to see whether candidates have any history that might make them a dubious choice for employment. For some potential employees, an embarrassing or incriminating photo circulated through Facebook may make it hard to get a job. Finally, some employers check credit histories or criminal records. A bank hiring tellers, for example, would probably want to know about an applicant’s criminal and credit histories. Increasingly, credit checks are being used for nonbanking jobs. Despite the trend, because of the invasive nature of such checks, employers need to be sure there is a need for them. To further complicate matters not checking can carry a legal cost. Substantive and Contingent Selection Introduction Heart of the selection process. Used after passing initial screening. Written tests Typical written tests are tests of intelligence or cognitive ability, personality, and integrity. Long popular as selection devices, they declined in use because between the late 1960 and mid-1980s they were characterized as discriminating, and they were not validated. Intelligence or Cognitive Ability Tests. Tests in intellectual ability, spatial and mechanical ability, perceptual accuracy, and motor ability have shown to be moderately valid predictors for many semiskilled and unskilled operative jobs. Intelligence tests are particularly good predictors for jobs that require cognitive complexity. Personality Tests Personality tests are inexpensive and simple to administer, and their use has grown. However, concern about applicants faking responses remain, partly because it’s fairly easy to claim to be hard-working, motivated, and dependable when asked in a job application setting even if it’s not accurate, and partly because applicants aren’t always aware they are faking. Integrity Tests As ethical problems have increased in organizations, integrity tests have gained popularity. These paper-and-pencil tests measure dependability, carefulness, responsibility, and honesty. They have proven to be powerful predictors of supervisory ratings of job performance and of theft, discipline problems, and excessive absenteeism. Performance simulation tests Although they are more complicated to develop and administer than written tests, performance-simulation tests have higher face validity (which measures whether applicants perceive the measures to be accurate), and their popularity has increased. The three best-known performance simulation tests are work samples, assessment centers and situational judgment tests. Work sample tests Hands-on simulations of part or the entire job that must be performed by applicants. Each work sample element is matched with a corresponding job performance element. Work samples are increasingly used for all levels of employment. Assessment centers Assessment centers use a more elaborate set of performance simulation tests, specifically designed to evaluate a candidate’s managerial potential. Line executives, supervisors, and/or trained psychologists evaluate candidates as they go through one to several days of exercises that simulate real problems. Situational judgment tests To reduce the costs of job simulations, many organizations have started to use situational judgment tests, which ask applicants how they would perform in a variety of job situations and compare their answers to those of high-performing employees. One study comparing situational judgment tests to assessment centers found the assessment center was a better predictor of job performance, although the difference was not large. Ultimately, the lower cost of the situational judgment test may make it a better choice for some organizations than a more elaborate work sample or assessment center. Realistic job previews These job tryouts are given as a way to assess talent versus experience. They decrease turnover because both employers and new hires know what they are getting into ahead of time. Interviews The interview continues to be the device most frequently used. It seems to carry a great deal of weight. The candidate who performs poorly in the employment interview is likely to be cut, regardless of his/her experience, test scores, or letters of recommendation, and vice versa. This is important because of the unstructured form of most selection interviews. The unstructured interview—short in duration, casual, and made up of random questions—is an ineffective selection device. The data are typically biased and often unrelated to future job performance. Without structure, interviewers tend to favor applicants who share their attitudes, give undue weight to negative information, and allow the order in which applicants are interviewed to influence their evaluations. To reduce bias, managers should adopt a standardized set of questions, a uniform method of recording information, and standardized ratings of applicants’ qualifications. Training interviewers to focus on specific dimensions of job performance, practicing evaluation of sample candidates, and giving interviewers feedback on how well they were focused on job-relevant characteristics significantly improves the accuracy of their ratings. Interview effectiveness also improves when employers use behavioral structured interviews, probably because these assessments are less influenced by interviewer biases. They require applicants to describe how they handled specific problems and situations in previous jobs, based on the assumption that past behavior offer the best predictor of future behavior. Panel interviews also minimize the influence of individual biases and have higher validity. Most organizations use interviews as more than a prediction of performance device. Companies use them to assess applicant-organization fit. So in addition to evaluating specific, job-related skills, they are looking at personality characteristics and personal values to find individuals who fit the organization’s culture and image. Contingent Selection Tests Once an applicant has passed substantive selection (such as background checks, interviews, etc.), the person is ready to be hired subject to a final check. One common contingent method is a drug test. Drug testing is controversial. Many applicants think testing without reasonable suspicion is invasive or unfair and say they should be tested on job performance factors, not lifestyle choices that may not be relevant. Employers might counter that drug use and abuse are extremely costly, not just in financial terms but also in terms of people’s safety. They have the law on their side. The U.S. Supreme Court has concluded that drug tests are “minimally invasive” selection procedures that as a rule do not violate individuals’ rights. Under the Americans with Disabilities Act, firms may not require employees to pass a medical exam before a job offer is made. They can conduct medical exams after making a contingent offer, to determine whether an applicant is physically or mentally able to do the job. Training and Development Programs Introduction Skills deteriorate and can become obsolete. U.S. corporations with 100 or more employees spent more than $125 billion in on formal training in recent years. Types