Chapter 05 - Human Resource Planning and Recruitment Please click here to access the new HRM Failures case associated with this chapter. HRM Failures features real-life situations in which an HR conflict ended up in court. Each case includes a discussion questions and possible answers for easy use in the classroom. HRM Failures are not included in the text so that you can provide your students with additional real-life content that helps engrain chapter concepts. Chapter Summary This chapter describes the process an organization uses to plan and recruit so that there will be adequate human resources. The steps described are linking business strategies to future needs, forecasting labor demand and supply, determining in what positions there will exist a labor shortage or surplus, setting goals regarding future human resource needs, and identifying strategies to solve the problems of shortages and/or surpluses. The ability to recruit successfully is described as depending upon personnel policies such as job posting (an internal strategy), level of pay in comparison to the market, and the extent of job security. The chapter describes sources for recruiting as well as the use of yield ratios and costs to evaluate the effectiveness of sources. Lastly, the role of the recruiter and how to enhance his or her impact on the candidate is presented. Learning Objectives After studying this chapter, the student should be able to: 1. Discuss how to align a company's strategic direction with its human resource planning. 2. Determine the labor demand of workers in various job categories. 3. Discuss the advantages and disadvantages of various ways of eliminating a labor surplus or avoiding a labor shortage. 4. Describe the various recruitment policies organizations adopt to make job vacancies more attractive. 5. List the various sources from which job applicants can be drawn, their relative advantages and disadvantages, and the methods for evaluating them. 6. Explain the recruiter’s role in the recruitment process, the limits the recruiter faces, and the opportunities available. Extended Chapter Outline Note: Key terms appear in boldface and are listed in the "Chapter Vocabulary" section. Opening Vignette: Made in America: A Source of Competitive Advantage? After a long period of American companies outsourcing manufacturing, firms like Walmart, Apple, Airbus, and Ashley Furniture are making moves that are beginning to rekindle the manufacturing sector in the US. Cheaper energy costs, tighter safety and ethical controls, and a more productive and technologically savvy workforce have started to make inroads in making manufacturing in the US attractive and competitive again. And the benefits don’t stop at simply adding jobs, it is the downstream effects like adding $1.48 to the economy for every $1.00 manufactured and allowing US companies the chance to innovate which results in US workers having the opportunity to develop their skills that really have an impact. Apparently companies in other countries are noticing the changes also. German-based Volkswagen and French-based Michelin decided to open new facilities here in the US rather than their own hope countries. Discussion Question 1. Explain how, in the midst very shakey economic times, there seems to be a resurgence in interest in US manufacturing even with the higher cost of labor in the US. If you were an HR professional in a company that competed for this talent, what might you do to help your company sell the idea that manufacturing in the US can be competitive? Answer: The reason for the resurgence is a combination of factors that over time should compound the benefits of US-based manufacturing. First, wages in countries like China, have increased drastically and faster than here in the US with the increase in manufacturing activity there. Second, over time, US workers gain more knowledge and skills as they are given the opportunity to innovate on the factory floor, making them more valuable. Third, the US has tighter safety and ethical controls helping prevent issues with company image arising. Also, US workers tend to be more flexible and reliant on technological advances than workers in other countries allowing for fewer workers to pay. Introduction—Firms and the workers face challenges such as the “war for talent,” as illustrated by this opening vignette. In particular, demand for expertise—such as hardware and software expertise—creates constraints and opportunities, and employers can respond in many ways. Two of the major ways that societal trends and events affect employers are through: Consumer markets, which affect the demand for goods and services. Labor markets, which affect the supply of people to produce goods and services. Keys to utilizing labor markets to the organizations own competitive advantages are: 1. Companies must have a clear idea of their current level of human resources (strengths and weaknesses). 2. Companies must be aware of where they are going in the future and how the current configuration of human resources relates to what they will need in the future. 3. Where there are discrepancies between present configurations and those needed in the future, organizations must have programs to address these issues. II. The Human Resources Planning Process—The process consists of forecasting, goal setting and strategic planning, and program implementation and evaluation (See Figure 5.1 in text). A. Forecasting is the attempts to determine the supply of and demand for various types of human resources to predict areas within the organization where there will be future labor shortages or surpluses.. 1. Determining Labor Demand a. Labor demand can be predicted by the use of statistical techniques such as leading indicator, which is an objective measure that accurately predicts future labor demand (for example, sales may be directly related to a need for salespeople, but not sales support positions). b. Statistical planning models are useful when there is a long, stable history that can be used to reliably detect relationships among variables. c. Statistical models are almost always complemented by subjective judgments of people who have expertise in the area. 2. Determining Labor Supply a. Internal labor supply is determined by a detailed analysis of how many people are currently in various job categories, modified to reflect changes in the near future caused by retirements, promotions, transfers, voluntary turnovers, or terminations. b. A transitional matrix is a table used to project internal labor supply. The matrix shows the propor¬tion or number, of employees in different job categories at different times and how people move from one job to another in the organization and how many people enter and leave the organization (text Table 5.1). This method is best combined with judgmental methods. 3. Determining Labor Surplus or Shortage—By comparing fore¬casts for labor supply and demand for specific jobs, the organi¬zation can determine what it needs to do. Examples: It is likely that the U.S. is going to experience a labor shortage of primary care physicians of up to 100,000 doctors by 2025 as a result of the Affordable Care Act going in to effect. Conversely, there is an anticipated surplus of 175,000 lawyers coming up. B. Goal Setting and Strategic Planning—These tools define specific goals regarding a desired end and provide benchmarks for deter¬mining the relative success of a program aimed at addressing labor surpluses or shortages. A specific timetable is set for when results should be achieved (See tables 5.2 and 5.3 in text). The point should be clear that without planning by the organization, employees suffer the most, especially in a labor surplus because of layoffs and pay reductions. 1. Options for reducing an expected labor surplus: Downsizing Pay reductions Demotions Transfers Work sharing Hiring freeze Natural attrition Early retirement Retraining 2. Options for avoiding an expected labor shortage: Overtime Temporary employees Outsourcing Retrained workers Turnover reductions New external hires Technological innovation 3. Downsizing – the planned elimination of large numbers of personnel designed to enhance organizational competitiveness.. a. There were four major reasons that organizations engaged in downsizing: - Cost reduction through decreased labor. - Closing outdated plants or introducing technological change reduced the need for labor. - Mergers and acquisitions reduced the need for large bureau¬cracies. - For economic reasons, many firms relocated parts of oper¬ations. Although the jury is still our on whether these downsizing efforts have led to enhanced organizational effectiveness, some early reports indicate the results have not met expec¬tations. Example: Yahoo cut 2,000 jobs in 2012 (15% of their workforce). They anticipated $375 million in savings, which was partially offset by approximately $145 million in severance pay expenses. b. Although downsizing has an immediate effect on costs, much evidence suggests that it has negative effects on long term organizational effectiveness and even lower longer term profits. Reasons include: - Although the initial cost savings are a short-term plus, the long-term effects of an improperly managed downsizing effort can be negative. In the service industry, the effects of downsizing can be exacerbated. When downsizing efforts are not complemented by changes in the nature of work roles, performance can also suffer. In the age of blogs and text messaging, the once private practice of laying off employees becomes increasingly transparent, which can result in unwanted publicity. Angry employees can sue for loss of wages under the Worker Adjustment and Training Act, which requires employers to give workers 60 days warning regarding layoffs. There was a spike in these lawsuits in 2009. 4. Early Retirement Programs and Buyouts—The average age of the U.S worker is getting older. Because of improved health of the older worker and decrease in physical demand of the job individuals are able to work long past the traditional retirement age. Although older workers bring experience to the table, they also create problems like being more costly than younger workers because of seniority, higher medical costs, and higher pension contributions. Many employers are stressing early retirement by offering incentive programs to older employees. Figure 5.2 shows the aging population in the United States. 