FundamentalsofHumanResourceManagement

Tomywife,Marie,andoursixchildren,

Jesse,Justin,Danielle,Nicole,Brian,andRenee

R.N.L.

Formyfather,Charles“Chuck”Hendon,whotaughtmeperseverance

J.R.H.

FundamentalsofHumanResourceManagementFunctions,Applications,SkillDevelopment

RobertN.LussierSpringfieldCollegeJohnR.Hendon

UniversityofArkansasatLittleRock

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Names:Lussier,RobertN.,author.|Hendon,JohnR.,author.

Title:Fundamentalsofhumanresourcemanagement:functions,applications,skilldevelopment/RobertN.Lussier,JohnR.Hendon.

Description:LosAngeles:Sage,[2017]|Includesbibliographicalreferencesandindex.

Identifiers:LCCN2015035721|ISBN978-1-4833-5850-5(pbk.:alk.paper)

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BriefContentsPrefaceAcknowledgmentsAbouttheAuthorsPARTI21stCenturyHumanResourceManagementStrategicPlanningandLegalIssues

Chapter1.TheNewHumanResourceManagementProcessChapter2.Strategy-DrivenHumanResourceManagementChapter3.TheLegalEnvironmentandDiversityManagement

PARTIIStaffingChapter4.MatchingEmployeesandJobs:JobAnalysisandDesignChapter5.RecruitingJobCandidatesChapter6.SelectingNewEmployees

PARTIIIDevelopingandManagingChapter7.Training,Learning,TalentManagement,and

DevelopmentChapter8.PerformanceManagementandAppraisalChapter9.EmployeeRightsandLaborRelations

PARTIVCompensatingChapter10.CompensationManagementChapter11.EmployeeIncentivesandBenefits

PARTVProtectingandExpandingOrganizationalOutreach

Chapter12.WorkplaceSafety,Health,andSecurityChapter13.OrganizationalEthics,Sustainability,andSocialResponsibilityChapter14.GlobalIssuesforHumanResourceManagers

AppendixGlossaryNotesIndex

DetailedContentsPrefaceAcknowledgmentsAbouttheAuthorsPARTI21stCenturyHumanResourceManagementStrategicPlanningandLegalIssues

Chapter1.TheNewHumanResourceManagementProcess

WhyStudyHumanResourceManagement(HRM)?21stCenturyHRM

HRMThenandNowHRMChallengesCriticalDependentVariablesTechnologyandKnowledgeLaborDemographics

DisciplinesWithinHRMTheLegalEnvironment:EEOandDiversity

ManagementStaffingTrainingandDevelopmentEmployeeRelationsLaborandIndustrialRelationsCompensationandBenefitsSafetyandSecurityEthicsandSustainability

HRMResponsibilitiesLineVersusStaffManagementMajorHRResponsibilitiesofHRStaffandLineManagement

HRMSkillsTechnicalSkillsHumanRelationsSkillsConceptualandDesignSkillsBusinessSkills

HRMCareersSocietyforHumanResourceManagement

(SHRM)OtherHROrganizationsProfessionalLiability

Practitioner ’sModelforHRMTheModel

TrendsandIssuesinHRMCreatinganEngagedWorkforceReverseDiscriminationRulingsContinuetoEvolve

ChapterSummaryKeyTermsReviewCommunicationSkillsCase1-1Ba-Zynga!ZyngaFacesTroubleinFarmvilleSkillBuilders

Chapter2.Strategy-DrivenHumanResourceManagement

StrategyandStrategicPlanninginthe21stCentury:TheOrganizationandtheEnvironmentTheExternalEnvironmentStrategy

WhatIsStrategy?Visions,Missions,andObjectivesTypesofStrategiesHowStrategyAffectsHRMHowHRMPromotesStrategy

StructureBasicsofOrganizationalStructureHowDoesStructureAffectEmployeeBehavior?HowDoesStructureAffectHRM?

OrganizationalCultureWhatIsOrganizationalCulture?HowCultureControlsEmployeeBehaviorinOrganizationsSocialMediaandCultureManagement

AnIntroductiontoDataAnalyticsforHRM

ABriefonDataAnalyticsHRAnalyticsDesiredOutcomes

HumanResourceInformationSystems(HRIS)

WhatAreHRIS?HowDoHRISAssistinMakingDecisions?

MeasurementToolsforStrategicHRM

EconomicValueAdded(EVA)ReturnonInvestment(ROI)

TrendsandIssuesinHRMEverythingOldIsNewAgain:ManagingDataforHRMDecisionMakingContinuingGlobalizationIncreasestheNeedforStrategicandHRMPlanning

ChapterSummaryKeyTermsReviewCommunicationSkills

Case2-1Strategy-DrivenHRManagement:Netflix,ABehind-The-ScenesLookAtDeliveringEntertainmentSkillBuilders

Chapter3.TheLegalEnvironmentandDiversityManagement

TheLegalEnvironmentforHRM:ProtectingYourOrganizationAUser ’sGuidetoManagingPeople:TheOUCHTest

ObjectiveUniforminApplicationConsistentinEffectHasJobRelatedness

MajorEmploymentLawsEqualPayActof1963TitleVIIoftheCivilRightsActof1964(CRA)AgeDiscriminationinEmploymentActof1967(ADEA)VietnamEraVeteransReadjustmentAssistance

Actof1974(VEVRAA)PregnancyDiscriminationActof1978(PDA)AmericanswithDisabilitiesActof1990(ADA),asAmendedin2008CivilRightsActof1991UniformedServicesEmploymentandReemploymentRightsActof1994(USERRA)VeteransBenefitsImprovementActof2004(VBIA)TitleIIoftheGeneticInformationNondiscriminationActof2008(GINA)LillyLedbetterFairPayActof2009(LLFPA)

EqualEmploymentOpportunityCommission(EEOC)

WhatDoestheEEOCDo?EmployeeRightsUnder

theEEOCEmployerRightsandProhibitions

EEO,AffirmativeAction,andDiversity:What’stheDifference?

AffirmativeAction(AA)DiversityintheWorkforce

SexualHarassment:ASpecialTypeofDiscrimination

TypesofSexualHarassmentWhatConstitutesSexualHarassment?ReducingOrganizationalRiskFromSexualHarassmentLawsuits

ReligiousDiscriminationTrendsandIssuesinHRM

FederalAgenciesAreBecomingMoreActivistinPursuingDiscriminationClaimsTheADAandtheADAAmendmentsAct

(ADAAA)ChapterSummaryKeyTermsReviewCommunicationSkillsCase3-1English-Only:OneHotel’sDilemmaSkillBuilders

PARTIIStaffingChapter4.MatchingEmployeesandJobs:JobAnalysisandDesign

EmployeeandJobMatchingWorkflowAnalysis

OrganizationalOutputTasksandInputs

JobAnalysisWhyDoWeNeedtoAnalyzeJobs?DatabasesJobAnalysisMethodsOutcomes:JobDescriptionandJobSpecification

JobDesign/RedesignOrganizationalStructureandJobDesign

ApproachestoJobDesignandRedesign

TheJobCharacteristicsModel(JCM)DesigningMotivationalJobs

JobSimplificationJobExpansionJobDesignforFlexibility

HRForecastingForecastingMethods

ReconcilingInternalLaborSupplyandDemand

OptionsforaLaborSurplusOptionsforaLaborShortage

TrendsandIssuesinHRMO*NetasaToolforJobAnalysisWorkflowsandJobDesignforSustainability

ChapterSummaryKeyTermsReviewCommunicationSkillsCase4-1GaugingEmployment

atHoneywellSkillBuilders

Chapter5.RecruitingJobCandidates

TheRecruitingProcessExternalForcesActingonRecruitingEfforts

OrganizationalRecruitingConsiderations

WhatPoliciestoSetWhentoRecruitAlternativestoRecruitmentReachoftheRecruitingEffortSocialMediaRecruiting

InternalorExternalRecruiting?InternalRecruitingExternalRecruiting

ChallengesandConstraintsinRecruiting

BudgetaryConstraintsPolicyConstraintsandOrganizationalImageJobCharacteristicsandthe

RealisticJobPreview(RJP)TheRecruiter–CandidateInteraction

EvaluationofRecruitingPrograms

YieldRatioCostperHireTimeRequiredtoHireNewHireTurnoverNewHirePerformance

TrendsandIssuesinHRMTalentWarsGlobalKnowledgeWorkersasanOn-DemandWorkforce

ChapterSummaryKeyTermsReviewCommunicationSkillsCase5-1LINKEDIN:HowDoestheWorld’sLargestProfessionalNetworkNetwork?SkillBuilders

Chapter6.SelectingNewEmployees

TheSelectionProcessTheImportanceoftheSelectionProcessStepsintheSelectionProcess

Lookingfor“Fit”Personality-JobFitAbility-JobFitPerson-OrganizationFit

UniformGuidelinesonEmployeeSelectionProcedures

WhatQualifiesasanEmploymentTest?ValidandReliableMeasures

ApplicationsandPreliminaryScreening

ApplicationsandRésumésPre-employmentInquiries

TestingandLegalIssuesTheEEOCandEmploymentTestingPolygraphandGeneticTestingWrittenTesting

PhysicalTestingSelectionInterviews

InterviewingTypesofInterviewsandQuestionsPreparingforandConductingtheInterview

BackgroundChecksCreditChecksCriminalBackgroundChecksReferenceChecksWebSearches

SelectingtheCandidateandOfferingtheJob

HiringTrendsandIssuesinHRM

SelectionWithaGlobalWorkforceHRISandtheSelectionProcess

ChapterSummaryKeyTermsReviewCommunicationSkillsCase6-1NotGettingFace

TimeatFacebook—andGettingtheLastLaugh!SkillBuilders

PARTIIIDevelopingandManagingChapter7.Training,Learning,TalentManagement,andDevelopment

TheNeedforTrainingandDevelopment

TrainingandDevelopmentWhenIsTrainingNeeded?

TheTrainingProcessandNeedsAssessment

StepsintheTrainingProcessNeedsAssessmentEmployeeReadiness

LearningandShapingBehaviorLearningOperantConditioningandReinforcementShapingBehavior

DesignandDeliveryofTraining

On-the-JobTraining

(OJT)ClassroomTrainingDistanceorE-Learning

AssessingTrainingAssessmentMethodsChoosingAssessmentMethods

TalentManagementandDevelopment

CareersCommonMethodsofEmployeeDevelopmentAModelofCareerDevelopmentConsequences

TrendsandIssuesinHRMTheGamificationofTrainingandDevelopmentOutsourcingEmployeeTrainingandDevelopment

ChapterSummaryKeyTermsReviewCommunicationSkillsCase7-1GoogleSearch:BuildingtheProgramthat

WritestheCodetoFindFemaleTalentSkillBuilders

Chapter8.PerformanceManagementandAppraisal

PerformanceManagementSystems

PerformanceManagementVersusPerformanceAppraisalThePerformanceAppraisalProcessAccuratePerformanceMeasures

WhyDoWeConductPerformanceAppraisals?

Communication(Informing)DecisionMaking(Evaluating)Motivation(Engaging)

WhatDoWeAssess?TraitAppraisalsBehavioralAppraisalsResultsAppraisals

HowDoWeUseAppraisalMethodsandForms?

CriticalIncidentsMethodManagementbyObjectives(MBO)MethodNarrativeMethodorFormGraphicRatingScaleFormBehaviorallyAnchoredRatingScale(BARS)FormRankingMethodWhichOptionIsBest?

WhoShouldAssessPerformance?

SupervisorPeersSubordinatesSelfCustomers360-DegreeEvaluations

PerformanceAppraisalProblems

CommonProblemsWithinthePerformanceAppraisal

ProcessAvoidingPerformanceAppraisalProcessProblems

DebriefingtheAppraisalTheEvaluativePerformanceAppraisalInterviewTheDevelopmentalPerformanceAppraisalInterview

TrendsandIssuesinHRMIsItTimetoDoContinuousAppraisals?Competency-BasedPerformanceManagement

ChapterSummaryKeyTermsReviewCommunicationSkillsCase8-1Amazon.com:SellingEmployeePerformanceWithOrganizationandLeadershipReviewSkillBuilders

Chapter9.EmployeeRightsand

LaborRelationsManagingandLeadingYourWorkforce

TrustandCommunicationJobSatisfaction

MeasuringJobSatisfactionDeterminantsofJobSatisfaction

CommonlyAcceptedEmployeeRights

RightofFreeConsentRighttoDueProcessRighttoLifeandSafetyRightofFreedomofConscience(Limited)RighttoPrivacy(Limited)RighttoFreeSpeech(Limited)

ManagementRightsCodesofConductEmployment-at-Will

Coaching,Counseling,andDiscipline

Coaching

CounselingDisciplining

LegalIssuesinLaborRelationsTheRailwayLaborAct(RLA)of1926TheNationalLaborRelationsAct(NLRA)of1935(WagnerAct)TheLaborManagementRelationsAct(LMRA)of1947(Taft-HartleyAct)TheWorkerAdjustmentandRetrainingNotificationActof1988(WARNAct)

UnionsandLaborRightsUnionOrganizingLaborRelationsandCollectiveBargainingGrievancesDecertificationElections

TrendsandIssuesinHRMFacebook,Twitter,etc.@Work:AreTheyOutofControl?

NonunionWorkerProtectionandtheNLRB

ChapterSummaryKeyTermsReviewCommunicationSkillsCase9-1Off-DutyMisconductSkillBuilders

PARTIVCompensatingChapter10.CompensationManagement

CompensationManagementTheCompensationSystemMotivationandCompensationPlanning

OrganizationalPhilosophyAbilitytoPayWhatTypesofCompensation?PayforPerformanceorPayforLongevity?Skill-BasedorCompetency-BasedPay?At,Above,orBelowtheMarket?WageCompression

PaySecrecyLegalandFairnessIssuesinCompensation

FairLaborStandardsActof1938(Amended)PayEquityandComparableWorthOtherLegalIssues

JobEvaluationExternalMethodJobRankingMethodPoint-FactorMethodFactorComparisonMethod

DevelopingaPaySystemJobStructureandPayLevelsPayStructure

TrendsandIssuesinHRMAShiftFromBasePaytoVariablePayTheTechnologyofCompensation

ChapterSummaryKeyTermsReview

CommunicationSkillsCase10-1EmployeeRed-LiningatCVS:TheHaveandtheHaveNotSkillBuilders

Chapter11.EmployeeIncentivesandBenefits

TheValueofIncentivesandBenefitsIndividualIncentives

AdvantagesandDisadvantagesofIndividualIncentivesIndividualIncentiveOptions

GroupIncentivesAdvantagesandDisadvantagesofGroupIncentivesGroupIncentiveOptions

ExecutiveCompensationTheDodd-FrankWallStreetReformandConsumerProtectionActof2010

ExecutiveIncentivesStatutoryBenefits

SocialSecurityandMedicareWorkers’CompensationUnemploymentInsuranceFamilyandMedicalLeaveActof1993(FMLA)ThePatientProtectionandAffordableCareActof2010(ACA)

StatutoryRequirementsWhenProvidingCertainVoluntaryBenefitsVoluntaryBenefits

PaidTimeOffGroupHealthInsuranceRetirementBenefitsOtherEmployeeBenefits

FlexibleBenefit(Cafeteria)PlansTrendsandIssuesinHRM

IncentivestoActUnethically?PersonalizationofHealth

CareChapterSummaryKeyTermsReviewCommunicationSkillsCase11-1GoogleSearchesSASfortheBusinessSolutiontoHowtoCreateanAward-WinningCultureSkillBuilders

PARTVProtectingandExpandingOrganizationalOutreach

Chapter12.WorkplaceSafety,Health,andSecurity

WorkplaceSafetyandOSHATheOccupationalSafetyandHealthAct(OSHAct)

TheOccupationalSafetyandHealthAdministration(OSHA)

WhatDoesOSHADo?EmployerandEmployeeRightsandResponsibilitiesUnderOSANationalInstituteofOccupationalSafetyand

Health(NIOSH)EmployeeHealth

EmployeeAssistancePrograms(EAPs)andEmployeeWellnessPrograms(EWPs)ErgonomicsandMusculoskeletalDisorders(MSDs)SafetyandHealthManagementandTraining

StressFunctionalandDysfunctionalStressStressManagementTheStressTug-of-War

WorkplaceSecurityCyberSecurityGeneralSecurityPolicies,IncludingBusinessContinuityandRecovery

WorkplaceViolenceSocialMediaforWorkplaceSafetyandSecurity

EmployeeSelectionandScreening

TrendsandIssuesinHRMEmployeeWellnessBullyingintheWorkplace

ChapterSummaryKeyTermsReviewCommunicationSkillsCase12-1Nike:TakingaRunatFixingOutsourcedWorkerSafetySkillBuilders

Chapter13.OrganizationalEthics,Sustainability,andSocialResponsibility

EthicalOrganizationsEthicsDefinedContributingFactorstoUnethicalBehaviorEthicalApproaches

CodesofEthicsCreatingandMaintainingEthicalOrganizations

CorporateSocialResponsibility(CSR)

CSRDefinedStakeholdersandCSRLevelsofCorporateSocialResponsibility

SustainabilityHRandOrganizationalSustainabilitySustainabilityTrainingTheSustainable21stCenturyOrganization

TrendsandIssuesinHRMSustainability-BasedBenefitsDoesDiversityTrainingWork?

ChapterSummaryKeyTermsReviewCommunicationSkillsCase13-1Microsoft,Nokia,andtheFinnishGovernment:APromiseMade,APromiseBroken?SkillBuilders

Chapter14.GlobalIssuesforHumanResourceManagers

GlobalizationofBusinessandHRM

ReasonsforBusinessGlobalizationIsHRMDifferentinGlobalFirms?

Legal,Ethical,andCulturalIssues

InternationalLaborLawsUSLawNationalCulture

GlobalStaffingSkillsandTraitsforGlobalManagersStaffingChoice:Home-,Host-,orThird-CountryEmployeesOutsourcingasanAlternativetoInternationalExpansion

DevelopingandManagingGlobalHumanResources

RecruitingandSelectionExpatriateTrainingandPreparation

RepatriationAfterForeignAssignments

CompensatingYourGlobalWorkforce

PayIncentivesinGlobalFirmsBenefitProgramsAroundtheWorld

TrendsandIssuesinHRMGlobalizationofBusinessIsaTrend!TheWorldwideLaborEnvironment

ChapterSummaryKeyTermsReviewCommunicationSkillsCase14-1IBM(I’veBeenMoved)atHSBC:KeepingCompensationCompetitiveWithECAInternationalSkillBuilders

AppendixGlossaryNotesIndex

Preface

InhisbookPowerTools,JohnNirenbergasks,“Whyaresomanywell-intendedstudentslearningsomuchandyetabletoapplysolittleintheirpersonalandprofessionallives?”Theworldofbusinessandhumanresourcemanagement(HRM)haschanged,andsoshouldhowitistaught.IncreasingnumbersofstudentswantmorethanlecturestogainanunderstandingoftheconceptsofHRM.Theywanttheircoursestoberelevantandtoapplywhattheylearn,andtheywanttodevelopskillstheycanuseintheireverydaylifeandatwork.It’snotenoughtolearnaboutHRM;theywanttolearnhowtobeHRmanagers.Thisiswhywewrotethebook.AfterreviewingandusingavarietyofHRMbooksformorethanadecade,wedidn’tfindanythat(1)couldbeeasilyreadandunderstoodbystudentsand(2)effectivelytaughtstudentshowtobeHRmanagers.Wewrotethistext

outofourdesiretopreparestudentstobesuccessfulHRmanagersand/ortouseHRMskillsaslinemanagersoremployees.Asthesubtitlestates,thisbooknotonlypresentstheimportantHRMconceptsandfunctions,butalsotakesstudentstothenextlevelbyactuallyengagingthembyteachingthemtoapplytheconceptsthroughcriticalthinkingandtodevelopHRMskillstheycanuseintheirpersonalandprofessionallives.

MarketandCourseThisbookisforundergraduateandgraduate-levelcoursesinhumanresourcemanagement(HRM)includingpersonnelmanagement.ItisappropriateforafirstcourseinanHRMmajor,aswellasrequiredandelectivecoursesfoundinbusinessschools.ThistextbookisalsoappropriateforHRMcoursestaughtinotherdisciplinessuchaseducationandpsychology,particularlyIndustrialPsychologyandOrganizationalPsychology,andcanbeutilizedfortrainingcoursesinSupervision.ThelevelofthetextassumesnopriorbackgroundinbusinessorHRM.ThisbookisanexcellentchoiceforonlineandhybridcoursesinHRM.

LearningByDoing:APracticalApproachI(Lussier)startedwritingmanagementtextbooksin1988—priortothecallsbytheAssociationtoAdvanceCollegiateSchoolsofBusiness(AACSB)forskilldevelopment—tohelpprofessorsteachtheirstudentshowtoapplyconceptsanddevelopmanagementskills.PfefferandSutton(TheKnowing-DoingGap,2000)concludedthatthemostimportantinsightfromtheirresearchisthatknowledgethatisactuallyimplementedismuchmorelikelytobeacquiredfromlearningbydoingthanfromlearningbyreading,listening,orthinking.Wedesignedthisbooktogivestudentstheopportunityto“learnbydoing”withthefollowingapproaches:

Apractical“how-to-manage”approachwhichisstrategydriven.TheonlyHRtextwhereprimarycontentareasidentifiedintheSocietyofHuman

ResourceManagement2013CurriculumGuidebookasrequiredforundergraduatestudentsisspecificallyidentifiedinthetextwherethematerialiscovered(over150items).Inaddition,manyofthesecondaryandgraduatestudentsonlyitemsarealsoidentifiedastheyoccurinthetext.Sixtypesofhigh-qualityapplicationmaterialsusetheconceptstodevelopcritical-thinkingskills.Fourtypesofhigh-qualityskill-builderexerciseshelptoactuallydevelopHRmanagementskillsthatcanbeutilizedinstudents’professionalandpersonallives.AselectionofvideosthatreinforceHRM-relatedabilitiesandskills.Aflexibleapproachwhichmeetsthepreferredteachingstyleofprofessorsandlearningstylesoftoday’sstudentswhowanttobeengagedwithactivelearning.

ANewGenerationofLearnersToday’sstudents,including“Millennials”and“GenerationZ”orthePostmillennials,succeedwhentheyarefullyengagedinlearningonmultiplelevels;traditionalmethodsofteachingdonotalwaysmeettheirneeds.Ourtextisflexibleenoughtoaccompanylecture-basedteaching,andalsooffersawiderangeofengagingactivitieswhichaccommodateavarietyofcontemporarylearningstyles.Manyofthespecificlearningpreferencesoftoday’sstudentshavebeenaddressedinthebook’soverallapproach,organization,anddistinctivefeatures:

ActiveLearning

Adesireforactivelearningisaddressedwithalargevarietyofactivitiesandskill-buildingtools.

PracticalApproaches

Adesireforapplicationandskillsinpersonalandprofessionalrealmsisaddressedbyavarietyoffeaturesthroughoutthetext.Immediateapplicationandongoingself-assessmentarefoundintheWorkApplicationpromptsandself-assessmenttools.Organizationtoolssuchaschecklists,summaries,and“howto”instructionsareintegratedthroughout:forexample,themarginalreferencestoSHRMcurriculumguidelines.

AccessibleContent

Chunkingofcontentintoeasilydigestedsegmentshelpsstudentstoorganizestudytime.Visuallearningpreferencesareaccommodatedincolorfulexhibits,models,andfiguresthroughoutthetext,alongwithanancillarypackagewhichincludesvisuallearningoptions.Internetlearning

preferencesarerecognizedinarobustweb-basedpackagewhichincludesvideoandinteractivefeaturesforstudents.

AThree-ProngedApproachWehavecreatedaconcisetextbookintendedtodevelopthefullrangeofHRMcompetencies.Asthetitleofthisbookimplies,weprovideabalanced,three-prongedapproachtothecurriculum:

Concepts/FunctionsThefollowingfeaturesareprovidedtosupportthefirststepinthethree-prongedapproach.

HRMfunctions.Chapter1presentseightmajorHRMfunctionsidentifiedbySHRMwithquestionsthatneedtobeanswered.Thebookisstructuredaroundtheeightfunctionsinfiveparts;seethetableofcontentsfordetails.Thesefunctionsareemphasizedinordertoshowstudentsthedepthofknowledgethatisrequiredofa21stcenturyHRmanager.

Pedagogicalaids.EachchapterincludesLearningOutcomes,ChapterSummaryandKeyTerms,andReviewQuestions.Marginaliconsalsoindicatepointsatwhich(1)InternationalHumanResourcesand(2)Ethics,Sustainability,andSocialResponsibilityarediscussedinthetext.

SHRM’sRequiredContent,aswellasmanySecondaryandGraduate-onlyHRContentAreasfromtheSHRMHumanResourceCurriculum:GuidebookandTemplatesforUndergraduateandGraduatePrograms(SHRM,2013),areannotatedforeasyreferencewheretheyappearineachchapterofthetext.AmarginnoteseenhereidentifiestheCurriculumGuidetopicbeingcovered,andareferencenumberlinkstoanappendixcoveringtheentireSHRMCurriculumGuide.NearlyallofthePrimaryContentAreasandSubtopicsidentifiedintheSHRMCurriculumGuidebookareintroducedwithinthetext.

ApplicationsThefollowingfeaturesareprovidedtosupportthesecondstepinthethree-prongedapproach.

OpeningVignettesillustratehowareal-lifeHumanResourcesmanagercurrentlyemployedbythestateofArkansasworkswithinthevariousHRMfunctionsinherdailyactivities.

OrganizationalexamplesofHRMconceptsandfunctionsappearthroughoutthebook.

WorkApplicationsincorporateopen-endedquestionswhichrequirestudentstoexplainhowtheHRMconceptsapplytotheirownworkexperience.Studentexperiencecanbepresent,past,summer,full-time,part-timeemployment,orvolunteerwork.

ApplyingtheConceptfeaturesaskthestudenttodeterminethemostappropriateHRM

concepttobeusedinaspecificshortexample.

EthicalDilemmafeaturesgivestudentsexamplesofreal-worldsituationsinwhichtheyneedtomakeachoiceusingtheconceptsandskillsfromthechapter.

CasesattheendofeachchapterillustratehowspecificorganizationsusetheHRMfunctions.Criticalthinkingquestionschallengethestudentstoidentifyandapplythechapterconceptswhichareillustratedineachcase.Severallongerandmorecomprehensivecasesarealsoavailabletotheinstructoronthewebsite,eitherfortestingmaterialortoallowstudentstoapplywhattheyhavelearnedoverasignificantpartofthecourse.

SkillDevelopmentThefollowingfeaturesareprovidedtosupportthethirdstepinthethree-prongedapproach.

Self-AssessmentshelpstudentstogainpersonalknowledgeofhowtheywillcompletetheHRMfunctionsintherealworld.Allinformationforcompletingandscoringiscontainedwithinthetext.

CommunicationSkillsattheendofeachchapterincludequestionsforclassdiscussion,presentations,and/orwrittenassignmentstodevelopcriticalthinkingcommunicationskills;theyarebasedonHRContentAreas.

BehaviorModelingshowingstep-by-stepactionstofollowwhenimplementingHRMfunctions,suchashowtoconductajobinterview,performanceappraisals,andcoachinganddisciplining,arepresented

throughoutthetext.

SkillDevelopmentExercisesdevelopskillsthatcanbeusedinstudents’personalandprofessionallives.Manyofthecompetitorexercisestendtobediscussion-orientedexercisesthatdon’tactuallydevelopaskillthatcanbeusedimmediatelyonthejob.

Ancillarieshttp://edge.sagepub.com/fundamentalsofhrm

SAGEedgeoffersarobustonlineenvironmentfeaturinganimpressivearrayoftoolsandresourcesforreview,study,andfurtherexploration,keepingbothinstructorsandstudentsonthecuttingedgeofteachingandlearning.

SAGEedgeforInstructorssupportsteachingbymakingiteasytointegratequalitycontent,creatingarichlearningenvironmentforstudents.

TestbanksbuiltonBloom’staxonomyandtiedtothebook’slearningobjectivesprovideadiverserangeofpre-writtenoptionsaswellastheopportunitytoeditanyquestionand/orinsertpersonalizedquestionstoeffectivelyassessstudents’

progressandunderstanding.Samplecoursesyllabiforsemesterandquartercoursesprovidesuggestedmodelsforstructuringone’scourse.Editable,chapter-specificPowerPoint®slidesoffercompleteflexibilityforcreatingamultimediapresentationforthecourse.EXCLUSIVE!Accesstofull-textSAGEjournalarticlesthathavebeencarefullyselectedtosupportandexpandontheconceptspresentedineachchaptertoencouragestudentstothinkcritically.Eacharticlehasopen-endeddiscussionquestionstopromptdeeperengagementwiththematerial.Multimediacontentincludesvideosthatappealtostudentswithdifferentlearningstyles.TheInstructor’sManualprovidesanswerstoin-textquestionsandcasenotes.

SAGEedgeforStudentsprovidesapersonalizedapproachtohelpstudents

accomplishtheircourseworkgoalsinaneasy-to-uselearningenvironment.

Mobile-friendlyeFlashcardsstrengthenunderstandingofkeytermsandconcepts.Mobile-friendlypracticequizzesallowforindependentassessmentbystudentsoftheirmasteryofcoursematerial.Acustomizedonlineactionplanhelpstrackprogressthroughthecourseandmaterialstoenhancethelearningexperience.Chapterlearningobjectiveshelpstudentsreinforcethemostimportantmaterial.Multimediacontentincludesvideoandwebresourcesthatappealtostudentswithdifferentlearningstyles.EXCLUSIVE!Accesstofull-textSAGEjournalarticlesthathavebeencarefullyselectedtosupportandexpandontheconceptspresentedineachchapter.

Acknowledgments

WewouldliketothankourteamatSAGEPublications,whichhelpedbringthisbooktofruition.Ourfirstexecutiveeditor,PatriciaQuinlin,whobroughtustoSAGE,andeditorLisaCuevasShawhaveshepherdedthedevelopmentofthefirsteditionofHumanResourceManagementfromitsinception.Ourcurrenteditor,MaggieStanley,aswellasAbbieRickard,NicoleMangona,andKatieBierach,providedadditionalassistanceandsupport.WearegratefultoJanetKieselforacoverandinteriordesignthatsetsthisbookapart.Duringtheproductionprocess,LauraBarrettprovidedprofessionalismandvaluablesupport.LizThorntonlenthermarketingexperienceandskillstopromotingthebook.

WewouldliketoacknowledgeourcolleaguesatSHRMwhoprovidedorganizationalresources—inparticularthe2013SHRM

HumanResourceCurriculum—toensurethatFundamentalsofHumanResourceManagementisthetextbookofchoiceforfutureHRpractitioners.WewouldalsoliketorecognizeCindyWrightoftheDepartmentofHumanServicesforArkansasforhervitalcontributionofchapteropeningvignettes,whichfeatureherpersonalinsightandexperienceasanHRprofessional.ExcellentcasematerialhasbeenprovidedbyCanGuler,KomalThakker,andHerbertShermanoftheDepartmentofManagementSciences,SchoolofBusinessBrooklynCampus,LongIslandUniversity,andbyRobertWayland,UniversityofArkansasatLittleRock.

Thankstothefollowingreviewerswhoparticipatedthroughoutallstagesofthebook’sdevelopment:

WaiKwan(Elaine)Lau,MarshallUniversityTonyDaniel,ShorterUniversitySamuelL.Rohr,PurdueUniversityNorthCentral

MarieA.Valentin,TexasA&MUniversityBrianMartinson,TarletonStateUniversityCindyLanphear,UniversityoftheOzarksTonyBledsoe,MeredithCollegeJoniKoegel,CazenoviaCollegeAndreaSmith-Hunter,SienaCollegeReggieHall,TarletonStateUniversityRichardBahner,KeanUniversityKatinaSawyer,VillanovaUniversityHudsonNwakanma,FloridaA&MUniversityKellyHall,StetsonUniversityJuliePalmer,WebsterUniversityKellyMollica,UniversityofMemphis

AbouttheAuthors

RobertN.LussierisaprofessorofmanagementatSpringfieldCollege.Throughteachingmanagementcoursesformorethan25years,hehasdevelopedinnovativemethodsforapplyingconceptsanddevelopingskillsthatcanbeusedbothpersonallyandprofessionally.Aprolificwriter,Dr.Lussierhasmorethan425publicationstohiscredit,includingManagement7e(SAGE),HumanRelations10e(McGraw-Hill),andLeadership6e(SouthWestern/Cengage)andhaspublishedintoptieracademicjournals.HeholdsabachelorofscienceinbusinessadministrationfromSalemStateCollege,master ’sdegreesinbusinessandeducationfromSuffolkUniversity,andadoctorateinmanagementfromtheUniversityofNew

Haven.HeservedasfoundingdirectorofIsraelProgramsandhastaughtcoursesinIsrael.

JohnR.Hendonisaseven-timeentrepreneurandformerdirectorofoperationsfora$60millioncompany.Hebroughthisexperienceandintereststotheclassroomfulltimein1994andhasbeenaManagementfacultymemberattheUniversityofArkansasatLittleRockforover17years.AnactivememberoftheSocietyforHumanResourceManagement,heteachesintheareasofHumanResourcesManagement,Strategy,andOrganizationalManagement,andresearchesinanumberofareasintheManagementfield,specializinginEntrepreneurialresearch.JohnisalsocurrentlythePresidentof“TheVMPGroup,”anArkansas-basedbusinessconsultingfirm.John’scompanyconsultswithavarietyofbusinessesonhumanresources,familybusiness,strategicplanning,organizationaldesign,andleadership.He

hasprovidedprofessionalassistanceinthestart-upandoperationofdozensofArkansasandCalifornia-basedbusinessesandnon-profits,governmentagencies,andutilities.JohnholdsanMBAdegreefromSanDiegoStateUniversityandaBSinEducationfromtheUniversityofCentralArkansas.

©iStockphoto.com/Thomas_EyeDesign

PartI21stCenturyHumanResourceManagementStrategicPlanningandLegalIssues

1TheNewHumanResourceManagementProcess2Strategy-DrivenHumanResourceManagement3TheLegalEnvironmentandDiversityManagement

Practitioner’sModel

1TheNewHumanResourceManagementProcess

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ChapterOutlineWhyStudyHumanResourceManagement(HRM)?21stCenturyHRM

HRMThenandNowHRMChallengesCriticalDependentVariablesTechnologyandKnowledgeLaborDemographics

DisciplinesWithinHRMTheLegalEnvironment:EEOandDiversityManagementStaffingTrainingandDevelopmentEmployeeRelationsLaborandIndustrialRelationsCompensationandBenefitsSafetyandSecurityEthicsandSustainability

HRMResponsibilitiesLineVersusStaffManagementMajorHRResponsibilitiesofHR

StaffandLineManagementHRMSkills

TechnicalSkillsHumanRelationsSkillsConceptualandDesignSkillsBusinessSkills

HRMCareersSocietyforHumanResourceManagement(SHRM)OtherHROrganizationsProfessionalLiability

Practitioner’sModelforHRMTheModel

TrendsandIssuesinHRMCreatinganEngagedWorkforceReverseDiscriminationRulingsContinuetoEvolve

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

1-1ExplainwhyallmanagersneedtounderstandthebasicsofHRM.PAGE41-2DiscusshowHRMhelpsimproveorganizationalrevenuesina21stcenturyorganization.PAGE61-3DescribethemajorHRMdisciplineareas.PAGE101-4RecalltheprimarydifferencebetweenlineandstaffmanagersandtheirmajorHRresponsibilities.PAGE131-5SummarizethemajorHRMskillsets.PAGE161-6IdentifythemostcommonHRMcertificationprogramsandtheirparentorganizations.PAGE171-7Explainthepractitioner’smodelforHRMandhowitappliestothisbook.PAGE19

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindyreflectedonthecurrentstateoftheHRfield:Choiceandchange—twothingsyoucanrelyontoday!Nolongermerelyconcernedwithhiring,firing,andrecordkeeping,theaveragehumanresourcesdepartment(HR)increasinglypartnerswiththestrategicplannersintheexecutivesuite,thankstoHR-basededucationandcertifications.HRcertificationisavailablethroughHRCIwithPHR,SPHR,andGPHRdesignations,andSHRMalsooffersitsownprogramofcertificationwithSHRM-CPandSHRM-SCP.

MyprofessionalprogressbeganwithmembershipinHRorganizations.First,IbecameaSHRMstudentmember,whichprovidedaccesstoSHRM’swebsite—whichwasinturnvaluableforresearchwhileIwasastudent.Istilluseitfrequently.Next,myinvolvementspreadtothelocalHRassociation.Thechaptermeetingsprovidedexcellentopportunitiesforeducationthroughthemonthlyprograms,aswellasfornetworkingandswapping“bestpractices”withmycolleagues.Myinvolvementinspiredmetobecomecertifiedasaprofessional.Butbeyondthat,Ihavefoundthatthosewhoinvestincertificationtendtobecomemoreinvolvedintheir

professionand,byextension,moresuccessful.

Iinviteyoutojoinmeasweexplorethefieldofhumanresourcemanagement(HRM).Chapter1givesanoverviewofHRMasaprofession.

©CindyWright

CindyWright,PHR,camelatetotheHumanResourcesprofession,andperhapsthatexplainssomeofherpassionforthefield.WrightgraduatedsummacumlaudewithaBusinessAdministrationdegree,HRemphasis.Shewasrecognizedas“OutstandingGraduate”bytheHumanResourcesManagementdepartment.Afteremploymentasabenefitsadministratorforseventhousandtelecommunication’sretirees,thenasanHRGeneralistforagaswelldrillingcompanyof500employees,WrightisnowworkinginpersonnelmanagementfortheDepartmentofHumanServicesintheDivisionofBehaviorHealthServices.Besidesmembershipintheprofession’snationalorganization—theSocietyforHumanResourceManagement(SHRM),Wrighthasbeenactiveinthelocalaffiliatedchapter—theCentralArkansasHumanResourcesAssociation(CAHRA).WrightservedasVicePresidentofAdministrationforthechapter’sBoardaswellasChairoftheCollegeRelation

Committee.Shewasrecognizedbyherpeerswiththe“RisingStar”awardforherworkincreatingastudentchaptermembershipandwasinvolvedintheinitialeffortstocreatesatelliteCAHRAchapters.Wright’smissionistoprovideassistancetoothersinterestedinenteringintoandadvancingwithintheHumanResourcesprofession.

WhyStudyHumanResourceManagement(HRM)?It’snaturaltothink,“WhatcanIgetfromthisbook?”or“What’sinitforme?”Successinourprofessionalandpersonallivesisaboutcreatingrelationships,1andstudentsgenerallyunderstandtheimportanceofrelationships.2Thebetteryoucanworkwithpeople,themoresuccessfulyouwillbeinyourpersonalandprofessionallives—whetherasanemployee,alinemanager,orahumanresourcemanager.Andthat’swhatthisbookisallabout.