of Training Introduction There are four general skill categories for training—basic, technical, interpersonal, and problem solving skills—and civility and ethics training. Basic skills One survey of more than 400 human resources professionals found that 40 percent of employers believe high school graduates lack basic skills in reading comprehension, writing, and math. As work has become more sophisticated, the need for these basic skills has grown significantly, leading to a gap between employer demands for skills and the available skills in the workforce. The challenge isn’t unique to the United States. It’s a worldwide problem—from the most developed countries to the least. For many undeveloped countries, widespread illiteracy means there is almost no hope of competing in a global economy. Organizations find they must provide basic reading and math skills for their employees. A literacy audit showed that employees at gun manufacturer Smith & Wesson needed at least an eighth-grade reading level to do typical workplace tasks. Yet 30 percent of the company’s 676 workers with no degree scored below eighth-grade levels in either reading or math. After the first round of basic-skills classes, company-paid and on company time, 70 percent of attendees brought their skills up to the target level, allowing them to do a better job. They displayed increased abilities to use fractions and decimals, better overall communication, greater ease in writing and reading charts, graphs, and bulletin boards—and a significant increase in confidence. Technical skills Most training is directed at upgrading and improving an employee’s technical skills. Technical training is important for two reasons—new technology and new structural designs. As organizations flatten their structures, expand their use of teams, and break down traditional departmental barriers, employees need mastery of a wider variety of tasks and increased knowledge of how their organization operates. Indian companies have faced a dramatic increase in demand for skilled workers in areas like engineering for emerging technologies, but many recent engineering graduates lack up-to-date knowledge required to perform these technical tasks. Companies like Tata and Wipro provide new hires with up to 3 months of training to ensure they have the knowledge to perform the technical work demanded. In addition, these organizations are attempting to form partnerships with engineering schools to ensure their curricula meet the needs of contemporary employers. Problem-solving skills Problem-solving training for managers and other employees can include activities to sharpen their logic, reasoning, and problem defining skills as well as their abilities to assess causation, develop and analyze alternatives, and select solutions. Problem-solving training has become a part of almost every organizational effort to introduce self-managed teams or implement quality-management programs. Interpersonal skills Almost all employees belong to a work unit. Their work performance depends on their ability to effectively interact with coworkers and bosses. Some require training in how to be a better listener, how to communicate ideas more clearly, and how to be a more effective team player. Civility training As human resource managers have become increasingly aware of the effects of social behavior in the workplace, they have paid more attention to the problems of incivility, bullying, and abusive supervision in organizations. Examples of incivility include being ignored, being excluded from social situations, having your reputation undermined in front of others, and experiencing other actions meant to demean or disparage. Researchers have shown that these forms of negative behavior can decrease satisfaction, reduce job performance, increase perceptions of unfair treatment, increase depression, and lead to psychological withdrawal from the workplace. Minimize incivility, bullying, and abusive supervision. One possibility is training specifically targeted to building civility by having directed conversations about it and supporting the reduction of incivility on an ongoing process. Following a training intervention based on these principles, coworker civility, respect, job satisfaction, and management trust have increased, while supervisor incivility, cynicism, and absences decreased. Thus, the evidence suggests that deliberate interventions to improve the workplace climate for positive behavior can indeed minimize the problems of incivility. Ethics training It is common for employees to receive ethics and values guidance incorporated in new-employee orientations, developmental programs, or as periodic reinforcements of ethical principles. Critics argue that ethics are based on values, and value systems are fixed at an early age. Ethics cannot be formally “taught” but must be learned by example. Supporters of ethics training argue that values can be learned and changed after early childhood. Even if it could not, it helps employees to recognize ethical dilemmas, become more aware of the ethical issues underlying their actions, and reaffirms an organization’s expectations. Ethic training also reaffirms an organization’s expectations that members will act ethically. Individuals who have greater exposure to organizational ethics codes and ethics training do tend to be more satisfied and perceive their organizations as more socially responsible, so ethics training does have some positive effects. Training Methods Historically, training meant formal training. It is planned in advance and has a structured format. Organizations are increasingly relying on informal training. Unstructured, unplanned, and easily adapted to situations and individuals. Most informal training is nothing other than employees helping each other out. They share information and solve work-related problems with one another. Job Training. On-the-job training includes job rotation, apprenticeships, understudy assignments, and formal mentoring programs. The primary drawback of these methods is that they often disrupt the workplace. Organizations are investing increasingly in off-the-job training—nearly $130 billion annually. What types of training might this include? The most popular is live classroom lectures. It also encompasses videotapes, public seminars, self-study programs, Internet courses, satellite-beamed television classes, and group activities that use role-plays and case studies. Computer-Based Training. Recently, e-training (computer-based training) is the fastest growing training delivery mechanism. E-learning systems emphasize learner control over the pace and content of instruction, allow e-learners to interact through online communities, and incorporate other techniques such as simulations and group discussions. Computer-based training that lets learners actively participate in exercises and quizzes was more effective than traditional classroom instruction. Evaluating Effectiveness The effectiveness of a training program can refer to the level of student satisfaction, the amount students learn, the extent to which they transfer the material from