Evolution of HRM Function

Personnel Administration Scientific Management Human Relations movement Government regulation Human Resources movement Strategic human resource management

HRM Practices
Human Resource Planning Job analysis Recruitment and selection Compensation and benefits Training and development Performance appraisal and management

In a regulatory environment

HRM Responsibility
Company Leadership
CEO/ Executive leve Front-line management

Human Resources Professionals

Executives Generalists Specialists

Competitive Advantage
Cost strategy Product differentiation Link to HR practices

Resource Based View

Rare Valuable Imperfectly imitable Non-substitutable

Competitive Challenges to HRM

Global challenge Satisfying stakeholders Economy Legal environment Technology advances Changing demographics

Human Resource Planning

Organizational Planning
Organizational Mission Scan environment Set strategic goals Formulate strategic plans

Sample Mission Statement

Southwest Airlines:
The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.

Human Resource Planning

Strategic Plans include:
Technological forecasts Economic forecasts Organizational planning Investment planning Annual operating plans

HR Planning- Demand Forecasting

Statistical Analysis
Business factors Trend analysis Ration Analysis

Judgmental Analysis
Brainstorming Delphi Technique Sales force estimates

Other- Unit-demand

HR Planning- Supply Forecasting

Internal
Assess current workforce Skills inventory Succession planning

HR Planning- Actions
When labor demand exceeds labor supply (tight)
training or retraining succession planning promotion from within subcontracting use of part-time/ temporary workers use of overtime

HR Planning- Actions
When labor supply exceeds labor demand (loose)
pay cuts reduced hours work-sharing voluntary early retirements inducements to quit (eg. Severance pay) layoffs

Environmental Scanning
Economic, social, political factors Government and legislation Population, workforce demographics Competition, markets Technology

Exercise- Trend Analysis

Aging of the labor force Shift from manufacturing economy to service economy Increasing number of dual career families Increasing diversity of workforce (more women and minorities)

Human Resource Information Systems

Created for administrative purposes Used also to support decision-making Typically a relational database Often managed by an HR group

Data Collected by an HRIS

Employee Data Name Social security number Date of birth Gender Race Marital Status Address Telephone Number Emergency Contact Dependent Information Organization/Job Data Pre-employment test scores Job title Job grade Salary Benefit selections Performance appraisal ratings Promotional history Corrective action records Attendance history Training records

Functional Use of Data

Functions Using Data Compensation and Benefits Health and Safety Performance Appraisal Training and Development EEO/AA Recruiting and Placement Labor Relations Regularly Generated/Ad hoc Reports Payroll runs Benefit costs Recruiting effectiveness Supply/demand forecasting Transaction histories Training completed Adverse impact analysis

Who can access/use the HRIS

HR Staff Managers Strategic planners Employees

Important Considerations in HRIS Implementation

Return on investment Off-the shelf vs. customization Confidentiality Legal considerations

Intranets- HR Uses
Job posting On-line training and scheduling Employee manual Employee communications and messages Self-service file maintenance Benefit enrollment

Intranets and Competitive Advantage

Strategic Uses: Improve communication effectiveness Knowledge management Support innovation

Intranets must have:

Effective management Culture that supports information sharing User training Employee empowerment to use Organized content

Analyzing HRIS Data

Data-mining Other Statistical Analysis Data-warehousing

Examples of Relationships in HRIS

What are some characteristics of applicants that are eventually successful in the organization? Is there a relationship between merit increases and improved performance? Do benefit selections affect turnover? Are there common career paths in the organization? Is there a relationship between promotional history and length of service? Are there any attributes that make an employee a productive telecommuter? Is there a relationship between absenteeism and performance? Is there a profile of a typically successful employee?

Outline of Legal Considerations

Regulatory Model Equal Employment Opportunity Workplace Justice Laws Pay and Benefit Legislation Labor Unions Health and Safety

EEO Legislation
1964: Title Vll Civil Rights Act 1967: Age Discrimination in Employment Act 1978: Pregnancy Discrimination Act 1986: Immigration Reform & Control Act 1990: Americans with Disabilities Act 1991: Civil Rights Act

Regulatory Model
Regulatory Action
Rulings Written regulations Complaint investigations Technical assistance Lawsuits

Concerns
Fairness issues Economic disparity Changing material values Interest group agendas Political party mandates Loop-holes in current legislation

Laws
Passed by congress Passed by state legislature Presidential executive orders

Agencies
Federal agencies State agencies Independent commissions

Management Responses
Planning compliance strategies Formulating appropriate HR policies Briefing and training employees and managers Defending lawsuits Working with government agencies lobbying for policy changes