5. Employing Temporary Workers—Some strategies can be turned on and off fairly painlessly, such as the use of overtime and/or temporary employees. Operational flexibility is the primary reason for this, although the use of temps also frees the firm from many admin¬istrative tasks and financial burdens (health insurance, pension, worker's compensation, life insurance, etc.). Smaller companies may use temporary agencies to do their employment screening for them. After 90 days, if the employee works out, he or she is often offered a permanent position. Training may be done by the agency as well. Finally, temporary employees bring a fresh perspective to the firm, particularly if they have temped in a number of other organizations. The potential conflicts between permanent and temporary employees need to be managed. There are several key issues: a. The organization needs to have bottomed out first in terms of any downsizing before it starts bringing in temporaries. b. If the organization is concerned about the reactions of full time workers to the temporaries, it may want to go out of its way to hire “nonthreatening” temporaries. c. The organization, however, must be careful not to create the perception that temporary workers are second class organiza¬tional citizens. d. Finally, HR staff can also prevent feelings of a two tiered society by ensuring that the temporary agency provides benefits to the temporaries that are at least minimally comparable with those enjoyed by the full time workers with whom they interact. 6. Outsourcing—This occurs when a firm is interested in a broad set of services performed by an outside organization. a. Offshoring is a special case of outsourcing where the jobs that move actually leave one country and go to another, like the example in the opening vignette. b. Steps to take that help ensure the success of outsourcing strategies include: - When choosing an outsourcing vendor, it is usually the bigger and older the better. - Jobs that are proprietary or require tight security should not be outsourced. - It is a good idea to start small and monitor constantly. 7. Altering pay hours—Many companies that are facing labor shortages are forced to get more hours out of existing employees. Although employers are forced to pay higher wages, many prefer this to hiring and training new employees. Competing Through Globalization: Struggling to Find a Custom Fit in an Italian Town The Tuscan city of Prato, which produces over 27% of Italy’s textile output, is experiencing what many other urban areas across the globe are experiencing – a large and rapid influx of immigrant labor. In the case of Prado, over the past 25 years the immigrant population has changed such that 25% of Prado’s residents are Chinese and nearly 4,000 of the garment-producing businesses are Chinese owned. And while these businesses are able to produce clothes faster and cheaper than their Italian counterparts, they have still been able to benefit from putting a “Made in Italy” tag on their products. Discussion Question How does one balance the rights and responsibilities of labor market newcomers versus established players when transforming from a historically important but non-viable business model to a new and uncertain business model?? Answer: This is a tricky situation and students’ answers may vary greatly. On the one hand, it is critical to grow the economy, but on the other it is critical to preserve heritage and history… And on top of that, where does one draw the line in terms of sharing the reputation of their community verses allowing for free-market competition. Balancing the rights and responsibilities involves: 1. Assessing Needs and Expectations: Evaluate the needs of both newcomers and established employees, ensuring fair treatment and clear communication about changes. 2. Providing Support: Offer retraining and career transition support to established employees, while integrating newcomers into the new business model. 3. Ensuring Fairness: Implement transparent policies that address the interests of all parties, maintaining equity and fostering a cooperative environment during the transition. C. Program implementation and evaluation are critical elements to ensure that an individual is held accountable for achieving the stated goals and has the necessary authority and resources to accomplish goals. Program evaluation examines results: 1. It considers whether the company has avoided any predicted shortages or surpluses. 2. It examines the programs implemented to ensure that they had the desired results and whether the programs were implemented as planned. 3. It is also crucial to examine the process in addition to the results, however. For example, ultimately, human resources planning should reduce instances of over and- under supply of human resources. It will do this with increasing effectiveness only if forecasts and projections become increasingly accurate. D. The Special Case of Affirmative Action Planning Consider underutilization for voluntary affirmative action to promote diversity and/or as a requirement of serving as a contractor to the federal government. 1. Work force utilization review is a comparison that examines the proportion of a company's workers in a subgroup to the proportion that each subgroup represents in the relevant labor market. This comparison is used to determine whether any subgroups may be underutilized. Underutilization occurs when the proportion of the subgroup in the organization is lower than that of the labor market. a. A voluntary affirmative action program may be imple¬mented in which selection programs may be reviewed and revised to decrease the underutilization and/or increase the diversity of the organization and decrease the likelihood of a lawsuit. Steps for implementation are identical to the generic planning process discussed earlier. b. Students should be aware, however, that voluntary affir-mative action programs may be subject to lawsuits alleging reverse discrimination. Court ordered affirmative action plans are mandated by the courts as part of the settlement of discrimination complaints. III. The Human Resource Recruitment Process—Human resource recruitment is any orga¬nizational activity that is designed to affect the number of people who apply for vacancies, the type of people who apply for them, and/or the likelihood that those applying for vacancies will accept positions if offered. The goal of recruitment is to ensure that when a vacancy occurs, the organization has a number of reasonably qualified appli¬cants to choose from (Figure 5.4 in text). A. Personnel policies, in relationship to recruitment, affect the nature of the vacancies for which people are required and impact the ability of the organization to recruit and its level of requiring success. 1. Internal versus External Recruiting: Job Security—A decision must be made on whether to recruit from within or outside the organization. Companies that recruit from within often use a job posting program in which vacancies are publicized on bulletin boards, in company newsletters, or in memos. Employees can apply and typically receive first consideration before the organization searches externally. Such policies make it clear that there are opportunities to advance and increase the level of skills within the organization. Example: A good example of the power of tapping internal sources of recruits is provided Edwards Lifesciences, a medical device maker that has grown an average of 7 percent a year for the last 10 years. Edwards Lifesciences identifies the 75 most critical jobs in the company, and then identifies two or three individuals who would serve as potential excellent replacements or successors. Identifying candidates early allows the company to invest in them slowly but surely and gives the company “bench strength.” 2. Employment-at-Will Policies a. Employment at will policies state that either party in the employment relationship can terminate that relationship at any rime, regardless of cause. Many legal protections exist that make it difficult for organizations to manage employment entirely “at will.” b. Companies that do not have employment at will typically have extensive due process policies that describe steps an employee can take to appeal a termination decision. Employment at will companies are only considered equally attractive to due process companies when the lack of job secu¬rity is offset by higher than average total compensation. 3. Extrinsic and Intrinsic Rewards—Lead the market pay strategy is a policy of paying higher than ¬current market wages. This creates a distinct advantage in recruiting since higher pay can make up for a job's less attrac¬tive features. However, employees in today’s labor pool are attracted to other incentives besides money. There is also pressure on human resources to deliver the best employees, so higher productivity, quality, and so on, are achieved. 4. Image advertising promotes an organization as a good place to work in general and may be particularly important for organi¬zations in highly competitive labor markets that perceive them¬selves as having a bad image. B. Recruitment Sources—Since recruitment sources are unlimited, an organization must decide how to reach the best sources of potential employees. 