training to their jobs, or the financial return on investments in training. Rigorous measurement of multiple training outcomes should be a part of every training effort. Not all training methods are equally effective. The success of training also depends on the individual. Personality is important: those with an internal locus of control, high conscientiousness, high cognitive ability, and high self-efficacy learn more. The climate also is important: when trainees believe there are opportunities and resources to let them apply their newly learned skills, they are more motivated and do better in training programs. After-training support from supervisors and coworkers has a strong influence on whether employees transfer their learning into new behavior. An effective training program requires not just teaching the skills but also changing the work environment to support the trainees. Performance Evaluation What Is Performance? In the past, most organizations assessed only how well employees performed the tasks listed on a job description, but today’s less hierarchical and more service-oriented organizations require more. Researchers now recognize three major types of behavior that constitute performance at work: Task performance Performing the duties and responsibilities that contribute to the production of a good or service or to administrative tasks. This includes most of the tasks in a conventional job description. Citizenship Actions that contribute to the psychological environment of the organization, such as helping others when not required, supporting organizational Objectives, treating coworkers with respect, making constructive suggestions, and saying positive things about the workplace. Counter productivity Actions that actively damage the organization. These behaviors include stealing, damaging company property, behaving aggressively toward coworkers, and taking avoidable absences. Most managers believe good performance means doing well on the first two dimensions and avoiding the third. A person who does core job tasks very well but is rude and aggressive toward coworkers is not going to be considered a good employee in most organizations, and even the most pleasant and upbeat worker who can’t do the main job tasks well is not going to be a good employee either. Purposes of Performance Evaluation Management uses evaluations for general human resource decisions, such as promotions, transfers, and terminations. Evaluations identify training and development needs. They pinpoint employee skills and competencies needing development. They provide feedback to employees on how the organization views their performance and are often the basis for reward allocations including merit pay increases. We will emphasize performance evaluation in its role as a mechanism for providing feedback and as a determinant of reward allocations. What Do We Evaluate? Introduction The criteria or criterion used to evaluate performance has a major influence on performance. The three most popular sets of criteria are individual task outcomes, behaviors, and traits. Individual task outcomes If ends count, rather than means, then management should evaluate an employee’s task outcomes. Behaviors It is difficult to attribute specific outcomes to the actions of employees in advisory or support positions or employees whose work assignments are part of a group effort. We may readily evaluate the group’s performance, but if it is hard to identify the contribution of each group member, management will often evaluate the employee’s behavior. Measured behaviors needn’t be limited to those directly related to individual productivity. As we pointed out in discussing organizational citizenship behavior (see Chapters 1 and 3), helping others, making suggestions for improvements, and volunteering for extra duties make work groups and organizations more effective and are often incorporated into evaluations of employee performance. Traits Traits may or may not be highly correlated with positive task outcomes, but only the naive would ignore the reality that such traits are frequently used in organizations for assessing performance. Who Should Do the Evaluating? By tradition the task has fallen to managers, because they are held responsible for their employees’ performance. But others may do the job better. With many of today’s organizations using self-managed teams, telecommuting, and other organizing devices that distance bosses from employees, the immediate superior may not be the most reliable judge of an employee’s performance. Peers and even subordinates are being asked to take part in the process, and employees are participating in their own evaluation. A recent survey found that about half of executives and 53 percent of employees now have input into their performance evaluations. In most situations, in fact, it is highly advisable to use multiple sources of ratings. Any individual performance rating may say as much about the rater as about the person being evaluated. By averaging across raters, we can obtain a more reliable, unbiased, and accurate performance evaluation. The latest approach to performance evaluation is 360-degree evaluations. These provide performance feedback from the employee’s full circle of daily contacts, from mailroom workers to customers to bosses to peers. (Exhibit 17-2) The number of appraisals can be as few as 3 or 4 or as many as 25. Most organizations collect 5 to 10 per employee. Some firms using 360-degree programs are Alcoa, DuPont, and Levi Strauss. By relying on feedback from coworkers, customers, and subordinates, these organizations are hoping to give everyone a sense of participation in the review process and gain more accurate readings on employee performance. Evidence on the effectiveness of the 360-degree evaluation is mixed. It provides employees with a wider perspective on their performance, but many organizations don’t spend the time to train evaluators in giving constructive criticism. Some allow employees to choose the peers and subordinates who evaluates them, which can artificially inflate feedback. It’s also difficult to reconcile disagreements between rater groups. There is clear evidence that peers tend to give much more lenient ratings that supervisors or subordinates, and peers also tend to make more errors in appraising performance. Methods of Performance Evaluation Written essays The simplest method of evaluation is to write a narrative describing an employee’s strengths, weaknesses, past performance, potential, and suggestions for improvement. No complex forms or extensive training is required, but the results often reflect the ability of the writer. Critical incidents Critical incidents focus on those behaviors that are key in making the difference between executing a job effectively and executing it ineffectively. The appraiser writes down anecdotes that describe what the employee did that was especially effective or ineffective. A list of critical incidents provides a rich set of examples to discuss with the employee. Graphic ratings scales Graphic ratings scales refer to a set of performance factors, such as