Inthe21stcenturyorganization,humanresources(HR)—thepeoplewithinanorganization—areoneoftheprimarymeansofcreatingacompetitiveadvantagefortheorganization,becausethewayswemanagepeopledirectlyaffecttheirperformance.3Thisisbecausemostorganizationsofcomparable

sizeandscopewithinanindustrygenerallyhaveaccesstothesamematerialandfacilities-basedresourcesthatanyotherorganizationwithintheindustrymayhave,makingitverydifficulttocreateacompetitiveadvantagebasedonmaterial,facility,orothertangibleresources.Whatthisfrequentlyleavesispeopleastheorganization’smostvaluableasset.4 Iftheorganizationcanmanageitspeoplemoresuccessfullythanitscompetitorsdo,ifitcangetitsemployeesengagedintheday-to-daysuccessoftheorganization,andifitcangetthemtostaywiththeorganization,thenithasamuchgreaterchanceofbeingsuccessful—withthetermsuccessfuldefinedinthiscaseasbeingmoreproductiveandmoreprofitablethanthecompetition.5Managersareresponsibleforgettingthejobdonethroughemployees,6sotheorganization’shumanresourcesarenearlyalwaysitsmostvaluableresource.(Asyoucansee,thereareSHRMGuideboxesnexttothissection.Wewillexplaintheminthesixthsectionofthischapter,“HRMCareers.”)

Whilejobsatisfaction(whichwewilltalkaboutatlengthlater)canbeanimportantaspectofemployeeengagement,theoverallconceptofemployeeengagementismuchlarger.Itisacombinationofjobsatisfaction,ability,andawillingnesstoperformfortheorganizationatahighlevelandoveranextendedperiodoftime.Googleisanexampleofanorganizationthattakestheconceptofemployeeengagementveryseriously.Google’s“ProjectOxygen”isoneattempttoanalyzewhatmakesabetterbossandusethatinformationtotrainmanagerstobemoreconsistentandinteractive.7Thistrainingisdesignedtocreategreateremployeesatisfactionandengagement,forverypracticalreasons.AccordingtoHRMagazine,companiesthatfallinto“thetop10%onemployeeengagementbeattheircompetitionby72%inearningspershareduring2007–08.”8Companieswithhighlevelsofsatisfactionandengagementoutperformedthosewithlessengagedemployeesinreturnoninvestment(ROI),operatingincome,

growthrate,andlong-termcompanyvaluation.9

Today’sstudentswantcoursestobedirectlyapplicabletotheirlivesoutsideofschool.10Organizationsalsowantmanagerstohavetheabilitytoapplyconceptsatwork.11Theroleofmodernmanagersalsocontinuestochange,requiringtoday’sorganizationalleaderstodealwithincreasinglydynamicandcomplexenvironments.12Becauseoftheseissues,thisbookusesathree-prongedapproach,withtheseobjectives:

ToteachyoutheimportantfunctionsandconceptsofHRMTodevelopyourabilitytoapplyHRMfunctionsandconceptsthroughcriticalthinkingTodevelopyourHRMskillsinyourpersonalandprofessionallivesTooffersomeuniquefeaturestofurthereachofthethreeobjectives,assummarizedinExhibit1-1

Exhibit1-1FeaturesofThisBook’sThree-ProngedApproach

Thisbookwillteachyouhowtogetpeopleengagedandgettheresultsnecessarytosucceedagainsttoughcompetitorsinthenewcentury.13WewillfocusonHRmanagement,buttheprincipleswithinthistextapplytoanyformofmanagement.Thebottomlineisthatifyoulearntheseskillsandapplythemsuccessfullyinanymanagerrole,youwillgetyouremployeesengagedandimproveproductivity.Thatiswhatwillgetyounoticedbyseniormanagementandallowyoutomoveuptheorganizationalladder.Solet’sgetstarted!

LO1-1ExplainwhyallmanagersneedtounderstandthebasicsofHRM.

Humanresources(HR)Thepeoplewithinanorganization

SHRMSHRMGuideboxes(tiedtoAppendix)throughoutthetextwillshowyouwhatSHRMsaysacollegecurriculumshouldteachinanHRMmajor.

SHRMA:5

EmployeeInvolvement

EmployeeengagementAcombinationofjobsatisfaction,ability,andawillingnesstoperformfortheorganizationatahighlevelandoveranextendedperiodoftime

WORKAPPLICATION1-1Howcanthiscoursehelpyouinyourpersonalandprofessionallives?Whatareyourgoals,orwhatdoyouwanttogetoutofthiscourse?

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

A.EmployeeandLaborRelations(required)

4.Employeeengagement5.Employeeinvolvement6.Employeeretention20.Attendance

B.EmploymentLaw(required)21.Professionalliability

C.Ethics(required)8.Codesofethics

D.HR’sRoleinOrganizations(required)

1.Generally...discussHR’srolewithregardtoeachoftheindividualHRdisciplines

F.ManagingaDiverseWorkforce(required)

8.ReversediscriminationJ.StrategicHR(required)

5.Sustainability/corporatesocialresponsibility6.Internalconsulting(required—graduatestudentsonly)9.Ethics(integrated)11.Organizationaleffectiveness

O.Globalization(required—graduatestudentsonly)

8.GloballabormarketsQ.OrganizationalDevelopment(required—graduatestudentsonly)

5.Improvingorganizationaleffectiveness6.Knowledgemanagement9.Ongoingperformanceandproductivityinitiatives10.Organizationaleffectiveness

21stCenturyHRM

HRMThenandNowBackinthemid-1970s—whenthereweren’tevenanycomputersavailabletomostmanagers!—thehumanresourcemanager(weusuallycalledthempersonnelmanagersthen)wassometimesselectedforthejobbecausethatpersonhadlimitedskillsasanoperationalmanager.Manytimestheywerenotconsideredcapableofmanaginglinefunctionsinrealoperations,soweputtheminHR.ThiswasbecauseHRMwasconsideredtobeabiteasierthanothermanagementjobs.HRmanagerswereonlyexpectedtobepaperpusherswhocouldkeepallofthepersonnelfilesstraight.Theyhadverylittletodowiththemanagementoftheorganization’sbusinessprocesses.

CostCenters.Inthesetypesoforganizations,theHR

departmentwasconsideredacostcenter.Acostcenterisadivisionordepartmentthatbringsinnorevenueorprofitfortheorganization—runningthisfunctiononlycoststheorganizationmoney.Asyoucaneasilysee,wedon’twantmany(orany)costcentersifwecanhelpit.Weneedrevenuecentersinstead.

LO1-2DiscusshowHRMhelpsimproveorganizationalrevenuesina21stcenturyorganization.

SHRMA:4

EmployeeEngagement

RevenueCenters.Revenuecenters,however,aredivisionsordepartmentsthatgeneratemonetaryreturnsfortheorganization.Wherecostcenterseatupavailablefunds,revenuecentersprovidefundsfortheorganizationtooperate.So,what’sagoodHRmanagertodo?HRdepartmentsarenotabletogeneraterevenuedirectlybecauseoftheirtaskingwithintheorganization,buttheycangeneratesignificantrevenueandprofitinanindirectfashionasproductivitycenters.

SHRMQ:9

OngoingPerformanceandProductivity

ProductivityCenters.Aproductivitycenterisarevenuecenterthatenhancestheprofitabilityoftheorganizationthroughenhancingtheproductivityofthepeoplewithintheorganization.Today’sHRmanagersarenolongerrunninganorganizationalcostcenter.HRMenhancestherevenuesoftheorganization—bybeingaproductivitycenter.Productivityistheamountofoutputthatanorganizationgetsperunitofinput,withhumaninputusuallyexpressedintermsofunitsoftime.

Buthowcanwebecomemoreproductive?Productivityistheendresultoftwocomponentsthatmanagersworktocreateand

improvewithintheorganization:

Effectiveness—afunctionofgettingthejobdonewheneverandhoweveritmustbedone.Itanswersthequestion,“Didwedotherightthings?”Efficiency—afunctionofhowmanyorganizationalresourcesweusedingettingthejobdone.Itanswersthequestion,“Didwedothingsright?”

Bothoftheseareimportant,butmostofthetime,wearefocusedonefficiency.Ourpeopleallowustobemoreefficientasanorganizationiftheyareusedinthecorrectmanner.Thiscourseisabouthowtomakeourpeoplemoreefficient.

Companiesaroundtheworldaretakingthisneedforefficiencyveryseriously,andafewexampleswillquicklyshowhowseriously.TeresaTaylorofCenturyLink,LisaBrummelofMicrosoft,andLeslieLockeofAthenahealthwerealllinemanagerswithsignificantexperience,butnoneofthemhad

seniorHRMexperiencewhentheirorganizationsaskedthemtobecomeHRleaders.Eachofthecompanieswasconcernedaboutemployeeengagementandproductivity,andespeciallyaboutimprovingefficiency,14sothecompaniesputsomeoftheirbestmanagersintheHRMjob.Inadditiontoimprovingefficiency,somefairlynewresearchhasshownthatamongFortune500firms,havingaseniorHRmanagerinthe“C-suite”—meaninghavingachiefofhumanresourcesoperations(CHRO)inadditiontohavingachiefoperationsofficer(COO),achieffinanceofficer(CFO),etc.—increasedprofitabilityby105%overpeercompaniesthatdidnothaveaCHRO!15

HRmanagementdealsprimarilywithimprovingtheefficiencyofthepeoplewithinourorganization—gettingmoreperunitoftime.Ifourpeopleareinefficient,itcanliterallykilltheorganization.

CostcenterAdivisionordepartmentthatbringsinnorevenueorprofitfortheorganization—running

thisfunctiononlycoststheorganizationmoney

RevenuecentersDivisionsordepartmentsthatgeneratemonetaryreturnsfortheorganization

ProductivitycenterArevenuecenterthatenhancestheprofitabilityoftheorganizationthroughenhancingtheproductivityofthepeoplewithintheorganization

ProductivityTheamountofoutputthatanorganizationgetsperunitofinput,withhumaninputusuallyexpressedintermsofunitsoftime

EffectivenessAfunctionofgettingthejobdonewheneverandhoweveritmustbedone

EfficiencyAfunctionofhowmanyorganizationalresourcesweusedingettingthejobdone

SHRMQ:5,10,J:11

ImprovingOrganizationalEffectiveness;OrganizationalEffectiveness

WORKAPPLICATION1-2Recallyourmostrecentjob.Didyouworkinatraditionalcostcenter,arevenuecenter,oraproductivitycenter?Brieflydescribethefirmanddepartmentandwhatmadeitacost,revenue,orproductivitycenter.

HRMChallengesArecentSHRMsurveyofHRprofessionalsaskedwhatchallengestheythinkwillbemostsignificantoverthenext10years.Hereiswhattheysaid.16

Thethreebiggestchallenges:

1. Retainingandrewardingthebestemployees

2. Developingthenextgenerationofcorporateleaders

3. Creatingacorporateculturethatattractsthebestemployees

TheHRcompetenciesandsubcompetenciesthatwillbethemostcritical:

1. Businessacumen1. HRmetrics/analytics/business

indicators2. Knowledgeofbusinessoperations

andlogistics3. Strategicagility

2. Organizationalleadershipandnavigation3. Relationshipmanagement4. Communication

Today’stechnologyimprovestheeffectivenessandefficiencyofHRmanagers,leadingtohigherlevelsofproductivitythroughouttheorganization.

©iStockphoto.com/Yuri_Arcurs

Canyouseehowthesechallengesandthe

competenciescouldhaveaneffectonproductivity?Wehavepursuedbetterselectionandretentionstrategiesforanumberofyears,andwehaverecentlybecomemuchbetteratidentifyingfutureleadersandmanagingorganizationalrelationships,culture,andstructure.

Wherewehavenotdoneaswell—atleastinmostorganizationstothispoint—isinbusinessacumen,especiallyinquantitativeareasdealingwithmetricsanddataanalytics.ThisisanareathatwillexplodeinthenextfewyearsinHRdepartmentsallovertheworld.TheabilitytoanalyzelargedatasetswillallowHRMstoworktowardovercominganotheroftheirchallenges—creatingstrategicagilityandgreaterproductivity.WewillintroduceyoutosomeofthebasicHRmetricsaswegothroughthistextsothatyouhaveaworkingunderstandingofhowtheymightbeusedineachfunctionalareaofHRM.

CriticalDependentVariablesBeforewegofurther,let’slookatsomeofthethingsthatmanagerstellustheymustcontroltocompeteintoday’sbusinessenvironmentbutthattheycan’tdirectlymanipulate.Everytimethatwesurveymanagersinanyindustryoranydepartmentaboutmanagingothers,theybringupthefollowingissuesasbeingamongthemostimportantandmostdifficultthingsthattheydealwith:17

1. Productivity—definedabove2. Jobsatisfaction—afeelingofwell-being

andacceptanceofourplaceintheorganization

3. Turnover—permanentlossofworkersfromtheorganization.Whenpeoplequit,itisconsideredvoluntaryturnover,whilewhenpeoplearefired,itisinvoluntaryturnover.

4. Absenteeism—temporaryabsenceofemployeesfromtheworkplace

Notethatalloftheseissuesdealwithpeople:notcomputers,notbuildings,notfinances—people!Wehavealreadyintroducedyoutoproductivity,butwhatabouttheotherthreeitems?Whydowecareaboutjobsatisfaction,turnover,andabsenteeism?Let’stakeamomentforamoredetailedlookateachofthem.

Jobsatisfaction,asnotedabove,isthefeelingofwell-beingthatweexperienceinourjobs—it’sbasicallywhetherornotwelikewhatwedoandtheimmediateenvironmentsurroundingusandourjobs,or“theextenttowhichpeoplelike(satisfaction)ordislike(dissatisfaction)theirjobs.”18Thereisawealthofresearchthatshowsthatifouremployeesarehighlydissatisfiedwiththeirjobs,theywillbefarmorelikelytovoluntarilyleaveandcreateturnover.19Theywilltypicallyalsohavelowerthanaverageproductivity,sowewanttomaintainreasonablyhighjobsatisfaction.

Turnoveristhepermanentlossofworkers

fromtheorganization.Thereisstrongand“growingrecognitionthatcollectiveturnovercanhaveimportantconsequencesfororganizationalproductivity,performance,and—potentially—competitiveadvantage.”20Aswewilldiscussthroughoutthebook,turnoverisverycostly,sowewanttominimizeturnover.

Howaboutabsenteeism?Absenteeismisthefailureofanemployeetoreporttotheworkplaceasscheduled.Onanannualbasis,absenteeismcostsintheUnitedStateswentfromanestimated$30billionin198421toanywherefrom$100to$150billionperyearin2011.22,23Welikelyloseproductivity,andifsomeofourworkersarefrequentlyabsent,itcauseslowerjobsatisfactioninotherswhohavetocontinually“takeuptheslack”fortheirabsentcoworker.

Notethatthesefourissuesareinterrelated.Absenteeismiscostly,isoftenduetoalackofjobsatisfaction,andleadstolower

productivity.24Peopletendtoleavetheirjobs(turnover)whentheydon’thavejobsatisfaction,andwhiletheyarebeingreplacedandsometimesafter,organizationalproductivitygoesdown.25Seeingthatjobsatisfactioncanaffectabsenteeism,turnover,andproductivity,wewilldiscussjobsatisfactioninsomemoredetailinChapter9.

Sothebottomlineisthis:Asmanagers,wealwaysneedtobedoingthingsthatwillimproveproductivityandjobsatisfactionandthatwillreduceabsenteeismandturnover.Theseitemsarecritical.EverythinginHRMrevolvesaroundthesefourthings.

WORKAPPLICATION1-3Howwouldyourateyourlevelofproductivity,jobsatisfaction,turnover,andabsenteeismonyourcurrentjoborapastjob?

SHRMA:6

EmployeeRetention

SHRMA:20

Attendance

JobsatisfactionThefeelingofwell-beingthatweexperienceinourjobs—basicallywhetherornotwelikewhatwedoandtheimmediateenvironmentsurroundingusandourjobs

TurnoverThepermanentlossofworkersfromtheorganization

AbsenteeismThefailureofanemployeetoreporttotheworkplaceasscheduled

InformationAge Anerathatbeganaround1980,inwhichinformationbecameoneofthemainproductsusedinorganizations;itischaracterizedbyexponentialincreasesinavailableinformationinallindustries

TechnologyandKnowledgeThe20thcenturysawthegrowthanddeclineoftheIndustrialAgeintheUnitedStatesandmostotherdevelopedcountriesaroundtheworld.However,aswenearedtheendofthe20thcentury,westartedtoentertheInformationAge—anerathatbeganaround1980,inwhichinformationbecameoneofthemainproductsusedinorganizations;itischaracterizedbyexponentialincreasesinavailableinformationinallindustries.Thiswaswhenassemblylineworkbegantobetakenovermoreandmorebycomputers,robots,andothermachines,anditwaswhenthehumansinourorganizationswerebeginningtoprovidemorethanjustlabor;theystartedtoprovideintelligence—orknowledge.IntheInformationAge,webegantoseeanewkindofworker—knowledgeworkers.

KnowledgeWorkersandtheKnowledge-BasedFirm.Knowledgeworkersareworkerswho“usetheirheadmorethantheirhands”andwhogatherandinterpretinformationtoimproveaproductorprocessfortheirorganizations.Therehasbeenalotwritteninthepast20yearsonknowledgeworkers,butwecanboilitdowntothefactthatmostworkersin21stcenturyorganizationsarenotworkingprimarilywiththeirhands;theyworkwiththeirminds.Inessence,knowledgeworkersmanageknowledgeforthefirm.

SHRMQ:6

KnowledgeManagement

ThePaceofTechnologicalChange.Technologyiscurrentlyoutstrippingourabilitytouseit.Computersgetfasterandfaster,butthehumanbeingsthathavetousethemdon’t.Whatdoesthismeantoabusiness?Itmeansthatifwecanfigureoutwaystotakeadvantageofthetechnologybetterandquickerthanourcompetitorscan,thenwecancreateasustainablecompetitiveadvantage.Wemustcontinuallyfigureoutwaystousethetechnologymoresuccessfullythroughhiringandtrainingbetterandmorecapableemployees—ourhumanresources.Ifwedothis,thenourpeoplewillcontinually

figureoutwaystotakeadvantageofitbeforeourcompetitors.

KnowledgeWorkersAreinShortSupply.However,thereisacontinuousshortageofknowledgeworkersavailable.Infact,“ThemajorityofjobsbeingcreatedintheUnitedStatesrequireskillspossessedbyonly20%ofthecurrentworkforce.”26Andthenewsisthesameglobally.Thismeansthatfortheforeseeablefuture,wewillhaveashortageofknowledgeworkers.SoeachHRmanagerisgoingtobecompetingwitheveryotherHRmanagerintheworldforthat20%oftheworkforcethatcomprisesthepoolofknowledgeworkers.Onlyiftheorganizationmanagesitspeoplesuccessfullyandmaintainsareasonableworkingenvironmentwillithaveanychanceoffillingmostofthejobsthatithasavailable.

KnowledgeworkersWorkerswho“usetheirheadmorethantheirhands”andwhogatherandinterpretinformationtoimproveaproductorprocessfortheirorganizations

LaborDemographicsInadditiontotheissuesofknowledgeworkersandknowledge-basedorganizations,wefacesignificantdemographicchangesinthelaborforcethatwillbeavailabletoourcompaniesoverthenext20years.

Partofthediversityintoday’sworkforceispeopleretiringlaterinlifeandworkingpart-time.

©Colorblind/Cardinal/Corbis

Companiesarealreadyseeingareductioninthenumberandqualityofpotentialemployees,aswellasgreatergender,ethnic,andagediversitythanatanytimeinthepast.Thelackofskilledworkersforincreasinglycomplexjobsisconsideredtobeamajor,ongoingproblem.27,28Partlyasaresultofthisshortageofskilledlabor,weareseeingmoreolderemployeeswithhigh-levelskillsetsremainintheworkforce.Someagenciesestimatethatover90%ofthegrowthintheUSlaborforcebetween2006and2016willbefromworkersages55andolder.29Soasamanagerina21stcenturyorganization,yourworkforcewilllookmucholderthanithashistorically.

Yourorganizationwillalsolookmoreculturallydiverse—evencomparedtotoday.Thegrowthinimmigrantworkerswillbesubstantial.Hispanicworkers(ofallnationalities)alonearepredictedtobeapproximately24%oftheworkforcein2050,buttoday,theyonlymakeupabout14%oftheworkforce.Asianworkersareexpectedto

moveupfromabout4%nowtoabout8%oftheworkforcein2050.Butthegendermixwillstayfairlyclosetowhatitistoday.Thepercentageofwomenintheworkforcehasstabilizedatabout47%or48%.30

Allofthismeansthatmanagersofa21stcenturyorganizationwillneedtobemoreculturallyawareandabletodealwithindividualswithsignificantlydifferentworkethics,culturalnorms,andevenlanguages.

SHRMO:8

GlobalLaborMarkets

DisciplinesWithinHRMHRMisanexcitingfieldwithmanydifferentpathsthatyoucantakeoverthecourseofyourcareer.Thefieldissobroadthatyoucoulddosomethingdifferenteachyearfora40-yearcareerandneverexactlyduplicateanearlierjob.Althoughtherearemanydifferentjobsinthefield,mostofthemfallintoafewcategories.Let’sbrieflytakealookateachofthesedisciplinesorspecialties.Butfirst,completetheself-assessmentbelowtohelpyoubetterunderstandyouroverallinterestinHRandwhichspecialtiesinterestyoumore.Thissectionpresentsthedisciplinesdiscussedindetailthroughoutthebook,sowewillkeepitshorthere.

TheLegalEnvironment:EEOandDiversityManagementEqualemploymentopportunity(EEO)anddiversitymanagementspecialistsensurecompliancewithequalopportunitylawsandregulationsaswellasorganizationalaffirmativeactionplans(whensuchplansarerequiredordesired).Theyalsohaveresponsibilitiesrelatedtothemanagementofdiverseemployeegroupswithinthecompany.

TheHRlegalandregulatoryenvironmentiscriticaltoeveryorganizationtoday.ThisisalsoquitelikelytheareathatchangesmorethananyotherinHRM.EverycourtcasethatdealswiththeHRenvironmentinsideanyorganizationhasthepotentialtoaffecteveryorganization.Evenifthecourtrulingdoesn’tchangethewayacompanyhastodobusiness,ifafederalorstatelegislatureseesthatrulingasunfair,thenitmaychangethelawandthusaffecteachorganizationunderitsjurisdiction.

LO1-3DescribethemajorHRMdisciplineareas.

StaffingStaffingincludesallofthethingsthatweneedtodotogetpeopleinterestedinworkingforourcompany—goingthroughtherecruitingprocess,selectingthebestcandidateswhoapply,andgettingthemsettledintotheirnewjobs.However,thisareacanliterallymakeorbreaktheorganizationinitsabilitytobeproductive.31Ifweattractandhiretherighttypesofpeoplewiththerightattitudesandskills,thentheorganizationwillhaveagoodstartatbeingsuccessful.

TrainingandDevelopmentNext,wehavethetraininganddevelopmentdiscipline.Wetrainpeopleforavarietyofreasons,fromteachingthemtheirbasicjobtoteachingthemthethingsthattheywillneedinordertomoveupintheorganizationaspeopleabovethemresignorretire.

Asatraininganddevelopmentspecialist,youwouldhaveresponsibilityforthetrainingprocesseswithintheorganizationaswellasforthedevelopmentofcurriculaandlessonplansandthedeliveryoftrainingcourses.Youwouldalsobeinvolvedwiththedevelopmentoftalentwithinthecompanysothatemployeesaretrainedandreadytomoveintomoreseniorpositionsasthosepositionsbecomevacant.

EmployeeRelationsThisspecialtycoversawidearrayofitemssuchascoaching,counseling,anddiscipliningtheworkforceasneeded.Italsoinvolvesleadershipandteam-buildingeffortswithintheorganization.Wealsomeasureandevaluatejobsatisfactionandemployeeengagementaspartofemployeerelations.HRmanagersinthisfunctionhavetokeepupwiththemanyandvariedlawsrelatingtoemployeerelations,andthisspecialtyalsoinvolvesthemanagementofemployeecommunication.

Recyclingcontributestoourpresentandfuturesustainability.

©iStockphoto.com/workinc

LaborandIndustrialRelationsThelaborandindustrialrelationsspecialistworkswiththelawsandregulationsthatcontroltheorganization’slabor-relatedrelationshipswiththeirworkforce.HRmanagerswhoworkinthisareamightbeinvolvedinunionvotes,negotiationsforunionagreements,collectivebargaining,grievances,andotheritemsthataffecttheunion/managementrelationshipwithintheorganization.Thisareaalsoincludesalllaborrelationsactivities,eveninnonunionbusinesses.

CompensationandBenefitsThecompensationandbenefitsspecialisthelpsdecidethetotalcompensationpackagethattheorganizationwillusetoattractandretainthebestmixofpeoplewithskillsthatarespecificallysuitedtotheorganization.Amanagerwillhavetounderstandthefederalandstatelawsthatdealwithcompensation.Youwouldalsodealdirectlywithallofthefederalandstatecompensationlawstoensurecomplianceinorganizationalpayandbenefitsprocedures.

SafetyandSecurityInthesafetyandsecuritydiscipline,youmightworkintheareaofoccupationalsafetyand/orhealthtomakesurewedon’tinjureourpeopleorcausethemtobecomesickbecauseofexposuretosomesubstancetheyworkwith.Thisdisciplinealsoincludesfieldssuchasstressmanagementandemployeeassistanceprograms,whichhelpemployeescopewiththedemandsoftheirjobsonadailybasis.Andfinally,thisfunctionworkstoensurethatemployeesaresecurefromphysicalharminflictedbyotherworkers,outsiders,orevenactsofnature.

EthicsandSustainabilityInthisspecialty,youwouldbearresponsibilityforseeingtoitthattheorganizationactsinanethicalandsociallyresponsiblemanner.Youmightworkoncodesofethicsandalsomakesureemployeeslivebythosecodes,suchasbymaintainingwaysinwhichemployeescanreportviolationsofethics(alsoknownaswhistle-blowing).

Sustainabilityismeetingtheneedsoftodaywithoutsacrificingfuturegenerations’abilitytomeettheirneeds.32Somecompanieshavehistoricallydonearelativelypoorjobofmaintainingtheenvironmentinsomecountriesinwhichtheyoperated.

Ifyoutakealookatthetableofcontentsaswellasthepractitioner ’smodelbelow,youwillrealizethatthisbookisorganizedtodiscusstheeightareasofHRMlistedabove.Next,let’stakealookatsomeofthe

professionalorganizationsthatareouttheretohelpyougetwhereyouwanttogoinanHRMcareer.

SHRMJ:5

Sustainability/CorporateSocialResponsibility

J:9

Ethics(integrated)

C:8

CodesofEthics

1-1Selfassessment

HRDisciplinesFollowingare24HRactivitiesthatyoucouldbeinvolvedin.Rateyourinterestineachspecialtywithanumber(1–7)thatrepresentsyourinterestintheactivity.

1. _____Workingtomakesureeveryoneinthefirmistreatedfairly

2. _____Workingagainstdiscriminationandhelpingminoritiestogethiredandpromoted

3. _____Knowingthelaws,helpingthefirmimplementlaws,andreportinghowthefirmcomplieswiththeHRlaws

4. _____Workingtogetpeopletoapplyforjobs,suchaswritingadvertisementsandattendingjobfairs

5. _____Interviewingjobcandidates6. _____Orientingnewemployeestothefirmand

theirjobs7. _____Teachingemployeeshowtodotheir

currentjobs8. _____Developingemployees’generalskillsso

theycanprogressinthefirm9. _____Designingcurriculaandlessonplansfor

otherstoteachemployees10. _____Coaching,counseling,anddisciplining

employeeswhoseworkqualityisnotuptostandards

11. _____Workingwithteamsandhelpingresolveconflicts

12. _____Workingtounderstandandimprovethelevelofjobsatisfactionthroughoutthefirm

13. _____Workingwithunionemployees14. _____Collectivebargainingwithunions15. _____Solvingemployeecomplaints16. _____Workingtodeterminefairpayfordifferent

jobs,includinginvestigatingcompetitors’payscales

17. _____Creatingincentivestomotivateandrewardproductiveemployees

18. _____Findinggoodbenefitsproviders,suchaslower-costandhigher-qualityhealthinsuranceproviders

19. _____Makingsurethatemployeesdon’tgethurtonthejob

20. _____Workingtokeepemployeeshealthy,suchasdevelopingdietandexerciseprograms

21. _____Ensuringthesecurityofthefacilitiesandemployees,issuingIDs,andkeepingemployeerecordsconfidential

22. _____Ensuringthatemployeesareethical,suchasdevelopingandenforcingcodesofethics

23. _____Enforcingethicalstandards,suchasmaintainingmethodsforemployeestoconfidentiallyreportethicsviolations

24. _____Workingtohelptheorganizationdevelopmethodstoimproveefficiencywhileprotectingourenvironment

ScoringandInterpretingIndividualDisciplineResultsPlaceyourratingnumbers(1–7)belowandtotalthethreescoresforeachdiscipline.Thenrankyourtotalsfrom1to8todeterminewhichdisciplinesinterestyoumost:

LegalEnvironment:EEOandDiversityManagement

1_____2_____3____________Total(Rankthistotal:_____[1–8])

Staffing4_____5_____6____________Total(Rankthistotal:_____[1–8])

TrainingandDevelopment7_____8_____9____________Total(Rankthistotal:_____[1–8])

EmployeeRelations10_____11_____12____________Total(Rankthistotal:_____[1–8])

LaborandIndustrialRelations

13_____14_____15____________Total(Rankthistotal:_____[1–8])

CompensationandBenefits16_____17_____18____________Total(Rankthistotal:_____[1–8])

SafetyandSecurity19_____20_____21____________Total(Rankthistotal:_____[1–8])

EthicsandSustainability22_____23_____24____________Total(Rankthistotal:_____[1–8])

Thehigheryourtotalineachdiscipline,thegreateryourinterestinthatareaofHRatthispointintime.Ofcourse,yourinterestlevelscanchangeasyoulearnmoreabouteachdiscipline.Youwillalsobedoingself-assessmentsinalltheotherchaptersthatrelatetotheseeightdisciplines.

ScoringandInterpretingTotalDisciplineResultsNowaddupyourgrandtotalinterestscorefromall24activitiesandwriteithere:________.Thencompareittothecontinuumbelowtogaugeyouroveralllevelofinterestinworkinginhumanresources:

Thehigheryourscore,thegreaterisyouroverallinterestinHR,againatthistimeonly.

Youshouldrealizethatthisself-assessmentisonlydesignedtoshowyourcurrentlevelofinterest.ItmaynotpredicthowmuchyouwillenjoyworkinginanyHRdisciplineinthefuture.Forexample,ifyougetarealjobinanareawhereyougaveyourselfalowscoretoday,youcouldendupfindingitveryinteresting.Theself-assessmentsthroughoutthisbookaredesignedtogiveyouabetterunderstandingofyourinterestandaptitudesatthepresenttime,andtheyareopentoyourinterpretations.Forexample,somepeopletendtoratethemselvesmuchlowerorhigherthanotherseventhoughtheyhavethesamelevelofinterest—sodon’tbetooconcernedaboutyourscore.Therearenocorrectanswersorscores.Somepeoplewithlowerscoresmayactuallyenjoythecoursemorethanthosewithhigherscores.Thepurposeoftheseself-assessmentsistohelpyougainself-knowledgeandget

youthinkingabouthowthetopicofHRMrelatestoyou.

Soatthispoint,youshouldhaveabetterideaofwhattheeightHRdisciplinesareandwhichareasareofmoreandlessinteresttoyou.Butasyoureadtherestofthischapterandtheothersandlearnmoreabouteachdiscipline,youmaychangeyourmind.

HRMResponsibilitiesNowthatweknowtheHRdisciplines,it’stimetolearnthedifferencebetweenlineandstaffmanagersandhowtheirHRresponsibilitieswithinthedisciplinesaredifferentwhilebeingrelated.

LineVersusStaffManagementLinemanagersaretheindividualswhocreate,manage,andmaintainthepeopleandorganizationalprocessesthatcreatewhateveritisthatthebusinesssells.Putsimply,theyarethepeoplewhocontroltheactualoperationsoftheorganization.Alinemanagermayhavedirectcontroloverstaffemployees,butastaffmanagerwouldnotgenerallyhaveanydirectcontroloflineemployees.HRmanagers,ontheotherhand,wouldgenerallybestaffmanagers,individualswhoadviselinemanagersinsomefieldofexpertise.Thesemanagers,includingaccountants,lawyers,andHRstaff,actbasicallyasinternalconsultantsforthecompany.SoHRmanagershavestaffauthoritytoadvisetheoperationalmanagersconcerningtheHRdisciplines,aswediscussnext.

Lineandstaffemployeescanworkmoreeffectivelytogetherwithtoday’stechnology.

©iStockphoto.com/workinc

LO1-4RecalltheprimarydifferencebetweenlineandstaffmanagersandtheirmajorHRresponsibilities

WORKAPPLICATION1-4GivebriefexamplesoftheHRdisciplinesperformedbytheHRdepartment(orindividualsresponsibleforHR)whereyouworkorhaveworked.

1-1ApplyingTheConcept

HRMDisciplinesIdentifyeachHRMdisciplineandwritethelettercorrespondingtoitbeforetheactivityinvolvingit:

1. LegalEnvironment:EEOandDiversityManagement

2. Staffing3. TrainingandDevelopment4. EmployeeRelations5. LaborandIndustrialRelations6. CompensationandBenefits7. SafetyandSecurity8. EthicsandSustainability

_____1.TheHRmanageriswritinganadtorecruitajobcandidate._____2.TheHRmanagerisinvestigatinganemployeecomplaintofracialdiscrimination._____3.TheHRmanageristakingaclassinpreparationfortheexamtobecomecertifiedasaProfessionalinHumanResources(PHR)._____4.TheHRmanagerisworkingwithaninsurancecompanytotrytokeepthehighcostofhealthinsurancedown._____5.TheHRmanagerisreplacingtheofficecopierwithamoreenergy-efficientmodel._____6.TheHRmanagerishavinganew

softwareprograminstalledtoprotectemployeerecordsfromtheft._____7.TheHRmanagerisworkingonthenewcollectivebargainingcontractwiththeTeamstersUnion._____8.TheHRmanagerislookingforpotentialnewemployeesattheLinkedInwebsite._____9.TheHRmanagerisfillingoutanaccidentreportwithaproductionworkerwhogothurtonthejob._____10.TheHRmanagerisreviewingareportthatcomparesitswagesandsalariestootherbusinessesinthearea._____11.TheHRmanagerisgivingprioritytopromotingamemberofaminoritygrouptoamanagementposition._____12.TheHRmanageristeachingthenewemployeehowtousetheHRsoftwareprogram._____13.TheHRmanagerisreferringanemployeetoamarriagecounselor.

1-1Ethicaldilemma:whatwouldyoudo?OurfirstHRdisciplineistoknowandobeythelaws,andthelastdisciplineisethicsandsustainability.Alongdebatedissueis:(a)shouldacompanyfocusonmakingaprofitanddoingsowithinthelaw,or(b)shouldacompanygobeyondthelawtobeethicalandsociallyresponsible?Someexpertsstatethat(c)bybeingethicalandsociallyresponsiblethefirmwillbemoreprofitable,whereas(d)otherssaythatoneshouldn’tconsiderprofits—acompanyshouldbeethicalandsociallyresponsiblesimplybecauseitistherightthingtodo.Apple’scofounderSteveJobsprimarilybelievedinfocusingonprofits,whereascurrentCEOTimCookhaschangedpoliciestobemoresociallyresponsiblebygivingmoreresourcestononprofitorganizations.

1. Doyouagreewith(a)focusingonprofits,or(b)goingbeyondtobeethicalandsociallyresponsible?

2. Doyouagreewith(c)beingethicalandsociallyresponsibleifitisprofitable,or(d)thatacompanyshouldbeethicalsimplybecauseitistherightthingtodo?

3. ReviewtheHRdisciplinesanddescribehowacompanycanbeethicalandsocially

responsibleinperformingthesefunctions.

MajorHRResponsibilitiesofHRStaffandLineManagementAllmanagersareresponsibleformeetingtheorganization’sgoalsthrougheffectivemanagementofitshumanresources.However,theirmajorHRresponsibilitiesaredifferent.TheHRstaffhastheprimaryresponsibilityofdevelopingtheHRpoliciesandprogramsforeveryoneintheorganizationtoimplementonadailybasis.Thelinemanagers,therefore,areresponsibleforimplementingtheHRpolicieswithintheirdepartments.Let’sreviewtheHRdisciplinesanddiscusssomedifferences.

TheLegalEnvironment:EEOandDiversityManagement.TheHRstaffneedstoknowthelawsandtrainthelinemanagershowtooperatewithinthelaw,suchaswhatlinemanagerscanandcan’t

askduringtheinterviewprocesstofollowEEOlaws.HRstaffmaydevelopdiversityprogramsandteachlinemanagershowtoworkwithadiversityofemployees.Staffing.TheHRstaffgenerallyrecruitsemployees,butlinemanagersselectwhoishired.TrainingandDevelopment.HRstaffdeveloptrainingprograms,includingtraininglinemanagershowtobeeffectivemanagers.HRmayteachmanyemployeeshowtodotheirjobs,butlinemanagerstendtoprovideongoingon-the-jobtraining.EmployeeRelations.HRstaffdeveloppolicies,butlinemanagersareconstantlydealingwithemployeerelations.HRmaytrainlinemanagersonhowtocoachanddisciplineemployees.LaborandIndustrialRelations.HRisresponsibleforpoliciesandtrainingtomakingsurethelaborlawsarefollowed,andlinemanagersimplementthem.Iftheorganizationhasaunion,HRoftenhelps

inthecontractnegotiations.CompensationandBenefits.HRisresponsiblefordevelopingthepaysystemincludingsalaryandbenefits,butlinemanagerscanoftenhavesomeinputintohowmuchanindividualispaid,includingraises.SafetyandSecurity.HRisresponsibleforknowingthesafetylaws(OSHA)andensuringthatlinemanagerstrainandmanagetheiremployeestofollowthesafetyrules.EthicsandSustainability.HRmaydevelopEthicsCodesforeveryoneintheorganizationtofollow,andlinemanagersareresponsibleformakingethicaldecisionsandhelpingtheiremployeesdolikewise.

WORKAPPLICATION1-5Giveexamplesoflineandstaffpositionsatanorganizationwhereyouworkorhaveworked.

SHRMJ:6

InternalConsulting

SHRMD:1

HR’sRoleinOrganizations

LinemanagersTheindividualswhocreate,manage,andmaintainthepeopleandorganizationalprocessesthatcreatewhateveritisthatthebusinesssells

StaffmanagersIndividualswhoadviselinemanagersinsomefieldofexpertise

HRMSkillsAllmanagersrequireamixoftechnical,humanrelations,conceptualanddesign,andbusinessskillsinordertosuccessfullycarryouttheirjobs(seeExhibit1-2).33ThesetofnecessaryHRskillsissimilartotheskillsneededbyothermanagers,butofcourseitemphasizespeopleskillsmorethansomeothermanagementpositionsdo.