Challenges to Laws

State Court System

Federal Court System

Opinions and Decisions

Types of Discrimination
Disparate Treatment
Differential treatment of protected class individuals

Disparate Impact
Identical treatment of protected class individuals, but differential outcomes

Defenses Against Discrimination

Job relatedness Business necessity Bona Fide Occupational Qualification Bona Fide Seniority System Voluntary Affirmative Action Program Demonstrate no adverse impact

Proving Adverse Impact

4/5 Rule - comparison of minority/majority selection ratio If selection ratio is below 4/5 or 80%- then there is adverse impact

Adverse Impact- Examples

#hired/ #applied- compute for each group
Female: 30/100= 30%; Male: 60/100= 60%

minority % / majority %

(compare with 4/5) (5/10 or 50%)

30% / 60% = .30/.60 = 0.5

#hired/ #applied- compute for each group

Female: 50/100= 50%; Male: 60/100= 60%

minority % / majority %

(compare with 4/5) (5/6 or 83%)

50% / 60% = .50/.60 = 0.83

Affirmative Action Plans

Required for Federal Contractors by Executive Order 11246 Can also be voluntary Never use quota system- unless directed by courts Components:
Utilization analysis Written plan

Employment-at-Will Exceptions
Violates a law Public policy Implied contract Good faith and fair dealing

Avoiding Wrongful Termination

Employment-at-Will statement in:
applications offer letters employee handbook

Train managers:
avoid making commitments or promises avoid certain terminology

Employee Handbook
Employment policies or procedures Orientation information for new employees Legal obligations of employer and employee Responsibilities of employer and employee to each other

Sexual Harassment
Quid pro quo Hostile environment Tips to avoid: Have a written policy Provide training Formal investigation process Be aware

Family Medical Leave Act

Companies with 50 or more employees 12 weeks of unpaid leave for
birth or adoption own illness or family member illness

Continued health coverage Can be intermittent Reinstated to same or similar position

Surveillance and Monitoring

Business reasons Have a written policy Use in moderation Treat all employees equally

The Process of Job Analysis

Sources of Data Job Description

Job Data

Human Resources Functions

Methods of Collecting Data

Job Specification

Sources of Data
Job Analyst Employee Supervisor Customer

Methods of Collection
Interviews Questionnaires Observations Records or Critical Incidents

Data Collected
Job Content Job Context Worker Requirements: Knowledge Skills Abilities

Results of Job Analysis

Job Description Tasks Duties Responsibilities Job Specifications
Knowledge requirements Skill requirements Abilities needed (including physical demands)

Using Job Analysis Results

Recruiting and Selection Training and Development Performance Appraisal Compensation Productivity improvement Employee discipline Safety Organizational Efficiency

Problems with Job Descriptions

Not useful if not well-written Often not updated Could violate law Can limit scope of job holder

Recruiting
Purpose- create pool Specifically:
Minimize cost Increase success Improve retention EEO issues Public image

Strategic Issues
Large number or highly qualified? Quick or quality? Cost? Fill vacancy or start career? Public relations?

Steps in Recruiting Process

Identify opening How to fill opening Identify targeted population Source candidates Selection process

Internal Recruitment
Advantages
Capitalize on investment Increase moral Improve retention

Disadvantages
Insufficient supply Ripple effect Lack new ideas

Internal Recruiting Process

Skills database Supervisor recommendations Career progression system Job posting
Available to all Timeliness Can de-moralize if not done well Confidentiality

External Recruiting
Employee referrals Walk-ins Recruitment advertising Direct recruiting Search research Contingency search (include temp-to-perm) Retained search College recruiting Non-fee agencies

External Recruiting
Job Fairs Professional Associations Internet Company website Online boards Banner advertising Using e-mail

Choosing the Right Method

Depends on:
Type of job Timeframe Geographic area Cost Mix of candidates

Need to look at:

Define target market Whats worked before?