1. Internal versus External Sources—Relying on internal sources is useful since employees are well known and are knowledgeable about the organization and jobs. However, there may not be enough internal recruits (especially for entry level jobs); internal recruiting does not encourage creativity or change; and, if the current force is not diverse, internal recruiting will lead to a homogeneous work force, which can pose legal threats Competing Through Sustainability: Few Line Up for Jobs Abandoned by Immigrants This vignette provides a glimpse into the ethical and legal issues surrounding hiring immigrant workers and the sustainability of business models that are premised on the availability of cheap labor. The scenario described in the vignette is the Alabama labor market which was devastated by a State law preventing illegal immigrants from working. The dilemma comes from the fact that many of the jobs these immigrant laborers were doing are things that native Alabamians won’t do. Discussion Questions Is the inability to find traditional workers willing to perform the types of jobs described here a sign that the business model in some of these industries has to change? Answer: Answers may vary but the basic issue is in today’s world economy, companies have to find a way to compete with foreign companies who employee workers at often-times much lower salary levels. At the end of the day, whether these jobs are done by native or immigrant workers, the fact remains that to stay competitive, organizations do have to be cost conscious. Yes, the inability to find traditional workers for certain jobs may indicate that the business model needs to change. It suggests that the existing model may not align with current worker expectations, compensation standards, or working conditions, signaling a need for innovation in job design, recruitment strategies, or overall industry practices. Why do the laws of supply and demand not seem to hold within these industries when it comes to labor markets? Answer: Labor market behavior in this situation does seem to defy the logic of supply and demand. However, it is important to keep in mind that the wage levels for these types of jobs have been artificially kept lower than the prevalent market levels. As such, native workers are not willing to take these jobs at those wage levels. Evidence-Based HR The evidence seems to support the idea that when a company needs to replace their leader, an internal recruit is the better choice. Internal recruits last longer in terms of tenure and are ousted far less frequently than external recruits. Exercise Have students visit several different corporate websites. As a suggestion, have students visit Fortune 500 websites: http://money.cnn.com/magazines/fortune/fortune500/index.html Have students look for evidence of internal or external recruitment policies. Consider having students look for trends in terms of industry policies for recruitment and see if they can identify any patterns. For example, are there industries that tend to have more internal recruitment? Does the nature of or type of industry matter? Have students discuss. 2. Direct Applicants and Referrals a. Direct applicants are people who apply for a vacancy without prompting from an organization. b. Referrals are people who are prompted to apply for a vacancy by someone within the organiza¬tion. c. Direct applicants may have already investigated the organiza¬tion and are sold, which creates a self selection that is easier for the organization. Direct applicants tend to be one of the best sources, since they are also low cost. Integrity in Action: Anti-Poaching Agreements Spark Anti-Trust Lawsuits Some organizations attempt to “poach” competitor’s employees to hire rather than finding applicants who are not already employed. A group of high-tech firms had an unofficial agreement that they would refrain from poaching each other’s employees, which resulted in an anti-trust claim. The lawsuit was dismissed, but raises the question of the legality and ethics of such agreements and the practice of poaching itself. Discussion Question Why is having one’s best employees “poached” by a competitor such a devastating event and what steps can employers take to prevent the loss of their top talent other than engaging in secret collusions that may violate anti-trust laws? Answer: The issues here are the potential losses of proprietary information and organizational learning, lost costs of training and socialization, and issues related to the employee’s opportunity to pursue the best employment situation for themselves. 3. Advertisements in newspapers and periodicals – typically are less effective than direct applicants or referrals and is more expen¬sive. Jobs should be described very specifically in advertisement. Local newspapers, although commonly used do not target skill levels very well. Journals, periodicals, and/or cable television may be useful in reaching the appropriate audience. 4. Electronic Recruiting – The growth of the information highway as opened up new vistas for organizations trying to recruit talent. Ways to get into “e-recruiting include: a. use an organization’s own web page to solicit applications. b. use large, well known job sites such as Monster.com, HotJobs.com, or CareerBuilder.com. Competing Through Technology Unlocking the Secrets of Applicant Tracking Systems Organizations today are receiving more applications than ever before. Part of the reason for this is the ease at which an applicant can apply for a job using social media and the Internet. The case describes several key pointers for job applicants using these features to apply for jobs. It is important for applicants to recognize that if their choice of words on their resume does not match the terms described in the online job posting, many applicant tracking programs will not recognize their resume as a match (for example, if the posting asks for someone who is innovative, saying you are “creative” will likely not show up as a match). Discussion Question How useful do you feel an applicant tracking system is in procuring the best applicant for a given job? What are the potential benefits to these systems to the organization? To the applicant? Answer: Student responses may vary in response to these issues, but many younger people today view information technology as part of who they are. Important to point out however that the issue remains that a person who chooses different phrases or verbiage is not necessarily a bad choice to fill a job and that person may never get looked at. An applicant tracking system (ATS) is quite useful in procuring the best applicant for a job by streamlining the recruitment process. Benefits to the organization: 1. Efficiency: Automates resume screening and application management, saving time and reducing administrative burdens. 2. Consistency: Ensures uniform evaluation criteria and compliance with hiring regulations. 3. Data Insights: Provides analytics on recruitment metrics and helps identify the most effective sourcing channels. Benefits to the applicant: 1. Ease of Application: Simplifies the application process with user-friendly interfaces and status tracking. 2. Visibility: Increases the chances of being noticed through keyword matching and automated sorting. 3. Feedback: Offers insights into application status and, occasionally, reasons for rejections. 5. Public and Private Employment Agencies—Agencies will search their computerized inventory of individuals searching for work for an organization at no charge. a. Public employment agencies serve primarily the blue-collar labor market. b. Private employment agencies serve primarily the white-collar labor market. Theses agencies charge the organization for referrals. c. Executive search firms are often referred to as “head hunters” because they recruit executives who tend to be employed. A high level of anonymity for the executives and the organization is employed until it is clear that both sides wish to pursue an inter¬view. This is an expensive tool since the charge is roughly one-¬third to one half of the annual salary of the executive who is placed. Often, organizations consider the successful recruitment of top executives so critical that the charge is appropriate. 6. Colleges and universities may be an important source for entry ¬level professionals. To increase effectiveness, organizations employ internship programs to get early access to potential appli¬cants and to assess their capabilities directly. Interns also receive more realistic information about a potential job at the organiza¬tion. A job fair is a place where employers gather for a short time to meet large numbers of potential applicants. These are often held on campuses and can inexpensively increase visibility. 7. Evaluating the quality of recruiting sources can be done by compiling yield ratios that express the percentage of applicants who successfully move from one stage of the recruitment and selection process to another. Comparing yield ratios and the costs of various sources helps determine which sources are most effective. Quality of recruits should also be considered. A caution is provided that the sources depend on the skills that are needed and where it is logical to recruit, given those needs. (Table 5.4 and provide examples of yield ratios for different sources.) C. Recruiters—The recruiter comes late in the process, at which point an applicant has a good idea whether he or she is interested in the job. Since recruiters are perceived by the applicant to be "selling" the job, their input may be discounted. Recruiters may have more impact depending on a number of factors . 1. The Recruiter’s Functional Area—The recruiter is likely to be perceived as more credible if he or she is from the same func¬tional area the recruit is being considered for. 2. The Recruiter's Traits—Critical traits appear to be warmth and “informativeness.” 