TechnicalSkillsThefirstskillsetthatanHRmanagermustdeveloptobesuccessful,andtheeasiestonetodevelop,istechnicalskills.34Technicalskillsaretheabilitytousemethodsandtechniquestoperformatask.HRmanagersrequiremanyskills,includingcomprehensiveknowledgeoflaws,rules,andregulationsrelatingtoHR;computerskills;interviewingandtrainingskills;understandingofperformanceappraisalprocesses;andmanyothers.Wewillcovermanyoftheseskillsintheremainingchaptersofthisbook.

LO1-5SummarizethemajorHRMskillsets.

WORKAPPLICATION1-6GiveexamplesofHRresponsibilitiesperformedbyyourpresentbossorapastboss.

HumanRelationsSkillsThesecondmajorskillsetishumanrelationsskills,whichcomprisetheabilitytounderstand,communicate,andworkwellwithindividualsandgroupsthroughdevelopingeffectiverelationships.Theresourcesyouneedtogetthejobdonearemadeavailablethroughrelationshipswithpeoplebothinsidetheorganization(i.e.,coworkersandsupervisors)andoutsidetheorganization(i.e.,customers,suppliers,andothers).35Wewillfocusoninterpersonalskillsthroughoutthisbook,andyouwillhavetheopportunitytodevelopyourhumanrelationsskillsthroughthiscourse.

HRmanagersmusthavestrongpeopleskills,includingbeingempathetic.Empathyissimplybeingabletoputyourselfinanotherperson’splace—tounderstandnotonlywhatthatpersonissayingbutwhytheindividualiscommunicatingthatinformationtoyou.

Empathyinvolvestheabilitytoconsiderwhattheindividualisfeelingwhileremainingemotionallydetachedfromthesituation.

TechnicalskillsTheabilitytousemethodsandtechniquestoperformatask

HumanrelationsskillsTheabilitytounderstand,communicate,andworkwellwithindividualsandgroupsthroughdevelopingeffectiverelationships

EmpathyBeingabletoputyourselfinanotherperson’splace—tounderstandnotonlywhatthatpersonissayingbutwhytheindividualiscommunicatingthatinformationtoyou

ConceptualandDesignSkillsConceptualanddesignskillshelpindecisionmaking.Leaders’decisionsdeterminethesuccessorfailureoftheorganization.36Soorganizationstraintheirpeopletoimprovetheirdecision-makingskills.37Conceptualanddesignskillsincludetheabilitytoevaluateasituation,identifyalternatives,selectareasonablealternative,andmakeadecisiontoimplementasolutiontoaproblem.

ConceptualanddesignskillsTheabilitytoevaluateasituation,identifyalternatives,selectareasonablealternative,andmakeadecisiontoimplementasolutiontoaproblem

BusinessSkillsLastly,HRmanagersmusthavestronggeneralbusinessskills.Businessskillsaretheanalyticalandquantitativeskills—includingin-depthknowledgeofhowthebusinessworksanditsbudgetingandstrategicplanningprocesses—thatarenecessaryforamanagertounderstandandcontributetotheprofitabilityoftheorganization.HRprofessionalsmusthaveknowledgeoftheorganizationanditsstrategiesiftheyaretocontributestrategically.Thisalsomeansthattheymusthaveunderstandingofthefinancial,technological,andotherfacetsoftheindustryandtheorganization.Today,HRmanagersmustgainthecapabilitytomanipulatelargeamountsofdatausingdataanalyticsprogramsandHRmetrics.

Exhibit1-2HRMSkills

BusinessskillsTheanalyticalandquantitativeskills—includingin-depthknowledgeofhowthebusinessworksanditsbudgetingandstrategicplanningprocesses—thatarenecessaryforamanagertounderstandandcontributetotheprofitabilityoftheorganization.

WORKAPPLICATION1-7GiveexamplesofhowapresentorpastbossofyoursusedeachofthefourHRMskills.

HRMCareersIfyouareinterestedinHRMasacareer,thereareseveralprofessionalassociationsandcertificationprogramsassociatedwithHRmanagementthatwillhelpyougetintothesejobsandhelpyouadvancemorequicklyinthefuture.We’velistedsomeofthembelow,andthereareseveralotherswithinspecificHRdisciplinesthatarenotdiscussedhere.

SocietyforHumanResourceManagement(SHRM)TheSocietyforHumanResourceManagement(SHRM)isthelargestandmostrecognizedoftheHRMadvocacyorganizationsintheUnitedStates.Accordingtoitswebsite,SHRMis“theworld’slargestassociationdevotedtohumanresourcemanagement...representingmorethan250,000membersinover140countries.”38

WhatdoesSHRMdo?Probablythebiggestpartofitsworkisdedicatedto(1)advocacyfornationalHRlawsandpoliciesfororganizationsand(2)trainingandcertificationofHRprofessionalsinanumberofspecialtyareas.SHRM’snew“competency-based”certificationprogramsincludetheSHRMCertifiedProfessionalandSeniorCertifiedProfessional(SHRM-CPandSHRM-SCP).

SHRMisanoutstandingorganizationthatanyonethinkingaboutacareerinhumanresourcesshouldconsiderjoining.Studentmembershipshavealwaysbeenandcontinuetobeveryinexpensive,especiallyconsideringallthatisavailabletomembersoftheorganization.

SHRMalsoprovidesacurriculumguideforcollegesanduniversitiesthatofferHRMdegreeprograms.TheguideidentifiesspecificareasinwhichSHRMbelievesstudentsshouldgaincompetenceasHRMmajors.BecauseSHRMissuchasignificantforceineachoftheHRMfields,wehavedecidedtoshowyouwhereeachoftherequiredcurriculumareasiscoveredwithinthistext.Ineachchapter,youwillseenotesonthesideofthepagewhenaSHRMrequiredtopicisdiscussed.ThesenotesarealphanumericallykeyedtotheinformationintheAppendixSHRMCurriculumGuide2013.YoumightwanttopayspecialattentiontothesesidenotesifyouhaveplanstobecomeanHRmanager.

TakingandpassingtheSHRMAssuranceofLearningExamisanimportantsteponthepathtobecominganHRManager.

©iStockphoto.com/PeopleImages

IfyoudodecidetoworktowardagoalofbecominganHRmanager,youwillneedtothinkabouttakingtheSHRMAssuranceofLearningExam.AccordingtotheSHRMwebsite,“Firstandforemost,passingtheassessmentwillhelpstudentsshowpotentialemployerstheyhaveacquiredtheminimum

knowledgerequiredtoentertheHRprofessionattheentrylevel.”39TogetmoreinformationabouttheAssuranceofLearningExam,gototheSHRMwebsiteathttp://www.shrm.org/assessment.

LO1-6IdentifytheHRMcertificationprogramsandtheirparentorganizations.

SocietyforHumanResourceManagement(SHRM)ThelargestandmostrecognizedoftheHRMadvocacyorganizationsintheUnitedStates

1-2ApplyingTheConcept

HRMSkillsIdentifyeachactivityasbeingoneofthefollowingtypesofHRMskillsandwritethelettercorrespondingtoeachskillbeforetheactivityoractivitiesdescribingit:

1. technical2. humanrelations3. conceptualanddesign4. business

____14.TheHRmanagerisworkingonthestrategicplanningprocess.____15.TheHRmanagerisworkingondeterminingwhymoreemployeeshavebeencomingtoworklaterecently.____16.TheHRmanagerisfillingoutacomplexgovernmentform.____17.TheHRmanageristalkingsociallywithafewofherstaffmembers.____18.TheHRmanagerispraisingastaffmemberforfinishingajobanalysisaheadofschedule.____19.TheHRmanagerisassigningprojectstovariousstaffmembers.____20.TheHRmanageriscommunicatingwithemployeesthroughoutthecompanyviaemail.

OtherHROrganizationsInadditiontoSHRM,therearethreeorganizationsthathavecertificationprogramsthatarerecognizedinmanycountriesaroundtheworld.ThefirstoneistheAssociationforTalentDevelopment(ATD).Asitsnameimplies,ATDprimarilyfocusesonthetraininganddevelopmentfunctionsofHRmanagers.40ItsmajorcertificationsincludetheCertifiedProfessionalinLearningandPerformance(CPLP)andtheHumanPerformanceImprovement(HPI)certification.

Second,theHumanResourceCertificationInstitute(HRCI)providessomeofthemostrespectedcertificationsforHRpersonnelanywhereintheworld.ThethreebiggestcertificationprogramsarethePHR,SPHR,andGPHRcertifications.PHRstandsforProfessionalinHumanResources,SPHRstandsforSeniorProfessionalinHumanResources,andGPHRstandsforGlobal

ProfessionalinHumanResources.Thesecertificationsarerecognizedbyorganizationsworldwideasverificationofahighleveloftraining.

ThethirdorganizationisWorldatWork,whosecertificationsmainlycovercompensationandperformancemanagementprograms.41CertificationsfromthisorganizationincludeCertifiedCompensationProfessional(CCP),CertifiedBenefitsProfessional(CBP),GlobalRemunerationProfessional(GRP),Work-LifeCertifiedProfessional(WLCP),CertifiedSalesCompensationProfessional(CSCP),andCertifiedExecutiveCompensationProfessional(CECP).

WORKAPPLICATION1-8Areyoujoiningorwillyoujoinaprofessionalassociation,andwillyouseekcertification?Explainwhyorwhynot.

ProfessionalLiabilityDoyourealizethatyoucanbeheldpersonallyliableforyouractionsonthejob?Ifyoubreakthelaw,youcanbesuedandpossiblyfacecriminalcharges.ThisisoneofthemanyreasonswhyyoureallywanttounderstandalloftheHRMconcepts.Youneedtobeawareofthepotentialforpersonalliability,andinsomecases,youmayevenneedtoconsiderprofessionalliabilityinsurance—forinstance,ifyouareanHRMconsultanttooutsideorganizations.

Practitioner’sModelforHRMWehavegivenyoua(very)briefhistoryoftheHRMworldandwhatHRmanagementdoesfortheorganization.NowweneedtostarttalkingaboutsomeofthedetailedinformationthatyouwillneedtoknowinordertobeasuccessfulHR(orother)managerforyourorganization.Howwillwedothat?Wearegoingtoworkthroughwhatyouneedtoknowusingapractitioner ’smodelforHRM,showninExhibit1-3,whichisthefoundationforthisbook.

TheModelThepractitioner ’smodelisdesignedtoshowyouhoweachoftheareaswithinHRMinteractandwhichitemsyoumustdealwithbeforeyoucangoontosuccessfullyworkonthenextsection—kindoflikebuildingafoundationbeforeyoubuildahouse.Let’sdiscussthedetailsofeachsectionofthemodelseparately.Aswediscusseachsection,referbacktoExhibit1-3foravisualofthesection.

Exhibit1-3ThePractitioner ’sModelforHRM

SectionI:21stCenturyHRM,StrategicPlanning,andHRLaws.YouhavealreadybegunSectionI,wherewetalkaboutHRMinthe21stcentury,includingthenecessityofhavingstrategy-drivenHRM

andastrongunderstandingofthebasicHRlegalenvironment.Thisisthebasisforeverythingelsethata21stcenturyHRmanagerwilldo,soitisthefoundationofourdiagram.Thesearethethingsthataremostcriticaltotheorganization’sbasicstabilityandsuccess,becauseifwedon’tgetthemright,wewillprobablynotbearoundlongenoughasanorganizationtobesuccessfulinthesectionsrestingonthisone.

LO1-7Explainthepractitioner’smodelforHRMandhowitappliestothisbook.

SHRMB:21

ProfessionalLiability

SectionII:Staffing.Nowthatwehaveastableorganizationwithsomeformofdirection,westarttolookatgettingtherightpeopleintotherightjobsWefirstlookatidentifyingthejobsthatwillneedtobefilledandthenworkthroughhowtorecruittherightnumbersandtypesofpeopletofillthosejobs.Finally,wefindoutwhatouroptionsareconcerningmethodstoselectthebestofthosejobcandidateswhomwehaverecruited.

SectionIII:DevelopingandManaging.

Inthethirdsection,welearnhowtomanageourpeopleoncetheyhavebeenhired.Wehavetotrainpeopletodojobs;wehavetoevaluatetheminsomeformalmannersothattheyknowhowwelltheyaredoing;andwehavetodevelopthemsothattheycanfillhigher-levelpositionsasweneedpeopletostepupintothosepositions.Wesometimeshavetocoach,counsel,and/ordisciplineouremployeesaswell,soweneedtolearnhowtodothosethings.Finally,SectionIIIaddressestheroleofemployeeandlaborrelations.

SectionIV:Compensating.Thefourthsectionwillcoverthecompensationandbenefitspackagestokeepourpeoplesatisfied(oratleastnotdissatisfied).Bothdirectcompensation,intheformofbasepayandincentives,andindirectpay,intheformofworkerbenefits,provideuswithsomelevelofcontroloverwhatouremployeesdecidetodofortheorganization.SectionIVshowsushowtorewardand

maintainourworkforce,sincetheyaresocriticaltoourongoingsuccess.

SectionV:ProtectingandExpanding.Thelastsection’stopicsincludemanagingsafetyandhealth,providingethicalandsocialresponsibilityguidelinestomembersoftheorganization,andtheglobalizationissuesinvolvedinworkinginmultiplecountriesandcultures.Inadditiontosafetyandhealth,twoareashavebecomefarmoreimportantsincethebeginningoftheinformationageintheearly1980s:ethical,sustainable,andsociallyresponsibleorganizations;andtheabilitytooperateinaglobalbusinessenvironment.

TrendsandIssuesinHRMIneachchapterofthistext,wewillbrieflydiscusssomeofthemostimportantissuesandtrendsinHRMtoday.TheseissuesandtrendswillcoverareassuchastheuseoftechnologyinHRM,HRinsmallbusinesses,ethicalissuesinHR,anddiversityandequalopportunity.Forthischapter,wehavechosenthefollowingissues:creatinganengagedworkforceandtheissueofreversediscrimination.

CreatinganEngagedWorkforceManyofouremployeesarehighlytalentedandextremelydifficulttoreplace,butaccordingtoarecentGallupreport,70%ofthemjustaren’tbeingmadeanintegralpartoftheorganizationthroughtheuseofmanagementtechniquesthatcausethemtobecomemoreinterestedinboththeirworkandtheworkoftheorganizationoverall.42Thissamereportshowsthatcompanieswiththemostengagedworkforcehad147%higherearningspershare,betterproductivityandprofitability,andlowerabsenteeismandturnoverthantheircompetitors,sothereiscertainlystrongreasontoworktowardamoreengagedworkforce.

Higherratesofpayarenottheanswer,oratleastnotthecompleteanswer.Evidenceshowsthatincreasesinpaydonotprovidethemotivationalpotentialthatmostemployees

andmanagersbelievetheydo.43

Thefirstandmostimportantthingthatcompaniesmustdotoimproveengagementistofind,hire,andtrainmanagersonhowtocreateemployeeengagement.Trainthemtocommunicateandbeempathetic,andtoprovidefeedbacksothatemployeesknowthattheirmanagersrecognizegoodwork.44 Theevidencesaysthatpoorlytrainedmanagersarelikelythebiggestreasonforemployeesbeingactivelydisengaged.

Thesecondthingistocreateandadheretocompanyvaluesandgoalsthatmakeemployeesfeeltheyarepartofsomethingthatisimportantandmuchbiggerthantheycoulddoontheirown.45Theywillberequiredtoengagewithothersinordertohaveaccesstocoworkerswhowillbeavailabletohelpinreachingthosegoals.

Third,youhavetomaketheharddecisiontogettheactivelydisengagedemployeesoutofthecompany.Thisisacaseof“onebadapple

spoilingthewholebarrel.”Activelydissatisfiedemployeescreatetensionintheworkplace,whichconvertstodisengagementamongotheremployeeswhowerejustrecentlyexcellentworkers.46

ReverseDiscriminationRulingsContinuetoEvolveIn2009,acaseclaiming“reversediscrimination”(Ricciv.DeStefano.47)cametotheSupremeCourt.Whatisreversediscrimination?Itisdiscriminationagainstamajoritygroupratherthanaminoritygroup.IngeneralintheUnitedStates,thiswouldbediscriminationagainstwhitemaleemployeesorapplicants.Weprotectmanydifferentracial,ethnic,genderandothergroupswithintheUnitedStates,buthowdowe,andshouldwe,protectthemajoritygroup?Atwhatpointdoestheprotectionofminoritygroupscrossovertodiscriminationagainstthemajority?

Ricciv.DeStefanorenewedthediscussionofrace-baseddecisionmakinginemployment.Andwhilethereweremanynuancestothecase,theendresultwasthatreversediscriminationwasdeemedtohaveoccurred.Awrittenpromotionexamforfirefighters

wasconsidereddiscriminatorywhennoblackandonlyoneHispanictest-takerpassedtheexam.Asaresult,thecityofNewHaventhrewtheentireexamoutanddidn’tpromoteanyone.Thefirefighterswhoscoredhighestontheexamsuedbasedonreversediscrimination.

Wasthedecisionrightorwrong?Wecan’tmakethatdeterminationhere,butemploymentdiscriminationofalltypescontinuestobesomethingthatHRmanagershavetobeveryawareofandguardagainsttothebestoftheirability.Nobodyinyourworkforcelikesfeelingthattheyhavebeentreatedunfairly.Fairnessisoneofthecriticalthemesyouwillseedealtwiththroughoutthisbook.TheHRdepartmentis,andwillcontinuetobe,theorganization’swatchdogonthetopicofworkforcediscriminationandfairnesstoallemployees.

SHRMF:8

ReverseDiscrimination

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary1-1ExplainwhyallmanagersneedtounderstandthebasicsofHRM.

Inamodernorganization,humanresourcesareoneoftheprimarymeansofcreatingacompetitiveadvantagefortheorganization,becausethewayswemanagepeopledirectlyaffectstheirperformance.Engagedemployeeshavealsobeenshowntodirectlycontributetothebottomline(thetop10%onemployeeengagementbeattheircompetitionby72%inearningspershareduring2007–2008).HRMprovidesallmanagerswithtoolstoengagetheiremployeesandasaresultincreaseemployeeproductivityandcompanyprofitability.

1-2DiscusshowHRMhelpsimproveorganizationalrevenuesina21st

centuryorganization.Today’sHRdepartmentactsasaproductivitycenterratherthanacostcenter,enhancingtheprofitabilityofthecompanybyimprovingemployeeproductivity.HRMpracticesprimarilyhelptoimproveorganizationalefficiency.Employeesbecomemoreefficientiftheyareusedcorrectly,whichmeansthatmanagersdon’tuseuptheirtime(thevaluableresourcethatwegetfromemployees)inaninefficientmanner.

1-3DescribethemajorHRMdisciplineareas.

Thelegalenvironment:EEOanddiversitymanagement.Thisdisciplinedealswithequalopportunitylawsandregulationsaswellasmanagementofadiverseworkforce.Staffing.Thisdisciplinemanagestheprocessesinvolvedinjobanalysis,recruiting,andselectionintothe

organization.Traininganddevelopment.Thisdisciplinehasresponsibilityforthetrainingprocesseswithintheorganization,fordevelopingcurriculaandlessonplans,andfordeliveryoftrainingcourses.Itisalsoinvolvedwithdevelopmentoftalentwithinthecompanytoprovideagroupofemployeeswhowillbeabletomoveintomoreseniorpositionsthatbecomevacant.Employeerelations.Thisareainvolvesthecoaching,counseling,anddisciplineprocesses,alongwithemployeecommunicationandstressmanagement.Itisalsotypicallyresponsibleforthemanagementofjobsatisfactionandemployeeengagement.Laborandindustrialrelations.Thisdisciplineworkswiththelawsandregulationsthatcontroltheorganization’srelationshipswithitsworkforce.Italsoworkswithany

union-managementcontracts,includingbutnotlimitedtounionvotes,grievances,contractnegotiations,andbargainingwithunionrepresentatives.Compensationandbenefits.Thisdisciplineworkswithpayofvarioustypesandwithbenefitspackages,allofwhicharedesignedtoattractandkeeptherightmixofemployeesintheorganization.Italsodealsdirectlywithallofthefederalandstatecompensationlawstoensurecompliance.Safetyandsecurity.Thisdisciplineworkstoensurethattheenvironmentonthejobissafeforallworkerssothaton-the-jobinjuriesandillnessesareminimizedtothegreatestextentpossible.Italsoinvolvesmanagingtheorganization’splanningforsecuringtheworkforce,bothfrombeingharmedbyotherpeopleandfromnaturaldisasterssuchas

earthquakesortornados.Ethicsandsustainability.Thisdisciplinebearsresponsibilityforseeingtoitthattheorganizationactsinanethicalandsociallyresponsiblemanner,tominimizeharmtotheenvironmentanditsvariousstakeholders.Itinvolvesmanagingthesustainabilityeffortsintheorganizationtominimizethedepletionofworldwideresourcescausedbytheorganizationcarryingoutitsprocesses.

1-4RecalltheprimarydifferencebetweenlineandstaffmanagersandtheirmajorHRresponsibilities.

TheHRstaffhastheprimaryresponsibilityofdevelopingthepoliciesandprogramswithitsHRdisciplinesforeveryoneintheorganizationtoimplementonadailybasis.ThelinemanagersareresponsibleforimplementingtheHRpolicieswithintheirdepartments.

1-5SummarizethemajorHRMskillsets.

TheHRMskillsetsincludetechnicalskills,humanrelationsskills,conceptualanddesignskills,andbusinessskills.Technicalskillsincludetheabilitytousespecializedknowledge,methods,andtechniquestoperformatask.Humanrelationsskillsprovidetheabilitytounderstand,communicate,andworkwellwithindividualsandgroupsthroughdevelopingeffectiverelationships.Conceptualanddesignskillsprovidetheabilitytoevaluateasituation,identifyalternatives,selectanalternative,andimplementasolutiontotheproblem.Finally,businessskillsprovideanalyticalandquantitativeskills,includingthein-depthknowledgeofhowthebusinessworksandofitsbudgetingandstrategicplanningprocesses.

1-6IdentifythemostcommonHRMcertificationprogramsandtheirparent

organizations.TheprimarycertificationsarecarriedoutbySHRM,ATD,HRCI,andWorldatWork.SHRM’s“competency-based”certificationprogramsincludetheSHRMCertifiedProfessionalandSeniorCertifiedProfessional(SHRM-CPandSHRM-SCP).ATDtraininganddevelopmentcertificationsincludetheCertifiedProfessionalinLearningandPerformance(CPLP)andtheHumanPerformanceImprovement(HPI)certification.HRCImaintainscertificationprogramsforProfessionalinHumanResources(PHR),aseniorversion(SPHR),andaglobalversion(GPHR).Finally,certificationsfromWorldatWorkincludeCertifiedCompensationProfessional(CCP),CertifiedBenefitsProfessional(CBP),GlobalRemunerationProfessional(GRP),Work-LifeCertifiedProfessional

(WLCP),CertifiedSalesCompensationProfessional(CSCP),andCertifiedExecutiveCompensationProfessional(CECP).

1-7Explainthepractitioner’smodelforHRMandhowitappliestothisbook.

Thepractitioner ’smodelshowstherelationshipsbetweeneachofthefunctionsanddisciplineswithinHRM.Onthefirstlevelaretheitemsthatareabsolutelycriticaltotheorganizationifitisgoingtocontinuetooperate(andstaywithinfederalandstatelawswhiledoingso)andbestableandsuccessfulforasignificantperiodoftime.Thesecondlevelencompassesthosethingsthatarerequiredtoidentifythekindsofjobsthatmustbefilledandthenrecruitandselecttherighttypesofpeopleintothosejobssothecompanycanmaximizeproductivityoverthelongterm.Theseitemswillallowtheorganizationtogetitsworkdone

successfullyoverlongperiodsoftime.Inthethirdtier,weconcernourselveswithmanagementofthehumanresourcesthatweselectedinthesecondlevel.Wehavetogetthemtrainingtodotheirjobsandallowthemtoperformthosejobsforaperiodoftime.Wethenhavetoappraisetheirperformanceand,ifnecessary,correctbehaviorsthatarenotallowingthemtoreachtheirmaximumpotential.Asthisisoccurring,weneedtoensurethatwemaintainpositiverelationshipswithouremployeessothattheyremainengagedandproductive.Inthefourthtier,wewanttomakesurethatwerewardourworkforcereasonablythroughfairandreasonablecompensationplanningtominimizeunnecessaryturnoveranddissatisfaction.Inthelasttierweprovideforemployeesafetyandhealth,andalsoturnourattentiontoorganizationalethicsandtheissues

surroundingglobalbusinessoperationsbecausetheseissueswillallowustosustainourworkforceandthriveinthe21stcentury.

KeyTermsabsenteeism,8businessskills,16conceptualanddesignskills,16costcenter,6effectiveness,6efficiency,6empathy,16employeeengagement,5humanrelationsskills,16humanresources,4InformationAge,8jobsatisfaction,8knowledgeworker,9linemanager,14productivity,6productivitycenter,6revenuecenter,6SocietyforHumanResourceManagement(SHRM),17staffmanager,15technicalskills,16

turnover,8

keytermsreviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. __________thepeoplewithinanorganization.

2. __________isacombinationofjobsatisfaction,ability,anda“willingnesstoperform”fortheorganizationatahighlevel,andoveranextendedperiodoftime.

3. __________adivisionordepartmentwithinanorganizationthatbringsinnorevenueorprofit–inotherwordsitcostsmoneyfortheorganizationtorunthisfunction.

4. __________adivisionordepartmentthatgeneratesmonetaryreturnsfortheorganization.

5. __________arevenuecenterthatenhancesprofitabilityoftheorganizationthroughenhancingtheproductivityofthe

peoplewithintheorganization.6. __________theamountofoutputthatan

organizationgetsperunitofinput,withhumaninputusuallyexpressedintermsofunitsoftime.

7. __________answersthequestion“Didwedotherightthings?”;itisafunctionofgettingthejobdonewheneverandhoweveritmustbedone.

8. __________isafunctionofhowmanyorganizationalresourcesweusedingettingthejobdone;itanswersthequestion“Didwedothingsright?”

9. __________isthefeelingofwell-beingthatweexperienceinourwork—basicallywhetherornotwelikewhatwedoandtheimmediateenvironmentsurroundingusandourwork.

10. __________isthepermanentlossofworkersfromtheorganization.

11. __________isthefailureofanemployeetoreporttotheworkplaceasscheduled.

12. __________isanerathatbeganaround1980inwhichinformationbecameoneofthemainproductsusedin

organizations;itischaracterizedbyexponentialincreasesinavailableinformationinallindustries.

13. __________areworkerswho“usetheirheadmorethantheirhands”togatherandinterpretinformationinordertoimproveaproductorprocessfortheirorganizations.

14. __________includetheabilitytousemethodsandtechniquestoperformatask.

15. __________aretheabilitytounderstand,communicate,andworkwellwithindividualsandgroupsthroughdevelopingeffectiverelationships.

16. ___________isbeingabletoputyourselfinanotherperson’splace—tounderstandnotonlywhattheyaresayingbutwhytheyarecommunicatingthatinformationtoyou.

17. ___________aremadeupoftheabilitytoevaluateasituation,identifyalternatives,selectanalternativeandmakeadecisiontoimplementasolutiontoaproblem.

18. __________aretheanalyticalandquantitativeskills,includingin-depthknowledgeofhowthebusinessworksanditsbudgetingandstrategicplanningprocessesthatarenecessaryforamanagertounderstandandcontributetotheprofitabilityoftheirorganization.

19. __________createandmanagetheorganizationalprocessesandthepeoplethatcreatewhateveritisthatabusinesssells.

20. __________aretheindividualsthatadviselinemanagementofthefirmintheirareaofexpertise.

21. __________isthelargestandmostrecognizedoftheHRMadvocacyorganizationsintheUnitedStates.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. WhyisitimportantforallbusinessmajorstotakethiscourseinHRM?

2. AreyouinterestedinbecominganHRmanager?Whyorwhynot?

3. Doyouagreewiththestatement“Effectivelyutilizingthehumanresourceswithintheorganizationisoneofthefewwaystocreateacompetitiveadvantageinamodernbusiness”?Whyorwhynot?

4. Isemployeeengagementpossibleinanagewhenpeopletendtohaveverylittleloyaltytotheiremployersandviceversa?Howwouldyouworktoincreaseemployeeengagementasamanager?

5. CanHRMreallycreaterevenuefortheorganization?Ifso,how?

6. Identifysomethingsthatcouldbedonebyamanagertoincreaseproductivityandjobsatisfactionanddecreaseabsenteeismandturnover.Makealistforeachitem.

7. IfyouweretheHRmanagerforyourorganization,whatwouldyoudotoincreasethenumberofapplicantswhoapplyfor“knowledgeworker”positionsinyourorganization?Assume

youcan’tpaythemmore.8. Isthereanythingthatanindividualwithinan

organizationcandotohelpimproverelationsamongdiverseworkers?Ifso,what?

9. Somesaythatformanagers,hardskills(technicalandbusinessskills)aremoreimportantthansoftskills(humanrelationsandconceptualanddesignskills).Whatdoyouthink,andwhy?

10. Areexternalcertificationprograms(inalljobs)becomingmoreimportant?Why?

Case1-1Ba-Zynga!ZyngaFacesTroubleinFarmvilleInlate2011,Zynga’semployeeswereshowingseriousfrustrationwithlonghours,high-stressdeadlines,andespeciallytheleadershipofthecompany.ResponsestoaquarterlystaffsatisfactionsurveyprovidedlotsofcriticismofboththecompanycultureandMr.MarkPincus—theCEO.Oneindividualwassodisenchantedthatheopenlyexpressedhisintentto“cashout”andleaveafterthecompany’sinitialpublicoffering(IPO)inDecember2011.

Zyngawasoneofthefastestgrowingweb-basedcompaniesatthatpointintime.Itoperatedwithanalmostmilitarycommand-and-controlstructure,withautonomousunitsinchargeofeachgame(mostofyouwillrecognizethegamesFarmVilleandCityVille).Attimes,itwas“amessyandruthlesswar.”48Employeesworkedlonghourswhile“managersrelentlesslytrack[ed]progress,andtheweaklinks[were]demotedorletgo.”49Theentireenvironmentcouldbedescribedasintense.

Therewereseriousconcernsaboutthelong-termviabilityofthisculture,though.“Whilesomestaffmembersthriveinthisenvironment,othersfinditcrushing.Severalformeremployeesdescribe

emotionallychargedencounters,includingloudoutburstsfromMr.Pincus,threatsfromseniorleaders,andmomentswhencolleaguesbrokedown[in]tears.”50Anumberofformeremployeesspokeabouthowthehigh-pressureculturemightbecomeamajorliabilityasthecompanycontinuedtogrow.Theconsensusoftheseformerworkersappearedtobethatthecompanymightnotcontinuetobeabletoattractandretainthetopengineeringandprogrammingtalentthattheywouldneedgoingforward.

“WhilefromtheoutsideZyngamayhavethefunandwhimsyoftheWillyWonkachocolatefactory,theorganizationthrivesonnumbers,relentlesslyaggregatingperformancedata,fromtheupperrankstothecafeteriastaff.”51Everythingwasmeasuredandmapped,andresultswereusedtoidentifythetopperformersalongwiththe“not-so-top”performersandtheirgroups.(Topteamshadbeenknowntoberewardedwithvacationsfortheentireteam,withspendingmoneyprovidedbythecompany!)Mr.Pincuspersonallytrackedlargeamountsofdatashowingperformancelevelsforthe3,000employeesandtheirworkteams.

Itwasn’tthatZyngawasfailing,oreventhattherewasanopenfearoffailure.ZyngawasoneoftherareInternetstart-upsthatwereactuallymakingmoney.Zyngahadgarnered$828.9millioninrevenueinthefirstninemonthsof2011andhadearned$121millionsincethestartof2010.However,thecompanyculturewaspurelyperformancedriven.Thebestemployeeswererewardedverywell,whilepeoplewhocouldn’t

“hitthenumbers”werelikelytodisappear.

Otherlocalcompaniesandtheirhumanresourcesmanagerswerelookingoninanticipation.Theyalsohadtalentacquisitionproblems,butmanyhadamuchmorecollaborativeculturethanZyngadid,andtheythoughttheywouldbeabletousetheseculturalattributestostealtalentfromZyngaaftertheIPOconcluded.TheyknewthatmostofZynga’searlyemployeeswhohadsometypeofstockoroptionsinthecompanywouldnotbelikelytoleaveuntiltheIPOwasfinalized,butthatmanywouldbelookingaroundsoonafter.

Questions1. ImagineyouarethenewHRdirectoratZynga.

Whatdoyouthinkyoumightdointhissituationtolimitthepotentiallossofalargenumberofverytalentedemployees?

2. ArethereanybenefitsorincentivesthatyoucanthinkofthatmightmakemorepeoplewanttostayonatZyngaaftertheIPOiscompleteandtheycan“gettheirmoney”?

3. HRmanagersfrequentlyhavetoteachotherseniormanagershowtodealwiththeiremployeesbetter.WhatdoyouthinkyouwoulddoaboutMr.Pincus?Isthereanythingyoucoulddo?Couldyoucoachhimconcerninghismanagementstyle?Doyouthinkthiswouldbeeffective?

4. Doyouthinkthatbigcashandstockrewardsfortopperformersand“theboot”forpoorperformersistheappropriatewaytomanagetalentinthistypeofhigh-techbusiness?Whyorwhynot?

SKILLBUILDER1-1GettingtoKnowYou

Objectives1. Togetacquaintedwithsomeofyourclassmates2. Togainabetterunderstandingofwhatthecourse

covers3. Togettoknowmoreaboutyourinstructor

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskill—Humanrelations2. SHRM2013CurriculumGuidebook—A:

EmployeeRelations

Procedure1(5–8minutes)Breakintogroupsoffiveorsix,preferablywithpeopleyoudonotknow.Haveeachmembertellthegrouptheirnameandtwoorthreesignificantthingsaboutthemselves.Thenhaveallgroupmembersaskeachotherquestionstogettoknoweachotherbetter.

Procedure2(4–8minutes)Caneveryoneinthegroupaddresseveryotherpersonbyname?Ifnot,haveeachmemberrepeattheirname.Theneachpersoninthegroupshouldrepeatthenamesofallthegroupmembersuntileachpersonknowseveryone’sfirstname.

ApplicationWhatcanyoudotoimproveyourabilitytorememberpeople’snames?

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Procedure3(5–10minutes)Electaspokespersonforyourgroup.Lookoverthefollowingcategoriesanddecideonsomespecificquestionsyouwouldlikeyourspokespersontoasktheinstructorfromoneormoreofthecategories.Thespokespersonwillnotidentifywhoaskedthequestions.Youdonothavetohavequestionsforeacharea.

Courseexpectations.Whatdoyouexpecttocoverorhopetolearnfromthiscourse?Doubtsorconcerns.Isthereanythingaboutthecoursethatyoudon’tunderstand?Questionsabouttheinstructor.Listquestionsyou’dliketoasktheinstructortogettoknowthembetter.

Procedure4(10–20minutes)Eachspokespersonaskstheinstructoronequestionatatimeuntilallquestionshavebeenanswered.Spokespeopleshouldskipquestionsalreadyaskedbyothergroups.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

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SKILLBUILDER1-2ComparingHRManagementSkillsandHRResponsibilities

ObjectiveTobetterunderstandtheimportanceofgoodHRmanagementskillsandimplementingHRresponsibilitieseffectively

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Conceptualanddesign2. SHRM2013CurriculumGuidebook—A:

EmployeeRelations

CompareYourSupervisors’HRManagementSkillsandHRResponsibilitiesEffectivenessRecallthebestsupervisororbossyoueverworkedforandtheworstoneyoueverworkedfor(preferablylinemanagers,notHRmanagers).Comparethesetwopeoplebywritingbriefnotesinthefollowingchartabouteachperson’sHRmanagementskillsandHRresponsibilities.

HRManagementSkillsandHRResponsibilitiesBestSupervisororBoss WorstSupervisororBoss

TechnicalHumanRelationsConceptualandDesignBusinessSkillsLegalConsiderationsStaffingTrainingandDevelopmentEmployeeandLaborRelationsSafetyandSecurityEthics

Basedonyourownexperienceswithagoodbossandapoorone,whatdoyoubelievearethekeydifferencesbetweengoodandpoormanagers?

ApplyItWhatdidIlearnfromthisexercise?HowwillIusethisknowledgeinthefuture?

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2Strategy-DrivenHumanResourceManagement

©iStockphoto.com/Photo_Concepts

ChapterOutlineStrategyandStrategicPlanninginthe21stCentury:TheOrganizationandtheEnvironmentTheExternalEnvironmentStrategy

WhatIsStrategy?Visions,Missions,andObjectivesTypesofStrategiesHowStrategyAffectsHRMHowHRMPromotesStrategy

StructureBasicsofOrganizationalStructureHowDoesStructureAffectEmployeeBehavior?HowDoesStructureAffectHRM?

OrganizationalCultureWhatIsOrganizationalCulture?HowCultureControlsEmployeeBehaviorinOrganizationsSocialMediaandCultureManagement

AnIntroductiontoDataAnalyticsforHRM

ABriefonDataAnalyticsHRAnalyticsDesiredOutcomes

HumanResourceInformationSystems(HRIS)

WhatAreHRIS?HowDoHRISAssistinMakingDecisions?

MeasurementToolsforStrategicHRMEconomicValueAdded(EVA)ReturnonInvestment(ROI)

TrendsandIssuesinHRMEverythingOldIsNewAgain:ManagingDataforHRMDecisionMakingContinuingGlobalizationIncreasestheNeedforStrategicandHRMPlanning

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

2-1Classifythemajorcomponentsoftheexternalenvironment.PAGE312-2Discussthethreemajororganizationalfactorsthataffectourstrategicoptions.PAGE332-3Summarizethemajorcomponentsoforganizationalstructureandwhyitisimportanttounderstandthem.PAGE392-4Describeorganizationalcultureandhowitaffectsthemembersoftheorganization.PAGE402-5Definedataanalyticsandexplainhowithelpsorganizationsmakeimportantdecisions.PAGE422-6Identifyhowhumanresourceinformationsystems(HRIS)canhelpHRmakedecisions.PAGE442-7Recallthecommonmeasurementtoolsforstrategichumanresourcemanagement(HRM).PAGE452-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE49

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindynotesthatonethingmanyfamilyget-togethershaveincommonisstorytelling—reminiscingaboutcommonexperiencesandoutstandingmembers.Thesestoriesarepartofthetiesthatbindanddefinethegroup,andthesameistrueforyourwork“family.”

Forexample,takethisstoryaboutBill,anexecutivewhostartedworkasanemergencymedicaltechnician(EMT).OnetimewhileBillwasmovinganursinghomeresident,theresident’sbedriddenroommatefeeblyattemptedtosaygood-bye.Youngandimpatient,Billdidn’tstoptoletthetwotalkbuthurriedofftothehospitalwithhispassenger.Thenexttimehewasatthatlocation,Billwaspulledasidebyanursewhosaid,“WhatIamabouttosaywillbreakyourheart,butitwillmakeyouabetterman.Thewomanyoutransporteddiedinthehospitalthatnight.Theroommatewasherhusbandof70years,andyoudidn’tgivehimtimetosaygood-bye.”Everafterwardinhiscareer,Bill’smottowas“PatientsFirst,”andthatgoalpermeateshisinstitutioneventodayineverythingitdoes.

