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Human Resource Management
Human Resource Management includes all activities
used to attract & retain employees and to ensure
they perform at a high level in meeting organizational goals.
These activities are made up of
1. Recruitment & selection.
2. Training and development.
3. Performance appraisal and feedback.
4. Pay and benefits.
5. Labor relations.
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Components of a HRM System
Recruitment
& Selection
Labor
Relations
Pay &
Rewards
Performance
Appraisal
&
Feedback
Training &
Development
Figure 10.1
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HRM Components
Component should be consistent with the others,
organization structure, and strategy.
Recruitment: develop a pool of
qualified applicants.
Selection: determine relative qualifications & potential for a job.
Training & Development: ongoing process to develop worker’s abilities and skills.
Performance appraisal & feedback: provides information about how to train, motivate, and reward workers.
Managers can evaluate and then give feedback to enhance worker performance.
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HRM Components
Pay and Benefits: high performing employees should
be rewarded with raises, bonuses.
Increased pay provides additional
incentive.
Benefits, such as health insurance, reward membership in firm.
Labor relations: managers need an effective relationship with labor unions that represent workers.
Unions help establish pay, and working conditions.
If management moves to a decentralized structure, HRM should be adjusted as well.
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HRM Legal Environment
Management of HR is a complex
area. There are many federal, state and local regulations.
Equal Employment Opportunity (EEO): ensures all citizens have equal opportunity for employment without regard to sex, age, race, origin, religion, or disabilities.
Makes effective management of diversity crucial.
Equal Employment Opportunity Commission (EEOC) enforces laws.
Managers must take steps to ensure discrimination does not occur.
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Human Resource Planning
HR Planning includes all activities managers
do to forecast current and future HR needs.
Must be
done prior to recruitment and selection
Demand forecasts made by managers estimate the number & qualifications the firm will need.
Supply forecasts estimate the availability and qualifications of current workers and those in the labor market.
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Recruitment & Selection
Human Resources
Planning
Job Analysis
Determine recruitment
& selection needs
Figure
10.2
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HRM Planning: Outsourcing
Outsourcing: managers can decide to contract
with outside workers rather than hiring them.
Outsourcing is more
flexible for the firm.
Outsourcing often provides human capital at a lower cost.
Outsource problems: managers lose control over output.
Outsource contractors are not committed to the firm.
Unions typically are against outsourcing that has potential to eliminate member’s jobs.
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HRM Planning: Job Analysis
Job analysis determines the tasks,
duties and responsibilities of the job.
A job analysis should
be done for each job in the organization.
Job analysis can be done by:
Observe current workers.
Questionnaires filled out by worker and managers.
Current trends are toward flexible jobs where duties are not easily defined in advance.
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Recruitment
External recruiting: managers look outside the firm for
people who have not worked at the firm before.
Managers
advertise in newspapers, hold open houses, recruit at universities, and on the Internet.
External recruitment is difficult since many new jobs have specific skill needs.
A multi-prong approach to external recruiting works best.
Internal Recruiting: positions filled within the firm.
Internal recruiting has several benefits:
Workers know the firm’s culture, may not have new ideas.
Managers likely already know the candidates.
Internal advancement can motivate employees.
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Honesty in Hiring
Managers may be tempted to over-rate
the attractiveness of the job and firm.
They feel if
they are honest, person will not work there.
Research indicates this is a poor strategy.
Realistic Job Preview: provides an accurate overview of the job.
Avoids having to hire, train and then lose workers.
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Selection Tools
Background
Information
Interviews
References
Paper tests
Physical
Ability tests
Performance tests
Selection
Figure 10.3
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Selection Process
After a pool of applicants are identified,
qualifications related to the job requirements are determined:
Background Information:
includes education, prior employment, college major, etc.
Interview: almost all firms use one of two types:
Structured interview: managers ask each person the same job-related questions.
Unstructured interview: held like a normal conversation.
Usually structured interviews preferred; bias is possible.
Physical Ability Test: measure strength & endurance.
Good for physically demanding jobs.
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Selection Process
Paper & Pencil Tests: Either an
ability and personality test.