3. The Recruiter's Realism—Deceiving candidates about the nega¬tive elements of a job may increase later turnover; however, telling candidates about negative elements does not appear to inoculate them against disappointment nor make negative elements go away. Personnel policies that affect the job's attrib¬utes are likely to be more critical than recruiter realism. Enhancing Recruiter Impact—Recruiters can provide timely feedback about the status of the job search, avoid unfa¬vorable behaviors that send poor messages about the organiza¬tion, focus on inexperienced applicants with whom they might be more influential, and avoid mixing recruitment with selec¬tion. Recruiting should be done in teams, including a person from the functional area and members who are female and minority. A Look Back We opened this chapter with a story of how different companies in different industries all competed for the same valued resource: technical talent. Each organization was seeking some competitive edge that would result in their securing the most talented individuals, and each company had a different strategy depending on the company’s size, its social reputation, and the nature of the work itself. Questions 1. Discuss the advantages and disadvantages of hiring local workers versus offshoring versus bringing in immigrant labor? How does the nature of the product market affect what you might do in the labor market? Answer: Students should recognize the strengths and weaknesses with each choice.. The benefits of local workers are contributions to the economy, highly-skilled and talented workers, etc. Drawback could be the demands for higher wages by local workers. Offshoring benefits include less expense and the drawback is the potential lack of controls and ethical/safety concerns. Immigrant labor benefits include cheaper wages and willingness to do jobs others might not. Drawbacks include legal complexity involved with hiring immigrants, not hiring local workers, and the potential issues with public image. Hiring Local Workers: • Advantages: 1. Local Knowledge: Familiarity with regional market and cultural nuances. 2. Fewer Language Barriers: Easier communication and integration into the company culture. 3. Support for Local Economy: Contributes to community growth. • Disadvantages: 1. Higher Costs: Typically higher wages and benefits compared to offshore options. 2. Limited Talent Pool: May not find specialized skills locally. Offshoring: • Advantages: 1. Cost Savings: Lower wages and operational costs in some countries. 2. Access to a Global Talent Pool: Specialized skills and expertise. • Disadvantages: 1. Communication Challenges: Time zone differences and language barriers. 2. Quality Control Issues: Potential difficulty in maintaining standards. Bringing in Immigrant Labor: • Advantages: 1. Diverse Skills: Can fill labor shortages and bring unique skills. 2. Flexibility: Provides a temporary solution to labor needs. • Disadvantages: 1. Integration Challenges: Potential cultural and social integration issues. 2. Regulatory Hurdles: Complex visa and employment laws. Nature of the Product Market: The product market influences labor market decisions. High-competition markets might prioritize cost efficiency through offshoring, while those valuing local customization might favor local workers. In dynamic industries requiring specialized skills, hiring immigrant labor or offshoring might be preferable to meet evolving demands. 2. Assume you were a large and well established company that was now facing a labor surplus in some job category. Why might it be in your best interest to use some method other than layoffs to reduce this surplus, and in what sense are your options here a function of how well you did in terms of forecasting labor demand and supply? Answer: Student answers will vary. If a large and well established company is facing a labor surplus in a particular job category, it might consider cross training the employees in that category to be able to perform jobs that are not experiencing a surplus. They may also provide other types of training and development opportunities and help those employees to locate jobs within the company that are in higher demand and in a different field. The reason that these sorts of options are in the interest of the company are because it can retain current talent that it might need in the event of an upturn. Also, it would reduce unemployment claims. It would also likely maintain employee morale, since employees would likely feel that the company truly cared about the well being of its employees and did not perceive them to be entirely expendable. These options are certainly a function of how well the company did forecasting labor demand and supply, because based upon the accuracy or inaccuracy of those forecasts, there might be a large surplus of employees who the company might find it challenging to cross train or re-train (if the forecasts were inaccurate). Conversely, if forecasts were accurate, the surplus is not likely going to be unwieldy. Using methods other than layoffs to address a labor surplus can be beneficial for maintaining employee morale and preserving organizational knowledge. Alternatives like reassignment, retraining, or voluntary separation packages can be more cost-effective and less disruptive, preserving your company's reputation and avoiding the loss of valuable talent. Options and Forecasting: 1. Reassignment: Moves surplus employees to other roles where their skills are needed, which depends on accurate forecasting of labor needs across the organization. 2. Retraining: Upskills employees for different roles, which requires good forecasting of future skill requirements and changes in labor demand. 3. Voluntary Separation Packages: Offers incentives for employees to leave voluntarily, which is influenced by how well you've predicted future staffing needs and managed labor supply. Effective forecasting can help avoid surpluses and minimize the need for drastic measures, ensuring smoother transitions and better alignment with future labor needs. 3. Discuss the advantages and disadvantages of promoting workers from within your own firm versus going outside the firm to bring in external hires. How does the nature of the business situation affect this decision? Answer: Student answers will vary, but they should identify the fact that promotion from within give the benefit of an already socialized worker who may know the ins and outs of the organization’s culture. A big benefit of an external hire is bringing in “new blood” – i.e. new and fresh ideas and an outsider’s perspective. Promoting from Within: • Advantages: 1. Knowledge of Company Culture: Internal candidates are already familiar with organizational values and processes. 2. Employee Motivation: Provides career growth opportunities and enhances retention. 3. Reduced Hiring Costs: Lower recruitment and training expenses compared to external hires. • Disadvantages: 1. Limited Fresh Perspectives: May perpetuate existing practices and limit innovation. 2. Internal Conflicts: Can lead to dissatisfaction among other employees who were not promoted. 3. Skill Gaps: Might not address immediate needs for new skills or expertise. External Hiring: • Advantages: 1. New Perspectives: Brings in fresh ideas and innovative approaches that can drive change. 2. Specific Skills: Allows you to fill specific skill gaps or address expertise not available internally. 3. Competitive Advantage: Can offer a strategic edge by hiring top talent from competitors. • Disadvantages: 1. Higher Costs: Includes recruitment fees, onboarding, and training expenses. 2. Longer Integration Time: External hires may take longer to adapt to the company culture and processes. 3. Potential Risks: Uncertainty about the fit and performance of external candidates. Nature of the Business Situation: The decision is influenced by the business situation. In stable industries with a strong internal talent pool, promoting from within may be preferable. In rapidly changing or highly competitive sectors requiring specialized skills or new perspectives, external hiring may be more advantageous to drive innovation and meet immediate needs. Chapter Vocabulary These terms are defined in the "Extended Chapter Outline" section. Forecasting Leading indicator Transitional matrix Downsizing Outsourcing Offshoring Workforce utilization review Human resource recruitment Employment-at-will-policies Due process policies Direct applicants Referrals Discussion Questions 1. Discuss the effects that an impending labor shortage might have on the following three sub-functions of human resource management: selection and placement, training and career development, and compensation and benefits. Which sub-function might be most heavily impacted? In what ways might these groups develop joint, cooperative programs to avert a labor shortage? Answer: Labor shortages may have the following effects on: Selection and placement—There will be increased pressure on this function to recruit more widely, search for nontraditional recruiting sources, and perhaps to decrease the selection requirements simply to provide more desperately needed employees. Training and career development—Training will also be pressured to design a training program thee will produce "home grown" employees from within the company who can be taught the job. If people with fewer qualifications are selected, it will also be the responsibility of this group to provide skills reining, perhaps even basic skills training, that will result in reducing the gap between the people that the organization can hire and the skilled employees that must be available to meet the job demands. Compensation and benefits —There will be pressure to hire the employees who are at a premium at a rate that may challenge internal equity and even external equity. The consequence, if this is done, will be a high level of demand to reevaluate existing jobs because of the perceived inequity of incumbents. These pressures will strain the system, and a decision will have to be made regarding the cost/benefit of strategies to deal with the problem. For example, a solution may involve a short term recruiting strategy that would offer higher salaries than the organization would normally pay for the job in demand. A longer--term solution might involve a combination of recruiting, selection, and training approaches that would recruit people who have a core of skills relative to those in the jobs that are experiencing shortages. These people may be paid at salaries that fit more comfortably within the compensation system, and they can be trained in the additional required skills. 