Doing it Well
Realistic Job Preview Train organizational recruiters Convey organizational information Timing of process Offer flexibility Evaluate your efforts

Evaluate your Efforts

Operating Costs Cost per hire Yield ratios
Number of resumes to interviews Interviews to offers Offers to hires Overall

Retention rates Performance rating

Importance of Effective Selection

Retention Productivity Reduce training costs Legal compliance

Steps in Selection
Understand organization and job Select evaluation process Implement selection process Make decision Background check Offer

Legal Considerations
Equal Employment Opportunity Commission (EEOC)
Uniform Guidelines on Employee Selection Procedures National Origin Pregnancy discrimination Age discrimination Religious discrimination Disability

Legal Considerations
Constitutional
Privacy

Tort law
Negligent hiring Defamation

Other
Fair Credit Reporting Act

Selection Strategy
Decide what selection devices to use for each position. (Utility Analysis) What order? Multiple hurdle or same treatment?
Example- everyone must pass cognitive ability test to get to interview OR Everyone takes cognitive ability test and gets interview

Selection Strategy
Compensatory: all applicants get all tests (*costly!)
(1) applications (2) paper & pencil tests (3) work sample test (4) interview (5) offers 200 200 200 200 10

Multiple Hurdle: weed out applicants at each step of the hiring process based on whether pass/fail each test (*greater potential for adverse impact!)
(1) applications 200 (2) paper & pencil tests 120 (3) work sample test 40 (4) interview 20 (5) offers 10

*Note: courts dont accept bottom line defense- look for adverse impact at each step of the process

Reliability
Consistent/stable Over time Across different samples Across different judges

Validity
Face validity Content validity Construct validity Criterion related validity Validation approaches
Predictive validation study Concurrent validation study Validity generalization

Utility Analysis Considerations

Validity coefficient Selection ratio Job performance differential Cost of test

Utility Analysis Example

Expected gain ($) = (# applicants selected) x (validity) x (standard deviation of performance) x
(average standardized test score) -

(# applicants tested)(cost of test)

Selection Methods
Application Biodata inventory Background investigation
Drug test Reference checks

Written or Computer-based Tests Interviews

Examples of Written or Computer-based Tests

Job sample performance tests
Assessment centers

Cognitive ability tests Psychomotor ability tests Personality inventories Polygraph or honesty tests

Interview Process
Phone screening Human resources- organization fit Hiring manager Peers/customers round robin style Lunch, dinner or reception

Types of Interviews
Pre-screening Resume-based Structured Patterned Stress Case Behavioral

Interviewers Should:
Be prepared Listen Take notes Avoid common errors:
similar-to-me halo/horn effect recency effect

Selection Process-other
Candidate communications
Standard/timely One person responsible

Extending offers
Contingent Salary negotiable Verbal followed by written

Compensation- Why important?

Cost efficiency Legal compliance Enhance recruiting Improve retention

Equity Theory
Inputs vs. Outputs Variance?
Decrease inputs Request raise Change mindset Different comparison point Escape

Internal consistency vs. external competitiveness

Developing a Compensation System

Job analysis Job evaluation Market pricing Choose compensation method Develop pay structure Individual adjustments

Job Evaluation- Methods

Job ranking system Job classification system Point system Factor comparison system Hay profile method

Market Pricing
Focus on external Salary surveys Pay policy
Lead Match Lag

Final steps
Choose compensation method
Flat-rate Skill-based Incentive pay

Develop pay structure

Job grades Market point

Individual adjustments

Legal Constraints
Fair Labor Standards Act
Exempt vs. non-exempt
Administrative Executive Professional Sales

Minimum wage Overtime

Equal Pay Act

Comparable worth

Designing Benefit Plans

Need to Consider: Long-term strategic plans Characteristics of workforce Legal requirements Competitiveness Cost-effectiveness

Mandatory Benefits
Workers Compensation
On the job (includes stress) Medical expenses/lost wages Avoid injuries

Unemployment Compensation- may be denied:

Quit for no good reason Discharged for misconduct Refusing suitable work

Social Security

Retirement Benefits
Defined benefit pension plan Defined contribution pension plan 401(k) plans Employee Retirement Income Security Act (ERISA)

Other Benefits
Insurance
Health/dental Life, death or dismemberment Disability

Paid time-off
Vacation Personal days Holidays Sick days

Other Benefits
Employee service or perqs
Day/elder care Tuition reimbursement Company car/other equipment Service/other rewards Stock purchase plans Fitness/wellness programs Employee Assistance Program Discounted services Social activities/holiday bonus

Benefit Administration
Vanilla packages Flexible or Cafeteria plans Communication

Legal Issues
Consolidated Omnibus Budget Reconciliation Act (COBRA)
continuation of benefits

Health Insurance Portability Protection Act (HIPPA)

eliminates pre-existing condition

New Hire Orientation

Retain/motivate Increase productivity Reduce anxiety Set expectations

Orientation Dos
Provide materials in advance Provide information on:
Company Social Technical Physical