Ability test: assess if applicant has
right skills for the job.
Personality test: seek traits relevant to job performance.
Be sure test is a good predictor of job performance.
Performance Tests: measure job performance.
Typing speed test is one example.
Assessment Center: candidates assessed on job-related activities over a period of a few days.
References: outside people provide candid information about candidate.
Can be hard to get accurate information.
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Reliability & Validity
Selection tools must be reliable and
valid.
Reliability: the degree to which the tool measures the
same thing each time it is used.
Scores should be close for the same person taking the same test over time.
Validity: Does the test measure what it is supposed to measure?
Example: does a physical ability test really predict the job performance of a firefighter?
Managers have an ethical and legal duty to develop good selection tools.
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Training & Development
Training: teach organizational members how to
perform current jobs.
Help worker’s acquire skills to perform effectively.
Development:
build worker’s skills to enable them to take on new duties.
Training used more often at lower levels of firm, development is common with managers.
A Needs Assessment should be taken first to determine who needs which program and what topics should be stressed.
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Types of Training
Training
Development
Apprentice-
ships
On-the-job
Training
On-the-job
Training
Needs
Assessment
Figure 10.4
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Types of Training
Classroom Instruction: workers acquire skills in
classroom.
Includes use of videos, role-playing, simulations.
On-the-Job Training: learning occurs
in the work setting as worker does the job.
Training given by co-workers and can be done continuously.
Apprenticeships: worker contracts with a master worker to learn a skill.
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Types of Development
Varied Work Experiences: Top managers must
build expertise in many areas.
Workers identified as possible top
managers given many different tasks.
Formal Education: tuition reimbursement is common for managers taking classes for MBA or similar.
Long-distance learning can also be used to reduce travel.
Whatever training and development efforts used, results must be transferred to the workplace.
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Performance Appraisal & Feedback
Trait Appraisals: evaluate on traits
(skills, abilities) related to the job.
Problem: Even though a
worker has the trait, they may not use it in the job and it is hard to give feedback.
Behavior Appraisals: how a worker does the job.
Focuses on what a worker does and provides good feedback options.
Results appraisals: what a worker accomplishes.
Sales reps are usually evaluated on what they sell.
Objective appraisals: based on facts (sales figures)
Subjective appraisals: based on a manager’s perceptions of traits, behavior, or results.
Many rating scales used to overcome subjective problems.
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Who Appraises Performance?
Supervisors
Peers
Customers &
Clients
Subordinates
Self
Sources of
performance
appraisals
Figure 10.6
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Who Appraises Performance?
Self: self appraisals can supplement manager
view.
Peer appraisal: coworker provides appraisal; common in team settings.
360
Degree: provides appraisal from a variety of people able to evaluate a manager:
Peers, customers, superiors, self.
Need to be alert to bias from some evaluators.
Effective feedback: appraisals must provide feedback:
Formal appraisals: conducted at set times of the year
Provides valuable, but infrequent feedback.
Informal appraisals: manager provides frequent feedback informally.
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Effective Feedback:
1. Be specific and focus on correctable
behavior. Provide a suggested improvement.
2. Focus on problem-solving and
improvement, not criticism.
3. Express confidence in worker’s ability to improve.
4. Use formal and informal feedback.
5. Treat subordinates with respect and praise achievements.
6. Set a timetable for agreed changes.
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Pay and Benefits
Pay level: how the firm’s pay
incentives compare to other firms in the industry.
Managers can
decide to offer low or high relative wages.
Pay Structure: clusters jobs into categories based on importance, skills, and other issues.
Benefits: Some are required (social security, workers comp).
Others (health insurance, day care, and others) are provided at the employers option.
Cafeteria-style plan: employee can choose the best mix of benefits for them. Can be hard to manage.
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Labor Relations
Considers all activities managers perform to ensure
there is a good relationship with labor unions.
There are
laws regulating some areas of employment.
Fair Labor Standards Act (1938) prohibits child labor, sets a minimum wage and maximum working hours.
Equal Pay Act (1963) men and women doing equal work will get equal pay.
Work Place Safety (1970) OSHA mandates procedures for safe working conditions.