quantity and quality of work, depth of knowledge, cooperation, loyalty, attendance, honesty, and initiative. The evaluator then goes down the list and rates each on incremental scales. The scales typically specify five points. Popular because they are less time-consuming to develop and administer and allow for quantitative analysis and comparison. Behaviorally anchored rating scales (BARS) BARS combine major elements from the critical incident and graphic rating scale approaches. The appraiser rates the employees based on items along a continuum, but the points are examples of actual behavior. To develop the BARS, participants first contribute specific illustrations of effective and ineffective behavior, which are translated into a set of performance dimensions with varying levels of quality. Forced comparisons Forced comparisons evaluate one individual’s performance against the performance of one or more. It is a relative rather than an absolute measuring device. The two most popular are group order ranking and individual ranking. The group order ranking requires the evaluator to place employees into a particular classification, such as top one-fifth or second one-fifth. The individual ranking approach rank-orders employees from best to worst. One parallel to forced ranking is forced distribution of college grades. As shown in Exhibit 17-3, the average GPA of a Princeton University undergraduate has gotten much higher over time. Improving Performance Evaluations Introduction The performance evaluation process is a potential minefield. Evaluators can unconsciously inflate evaluations (positive leniency), understate performance (negative leniency), or allow the assessment of one characteristic to unduly influence the assessment of others (the halo error). Some appraisers bias their evaluations by unconsciously favoring people who have qualities and traits similar to their own (the similarity error). And, some evaluators see the evaluation process as a political opportunity to overtly reward or punish employees they like or dislike. Although no protections guarantee accurate performance evaluations, the following suggestions can make the process more objective and fair. Use multiple evaluators As the number of evaluators increases, the probability of attaining more accurate information increases. A set of evaluators judges a performance, the highest and lowest scores are dropped, and the final performance evaluation is made up from the cumulative scores of those remaining. Evaluate selectively Evaluate only those areas in which you have some expertise. Appraisers should be as close as possible, in terms of organizational level, to the individual being evaluated. Train evaluators There is substantial evidence that training evaluators can make them more accurate raters. Most rater training courses emphasize changing the raters’ frame of reference by teaching them what to look for, so everyone in the organization defines good performance in the same way. Another effective training technique is to encourage raters to describe the employee’s behavior in as much detail as possible. Providing more detail encourages raters to remember more about the employee’s performance, rather than just acting on their feelings about the employee at the moment. Provide employees with due process The concept of due process increases the perception that employees are treated fairly. Three features characterize due process systems: Individuals are provided with adequate notice of what is expected of them. All relevant evidence is aired in a fair hearing so individuals affected can respond. The final decision is based on the evidence and is free from bias. One technique organizations might consider to enhance due process is posting appraisals online so employees can see their own performance scores exactly as the supervisor enters them. One company that did so found employees believed rater accountability and employee participation were higher when appraisal information was available online prior to appraisal interviews. It might be that raters were more sensitive to providing accurate ratings when they knew employees would be able to see their own information directly. Providing Performance Feedback Managers are often uncomfortable discussing weaknesses with employees. In fact, unless pressured by organizational policies and controls, managers are likely to ignore this responsibility. Even though almost every employee could stand to improve in some areas, managers fear confrontation when presenting negative feedback. Employees become defensive. Employees tend to have inflated assessments of their own behavior. The solution to the problem is not to ignore it but to train managers to conduct constructive feedback sessions. An effective review—in which the employee perceives the appraisal as fair, the manager as sincere, and the climate as constructive—can leave the employee feeling upbeat, informed about areas needing improvement, and determined to correct them. It probably won’t surprise you that employees in a bad mood are much less likely to take advice than employees in a good mood. Appraisals should also be as specific as possible. People are most likely to overrate their own performance when asked about overall job performance, but they can be more objective when feedback is about a specific area. It’s also hard to figure out how to improve your performance globally—it’s much easier to improve in specific areas. In addition, the performance review should be a counseling activity more than a judgment process, best accomplished by allowing it to evolve from the employee’s own self-evaluation. International Variations in Performance Appraisal Let’s examine performance evaluation globally in the context of four cultural dimensions: individualism/collectivism, a person’s relationship to the environment, time orientation, and focus of responsibility. Individual-oriented cultures such as the United States emphasize formal performance evaluation systems more than informal systems. They advocate written evaluations performed at regular intervals, the results of which managers share with employees and use in the determination of rewards. On the other hand, the collectivist cultures that dominate Asia and much of Latin America are characterized by more informal systems—downplaying formal feedback and disconnecting reward allocations from performance ratings. Some of these differences may be narrowing, however. In Korea, Singapore, and even Japan, the use of performance evaluation has increased dramatically in the past decade, though not always smoothly or without controversy. One survey of Korean employees revealed that a majority questioned the validity of their performance evaluation results. One recent study focused on the banking industry found significant differences across countries in performance appraisal practices. Formal performance appraisals were used more frequently in countries that were high in assertiveness, high in uncertainty avoidance, and low in in-group collectivism. In other words, assertive countries that see performance as an individual responsibility, and