2. Discuss the costs and benefits associated with statistical versus judgmental forecasts for labor demand and labor supply. Under what conditions might either of these techniques be infeasible? Under what conditions might both are feasible but one more desirable than the other? Answer: Certainly, judgment by experts may be intuitively appealing since it appears faster and less expensive than compiling and analyzing statistics. There may not be employees available who have the skills to work with data for planning purposes. Hiring consultants to analyze the data might be very expensive, and the perception could be that the planning could be done without this laborious and expensive step. However, if the situation is relatively stable, these statistics may be the best source of projections for future planning strategies, since one could expect the future to be very similar to the past. Both these techniques might be infeasible to use when the environment is so unstable that neither past experience nor expert judgment will provide a reliable base of information. Both may be feasible when there is some instability in the environment. Statistical information could be examined in comparison to leading indicators. This might help define a relationship between actual changes in the environment and what happens to human resources. For example, in a bank, although mortgage interest rates may be unstable, there is a strong, negative correlation between mortgage interest rates and the number of analysts necessary to process mortgage applications Judgment of experts may be needed, however, to attempt a projection of what may happen to mortgage interest rates in the future. 3. Some companies have detailed affirmative action plans, complete with goals and timetables, for women and minorities and yet have no formal human resource plan for the organization as a whole. Why might this be the case? If you were a human resource specialist interviewing with this company for an open position, what would this practice imply for the role of the human resource manager in that company? Answer: Organizations may have derailed affirmative action plans because they must. They might be government contractors or they could be under a court ordered decree that forces them to have such a plan. There are no legal requirements for human resource planning and, therefore, many organizations might not possess the expertise to recognize the need for one or how to plan. The position of the human resource manager in terms of career development might be highly problematic. If the organization does not consider it necessary to plan in reference to human resources, it is also likely that human resources are considered more as a cost than as an investment that will pay off in the future. Any manager might have difficulties in moving toward his or her career goals. Also, the human resources manager might legitimately be concerned that his or her role will not involve strategizing how human resources can contribute to business goals and helping the organization achieve its goals, but will be a role or managing paperwork and the process of human resources. 4. Recruiting people for jobs that entail international assignments is becoming increasingly important for many companies. Where might one go to look for individuals interested in these types of assignments? How might recruiting practices aimed at these individuals differ from those one might apply to the "average" recruit? Answer: Some colleges and universities have majors in international trade or business. Students often have a double major in a foreign language and business. They are more likely to be interested in going abroad. People who have language skills other than English might also be a possibility, particularly if they have lived in other countries. Placing job advertisements in special interest magazines might be helpful. Recruiting practices might differ from those used for the “average” recruit, since most individuals (and their families) would probably not be interested in an international assignment. If the job will require international travel or reassignment, clearly it should be discussed early in the recruiting process. You may need a person on the recruiting team who is familiar with the language and culture where the person would be assigned. This team member would be better equipped than the average recruiter to assess the person's ability to adjust to a different culture. The family of the candidate should also be interviewed, since their interest and adaptation are critical in a successful expatriation. 5. Discuss the relative merits of internal versus external recruitment. What types of business strategies might best are supported by recruiting externally, and what types might call for internal recruitment? What factors might lead a firm to decide to switch from internal to external recruitment and vice versa? Answer: Merits of internal recruitment are that the organization will be more familiar with the motivation and work habits of the candidate, and it provides motivation to employees, since internal promotions do occur. Merits of external recruitment include: Candidates may he recently educated/trained and therefore have up to dare skills and knowledge. Candidates might be more likely to be interested in and open to change and innovation. An organization is more likely to improve the situation of under¬utilization of minorities and women. Strategies related to high levels of competition would be best supported by internal recruitment, since losing employees' knowledge could hurt the organization. There would likely be evidence internally if employees were committed to the organization. Strategies that require constant change and innovation would be better served by external recruitment. Self-Assessment Exercise Refer to the self-assessment exercise in the text. Twitter Focus In 1999, Robert Reed started Personal Financial Advisors with one employee. Six years later, Reed realized that if he wanted to grow the business, he needed to get serious about HR planning and recruitment. His strategy was to recruit a financial planner adept at giving presentations to current and potential clients—a task that was not Reed’s favorite. Eight months later, Reed made the perfect hire: an experienced financial planner relocating to Louisiana. Hiring someone with the right skills set allowed Reed to focus his efforts on managing investments and providing clients with better-than-average returns while growing the company’s overall business. Question: 1. How important is hiring someone with the right skill set? What is the “right skill set” and how do you determine it? Answer: Hiring someone with the right skill set is crucial for ensuring job performance and achieving organizational goals. Defining the “Right Skill Set”: 1. Job Requirements: Includes both technical skills (e.g., software proficiency, industry-specific knowledge) and soft skills (e.g., communication, problem-solving). 2. Organizational Fit: Aligns with the company’s culture, values, and team dynamics. Determining the Right Skill Set: 1. Job Analysis: Conduct a thorough analysis of the role to identify essential skills and competencies. 2. Performance Metrics: Review past performance data and success factors for similar roles within the organization. 3. Consultation: Engage with current employees and managers to understand the skills that lead to success in the role. Ensuring candidates possess the right skill set helps maximize productivity, enhances team cohesion, and contributes to overall business success. Exercising Strategy: The Competition for Technical Talent The competition for tech talent is among the fiercest of any industry. The case describes a few scenarios of the types of competition: “Clash of the Titans” that involves big tech industry competitors like Oracle and Microsoft competing directly for talent; “David vs. Goliath” that involves start-ups competing with industry titans; or “Apples and Oranges” where non-tech firms need tech talent and have to compete with tech competitors for these employees. Discussion Questions Assume for a moment that you were a small new company seeking talent that was in high demand. Based on the material in this chapter, how might you go about competing against larger and more established firms in terms of how, where, when, and whom you would use to recruit the best employees? Answer: Student responses may vary here, but students should demonstrate in their response that they understand the fundamentals of recruiting employees is more than just being the biggest and the best employer. They should address that finding where (both in terms of where the job posting is listed as well as geographically locating the best talent) to recruit the best employees is one key piece of the puzzle, market timing of the job posting, and who you use as a model employee to recruit the talent are all necessary for successful recruitment. Also, providing employees the intrinsic motivator of an entrepreneurial opportunity of entering the firm on the ground floor would be a good idea as well. To compete for high-demand tech talent as a small new company against larger firms, consider the following strategies: 1. How: • Highlight Unique Benefits: Emphasize unique selling points such as a dynamic work environment, flexible work arrangements, and opportunities for rapid career growth. • Offer Equity or Profit Sharing: Provide stock options or profit-sharing plans to attract candidates interested in potential financial gains from the company's growth. 2. Where: • Utilize Niche Job Boards: Post job openings on industry-specific platforms, tech community forums, and sites like GitHub or Stack Overflow. • Engage in Tech Meetups: Attend or sponsor tech meetups, hackathons, and industry conferences to network with potential candidates and showcase your company's culture. 3. When: • Build Relationships Early: Engage with talent through internships, co-op programs, or networking events to build relationships before hiring needs arise. • Flexible Hiring Timelines: Be willing to adapt your hiring timelines to accommodate top talent who might be exploring multiple opportunities. 