Whatelsedefinescompanyculture?Chapter2

examinesstrategies,missionstatements,vision,andvalues—allimportantpiecesofacompany’sidentity.

StrategyandStrategicPlanninginthe21stCentury:TheOrganizationandtheEnvironmentStrategyandstrategicplanningprovideuswithaprocessoflookingatourorganizationanditsenvironment—bothtodayandintheexpectedfuture—anddeterminingwhatweasanorganizationwanttodotomeettherequirementsofthatexpectedfuture(seeExhibit2-1).Thisprocessofstrategicanalysisandbuildingacoherentstrategyismorecriticaltodaythanithaseverbeenbefore.1,2,3,4Thisisbecauseinmostworldwideindustriestoday,wehavefarmorecompetitionandcapacitythaneverbefore,makingitmoredifficulttocreatethesustainablecompetitiveadvantagethatweneedinordertosurviveoverthelongterm.

Exhibit2-1StrategicChoice

Thereisanoldsaying:“Whenyoufailtoplan,youplantofail.”Researchsupportsthissayingandconfirmstheimportanceofplanning.5Somemanagerscomplainthattheydon’thavetimetoplan,yetresearchshowsthatmanagerswhoplanaremoreeffectiveandefficientthannonplanners.Beforewegetintothedetailsofstrategicplanning,completeSelf-Assessment2-1todetermineyourlevelofplanning.

HRMisacriticalcomponentofstrategicplanning,becausewithouttherightpeoplewiththerighttypesofeducation,skills,andmind-set,wecannotexpecttoaccomplishtheobjectivesthatwesetforourselves.6Inthis

chapter,wefocusontheorganization’senvironment.Theenvironmenthastwoparts:internalandexternal.First,webrieflydiscusstheexternalenvironment.Thenwedescribeindetailthreekeyaspectsoftheinternalenvironment:strategy,structure,andculture.

Exhibit2-2TheExternalEnvironment

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

A.EmployeeandLaborRelations(required)

3.Managing/creatingapositiveorganizationalculture

C.Ethics(required)3.Individualversusgroupbehavior

E.JobAnalysis/JobDesign(required)9.Organizationdesign(missions,functions,andotheraspectsofworkunitsforhorizontalandverticaldifferentiation)

G.Outcomes:MetricsandMeasurementofHR(required)

1.Economicvalueadded7.Returnoninvestment(ROI)

J.StrategicHR(required)1.Strategicmanagement2.Enhancingfirmcompetitiveness3.Strategyformulation7.Competitiveadvantage8.Competitivestrategy10.LinkingHRstrategytoorganizationalstrategy13.Missionandvision

Q.OrganizationalDevelopment

(required—graduatestudentsonly)12.Organizationalstructureandjobdesign

TheExternalEnvironmentTheexternalenvironmentconsistsofaseriesofinfluencesthatoriginateoutsidetheorganizationandthatthecompanycannotcontrol.Eachoftheseforcesactsonthefirmandcausesthefirmtohavetochangeandadapt,usuallyintheformofstrategicresponsestoenvironmentalchanges.7TheninemajorforcesoriginatingintheexternalenvironmentareshowninExhibit2-2,alongwithanexplanationofeach(below).

Customers.Withoutcustomers,there’snoneedforanorganization.Therefore,companiesmustcontinuallyimproveproductsandservicestocreatevaluefortheircustomers.8Thisprocessofproductimprovementrequiresskilledemployeeswhoarewillingtousetheircreativitytoaddtotheorganization’sknowledgeandtherebyhelpcreatenewproductsandservicesforcustomers.

Competition.Businessesmustcompeteforcustomers,andtheirperformanceisnotsimplyafunctionoftheirownactions.Eachfirm’sperformancemustbeunderstoodrelativetotheactionsofitscompetitors.9Organizationsalsofrequentlycompeteforthesameemployeesandsometimesforsuppliers.10Also,changesincompetitors’strategiesoftenaffecttheperformanceoftheorganization.Suppliers.Organizationsbuyresourcesfromsuppliers.Therefore,partnershipswithsuppliersalsoaffectfirmperformance.11TheJapaneseearthquakeandtsunamiinFukushimaaffectedvirtuallyeverycompanyintheautoindustrybecauseelectroniccomponentsmadeinnorthernJapanwereunavailableforanextendedperiodoftime.12Itisimportanttodevelopcloseworkingrelationshipswithyoursuppliers.Laborforce.Thetalentpoolavailabletoanorganizationfromwhichtohirenew

employeeshasadirecteffectontheorganization’sperformance.LivingSocialisanexampleofafast-growingcompanythatisrecruitingthousandsofnewworkers.13Shareholders.Theownersofacorporation,knownasshareholders,influencemanagement.Mostshareholdersoflargecorporationsarenotinvolvedintheday-to-dayoperationofthefirm,buttheydovoteforthedirectorsofthecorporation.Theboardofdirectorsisalsogenerallynotinvolvedintheday-to-daymanagementofthefirm,butmayhireorfiretopmanagement.Thetopmanagerreportstotheboardofdirectors,andiftheorganizationdoesnotperformwell,theboardcanfirethatmanagerandothers.14Society.Oursociety,toagreatextent,determineswhatacceptablebusinesspracticesare.15Individualsandvariousgroupsofstakeholdersworktopressurebusinessestomakechanges.For

example,PepsihasbeenpressuredbyOxfamInternationaltoidentifyitssugarsuppliersandinvestigatesuspectedlandtheftbythosesuppliersfrompoorfarmers.16Technology.Feworganizationsoperatetodayastheydidevenadecadeago.Productsnotenvisionedafewyearsagoarenowbeingmass-produced,whichcreatesnewbusinessopportunities.Businessesthatdon’tkeepupwithtechnology,likeBlackBerry(aone-timecellphoneleader),losebusinesstothosecreatingthelatestbusinessinnovations,likeAppleandSamsung.Economic.Noorganizationhascontrolovereconomicgrowth,inflation,interestrates,foreignexchangerates,andsoon;thus,theeconomyhasadirectimpactonthefirm’sperformanceandprofits.Wealwayshavetotaketheeconomyintoaccountwhenperformingstrategicplanningactivities.Government.Asabusinessowneror

manager,youcan’tjustrunyourbusinessanywayyouwanttobecausethefederal,state,andlocalgovernmentsdevelopthelawsandregulationsthatdeterminewhatyourbusinesscanandcan’tdo.17Soalthoughyoucantrytoinfluencethegovernment,itclearlyaffectsyourbusiness.TolearnmoreabouttheUSfederalgovernment,visititsofficialwebportalathttp://www.usa.gov/.

Technologyisoneoftheninemajorforcesoriginatingintheexternalenvironment.

Companiesthatcontinuetoinnovatetheirtechnology,likeApple,willhaveanadvantageoverthecompetition.

©DamianDovarganes/AssociatedPress/Corbis

Inadditiontoouranalysisofthemajorexternalenvironmentalfactorsabove,weneedtoreviewsomeinternalorganizationalfactorstodecidewhatwewanttodoasanorganizationaswemoveintothefuture.ThemajorfactorsinouranalysisofourinternalenvironmentareshowninExhibit2-3andarediscussedinthisandthenexttwosections.

LO2-1Classifythemajorcomponentsoftheexternalenvironment.

WORKAPPLICATION2-1Giveexamplesofhowtheexternalenvironmenthaveaffectedanorganizationwhereyouworkorhaveworked.

2-1Selfassessment

LevelofPlanningWriteanumberfrom1to5beforeeachstatementtoindicatehowwelleachstatementdescribesyourbehavior.

_____1.WheneverIstartaprojectofanykind,Ihaveaspecificendresultinmind._____2.Whensettingobjectives,Istateonlytheendresulttobeaccomplished;Idon’tspecifyhowtheresultwillbeaccomplished._____3.Ihavespecificandmeasurableobjectives;forexample,IknowthespecificgradeIwanttoearninthiscourse._____4.Isetobjectivesthataredifficultbutachievable._____5.IsetdeadlineswhenIhavesomethingIneedtoaccomplish,andImeetthosedeadlines._____6.Ihavealong-termgoal(whatIwillbedoingin3–5years)andshort-termobjectivesthatwillgetmethere._____7.IhavewrittenobjectivesstatingwhatIwanttoaccomplish._____8.Iknowmystrengthsandweaknesses,amawareofthreats,andseekopportunities._____9.Ianalyzeaproblemandconsideralternativeactions,ratherthanimmediatelyjumpinginwithasolution.

_____10.IspendmostofmydaydoingwhatIplantodo,ratherthandealingwithemergenciesandtryingtogetorganized._____11.Iuseacalendar,appointmentbook,orsomeformofto-dolist._____12.Iaskothersforadvice._____13.Ifollowappropriatepolicies,procedures,andrules._____14.IdevelopcontingencyplansincasemyplansdonotworkoutasIexpectthemto._____15.IimplementmyplansanddetermineifIhavemetmyobjectives.

Addupthenumbersyouassignedtothestatementstoseewhereyoufallonthecontinuumbelow.

Don’tbetoodisappointedifyourscoreisn’tashighasyouwouldlike.Alloftheseitemsarecharacteristicsofeffectiveplanning.Reviewtheitemsthatdidnotdescribeyouandconsidermakinganefforttoimplementthosecharacteristicsofplanning.

StrategyStrategyandthestrategicplanningprocesshavealonghistory,andbusinesseshaveadaptedtheseprinciplestotheirownuse.“ManymilitaryhistoriansandcontemporarybusinessstudentsviewtheChinesemilitarystrategistSunTzu(ca.500BCE)asthedeveloperof“theBible”ofstrategy...SunTzu’sprinciplesaredividedintotwocomponents:1)knowingoneselfand2)knowingtheenemy.”18ToputSunTzu’swordsinacontemporarybusinesscontext,weneedtoknowourinternalandexternalenvironments.Buthowdoesamodernbusinessgoaboutcreatingandimplementingastrategicplan?Well,strategicplanningfollowsaprocess,19solet’sdiscussthatprocessnow.

Exhibit2-3TheInternalEnvironment

WhatIsStrategy?ResearchhasshownthatHRMisanimportantstrategicbusinessfunctionthatinfluencestheperformanceofbothlargeandsmallfirms.20Butwhatisstrategy?Atitsmostbasiclevel,astrategyisaplanofactiondesignedtoachieveaparticularsetofobjectives.Itlooksattheexternal(industryandmacro-)environmentandtheinternal(organizational)environmentinordertocreatestrategicadvantage.Strategicadvantageoccurswhenyouanalyzetheenvironmentbetterandreacttoitquickerthanyourcompetitorsdowhileusingallofyourinternalresourcesefficiently,thuscreatingthesustainablecompetitiveadvantagethatweintroducedinChapter1.

Inthissection,welookatthefollowingthreemajorstrategicquestionstoanalyzewhatkindofstrategicplanweneedtowrite:211.Whatisourpresentsituation(wherearewenow)?2.

Wheredowewanttogo?3.Howdoweplantogetthere?

Youwouldthinkthatansweringquestion1wouldbeeasy—butyoumustanswermanyotherquestionsbeforeyoucanconfidentlyanswer“Wherearewenow?”Theseotherquestionsinclude“Arewemakingaprofit?”“Doourproductssatisfyourcustomers’currentneeds?”“Dowehavetherightkindofworkforceinplaceatthistime?”“Isourtechnologyworkinglikeitshould?”“Dowehavesufficientphysicalresourceslikeplant,machineryandequipment,andretaillocations?”“Areouradvertisingandmarketingprogramssuccessful?”andmanymore.Answeringthesequestionscreatesapictureofyourorganization—asnapshotataparticularpointintime,andthatpicturehastobecomprehensivesothatyouknowwhatishappening,goodandbad,withintheorganizationinsignificantdetail.Ifyouthinkabouteachoftheseotherquestionsforjustasecond,youwillseehowcomplexansweringquestion1reallybecomes.

Question2isbasicallyaskinguswhatweplanto“looklike”asanorganizationataparticularpointinthefuture,meaningit’saskinguswhatisourvision,mission,andobjectivesfortheorganization.Answeringquestion3givesusthenecessaryinformationtocreatetheplanthatwillallowustoreachthegoalsthatweidentifyinouranswertoquestion2sothatwecanbecometheorganizationthatweenvisionandatthesametimecreateasustainablecompetitiveadvantage.

LO2-2Discussthethreemajororganizationalfactorsthataffectourstrategicoptions.

SHRMJ:8

CompetitiveStrategy

SHRMJ:1

StrategicManagement

StrategyAplanofactiondesignedtoachieveaparticularsetofobjectives

SHRMJ:7

CompetitiveAdvantage

2-1ApplyingTheConcept

TheExternalEnvironmentReadeachstatementandwriteinthelettercorrespondingtotheexternalenvironmentalfactoritrefersto.

1. customers2. competition3. suppliers4. laborforce5. shareholders6. society7. technology8. theeconomy9. governments

_____1.TheCEOwasfiredbytheownersbecauseourcompanyisnotprofitable._____2GEwantedtoacquireourcompany,buttheSECsaidthatwouldbeinviolationofantitrustlaws,therebypreventingthedeal._____3.Karenboughtanewoventhatwillcookourpizzainhalfthetimeandmakeittasteevenbetter._____4.eHarmony,anonlinedatingservice,islosingsomecustomerstootherservicesfocusingonChristian,African-

American,andolderpeopleseekingmatches._____5.Ourpurchasingagentjustclosedadealthatwillletusbuysugarforafewcentslessperpound,savingusthousandsofdollarsperyear.

Visions,Missions,andObjectivesAvisionandamissionaretwoofthemostcriticalcomponentsofanysuccessfulcorporatestrategy.Together,theyprovidetheinformationnecessarytofocuseveryemployeeonthecompany’sgoalsandobjectives.

TheVision.Avisioniswhatweexpecttobecomeasanorganizationataparticularpointintimeinthefuture.Thevisionbynecessityisafuzzything;itisnotspecificinthatitdoesn’tsayhowwe’regoingtoachieveit.Itiswhoweare,whatwestandfor,whatwebelievein,andwhatwewanttobecome.Despitetheirfuzziness,visionsareverypowerfulwhenusedcorrectly.Avisionprovidesafocuspointforthefuture;ittellsthecompanywhereitis

headed.22Ifeveryoneisfocusedonthesamefutureendstate,theywillworktowardthatsameendstate.

Sothevisionanswersthequestion“Whatdowewanttobecomeasanorganization?”Butthefirmisonlysuccessfulwhenthefollowerssharetheleader ’svision,23andHRiswheremanyorganizationsperformtheculturetrainingthatpromotesasharedvisionwithintheorganization.

SHRMJ:13

MissionandVision

TheMission.Incontrast,themissioniswherewestarttobecomespecific.Themissionstatementlaysoutourexpectationsofwhatwe’regoingtodoinordertobecometheorganizationthatwehaveenvisioned.Themissionismorespecificthanthevision,whichmeansthatitgenerallymustbeabitlonger-winded.Themissionstatementtakesintoaccountthingslikewhomweserve(intermsofcustomergroups,typesofproductsandservices,technologiesweuse,etc.)andhowweservethem.Fundamentally,itanswersthequestion“Whatdoweneedtodoinordertobecomewhatwehaveenvisioned?”

TraderJoe’sisknownforitsstrongcompanyvisionandmission.

©iStockphoto.com/slobo

PuttingtheVisionandMissionTogether.Let’suseasanexamplethevisionandmissionstatementsoftheCollegeofBusinessoftheUniversityofArkansasatLittleRock.Itsvisionstatementisasfollows:“TheCollege

ofBusinessservesasacatalysttoadvanceeducationandeconomicdevelopmentintheStateofArkansas.”24Noticethatthisvisionstatementdoesnottellyouhowthecollegewillbeacatalyst,orwhatitisgoingtodo.Butwhatisacatalyst?It’s“asubstancethatmodifiesandincreasestherateofareactionwithoutbeingconsumedintheprocess.”25So,thatmeansthecollegeisgoingtobeanorganizationthatincreasestherateofchangeineducationandeconomicdevelopmentinitshomestate.

Wethenlookatthemissionoftheorganization,whichtellsushowtheorganizationexpectstodowhatthevisionputsforth.Themissionstatementofthiscollegeofbusinesssays,“ThemissionoftheCollegeofBusinessistopreparestudentstosucceedasbusinessprofessionalsinaglobaleconomyandtocontributetothegrowthandviabilityoftheregionweserve.”26Sothecollegeofbusinesswillachieveitsvisionbyprovidingeducationthatgivesitsstudentsthe

toolstheyneedtosucceedinbusinessandcreatechangeinthestate.This,inturn,willacttoimprovethestate’seconomicfortunes.

Whenyouputthevisionandmissiontogether,allthepeopleintheorganizationgetamorecompletepictureofthedirectioninwhichtheyareexpectedtogo.Thisallowsthemalltofocusongoinginthatdirection,andthatinturnmakesitmucheasierforthemtohelptheorganizationachieveitsgoals.Thefactthattheycreateafocusisthethingthatmakesavisionandmissionsopowerful.Ifeveryoneintheorganizationisfocusedonthesameendresult,itismuchmorelikelythattheorganizationwillachievethatendresult.

Astrongvisionandagoodmissionstatementarecriticalpartsofthestrategicplanningprocess.Everythingelseinstrategicplanningcomesfromthevisionandmission.Vision+Mission=FOCUS!

Thenexttaskistogothroughaseriesof

analysesofbothexternalandinternalfactorstocomeupwiththeplanofactionthatanswersquestion3.Strategicplannerslookateachoftheenvironmentalfactorsthatwenotedabove,andtheyanalyzethecompany’scapabilitiesandlimitationstocomeupwithobjectivesandaworkableplan.Wewilldiscusssomeofthisprocessinthefollowingsections.

VisionWhatweexpecttobecomeasanorganizationataparticularpointintimeinthefuture

MissionstatementAstatementlayingoutourexpectationofwhatwe’regoingtodoinordertobecometheorganizationthatwehaveenvisioned

WORKAPPLICATION2-2Identifythevisionandmissionofanorganizationwhereyouworkorhaveworked.

SettingObjectives.Afterdevelopingourvisionandmission,thenextstepistosetobjectivesthatflowfromthemissiontoaddressstrategicissues.Successfulmanagershaveagoalorientation,27whichmeanstheysetandachieveobjectives.Goalorientationcanalsobelearned.28Youmustbeginwiththeendinmind,andobjectivesdonotstatehowtheywillbeaccomplished—justtheendresultyouwanttoaccomplish.29Objectivesstatewhatistobeaccomplishedinsingular,specific,andmeasurableterms,withatargetdate.

HereisamodeladaptedfromMaxWeberto

helpyouwriteeffectiveobjectives,followedbyafewcompanyexamples.

To+actionverb+singular,specific,measureableresult+targetdate

Honda:30To+introduce+12newHondamodelsforChinesemarkets+over3years,beginningin2013

Nike:31To+increase+annualrevenuesto$36billion+by2017

Dell:32To+cut+costsby$4billion+by2018

WORKAPPLICATION2-3Writeanobjectiveforanorganizationwhereyouworkorhaveworkedthatisspecific,thatismeasurable,andthathasatargetdate.

ObjectivesStatementsofwhatistobeaccomplishedinsingular,specific,andmeasurableterms,withatargetdate

2-2ApplyingTheConcept

WritingObjectivesForeachobjective,writeinthelettercorrespondingtowhich“must”criteriaisnotmet.

1. singleresult2. specific3. measurable4. targetdate

_____6.Tostartworkingoutaerobicallywithinafewweeks_____7.Todoubleticketsales_____8.Tosell7%moresandwichesand15%morechipsin2016_____9.Todecreasethenumberofsalesreturnsbyyearendof2016_____10.TobeperceivedasthebestrestaurantintheBostonareaby2017

2-1Ethicaldilemma:whatwouldyoudo?Amajorobjectiveofallbusinesscorporationsistomakeaprofitandtodevelopstrategiestoincreaseprofits.SomeUScorporationshaveusedthestrategyofinversion,toacquireaforeigncompanyandmoveheadquartersoverseastoreducepayingcorporatetaxes.SeveralmembersofCongressstatedthatalthoughinversionsarelegal,itisunethicaltoavoidpayingUStaxes.TheUSDepartmentoftheTreasurydraftednewrulestomakeitharderforcompaniestoavoidfederaltaxesbybuyingforeignenterprises.Thefedsstoppedshortofblockingcompaniesfromshiftingprofitsoverseas.33Theannouncementdidn’tstopBurgerKingWorldwide’sacquisitionofCanada’sTimHortons,34asmanycorporationsdon’tbelieveinversionsareunethical.SomemembersofCongressalsosaythatindividualsalsouselegaltaxloopholestolowertheirpersonalincometaxesandthatthisisunethical,butmostpeopletakeallthedeductionstheycantopaylesstaxes.

1. Areinversionsethicalorunethical?2. IfyoubecamethenewCEOofBurger

King,wouldyouhavethecompanypaythe

corporatetaxeventhoughitisnotrequiredtodosobylaw?

3. Asanindividualtaxpayer,will(ordoyou)takedeductionstolowertheamountyoupayintaxesornot?

4. Areyouranswerstoquestions2and3consistent,ordoyoubelievebusinessesshouldpaytheextrataxesbutindividualsshouldn’t?

5. ReviewtheHRdisciplinesanddescribehowacompanycanbeethicalandsociallyresponsibleinperformingthesefunctions.

TypesofStrategiesThereareseveralgenericstrategytypesthatweareabletocategorize.However,wewillkeepthissimpleandbreakthetypesofstrategiesdownintothreecommoncategories:costleadership,differentiation,andfocusornichestrategies.35

CostLeadership.Costleadersdoeverythingthattheycantolowertheinternalorganizationalcostsrequiredtoproducetheirproductsorservices.Walmarthashadgreatsuccesswiththisstrategy,andduringtherecentrecessionandevenafterward,Walmartreduceditspricesevenmoreaggressivelytocombatlossofbusinessto“dollar”stores.36However,low-coststrategiescanhaveadownsideaswell.TataMotors’cheapNanoautomobileatfirstfailedbecausepotentialcustomerssawitas

“toocheap”andthereforethought,“Itmustbeunreliable.”So,TataisnowbuildingmoreexpensiveNanos,hopingthattheywillcatchonwithyoungbuyers.37

Differentiation.Thisstrategyattemptstocreateanimpressionofdifferenceforthecompany’sproductorserviceinthemindofthecustomer.Thedifferentiatorcompanystressesitsadvantageoveritscompetitors.38IfthecompanylikeAppleissuccessfulincreatingthisimpression,itcanchargeahigherpriceforitsproductorservicethancanitscompetitors.Nike,HarleyDavidson,Margaritaville,andothersplacetheircorporatenameprominentlyontheirproductstodifferentiatethoseproductsfromthoseofthecompetition.

FocusorNiche.Withthisstrategy,thecompanyfocusesona

specificportionofalargermarket.Forinstance,thecompanymayfocusonaregionalmarket,aparticularproductline,orabuyergroup.Withinaparticulartargetsegmentormarketniche,thefirmmayuseeitheradifferentiationoracostleadershipstrategy.Itishardtocompetehead-onwiththebigcompanieslikeCoca-ColaandPepsi,butthemuchsmallerDrPepperSnappleGroup’stwonon-colashaveadifferentiatedtasteforamuchsmallertargetmarket,butitisstillveryprofitable.39

WORKAPPLICATION2-4Identifythestrategyofanorganizationwhereyouworkorhaveworkedandexplainhowtheorganizationusesthestrategyagainstitscompetitorstogaincustomers.

2-3ApplyingTheConceptIdentifywhichstrategyisusedbyeachbrandorcompanylistedandwritethelettercorrespondingtothecompany’sstrategybythecompany’sname.

1. costleadership2. differentiation3. focusorniche

_____11.Guccihandbags_____12.Bodybuildermagazine_____13.Rolexwatches_____14.TOMSshoes_____15.Targetstores

HowStrategyAffectsHRMThereareseveralareaswherethegenericcorporatestrategyaffectshowwedoourjobswithinHR.Let’stakealookatafewofthesignificantdifferencesbetweengenericstrategies.Wewillcontinuetodiscusstheseareasingreaterdetailasweprogressthroughthebook.

Companiesthathaveaspecificfocusornichecangarneratargetaudiencelookingforsomethingspecific,allowingthecompanyto

profitalongsidelarger,moredominantcompetitors.

©iStockphoto.com/ProArtWork

HRMandCostLeadership.Ifourorganizationisfollowingagenericcostleadershipstrategy,wearegoingtobemostinterestedinminimizingallinternalcosts,includingemployeecosts,tomaximizeefficiencyandeffectiveness.40Wewillprobablycreatespecificjobdescriptionsthatarehighlyspecializedwithintheorganizationsothatwehavepeopledoingthesamethingrepeatedly,likeMcDonald’s.Wewillalsohaveaspecificjobdescriptionforeachpositionandjob-specifictrainingwithverylittle,ifany,cross-training.Wemayprovideincentivesthatemphasizecostcontrolsandefficiency.

HRMandDifferentiation.

Ontheotherhand,ifourorganizationisfollowingadifferentiatorstrategy,we’regoingtobemoreconcernedwithemployeeswhohavetheabilitytoinnovateandcreatenewprocesses,andwhocanworkinuncertainenvironmentswithincross-functionalteams.41Inadifferentiatororganization,wewillmostlikelyhavemuchbroaderjobclassifications,aswellasbroaderwork-planningprocesses.Individualswillbehiredandpaidbasedonindividualknowledgeandcapabilities,notspecificallybasedonskillsrelatedtothejobtheyfilluponenteringtheorganization.Here,incentiveprogramswillmoreoftenrewardinnovationandcreativity.SoyoucanseeveryquicklythatHRMwillneedtodoitsjobinasignificantlydifferentwaybasedonthetypeofgenericstrategythatthecompanydecidestofollow.

HowHRMPromotesStrategySo,HRmanagersneedtorecruit,select,train,evaluate,andinteractwithemployeesdifferentlybasedondifferentorganizationalstrategies.Thesameholdstruewhenlookingatdifferentsetsofcompanyobjectives,differentcompetitors,andmanyotherindustryandcompanycharacteristics.

HRmanagershavetoevaluatealloftheorganizationalcharacteristicstodeterminewhatkindsofpeopletobringintotheorganizationandthenhowtomaintainthosepeopleoncetheyhavebecomeapartofthecompany.Thisisthereasonthatit’ssocriticalforHRmanagerstounderstandorganizationalstrategy.42Infact,asyougothroughtheremainderofthisbook,youwillseecontinuingreferencestohowHRMwillaffectthecompany’sabilitytodoitsworkoverthelongterm.EverythingthatHRdoesmustmeshwiththechosenstrategytoprovide

therightkindsofemployees,whowilllearnanddotherighttypesofjobssothatthecompanycanachieveitsgoals.

StructureTheselectionofaproperorganizationalstructureiscriticaltosuccessfullyimplementstrategy.43Organizationalstructurereferstothewayinwhichanorganizationgroupsitsresourcestoaccomplishitsmission.

InHRM,managersneedtohaveanunderstandingoforganizationalstructuretodotheirjobscorrectly.Anorganizationisasystemthatistypically,butnotalways,structuredintodepartmentssuchasfinance,marketing,production,humanresources,andsoon.Eachofthesedepartmentsaffectstheorganizationasawhole,andeachdepartmentisaffectedbytheotherdepartments.Allofanorganization’sresourcesmustbestructuredeffectivelyifitistoachieveitsmission.44

BasicsofOrganizationalStructureOnewaytolookatorganizationalstructureistoidentifyaseriesoffundamentalcomponents.Eachofthesecomponentsidentifiespartofhowwedividetheorganizationupandgroupitsresourcestomakethemmoreefficientandeffective.Let’sdiscusscomplexity,formalization,andcentralizationasstructuralcomponents.

Complexity.Complexityisthedegreetowhichdifferentpartsoftheorganizationaresegregatedfromoneanother.Organizationscanbebrokenupverticallyusingmanagementlayers,horizontallywithdepartmentsordivisions,andseparatedphysicallyfromeachother—forinstancewithmarketingfunctionsinNewYorkandmanufacturinginGuadalajara.Each

ofthesedemonstratesawayinwhichwebreaktheorganizationupintosmallerandmoredifferentiatedpieces.

Wewanttominimizecomplexityasmuchaspossibleinordertominimizeorganizationalcosts.Forexample,MicrosoftiscurrentlyworkingthroughchangestoitsorganizationalcomplexityundernewCEOSatyaNadellabecauseitshistoricalstructurehasbecometooexpensive.45

LO2-3Summarizethemajorcomponentsoforganizationalstructureandwhyitisimportanttounderstandthem.

SHRMJ:10

LinkingHRStrategytoOrganizationalStrategy

J:2

EnhancingFirmCompetitiveness

J:3

StrategyFormulation

E:9

OrganizationalDesign

Formalization.Formalizationisthedegreetowhichjobsarestandardizedwithinanorganization,meaningthedegreetowhichwehavecreatedpolicies,procedures,andrulesthat“program”thejobsoftheemployees.Ifwemakethingsroutinebycreatingstandardoperatingproceduresand

otherstandardprocesses,wecanusuallyincreasetheefficiencyandeffectivenessofthepeoplewithintheorganization.46

Howmuchwe’reabletoformalizejobswithintheorganization,though,dependsonwhattheorganizationisdesignedtodo.Iftheorganizationisdesignedtodothesamethingoverandover,suchasproducingalow-costcommodity,thenwecanusuallyformalizemanyofitsprocedures.Ontheotherhand,iftheorganizationisdesignedtodouniqueandnonroutinethings,thenwewillprobablynotbeabletoformalizeverymuchofwhattheorganizationdoes.47

WORKAPPLICATION2-5Brieflydescribesomeoftheorganizationalcultureartifactswhereyouworkorhaveworked.

Organizationalstructure Thewayinwhichanorganizationgroupsitsresourcestoaccomplishitsmission

ComplexityDegreetowhichdifferentpartsoftheorganizationaresegregatedfromoneanother

FormalizationDegreetowhichjobsarestandardizedwithinanorganization,meaningthedegreetowhichwehavecreatedpolicies,procedures,andrulesthat“program”thejobsoftheemployees

CentralizationDegreetowhichdecisionmakingisconcentratedwithintheorganization

Centralization.Centralization,thethirdmajorcomponentof

organizationalstructure,isthedegreetowhichdecisionmakingisconcentratedwithintheorganization.Thedegreeofcentralizationinanorganizationhastodowithdispersionofauthorityfordecisionmakinganddelegationofauthority.Ifwecanconcentrateauthorityindecisionmakingwithoneorafewindividuals,wecanconcentrateonhiringpeoplewhoareverygoodatmakingbusinessdecisionsinthosefewpositionsandnotworryaboutthedecision-makingskillsoftherestofouremployees.48

However,there’satrade-offtocentralizeddecisionmaking.Astheorganizationgetslarger,wemayhavetogothroughmanylayersoftheorganizationinordertogetadecisionmade.Thiscanslowdowntheprocesseswithinthefirm.Forexample,TEPCOwascriticizedforhavingacomplexbureaucraticdecision-makingprocessthatledtothemeltdownofthreereactorsatoneofitsnuclearplantsinJapan.49

IsThereOne“Best”Structure?No.Thebeststructureisonethatfitsthefirm’scurrentcompetitivesituationaswellasitsinternalcapabilitiesandthatenablesittoimplementitsstrategiessuccessfully.WarrenBuffettadvisesbusinessestokeepthingssimple,50andPeterDruckermayhavesaiditaswellasanyonewhenhenoted,“Thesimplestorganizationstructurethatwilldothejobisthebestone.”51

HowDoesStructureAffectEmployeeBehavior?Hereisageneralanswertohowstructureaffectsouremployees’behavior.Withhighcomplexity,formalization,andcentralization,employeesfocusonfollowingthepoliciesandruleswithinthelimitedscopeoftheirhighlyspecializejobswithoutmakingdecisions—likeMcDonald’s.Withlowcomplexity,formalization,andcentralization,employeescanbemorecreativetogetthejobdonethewaytheywantto—likeZappos,wheretherearenodepartmentsorstandardproceduresandemployeesareexpectedto“thinkonyourfeet”andmakedecisions.

SHRMC:3

Individualvs.GroupBehavior

SHRMQ:2

OrganizationalStructureandJobDesign

HowDoesStructureAffectHRM?AstheHRmanager,wouldyourjobchangeifyourorganizationadoptedthestructureofoneofthetwocompaniesabove?WouldyouneedtorecruitandhiredifferenttypesofpeopleinabureaucraticorganizationlikeMcDonald’sthanyouwouldinanentrepreneurialorganizationlikeZappos?Indeed,youwould.Inthemorebureaucraticorganization,youwouldmostlikelyhirepeoplewhohadsignificantdepthofexpertiseinanarrowareawithintheirfieldofknowledgesothattheycouldapplythatexpertiseinahighlyefficientmanner.Yourtrainingprogramswouldalsoprobablybemorespecificandgearedtowardparticularjobs.Infact,theorganizationalstructurewillaffectvirtuallyeveryfunctionoftheHRmanager.SoinordertobeasuccessfulHRmanager,youhavetounderstandandadapttotheparticularorganizationalstructureofyourfirm.

OrganizationalCultureOrganizationalcultureisanothercharacteristicthataffectshowtheHRmanageroperateswithinthefirm.FosteringtherightorganizationalcultureisoneofthemostimportantresponsibilitiesoftheCEOandothercorporateexecutives.52Managementneedstobeinvolvedinestablishingsharedvalues,beliefs,andassumptionssothatemployeesknowhowtobehave.53Everygroupofhumansthatgathertogetheranywhereatanypointintimecreateauniquegroupculture.Theyhavetheirowngroupstandards,callednorms,whichcreatepressureforthegroup’smemberstoconform.Socialgroupshavesocietalcultures,nationshavenationalcultures,andorganizationshavetheirowndistinctorganizationalcultures.

WhatIsOrganizationalCulture?Organizationalcultureconsistsofthevalues,beliefs,andassumptionsaboutappropriatebehaviorthatmembersofanorganizationshare.Culturedescribeshowemployeesdowhattheydo(behavior)andwhytheydowhattheydo(values,profits,customers,employees,society).Everyorganizationhasaculture,andsuccessdependsonthehealthandstrengthofitsculture.54 Therefore,leadersshouldspendalotoftimebuildingtheorganization’sculture.55Organizationalcultureisprimarilylearnedthroughobservingpeopleandeventsintheorganization.

ArtifactsofOrganizationalCulture.

Therearefiveartifactsoforganizationalculturethathelpemployeeslearntheculture:

1. Heroes,suchasfoundersSteveJobsofApple,SamWaltonofWalmart,HerbKelleherofSouthwestAirlines,FrederickSmithofFedEx,andotherswhohavemadeoutstandingcontributionstotheirorganizations.

2. Stories,oftenaboutfoundersandotherswhohavemadeextraordinaryefforts.TheseincludestoriesaboutSamWaltonvisitingeveryWalmartstoreyearly,orsomeonedrivingthroughablizzardtodeliveraproductorservice.Publicstatementsandspeechescanalsobeconsideredstories.

3. Slogans,suchasatMcDonald’s.Q,S,C,V(orquality,service,cleanliness,andvalue).

4. Symbols,suchaslogos,andplaques,pens,jackets,orapinkCadillacatthecosmeticsfirmMaryKay.

5. Ceremonies,suchasawardsdinnersfortopachieversatMaryKay.

LO2-4Describeorganizationalcultureandhowitaffectsthemembersoftheorganization.

SHRMA:3

Managing/CreatingaPositiveOrganizationalCulture

Organizationalculture Thevalues,beliefs,andassumptionsaboutappropriatebehaviorthatmembersofanorganizationshare

WORKAPPLICATION2-6Brieflydescribethecomplexity,formalization,andcentralizationoftheorganizationalstructurewhereyouworkorhaveworked.

HowCultureControlsEmployeeBehaviorinOrganizationsOrganizationalcultureisaverypowerfulforceincontrollinghowpeopleactwithinitsboundaries.Forinstance,iftheculturesaysthatwevaluehardworkandproductivitybutanindividualononeoftheteamsfailstodohisorherpart,thentheothermembersoftheteamarequitelikelytopressurethatindividualtoconformtotheculture.Sinceassumptions,values,andbeliefsaresostrong,allindividualswillmostlikelyconformtothosebehaviorsthattheculturevalues.

Doyoubelievethatculturehastheabilitytocauseyoutochangethewayyouact?Haveyoueverdonesomethingtofitin,orhaveyoueverdonesomethingyoureallydidn’twanttodobecauseofpeerpressure?Doesn’tpeerpressurecontrolmostpeople—atleast

sometimes?Thinkaboutthewayyouactaspartofyourfamily,andthencomparethattothewayyouactasastudentatschool,withagroupofyourfriends,orasanemployeeatwork.Chancesarequitehighthatyouactdifferentlywithinthesedifferent“cultures.”Weallacttoconform,forthemostpart,totheculturethatwehappentobeinatthatpointintime,becausetheculture’svaluespushustoactthatway.

Inastrongorganizationalculture,employeestendtodressandbehaveinsimilarways.

©iStockphoto.com/BraunS

WORKAPPLICATION2-7Giveexamplesofhowculturecontrolsemployeebehaviorwhereyouworkorhaveworked.

SocialMediaandCultureManagementRecallthateachorganizationhasaninternalandanexternalenvironment.Exhibit2-4putstogethertheinternalandexternalcomponentsmakingupthatenvironment.

Socialmediaisoneofthemechanismsthatwenowusetobothmonitorand—atleastpartially—controlorganizationalenvironments.56Companiescanmonitortheinternalenvironmentusingsocialmediavenues,whichgivesmanagementafeelfortheculturewithintheorganization.Theycanalsoactivelyseekoutinformationinternallyusingvariousformsofsocialmedia57andcanevenaskcompanymemberstointeractonsocialmediaplatformssuchasLinkedInandFacebook.Haveyoueverknownafriendwhoseorganizationaskedemployeesto“like”themonFacebook?Thismechanismisbecomingmoreimportanteverydayandwill

continuetodosofortheimmediatefuture.

Thesameistruefortheexternalenvironment,fromfollowingcompetitorsonsocialmediasitestoutilizinggovernmentWebpagesandmedialinks.Governmentsandotherentitiesareevenusingsocialmediatoextendtheirreachintocommunitiesthataregenerallyhardtoreachbecausetheydon’tpaymuchattentiontostandardmethodsofcommunicationlikeStateoftheUnionaddressesandregulatorybulletins.IntheUnitedStates,PresidentObama’sadministrationturnedtosocialmediatoattractyoungerindividuals(whodon’ttendtogetasinvolvedwithgovernmentissues)tothefederalhealthcareexchanges.Theadministrationdidthisbecausethenewhealthcarelawrequiredyoungermemberstosignuptooffsetthehighercostofinsuringolderindividuals.58

Socialmediacontinuestobecomemoreimportanttoeventraditionalbusinessesandgovernments.Youcanbetthatgovernments

willpaymoreattentiontosocialmediainthefuture,sincemanyofthe“ArabSpring”uprisingswerecoordinatedviasocialmedia.59Thisisjustoneexampleofthepowerofsocialmediasites.

