Lesson 7.

Staffing
7.1 INTRODUCTION

After an organization's structural design is in place, it needs people with the right skills, knowledge, and
abilities to fill in that structure. People are an organization's most important resource, because people
either create or undermine an organization's reputation for quality in both products and service. In
addition, an organization must respond to change effectively in order to remain competitive. The right
staff can carry an organization through a period of change and ensure its future success. Because of the
importance of hiring and maintaining a committed and competent staff, effective human resource
management is crucial to the success of all organizations.

7.2 MEANING OF STAFFICNG

Human resource management (HRM), or staffing, is the management function devoted to acquiring,
training, appraising, and compensating employees. In effect, all managers are human resource managers,
although human resource specialists may perform some of these activities in large organizations. Solid
HRM practices can mold a company's workforce into a motivated and committed team capable of
managing change effectively and achieving the organizational objectives.

Understanding the fundamentals of HRM can help any manager lead more effectively. Every manager
should understand the following three principles:

All managers are human resource managers.

Employees are much more important assets than buildings or equipment; good employees give a
company the competitive edge.

Human resource management is a matching process; it must match the needs of the organization with the
needs of the employee.

Determining Human Resource Needs

Staffing is an ongoing process that begins with finding the right people through proper planning,
recruiting, and selecting. But staffing doesn't end once employees are hired; management must keep and
nurture its people via training, appraising, compensating, and implementing employment decisions that
determine such things as promotions, transfers, and layoffs.

7.3 HUMAN RESOURCE PLANNING

The first step in the staffing process involves human resource planning. Human resource planning begins
with a job analysis in which descriptions of all jobs (tasks) and the qualifications needed for each position
are developed. A job description is a written statement of what a jobholder does, how it's done, and why
it's done. It typically portrays job content, environment, and conditions of employment. The job
specification states the minimum acceptable qualifications an incumbent must possess to perform a given
job successfully. It identifies the knowledge, skills, and abilities needed to do the job effectively.

Job analysis is then followed by a human resource inventory, which catalogs qualifications and interests.
Next, a human resource forecast is developed to predict the organization's future needs for jobs and
people based on its strategic plans and normal attrition. The forecast is then compared to the inventory to
determine whether the organization's staffing needs will be met with existing personnel or whether
managers will have to recruit new employees or terminate existing ones.

7.4 RECRUITING STRATEGIES

Recruitment includes all the activities an organization may use to attract a pool of viable candidates. Keep
in mind that recruiting strategies differ among organizations. Although one may instantly think of campus
recruiting as a typical recruiting activity, many organizations use internal recruiting, or promote-from-
within policies, to fill their high-level positions. Open positions are posted, and current employees are
given preferences when these positions become available. Internal recruitment is less costly than an
external search. It also generates higher employee commitment, development, and satisfaction because it
offers opportunities for career advancement to employees rather than outsiders.

If internal sources do not produce an acceptable candidate, many external recruiting strategies are
available, including the following:

Newspaper advertising

Employment agencies (private, public, or temporary agencies)

Executive recruiters (sometimes called headhunters)

Unions

Employee referrals

Internship programs

Internet employment sites

But there's more to recruiting than just attracting employees; managers need to be able to weed out the top
candidates. Once a manger has a pool of applicants, the selection process can begin.

7.4.1 SELECTING THE BEST PERSON FOR THE JOB

Having the right people on staff is crucial to the success of an organization. Various selection devices
help employers predict which applicants will be successful if hired. These devices aim to be not only
valid, but also reliable. Validity is proof that the relationship between the selection device and some
relevant job criterion exists. Reliability is an indicator that the device measures the same thing
consistently. For example, it would be appropriate to give a keyboarding test to a candidate applying for a
job as an administrative assistant. However, it would not be valid to give a keyboarding test to a candidate
for a job as a physical education teacher. If a keyboarding test is given to the same individual on two
separate occasions, the results should be similar. To be effective predictors, a selection device must
possess an acceptable level of consistency.

7.5 SELECTION TECHNIQUES

Application forms
For most employers, the application form is the first step in the selection process. Application forms
provide a record of salient information about applicants for positions, and also furnish data for personnel
research. Interviewers may use responses from the application for follow-up questions during an
interview.