4. Whom: • Target Passive Candidates: Reach out to passive candidates who may not be actively job-hunting but are open to exciting new opportunities. • Leverage Employee Networks: Encourage current employees to refer talented individuals from their networks, utilizing their connections to find skilled candidates. These approaches help small companies stand out in a competitive market and attract top tech talent despite their size. Assume for a moment that you were a large and well-established company, but learned recently that many of the people you were recruiting were choosing to go to smaller and less well-known upstarts. How might you go about competing against these smaller companies in terms of how, where, when, and whom you would use to recruit the best employees? Answer: Here again, students should demonstrate the importance of the where, how and who issues. However, it is also critical to recognize that perhaps these employees are leaving for better growth opportunities. As such, providing intrepreneurial opportunities and perhaps room to grow their career here would help to keep some of these valuable employees from leaving. To compete with smaller and less well-known companies when recruiting talent, a large and established company could consider the following strategies: 1. How: • Showcase Stability and Growth Opportunities: Highlight the advantages of working for a well-established company, such as job security, career advancement, and comprehensive benefits packages. • Enhance Employer Branding: Invest in building a strong employer brand that emphasizes the company’s impact, culture, and opportunities for professional development. 2. Where: • Target High-Traffic Recruitment Channels: Utilize mainstream job boards, professional networks like LinkedIn, and industry-specific sites to reach a broad audience. • Engage in Campus Recruiting: Partner with top universities and technical schools to attract emerging talent through career fairs, internships, and co-op programs. 3. When: • Be Proactive: Engage with talent early by building a pipeline through continuous networking and maintaining relationships with potential candidates even before specific job openings arise. • Offer Competitive Timelines: Streamline the recruitment process to make quick and competitive offers, addressing the urgency of the candidate's job search. 4. Whom: • Leverage Industry Leaders: Involve senior executives or well-known figures within the company in recruitment efforts to attract top talent through their influence and network. • Target Top Talent Pools: Focus on high-potential candidates who are looking for stability and growth, and emphasize the advantages of joining an established company over a startup. By leveraging these strategies, large companies can effectively compete with smaller firms and attract top talent despite their current recruitment challenges. Assume you were a large and well-established company that was now facing a labor surplus in some job category. Why might it be in your best interest to use some method other than layoffs to reduce this surplus, and in what sense are your options here a function of how well you did in terms of forecasting labor demand and supply? Answer: Here students should address the idea of the impacts of a layoff – and not just to those who are let go, but the remaining workers. Problems associated with these strategic decisions are often far bigger than the benefits derived from them. Additionally, the decision that is made should address forecasts of future trends – we don’t want to lay people off today only to turn around in 6 months and have to try to hire new people. As a large and well-established company facing a labor surplus, using methods other than layoffs can be advantageous: 1. Employee Morale and Retention: Reducing surplus through layoffs can negatively impact morale and lead to reduced trust and engagement among remaining employees. Alternatives like redeployment or offering voluntary separation can help maintain morale and avoid the negative effects of layoffs. 2. Skill Retention: Layoffs risk losing valuable skills and knowledge that could be critical for future needs. Alternatives such as retraining employees for other roles or adjusting job functions can help retain talent while aligning workforce skills with organizational needs. 3. Reputation Management: Layoffs can damage the company’s reputation and make it less attractive to future talent. Using alternatives like internal transfers, job sharing, or reduced hours can demonstrate a commitment to employees and improve the company's image. Options and Forecasting: The choice of method reflects how well the company has forecasted labor demand and supply. Accurate forecasting can lead to proactive measures such as adjusting hiring practices or retraining programs, thus minimizing the need for drastic measures like layoffs. Poor forecasting may lead to reactive and more disruptive solutions. Managing People Short-Work Programs Buffer Workers and Firms Some countries, for example Holland, have instituted programs to help employers weather financial storms such as the global economic recession between 2007 and 2008. Their model provides subsidies for employees whose employers had to cut back their hours during these difficult times. So, rather than lay workers off, employers simply cut back on their hours and government subsidies pay a part of the lost wages. This allows employees to remain employed and retain a majority of their income during these times, and it allows employers to keep talent onboard for when economic conditions improve. Discussion Questions If you were an employee in a context where there was a labor surplus, would you prefer a short-work program or would you prefer to just quit and find a new job? Answer: Student responses might vary but a suggested response could be that the financial crisis and the associated problems in the labor market, where the availability of jobs have declined and people are finding themselves looking very hard to find openings, are creating the conditions whereby people won’t have the luxury of simply shopping for a new job. At least with short-work, the person is able to remain employed with the hopes that when the economy picks back up, their job will return to full time. As an employee facing a labor surplus, the preference between a short-work program and quitting for a new job would depend on several factors: 1. Short-Work Program: • Advantages: Provides job security and income continuity while adjusting work hours. It might be preferable if it offers stability and if the job market is challenging. • Considerations: If the reduction in hours affects income significantly or if there are limited opportunities for additional work, it may be less appealing. 2. Quitting and Finding a New Job: • Advantages: Potentially offers a fresh start and possibly better career opportunities. It might be more attractive if the labor market is robust and there are promising job prospects. • Considerations: Involves risks such as job search stress, potential gaps in employment, and financial instability during the transition. Overall, the choice would depend on personal financial stability, job market conditions, and career goals. If you were an employer, how does a short-work program help you out in times of trouble, and why might you be tempted to be in trouble all the time? Answer: Again, student response may vary but one suggested response could be that employers are able to retain their talent during down-turns in the economy. This allows them to have a faster response time tp ramp up production/operations again when the times improve. Also, due to the reduction in paid working hours for employees during time of a downturn, employers are able to save money – making a downturn much more palatable, if not attractive, from that standpoint. Short-Work Program Benefits: 1. Cost Savings: Reduces labor costs without resorting to layoffs, allowing the company to maintain a skilled workforce and avoid the costs associated with hiring and training new employees later. 2. Employee Retention: Helps retain valuable employees and maintain morale, which can be crucial for long-term recovery and continuity when business conditions improve. 3. Flexibility: Provides flexibility to adjust work hours according to fluctuating business needs, rather than making permanent staffing changes. Temptation to Be in Trouble: 1. Cost Control: Frequent use of short-work programs might be tempting to control costs without making more permanent, potentially disruptive decisions like layoffs or restructuring. 2. Operational Continuity: Keeping the workforce employed, even at reduced hours, maintains operational continuity and employee readiness for future upswings in business activity. However, relying on such programs frequently can lead to issues like decreased employee engagement and potential negative perceptions of job security, so it's important to balance short-term cost control with long-term strategic planning. From a larger societal point of view, should governments support short-work programs with taxpayer money or is this just a give-away program that promotes failing employers and unnecessary employees? Answer: Responses here will likely be divided along political ideologies. We should expect that those who have a more liberal view of government will say that the government should support these programs, while more conservative people will likely see it as a give-away and as a program that supports businesses that would likely fail in the free market. From a societal perspective, government support for short-work programs can be justified for several reasons: 1. Economic Stability: Short-work programs help stabilize the economy during downturns by maintaining employment levels and consumer spending, reducing the need for broader unemployment benefits. 2. Preservation of Skills: By supporting businesses in keeping skilled workers, governments help preserve valuable skills and avoid the costs associated with retraining or hiring new employees when economic conditions improve. 