WORKAPPLICATION2-8Giveexamplesofhowyou,oranorganization,haveusedsocialmediaatwork.

2-4ApplyingTheConcept

TheInternalEnvironmentIdentifywhichinternalenvironmentalfactorisreferredtoineachstatementandthenwritethelettercorrespondingtothatfactorbeforethestatement.

1. strategy2. structure3. culture

_____16.“AtVictoria’sSecret,wefocusonsellingclothesandotherproductstowomen.”_____17.“AttheSEC,wehaveseverallayersofmanagement.”_____18.“AtFord,qualityisjobone.”_____19.“WalkingaroundtheofficeatBankofAmerica,IrealizedthatIwouldhavetowearajacketandtieeveryday.”_____20.“IworkintheproductiondepartmentatFord,andsheworksinthemarketingdepartment.”

AnIntroductiontoDataAnalyticsforHRMDataanalyticsistheprocessofaccessinglargeamountsofdatainordertoanalyzethosedataandgaininsightintosignificanttrendsorpatternswithinorganizationsorindustries.Computingpowerhasobviouslybeenincreasingataremarkablerateforthepast20years,ashastheabilitytobothcreateandstorelargeamountsofdataandinformation.Thisabilitytocreatehugeamountsofdatahasledtotheconceptof“bigdata.”

Bigdatainvolvesthecollectionofextremelylargedatasets—solarge,infact,thatdataanalyticsonthesedatasetswouldhavebeenimpossibleuntilveryrecently,sincewejustdidnothavethecomputingpowerortheprogramsavailable.Withtheadventoffastercomputersandnewanalyticsprograms,wecannowfindpatternsinthesemassivedata

setsthatallowustomakeimportantorganizationaldecisions—especiallystrategicdecisions.

Exhibit2-4TheInternalandExternalEnvironment

ABriefonDataAnalyticsCompanieslikeGooglegrewupondataanalytics.DirectorofResearchPeterNorvigsaidrecently,“Wedon’thavebetteralgorithmsthananyoneelse;wejusthavemoredata.”60AndGoogleanalyzesallofthatdatalookingforpatternsthatitcanuse.Manyothercompanieshavealsojumpedonthisbandwagon,includingsomepowerfuloutsourcerslikeIBMandOracle,whoaresellingbigdataservices.61Othercompaniesaredoingtheirownbigdataanalysis,usingbigdataasacompetitiveweapon,accordingtoaMcKinsey&Companyreport.62

AnalysisofbigdataisprovidinginformationthatHRmanagerscanimmediatelyactonaswell.Arecentanalysisshowedthat“thecommunicationskillsandpersonalwarmthofanemployee’ssupervisorareoftencrucialindeterminingtheemployee’stenureandperformance.”63AlotofHRmanagershave

anecdotallypassedthisinformationontotheirlinemanagersformanyyears.

Becauseofbigdata,wecannowanalyzethousandsorevenmillionsofinstancesofinteractionbetweenpeopleinandbetweenorganizationsandlookforpatternstothoseinteractions.So“Wecanmeasure,andthereforemanage,morepreciselythanever.”64Ifwefindapattern,itmaytelluswhatweshoulddobasedondataratherthaninstinct.Wecan“directlytranslatethat[pattern]knowledgeintoimproveddecisionmakingandperformance.”65

LO2-5Definedataanalyticsandexplainhowithelpsorganizationsmakeimportantdecisions.

DataanalyticsProcessofaccessinglargeamountsofdatainordertoanalyzethosedataandgaininsightintosignificanttrendsorpatternswithinorganizationsorindustries

HRAnalyticsHRmanagersmustbecomecomfortablewithcollectingandanalyzingbigdatatodriveresults.66AnalyticstoolsandprocessescanbeusedformanyHRfunctions,suchastalentacquisitionandmanagement,traininganddevelopment,workandjobanalysis,productivityanalysis,motivation,retention,andengagement.67However,organizationalsilos,skillsshortages,andsuspicionaboutreducinghumanbeingstodatapointsare“preventingHRdepartmentsfromeffectivelyusingtalentanalytics.”68

TheconvergenceofHRMandbigdataissometimescalledworkforcescience,as“Thisisabsolutelythewayforward.”69Theabilitytomeasureactionsandreactionsinlargenumbersandfindpatternsinthemisgoingtochangethemanagementofpeopleinorganizations—notjustinthelongterm,butintheimmediatefuture.Infact,itisalready

happening.Again,GoogleusesdataanalysisinHRjustasmuchasitdoesinthemarketingofproductsandservices.Googleknows,forinstance,thatitsmostinnovativeworkers“arethosewhohaveastrongsenseofmissionabouttheirworkand...haveautonomy.”70

DesiredOutcomesBusinessesareincreasinglylookingatinternalpeopleprocessesinordertopredicttheimpactofthoseprocessesontheirbusinessresults.71Thus,thedesiredoutcomesareincreasedperformance,and“companiesthatarehighlyskilledincoreHRpracticesexperienceupto3.5timestherevenuegrowthandasmuchas2.1timestheprofitmarginsoflesscapablecompanies.”72Thatisashockingdifferentialbetweenskilledandlessskilledorganizations.HRmanagerswhocanusesuchmetricscangaintheir“seatatthetable”whenstrategyisbeingdiscussedintheirfirms.ThereisnodoubtthatdataanalyticsisbecomingacriticalareaofexpertiseforHRmanagers—especiallyathighermanagementlevels.

HumanResourceInformationSystems(HRIS)Humanresourceinformationsystems(HRIS)areonetypeofsystemusedtomanageandanalyzedatainorganizations,asHRusesdatatoinfluencebusinessperformance.73Mostorganizationstodayusecomplexcomputersystemstomanageandmanipulatethosedata.

WhatAreHRIS?Humanresourceinformationsystems(HRIS)areinteractingdatabasesystemsthat“aimatgeneratinganddeliveringHRinformationandallowustoautomatesomehumanresourcemanagementfunctions.”74SomeofthemostcommonfeaturesinHRISincludemodulesfortrackingattendanceandleave,job,andpayhistoryandloggingappraisalscoresandreviewdates.Othersincludemodulesforbenefitsenrollmentandtracking,successionmanagement,trainingmanagement,andtimelogging.Thereareadditionalmodulesavailabledependingonthesizeandtypeoftheorganization.75

LO2-6Identifyhowhumanresourceinformationsystems(HRIS)canhelpHRmakedecisions.

HowDoHRISAssistinMakingDecisions?HRISallowustomaintaincontrolofourHRinformation,andtheymakeitavailableforouruseduringthestrategicplanningprocess.Organizationscanaccessthingssuchastrainingrecords,jobdescriptions,workhistories,andmuchmore.Havingthisaggregateinformationimmediatelyavailablemakesthestrategicplanningprocessbothquickerandsmoother.WecanusetheinformationstoredinthedatabasetomakedailydecisionswithintheHRdepartment.Forexample,sincetrainingrecordsareavailableintheHRIS,ifweneedtodeterminewhohascompletedconflictmanagementcourseworkforanewteambeingcreatedinthecompany,wecanquicklyidentifythoseindividualswiththatskillset.Wecanalsousethesamedatabaseswhenconsideringpromotions,transfers,andmanyotherdailyactivitiesthatarerequiredinsidetheorganization.

Humanresourceinformationsystems(HRIS)InteractingdatabasesystemsthataimatgeneratinganddeliveringHRinformationandallowustoautomatesomehumanresourcemanagementfunctions

MeasurementToolsforStrategicHRMHousedwithinmanyHRISarestatisticalpackagesforHRM.Justaswehavetoquantifyandmeasureotherpartsoftheorganization,wealsohavemeasurementtoolsspecifictoHRM.Twoofthemostcommontoolsareeconomicvalueadded(EVA)andreturnoninvestment(ROI).Let’stakeabrieflookateachofthesetools.

EconomicValueAdded(EVA)Economicvalueadded(EVA)isdesignedasamethodforcalculatingthecreationofvaluefortheorganization’sshareholders.Economicvalueadded(EVA)isameasureofprofitsthatremainafterthecostofcapitalhasbeendeductedfromoperatingprofits.Itprovidesshareholdersandmanagerswithabetterunderstandingofhowthebusinessisperformingoverall.Asanequation,EVAwouldlooklikethis:76EVA=Netoperatingprofitaftertax−(Capitalused×Costofcapital)

SoEVAisameasureofhowmuchmoneywemadethroughouroperationsminustheamountofmoneythatwehadtospendorborrow(ataparticularinterestrate)inordertoperformthoseoperations.Foracompanytogrow,itmustgenerateaveragereturnshigherthanitscapitalcosts.

LO2-7Recallthecommonmeasurementtoolsforstrategichumanresourcemanagement(HRM).

SHRMG:1

EconomicValueAdded

ReturnonInvestment(ROI)Returnoninvestment(ROI)isameasureofthefinancialreturnwereceivebecauseofsomethingthatwedotoinvestinourorganizationoritspeople.ROIismostcommonlyusedinfinancialanalyses,butmanyareasofHRlendthemselvestoROIcalculations.Theseareasincludetraining,outsourcing,benefits,diversity,andmanyothers.Ineachoftheseareas,wecancalculatethecostoftheprocess—whetherthatprocessistraining,diversitymanagement,oranythingelse—andcomparethattothereturnswegetfromtheprocess.

TocalculateROI,youneedtwofigures:thecostoftheinvestmentandthegainthatyoureceivefrommakingtheinvestment.Fromthere,thecalculationisprettysimple:ROI=Gainfrominvestment−CostofinvestmentCostofinvestment

So,asanexample,ifwecreateatrainingcoursetoimprovetheskillsofourassemblyworkersandsendalloftheworkersthroughthetraining,thattrainingwillcostus$1,000,000.Weknowthathistorically,duringanormalyearofproduction,theassemblyworkershavebeenabletoassemble$5,000,000worthofourproduct.However,afterthetrainingiscomplete,wemeasureourassemblyprocessovertheensuingyearandfindthatouramountofproductcreatedthatyearhasincreasedto$8,000,000.Thisgivesusa$3,000,000gainfromtheinvestment.Wecanplugthesenumbersintoourcalculationandfindoutthefollowing:ROI=$3,000,000−$1,000,000$1,000,000=$2,000,000$1,000,000=2or200%

Sointhiscase,ourreturnoninvestmentoverthecourseof1yearis2timesthecostoftheinvestment.

ItisalwaysimportanttocalculateatleastaroughROIforanyinvestmentinorganizationalresources.There’sadefiniteneedtounderstandhowmuchwegetinreturnforaninvestment.Don’tjustassumethatthereturnoninvestmentisalwayspositive—becauseit’snot.

SHRMG:7

ReturnonInvestment(ROI)

Economicvalueadded(EVA)Measureofprofitsthatremainafterthecostofcapitalhasbeendeductedfromoperatingprofits

Returnoninvestment(ROI)Measureofthefinancialreturnwereceivebecauseofsomethingthatwedotoinvestinourorganizationoritspeople

TrendsandIssuesinHRMHerewecontinueourdiscussionofsomeofthemostimportantissuesandtrendsinHRMtoday.Inthischapter,wechosethefollowingissues:managingdatatoimprovestructure,culture,andstaffing,andthecontinuingglobalizationofbusiness,whichincreasestheneedforstrategicplanning.Let’sdiscusseachofthesetopicsnext.

TakingacompanyglobalrequireseffectivestrategicandHRMplanning.

Jupiterimages/PHOTOS.com/Thinkstock

EverythingOldIsNewAgain:ManagingDataforHRMDecisionMakingAswenotedinthesectiononbigdata,therehavebeennewadvancesinbothcomputingpowerandstorageinthepastfewyears,andwenowhavetheabilitytododataanalysisthatwecouldnotattemptbefore.TheseimprovementsindatacapabilityhaveinturnledtoimprovementsinvirtuallyeveryareaofstrategicandHRMplanningasacomponentofstrategy.Inallareas,dataareleadingustonewconclusionsconcerningourpeopleandtheirwork.Forinstance,whenXeroxhadproblemsstaffingacallcenter,itanalyzedalargedatasetthatidentifiedsuccessfulemployees,andconsequentlyfoundthatthecompanywashiringbasedonthewrongcharacteristics.77Xeroxhadassumedthatpeoplewithcallcenterexperiencewoulddobetter,butunexpectedlythatwasnottrue.

PeoplewhoweremorecreativedidbetterinXerox’scallcenterenvironment.

Dataanalysisisbeingusedaroundtheworldtofindtherighttypeofworkersforspecificjobs,andwhendonecorrectly,itallowscompaniestolowerturnoverandmanageengagementbetterthanever.Thedataaretheretohelpyoumakebetterbusinessdecisions;thechallengeistousethedatatoimproveworkplaceattractivenesstoemployees,whocanthenincreasethecompany’schancesofsuccessthroughincreasedengagementwiththeiremployer.

ContinuingGlobalizationIncreasestheNeedforStrategicandHRMPlanningAsbusinessinmostindustriescontinuestoglobalize,competitionwillcontinuetoincrease.Thisisprimarilyduetothefactthatasindustriesglobalize,competitorswhousedtobelimitedtooneregion,country,orgroupofcountriesgainaccesstomanymoremarkets.Asmoreandmorecompetitorsgainaccesstomoreandmoremarkets,competitionislikelytoincrease.Thisincreasingcompetitionputspressureonbusinessestocreateaplantoovercometheircompetitors’advantages.

Aswenotedearlierinthischapter,theprocessofstrategicplanningisdesignedtoanalyzethecompetitivelandscapethatourorganizationfacesandcreateaworkableplanthatwillallowustocompetewithinthat

landscape.Soascompetitionincreases,developingagood,solid“global”strategyandimplementingcontinuousreviewsofourstrategicplansbecomemoreandmoresignificant.

Companiesmustbecomemorecompetentglobalcompetitors.ForHRM,thismeansthatHRmanagerswillneedtobecomebetteratmanagingexpatriateemployees,payingwagesacrossnationalborders,managingdisparatecountrylawsandregulations,andmuchmore.WewilldiscusstheglobalizationissuesforHRMinmoredetailinChapter14.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyour

criticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary2-1Classifythemajorcomponentsoftheexternalenvironment.

Thereareninemajorexternalforces:customers,competition,suppliers,thelaborforceandunions,shareholders,society,technology,theeconomy,andgovernments.Eachfactorisbrieflydiscussedbelow.

Customers.Companiesmustcontinuallyimproveproductstocreatevaluefortheircustomers.Competition.Organizationsmustcompeteagainsteachotherforcustomers,forthesameemployees,andsometimesforsuppliers.Competitors’changingstrategicmovesaffecttheperformanceofthe

organization.Suppliers.Thefirm’sperformanceisaffectedbyitssuppliers.Therefore,itisimportanttodevelopcloseworkingrelationshipswithyoursuppliers,andcloserelationshipsrequireemployeeswhohavetheabilitytocommunicate,empathize,negotiate,andcometomutuallyadvantageousagreements.Laborforce.Therecruitsavailabletoandtheemployeesofanorganizationhaveadirecteffectonitsperformance.Managementrecruitshumanresourcesfromtheavailablelaborforceoutsidethecompany’sboundaries.Shareholders.Theownersofacorporation,knownasshareholders,influencemanagement.Mostshareholdersoflarge

corporationsarenotinvolvedintheday-to-dayoperationofthefirm,buttheydovotefortheboardofdirectors,andthetopmanagerreportstotheboardofdirectors.Society.Individualsandgroupswithinsocietyhaveformedtopressurebusinessforchanges.Peoplewholiveinthesameareawiththebusinessdonotwantittopollutetheairorwaterorotherwiseabusenaturalresources.Technology.ComputersandtheInternethavechangedthespeedandthemannerinwhichorganizationsconductandtransactbusiness,andthey’reoftenamajorpartofthefirm’ssystemsprocesses.Changingtechnologiesrequiretechnologicallysavvyemployeeswhohavetheabilitytoadapttonewprocesses.

Economic.Noorganizationhascontrolovereconomicgrowth,inflation,interestrates,foreignexchangerates,andsoon.Ingeneral,asmeasuredbygrossdomesticproduct(GDP),businessesdobetterwhentheeconomyisgrowingthantheydoduringrecessions.Governments.National,state,andlocalgovernmentsallsetlawsandregulationsthatbusinessesmustobey.Governmentscreatebothopportunitiesandobstaclesforbusinesses.Toalargeextent,businessmaynotdowhateveritwantstodo;thegovernmenttellsbusinesswhatitcanandcannotdo.

2-2Discussthethreemajororganizationalfactorsthataffectourstrategicoptions.

Ourstrategicoptionsaregovernedtoagreatextentbyourcurrent

strategy,ourorganizationalstructure,andourculture.Strategydealswithhowtheorganizationcompeteswithinitsindustry.Strategyisjustaplanofactiontoachieveaparticularsetofobjectives.Itlooksattheexternalenvironmentandtheorganizationalenvironmenttocreatestrategicadvantage.Strategicadvantageoccurswhenyouanalyzetheenvironmentbetterandreactquickerthanyourcompetitorsdo,thuscreatingasustainablecompetitiveadvantage.

Organizationalstructurereferstothewayinwhichanorganizationgroupsitsresourcestoaccomplishitsmission.Organizationsstructuretheirresourcestotransforminputsandoutputs.Allofanorganization’sresourcesmustbestructuredeffectivelytoachieveits

mission.Asamanagerinanydepartment,youwillberesponsibleforpartoftheorganization’sstructure.Organizationalcultureconsistsofthesharedvalues,beliefs,andassumptionsaboutappropriatebehavioramongmembersofanorganization.Organizationalcultureisprimarilylearnedthroughobservingpeopleandeventsintheorganization.

2-3Summarizethemajorcomponentsoforganizationalstructureandwhyitisimportanttounderstandthem.

Allofanorganization’sresourcesmustbestructuredeffectivelyifitistoachieveitsmission.Structureismadeupofthreemajorcomponents:

Complexity,whichisthedegreetowhichthreetypesofdifferentiationexistwithintheorganization.Thesethreetypesareverticaldifferentiation,

horizontaldifferentiation,andspatialdifferentiation.Themoretheorganizationisdivided—whethervertically,horizontally,orspatially—themoredifficultitistomanage.Formalization,whichisthedegreetowhichjobsarestandardizedwithinanorganization.Themorewecanstandardizetheorganizationanditsprocesses,theeasieritistocontrolthoseprocesses.Centralization,whichisthedegreetowhichdecisionmakingisconcentratedwithintheorganizationatasinglepoint—usuallyatthetop.Ahighlycentralizedorganizationwouldhaveallauthorityconcentratedatthetop,whileadecentralizedorganizationwouldhaveauthorityspreadthroughout.Ifauthoritycanbecentralized,wecantake

advantageoflearningcurveeffectsthathelptoimproveourdecisionmakingovertime.

2-4Describeorganizationalcultureandhowitaffectsthemembersoftheorganization.

Organizationalcultureconsistsofthevalues,beliefs,andassumptionsaboutappropriatebehaviorthatmembersofanorganizationshare.Organizationalcultureisprimarilylearnedthroughobservingpeopleandeventsintheorganization.Becauseorganizationalcultureisbasedatleastpartlyonassumptions,values,andbeliefs,theculturecancontrolhowpeopleactwithinitsboundaries.Sinceassumptions,values,andbeliefsaresuchstronginfluences,individualswillgenerallyacttoconformtotheculture.Forthemostpart,weallacttoconformtotheculturethatwehappentobeinatanygivenpointintime,andthat’sbecausecultural

valuespushustoactthatway.2-5Definedataanalyticsandexplainhowithelpsorganizationsmakeimportantdecisions.

Dataanalyticsistheprocessofaccessinglargeamountsofdatainordertoanalyzethosedataandgaininsightintosignificanttrendsorpatternswithinorganizationsorindustries.AnalyticstoolsandprocessescanbeusedtoguidedecisionmakingformanyHRfunctions,suchastalentacquisitionandmanagement,traininganddevelopment,workandjobanalysis,productivityanalysis,motivation,retention,andengagement.Dataanalyticsonalargescale,orbigdata,willchangehowpeoplearemanagedwithinorganizations,andideallyleadtoincreasedperformanceoftheorganization.

2-6IdentifyhowHRIScanhelpHRmakedecisions.

Humanresourceinformationsystems

(HRIS)areinteractingdatabasesystemsthataimtogenerateanddeliverHRinformationandallowustoautomatesomeHRMfunctions.Theyareprimarilydatabasemanagementsystems,designedespeciallyforuseinHRfunctions.HRISallowustomaintaincontrolofourHRinformationandmakeitavailableforuseduringthestrategicplanningprocess.Havingthisinformationimmediatelyavailablemakesthestrategicplanningprocessbothquickerandsmoother.WecanalsousetheinformationstoredinthedatabasetomakedailydecisionswithintheHRdepartment,suchasadecisiononwhomtosendtoaparticulartrainingclass.Wecanalsousethesedatabaseswhenconsideringpromotions,transfers,teamassignments,andmanyotherdailyactivitiesthatarerequiredinsidetheorganization.

2-7Recallthecommonmeasurement

toolsforstrategicHRM.Wediscussedtwocommontoolsinthischapter:economicvalueadded(EVA)andreturnoninvestment(ROI).EVAisameasureofprofitsthatremainafterthecostofcapitalhasbeendeductedfromoperatingprofits.ROIisameasureofthefinancialreturnwereceivebecauseofsomethingthatwedotoinvestinourorganizationoritspeople.

2-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermscentralization,39complexity,39dataanalytics,42economicvalueadded(EVA),45formalization,39humanresourceinformationsystems(HRIS),44missionstatement,35objectives,36organizationalculture,40organizationalstructure,39returnoninvestment(ROI),45strategy,34vision,35

KeyTermsreviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. _________isaplanofactiontoachieveaparticularsetofobjectives.

2. _________iswhatweexpecttobecomeasanorganizationataparticularfuturepointintime.

3. _________isourexpectationsofwhatwe’regoingtodoinordertobecometheorganizationthatweenvisioned.

4. _________statewhatistobeaccomplishedinsingular,specific,andmeasurabletermswithatargetdate.

5. _________referstothewayinwhichanorganizationgroupsitsresourcestoaccomplishitsmission.

6. _________isthedegreeofthreetypesofdifferentiationwithintheorganization.

7. _________isthedegreetowhichjobsarestandardizedwithinanorganization.

8. _________isthedegreetowhichdecision-makingisconcentratedwithintheorganizationatasinglepoint-usuallyatthetopoftheorganization.

9. _________consistsofthevalues,beliefs,andassumptionsaboutappropriatebehaviorthatmembersofanorganizationshare.

10. _________istheprocessofaccessinglargeamountsofdatainordertoanalyzethosedataandgaininsightsintosignificanttrendsorpatternswithinorganizationsorindustries.

11. _________areinteractingdatabasesystemsthataimatgeneratinganddeliveringHRinformationandallowustoautomatesomehumanresourcemanagementfunctions.

12. _________isameasureofprofitsthatremainafterthecostofcapitalhasbeendeductedfromoperatingprofits.

13. _________isameasureofthefinancialreturnwereceivebecauseofsomethingthatwedotoinvestinourorganizationoritspeople.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Canyounameabusinessthatyouknowofinwhichcompetitionhasincreasedsignificantlyinthepastfewyears?Whydoyouthinkcompetitionhasincreasedinthiscase?

2. Whataresomeofthewaysinwhichtheenvironmentalfactorsthatwediscussedinthischapterdirectlyaffecttheorganization?

3. Doyouagreethateveryorganizationneedsastrategicplan?Whyorwhynot?

4. Thinkaboutthetechnologicalchangesthathaveoccurredsinceyouwereborn.Doyouthinkthosechangeshaveaffectedthestrategicplanningprocess?How?

5. Whatshouldamissionstatementfocuson—customers,competitors,products/services,theemployeeenvironment,orsomethingelse?Identifywhyyouchoseaparticularanswer.

6. Wediscussedthethreemajorgenericstrategiesinthischapter.Canyouthinkofexamplesofeachofthethreestrategiesinspecificbusinessesyouknowof?Inyouropinion,howsuccessfulhavethesecompaniesbeenwiththeirstrategy?

7. Ifyouweregoingtodesignthestructurefora

new,innovativestart-upcompany,whatkindofstructurewouldyoutrytocreateinregardtolevelofcomplexity,formalization,andcentralization?Whywouldyousetupthistypeofstructure?

8. Whichofthefiveartifacts,orimportantwaysinwhichemployeeslearnaboutculture,doyouthinkismostimportant?Why?

9. NamesomesituationsinHRMwhenyouwouldwanttouseeithereconomicvalueadded(EVA)orreturnoninvestment(ROI)asananalyticaltool.

Case2-1STRATEGY-DRIVENHRMANAGEMENT:Netflix,ABehind-the-ScenesLookatDeliveringEntertainmentNetflixisahighlysuccessfulretailerofmovierentalservices,withamarketvalueofover$25billion.ItoffersasubscriptionservicethatallowsitsmemberstostreamshowsandmoviesinstantlyovertheInternetongameconsoles,Blu-rayplayers,HDTVs,set-topboxes,hometheatersystems,phones,andtablets.NetflixalsoincludesasubscriptionserviceforthosewhoprefertoreceivediscsviatheUSmail(ratherthanstreaming),withoutthehassleofduedatesorlatefees.

TheideaofahomedeliverymovieservicecametoCEOReadHastingswhenhewasforcedtopay$40inoverduefinesafterreturningavideoofthemovieApollo13toBlockbuster.Herealizedthathecouldcapitalizeonanexistingdistributionsystem(theUSPostOffice)thatdidnotrequirerenterstoleavetheirhomes.TheNetflixwebsitewaslaunchedonAugust29,1997,withonly30employeesand925moviesavailablefor

rent.Itusedatraditionalpay-per-rentalmodel,charging$0.50perrentalplusUSpostage,andlatefeesapplied.NetflixintroducedthemonthlysubscriptionconceptinSeptember1999,andthenitdroppedthesingle-rentalmodelinearly2000.Sincethattime,thecompanyhasbuiltitsreputationonthebusinessmodelofflat-feeunlimitedrentalswithoutduedates,latefees,orshippingandhandlingfees.Inaddition,itsonlinestreamingservicedoesn’thavepertitlerentalfees.78Throughout2014,Netflix’stotalsalesgrewby21%,generatinganetincomeof$112million.79Subscribersincreasedbyalmost40%thatyear,reaching46million,andthestockvaluetripledfrom2012to2014.Buthowdidtheyreachthatpoint?80

TherearemanyreasonswhyNetflix’sstrategyissuccessful,yetthenumberstellonlytheresultsandnotthebehind-the-scenesstory.AccordingtoReadHastingsandformerchieftalentofficer(CTO)PattyMcCord,thissuccessisnotasurpriseatallgivenNetflix’sbusinessmodel.Butmoreimportant,theysay,isNetflix’sHRstrategy,whichistocreateanenvironmentoffullymotivatedemployeeswhounderstandthecultureofthecompanyandperformexceptionallywellwithinit.HastingsandMcCordhadtheforesighttodocumenttheirHRstrategyviaPowerPoint,andsoontheseslideswentviral,withmorethan5millionviewsontheWeb.McCorddescribedNetflix’sHRstrategyasconsistingofthefollowingsteps:

1. Selectingnewemployees/recruiting.Hireemployeeswhocareabout,understand,andthen

prioritizethecompany’sinterests.Thiswilleliminatetheneedforformalregulationsandpoliciesbecausetheseemployeeswillstrivetogrowthecompanyfortheirownself-satisfaction.ThissetsNetflixapartfromthemanycompaniesthatdonothireemployeeswhowouldbeagreatfitwiththecompany’scultureandthatthereforestillspendgreatamountsoftimeandmoneyonenforcingtheirHRpolicies—policiesthattargetonly3%oftheirworkforce.81

2. Talentmanagement/matchingemployeeswithjobs.Toavoidhighemployeeturnover,acompanymustrecruittalentedpeoplewiththerightskills,althoughmismatchesmayoccur.Layoffsandfiringsarealsoinevitablegivenchangingbusinesscycles.Insuchcases,itisHR’sdutytoplaceemployeesindepartmentsthatmatchtheemployees’skillsets,aswellastotrainemployeestomeetchangingbusinessneeds.82

3. Sendtherightmessages.Toboostoverallemployeemorale,mostHRdepartmentsthrowpartiesorgiveawayfreeitems.Butwhenstockpricesaredecreasingorsalesnumbersarenotashighaspredicted,whatusewouldacompanyhaveforanofficeparty?NetflixexecutivesstatedthattheyhavenotseenanHRinitiativethattrulyimprovedmorale.Insteadofcheerleading,employeesneedtobeeducatedabouthowthecompanyearnsitsrevenueandwhatbehaviorswilldriveitssuccess.Byreceivingclearmessagesabouthowemployeesshouldexecuteandcommittotheirduties,employeeswillbe

moreinformedaboutthecriteriatheywillneedtomeettoreceivetheirbonuses,andtheywillthereforebemoreapttoreceivethosebonuses.Knowingwhattodoandhowtodoit,employees’motivationwillincrease,andwithincreasedmotivation,moraleandperformancewillimprove.83

4. Performanceevaluation.Netfliximplementedinformal360-degreereviewsafterrealizingthatformalreviewsessionswerenoteffective.Theseinformal360-degreesessionsallowedworkerstogivehonestopinionsaboutthemselvesandcolleagues—focusingonwhethercertainpoliciesshouldstop,start,continue,orchange.Insteadofrelyingonbureaucraticmeasures,employeesvaluedtheseconversationsasanorganicpartoftheirwork,andthoseconversationshavebeendemonstratedtoincreaseemployeeperformance.84Forexample,Netflixfoundthatwhenitsemployeesperceivedtheirbossesaslessthanexpertintheirfield,employeeperformancedropped.EmployeesindicatedthatmanagerswhoreliedoncharmorIQwerenottrustedandreceivedlowsubordinateappraisals.

Questions1. Netflixwasapioneerintheonlinevideorental

market,making“old-fashioned”DVDrentalsathingofthepastandputtingBlockbusteroutofbusiness.DescribehowNetflixchangedtheentertainmentrentalindustry.

2. WhatisNetflix’scompetitivestrategy?Whatdoesitbelieveisthedrivingforcethatmakesthisstrategysosuccessful?Doyouagree?

3. Intermsofsustainingthecompany’scompetitiveadvantage,whatisthemostimportantstepthatNetflixhastaken,asnotedbyHastingsandMcCord?

4. “Wherewewanttobe,howtogetthere,andwherearewenow”arekeypointsofasuccessfulcompany’sstrategy.Howdothecompany’sHRpoliciessupportthefirm’sstrategy?

5. HowdoesNetflixmonitoritsemployees’performance?

6. HowwouldyoucreatealinkbetweencustomersandthewayemployeesperformtoassurethatincentivesaredistributedevenlyandequallyatNetflix?

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,LongIslandUniversitySchoolofBusiness,BrooklynCampus

SkillBuilder2-1WritingObjectivesForthisexercise,youwillfirstworkatimprovingineffectiveobjectives.Thenyouwillwritenineobjectivesforyourself.

ObjectiveTodevelopyourskillatwritingobjectives

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRManagementskills—conceptualanddesign2. SHRM2013CurriculumGuidebook—J:

StrategicHR

Part1Indicatewhichofthecriteriaeachofthefollowingobjectivesfailstomeetinthemodelandrewritetheobjectivesothatitmeetsallthosecriteria.Whenwritingobjectives,usethefollowingmodel:

To+actionverb+single,specific,andmeasurableresult+targetdate

1. Toimproveourcompanyimagebytheendof2017

Criterianotmet:________________________________Improvedobjective:_____________________________

2. Toincreasethenumberofcustomersby10%Criterianotmet:________________________________Improvedobjective:_____________________________Toincreaseprofitsduring2017Criterianotmet:________________________________Improvedobjective:_____________________________Tosell5%morehotdogsand13%moresodaatthebaseballgameonSunday,June14,2016Criterianotmet:

________________________________Improvedobjective:_____________________________

Part2Writethreeeducational,threepersonal,andthreecareerobjectivesyouwanttoaccomplish.Thesemaybeshort-term(somethingyouwanttoaccomplishtoday),long-term(somethingyouwanttohaveaccomplished20yearsfromnow),ormedium-termobjectives.Besuretostructureyourobjectivesusingthemodelandmeetingthecriteriaforeffectiveobjectives.

EducationalObjectivesPersonalObjectivesCareerObjectives

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

____________________________________________________________________________________

____________________________________________________________________________________

YourinstructormayaskyoutodothisSkillBuilderinclassinagroup.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,LongIslandUniversitySchoolofBusiness,BrooklynCampus

SkillBuilder2-2StrategicPlanningatYourCollegeThisexerciseenablesyoutoapplythestrategicplanningprocesstoyourcollegeoruniversityasanindividualand/oragroup.Completeeachstepbytypingorwritingoutyouranswers.Youcanalsoconductthisexerciseforanotherorganization.

ObjectiveTodevelopyourstrategicplanningskillsbyanalyzingtheinternalenvironmentofstrategy,structure,andculture

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRManagementskills—conceptualanddesign2. SHRM2013CurriculumGuidebook—J:

StrategicHR

PARTA:STRATEGY

Step1:DevelopaMission1. Whatisthevisionandmissionstatementofyour

university/collegeorschool/department?2. Isthemissionstatementeasytounderstandand

remember?3. Howwouldyouimprovethemissionstatement?

Step2:IdentifyaStrategyWhichofthethreegenericstrategiesdoesyourschoolordepartmentuse?

Step3:ConductStrategicAnalysis

1. CompleteaSWOTanalysisbyidentifyingthestrengths,weaknesses,opportunities,andthreatsfacingyourschool.

2. Determinethecompetitiveadvantage(ifany)ofyouruniversity/collegeorschool/department.

Step4:SetObjectivesWhataresomeobjectivesofyouruniversity/collegeorschool/department?

Step5:Implement,Monitor,andEvaluateStrategiesHowwouldyourateyouruniversity/college’sorschool/department’sstrategicplanning?Howcoulditbeimproved?

PARTB:STRUCTUREDescribeyourschoolordepartment’sorganizationalstructureintermsofitscomplexity,formalization,andcentralization.

PARTC:CULTUREIdentifyartifactsineachofthecategoriesofheroes,stories,slogans,symbols,andceremonies.

Identifytheculturallevelsoftheorganization’sbehaviors,valuesandbeliefs,andassumptions.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

____________________________________________________________________________________

____________________________________________________________________________________

____________________________________________________________________________________

YourinstructormayaskyoutodothisSkillBuilderinclassinagroup.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

3TheLegalEnvironmentandDiversityManagement

©iStockphoto.com/bbourdages

ChapterOutlineTheLegalEnvironmentforHRM:ProtectingYourOrganizationAUser’sGuidetoManagingPeople:TheOUCHTest

ObjectiveUniforminApplicationConsistentinEffectHasJobRelatedness

MajorEmploymentLawsEqualPayActof1963TitleVIIoftheCivilRightsActof1964(CRA)AgeDiscriminationinEmploymentActof1967(ADEA)VietnamEraVeteransReadjustmentAssistanceActof1974(VEVRAA)PregnancyDiscriminationActof1978(PDA)AmericanswithDisabilitiesActof1990(ADA),asAmendedin2008CivilRightsActof1991

UniformedServicesEmploymentandReemploymentRightsActof1994(USERRA)VeteransBenefitsImprovementActof2004(VBIA)TitleIIoftheGeneticInformationNondiscriminationActof2008(GINA)LillyLedbetterFairPayActof2009(LLFPA)

EqualEmploymentOpportunityCommission(EEOC)

WhatDoestheEEOCDo?EmployeeRightsUndertheEEOCEmployerRightsandProhibitions

EEO,AffirmativeAction,andDiversity:What’stheDifference?

AffirmativeAction(AA)DiversityintheWorkforce

SexualHarassment:ASpecialTypeofDiscrimination

TypesofSexualHarassmentWhatConstitutesSexualHarassment?ReducingOrganizationalRiskFrom

SexualHarassmentLawsuitsTrendsandIssuesinHRM

FederalAgenciesAreBecomingMoreActivistinPursuingDiscriminationClaimsTheADAandtheADAAmendmentsAct(ADAAA)

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

3-1DescribetheOUCHtestanditsfourcomponentsandidentifywhenitisusefulinanorganizationalsetting.PAGE563-2Identifythemajorequalemploymentopportunity(EEO)lawsandthegroupsofpeoplethateachlawprotects.PAGE593-3BrieflydiscussthemajorfunctionsoftheEqualEmploymentOpportunityCommission(EEOC).PAGE663-4Contrasttheconceptsofequalemploymentopportunity,affirmativeaction,anddiversity.PAGE683-5Comparethetwoprimarytypesofsexualharassment.PAGE703-6Brieflydiscusstheemployer’srequirementsconcerningavoidanceofreligiousdiscriminationintheworkplace.PAGE733-7DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE76

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindysays:OneofthereasonssomeagreewiththeDilbertcomicstripdepictionoftheHRmanagerasdevoidoffeelingisduetothenecessityoffairanduniformenforcementofgovernmentrulesandregulations,aswellasthecompany’sownpoliciesandprocedures.Aaron—afavoritewiththepatientsandawillingovertimeworker—misreadthescheduleandmissedadayofworkatthehospital.Ano-call/no-showmeritsawrittenwarning,butAaron’ssupervisordidn’twanttoadministerthediscipline.

“Well,”Iasked,“whatifweweretalkingaboutanotherlessexemplaryemployee?Whatabout,oh,let’ssay—Sandy?WhatwouldyoudoifshewasNC/NS?”

“Hey,noproblemthere—I’dwriteupSandyinaninstant!”repliedthesupervisor.

“Wait—wouldn’tthatbediscrimination?”Differenttreatmentofindividualswhoareinsimilarcircumstancesopensthedoortolegalliability.InChapter3,we’llexplorewhyHRisrequiredtoadviseandassistwithcomplianceissues—nomatterhow“heartless”itmayappear.

TheLegalEnvironmentforHRM:ProtectingYourOrganizationWeallhavetoobeythelaw.Inthischapter,wewillexploresomeofthelawsthatHRmanagershavetoworkwithonadailybasis,andwewillalsolookinsomemoredepthatdiversityandwhyitisvaluableinanorganization.

Wehavegrowntobelieveinthevalueofadiverseworkforce,1andoneoftheprimaryjobsofanHRmanageristoassistinavoidinganydiscriminatoryemploymentsituationsthatcancreatelegal,ethical,orsocialproblemswithorganizationalstakeholders.Asaresult,oneofthefirstthingsweneedtodointhischapterisdefinediscrimination,whichistheactofmakingdistinctionsorchoosingonethingoveranother;inHR,itismakingdistinctionsamongpeople.Soyoucanseethat

ifmanagersdon’tdiscriminate,thenthey’renotdoingtheirjob.However,wewanttoavoidillegaldiscriminationbasedonaperson’smembershipinaprotectedclass,andwewanttoavoidunfairtreatmentofanyofouremployeesatalltimes.Illegaldiscriminationismakingdistinctionsthatharmpeopleandthatarebasedonthosepeople’smembershipinaprotectedclass.Thischapterwillteachyousomeofthetoolsthatwecanusetoavoidillegaldiscrimination.