Be efficient Spread out

Orientation Donts
Emphasize paperwork Cause information overload Consider HRs job Hold hostage

Training Department
Faculty Model Customer Model Corporate University Virtual Training

Instructional Design Model

1. Conduct needs assessment 2. Design training 3. Select training methods 5. Ensure transfer of training 6. Evaluate training programs

Needs Assessment
Levels of analysis: Organizational Task Competency Person

Designing the Program

Instructional objectives Assess readiness and motivation Select appropriate instructors Understand adult learners
meaningful examples individual differences practice whole vs. parts distributive vs. massed feedback and reinforcement

Select Training Method

On-the-job Job instruction method Apprenticeship training Lecture Case studies Role playing Behavior modeling Computer-based instruction Interactive video

Transfer of Training
Over-learning Action plan Tie to job Follow-up

Evaluating Training
Employee reactions- happy sheets Testing Performance appraisal Organizational performance Return on investment

Management Development
Succession planning Development opportunities Specific training

Career Stages
Exploration/establishment Advancement Maintenance Strategic planning or Disengagement

Career Development Initiatives

Career pathing Career Planning Workbooks Career counseling or workshops Mentoring Self-selected training opportunities

Performance Appraisal- Goals

Improve performance Support employment decisions Ensure legal compliance Increase employee satisfaction

Types of Rating Instruments

Individual performance against common standards

Graphic Rating Scales Behaviorally Anchored Rating Scale (BARS) Behavior Observation Scale (BOS)
Individual performance against individual standards

Management by Objectives (MBO)

Compare employees to one another

Ranking Paired Comparison Forced Distribution

Who should evaluate?

Immediate supervisor Peers Subordinates Self-appraisal Customers served Multi-rater or 360 degree feedback

Appraisal Meeting
Ask for self-assessment Express appreciation/share developmental opportunities Focus on behavior- not the person Be supportive

Effective PA Systems
Good standards Train raters Timely- follow policy Well documented performance Opportunity to respond Action plan

Rater Errors
Recency effect First impression error Similar-to-me effect Halo/horn effect Central tendency

The Difficult Employee

Unsatisfactory quality or quantity of work
Lack of skills or motivation May need to identify and offer correction Examine environment Disciplinary action

Personal problems affect job

Drug or alcohol? EAP Disciplinary action

The Difficult Employee

Violate laws
Investigative process Pursue with authorities Disciplinary action

Violate policies
Educate employees Disciplinary action

Disciplinary Process
Warning system Act promptly Consistency Handle professionally

Progressive Discipline
Stepped process
Verbal warning Written warning Final written warning or suspension Termination

Identify behavior and why it is a problem Clear warning and explain consequences Document!

Positive Discipline
Stepped process Counseling & motivation replace threats & punishment Collaborative problem solving Must train supervisors

Disciplinary Meetings
Keep private Criticize selectively Opportunity to respond Attack problem, not person

Alternative Dispute Resolution

Advantages:
Less time consuming Less expensive Private

Components
Mandatory Not binding on employee Binding on company

Disputes
Covered
Involuntary terminations Claims of harassment or discrimination Constructive discharge Additional disputes Benefit or pension claims Workers compensation Unemployment Establishment or modification of a policy

Not covered

ADR Format
Mediation Arbitration Summary jury trial Mini-trial Peer review process

Successful ADR
Procedures in place Arbitrators with expertise Employees right to representation and discovery Written opinion

Productivity Improvement Programs

Types of rewards Extrinsic-Pay for Performance Intrinsic- Employee Empowerment

Expectancy Theory
Effort
Expectancy Performance Rewards
X

Instrumentality
X

MOTIVATION

Valence

Pay for Performance must have:

Effort-performance link Performance-reward link Valued rewards Timeliness of rewards Performance- organizational goals link Cost-efficient

Types of Plans
Merit pay Gainsharing plans Profit sharing plans Employee Stock Ownership Plans (ESOP) Variable pay plans

Variable Pay Plans

Piece rate Standard hour Bonus Sales incentives
Straight commission Combined salary/commission Draw

Employee Empowerment Plans

Informal participative decision-making Job enrichment
Skill variety, task identity, task significance, autonomy, feedback

Quality circles Continuous improvement programs Self-managed work-teams

Employee Relations
Must base initiatives on: Organizational size Company culture Strategic goals

Responsibilities of Employee Relations Function

Policies Employee retention Work/family balance EEO Compliance Diversity

Policy Development
Monitor, develop and implement Manage performance appraisal system Manage disciplinary action system

Employee Retention Strategy

Benchmarking Attitude surveys Union-avoidance Wellness programs Employee Assistance Program Performance counseling Service/recognition programs Exit interviews

Work/Family Balance
Flexible work schedules Telecommuting
Who Financial support Communication Social issues

Day/elder care

EEO Compliance
Reporting Affirmative action plans Responds to employees Management training Legal issues

Diversity Initiatives
Develops awareness Culture building Management training Employee training

Labor Relations History

1700s craft guilds American Federation of Labor (AFL) 1886 Congress of Industrial Organizations (CIO) 1936 - 1935 35% of workforce World War II- growth, AFL-CIO merger Drop to currently 14% 1997

Why join a union?