3. Preventing Greater Harm: These programs can prevent deeper recessions and larger economic problems that would arise from widespread layoffs, which could lead to higher social welfare costs and economic instability. While it's important to ensure that support is targeted effectively and that businesses are not misusing it, the overall societal benefits of maintaining employment and economic stability can outweigh concerns about promoting failing businesses. HR In Small Business: For Personal Financial Advisors, a Small Staffing Plan With a Big Impact Robert Reed’s small financial planning firm was in need of growth. His present staff of himself and an administrative assistance would not support the level of growth he wanted for the company. Reed did not want to grow his hours in the office however. Additionally, he wanted to concentrate on managing the investments so he needed to hire someone to do mostly client presentations. He was able to find such a person and the business plan worked. A few years later, Reed hired another financial planner who is working on his certification. Discussion Question Is a company ever too small to need to engage in human resource planning? Why or why not? Discuss whether you think Robert Reed planned his hiring strategy at an appropriate time in the firm’s growth. Answer: This is a personal preference but likely, if students are taking heed to the case and the chapter material, they will recognize that a prudent business will have some level of HR planning in place if they have any aspirations to grow the business, regardless of how small they are at present. Importance: Even small companies need human resource planning to align their workforce with their business goals, manage growth, and address challenges effectively. Proper planning helps ensure that the right talent is in place as the company evolves, preventing issues related to staffing, skills gaps, or operational inefficiencies. Robert Reed’s Timing: Planning the hiring strategy at an early stage in the firm’s growth is crucial. It allows for proactive recruitment and development, aligning talent acquisition with the company's expansion goals. If Reed waited too long, he might have faced challenges in scaling the business smoothly. Using Table 5.3, review the options for avoiding a labor shortage, and discuss how well the options besides new hires could have worked as ways for Reed to reach his goals for growth. As you do so, consider qualities of a financial-planning business that might be relevant (for example, direct client contact and the need for confidentiality). Answer: The other options besides new hires do not seem to be very attractive given the need for quality in this industry. The other options also would not provide a long-term solution as would be needed in a business that relies heavily on building a trusting, long-term client relationship. Options for Avoiding a Labor Shortage: Review of Options (from Table 5.3): • Employee Development: Investing in current employees’ skills can help meet growth needs without immediate new hires. Training employees for new roles or responsibilities can align their skills with the company’s expanding requirements. • Employee Retention: Improving retention through incentives or career development opportunities can reduce turnover and help maintain a stable workforce during growth phases. • Temporary or Contract Workers: Hiring temporary or contract workers can provide flexibility to meet short-term needs without committing to permanent hires. Relevance for a Financial-Planning Business: For a financial-planning firm, maintaining confidentiality and client trust is critical. Employee development and retention are effective for preserving client relationships and upholding confidentiality. Temporary or contract workers could be used for specific tasks but may not fit well with the need for consistent client contact and trust. Suppose that when Reed was seeking to hire a certified financial planner, he asked you for advice on where to recruit this person. Which sources would you suggest, and why? Answer: Answers here will vary, but should reflect conscious thought about where certified planners might be available – and likely hiring direct from universities would not provide that level of qualification. Recruitment Sources for a Certified Financial Planner: • Professional Associations: Recruit from financial planning associations or organizations, such as the Certified Financial Planner Board of Standards, to find qualified candidates with the necessary certifications and industry credibility. • Industry Conferences and Networking Events: Attend industry events to connect with potential candidates who are already established in the field and may have the required experience and expertise. • Referrals from Current Employees or Industry Contacts: Use referrals from existing employees or industry contacts to find trusted candidates who are familiar with the firm's values and requirements. These sources are effective for finding candidates with the specific qualifications needed for a financial-planning firm, ensuring they meet the necessary standards for certification and client interaction. Manager’s Hot Seat Diversity: Mediating Morality-Please refer to the Asset Gallery on the OLC for Hot Seat videos and notes. I. Introduction The diversity of employees and the potential conflict that may arise as a result is the focus of this scenario. Specifically, sexual orientation as a dimension of workplace diversity is presented here. This scene provides a background for a rich and compelling discussion of how to handle difficult issues related to individual differences. Applying this situation to other dimensions of diversity (e.g., religion, gender) will further the discussion and highlight to students the challenges of managing a diverse workforce. II. Learning Objectives To assess students’ understanding of workplace diversity and diversity management. To analyze and evaluate approaches to managing diversity in the workplace. To identify equal employment laws relevant to diversity management. III. Scenario Description: Overview: At the conclusion of a previous meeting between Syl Tang and two employees, Daniel Simmons and Bob Franklin, Daniel asked Tang about the same-sex partner benefits that he had requested earlier, incidentally informing Bob Franklin that he was homosexual. Bob expressed both discomfort and disapproval, and refused to continue to work with Daniel as a result of this revelation. Tang suggested meeting with each of them separately to discuss their concerns and then to regroup and discuss a solution. The individual meetings have taken place and now they are meeting together. Profile: Syl Tang is the Senior Supervisor of Research and Production at Earth First Pharmaceuticals, a company dedicated to the research and production of vaccines for various diseases. She manages eight different teams with specific areas of specialization. Daniel Simmons is a Vaccines Manager. He is an expert in tropical plants and botanical remedies. He leads a team of scientists and collaborates with other research teams at Earth First. He is also active in procuring funding for further research. Bob Franklin is a Natural Resources Manager and is an expert in certain types of chemical re-actives. In his role as Natural Resources Manager, he leads a team of scientists and collaborates with other research teams at EarthFirst. He is also active in procuring funding for further research. References: The references included in the DVD are: Dimensions of Workplace Diversity (PPT 10-3) Managerial Roles and Diversity (PPT 10-4) Promoting Effective Management of Diversity (PPT 10-6) Major Equal Employment Laws (PPT 10-9) Back History: Syl has been the supervisor for seven years and is highly respected and regarded. Her teams often cross-collaborate on special projects – each team has a specialized field of expertise. The teams are quite large, totaling over 100 people. With such a large department, Syl has less one on one contact with the employees than she would like. Simmons and Franklin have not worked together often, just on one or two short-term projects. They are currently collaborating on a high-pressure project, heading down the homestretch. Nothing out of the ordinary has happened at the office for a while. Tang is compiling her end of the month reports, without much stress or pressure. Simmons and Franklin are at the stage of their joint project where they are separately recording the joint findings as it pertains to their field of expertise. Simmons is gay and just started planning a commitment ceremony with his partner of 4 years. Simmons has never made any declaration in the office about being homosexual – some people know, some don’t. Scene Set-up: Simmons, Franklin, and Tang meet to discuss how they can meet the project’s objectives. Scene Location: Tang’s office The Meeting - Summary: Syl explains that she and Bob have discussed a solution that would enable two of Bob’s employees to take on a larger responsibility and still meet the needs of the project. Daniel states that Bob simply doesn’t want to work with him anymore because he is a gay man. He is concerned that if the word gets out that Bob was uncomfortable working with Daniel and found another solution, then a precedent will be set that negatively impact Daniel’s career. Syl argues that if Daniel didn’t get along with another co-worker she would not make Daniel work with him/her if there was another equally viable solution. She says that no one’s personal life will be discussed outside of this meeting and Daniel strongly disagrees. Syl suggests that Daniel come up with an alternative proposal and discuss it with her on Monday. Afterthoughts – Summary: Syl admits that Daniel has a good point because Bob probably will tell others that Daniel is gay. She doesn’t feel that Daniel is being discriminated against because as long as the project is completed well, he will receive the credit regardless of how the other team was staffed. She suggests that Bob should probably attend sensitivity training but says that there’s not much that can be done about employee’s personal feelings. Dossier: The specific artifacts included in the DVD are: Benefits Policy Excerpt Daniel Simmon’s Engagement Invitation Harassment Policy IV. Discussion