that desire certainty about where people stand, were more likely to use formal performance appraisals. On the other hand, in high uncertainty avoidance cultures, performance appraisals were also used more frequently for communication and development purposes (as opposed to being used for rewards and promotion). Another study found that individuals who were high in power distance and high in collectivism tend to give more lenient performance appraisals. The Leadership Role of HR Introduction HR also plays a key leadership role in nearly all facets of the workplace environment, from designing and administering benefit programs to conducting attitude surveys to drafting and enforcing employment policies. HR is on the front lines in managing adversarial employment conditions such as work-life conflicts, mediations, terminations, and layoffs. HR is on the scene when an employee joins and leaves, and all along the way. HR departments uniquely represent both the employee’s and the company’s perspective as needed. Companies have only recently begun to recognize the potential for HR to influence employee performance. Because employers and employees alike benefit from strong human resource practices, let’s consider some of the leadership functions of human resources. Communicating HR Practices Leadership by HR begins with informing employees about HR practices and explaining the implications of decisions that might be made around these practices. It is not enough to simply have a practice in place; HR needs to let employees know about it. When a company successfully communicates how the whole system of HR practices has been developed and what function this system serves, employees feel they can control and manage what they get out of work. The evidence supporting the contribution of communication and perception to HR effectiveness is considerable. For example, one study of different business units within a large food-service organization found that employee perceptions of HR practices, rated at the workgroup level, were significant predictors of OCB, commitment, and intention to remain with the company, but the HR practices led to these positive outcomes only if employees were aware they were in place. The effectiveness of HR practices also depends on employee attitudes. One review found that HR practices were more likely to lead to positive outcomes when employees felt motivated. Practices tend to be perceived differently in various business cultures. For example, the use of educational qualifications in screening candidates seems to be a universal practice, but aside from this, different countries emphasize different selection techniques. Structured interviews are popular in some countries and nonexistent in others. Communication is the bridge for HR to demonstrate fairness intentions. Designing and Administering Benefit Programs The responsibility for designing and administering an organization’s benefit program falls to the HR department, with input from executive management. Ideally, a benefit program should be uniquely suited to the organizational culture, reflect the values of the organization, demonstrate economic feasibility, and be sustainable in the long term. Such benefits will likely improve employees’ psychological well-being and therefore increase organizational performance. Drafting and Enforcing Employment Policies Employment policies that are informed by current laws but go beyond minimum requirements will help define a positive organizational culture and set high standards for performance. Policies differ from benefits in that they provide the guidelines for behavior, not just the working conditions. Any policy must have enforcement to be effective. Human resource managers are responsible for setting the organizational consequences of infractions, and often for enforcing the policies as well. Sometimes, human resource managers will need to take action even when the employee’s direct manager may not agree, especially if compliance with the law is at issue. Managing Work-Life Conflicts Work-life conflicts grabbed management’s attention in the 1980s, largely as a result of the growing number of women, with dependent children, entering the workforce. In response, most major organizations took actions to make their workplaces more family friendly. They introduced on-site childcare, summer day camps, flextime, job sharing, leaves for school functions, telecommuting, and part-time employment. But organizations quickly realized work-life conflicts were not limited to female employees with children. Male workers and women without children were also facing this problem. Heavy workloads and increased travel demands, for instance, made it increasingly hard for many employees to meet both work and personal responsibilities. Organizations are modifying their workplaces with scheduling options and benefits to accommodate the varied needs of a diverse workforce. Employees at Nestlé Purina can bring their dogs into the office; SAS Institute has on-site child care, a health care center, and a fitness center; and other firms offer perks ranging from on-site laundry to food services and free child care. Exhibit 17-4 lists some initiatives to help employees reduce work-life conflicts. Time pressures aren’t the primary problem underlying these conflicts. It’s the psychological incursion of work into the family domain and vice versa when people are worrying about personal problems at work and thinking about work problems at home. This suggests organizations should spend less effort helping employees with time-management issues and more helping them clearly segment their lives. Keeping workloads reasonable, reducing work-related travel, and offering on-site quality childcare are examples of practices that can help in this endeavor. Not surprisingly, people differ in their preference for scheduling options and benefits. Some prefer organizational initiatives that better segment work from their personal lives, as flextime, job sharing, and part-time hours do by allowing employees to schedule work hours less likely to conflict with personal responsibilities. Others prefer ways to integrate work and personal life, such as on-site childcare, gym facilities, and company-sponsored family picnics. Mediations, Terminations, and Layoffs Human resource departments often take center stage when unpleasant events such as disputes, substandard performance, and downsizing occur. Employees need to be able to trust their human resource professionals to maintain appropriate confidentiality and a balanced perspective. Managers need to be able to trust HR, too, to know the laws and represent the company’s perspective. The HR human resource professional should be well trained in mediation techniques and rely upon company policies to seek positive resolution. Sometimes, human resource managers are integral to the termination process, when employees are not able to resolve issues with management. Termination processes are subject to union labor contracts and laws, which can confound the situation. In Spain, for instance, labor laws have traditionally protected older