Economic needs Dissatisfaction with management Social and status concerns

Structure of Unions
Local Union National Union AFL-CIO

Labor Law
Railway Labor Act 1926 Norris-Laguardia Act 1932
No arbitrary court injunctions No yellow dog contracts

National Labor Relations Act (Wagner Act) 1932

Employees right to bargain collectively Certification/de-certification process Right to strike, define ULPs Establish National Labor Relations Board (NLRB)

Labor Law, Cont.

Labor Management Relations Act (Taft-Hartley Act) 1947
Employers right to free speech No closed shop President right to seek injunction Established Federal Mediation and Conciliation Service

Labor-Management Reporting and Disclosure Act (Landrum-Griffin Act) 1959

Bill of rights for union members Unions cannot discriminate Financial reporting requirement

How Unions Organize

Employer Recognition Petition phase Election phase Union Certification Collective bargaining agreement

Collective Bargaining Agreement

Preparing for bargaining Establishing an agenda
Illegal items Mandatory items Voluntary items

Good faith bargaining

Collective Bargaining, Cont.

Unions power:
Strike Boycott

Employers power:
Lockout Continue operating

Resolving deadlocks: Mediation Arbitration

Unfair Labor Practices

Employer interfere, restrain or coerce dominate/unlawfully support union discriminate against those who participate retaliation refuse to bargain

Unfair Labor Practices

Union coercive behavior threats of economic reprisals third-party strike/boycott featherbedding unfairly represent employees

Labor Relations, cont.

Administering a contract
Grievance process

Cooperation efforts Union de-certification

Petition for de-certification Petition for a different union Employers may petition

Health and Safety Facts

Over 85,000 work related deaths in past 15 yrs. About 75 million lost work days. Cost to employers- 1.75 billion per year

Occupational Safety and Health Act 1970

Established Occupational Health and Safety Administration Covers all employers except government Developed and set guidelines

How OSHA is enforced:

Workplace inspections Citations and penalties On-site consultations Voluntary Protection Programs

Responsibilities and Rights

Provide hazard-free workplace Keep employees informed Keep records and report incidents Right to know requirements
Material Safety Data Sheets (MSDS)

Creating a Safe Environment

Safety awareness Safety training Incentives for safety Accident prevention Safety committee

Health Hazards
Chemical hazards
Teratogens

Indoor air quality Video display terminals Repetitive motion injuries

carpal tunnel syndrome ergonomics

Substance abuse

Employee Wellness
Wellness programs Stress management Employee Assistance Programs

Workplace Violence
Employment process Management training Communicated policy Security

International Human Resource Management

Cultural differences Recruiting and selection Training Compensation Legal issues Returning home

Managing in a Cross-cultural Organization

Cultural sensitivity Motivation Ethics Negotiations Leadership Perception Communication

International Employees
Expatriate or home-country nationals Host-country national Third-country nationals

Selection
Stress tolerance Relationship development Perceptual skills Family support Testing

Training
Language Cultural Family/personal life

Compensation
Incentive to take position Maintain standard of living Children education Maintain relationships
Balance Sheet Approach

Legal Issues
Local laws employment discrimination Human rights

Repatriation
Planning Career Management Transitional Support

Careers in HRM
Generalist vs. Specialist Large vs. small organization Outsourced functions Strategic vs. administrative

Specialist Functions
Compensation Benefits Training Employee Relations Recruiting HRIS

Management Career Paths

Senior Generalist Team leader Manager Director Executive

Human Resource Service Providers

Independent or with company Organizational effectiveness consulting Staffing Benefits General HR

What is needed?
HR Expertise- Law Business Operations expertise Strong leadership ability Oral and written communication skills Ability to develop relationships Creative Strong sense of ethics Persuasive

Career Preparation
Undergraduate degree Graduate degree- MBA or HR Certification: PHR, SPHR Conferences