These forms range from requests for basic information, such as names, addresses, and telephone numbers,
to comprehensive personal history profiles detailing applicants' education, job experience skills, and
accomplishments.

Testing
Testing is another method of selecting competent future employees. Although testing use has ebbed and
flowed during the past two decades, recent studies reveal that more than 80 percent of employers use
testing as part of their selection process.

Again, these tests must be valid and reliable. As a result, a manager needs to make sure that the test
measures only job-relevant dimensions of applicants.

Most tests focus on specific job-related aptitudes and skills, such as math or motor skills.

Interviews
Another widely used selection technique is the interview, a formal, in-depth conversation conducted to
evaluate an applicant's acceptability. In general, the interviewer seeks to answer three broad questions:

Can the applicant do the job?

Will the applicant do the job?

How does the applicant compare with others who are being considered for the job?

Interviews are popular because of their flexibility. They can be adapted to unskilled, skilled, managerial,
and staff employees. They also allow a two-way exchange of information where interviewers can learn
about the applicant and the applicant can learn about the employer.

Interviews do have some shortcomings, however. The most noticeable flaws are in the areas of reliability
and validity. Good reliability means that the interpretation of the interview results does not vary from
interviewer to interviewer. Reliability is improved when identical questions are asked. The validity of
interviews is often questionable because few departments use standardized questions.

Managers can boost the reliability and validity of selection interviews by planning the interviews,
establishing rapport, closing the interview with time for questions, and reviewing the interview as soon as
possible after its conclusion.

Other selection techniques

Reference checking and health exams are two other important selection techniques that help in the
staffing decision.
Reference checking allows employers to verify information supplied by the candidate. However,
obtaining information about potential candidates is often difficult because of privacy laws and employer
concerns about defamation lawsuits.

Health exams identify health problems that increase absenteeism and accidents, as well as detecting
diseases that may be unknown to the applicant.

7.6 ORIENTATION AND TRAINING PROGRAMS

Once employees are selected, they must be prepared to do their jobs, which is when orientation and
training come in. Orientation means providing new employees with basic information about the employer.
Training programs are used to ensure that the new employee has the basic knowledge required to perform
the job satisfactorily.

Orientation and training programs are important components in the processes of developing a committed
and flexible high-potential workforce and socializing new employees. In addition, these programs can
save employers money, providing big returns to an organization, because an organization that invests
money to train its employees results in both the employees and the organization enjoying the dividends.

7.6.1 Orientation
Orientation programs not only improve the rate at which employees are able to perform their jobs but also
help employees satisfy their personal desires to feel they are part of the organization's social fabric. The
HR department generally orients newcomers to broad organizational issues and fringe benefits.
Supervisors complete the orientation process by introducing new employees to coworkers and others
involved in the job. A buddy or mentor may be assigned to continue the process.

7.6.2 Training needs

Simply hiring and placing employees in jobs does not ensure their success. In fact, even tenured
employees may need training, because of changes in the business environment. Here are some changes
that may signal that current employees need training:

Introduction of new equipment or processes

A change in the employee's job responsibilities

A drop in an employee's productivity or in the quality of output

An increase in safety violations or accidents

An increased number of questions

Complaints by customers or coworkers

Once managers decide that their employees need training, these managers need to develop clear training
goals that outline anticipated results. These managers must also be able to clearly communicate these
goals to employees.

7.6.3 Training methods

Most training takes place on the job due to the simplicity and lower cost of on-the-job training methods.
Two popular types of on-the-job training include the following:

Job rotation. By assigning people to different jobs or tasks to different people on a temporary basis,
employers can add variety and expose people to the dependence that one job has on others. Job rotation
can help stimulate people to higher levels of contributions, renew people's interest and enthusiasm, and
encourage them to work more as a team.

Mentoring programs. A new employee frequently learns his or her job under the guidance of a seasoned
veteran. In the trades, this type of training is usually called an apprenticeship. In white-collar jobs, it is
called a coaching or mentoring relationship. In each, the new employee works under the observation of an
experienced worker.