workers with near-guaranteed employment. For departing employees, the HR department is often the last stop on their way out the door. HR managers are thus in charge of leaving a favorable impression with the employee and collecting helpful input from the exit interview. This is never truer than when organizations terminate employees in layoffs. Employees who think the layoff process was handled fairly are more apt to recommend the company to others and to return to work if asked. Employees who survive a layoff and stay employed with the company also evaluate the fairness of the downsizing process, according to another study, particularly in individualistic countries. In sum, the role of HR is increasing for organizations worldwide, and top management is realizing human resource leadership is needed to create the cultures and positive business outcomes top corporations need to stay competitive. Summary and Implications for Managers An organization’s human resource (HR) policies and practices create important forces that greatly influence organizational behavior (OB) and important work outcomes. HR departments have become increasingly integral in shaping the composition of the organization’s workforce. First, as more organizations have turned to internal recruitment methods, HR departments have taken the lead in creating online portals and other easy-access methods for candidates to learn about the organization and be attracted to apply. Second, HR departments are involved in all phases of selection: initial selection, substantive selection, and contingent selection. The greatest increase in the involvement of HR in selection may be in the initial selection phase, wherein HR professionals develop, monitor, and screen the great numbers of applications that are submitted. However, HR involvement has increased in all areas of selection, and HR professionals are responsible for understanding the applicable laws and guidelines to serve as an informed, up-to-date resource for managers. In effective organizations, HR remains present throughout an employee’s time with the organization. HR departments create and administer training and development programs, and they set policies and practices with top management that govern the performance evaluation system. HR serves in a leadership capacity with responsibilities including the need to regularly communicate practices to employees, design and administer benefit programs, manage work-life conflicts, and conduct mediations, terminations, and layoffs. HR should bring an awareness of ethical issues to all stages of an individual’s experience with the organization. Knowledgeable HR professionals are therefore a great resource to all levels of the organization, from top management to managers to employees. Specific implications for managers are below: An organization’s selection practices can identify competent candidates and accurately match them to the job and the organization. Consider assessment methods that are most likely to evaluate the skills directly needed for jobs you are looking to fill. Use training programs for your employees to achieve direct improvement in the skills necessary to successfully complete the job. Employees who are motivated will use those skills for their greater productivity. Training and development programs offer ways to achieve new skill levels and thus add value to your organization. Successful training and development programs include and ethical component. Use performance evaluations to assess an individual’s performance accurately and as a basis for allocating rewards. Make sure the performance evaluations are as fair as possible. As demonstrated in Chapter 7 in our discussion of equity theory, evaluations perceived as unfair can result in reduced effort, increases in absenteeism, or a search for another job. Give your employees the opportunity to participate in their evaluations so they understand the performance criteria and engage with the improvement process. Career Objectives How do I fire someone? One of the people who reports to me simply isn’t living up to his job responsibilities, and I’m afraid that I have to let him go. I have no idea how to approach him, so the meeting will turn out okay. What’s the best way to terminate him? — Ariana Dear Ariana: Most supervisors agree that terminating a problem employee can be one of the hardest parts of management. In general, the number-one way to reduce the stress of firing is to avoid giving surprises. A problem employee needs to be told as soon as possible that there are issues with performance. Be sure to document performance problems early and let your employee know the consequences of failing to improve. It may even be the case that identifying problems can eliminate the need for firing through initiating development strategies and providing training that improves performance. If you’ve decided the termination needs to proceed, then begin to plan the termination meeting. Good HR guidance can be one of your best resources in this process. It’s natural to be worried about how your employee is going to react, but here are some strategies that may help you end the employment relationship in a way that minimizes conflicts: Ask your HR representatives what alternatives and techniques they’d recommend. Many companies have established policies and procedures that will help you conduct this meeting in a professional manner. Practice. A chance to practice the meeting with a neutral party (not someone with connections to the person or your organization) will help you reduce stress and anticipate how the meeting will go. Be sure to respect your employee during the process. When possible, conduct the termination behind closed doors. Send a clear message that his employment is at an end. The last thing you want is a situation where he doesn’t get the message or feels you are so indecisive that he can argue his way out of the termination. Attempts to “soften the blow by providing positive feedback or working your way up to the bad news are often confusing and can create an opening for an extended, unpleasant, and unproductive argument. Avoid going over past mistakes in detail. At the point of termination, there is no reason to reassess problems you’ve previously discussed—it’s better to just make a clean statement that things aren't working out, and your documentation should have the details for later reference if needed. Going over the reasons why the relationship is over will make your employee feel insulted or offended. Have an after-meeting plan. What are your organization’s policies—does your employee need to be escorted immediately out of the building, for instance? What are the policies for returning business property? Demonstrate adherence to the plan to keep the termination process objective. Of course, none of this advice can remove all the stress of terminations, but a combination of preparation, respect, and clarity can help make the situation better than it would be otherwise. Sources: S. R. McDonnell, “10 Steps Needed to Properly Fire Someone,” Entrepreneur, May 26, 2015, http://www.entrepreneur .com/article/246573; E. Frauenheim, “Employee Crisis Communications 101,” Workforce, November 13, 2013, http://www. .workforce.com/articles/20036-employeecrisis-communications-101; and R. A. Mueller-Hanson and E. D. Pulakos, “Putting the ‘Performance’ Back in Performance Management, ” SHRM-SIOP Science of HR White Paper Series, 2015, http://www.shrm.org/ Research/Documents/SHRM-SIOP%20Performance%20Management.pdf. An Ethical Choice HIV/AIDS and the Multinational Organization It wasn’t long ago that an AIDS diagnosis was a death sentence, and the ethical choices for HR departments revolved around palliative care and death benefits. Thankfully, those days are gone, at least for most. Now the ethical choice is about the standards of care and support organizations want to provide, for which employees worldwide, and for how long. “There has been an uptick with those employed that have HIV/AIDS” as the disease has become more chronic than fatal, said Randy Vogenberg of the Institute for Integrated Healthcare. However, whether someone can continue working still depends upon drug therapy, workplace accommodations, and employee education. In most countries, standards are not specifically mandated, leaving employers to choose the level of support to offer. “It’s not a question of whether a business is going to be confronted with this, ” labor law attorney Peter Petesch says. “It’s a question of how soon.” By current estimates, more than 1.2 million people in the United States and 36.9 million people globally live with HIV. Over two-thirds of HIV infections are in sub-Saharan Africa, and 76 percent of infected individuals live in developing countries. Worldwide, there is little consistency in the approach to the problem. Few U.S. companies have specific HIV/AIDS policies, for example, and although benefit plans cover the illness, employees’ out-of-pocket costs for the expensive drug therapy can range significantly. HIV/AIDS treatment is available in Europe through the national health care system. Some larger African companies run clinics where national health care or insurance is insufficient, but not all companies offer insurance. In India and China, insurers do not cover HIV/AIDS, so companies need to consider separate employee reimbursement to match their intentions for coverage. When it comes to HIV/AIDS, an ounce of prevention is worth a pound of cure, or more literally, dramatic corporate savings. Research found that the investment companies spent on preventing the disease from spreading and on treating infected employees saved money and lives. HR initiatives like providing peer educators to teach employees about prevention and accommodation, free counseling services, free voluntary testing, and well-being monitoring have been effective worldwide. “Nobody needs to die of this disease anymore, ” said Jenni Gillies, head of business development for beer brewer SABMiller, which has 70, 000 employees in 75 countries. But there are costs and responsibilities associated with each decision about the level of care to support or supply, and how far companies should meet this need over other employee needs will be a constant question. Some organizations may conclude that governments and other systems are responsible for the care of citizens. It’s a tough call. Meanwhile, individual managers can assist in preventing discrimination and encouraging education. Sources: “HIV/AIDS Basics Statistics, ” Center for Disease Control, http: //www.cdc.gov/hiv/statistics/basics.html, accessed July 21, 2015; J. Mooney, “People with HIV and AIDS: Living and Working Longer, ” HR Magazine, June 2012, 41–44; SABMiller corporate website, “Inside View” page, www.insideview.com/directory/sabmiller-plc, accessed June 18, 2013; and World Health Organization, “HIV/AIDS” fact page, http: //www.who.int/mediacentre/factsheets/fs360/en/, updated July 2015. Class Exercise Ask students to read the article on multinational benefits at http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/MultinationalBenefits.aspx. Assign each student to the role of an HR manager working on benefits in different parts of the world. Ask each student, acting in this role, to prepare an action plan that considers issues related to HIV/AIDS that were outlined in this feature and which reflect the concerns raised in the article on multinational benefits. Have each student write up his or her action plan and submit it to another student in the class. Have the second student evaluate the action plan and make recommendations for change, if needed. Teaching Notes This exercise is applicable to face-to-face classes or synchronous online classes such as Black Board 9.1, Breeze, WIMBA, and Second Life Virtual Classrooms. See http: //www.baclass.panam.edu/imob/SecondLife for more information. Myth or Science? The24-Hour Workplace Is Harmful This statement appears to be true in many cases. Although technology makes it possible for employees to be plugged in all the time, in constant contact around the globe, research suggests that employers who push employees to check in at all hours and stay connected may well be doing themselves (and their employees) a disservice. A growing body of research has uncovered the serious health consequences of insufficient sleep, and work practices that encourage employees to be plugged in 24 hours per day may be making the situation worse. One study examined how late-night work influenced job outcomes by having employees complete diary surveys on their sleep and engagement at work over multiple days. Those who used smartphones at night for work were less engaged in their work tasks the next day, even after accounting for other technology use. From another angle, researchers have looked at the personal consequences of “workaholism,” which is the tendency to think constantly about work off the job and to feel compelled to work excessive hours. This habit is associated with higher levels of burnout, stress, and family problems. While workaholism is partially driven by personality factors, surveys suggest that features of the workplace itself can enhance workaholic tendencies, including excessive workloads, conflicting work priorities, and time pressures. The employee may not immediately perceive these effects, since workaholics are often highly committed to their work and enjoy it in the short term, until burnout occurs. The key to maintaining performance over time may lie in developing psychological detachment from work. Alongside studies showing the negative effects of overexposure to work demands, we can place another body of work showing that short, regular breaks made up of total rest and avoidance of work responsibilities can recharge a person's energy. Unplugging from constant work demands for short periods actually makes us much more productive over the long haul. Therefore, the evidence is clear: unplug to recharge yourself. HR can support this effort by presenting the research findings to managers and helping to establish practices and boundaries that benefit everyone. Sources: K. Lanaj, R. E. Johnson, and C. M. Barnes, “Beginning the Workday Yet Already Deprived? Consequences of Late-Night