WORKAPPLICATION3-1Giveexamplesofhowyouandotheremployeeslegallydiscriminateatwork.

LO3-1DescribetheOUCHtestanditsfourcomponentsandidentifywhenitisusefulinanorganizationalsetting.

DiscriminationTheactofmakingdistinctionsorchoosingonethingoveranother;inHR,itismakingdistinctionsamongpeople

IllegaldiscriminationTheactofmakingdistinctionsthatharmpeopleandthatarebasedonthosepeople’smembershipinaprotectedclass

OUCHtestAruleofthumbruleusedwheneveryouarecontemplatinganyemploymentaction,tomaintainfairnessandequityforallofyouremployeesorapplicants

AUser’sGuidetoManagingPeople:TheOUCHTestBeforewestarttalkingaboutequalemploymentopportunityandalloftheformsofillegaldiscriminationintheworkplace,let’staketheopportunitytointroduceyoutotheOUCHtest.2TheOUCHtestisaruleofthumbruleusedwheneveryouarecontemplatinganyemploymentaction,tomaintainfairnessandequityforallofyouremployeesorapplicants.Youshouldusethistestwheneveryouarecontemplatinganyactionthatinvolvesyouremployees.

Exhibit3-1TheOUCHTest

OUCHisanacronymthatstandsfor(seeExhibit3-1):

ObjectiveUniforminapplicationConsistentineffectHasjobrelatedness

ObjectiveIstheactionobjective,orisitsubjective?Somethingthatisobjectiveisbasedonfact,orquantifiableevidence.Somethingthatissubjectiveisbasedonyouremotionalstate/feelingsoropinion.Youshouldmakeyouremploymentactionsasobjectiveaspossible,inallcases.

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

B.EmploymentLaw(required)1.AgeDiscriminationinEmploymentActof19672.AmericanswithDisabilitiesActof1990andasamendedin20083.EqualPayActof19634.PregnancyDiscriminationActof19785.TitleVIIoftheCivilRightsActof1964and19916.ExecutiveOrder11246(1965)15.UniformedServicesEmploymentandReemploymentRightsActof1994(USERRA)17.Enforcementagencies(EEOC,OFCCP)24.Disparateimpact25.Disparatetreatment27.Unlawfulharassment

SexualReligiousDisabilityRaceColorNationoforigin

28.Whistle-blowing/retaliation29.Reasonableaccommodation

ADAReligious

31.LillyLedbetterFairPayAct32.GeneticInformationNondiscriminationAct(GINA)

E.JobAnalysis/JobDesign(required)6.Compliancewithlegalrequirements

Equalemployment(job-relatedness,bonafideoccupationalqualificationsandthereasonableaccommodationprocess)

F.ManagingaDiverseWorkforce(required)

1.Equalopportunityemployment2.Affirmativeaction4.Individualswithdisabilities6.Racial/ethnicdiversity7.Religion9.Sex/genderissues12.Businesscasefordiversity

I.Staffing:RecruitmentandSelection(required)

15.Bonafideoccupationalqualifications(BFOQs)

UniforminApplicationIstheactionbeinguniformlyapplied?Ifyouapplyanactioninanemploymentsituation,areyouapplyingthatsameactioninallcasesofthesametype?Ifyouasksomeonetoperformatest,youneedtocreatetheexactsametestingcircumstances,asmuchasyoucancontrolthem.Forinstance,ifonepersontookanexaminaquietroomandtheotherinanoisyhallway,youwouldnotbeuniforminapplication.

ConsistentinEffectDoestheactionhaveasignificantlydifferenteffectononeormoreprotectedgroupsthanithasonthemajoritygroup?Wehavetotrytomakesurethatwedon’taffectoneofthemanyprotectedgroupsdisproportionatelywithanemploymentaction.Buthowcanweknow?

TheDepartmentofLaborandtheEEOChavegivenustheFour-FifthsRule,3atestusedbyvariousfederalcourts,theDepartmentofLabor,andtheEEOCtodeterminewhetherdisparateimpactexistsinanemploymenttest.Iftheselectionratioforanygroup(e.g.,Asianmales)islessthanfour-fifthsoftheselectionrateforthemajoritygroup(e.g.,whitemales)inanyemploymentaction,thenitconstitutesevidenceofpotentialdisparateimpact.

Foranexample,takealookatExhibit3-2.Let’ssupposethatweliveinanareathatisbasicallyevenlysplitbetweenAfrican-

AmericanandWhite,non-Hispanicpopulations.Youareplanningonhiringabout40newemployeesforageneralpositioninyourcompany.Youdecidetogiveeachofthepotentialemployeesawrittentest.IftheresultsofthetestdisproportionatelyruleouttheAfrican-Americanapplicants,thenyourwrittentestisnotconsistentineffect.Solet’slookatthenumbersinExhibit3-2.

Exhibit3-2TheFour-FifthsRule

Inthefirstexample,theselectionrateof

AfricanAmericanmales(theprotectedgroupinthiscase)was17%,whichisabovetheFour-FifthsRulethresholdof16%.Therefore,weare“consistentineffect,”basedontheFour-FifthsRule.

However,inthesecondexample,theselectionrateofAfricanAmericanmaleswas22.5%,andtheminimumvaluebytheFour-FifthsRulewas23.2%.Asaresult,wewouldbeoutsidetheboundariesofbeingconsistentineffectinthiscase.

IfweareoutofcompliancewiththeFour-FifthsRule,haveweautomaticallybrokenthelaw?No.4Wedohavetoinvestigatewhyweareoutsidethefour-fifthsparameter,though.Ifthereisalegitimatereasonforthediscrepancythatwecanproveinacourtcase,thenweareprobablyOKwithaselectionratethatisoutsidetheparameters.Wecanalsolookatsixfifthstodeterminethepossibility

ofreversediscrimination,sowewouldwanttohavebetween16and24African-Americanmalesselectedinthefirstexample,since6/5of20is24.

ConsistencyineffectisbyfarthemostcomplexofthefourOUCHtestfactors.However,itisalsoveryimportantforustoshowconsistencyinouractionsasmanagersinanorganization.

Four-FifthsRule Atestusedbyvariousfederalcourts,theDepartmentofLabor,andtheEEOCtodeterminewhetherdisparateimpactexistsinanemploymenttest

HasJobRelatednessIstheactiondirectlyrelatedtotheprimaryaspects,oressentialfunctionsofthejobinquestion?5Inotherwords,ifyourjobhasnothingtodowithmakingcoffeefortheofficeinthemorning,Icannotbaseanyemploymentactionsuchasahiringorfiringonwhetherornotyoucanmakecoffee.

RememberthattheOUCHtestisaruleofthumbanddoesnotworkperfectly.Itisnotalegaltestbyitself.Itisagoodguidetonondiscriminatorypractices,butitisonlyaguide.

WORKAPPLICATION3-2Selectanemploymentpolicyatthecompanywhereyouworkoratacompanywhereyouhaveworked.GiveittheOUCHtest,statingwhetheritdoesordoesnotmeeteachofthefourcriteria.

MajorEmploymentLawsManagersneedabasicunderstandingofthemajoremploymentlawsthatarecurrentlyineffect.Ifyoudon’tunderstandwhatislegalandwhatisn’t,youcaninadvertentlymakemistakesthatmaycostyouremployersignificantamountsofmoneyandtime.Let’stakeachronologicallookatsomeofthelawslistedinExhibit3-3.

EqualPayActof1963TheEqualPayActrequiresthatwomenwhodothesamejobasmen,inthesameorganization,mustreceivethesamepay.Itdefinesequalintermsof“equalskill,effort,andresponsibility,and...performedundersimilarworkingconditions.”6However,ifpaydifferencesaretheresultofdifferencesinseniority,merit,quantityorqualityofproduction,oranyfactorotherthansex(e.g.,shiftdifferentialsandtrainingprograms),thenpaydifferencesarelegallyallowable.7Whiledesignedtoequalizepaybetweenmenandwomen,theactwasneverfullysuccessful,butournextlawaddedseriousconsequencestosuchunequaltreatment.

Exhibit3-3MajorEEOLawsinChronologicalOrder

LO3-2Identifythemajorequalemploymentopportunity(EEO)lawsandthegroupsofpeoplethateachlawprotects.

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EqualPayActof1963

TitleVIIoftheCivilRightsActof1964(CRA)Thisactchangedthewaythatvirtuallyeveryorganizationinthecountrydidbusiness,anditalsohelpedchangeemployers’attitudesaboutdiscrimination.The1964CRAstatesthatitisillegalforanemployer“(1)tofailorrefusetohireortodischargeanyindividual,orotherwisetodiscriminateagainstanyindividualwithrespecttohiscompensation,terms,conditions,orprivilegesofemployment,becauseofsuchindividual’srace,color,religion,sex,ornationalorigin;or(2)tolimit,segregate,orclassifyhisemployeesorapplicantsforemploymentinanywaywhichwoulddepriveortendtodepriveanyindividualofemploymentopportunitiesorotherwiseadverselyaffecthisstatusasanemployee,becauseofsuchindividual’srace,color,religion,sex,ornationalorigin.”8

PresidentBarackObamasignedtheLillyLedbetterFairPayActintolawin2009.

JoyceN.Boghosian/BrokenSphere/CreativeCommons

Theactappliestoorganizationswith15ormoreemployeeswhoareworking20ormoreweeksayearandwhoareinvolvedininterstatecommerce.Thelawalsogenerallyappliestostateandlocalgovernments;educationalinstitutions,publicorprivate;allemploymentagencies;andalllaborassociationsofanytype.

Let’sdiscusssomeoftheimportantconceptsintroducedbytheCRAof1964.

TypesofDiscrimination.The1964CRAidentifiedthreetypesofdiscrimination.Subsequentcourtrulingshelpedtofurtherdefinethethreetypes:disparatetreatment;disparateimpact;andpatternorpractice.

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TitleVIIoftheCivilRightsActof1964and1991

Disparate(Adverse)Treatment.Disparatetreatmentexistswhenindividualsinsimilarsituationsareintentionallytreateddifferentlyandthedifferenttreatmentisbasedonanindividual’smembershipinaprotectedclass.Inacourtcase,theplaintiffmustprovethattheemployerintendedtodiscriminateinordertoprovedisparatetreatment.9Disparatetreatmentisgenerallyillegalunlesstheemployercanshowthattherewasa“bonafideoccupationalqualification”(orBFOQ)thatcausedtheneedtointentionallydisallowmembersofaprotectedgroupfromapplyingfororgettingthejob.

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DisparateTreatment

Disparate(Adverse)Impact.Disparateimpactoccurswhenanofficiallyneutralemploymentpracticedisproportionatelyexcludesthemembersofaprotectedgroup;itisgenerallyconsideredtobeunintentional,butintentisirrelevant.10

DisparateimpactisgenerallyjudgedbyuseoftheFour-FifthsRule.Ifourinvestigationshowsthatanemploymenttestormeasurewasbiasedtowardoragainstacertaingroup,thenwehavetocorrectthetestormeasureunlesstherewasalegitimatereasontomeasurethatparticularcharacteristic.However,ifourinvestigationshowsthatthetestwasvalidandreliableandthattherewassomeother

legitimatereasonwhywedidnotmeetthefour-fifthsstandard,thenillegaldiscriminationmaynotexist.

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DisparateImpact

DisparatetreatmentWhenindividualsinsimilarsituationsareintentionallytreateddifferentlyandthedifferenttreatmentisbasedonanindividual’smembershipinaprotectedclass

DisparateimpactWhenanofficiallyneutralemploymentpracticedisproportionatelyexcludesthemembersofaprotectedgroup;itisgenerallyconsideredtobeunintentional,butintentisirrelevant

PatternorpracticediscriminationWhenapersonorgroupengagesinasequenceofactionsoverasignificantperiodoftimethatisintendedtodenytherightsprovidedbyTitleVIIofthe1964CRAtoamemberofaprotectedclass

PatternorPractice.Patternorpracticediscriminationoccurs

whenapersonorgroupengagesinasequenceofactionsoverasignificantperiodoftimethatisintendedtodenytherightsprovidedbyTitleVIIofthe1964CRAtoamemberofaprotectedclass.IfthereisreasonablecausetobelievethatanyorganizationisengaginginapatternorpracticethatdeniestherightsprovidedbyTitleVII,theUSAttorneyGeneralmaybringafederallawsuitagainstit.11Ingeneral,noindividualcandirectlybringapattern-or-practicelawsuitagainstanorganization.Aswiththedisparatetreatmentconcept,itmustbeproventhattheemployerintendedtodiscriminateagainstaparticularclassofindividualsanddidsooveraprotractedperiodoftime.

SeeExhibit3-4fortypesofdiscriminationandtypesoforganizationaldefensesagainstillegaldiscriminationcharges.

WORKAPPLICATION3-3GiveexamplesofBFOQforjobsatanorganizationwhereyouworkorhaveworked.

OrganizationalDefensesAgainstDiscriminationCharges.Theorganizationcandefenditselfagainstdiscriminationchargesbyshowingeitherthattherewasaneedforaparticularcharacteristicorqualificationforaspecificjoborthattherewasarequirementthatthebusinessdocertainthingsinordertoremainviableandprofitablesothatwedidn’tharmallofouremployeesbyfailingandshuttingdown.Let’sreviewthesedefenses.

BonaFideOccupationalQualification(BFOQs).Thefirstdefenseisabonafideoccupationalqualification(BFOQ),aqualificationthatisabsolutelyrequiredinorderforanindividualtobeabletosuccessfullydoaparticularjob.Thequalificationcannotjustbeadesirablequalitywithinthejobapplicant—itmustbemandatory.12ABFOQdefensecanbeusedagainstbothdisparateimpactanddisparatetreatmentallegations.

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BonaFideOccupationalQualifications(BFOQs)

BusinessNecessity.Businessnecessityexistswhenaparticularpracticeisnecessaryforthesafeandefficientoperationofthebusinessandwhenthereisaspecificbusinesspurposeforapplyingaparticularstandardthatmay,infact,bediscriminatory.Abusinessnecessitydefenseisappliedbyanemployerinordertoshowthataparticularpracticewasnecessaryforthesafeandefficientoperationofthebusinessandthatthereisaspecificbusinesspurposeforapplyingaparticularstandardthatmay,infact,bediscriminatory.Businessnecessitydefensesmustbecombinedwithatestforjobrelatedness.However,businessnecessityisspecificallyprohibitedasadefenseagainst

disparatetreatment.13

Bonafideoccupationalqualification(BFOQ)Aqualificationthatisabsolutelyrequiredinorderforanindividualtobeabletosuccessfullydoaparticularjob

BusinessnecessityWhenaparticularpracticeisnecessaryforthesafeandefficientoperationofthebusinessandwhenthereisaspecificbusinesspurposeforapplyingaparticularstandardthatmay,infact,bediscriminatory

JobrelatednessWhenatestforemploymentisalegitimatemeasureofanindividual’sabilitytodotheessentialfunctionsofajob

JobRelatedness.Jobrelatednessexistswhenatestforemploymentisalegitimatemeasureofanindividual’sabilitytodotheessentialfunctionsofajob.Forjobrelatednesstoactasadefenseagainstachargeofdiscrimination,itfirsthastobeabusinessnecessity,andthentheemployermustbeabletoshowthatthetestfortheemploymentactionwasalegitimate

(valid)measureofanindividual’sabilitytodothejob.14

Exhibit3-4OrganizationalDefensestoDiscriminationCharges

3-1ApplyingTheConcept

BFOQStateifeachofthefollowingwouldorwouldn’tmeetthetestofaBFOQ:

1. ItisalegalBFOQ2. ItisNOTalegalBFOQ

_____1.Forthejobofmodelingwomen’sclothing,applicantsmustbefemale._____2.Forajobofloadingpackagesontotruckstobedelivered,applicantsmustbeabletolift35pounds._____3.ForthejobofteachingbusinessataCatholiccollege,applicantsmustbepracticingCatholics._____4.Forthejobofattendantinamen’slockerfacilityatagym,applicantsmustbemale._____5.Forthejobofaguardinaprisonwithmaleinmates,applicantsmustbemen.

AgeDiscriminationinEmploymentActof1967(ADEA)TheADEAprohibitsdiscriminationagainstemployeesage40orolder,soitaddedthe“protectedclass”ofage.Inthiscase,itappliesiftheorganizationhas20ormoreworkersinsteadof15.ThewordingofthisactalmostexactlymirrorsTitleVIIwiththeexceptionofthe20-workerminimum.Thismirroringofthe1964CRAistrueofnearlyalloftheprotectedclassdiscriminationlawsthatcameaboutafter1964.

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AgeDiscriminationinEmploymentActof1967(1967)

VietnamEraVeteransReadjustmentAssistanceActof1974(VEVRAA)ThisactagainprovidesbasicallythesameprotectionastheCRAdoes,butforVietnamveterans.However,itonlyappliestofederalcontractors.Itrequiresthat“employerswithfederalcontractsorsubcontractsof$100,000ormoreprovideequalopportunityandaffirmativeactionforVietnameraveterans,specialdisabledveterans,andveteranswhoservedonactivedutyduringawarorinacampaignorexpeditionforwhichacampaignbadgehasbeenauthorized.”15

PregnancyDiscriminationActof1978(PDA)ThePregnancyDiscriminationActprohibitsdiscriminationagainstwomenaffectedbypregnancy,childbirth,orrelatedmedicalconditionsasunlawfulsexdiscriminationunderTitleVIIandrequiresthattheybetreatedasallotheremployeesforemployment-relatedpurposes,includingbenefits.16Again,thislawismandatoryforcompanieswith15ormoreemployees,includingemploymentagencies,labororganizations,andstateandlocalgovernments.

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PregnancyDiscriminationActof1978

AmericanswithDisabilitiesActof1990(ADA),asAmendedin2008TheADAisoneofthemostsignificantemploymentlawseverpassedintheUnitedStates.Itprohibitsdiscriminationbasedondisabilityinallemploymentpractices,suchasjobapplicationprocedures,hiring,firing,promotions,compensation,andtraining.Itappliestovirtuallyallemployerswith15ormoreemployeesinthesamebasicwaysastheCRAof1964does.

Thereare,however,manythingsabouttheADAthatmakeitdifficultforemployerstoimplement.Thefirstoftheseisthedefinitionoftheword“disability.”TheADAdefinesadisabilityasaphysicalormentalimpairmentthatsubstantiallylimitsoneormoremajorlifeactivities,arecordofhavingsuchanimpairment,orbeingregardedashavingsuch

animpairment.17

WhatDoestheADARequireofEmployers?Anorganizationmustmake“reasonableaccommodations”tothephysicalormentallimitationsofanindividualwithadisabilitywhowasotherwisequalifiedtoperformthe“essentialfunctions”ofthejob,unlessitwouldimposean“unduehardship”ontheorganization’soperation.18

Areasonableaccommodationisanaccommodationmadebyanemployertoallowsomeonewhoisdisabledbutotherwisequalifiedtodotheessentialfunctionsofajobtobeabletoperformthatjob.Reasonableaccommodationsareusuallyinexpensiveandeasytoimplement.Forexample,ifajobrequiresthattheemployeeuseacomputerkeyboardandablindindividualappliesforthatjob,theorganizationcanmakeareasonableaccommodationbypurchasinga

Braillekeyboard.Inthiscase,Braillekeyboardsareinexpensiveandprovidetheblindindividualwiththeabilitytodothejobbasedonthereasonableaccommodationprovided.

Indefiningreasonableaccommodations,itisalsonecessarytodistinguishbetween“essential”and“marginal”jobfunctions.Essentialfunctionsarethefundamentaldutiesoftheposition.Basedonmanycourtdecisions,afunctioncangenerallybeconsideredessentialifitmeetsoneofthefollowingcriteria:

1. Thefunctionissomethingthatisdoneroutinelyandfrequentlyinthejob.

2. Thefunctionisdoneonlyonoccasion,butitisanimportantpartofthejob.

3. Thefunctionmayneverbeperformedbytheemployee,butifitwerenecessary,itwouldbecriticalthatitbedoneright.

Marginaljobfunctions,ontheotherhand,arethosefunctionsthatmaybeperformedon

thejobbutneednotbeperformedbyallholdersofthejob.Individualswithdisabilitiescannotbedeniedemploymentiftheycannotperformmarginaljobfunctions.19

UndertheADA,employersare:20

Notrequiredtomakereasonableaccommodationsiftheapplicantoremployeedoesnotrequestit;Notrequiredtomakereasonableaccommodationsifapplicantsdon’tmeetrequiredqualificationsforajob;Notrequiredtolowerqualitystandardsorprovidepersonaluseitemssuchasglassesorhearingaidstomakereasonableaccommodations;andNotrequiredtomakereasonableaccommodationsiftodosowouldbeanunduehardship.

Anunduehardshipexistswhenthelevelofdifficultyforanorganizationtoprovideaccommodations,determinedbylookingatthenatureandcostoftheaccommodationandthe

overallfinancialresourcesofthefacility,becomesasignificantburdenontheorganization.However,anunduehardshipmaybedifferentfordifferentcompanies.Forinstance,asmallcompanymayhaveanundueburdenbasedonarelativelylow-costaccommodationtoadisabledindividual,whilealargercompanycouldnotclaimunduehardshipforthesameaccommodation.

ThebiggestproblemthatemployershavewiththeADAisthefactthatitcontainsanumberofwordsandphrasesthatcanbeinterpretedinavarietyofways.Becauseofthesepoorlydefinedterms,companieshavehadadifficulttimeinapplyingtheADAinaconsistentmanner,andasaresult,theyhavequitelikelybeeninvolvedinmorelawsuitsperdisabledemployeethanwithanyotherprotectedgroup.21

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AmericanswithDisabilitiesAct(ADA)

F:4

IndividualsWithDisabilities

B:29

ReasonableAccommodation—ADA

DisabilityAphysicalormentalimpairmentthatsubstantiallylimitsoneormoremajorlifeactivities,arecordofhavingsuchanimpairment,orbeingregardedashavingsuchanimpairment

ReasonableaccommodationAnaccommodationmadebyanemployertoallowsomeonewhoisdisabledbutotherwisequalifiedtodotheessentialfunctionsofajobtobeabletoperformthatjob

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TitleVIIoftheCivilRightsActof1991

EssentialfunctionsThefundamentaldutiesoftheposition

MarginaljobfunctionsThosefunctionsthatmaybeperformedonthejobbutneednotbeperformedbyallholdersofthejob

UnduehardshipWhenthelevelofdifficultyforanorganizationtoprovideaccommodations,determinedbylookingatthenatureandcostoftheaccommodationandtheoverallfinancialresourcesofthefacility,becomesasignificantburdenontheorganization

CompensatorydamagesMonetarydamagesawardedbythecourtthatcompensatetheinjuredpersonforlosses

PunitivedamagesMonetarydamagesawardedbythecourtthataredesignedtopunishaninjuringpartythathasintentionallyinflictedharmonothers

CivilRightsActof1991TheCRAof1991wasenactedasanamendmentdesignedtocorrectafewmajoromissionsofthe1964CRAaswellastooverturnseveralUSCourtdecisions.22OneofthemajorchangesintheamendmentwastheadditionofcompensatoryandpunitivedamagesincasesofintentionaldiscriminationunderTitleVIIandtheADA,whenintentionalorrecklessdiscriminationisproven.Compensatorydamagesaremonetarydamagesawardedbythecourtthatcompensatetheinjuredpersonforlosses.Suchlossescanincludefuturepecuniaryloss(potentialfuturemonetarylosseslikelossofearningscapacity),emotionalpain,suffering,andlossofenjoymentoflife.Punitivedamagesaremonetarydamagesawardedbythecourtthataredesignedtopunishaninjuringpartythathasintentionallyinflictedharmonothers.Theyaremeanttodiscourageemployersfromintentionallydiscriminating,

andtheydothisbyprovidingforpaymentstotheplaintiffbeyondtheactualdamagessuffered.

TheUniformedServicesEmploymentandReemploymentRightsAct(orUSERRA)waspassedin1994.ThismeasureprotectsmilitarymembersfromlosingtheircivilianjobsshouldtheybecalledawaybyUSgovernmentorders.

©iStockphoto.com/MivPiv

However,theactalsoprovidesforasliding

scaleofupperlimitsor“caps”onthecombinedamountofcompensatoryandpunitivedamagesbasedonthenumberofemployeesemployedbytheemployer.ThelimitationsareshowninExhibit3-5.23

Anothermajorareainwhichthe1991ActchangedtheoriginalCRAisintheapplicationofquotasforprotectedgroupmembers.Quotasweremadeexplicitlyillegalbythe1991act.Theactalsoprohibits“discriminatoryuse”oftestscores,whichisalsocalledracenorming.Racenormingexistswhendifferentgroupsofpeoplehavedifferentscoresdesignatedas“passing”gradesonatestforemployment.The1991actbasicallyequatedthiswithquotasand,assuch,madeitillegal.24Soyoucan’thavedifferentpassinggradesforanygroup.

UniformedServicesEmploymentandReemploymentRightsActof1994(USERRA)USERRAwaspassedtoensurethecivilianreemploymentrightsofmilitarymemberswhowerecalledawayfromtheirregular(nonmilitary)jobsbyUSgovernmentorders.UnlikeotherEEOlaws,thereisnominimumnumberofemployeesrequiredforcoveragebyUSERRA.25PertheUSDepartmentofLaborwebsite,“USERRAisintendedtominimizethedisadvantagestoanindividualthatoccurwhenthatpersonneedstobeabsentfromhisorhercivilianemploymenttoserveinthiscountry’suniformedservices.USERRAmakesmajorimprovementsinprotectingservicememberrightsandbenefitsbyclarifyingthelawandimprovingenforcementmechanisms.”26

USERRAcoversvirtuallyeveryindividualinthecountrywhoservesorhasservedintheuniformedservices,anditappliestoallemployersinthepublicandprivatesectors,includingfederalemployers.Italsoprovidesprotectionfordisabledveterans,requiringemployerstomakereasonableeffortstoaccommodatetheirdisabilities.27

Exhibit3-5CapsonCompensatoryandPunitiveDamagesbyEmployerSize

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UniformedServicesEmploymentandReemploymentRightsActof1994(USERRA)

Racenorming Whendifferentgroupsofpeoplehavedifferentscoresdesignatedas“passing”gradesonatestforemployment

VeteransBenefitsImprovementActof2004(VBIA)TheVBIAwasenactedasanamendmenttoUSERRA.Itextendedtherequirementforemployerstomaintainhealthcarecoverageforemployeeswhowereservingonactivedutyinthemilitary(originally,thisperiodwas18months,buttheVBIAchangeditto2years),anditalsorequiredemployerstopostanoticeofbenefits,duties,andrightsunderUSERRA/VBIAinaplacewhereitwouldbevisibletoallemployeeswhomightbeaffected.28

WORKAPPLICATION3-4Giveexamplesofhowmajoremploymentlawshaveaffectedanorganizationwhereyouworkorhaveworked,preferablyasthelawrelatesdirectlytoyou.Besuretospecifythelawandwhatthefirmdoesordoesn’tdobecauseofthelaw.

TitleIIoftheGeneticInformationNondiscriminationActof2008(GINA)TitleIIoftheGeneticInformationNondiscriminationActof2008(GINA)“prohibitstheuseofgeneticinformationinemployment,prohibitstheintentionalacquisitionofgeneticinformationaboutapplicantsandemployees,andimposesstrictconfidentialityrequirements.”29

Becausecompanieswerestartingtousegeneticteststomakeemploymentandhealthcaredecisions,Congressdecidedtoaddresstheirusesothatthegeneralpublicwouldnotfearadverseemployment-relatedorhealthcoverage–relatedconsequencesforhavingagenetictestorparticipatinginresearchstudiesthatexaminegeneticinformation.30TheresultwasGINA.

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GeneticInformationNondiscriminationAct(GINA)

LillyLedbetterFairPayActof2009(LLFPA)ThislawamendedTitleVIIofthe1964CRA.Inpracticalterms,theLLFPAextendstheperiodoftimeinwhichanemployeeisallowedtofilealawsuitforcompensation(pay)discrimination.The1964CRAonlyallowed180daysfromthetimeofthediscriminatoryactionforanindividualemployeetofilealawsuit.TheLLFPAallowsanindividualtofilealawsuitwithin180daysafter“anyapplication”ofthatdiscriminatorycompensationdecision,includingeverytimetheindividualgetspaid,aslongasthediscriminationiscontinuing,whichwouldusuallybefortheentireperiodoftheiremployment.

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LillyLedbetterFairPayAct

3-2ApplyingTheConcept

EmploymentLawsReviewthelawslistedbelowandthenwritethelettercorrespondingtoeachlawbeforethestatement(s)describingasituationwherethatlawwouldapply.

1. EqualPay2. TitleVIICRA19643. ADEA4. VEVRAA5. PDA6. ADA7. CRA19918. USERRA9. VBIA10. GINA11. LLFPA

_____6.Ihadtotakeamedicaltest,andthecompanyfoundoutthatIamathighrisktogetcancer.Soitdecidednottohiremesoitcouldsavemoneyonmedicalinsurance._____7.AlthoughIwasthebestqualified,IwasintentionallynotpromotedbecauseIamawoman._____8.Ican’tunderstandwhythisfirmdoesn’twanttohiremejustbecauseIservedmycountry.Ididn’twanttogoandfightoverseas,butIwasdraftedintothe

Armyin1969andhadnochoice;Ididn’twanttogotojailfordraftevasion._____9.MybossislayingmeoffbecauseIserveintheNationalGuardandwillbedeployedoverseasforsixmonths.Asaresult,IwillhavetofindanewjobwhenIgetback._____10.Thefirmislayingmeofftohiresomeyoungerpersontosavemoney.IsthiswhatIdeserveformy20yearsofdedication?_____11.I’mbeingpaidlessthanthemenwhodothesamejobs,justbecauseI’mawoman._____12.Thefirmhiredthisnewguyandboughtaspeciallowdeskbecauseheissoshort._____13.I’msuingthefirmforlostwagesbecausetheyintentionallydiscriminatedagainstmeandfiredmewhenIcomplainedaboutit.

EqualEmploymentOpportunityCommission(EEOC)Thevariousfederalequalemploymentopportunity(EEO)lawsareenforcedbytheEqualEmploymentOpportunityCommission(EEOC).TheEEOCisafederalagencythathassignificantpoweroveremployersintheprocessofinvestigatingcomplaintsofillegaldiscrimination.31

WhatDoestheEEOCDo?TheEEOCbasicallyhasthreesignificantresponsibilities:(1)investigatingandresolvingdiscriminationcomplaintsthrougheitherconciliationorlitigation,(2)gatheringandcompilingstatisticalinformationonsuchcomplaints,and(3)runningeducationandoutreachprogramsonwhatconstitutesillegaldiscrimination.32Additionally,everycompanywithmorethan100employeesorwithmorethan50employeesandwithfederalcontractstotaling$50,000ormoremustfileanEEO-1ReportwiththeEEOCeachyear.33TheEEO-1identifiesthecompany’sEEOcompliancedatabasedonprotectedclassificationswithinfederallaw.

Generally,adiscriminationcomplaintmustbefiledwiththeEEOCwithin180daysofthedateofdiscrimination.IftheEEOCdeterminesthatdiscriminationhastakenplace,itwillattempttoprovidereconciliation

betweentheparties.IftheEEOCcannotcometoanagreementwiththeorganization,therearetwooptions:

1. Theagencymayaidtheallegedvictiminbringingsuitinfederalcourt.

2. Itcanissuea“right-to-sue”lettertotheallegedvictim.Aright-to-sueisanoticefromtheEEOC,issuedifitelectsnottoprosecuteanindividualdiscriminationcomplaintwithintheagency,thatgivestherecipienttherighttogodirectlytothecourtswiththecomplaint.

LO3-3BrieflydiscussthemajorfunctionsoftheEqualEmploymentOpportunityCommission(EEOC).

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EnforcementAgencies—EEOC

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ComplianceWithLegalRequirements

EmployeeRightsUndertheEEOCEmployeeshavetherighttobringdiscriminationcomplaintsagainsttheiremployerbyfilingacomplaintwiththeEEOC.TheyalsohavetherighttoparticipateinanEEOCinvestigation,hearing,orotherproceedingwithoutthreatofretaliation;rightsrelatedtothearbitrationandsettlementofthecomplaint;andtherighttosuetheemployerdirectlyincourtoverclaimsofillegaldiscrimination,eveniftheEEOCdoesnotsupporttheirclaim.Forinformationonhowtosubmitawrittencomplaint,seetheEEOCwebsitelink(http://www.eeoc.gov/employees/howtofile.cfm

SHRMF:1

EqualOpportunityEmployment

B:27

UnlawfulHarassment

B:28

Whistle-blowing/Retaliation

EmployerRightsandProhibitionsTheemployerhasarighttodefendtheorganizationusingthedefensesnotedearlier:BFOQ,businessnecessity,andjobrelatedness.However,theemployerdoesnothavearighttoretaliateagainstindividualswhoparticipateinanEEOCaction.Theemployeralsoisprohibitedfromcreatingaworkenvironmentthatwouldleadtochargesofconstructivedischarge.

Retaliation.Inadditiontoprovidingdefensesagainstdiscriminationclaims,the1964civilrightsactidentifiesasituationinwhichorganizationscanbeheldliableforharmingtheemployeebecauseofretaliation.34Retaliationisasituationwheretheorganizationtakesan“adverseemployment

action”againstanemployeebecausetheemployeebroughtdiscriminationchargesagainsttheorganizationorsupportedsomeonewhobroughtdiscriminationchargesagainstthecompany.Anadverseemploymentactionisanyactionsuchasfirings,demotions,schedulereductions,orchangesthatwouldharmtheindividualemployee.

Retaliationisaformofharassmentbasedonanindividualfilingadiscriminationclaim.EachoftheEEOlawsidentifiesretaliationasillegalharassmentbasedontheprotectedclassidentifiedwithinthatlaw.

Managersneedtobeawarethatthereareseverepenaltiesforengaginginretaliationagainstanemployeeorapplicantforparticipatinginprotectedactivity.In2013,over40%ofallEEOCcomplaintshadaretaliationclaimasatleastacomponentofthecomplaint.35

Right-to-sue AnoticefromtheEEOC,issuedifitelectsnottoprosecuteanindividualdiscrimination

complaintwithintheagency,thatgivestherecipienttherighttogodirectlytothecourtswiththecomplaint

WORKAPPLICATION3-5HasanorganizationwhereyouworkorhaveworkedhadanypotentialoractualcasesbroughttotheEEOCagainstit?Ifso,explainthecomplaint(s).TheHRstaffatyouremployermaynotbetooeagertotalkaboutthis,butyoucandosomeresearchonlargercorporations.

ConstructiveDischarge.Theorganizationcanalsobeaccusedof“constructivedischarge”duetodiscriminatoryactionsonthejob.Constructivedischargeexistswhenanemployeeisputundersuchextremepressurebymanagementthatcontinuedemploymentbecomesintolerableand,asaresult,theemployeequits,orresignsfromtheorganization.InaSupremeCourtdecisionin2004,36thecourtnotedthattheUSCourtofAppealshadidentifiedconstructivedischarge

asthefollowing:“(1)heorshesufferedharassmentordiscriminationsointolerablethatareasonablepersoninthesamepositionwouldhavefeltcompelledtoresign...;and(2)theemployee’sreactiontotheworkplacesituation—thatis,hisorherdecisiontoresign—wasreasonablegiventhetotalityofcircumstances.”

Soifanindividualcanshowthatconstructivedischargecausedthemtoresignfromtheorganization,thentheindividualwouldbeeligibleforallemployeerightsassociatedwithbeinginvoluntarilyterminatedfromthecompany.

RetaliationAsituationwheretheorganizationtakesan“adverseemploymentaction”againstanemployeebecausetheemployeebroughtdiscriminationchargesagainsttheorganizationorsupportedsomeonewhobroughtdiscriminationchargesagainstthecompany

AdverseemploymentactionAnyactionsuchasfirings,demotions,schedulereductions,orchangesthatwouldharmtheindividualemployee

Constructivedischarge Whenanemployeeisput

undersuchextremepressurebymanagementthatcontinuedemploymentbecomesintolerableand,asaresult,theemployeequits,orresignsfromtheorganization

EEO,AffirmativeAction,andDiversity:What’stheDifference?Managersneedtounderstandthetermsequalemploymentopportunity(EEO),affirmativeaction,anddiversity.Thesearesignificantlydifferentconceptsandtheyshouldnotbeusedinterchangeably.EEOisthetermthatdealswithaseriesoflawsandregulationsputinplaceatthefederalandstategovernmentleveloverthelast45years.Assuch,EEOisveryspecificandnarrowlydefinedwithinfederalandstatelaws.

AffirmitiveActionprogramsandpoliciesareintendedtopreferthehiringofindividualsfromprotectedgroupsinanattempttomitigatepastdiscrimination.

©GregoryShamus/Reuters/Corbis

Ontheotherhand,affirmativeactionwascreatedinthe1960sthroughaseriesofpoliciesatthepresidentialandlegislativelevelsintheUnitedStates.Affirmativeaction,exceptinafewcircumstances,doesnothave

theeffectoflaw.37Therefore,affirmativeactionisamuchbroaderconceptbasedonpoliciesandexecutiveorders(ordersfromthepresident)tohelplegallyprotectedgroups.

Finally,diversityisnotlaw,nornecessarilyevenpolicywithinorganizations.Diversityisaverybroadsetofconceptsthatdealwiththedifferencesamongpeoplewithinorganizations.Today’sorganizationsviewdiversityasavaluablepartoftheirhumanresourcesmakeup.However,therearenospecificfederallawsthatdealwithrequirementsfordiversitywithinorganizations,beyondtheEEOlawsthatspecificallyidentifyprotectedclassmembersandrequirethatorganizationsdealwiththoseprotectedclassmembersinanequalwaywhencomparedtoallothermembersoftheorganization.

Let’stakeacloserlookatEEO,affirmativeaction,anddiversity.Exhibit3-6providesasummaryofthesethreeconcepts.

AffirmativeAction(AA)Affirmativeactionisaseriesofpolicies,programs,andinitiativesthathavebeeninstitutedbyvariousentitieswithinbothgovernmentandtheprivatesectorthataredesignedtopreferhiringofindividualsfromprotectedgroupsincertaincircumstances,inanattempttomitigatepastdiscrimination.ThereareonlytwospecificcasesinwhichAAcanbemandatedorrequiredwithinanorganization.38InallothercasesAAisstrictlyvoluntary.Thetwosituationswhereaffirmativeactionismandatoryare:

ExecutiveOrder11246.Ifthecompanyisacontractortothefederalgovernmentandreceivesmorethan$10,000peryear,theyarerequiredbypresidentialorder(ExecutiveOrder11246)tomaintainanaffirmativeactionprogram.Exemptionsfrom

thisorderincludethefollowing:

“(A)Governmentcontractororsubcontractorthatisareligiouscorporation,association,educationalinstitution,orsociety,withrespecttotheemploymentofindividualsofaparticularreligiontoperformworkconnectedwiththecarryingonbysuchcorporation,association,educationalinstitution,orsocietyofitsactivities...”39“...facilitiesofacontractorthatareinallrespectsseparateanddistinctfromactivitiesofthecontractorrelatedtotheperformanceofthe(federalgovernment)contract...’’40

Exhibit3-6EqualEmploymentOpportunity,AffirmativeAction,andDiversity

LO3-4Contrasttheconceptsofequalemploymentopportunity,affirmativeaction,anddiversity.