7.7 EVALUATING EMPLOYEE PERFORMANCE

Employee performance should be evaluated regularly. Employees want feedback—they want to know
what their supervisors think about their work. Regular performance evaluations not only provide feedback
to employees, but also provide employees with an opportunity to correct deficiencies. Evaluations or
reviews also help in making key personnel decisions, such as the following:

Justifying promotions, transfers, and terminations

Identifying training needs

Providing feedback to employees on their performance

Determining necessary pay adjustments

Most organizations utilize employee evaluation systems; one such system is known as a performance
appraisal. A performance appraisal is a formal, structured system designed to measure the actual job
performance of an employee against designated performance standards. Although performance appraisals
systems vary by organizations, all employee evaluations should have the following three components:

Specific, job-related criteria against which performance can be compared

A rating scale that lets employees know how well they're meeting the criteria
Objective methods, forms, and procedures to determine the rating

Traditionally, an employee's immediate boss conducts his or her performance appraisal. However, some
organizations use other devices, such as peer evaluations, self-appraisals, and even customer evaluations,
for conducting this important task.

The latest approach to performance evaluation is the use of 360-degree feedback. The 360-degree
feedback appraisal provides performance feedback from the full circle of daily contacts that an employee
may have. This method of performance appraisal fits well into organizations that have introduced teams,
employee involvement, and TQM programs.

7.8 MAKING EMPLOYMENT DECISIONS

Employment decisions go beyond determining which employees are due for raises. Through regular,
objective performance appraisals, managers acquire information to make and implement decisions about
promotions, transfers, demotions, separations, and compensation.

In most organizations, outstanding employees are recognized for their hard work and outstanding
performances, and offered promotions. A promotion generally means rewarding an employee's efforts by
moving that person to a job with increased authority and responsibility.

Downsizing has led many firms to rely on lateral moves or transfers instead of promoting employees. A
lateral move can act as an opportunity for future vertical advancement because it can broaden an
employee's experiences and add skills.

On the other hand, sometimes employees' performances signal that they aren't adapting well to their jobs
and may need fewer responsibilities. One option is a demotion, or reassignment to a lower rank or less
prestigious position. Demotions are not a popular technique because of the stigma attached to this move.
A misconception is that demotions should be used as punishment for ineffective performance.

The departure of an employee from an organization is referred to as separation. Separation may be

voluntary or involuntary. Resignations and retirements are voluntary separations. Involuntary separations
are layoffs and/or firings. Lately, the rash of downsizing throughout the United States has resulted in
many layoffs.

Sometimes, however, an employee must be terminated because of poor performance. Dismissal or firing
of employees should occur only on the basis of just cause and only after all reasonable steps to
rehabilitate the employee have failed. In some cases, such as gross insubordination or theft, immediate
dismissal is required.

7.9 COMPENSATING EMPLOYEES

Employee compensation refers to all work-related payments, including wages, commissions, insurance,
and time off.

Wages and salaries are the most obvious forms of compensation and are based on job evaluations that
determine the relative values of jobs to the organization. Under the hourly wage system, employees are
paid a fixed amount for each hour they work. The system is generally used for lower skilled occupations.
Salaried employees receive a fixed sum per week or month, no matter how many hours they work. Most
professional positions are salaried; the reality is that these jobholders typically work in excess of a
“minimum” 40-hour workweek.

Some occupations are compensated through incentive pay programs. Salespeople typically receive
commissions based upon the quantities of goods they sell. Some sales compensation plans contain
elements of both a salary and commission. A production worker's pay may be based upon some
combination of an hourly wage and an incentive for each “piece” he or she makes. Some employees are
offered merit awards as a reward for sustained superior performance.

Employee benefits are supplements to wages or pay. Some benefits, such as unemployment and worker's
compensation, are legally mandated. Other benefits are optional and help build employee loyalty to an
organization, including the following:

Health insurance

Pension plans

Employee discounts

Vacation, sick, and personal days

Bonuses (incentive money paid to employees in addition to their regular compensation)

Profit-sharing (money from a portion of the company profits used to supplement regular compensation)

Stock options (a plan that permits employees to buy shares of stock in the employee's firm at or below the
present market value)

A top management executive is given benefits unique to his or her status. Additional executive benefits
are termed perquisites (perks).