Smartphone Use and Sleep, ” Organizational Behavior and Human Decision Processes 124 (May 2014): 11–23; M. A. Clark, J. S. Michel, L. Zhdanova, S. Y. Pui, and B. B. Baltes, “All Work and No Play? A Meta-Analytic Examination of the Correlates and Outcomes of Workaholism, ” Journal of Management, February 2014, doi: 10.1177/0149206314522301; S. Sonnentag and C. Fritz, “Recovery from Job Stress: The Stressor-Detachment Model as an Integrative Framework, ” Journal of Organizational Behavior 36 (2015): S72–S103. Class Exercise Divide the class into teams of three to five students each. Ask each group to read the article at http: //www.bloomberg.com/news/articles/2015-05-05/five-charts-that-show-work-life-balance-is-dead. Then, students should discuss which policies they would most value as they try to create a work-life balance. Students should consider whether their perspectives would change over time, and if so, how, and whether their perspectives differ by gender. Next, ask students to make a case for their positions and develop an overall policy on work-life balance for their organization. Each team should present its findings to the class and discuss the similarities and differences between each recommended policy. Teaching Notes This exercise is applicable to face-to-face classes or synchronous online classes such as Black Board 9.1, Breeze, WIMBA, and Second Life Virtual Classrooms. See http: //www.baclass.panam.edu/imob/SecondLife for more information. Personal Inventory Assessments Positive Practices Survey Take this PIA to learn more about positive practices you can use today and in the future. Point/Counterpoint Employers Should Check Applicant Criminal Backgrounds Point Depending on where you live, you may have been asked about your criminal arrest record on a job application. Even if you weren't asked outright, the company may have investigated anyway by using a background check service. Surveys suggest that nearly 70 percent of companies do some sort of criminal background check on job applicants. When so many are using the same basic strategy, it’s likely they have a good reason. Companies check criminal records for many purposes. Most obviously, nothing predicts future criminal behavior like prior criminal behavior. Many employees have used the access and privileges of their jobs to commit crimes ranging from theft to assault or even murder. A check of their criminal records may have helped screen out these individuals. As Lucia Bone, founder of the nonprofit Sue Weaver Cause, says, “It is the employer’s responsibility to protect both their business, their employees, and their customers.” This is a deeply meaningful issue for Bone. The organization she founded is named after her sister, Sue Weaver, murdered by a man with a criminal record who had access to her home to clean air ducts. Many hiring managers check criminal backgrounds specifically because they do not want their own lack of diligence to lead to similarly tragic outcomes. Besides signalling the direct risk of criminal activity on the job, criminal records may be good behavioral indicators of other deviant workplace behavior. People who are willing to violate social conventions in one area may well be more likely to violate them in others. When employers screen for the use of illegal drugs or shoplifting arrests, they are trying to identify people who might lie to supervisors or embezzle money. Information gathered from criminal records is likely to be more objective and accurate than a manager’s gut feelings about who is going to pose a problem in the future. Counterpoint According to sociologist Devah Pager, the high U.S. incarceration rate means employers’ hiring decisions have major labor market and social implications if based on criminal records. Koch Industries has stopped asking applicants about criminal records. CEO Charles Koch notes, “If ex-offenders can’t get a job, education, or housing, how can we possibly expect them to have a productive life?” Koch’s concern is valid. One study linked a young-adult arrest record to lower incomes and education levels later in life and a conviction record to even lower levels. There are also substantial racial and ethnic group differences in arrest rates, and men are much more likely to have arrest and conviction records than women. The Equal Employment Opportunity Commission (EEOC) concludes that excluding individuals with criminal records from jobs effectively discriminates against African American men in particular. Furthermore, criminal background checks don’t necessarily give employers the information they seek. A core principle of modern criminal justice holds that we are all innocent until proven guilty. However, some screens will turn up both conviction and arrest records. This is problematic because fewer than half of arrests end in conviction. While the use of arrest records is prohibited in many localities, that is far from a universal rule. Other investigations have found that online criminal records checks are prone to false positives, reporting that someone has a criminal past who really doesn’t. Another problem is a lack of relevance. While many would agree that a person convicted of assault is not a good candidate for work that requires carrying a weapon or associating with vulnerable populations, it’s less clear how a petty-theft conviction might raise the same concerns. Sociologist Christopher Uggen summarizes by observing, “We haven’t really figured out what a disqualifying offense should be before particular activities.” Sources: B. Appelbaum, “Out of Trouble, but Criminal Records Keep Men Out of Work,” New York Times, February 28, 2015, http://www.nytimes.com/2015/03/01/business/out-of-trouble-but-criminal-records-keep-men-out-of-work. html?_r=0 C. Zillman, “Koch Industries Stops Asking Job Candidates about Their Criminal Records,” Fortune, April 27, 2015, http://fortune.com/2015/04/27/koch-industries-stops-asking-job-candidates-about-their-criminal-records/; and G. Fields and J. R. Emshwiller, “As Arrest Records Rise, Americans Find Consequences Can Last a Lifetime,” Wall Street Journal, August 18, 2014, http://www.wsj.com/articles/as-arrest-records-rise-americans-find-consequences-can-last-alifetime-1408415402. Class Exercise Create teams of three to five students each. Ask the teams to read the article at http: //www.socialfish.org/2010/07/keep-it-legal-social-media-and-hiring.html. Ask the teams to prepare a whitepaper as if they were a management team in a major firm. The paper should determine what the position of the firm will be based on the teams’ consensus of opinion weighing the Point and Counterpoint ideas and the legality aspects of using social media for background checks. Have each team present its whitepaper to the class. Teaching Notes This exercise is applicable to face-to-face classes or synchronous online classes such as Black Board 9.1, Breeze, WIMBA, and Second Life Virtual Classrooms. See http: //www.baclass.panam.edu/imob/SecondLife for more information. Instructor Manual for Organizational Behavior Timothy A. Judge Stephen P. Robbins 9781292146300, 9780133507645, 9780136124016