SHRMF:2

AffirmativeAction

SHRMB:6

ExecutiveOrder11246(1965)

AffirmativeactionAseriesofpolicies,programs,andinitiativesthathavebeeninstitutedbyvariousentitieswithinbothgovernmentandtheprivatesectorthataredesignedtopreferhiringofindividualsfromprotectedgroupsincertaincircumstances,inanattempttomitigatepastdiscrimination

WORKAPPLICATION3-6Hasanorganizationwhereyouworkorhaveworkedhadanaffirmativeactionprogram?Ifso,describeit.Also,hastherebeenanyreversediscrimination?

3-1Ethicaldilemma:whatwouldyoudo?TheUnitedStateswasonceknownasthe“meltingpot,”aspeoplefromallovertheworldcametothecountryandadjustedtoitsculture.Inthepast,generally,immigrantshadtolearnEnglishtogetajob.Today,however,manyorganizationshirepeoplewhocan’tspeakEnglish,andtheyusetranslatorsandhavepolicieswritteninmultiplelanguagesfortheseemployees.Governmentagenciesatthefederal,state,andlocallevelsarealsoprovidingtranslatorsandwrittenmaterialsinotherlanguages.

1. WhyaresomeorganizationsnolongerrequiringworkerstospeakEnglish?

2. ShouldaworkerberequiredtobeabletospeakEnglishtogetajobintheUnitedStates?

3. Isitethicalto(ornotto)hirepeoplewhocan’tspeakEnglishandtoprovidetranslatorsandpolicieswritteninmultiplelanguages?

FederalCourtOrdersforAA

Programs.Ifanorganizationispresentedwithafederalcourtordertocreateanaffirmativeactionprogramtocorrectpastdiscriminatorypractices,itmustcomply.Thisisusuallyonlydonewhenthereisahistoryofpastdiscriminatorypracticesintheorganization.

TheBakkev.Californiadecisionof1978isthebasisfortheconceptofreversediscrimination,whichisdiscriminationagainstmembersofthemajoritygroupbyanorganization,generallyresultingfromaffirmativeactionpolicieswithinanorganization.AndtherehavebeenanumberofotherrecentAArulingsinfederalcourtsForexample,theSupremeCourtorderedalowercourttoreconsidera“race-conscious”admissionsplanatTexasstateuniversities,41anditalsoupheldavoter-backedAAbaninMichigan’suniversities.42

DiversityintheWorkforceDiversityissimplytheexistenceofdifferences—inHRM,itdealswithdifferenttypesofpeopleinanorganization.Let’sdiscusswhyorganizationsareembracingdiversityasitprovidesbothopportunitiesandchallenges.43

DemographicDiversity.Isdiversityreallyallthatimportant?Theanswerisyes.44Thereiscurrentlyashortageofskilledworkers—andtherewillbefortheforeseeablefuture,sotoexcludeaqualifiedpersonbecausethatindividualisdifferentinsomewayiscounterproductivetobusinesssuccess.Increasingculturaldiversityintheworkforceposesoneofthemostchallenginghumanresourceandorganizationalissuesofourtime.45

SHRMF:6

Racial/EthnicDiversity

SHRMF:12

BusinessCaseforDiversity

WhyDoWeNeedDiversity?Diversityhelpsincreasesales,revenues,andprofits—inotherwords,embracingdiversitycreatesbusinessopportunities.46Diverseemployeesallowustoseethediversityaroundus,inourcustomersandotherstakeholders,muchbetterthanwewouldifourworkgroupsweremorehomogenous.47Asaresult,wearebetterabletoprovideproductsandservicesthatwillappealtothelargerandmorediversegroupsthatwecomeintocontactwithduringthecourseofdoingbusiness.48

WhatAretheAdvantagesofa

DiverseWorkforce?Theprimaryadvantagesofadiverseworkforcecomefromtheabilitytostimulateandprovidemorecreativeandinnovativesolutionstoorganizationalproblems.49Creativityisabasicabilitytothinkinuniqueanddifferentwaysandapplythosethoughtprocessestoexistingproblems,andinnovationistheactofcreatingusefulprocessesorproductsbasedoncreativethoughtprocesses.

Adiversegrouplookingataproblemwillanalyzetheproblemfromdifferentdirectionsandindifferentways,andwilldiscovermoreoftheaspectsoftheproblemthanwouldasinglepersonoramorehomogeneousworkgroup.50

Whyisitsohardtobeinnovativeandcreative?Mostofushavelearnednottobecreative—wehavebeentoldoverandoveraswegrowupthatweshoulddothingstheway

everyoneelsedoesthem.Inotherwords,wehavebeentrainednottobeinnovative!Overtime,thishastheeffectofcausingmostofustolosetheabilitytothinkdifferently.Thisability,calleddivergentthinking,isnecessaryinordertocomeupwithcreativesolutionstoaproblem.51Divergentthinkingistheabilitytofindmanypossiblesolutionstoaparticularproblem,includingunique,untestedsolutions.

Byintroducingdiversityintoourworkforce,weassisttheprocessofdivergentthinking.Differentpeoplethinkdifferentlybecausetheyhavedifferentbackgroundsandhavesolvedproblemsdifferentlyinthepast,sothishastheeffectofincreasingthecreativityandinnovationintheorganizationwithouttheindividualhavingtorelearntheabilitytobehighlycreative.

ReversediscriminationDiscriminationagainstmembersofthemajoritygroupbyanorganization,generallyresultingfromaffirmativeactionpolicieswithinanorganization

DiversityTheexistenceofdifferences—inHRM,

itdealswithdifferenttypesofpeopleinanorganization

CreativityAbasicabilitytothinkinuniqueanddifferentwaysandapplythosethoughtprocessestoexistingproblems

InnovationTheactofcreatingusefulprocessesorproductsbasedoncreativethoughtprocesses

WORKAPPLICATION3-7Discusshowdemographicdiversityandtheneedfordiversityisaffectinganorganizationyouworkfororhaveworkedfor.Whataresomeoftheadvantagesandchallengesfacedbythefirm?Also,describehowdiversityismanagedattheorganization.

AreThereAnyChallengestoDiversity?Thereareseveralthingsthatcancausediversitytobreakdowntheorganizationinsteadofallowingittobecomebetterandmorecreative.52Thefirstissueisconflict.Conflictissimplytheactofbeingopposedtoanother.Conflictoccursininteractionsbetweenindividuals.Therearemanyreasonsforconflict,butitistypicallygreaterwhenpeoplearesignificantlydifferentfromeach

other,whichmeansthatifwecreateamorediverseworkforce,there’sagreaterlikelihoodformoreconflict.

Thesecondbigissueisgroupcohesiveness.Cohesivenessisanintentanddesireforgroupmemberstosticktogetherintheiractions.Inorganizations,wehavelearnedthatinorderforaworkgrouptobecomeasgoodasitpossiblycanbe,thegrouphastobecomecohesive.Themembershavetolearntowanttobepartofthegroupandwanttointeractwithothermembersofthegroupinorderforthegrouptoperformatahighlevel.However,themorediversitythereiswithinthegroup,themoredifficultitistocreatethecohesivenessnecessaryforhighperformance.So,morediversegroupstendtobelesscohesive—notalways,butasageneralrule.53

ManagingDiversity.Diversityaffectsbottom-lineprofits,butsodosomeofthechallengesassociatedwith

diversity,likeconflictandreducedcohesiveness.Inotherwords,ifallofourdiverseemployeesdon’tworkwelltogether,theorganizationdoesnotworkwell.54Managingdiversitysothatwegainthebenefitsavailableisoneofthemostcriticaljobsofa21stcenturymanager.Diversitycanbemanagedsuccessfullyonlyinanorganizationalculturethatvaluesdiversity.55

Throughmanagingdiversity,affirmativeactionanddiversityprogramshavebeenusedtohelpwomenandminoritiesadvanceinorganizations.CompleteSelf-Assessment3-1todetermineyourattitudetowardwomenandminoritiesadvancingatwork.

SHRMF:9

Sex/GenderIssues

SexualHarassment:ASpecialTypeofDiscriminationSexualharassmentispartofthe1964CRA(theprohibitionofdiscriminationbasedonsex),butitisoneofthetwoitemswementionedearlierinthechapterthatwasnotspecificallyrecognizedasaseparatetypeofdiscriminationuntilfederalcourtsstartedhearingcasesontheact.Sexualharassmentisapervasiveissueinorganizations,andweallneedtounderstandwhatitisandhowtoavoidcreatingasituationwhereitcanoccuratwork.

TypesofSexualHarassmentSexualharassmentisdefinedbytheEEOCas“unwelcomesexualadvances,requestsforsexualfavors,andotherverbalorphysicalconductofasexualnatureconstitutessexualharassmentwhensubmissiontoorrejectionofthisconductexplicitlyorimplicitlyaffectsanindividual’semployment,unreasonablyinterfereswithanindividual’sworkperformanceorcreatesanintimidating,hostileoroffensiveworkenvironment.”56Therearetwotypesofsexualharassmentspecificallydelineatedinlaw:quidproquoharassmentandhostileworkenvironment.57Botharediscussedbelow.

QuidProQuoHarassment.Literally,quidproquomeans“Thisforthat.”Quidproquoharassmentisharassmentthatoccurswhensometypeofbenefitor

punishmentismadecontingentupontheemployeesubmittingtosexualadvances.“Ifyoudosomethingsexualforme,Iwilldosomethingforyou.”Quidproquoisadirectformofharassmentaimedatanindividualandismostcommonlyseeninsupervisor-subordinaterelationships,althoughthisisnotalwaysthecase.Itis,however,basedonthepowerofoneindividualoveranother.

LO3-5Comparethetwoprimarytypesofsexualharassment.

Divergentthinking Theabilitytofindmanypossiblesolutionstoaparticularproblem,includingunique,untestedsolutions

ConflictTheactofbeingopposedtoanother

CohesivenessAnintentanddesireforgroupmemberstosticktogetherintheiractions

Sexualharassment“unwelcomesexualadvances,requestsforsexualfavors,andotherverbalorphysicalconductofasexualnatureconstitutessexualharassmentwhensubmissiontoorrejectionofthisconductexplicitlyorimplicitlyaffectsanindividual’semployment,unreasonablyinterfereswithanindividual’sworkperformanceorcreatesanintimidating,hostileoroffensiveworkenvironment”

QuidproquoharassmentHarassmentthatoccurswhensometypeofbenefitorpunishmentismadecontingentupontheemployeesubmittingtosexualadvances

3-1Selfassessment

AttitudesAboutWomenandMinoritiesAdvancingBehonestinthisself-assessment,asyourassessmentwillnotbeaccurateifyouaren’t.Also,youshouldnotbeaskedtoshareyourscorewithothers.

Eachquestionbelowisactuallytwoquestions.Itasksyouaboutyourattitudetowardwomen,anditalsoasksyouaboutyourattitudetowardminorities.Therefore,youshouldgivetwoanswerstoeachquestion:oneregardingwomenandtheotherregardingminorities.Writethenumbercorrespondingtoyouranswer(5=agree,3=don’tknow,1=disagree)aboutwomenintheWomencolumn,andwritethenumbercorrespondingtoyouransweraboutminoritiesintheMinoritiescolumn.

Women:Todetermineyourattitudescoretowardwomen,addupthetotalofyour10answersintheWomencolumnandplacethetotalontheTotallineand

onthefollowingcontinuum.Thehigheryourtotalscore,themorenegativeyourattitude.

Minorities:Todetermineyourattitudescoretowardminorities,addupthetotalofyour10answersfromtheMinoritiescolumnandplacethetotalontheTotallineandonthefollowingcontinuum.Thehigheryourtotalscore,themorenegativeyourattitude.

Eachstatementisanegativeattitudeaboutwomenandminoritiesatwork.However,researchhasshownallofthesestatementstobefalse;theyareconsideredmyths.Suchstatementsstereotypewomenandminoritiesunfairlyandpreventthemfromadvancinginorganizationsthroughgainingsalaryincreasesandpromotions.Thus,partofmanagingdiversityanddiversitytrainingistohelpovercomethesenegativeattitudestoprovideequalopportunitiesforALL.

HostileWorkEnvironment.Hostileworkenvironmentisharassmentthatoccurswhensomeone’sbehavioratworkcreatesanenvironmentthatissexualinnatureandthatmakesitdifficultforsomeoneofaparticularsextoworkinthatenvironment.Hostileworkenvironmentsexualharassment

happenswhena“reasonableperson”determinesthatthebehaviorinquestiongoesbeyondnormalhumaninteractionandthejokesandkiddingthataccompanysuchinteraction,insteadrisingtoalevelthatsuchareasonablepersonwouldconsidertheactoractstobebothharassingandsexualinnature.58Forthepurposesofthelaw,areasonablepersonisthe“average”personwhowouldlookatthesituationanditsintensitytodeterminewhethertheaccusedpersonwaswrongintheiractions.

WORKAPPLICATION3-8Ahighpercentageofpeople,especiallywomen,havebeensexuallyharassed.Haveyouoranyoneyouknowbeensexuallyharassedatwork?Brieflydescribethesituation,statingifitwasquidproquoorahostileworkenvironment.

WhatConstitutesSexualHarassment?Sexualharassmentdoesnothavetooccurbetweenamaleandfemaleorbetweenasupervisorandsubordinates.Same-sexharassmentalsooccursatwork.59

Asinotherformsofillegaldiscrimination,theplaintiffonlyhastoshowaprimafacie(literally“onthefaceofit,”meaningitlookslikeharassmenttoourreasonableperson)casethatharassmenthasoccurred.Toqualifyasaprimafaciecaseofsexualharassment,theworksituationmustincludethefollowingcharacteristics:60

1. Theplaintiffisamemberofaprotectedclass;

2. Theharassmentwasbasedonsex;3. Thepersonwassubjecttounwelcome

sexualadvances;or4. Theharassmentwassufficientlysevere

enoughtoaltertheterms,conditions,orprivilegesofemployment.

Inorderfortheorganizationtobeconsideredforliability,twocriticalconditionsmustexist:61

1. Theplaintiffdidnotsolicitorincitetheadvances.

2. Theharassmentwasundesirable,andwassevereenoughtoaltertheterms,conditions,andprivilegesofemployment.

Exhibit3-7LimitingOrganizationalLiabilityforSexualHarassment

HostileworkenvironmentHarassmentthatoccurswhensomeone’sbehavioratworkcreatesanenvironmentthatissexualinnatureandthat

makesitdifficultforsomeoneofaparticularsextoworkinthatenvironment

ReasonablepersonThe“average”personwhowouldlookatthesituationanditsintensitytodeterminewhethertheaccusedpersonwaswrongintheiractions

3-3ApplyingTheConcept

SexualHarassmentWritetheletterandnumbercodeslistedbelowbeforeeachstatementtoindicatethekindofbehavioritdescribes.

1. sexualharassment:Aftertheharassmentletter,writeinifitis(1)quidproquoor(2)hostileworkenvironmentharassment(i.e.,writea/1ora/2).

2. notsexualharassment

_____14.KarentellshercoworkerJimanexplicitlysexualjoke,eventhoughtwicebefore,Jimtoldhernottotellhimanydirtyjokes._____15.Ricky-Joetypicallyputshishandonhissecretary’sshoulderashetalkstoher,andsheiscomfortablewiththisbehavior._____16.José,thesupervisor,tellshissecretary,Latoya,thathe’dliketotakeheroutforthefirsttimetoday._____17.Cindytellsherassistant,Juan,thathewillhavetogotoamotelwithherifhewantstoberecommendedforapromotion._____18.JackandJillhaveeachhunguppicturesofnudemenandwomenonthewallsneartheirdesks,inviewofother

employeeswhowalkby._____19.AscoworkerRacheltalkstoCarlos,heissurprisedanduncomfortablebecauseshegentlyrubbedhisbuttock.

ReducingOrganizationalRiskFromSexualHarassmentLawsuitsOncetheplaintiffhasshownaprimafaciecasefortheaccusation,thecourtswilldeterminewhethertheorganizationisliablefortheactionsofitsemployeebasedontheanswerstotwoprimaryquestions:

1. Didtheemployerknowabout,orshouldtheemployerhaveknownabout,theharassment?

2. Didtheemployeracttostopthebehavior?

Ingeneral,iftheemployerkneworshouldhaveknownabouttheharassmentanddidnothingtostopthebehavior,thentheemployercanbeheldliable.Sexualharassmentshouldbetreatedveryseriously,becausetheconsequencescanbegraveforthe

organizationifitdoesn’tdowhatitshouldtopreventtheharassment.

Sohowdoyouprotectyourorganizationfromliabilityincaseofachargeofsexualharassment?Exhibit3-7showsfiveimportantstepstofollow.62

WORKAPPLICATION3-9Describethesexualharassmentpolicywhereyouworkorhaveworked.Ifyouarenotsure,checkthecompanyHRhandbookortalktoanHRdepartmentstaffmembertogettheanswer.

ReligiousDiscriminationReligion-baseddiscriminationandtheabilityofemployerstocreateworkrulesthatmayaffectreligiousfreedomcontinuetobeanissueintheworkplace.63Theissueofstandardsofdressinanumberofreligions,mostnotablyIslam’sstandardsforwomen’sattireinpublic(includingthehijaborniqab),hasbecomeapointofcontentioninsomeworkplaces.Ifanemployerseestheniqabasasymbolofrepression,cantheemployerdenytherighttowearsuchheadcoveringsandusetheantidiscriminationstatutesconcerninggenderasjustification?Cananemployerrequiredriversthatworkforthemtodeliveralcoholtocustomerwarehouseswhenthedriversmayhaveareligiousoppositiontodrinkingalcohol?64Therearemanyreligiousfreedomquestionsthatwearedealingwithincompaniestoday,andtherearecertainlynoeasyanswers.

Rememberthatreligiousdiscriminationisaviolationofthe1964CRAbecauseitidentifiesreligionasaprotectedclass.BecausereligionwasspecificallyidentifiedintheCRA,wecan’tuseitasafactorinmaking“anyemploymentdecision”withouremployees.Religionisalessobviouscharacteristicthangenderorrace,soitisusuallynotacharacteristiconwhichwebasedecisions.However,ifaperson’sreligionrequiresacertaintypeofdressorobservationofreligiousholidaysordaysofworshipthatisnotinkeepingwiththenormalworkdaypracticesoftheorganization,andiftheindividualrequestsaccommodationforthesereligiousbeliefs,thenwegenerallywouldneedtomakeeveryreasonableefforttoaccommodatesuchrequests.

Religionisidentifiedasaprotectedclassinthe1964CivilRightsAct,meaningthatanemployercannotconsideranindividual’sreligionwhenmakingemploymentdecisions.

©iStockphoto.com/JohnnyGreig

LO3-6Brieflydiscusstheemployer’srequirementsconcerningavoidanceofreligiousdiscriminationintheworkplace.

TrendsandIssuesinHRMWeagainendthischapterwithtwosignificantissuesthatareaffectingHRM.Theseissuesincludeincreasingfederalagencyactivisminreinterpretinglawsthathavebeenineffectforasmanyas80years,andthe2008amendmenttotheADA.

FederalAgenciesAreBecomingMoreActivistinPursuingDiscriminationClaimsAnumberoffederalagencieshavebecomemuchmoreactiveoverthepastfewyearsinpursuinglarge-scaleclaimsagainstUSbusinesses.TheEEOC,theOccupationalSafetyandHealthAdministration(OSHA),theNationalLaborRelationsBoard(NLRB),andotheragencieshavebeguntoactdirectlyagainstcompaniesinmanycaseswithoutacomplaintbeingfiled.Systemicdiscriminationinvestigationsconstituteonetypeofinvestigationthathasincreaseddramatically.65

Systemicdiscrimination(23%ofEEOC’sactivecasesin2013)66isdefinedbytheEEOCas“apatternorpractice,policy,orclasscasewheretheallegeddiscrimination

hasabroadimpactonanindustry,profession,company,orgeographicarea.”67Inoneyearalone,morethan300systemicinvestigationsresultedin63settlementsorconciliationagreementsworthmorethan$40million.68

AstheHRmanager,youneedtoknowthatthereisnolongeraminimalchanceofbeinginvestigatedforpotentialwrongdoingifthereisn’tanemployeecomplaint.Federalagenciesareactivelyseekingoutevidenceof“patternorpractice”formsofdiscriminationandthenprosecutingthosecases.Soyouwillneedtobemorediligentthaneverinmaintainingafairandnondiscriminatoryworkplace.

SHRMB:29

ReasonableAccommodation—Religious

SHRMF:7

Religion

TheADAandtheADAAmendmentsAct(ADAAA)ClaimsundertheADAincreasedfrom17,734in2007tomorethan25,000in2011,mostlyduetothechangesintheADAAA.69Thisincreaseisatleastinpartduetotheincreaseinassociationdiscriminationclaims—claimsthatonehasbeendiscriminatedagainstbecauseoneis,forexample,associatedwithapartnerwhohasHIVorhasafamilymemberwhoisdisabledandneedscare.70

RecentEEOCguidancealsonotesseveralconditionsthatmaybeepisodicorinremissionwherethechangesintheADAAAhavemadeitclearthatthoseconditionsarecoveredbythelaw.Amongtheseconditionsarecancer,diabetes,andepilepsy.71TheMidwestRegionalMedicalCenterinOklahomawaschargedbytheEEOCwithfiringanemployeebecauseofherongoing

cancertreatments.72TheEEOCfiledsuitonbehalfoftheindividualwhenshewasterminated,notingthatshecouldhavereturnedtoworkafterashortperiodofsickleaveifshehadbeenallowedtodoso.

EnforcementactionsbasedontheADAAArevisionswillalmostcertainlycontinuetoevolve.AsanHRmanager,youwillneedtokeepapprisedofthedevelopmentsinthisamendmenttotheADAtoprovidegoodcounseltotheexecutivesandmanagersinyourcompanyorotherorganization.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesat

SAGEedge.

ChapterSummary3-1DescribetheOUCHtestanditsfourcomponentsandidentifywhenitisusefulinanorganizationalsetting.

TheOUCHTestisaruleofthumbyoushouldusewheneveryouarecontemplatinganyemploymentaction.Youuseittomaintainequityforallofyouremployeesorapplicants.OUCHisanacronymthatstandsforObjective,Uniforminapplication,Consistentineffect,andHasjobrelatedness.Anemploymentactionshouldgenerallybeobjectiveinsteadofsubjective;weshouldapplyallemploymentteststhesameway,everytime,witheveryone,tothebestofourability;theemploymentactionshouldnothaveaninconsistenteffectonanyprotectedgroups;andthetestmustbedirectlyrelatedtothejobto

whichweareapplyingit.3-2Identifythemajorequalemploymentopportunity(EEO)lawsandthegroupsofpeoplethateachlawprotects.

TheEqualPayActof1963requiresthatwomenbepaidequaltomeniftheyaredoingthesamework.TheCivilRightsActof1964prohibitsdiscriminationonthebasisofrace,color,religion,sex,ornationalorigin,inallareasoftheemploymentrelationship.TheAgeDiscriminationinEmploymentActof1967prohibitsagediscriminationagainstpeople40yearsofageorolder,anditrestrictsmandatoryretirement.TheVietnamEraVeteransReadjustmentAssistanceActof1974prohibitsdiscriminationagainstVietnamveteransbyallemployerswithfederalcontractsorsubcontractsof$100,000ormore.Italsorequiresthataffirmative

actionbetaken.ThePregnancyDiscriminationActof1978prohibitsdiscriminationagainstwomenaffectedbypregnancy,childbirth,orrelatedmedicalconditions,andittreatssuchdiscriminationasunlawfulsexdiscrimination.TheAmericanswithDisabilitiesActof1990requiresemployerstoprovide“reasonableaccommodations”toallowdisabledemployeestowork.TheCivilRightsActof1991strengthenedcivilrightsbyprovidingforpossiblecompensatoryandpunitivedamagesfordiscrimination.TheUniformedServicesEmploymentandReemploymentRightsAct(USERRA)ensuresthecivilianreemploymentrightsofmilitarymemberswhowerecalledawayfromtheirregular(nonmilitary)jobsbyUS

governmentorders.TheVeteransBenefitsImprovementActof2004amendsUSERRAtoextendhealthcarecoveragewhileawayonduty,anditrequiresemployerstopostanoticeofbenefits,duties,andrightsofreemployment.TheGeneticInformationNondiscriminationActof2008prohibitstheuseofgeneticinformationinemployment,prohibitsintentionalacquisitionofthesame,andimposesconfidentialityrequirements.TheLillyLedbetterFairPayActof2009amendsthe1964CRAtoextendtheperiodoftimeinwhichanemployeeisallowedtofilealawsuitoverpaydiscrimination.

3-3BrieflydiscussthemajorfunctionsoftheEqualEmploymentOpportunityCommission(EEOC).

TheEEOCisafederalagencythatinvestigatescomplaintsofillegal

discriminationbasedonrace,color,religion,sex(includingpregnancy),nationalorigin,age(40orolder),disability,orgeneticinformation.TheEEOChasthreesignificantfunctions:investigatingandresolvingdiscriminationcomplaintsthrougheitherconciliationorlitigation,gatheringandcompilingstatisticalinformationonsuchcomplaints,andrunningeducationandoutreachprogramsonwhatconstitutesillegaldiscrimination.

3-4Discussthedifferencesamongequalemploymentopportunity,affirmativeaction,anddiversity.

Equalemploymentopportunitydealswithaseriesoflawsandregulationsputinplaceatthefederalandstategovernmentlevelsinthelast45years.Assuch,equalemploymentopportunityisveryspecificandnarrowlydefinedwithinUSlawandvariousstatelaws.Affirmativeaction,exceptinafew

circumstances,doesnothavetheeffectoflaw.Therefore,affirmativeactionisamuchbroaderconceptbasedonpolicythanisEEO,whichismorenarrowlybasedonlaw.Finally,diversityisnotlaw,nornecessarilyevenpolicywithinorganizations.Diversityisaverybroadsetofconceptsthatdealwiththedifferencesamongpeoplewithinorganizations.Today’sorganizationsviewdiversityasavaluablepartoftheirhumanresourcesmakeup,buttherearenospecificlawsthatdealwithrequirementsfordiversitywithinorganizationsbeyondtheEEOlaws.

3-5Comparethetwoprimarytypesofsexualharassment.

Quidproquoharassmentoccurswhensometypeofbenefitorpunishmentismadecontingentupontheemployeesubmittingtosexualadvances.Inotherwords,ifyoudosomethingforme,Iwilldo

somethingforyou,orconversely,ifyourefusetodosomethingforme,Iwillharmyou.Hostileworkenvironmentharassmentoccurswhensomeone’sbehavioratworkcreatesanenvironmentthatissexualinnatureandmakesitdifficultforsomeoneofaparticularsextoworkinthatenvironment.Hostileenvironmentsexualharassmenthappenswhena“reasonableperson”woulddeterminethattheenvironmentwentbeyondnormalhumaninteractionsandthejokesandkiddingthatgowiththoseinteractionsandrosetothelevelthatsuchareasonablepersonwouldconsidertheactoractstobebothharassingandsexualinnature.

3-6Brieflydiscusstheemployer’srequirementsconcerningavoidanceofreligiousdiscriminationintheworkplace.

Religiousdiscriminationisoneof

theidentifiedprotectedclassesinthe1964CivilRightsAct.Assuch,wecan’tuseitasafactorinmaking“anyemploymentdecision”withouremployees.Issuessuchasstandardsofdress,timeoffforreligiousholidays,adherencetostronglyheldreligiousbeliefs,andotherquestionsofreligiousfreedomshouldbeaccommodatedtothebestofourabilitytoavoidinadvertentviolationofthelaw.

3-7DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermsadverseemploymentaction,67affirmativeaction,68bonafideoccupationalqualification(BFOQ),61businessnecessity,61cohesiveness,70compensatorydamages,63conflict,70constructivedischarge,67creativity,69disability,62discrimination,56disparateimpact,60disparatetreatment,60divergentthinking,70diversity,69essentialfunctions,63Four-FifthsRule,57hostileworkenvironment,72illegaldiscrimination,56innovation,69

jobrelatedness,61marginaljobfunctions,63OUCHtest,56patternorpracticediscrimination,60punitivedamages,63quidproquoharassment,71racenorming,64reasonableaccommodation,62reasonableperson,72retaliation,67reversediscrimination,69right-to-sue,66sexualharassment,70unduehardship,63

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. __________istheactofmakingdistinctionsorchoosingonethingoveranother—inHR,itisdistinctionsamongpeople.

2. __________ismakingdistinctionsthatharmpeoplebyusingaperson’smembershipinaprotectedclass.

3. __________isaruleofthumbusedwheneveryouarecontemplatinganyemploymentaction,tomaintainfairnessandequityforallofyouremployeesorapplicants.

4. __________isatestusedbyvariousfederalcourts,theDepartmentofLabor,andtheEEOCtodeterminewhetherdisparateimpactexistsinanemploymenttest.

5. __________existswhenindividualsin

similarsituationsareintentionallytreateddifferentlyandthedifferenttreatmentisbasedonanindividual’smembershipinaprotectedclass.

6. __________occurswhenanofficiallyneutralemploymentpracticedisproportionatelyexcludesthemembersofaprotectedgroup;itisgenerallyconsideredtobeunintentional,butintentisirrelevant.

7. __________occurswhen,overasignificantperiodoftime,apersonorgroupengagesinasequenceofactionsthatisintendedtodenytherightsprovidedbyTitleVII(the1964CRA)toamemberofaprotectedclass.

8. __________isaqualificationthatisabsolutelyrequiredforanindividualtosuccessfullydoaparticularjob.

9. __________existswhenaparticularpracticeisnecessaryforthesafeandefficientoperationofthebusiness,andwhenthereisaspecificbusinesspurposeforapplyingaparticularstandardthatmay,infact,bediscriminatory.

10. __________existswhenatestforemploymentisalegitimatemeasureofanindividual’sabilitytodotheessentialfunctionsofajob.

11. __________isaphysicalormentalimpairmentthatsubstantiallylimitsoneormoremajorlifeactivities,arecordofhavingsuchanimpairment,oraconditionofbeingregardedashavingsuchanimpairment.

12. __________isanaccommodationmadebyanemployertoallowsomeonewhoisdisabledbutotherwisequalifiedtodotheessentialfunctionsofajobtobeabletoperformthatjob.

13. __________consistofthefundamentaldutiesoftheposition.

14. __________arethosefunctionsthatmaybeperformedonthejobbutneednotbeperformedbyallholdersofthejob.

15. __________occurswhenthelevelofdifficultyforanorganizationtoprovideaccommodations,determinedbylookingatthenatureandcostoftheaccommodationandtheoverallfinancial

resourcesofthefacility,becomesasignificantburdenontheorganization.

16. __________consistsofmonetarydamagesawardedbythecourtthatcompensatethepersonwhowasinjuredfortheirlosses.

17. __________consistofmonetarydamagesawardedbythecourtthataredesignedtopunishaninjuringpartythatintentionallyinflictedharmonothers.

18. __________occurswhendifferentgroupsofpeoplehavedifferentscoresdesignatedas“passing”gradesonatestforemployment.

19. __________isanoticefromtheEEOC,iftheyelectnottoprosecuteanindividualdiscriminationcomplaintwithintheagency,thatgivestherecipienttherighttogodirectlytothecourtswithacomplaint.

20. __________isasituationinwhichtheorganizationtakesan“adverseemploymentaction”againstanemployeebecausetheemployeebroughtdiscriminationchargesagainstthe

organizationorsupportedsomeonewhobroughtdiscriminationchargesagainstthecompany.

21. __________consistofanyactionssuchasfirings,demotions,schedulereductions,orchangesthatwouldharmtheindividualemployee.

22. __________existswhenanemployeeisputundersuchextremepressurebymanagementthatcontinuedemploymentbecomesintolerablefortheemployeeand,asaresultoftheintolerableconditions,theemployeeresignsfromtheorganization.

23. __________isaseriesofpolicies,programs,andinitiativesthathavebeeninstitutedbyvariousentitieswithinbothgovernmentandtheprivatesectortocreatepreferentialhiringofindividualsfromprotectedgroupsincertaincircumstances,inanattempttomitigatepastdiscrimination.

24. __________isdiscriminationagainstmembersofthemajoritygroupbyanorganization,generallyresultingfrom

affirmativeactionpolicieswithinanorganization.

25. __________istheexistenceofdifferences—inHRM,itdealswithdifferenttypesofpeopleinanorganization.

26. __________isabasicabilitytothinkinuniqueanddifferentwaysandapplythosethoughtprocessestoexistingproblems.

27. __________istheactofcreatingusefulprocessesorproductsbasedoncreativethoughtprocesses.

28. __________istheabilitytofindmanypossiblesolutionstoaparticularproblem,includingunique,untestedsolutions.

29. __________istheactofbeingopposedtoanother.

30. __________isanintentanddesireforgroupmemberstosticktogetherintheiractions.

31. __________consistsofunwelcomesexualadvances,requestsforsexualfavors,andotherverbalorphysical

conductofasexualnature;whensubmissiontoorrejectionofthisconductexplicitlyorimplicitlyaffectsanindividual’semployment;unreasonablyinterfereswithanindividual’sworkperformance;orcreatesanintimidating,hostile,oroffensiveworkenvironment.

32. __________isharassmentthatoccurswhensometypeofbenefitorpunishmentismadecontingentupontheemployeesubmittingtosexualadvances.

33. __________isharassmentthatoccurswhensomeone’sbehavioratworkcreatesanenvironmentthatissexualinnatureandmakesitdifficultforsomeoneofaparticularsextoworkinthatenvironment.

34. __________isthe“average”personwhowouldlookatthesituationanditsintensitytodeterminewhethertheaccusedpersonwaswrongintheiractions.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. DoyouagreethatapplyingtheOUCHtesttoanemploymentsituationwillminimizeillegaldiscrimination?Whyorwhynot?

2. ArethereanygroupsofpeopleintheUnitedStatesthatyouthinkshouldbecoveredbyfederallawsasaprotectedgroupbutarenotcurrentlycovered?Whyorwhynot?

3. Inyouropinion,ismostdiscriminationintheUnitedStatesunintentional(disparateimpact),orismostdiscriminationintentional(disparatetreatment)?Whydoyouthinkso?

4. Whatisyouropinionoforganizationsusingbonafideoccupationalqualifications(BFOQs)tolimitwhotheywillconsiderforajob?

5. DoyouagreethatmostemployersprobablywanttoobeytheAmericanswithDisabilitiesActbutdon’tknowexactlywhattheyarerequiredtodounderthelaw?Doyouthinkthatmostemployerswouldrathernothiredisabledpeople?Justifyyouranswer.

6. Howwouldyoudefinetheterms“reasonableaccommodation”and“unduehardship”ifyouwereaskedbyoneofyourcompanymanagers?

7. Hasaffirmativeactiongonetoofarincreatingapreferenceforhistoricallyunderrepresentedgroupsoverotheremployeesandapplicantsinsteadoftreatingeveryoneequally?

8. Doyouthinkthatsexualharassmentintheworkplaceisoverreportedorunderreported?Justifyyouranswer.

Case3-1English-Only:OneHotel’sDilemmaErica,theHumanResourceManager,wasfrustratedbymanyofherhotelstaffspeakingSpanishinthehallwaysandroomsastheywerecleaningthem.

TheSawmillHotelwhereEricaworksissituatedindowntownMinneapolis,Minnesota.Itstargetmarketincludessportsenthusiastsattendingnearbyprofessional(Twins,Vikings,Timberwolves,Wild)gamesbutalsobusinessprofessionalsandfamilies.Thisfour-starhotelfeaturesanindoorandoutdoorswimmingpool,amessagecenter,threestores,tworestaurants,andabeautyshop.Totalstaffincludesabout10managers,30cleaningassistantstotakecareofrooms,10frontdeskspecialists,and25whoareinvolvedwiththestores,restaurants,andbeautyshop.Allarerequiredtofocusoncustomerserviceastheirnumber-onevalue.

EricahireseveryoneinthehotelexceptfortheChiefExecutiveOfficer,VicePresidentofFinance,andVicePresidentofMarketing.Fortherestofthemanagers,the30cleaningassistants,andthestore,restaurant,andbeautyshopworkers,sheadvertisesforopeningswiththelocaljobserviceandtheMinneapolisStarTribune(withtheassociatedwebsite).AtypicalTribuneadforacleaningassistantreadsasfollows:CleaningAssistantsWanted,SawmillHotel,$9–$11/hour.Preparerooms

forcustomersandpreparelaundry.Contact:EricaHollie,HumanResourceManager,555-805-1234.

Asaresultoftheadvertising,Ericahasbeenabletoobtaingoodhelpthroughthelocaltargetmarket.Twenty-sevenofthe30cleaningassistantsarewomen.Twentyofthe30haveaHispanicbackground.OftheHispanics,allcanspeakEnglishatvaryinglevels.

Rachel,theleadcleaningassistant,believesthatmaximizingcommunicationamongemployeeshelpstheassistantsbecomemoreproductiveandstablewithinthehotelsystem.SheusesbothEnglishandSpanishtotalktoassistantsunderher.SpanishisusefulwithmanyassistantsbecausetheyknowSpanishmuchbetterthanEnglish.Spanishalsoisthe“goodfriends”languagethatallowstheSpanishspeakerstofreelycatchuponeachother’saffairsandthatmotivatesthemtostayworkingatthehotel.TheuseoftheSpanishlanguageamongcleaningassistantshasbeencommonpracticeamongthemforthetwoyearssincethehotelopened.

Inthelastfewmonths,topmanagementdecidedtohaveanevengreaterfocusoncustomerservicebyensuringcustomercommentcardsareavailableineachroomandatthefrontdesk.Customersalsocancommentonlineabouttheirstayatthehotel.

TherehavebeenseveralcustomercomplaintsthatcleaningassistantshavebeenlaughingaboutthembehindtheirbackinSpanish.Onecustomer,Kathy,thoughtthatstaffersnegativelycommentedabouthertightpinkstretchpantscoveringheroverweightlegs.Othercustomershavecomplainedtheydidn’tthink

askingstaffforhelpwaseasygiventheamountofSpanishspoken.Inall,about15outof42complaintsinatypicalmonthwereassociatedwiththeuseoftheSpanishlanguage.

Thoughbellhopsandfrontdeskclerksaretypicallytheworkerswhohandlecomplaintsfirst,Erica,theHumanResourceManager,hasthemainresponsibilitytonotifyworkersaboutcustomercomplaintpatternsandtosetpolicyindealingwiththecomplaints.TheprevalenceofcomplaintsconcerningworkersspeakingSpanisheachmonthledEricatomakeasignificantchangeinpolicyconcerningtheuseofSpanish.Inconsultationwithtopmanagement,Ericainstitutedthefollowingemployeehandbookpolicyeffectiveimmediately:

“Englishisthemainlanguagespokenatthehotel.AnycommunicationamongemployeesshallbeinEnglish.UseofSpanishorotherlanguagesisprohibitedunlessspecificallyrequestedbymanagementorthecustomer.”