Questions: The References and related Discussion Questions may be found in PowerPoint slides 10-1 to 10-9 on the instructor’s side of the text’s Website.. Learning Objective #1: To assess students’ understanding of workplace diversity and diversity management. The Dimensions of Workplace Diversity are provided in PPT 10-3. List all of the dimensions of diversity you observed in this scenario. Answer: Students will point out evidence of the diversity, beyond sexual orientation present among the three employees. Race, ethnicity, age, gender, behavioral style, occupation 1. Dimensions of Workplace Diversity: From PPT 10-3, the dimensions of diversity typically include: • Race and Ethnicity • Gender • Age • Disability • Sexual Orientation • Religion • Socioeconomic Status • Education Level • Cultural Background • Work Experience • Marital Status You would need to observe the specific scenario to identify which of these dimensions are present. Which of the managerial roles shown on PPT 10-4 did Syl demonstrate? Answer: Syl took on the role of the disturbance handler and liaison. From PPT 10-4, typical managerial roles include: • Interpersonal Roles: Figurehead, Leader, Liaison • Informational Roles: Monitor, Disseminator, Spokesperson • Decisional Roles: Entrepreneur, Disturbance Handler, Resource Allocator, Negotiator To determine which roles Syl demonstrated, consider the scenario specifics, such as Syl's interactions with others, how they managed information, and decision-making processes. How effective was Syl in performing the roles you cited in #2? Answer: Syl’s approach was very task-focused and she was interested in finding ways to separate the two co-workers rather than figuring out a way for them to work together. To assess Syl's effectiveness: • Interpersonal Roles: Evaluate how well Syl built relationships, motivated team members, and represented the company. • Informational Roles: Consider how effectively Syl gathered, shared, and communicated information. • Decisional Roles: Review Syl's ability to innovate, handle disruptions, allocate resources, and negotiate effectively. The effectiveness would be determined by how well Syl met these roles' requirements and contributed to organizational success. Specific examples from the scenario would provide insight into Syl's performance in these roles. Learning Objective #2: To analyze and evaluate approaches to managing diversity in the workplace. Provide examples from the scenario in which Syl either effectively or ineffectively promoted diversity. Use the information in PPT 10-6 to support your answer. Answer: Syl did not effectively increase the accuracy of perceptions or encourage flexibility. She seemed very willing to let Bob change the staffing of the project simply because he was uncomfortable around a gay man. Thus, he has predicted that a negative interaction will take place simply because Daniel is gay, when they have been working together fine in the past. Syl should attempt to challenge Bob on this belief. She also did not empower Daniel to challenge discriminatory behavior. When Daniel did, she shut him down and explained that this was an appropriate solution. She provided an analogy of two co-workers who don’t get along – a similar solution would work for them. 1. What is Syl’s objective [when suggesting to delegate certain portions of Bob’s work to Ralph and Jennifer]? Avoid conflict Complete project Mend team Syl states that her goal is to complete the project. It seems she is also interested in avoiding conflict by separating the two co-workers. There is no indication that she wants to mend the team. 2. Daniel’s perception [that Syl is letting Bob’s personal opinion affect a working relationship] is: Clouded Accurate Biased Syl believes that Daniel’s perception is clouded. Students should debate this issue. It seems that it is accurate given the fact that the working relationship is ceasing and Syl is trying to find alternative staffing models to complete the project. 3.How should Syl respond [to personal attacks in the meeting]? Mediate Change topic End meeting Syl believes she should change the topic. Again, students should discuss the pros and cons of this action. What are the dangers of not addressing the issue at hand, what are the advantages? 4. What is the main issue [when Syl states there is not going to be a discussion of anybody’s personal life]? Confidentiality Completing project Upholding morals Syl believes the main issue is completing the project. Confidentiality as a concern doesn’t make much sense since there was an email invitation to Daniel’s engagement party distributed to the entire company. 5. Why does Syl propose this [having Daniel come up with an alternative solution]? Shirk responsibility Mediation tactic Empower Daniel Syl is attempting to empower Daniel. Students should discuss the effectiveness of this approach. Isn’t it clear that Daniel wants to continue the working relationship? What valid reason has been given to change the working relationship? Learning Objective #3: To identify equal employment laws relevant to diversity management. According to Title VII of the Civil Rights Act of 1964, is Daniel being unlawfully discriminated against (see PPT 10-9)? Answer: No, Title VII does not protect people from discrimination on the basis of sexual orientation. However, same-sex sexual harassment was found to be illegal by the Supreme Court in Oncale vs. Sundowner Offshore Service, In. (1998). According to EarthFirst’s Harassment policy, is Daniel being discriminated against? Answer: Yes, the policy clearly states that employees who feel they are being discriminated against on the basis of their sexual orientation have recourse. What are the long-term implications of allowing Bob to refuse to work with Daniel? Answer: If Syl allows and condones this action, it could become a slippery slope. Daniel has a point (and Syl admits this in the Afterthoughts) that this will set a precedent for other employees to not accept Daniel because he is different from them. What actions should Daniel take next if he is separated from other employees? Answer: Daniel should follow the procedures clearly defined in the company’s harassment policy. HRM Failures Top Case 5: No Poaching Allowed When unemployment is low or demand is high for a certain type of job candidate, the competition for those workers can become fierce—and unlawful. In 2004, the labor market in Tulsa, Okla., was particularly tight for finance professionals. IBM had contracted with staffing firm AcctKnowledge on a three-year deal to supply 88 finance workers to serve as temporary staff in the computer maker’s Tulsa office. During the third year of the contract, however, IBM abruptly terminated the relationship and awarded the work to a rival staffing firm, Manpower. AcctKnowledge subsequently sued IBM and Manpower, charging that IBM unlawfully terminated its contract by not providing the contract’s stipulated 30-day notice. The suit also accused Manpower of “poaching” the temporary workers placed at IBM by AcctKnowledge, saying Manpower used threats and other tactics against the temporary workers as they reported for work at IBM’s Tulsa office. According to the suit, on October 23, 2007, Manpower representatives stood at entrances to the IBM building, soliciting temporary workers and distributing invitations to “informational sessions.” In those invitations, AcctKnowledge’s temporary workers learned IBM had terminated its relationship with AcctKnowledge. According to the Manpower representatives, if the temps wanted to keep their jobs at IBM, they would need to leave AcctKnowledge and sign on with Manpower. While poaching is common in many industries, HR experts warn that it’s a dangerous strategy. Not only does it not help expand the pool of qualified candidates, but poaching also leads to wage inflation. What’s more, when high performers are recruited en masse out of an organization, workplace morale suffers. Question If you were an employer, what would you do to protect your workforce against poachers? Possible answers Make sure contracts are written clearly and contain provisions that protect your organization in the event of nonperformance by the other party. Be ready to follow through on breached agreements or contracts. Periodically assess your employees’ job satisfaction; highly satisfied workers are less likely to leave their employer. To protect your workforce against poachers, consider the following strategies: 1. Strengthen Employment Agreements: Include non-solicitation clauses in employment contracts to deter employees from accepting offers from poaching firms. Ensure these clauses are clear and legally enforceable. 2. Foster a Positive Work Environment: Enhance employee engagement and satisfaction through competitive compensation, career development opportunities, and a supportive work culture. A happy and committed workforce is less likely to be swayed by poaching attempts. 3. Monitor and Respond to Poaching Activities: Keep an eye on industry trends and competitor activities. If poaching attempts are detected, take swift action to address the situation, such as by reinforcing loyalty and addressing any underlying issues that might make employees more susceptible to poaching. These actions help reduce the attractiveness of poaching offers and improve employee retention. Case: AcctKnowledge v IBM, 2009 U.S. Dist. Lexis 43623. Sources: John Zappe, “Tulsa Lawsuit Is Unusual and May Be a Loser,” ere.net, November 14, 2007, http://www.ere.net; Laurie Winslow, “Staffing Firms File Suits against Manpower, IBM,” Tulsa World, November 2, 2007, http://www.tulsaworld.com; Paul McDougall, “IBM, Manpower Accused Of Employee Poaching,” InformationWeek, November 1, 2007, http://www.infoweek.com; Deborah Perelman, “IBM Hit with Poaching Lawsuit,” eWeek Careers, November 5, 2007, http://www.careers.eweek.com; TECHWEB, “IBM, Manpower Accused of Employee Poaching,” November 1, 2007, http://www.techweb.com. Solution Manual for Human Resource Management Raymond Noe, John Hollenbeck, Barry Gerhart, Patrick Wright 9780077164126
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