Inane-mailexplanationforthenewpolicy,EricastatedthenumberofcomplaintsthathadcomefromtheuseofSpanishandtheneedforcustomercourtesyandcommunication.

RachelimmediatelyrespondedtoErica’se-mailbystatingthatthenewpolicywastooharshonthenativeSpanish-speakingassistantsatthehotel.ShethoughtthatabetterpolicyistoallowherassistantstocommunicatewitheachotherthroughSpanishbutbyquietlydoingsoawayfromcustomerearshot.Ifthereisageneraldiscussioninfrontofacustomer,itisrecommendedtospeakEnglish.Thereshouldneverbediscussionsinany

languageaboutcustomerappearances.

ThoughRachelgrumbled,thepolicystuckbecauseEricaandtopmanagementwantedtostopcustomercomplaints.Asaresultofthepolicy,10ofthe20Spanish-speakingassistantsquitwithintwomonths.Thesewerehigh-qualityassistantswhohadbeenwiththehotelsincethestart.Theirreplacementscamefromajobserviceandhavenotworkedoutaswellintheirperformance.

Questions1. Whatlaw(s)doyouthinkmightapplyinthis

case?2. ShouldacompletebanofSpanishbeinstituted

amongstaffofthehotelunlesscustomersuseSpanishthemselves,orshouldtheuseofSpanishbecompletelyallowedbystaffamongthemselvesaslongasitisquiet(whyorwhynot)?

3. Whatrules,ifany,wouldyouputintoeffectinthissituation,knowingaboutthecustomercomplaints?Explainyouranswer.

CasecreatedbyGundarsKaupinsofBoiseStateUniversity

SkillBuilder3-1TheFour-FifthsRuleForthisexercise,youwilldosomemath.

ObjectiveTodevelopyourskillatunderstandingandcalculatingtheFour-FifthsRule

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskill—Analyticalandquantitativebusinessskills

2. SHRM2013CurriculumGuidebook—G:Outcomes:MetricsandMeasurementinHR

CompletethefollowingFour-FifthsProblems

1:

Theselectionrateof_____%isequalto,lessthan,orgreaterthan_____%or4/5.

Therefore,theFour-FifthsRuleisorisnotmet.Howmanytotalfemalesandhowmanymorefemalesshouldbehired?___________

2:

Theselectionrateof_____%isequalto,lessthan,orgreaterthan_____%or4/5.

Therefore,theFour-FifthsRuleisorisnotmet.Howmanytotalandhowmanymorenonwhitesshouldbehired?___________

3:

Theselectionrateof_____%isequalto,lessthan,orgreaterthan_____%or4/5.

Therefore,theFour-FifthsRuleisorisnotmet.Howmanytotalandhowmanymorenonwhitefemalesshouldbehired?___________

SkillBuilder3-2DiversityTraining

ObjectiveTobecomemoreawareofandsensitivetodiversity

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskill—Humanrelationsskills2. SHRM2013CurriculumGuidebook—L:

TrainingandDevelopment

Answerthefollowingquestions:

RaceandEthnicity1. Myrace(ethnicity)is____.

2. Myname,____,issignificantbecauseitmeans____.[or]

Myname,____,issignificantbecauseIwasnamedafter____.

3. Onepositivethingaboutmyracial/ethnicbackgroundis____.

4. Onedifficultthingaboutmyracial/ethnicbackgroundis____.

Religion5.Myreligionis____.6.Onepositivethingaboutmyreligiousbackgroundis____.7.Onedifficultthingaboutmyreligiousbackgroundis____.

Gender8.Iam____(male/female).9.Onepositivethingaboutbeing(male/female)is____.10.Onedifficultthingaboutbeing(male/female)is____.

Age11.Iam____yearsold.12.Onepositivethingaboutbeingthisageis____.13.Onedifficultthingaboutbeingthisageis____.

Other14.OnewayinwhichIamdifferentfromotherpeopleis____.15.Onepositivethingaboutbeingdifferentinthiswayis____.16.Onenegativethingaboutbeingdifferentinthiswayis____.

Prejudice,Stereotypes,andDiscrimination

17.Describeanincidentinwhichyouwereprejudged,stereotyped,ordiscriminatedagainst.Itcouldbesomethingminor,suchashavingacommentmadetoyouaboutyourwearingthewrongtypeofclothes/sneakersorbeingthelastonepickedwhenselectingteams.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

YourinstructormayaskyoutodothisSkillBuilderinclassinagroup.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

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©iStockphoto.com/Yuri

PartIIStaffing

4MatchingEmployeesandJobs:JobAnalysisandDesign5RecruitingJobCandidates6SelectingNewEmployees

Practitioner’sModel

4MatchingEmployeesandJobsJobAnalysisandDesign

©BuckStudio/Crave/Corbis

ChapterOutlineEmployeeandJobMatchingWorkflowAnalysis

OrganizationalOutputTasksandInputs

JobAnalysisWhyDoWeNeedtoAnalyzeJobs?DatabasesJobAnalysisMethodsOutcomes:JobDescriptionandJobSpecification

JobDesign/RedesignOrganizationalStructureandJobDesignApproachestoJobDesignandRedesign

TheJobCharacteristicsModel(JCM)DesigningMotivationalJobs

JobSimplificationJobExpansionJobDesignforFlexibility

HRForecasting

ForecastingMethodsReconcilingInternalLaborSupplyandDemand

OptionsforaLaborSurplusOptionsforaLaborShortage

TrendsandIssuesinHRMO*NetasaToolforJobAnalysisWorkflowsandJobDesignforSustainability

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

4-1DescribetheprocessofworkflowanalysisandidentifywhyitisimportanttoHRM.PAGE864-2Summarizethefourmajoroptionsavailableforthejobanalysisprocess.PAGE874-3Discussthefourmajorapproachestojobdesign.PAGE914-4Identifyandbrieflydescribethecomponentsofthejobcharacteristicsmodel(JCM).PAGE944-5Explainthethreemajortoolsformotivationaljobdesign.PAGE964-6DiscussthethreemostcommonquantitativeHRforecastingmethods.PAGE984-7Namethesevenmajoroptionsformanagingalaborsurplusandthesevenoptionsforovercomingalaborshortage.PAGE1004-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE108

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindy’sdaystartedwhenanexecutiveburstintotheHRoffice.“Holdeverything!”heshouted.“Dougjustannouncedhe’sretiringunexpectedly,andwe’vegottostartadvertisingforsomeonetoreplacehimimmediately.Idon’tknowhowwecanmanagewithouthim!”

“Calmdown—wecandothis,”shereplied.“Justsendusyoursuccessionplanningmatrixandhisfunctionaljobdescription,andwe’llstarttheprocesstoreplacehim.”

“Ihatetoadmitit,butInevercompletedthatmatrix,andIdon’thaveanupdatedjobdescriptionforDoug,”themanagerrepliedsheepishly.“Therehavebeensomanychangeswiththedepartmentreorganizationsthisyearthatweneedtoreconfigureeverything.”

Whilehiringsomeonenewistheperfecttimetoupdatethejobdescriptionforaposition,itisnotthebesttimetocreateone.Whyisitimportanttohaveacurrentjobdescription,andhowdoesonegoaboutwritingone?Chapter4 showshowtosuccessfullyidentifyanddocumentmotivationalpositions.

EmployeeandJobMatchingNowthatwehavelearnedsomeofthebasicsconcerninghowtotreatourhumanresourcesfairlyandequitably,weneedtostartputtingpeopletoworkintheorganization.Let’sstartwiththerealizationthatinorderfortheorganizationtomaximizeproductivity,wemustmatchtherightpeoplewiththerightjobs.1Why?Becausemismatchedworkerstendtohavelowjobsatisfaction,leadingtoabsenteeism,higherturnover,andlowerlevelsofproductivitythanthosewhoarematchedeffectively.2Thefirststeptomatchingpeopletotherightjobsistodeterminewhatjobsweneedtohaveperformedandthequalificationsneededtodothejobs.Thenwecanmatchemployeestothosejobs.Let’sstartbytakingabrieflookatworkflowanalysis.

WorkflowAnalysisImaginethatwearestartingupabrandnewcompany.Thefirstthingwehavetoknowiswhatweexpecttheorganizationtodo.Doweplantomakeproducts(e.g.,Samsung),ordoweplantoprovideservices(e.g.,Netflix)?PerourdiscussionoforganizationalstructureinChapter2,thewayinwhichweputtheorganizationtogetherwilldependonwhatweexpectittodo,andthatinturnwillhelpdeterminetheworkflow.Workflowanalysisisthetoolthatweusetoidentifywhathastobedonewithintheorganizationtoproduceaproductorservice.Foreachproductorservicethatweprovideintheorganization,wehavetoidentifytheworkprocessesthatcreatethatproductorservice.

OrganizationalOutputThefirstthingweanalyzeistheendresultofourprocesses:ourexpectedorganizationaloutputs,orwhatthecustomerwantsfromus.3Soweareactuallyworkingbackward.Ifwedecidethatwearegoingtomakedesksbutwedon’tidentifywhatkindofdeskswe’regoingtomake,thendoweneedskilledcraftsman,metalworkers,orjustunskilledassemblers?Theansweris,ofcourse,thatitdependsonwhatkindofdeskweplantomake.Soidentifyingtheendresultisacriticalfirststepinidentifyingtheworkflowsneededtocreatethatresult.

LO4-1DescribetheprocessofworkflowanalysisandidentifywhyitisimportanttoHRM.

SHRME:8

WorkManagement(WorkProcessesandOutsourcing)

TasksandInputsOnceweidentifytheresultweexpect,wecanthendeterminethestepsoractivitiesrequiredtocreatetheendresultwe’veidentified.Finally,basedonthestepsthatweidentifyandthetasksthatwillhavetobeperformed,wecanidentifytheinputsthataregoingtobenecessarytocarryoutthestepsandperformthesametasks.4

Thereisasimplemnemonic(amemorytool)availabletorememberwhatresourceinputswehaveavailable.Itiscalledthe4Ms:5

1. Machines—resourcessuchastools,equipment,manufacturingmachinery,andothermachinesthatareusedincompletingwork

2. Material—anyphysicalresource(e.g.,wood,metal,buildings,realestate,etc.)thatweuseinproduction

3. Manpower—thepeoplethatareneededin

aparticularproductionprocess—bothquantityandtypes

4. Money—thecapitalthatmustbespenttoperformourprocesses

Thesefourlargecategoriesofresourcesarewhatweuseupindoingwhatweintendtodo.6Wheneverwelookatworkflowanalysis,wehavetoidentifywhichofthe4Msandhowmuchofeachweareusingupinaparticularprocess.ThefinalresultofourworkflowanalysisisshowninExhibit4-1.

WorkflowanalysisThetoolthatweusetoidentifywhathastobedonewithintheorganizationtoproduceaproductorservice

WORKAPPLICATION4-1UsingExhibit4-1asanexample,identifytheoutputand4Msinputsforanorganizationthatyouworkfororhaveworkedfor.

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

E.JobAnalysis/JobDesign(required)1.Job/roledesign(roles,duties,andresponsibilities)7.HRplanning(skillinventoriesandsupply/demandforecasting)8.Workmanagement(workprocessesandoutsourcing)

G.Outcomes:MetricsandMeasurementofHR(required)

5.Trendandratioanalysisprojections10.Quantitativeanalysis12.Analyzingandinterpretingmetrics13.Forecasting

I.Staffing:RecruitmentandSelection(required)

1.Theemploymentrelationship:Employees,contractors,temporaryworkers

J.StrategicHR(required)12.TrendsandforecastinginHR

M.WorkforcePlanningandTalentManagement(required)

1.Downsizing/rightsizing(secondary)2.Planning:Forecastingrequirementsandavailabilities,gapanalysis,action

planning,core/flexibleworkforce6.Laborsupplyanddemand

S.Downsizing/Rightsizing(secondary)1.Employmentdownsizing2.Alternativestoemploymentdownsizing4.Whydownsizinghappens5.Whendownsizingistheanswer7.Alternativestodownsizing8.Consequencesofemploymentdownsizing9.Approachestoreducingstaffsize13.Importanceoffocusingonindividualjobsversusindividualstaffmembers14.Layoffs

JobAnalysisOnceweunderstandtheworkflowsintheorganization,thenextthingthatweneedtodoisfigureoutwhichpartsoftheworkflowsaredonebyeachperson.Thisistheconceptofjobanalysis.Jobanalysisistheprocessusedtoidentifytheworkperformedandtheworkingconditionsforeachofthejobswithinourorganizations.Jobanalysisresultswillincludeduties,responsibilities,skills,knowledgerequired,outcomes,conditionsunderwhichtheworkermustoperate,andpossiblyotherfactors.7

Exhibit4-1WorkflowAnalysis

Thetwoprimaryoutcomesformostjobanalysisprojectsarethejobdescriptionandthejobspecification.Thejobdescriptionidentifiesthemajortasks,duties,andresponsibilitiesthatarecomponentsofajob,whilethejobspecificationidentifiesthequalificationsofapersonwhoshouldbecapableofdoingthejobtasksnotedinthejobdescription.

WhyDoWeNeedtoAnalyzeJobs?JobanalysisisthebasisofjustabouteverythingthatHRdoes.8Ifyouthinkaboutit,youwillrealizethatweneedtoidentifyandcorrectlyanalyzethejobsintheorganizationinordertoperformanyofthefollowingfunctions:

1. Humanresourceplanning.Jobanalysishelpsusdesignjobsbettertogettheresultsthatweneed.(Wewilltalkaboutjobdesignshortly.)

2. Jobevaluationforcompensation.Ifwedon’tknowwhatthejobconsistsof,howcanwedeterminehowmuchthejobisworthtotheorganizationsoweknowhowmuchtopaytheperson?

3. Staffing(recruitingandselection).Ifwedon’tknowwhatanemployeeisgoingtodoandhowmuchwewillpaythatemployee,thenhowdoweknowwhom

torecruitandhire?4. Training.Ifwedon’tknowwhatthejob

consistsof,howcanweteachpeopletodothejob?

5. Performancemanagement.Howcanweevaluateperformanceifwedon’tknowwhattheworker ’sjobconsistsof?

6. Maintainasafeworkenvironment.Jobanalysiswillhelpusidentifyhazardsthatthejobincumbentwillneedtounderstand,aswellasanyrequiredpersonalprotectiveequipmentandtrainingthepersonwillneedtosafelycarryoutthejob.

SojobanalysisisimportanttotheHRdepartment,buthowdoesitaffectothermanagers?Thinkaboutthefollowingissuesthatanyorganizationalmanagermayfaceonaroutinebasis:

1. Managersmusthavedetailedinformationaboutallthejobsintheirworkgroupssothattheycanunderstandtheworkflowprocesses.

2. Managersneedtounderstandjobrequirementsintheirworkgroupssothattheycanmakeintelligenthiring,training,andpromotiondecisions.

3. Everymanagerisresponsibleforconductingperformanceevaluationstoensurethatallemployeesareperformingtheirjobssatisfactorily.

SowecanseethatjobanalysisisveryimportanttobothHRandlinemanagers.Buthowdoyouanalyzeajob?

LO4-2Summarizethefourmajoroptionsavailableforthejobanalysisprocess.

JobanalysisTheprocessusedtoidentifytheworkperformedandtheworkingconditionsforeachofthejobswithinourorganizations

DatabasesTherearevariousdatabasesthatcanbehelpfultothoseperformingjobanalysis.TheUSDepartmentofLabor’sO*NET9isone.O*NETdatagivesyougeneralinformationonover900jobtitles,andyoucanthenadjustthatinformationtoyourcompany’sspecificcircumstances.Otherdatabasesarealsoavailablecommercially,andtheinformationtheyprovidecanhelpwithjobanalysisofalargenumberofjobsthatarecommonacrossmanydifferentcompanies.

Usingadatabasecanbeagoodstartingpointforjobanalysis.However,eachjobanalysiswillmostlikelyneedtobecustomized,andifyoucan’tfindoneonadatabase,youneedtoconductyourownjobanalysis.Howtodosoisournexttopic.

JobdescriptionIdentificationofthemajortasks,duties,andresponsibilitiesthatarecomponentsofa

job

JobspecificationIdentificationofthequalificationsofapersonwhoshouldbecapableofdoingthejobtasksnotedinthejobdescription

JobAnalysisMethodsFourcommonlyusedmethodsofjobanalysisincludetheuseofquestionnaires,interviews,diaries,andobservation.10,11Thenecessaryresultthatwearelookingforwithallfourmethodsisajobdescriptionandspecificationforapersontobesuccessfulintheposition.Let’sdiscussthefourmethods.

Questionnaires.Anumberofhighlyvalidandreliablequestionnairescanbegiventodifferentpeopleinordertoanalyzethejobinquestion.Aquestionnairemaybegiventothecurrentjobholder(theincumbent),thesupervisor,orotherswhoareaffectedbythewaythejobisdoneintheorganization.Mostofthequestionnairesfollowsimilarprocesses.Eachasksquestionsthathelptoidentifythefunctionsthatareapartofaparticularjob,

andthen,inmostcases,assignsapointvaluetothatfunction.12ThePositionAnalysisQuestionnaireandtheManagementPositionDescriptionQuestionnairearetwoexamplesofthistypeofjobanalysis.13

QuestionnaireAdvantages

QuickwaytogetinformationfromlargenumberofsourcesUsuallyeasytoquantifyRelativelylowcostGenerallyvalidandreliableinstrumentsNoneedforatrainedinterviewerorobserver

QuestionnaireDisadvantages

Incompleteresponses(nobodyisinterviewingorobservingactions,sothereisnofollow-up)ResponsesmaybehardtointerpretLowresponseratesarepossibleifthereisnosupervisoryfollow-up

Interviews.Injobanalysisinterviews,questionsareusuallyaskedbytrainedinterviewersoftheincumbentandtheanswersarecompiledintoaprofileofthejob.Theinterviewerasksjob-relatedquestions,andtheincumbentdescribesthejobbasedonthequestionsasked.

InterviewAdvantages

TheincumbentismostfamiliarwiththejobCanincludequalitativedataAllowstheinterviewertofollowupconfusingorincompleteanswersSimple,quick,andmorecomprehensivethansomeotherformsProvidesanopportunitytoexplaintheneedfortheanalysisandanswerquestions

InterviewDisadvantages

Dependentontrainedinterviewerand

well-designedquestionsWorkersmayexaggeratetheirjobdutiesTime-consumingandmaynotbecostefficient

Anemployee’sdiaryorlogoutliningtheirdailytasksandactivitiescanbeusedasthebasisforajobdescription.

©iStockphoto.com/m-imagephotography

Diaries.

Heretheworkermaintainsaworklog,ordiary,inwhichtheemployeewritesdownthetasksaccomplishedwhilegoingaboutthejob.14Thislogbecomesthedocumentfromwhichwebuildthedescriptionofthejob.

DiaryAdvantages

ParticipatoryformofanalysisMaycollectdataastheyhappenTheworkerknowsthejobandwhatisimportantUsefulforjobsthataredifficulttoobserve

DiaryDisadvantages

ReliesonworkerwritingallworkdownWorkermayrelyonmemoryofthingsdoneearlierinthedayInformationdistortionDataarenotinastandardformat—makesquantifyingdifficult

Observation.Wecanalsouseobservationofthepersonatwork,inwhichanobservershadowstheworkerandlogstasksthattheworkerperformsoveraperiodoftime.Atrainedobserverwillusuallyidentifytasksthatworkersdon’teventhinkaboutdoingandthereforewouldn’thavenotedinalogordiary.

ObservationAdvantages

FirsthandknowledgeAllowstheanalysttoseetheworkenvironment,viewthetoolsandequipmenttheworkeruses,observetheworker ’sinterrelationshipswithotherworkers,andgaugethecomplexityofthejobReducesinformationdistortioncommoninsomeothermethodsRelativelysimpletouse

ObservationDisadvantages

Observermayaffectthejobincumbent’sperformanceInappropriateforjobsthatinvolvesignificantmentaleffortMaylackvalidityandreliabilityTime-consumingRequiresatrainedobserver

Thefourmethodslistedabovearecertainlynottheonlymethodsofjobanalysis,andtheymaynotevenbethebestoptionsforanyparticularsituation.Therearemanyotheroptions,includingtheuseofsubjectmatterexperts,worksampling,videotapingofjobs,andothers.However,thesefourtypesofanalysisdemonstratethebasicprocessofjobanalysis.Wecanalsousemultiplemethodsifonemethodalonewillnotprovideagoodanalysis.

WORKAPPLICATION4-2Whichofthefourjobanalysisprocesseswouldbethemostappropriatetousetowritethejobdescriptionandjobspecificationsforajobyouholdorhaveheld?Explainwhyithasadvantagesovertheothermethods.

Outcomes:JobDescriptionandJobSpecificationTheprimaryoutcomesthatwearelookingforinanyjobanalysisarethecreationofajobdescriptionandajobspecification.15Thesetwooutcomesareroutinelywrittenintoonedocument.Thejobdescriptionpartdescribesthejobitself,notthepersonwhowilldothejob.Thejobspecificationpartidentifiesthequalificationsneededbythepersonwhoistofillaposition.Wewillusethejobspecificationtogooutandrecruitwhenwehaveanopeningforthejob.Exhibit4-2showsasamplejobdescriptionandspecification.

WORKAPPLICATION4-3Completeajobanalysisforajobyouholdorhaveheld;writeabriefjobdescriptionandjobspecifications.

4-1ApplyingTheConcept

JobAnalysisMethodsReviewthefollowingjobanalysismethodsandthenwritethelettercorrespondingtoeachmethodbeforethesituationinwhichitwouldbethemostappropriate.

1. questionnaire2. interview3. diary4. observation

____1.Onyourstaff,youhaveanindustrialengineerwhoisanefficiencyexpert.Youwanthertoimprovetheproductivityofyourmachinists.____2.Youhaveprofessionalswhoworkindependentlyusingdifferentmethodsofdevelopingcomputergames.____3.Inyourcallcenter,wherehundredsofemployeesmakecoldcallstosellyourproducts,thereisahighturnoverratethatyouwanttoimprove.____4.Youhaveseveralservicecallemployeeswhorepairavarietyofcomputers.Youwouldliketohaveabetterideaofwhattypesofcomputerstheyarefixing.

JobDesign/RedesignTasksaregroupedbytheorganization,usuallyintofunctionaldepartments,andthetasksarefurthergroupedintojobsforeachemployee,providingstructuresandprocesses.Jobdesignistheprocessofidentifyingtasksthateachemployeeisresponsibleforcompleting,aswellasidentifyinghowthosetaskswillbeaccomplished.Jobdesigniscrucialbecauseitaffectsjobsatisfactionandproductivity,alongwithalargenumberofotherfunctionsinHRM.16

Jobredesignreferstochangingthetasksorthewayworkisperformedinanexistingjob.Jobdesign,whichincludesredesign,isaboutworkingsmarter,notharder,tofindnewwaysofdoingthingsthatboostproductivity.17

OrganizationalStructureandJobDesignThewaywecombinethecomponentsofanorganizationalstructurecausesemployeestoactindifferentways(Chapter2).Jobsintheorganizationhavetobedesignedtofitwithintheconfinesofthestructurethatwehavedesigned.18

Ifwehaveamorerelaxed,flatterstructurewithlotsofautonomyforourworkers,wewillneedtodesignourjobstotakeadvantageofthatautonomyorself-directiononthepartofouremployees.If,ontheotherhand,wehavearigid,bureaucraticorganizationalstructurewithstrongcentralizeddecisionmakingandcontrol,thenourjobshavetobedesignedsothattheycanbereadilycontrolledbyacentralauthority.

Exhibit4-2JobDescription—Apple“ChannelComplianceReportingManager”

LO4-3Discussthefourmajorapproachestojobdesign.

JobdesignTheprocessofidentifyingtasksthateachemployeeisresponsibleforcompleting,aswellasidentifyinghowthosetaskswillbeaccomplished

ApproachestoJobDesignandRedesignJobdesign/redesigncantakeseveralforms,dependingonwhatwearetryingtoaccomplishintheorganization.Therearefourprimaryapproachestojobdesign:mechanistic,biological,perceptual-motor,andmotivational.19

1.Mechanisticjobdesignfocusesondesigningjobsaroundtheconceptsoftaskspecialization,skillsimplification,andrepetition.Whenwedesignamechanisticjob,wewilltrytomakethejobsimpleandrepetitivesothattheworkercangetverygoodandveryfastatdoingit.Anexampleofmechanisticjobdesigninmanufacturingwouldbeattachingthedesktoptoitsbaseusingsixfastenersandthengoingtothenextdesktodothesamethingagain.Thebiggestprobleminmechanisticjobdesignisthatwemightoverspecializetheworktothepointthat

itbecomestoorepetitiveandthusveryboring.20

2.Biologicaljobdesignfocusesonminimizingthephysicalstrainontheworkerbystructuringthephysicalworkenvironmentaroundthewaythebodyworks.Herewemakethejobphysicallyeasiersothatworkerscanbemoreefficientandsothatitislesslikelythattheywillbeinjuredandhavetomisswork.Anexampleofbiologicaljobdesignwouldinvolveinstallingaconveyorbeltthatliftsandadjuststothecorrectlevelsoeachpersoncanassembletheirpartsofthefinalproductwithinacomfortablerangeofmotion.Thisallowstheworkerstodotheirjobswithminimalphysicalstrain.Again,though,thisapproachdoeslittletomakeworkersmoremotivatedorsatisfiedwiththeirwork.

3.Perceptual-motorjobdesignfocusesondesigningjobswithtasksthatremainwithintheworker’snormalmentalcapabilitiesandlimitations.Insteadoftryingtominimizethephysicalstrainontheworkforce,thegoalisto

designjobsinawaythatensurestheymoderatethementalstrainonaworker.21Forexample,wemightuseittobreakdownanexecutiveassistant’sjobintoareportwriterandaschedulerjob,becausethesetsofskillsneededinthesetwoareasaresignificantlydifferent.Onemoretime,wemaycreatejobsthatarenotverymotivating.

4.Motivationaljobdesignfocusesonthejobcharacteristicsthataffectthepsychologicalmeaningandmotivationalpotentialofthejob,anditviewsattitudinalvariablesasthemostimportantoutcomesofjobdesign.Thetheoryisthatifworkersaremoremotivated,theywillproducemorework.Itistothislastapproachtojobdesignthatwecanapplythejobcharacteristicsmodel,whichwewilldiscussnext.

SHRME:1

Job/RoleDesign(Roles,Duties,andResponsibilities)

MechanisticjobdesignDesigningjobsaroundtheconceptsoftaskspecialization,skillsimplification,andrepetition

BiologicaljobdesignDesigningjobsbyfocusingonminimizingthephysicalstrainontheworkerbystructuringthephysicalworkenvironmentaroundthewaythebodyworks

WORKAPPLICATION4-4Whichofthefourapproachestojobdesign/redesignbestdescribesajobyouholdorhaveheld?Explainhowthejobincorporatesthefeaturesoftheapproach.

4-1Selfassessment

OrganizationalStructureandJobDesignPreferenceIndividualsdifferinthetypeoforganizationsandjobdesignsinwhichtheyprefertowork.Todetermineyourpreference,evaluateeachofthefollowing12statements,usingthescalebelow.Assigneachstatementanumberfrom1to5,representingyourlevelofagreementwiththestatement(5=strongagreement,3=notsure,1=strongdisagreement).

_____1.Ipreferhavingjustonebosstellingmewhattodo,ratherthanmultiplepeople._____2.Iprefertojustperformmyjob,ratherthanbeingconcernedaboutorganizationalobjectivesandbeinginvolvedinsettingthem._____3.Ipreferknowingthereportingrelationship,knowingwhoiswhoseboss,andworkingthroughproperchannels—ratherthanjustworkingdirectlywithavarietyofpeoplebasedonthesituation._____4.IpreferhavingaclearjobdescriptionsoIknowjustwhatIneedtodoatwork,ratherthanhavingtheambiguityofnotbeingsureanddoingwhateverneedstobedone._____5.Ipreferbeingaspecialistdoingonejobreallywell,ratherthanbeingageneralistdoing

severalthingsnotaswell._____6.Ipreferdoingmyownthingthatcontributestotheorganization,ratherthancoordinatingtheworkIdowiththatofothersinteams._____7.Ipreferslowchange,ratherthanregularfastchanges._____8.Ipreferroutineatwork,ratherthanbeingdelegatednewtaskstoperform._____9.Ipreferdoingmoresimpletasks,ratherthanmorecomplextasksthattakemoretimeandeffort._____10.Ipreferthatpeoplegetpromotedbasedprimarilyonseniority,ratherthanbasedonperformance._____Total

Scoring:Todetermineyourpreference,addupthenumbersyouassignedtothestatements(thetotalwillbebetween10and50)andplaceyourtotalscoreonthecontinuumbelow:

Anorganizationthatisminimallyormoderatelycomplex,highlyformalized,andcentralizedisamechanisticorganization.Organicorganizationsareevenmorecomplexbutloweronformalizationandcentralization.Thisexerciseteststhetypeofstructurewithwhichyoufeelmostcomfortable.Youwilllearnmoreaboutmechanisticandorganicstructuresthroughoutthischapter.Thehigheryourscore,themoreyouprefertoworkinamoretraditional,mechanistic,stablestructureandjobdesign.Theloweryourscore,

themoreyouprefertoworkinamorecontemporary,organic,changingstructureandjobdesign.

Reviewyouranswers,knowingthattheopeningstatementappliestomechanisticandtheoppositestatement(after“ratherthan”)appliestoorganicorganizationalstructureandjobdesign.Mostfirmsandpeoplepreferorganizationssomewherebetweenthetwoextremes.

TheJobCharacteristicsModel(JCM)Thejobcharacteristicsmodel(JCM)providesaconceptualframeworkfordesigningorenrichingjobsbasedoncorejobcharacteristics.22UseoftheJCMimprovesemployeemotivationandjobsatisfaction,23anditcanincreaseperformance.24AsExhibit4-3illustrates,usersoftheJCMfocusoncorejobdimensions,thepsychologicalstatesofemployees,andthestrengthofemployees’needforgrowthtoimproveemployeemotivation,performance,andjobsatisfactionandreducesabsenteeismandjobturnover.ResearchsupportstheideathatuseoftheJCMincreasesperformancebymeetingemployeeneedstogrowanddeveloponthejob.25

IntheJCM,thefivecorejobcharacteristicscanbefine-tunedtoimprovetheoutcomesofajobintermsofemployees’productivityand

theirqualityofworkinglife:

1. Skillvarietyisthenumberofdiversetasksthatmakeupajobandthenumberofskillsusedtoperformthejob.

2. Taskidentityisthedegreetowhichanemployeeperformsawholeidentifiabletask.Forexample,doestheemployeeputtogetheranentiretelevisionorjustplacethescreenintheset?

3. Tasksignificanceisanemployee’sperceptionoftheimportanceofthetasktoothers—theorganization,thedepartment,coworkers,and/orcustomers.

4. Autonomyisthedegreetowhichtheemployeehasdiscretiontomakedecisionsinplanning,organizing,andcontrollingthetaskperformed.

5. Feedbackistheextenttowhichemployeesfindouthowwelltheyperformtheirtasks.

Notethatifemployeesarenotinterestedinenrichingtheirjobs,thejobcharacteristics

modelwillfail.

Thefirstthreeofthecorejobcharacteristicsleadcollectivelytothepsychologicalstate(inthesecondcolumnofExhibit4-3)ofexperiencedmeaningfulnessofworktoprovideworkerswithavarietyofthingstodo.Iftheycanidentifywhatitisthattheyareaccomplishing,andiftheythinkthattheirjobisasignificantendeavor,thentheywillthinkthattheirworkhasmeaningandthusbemorelikelytostayinthejobanddoitwell.

Thecorecharacteristicofautonomyleadstothepsychologicalstateofexperiencedresponsibilityforoutcomes.Ifwegivepeopletheabilitytomakesomedecisionsontheirown,itislikelythattheywillfeelmoreresponsiblefortheoutcomeofthedecisionsthattheymake.

Finally,feedbackleadstothepsychologicalstateofknowledgeofresults.However,itisnottheknowledgeoftheresultitselfthatmatters.Rememberthatthesecondcolumnis

psychologicalstates!Itisthepsychologicalfeelingthatwegetfromknowingtheresultsthatcreatethestateof,forlackofabetterterm,satisfactionwiththeresultsofourwork.

Exhibit4-3TheJobCharacteristicsModel(JCM)

Allofthepsychologicalstatescollectivelyleadtoalloftheoutcomesnotedontherightsideofthediagram.Itisaninterestinglist.Ifthejobisdesignedcorrectly,themodelsaysthattheworkerwillquitepossiblybemoremotivatedandmoreproductiveandhavehigherjobsatisfactionwhilealsobeinglesslikelytobeabsentorleavetheorganization.

TheuseoftheJCMisevenmorecriticalformotivatingyoungmillennials(thanolderworkers)thatarelookingformeaningintheirwork;theydon’twant,andwillleave,boringjobs.26

LO4-4Identifyandbrieflydescribethecomponentsofthejobcharacteristicsmodel(JCM).

Perceptual-motorjobdesignDesigningjobswithtasksthatremainwithintheworker’snormalmentalcapabilitiesandlimitations

MotivationaljobdesignDesigningjobsbyfocusingonthejobcharacteristicsthataffectthepsychologicalmeaningandmotivationalpotentialofthejob;thisapproachviewsattitudinalvariablesasthemostimportantoutcomesofjobdesign

JobcharacteristicsmodelAconceptualframeworkfordesigningorenrichingjobsbasedoncorejobcharacteristics

4-2ApplyingTheConcept

JobDesignReviewthelistofjobdesigntechniquesbelowandwritethelettercorrespondingtoeachtechniquebeforethestatementexemplifyingthattechnique.

1. mechanistic2. organic3. biological4. perceptual-motor5. motivational

_____5.WearerequiredtowearthesespecialbeltswhenweunloadthetrucksatTarget._____6.Wehaveaddedenoughemployeessothatwearebreakingthehumanresourcesfunctionintoitsowndepartment.Jackwillnowfocusoncompensationandbenefits,andJillwillconductthetraining.Latoyawillberesponsibleforsafetyandsecurity._____7.HereatIntel,wearegoingtochangeyourjobsothatyoucandevelopnewskillsandcompleteentirejobsbyyourself.We’redoingthistomakethejobmoremeaningfultoyouandsothatyoucandothejobthewayyouwanttoandknowhowyouaredoing._____8.IjustfinishedtheCaseyproject.WhatshouldIdonow?

_____9.Thisisthe30thcustomerI’vecheckedoutatStop&Shopsupermarkettoday.

DesigningMotivationalJobsAvarietyofdifferentjobtoolscanbeusedindifferentcircumstancestodesignorredesignmotivationaljobs.Ourtoolsincludejobsimplification,jobexpansion,andflexiblework.Thesearediscussednext.

JobSimplificationThebestadvicegolferTigerWoodsevergotwastosimplify.27Jobsimplificationistheprocessofeliminatingorcombiningtasksand/orchangingtheworksequencetoimproveperformance.Jobsimplificationmakesjobsmorespecialized.Jobsimplificationbreaksajobdownintostepsusingaflowchart,andthenemployeesanalyzethestepstoseeiftheycandothefollowing:

Eliminate.Doesthetask,ordopartsofit,havetobedoneatall?Ifnot,don’twastetimeonthem.Combine.Doingsimilarthingstogetheroftensavestime.Makeonetriptothemailroomattheendofthedayinsteadofseveralthroughouttheday.Changesequence.Often,achangeintheorderofdoingthings,ordesigningnewsystems,resultsinalowertotaltimespentontasks.

Worksimplificationmaybemotivationalwhenanindividualisoverwhelmedbyajobbecauseitcanallowthatemployeetounderstandthejobbetter,andthejobthereforebecomesmoremotivational.However,wedon’twanttosimplifytheprocesstothepointwheretheworkerbecomesboredwiththejob.Sowehavetostriketherightbalance.28

LO4-5Explainthethreemajortoolsformotivationaljobdesign.

WORKAPPLICATION4-5Giveoneexampleofhowajobyouholdorhaveheldcouldbesimplified.Explainhowonecouldeliminate,combine,orchangethesequenceofjobtasks.

JobExpansionJobexpansionallowsustofocusonmakingtheworkmorevaried.29Jobexpansionistheprocessofmakingjobsbroader,withlessrepetition.Jobscanbeexpandedthroughrotation,enlargement,andenrichment.

JobRotation.Jobrotationinvolvesperformingdifferentjobsinsomesequence,eachoneforasetperiodoftime.Manyorganizationsdevelopconceptualskillsinmanagementtraineesbyrotatingthemthroughjobsinvariousdepartments.AfewofthecompaniesthathaveusedjobrotationareBethlehemSteel,Target,Ford,Motorola,NationalSteel,andPrudentialInsurance.

WORKAPPLICATION4-6Giveoneexampleofhowajobyouholdorhaveheldcanbeenlarged.Explainhowthejobcanusejobrotation,enlargement,orenrichment.

JobsimplificationTheprocessofeliminatingorcombiningtasksand/orchangingtheworksequencetoimproveperformance

JobexpansionTheprocessofmakingjobsbroader,withlessrepetition.Jobscanbeexpandedthroughrotation,enlargement,andenrichment

JobEnlargement.Jobenlargementinvolvesaddingtasks—atthesamelevel—tobroadenvariety.Bybroadeningthenumberoftasksforaworker,weareaffectingthecorejobcharacteristicofskillvariety,andwemaybehelpingwithtaskidentityandsignificance.Unfortunately,

addingmoresimilartaskstoanemployee’sjobisoftennotagreatmotivator.AT&T,Chrysler,GM,IBM,andMaytagareafewofthecompaniesthathaveusedjobenlargement.

JobEnrichment.Jobenrichmentistheprocessofbuildingmotivatorsintothejobitselftomakeitmoreinterestingandchallenging,frequentlythroughincreasingautonomy.30Asimplewaytoenrichjobsisforthemanagertodelegatemoreauthoritytoemployees31bymakingthemmoreautonomous(anothercorejobcharacteristic)tomakesomedecisionsthatwerereservedformanagement.32AnenrichedjobmayalsohelptheemployeewiththeJCMcharacteristicsoftaskidentityandsignificanceinsomecases.Maytag,Monsanto,Motorola,andTravelersInsurancehavesuccessfullyusedjobenrichment.

Targetemployeeswillrotatethroughanumberofpositionsonthejob,givingthemarangeofskillsandexperiences.

©ANDREWNELLES/Reuters/Corbis

JobDesignforFlexibilityInadditiontotheprimarytoolsfordesigningandredesigningspecificjobsabove,wehaveanothersetoftoolsthatcanbeusedintheworkplacetoimprovemotivationinentiregroupsofjobsormaybeeventheentireworkforce.33Thesetoolsincludeflextime,jobsharing,telecommuting,andcompressedworkweeks.34

Flextimeallowsustoprovideworkerswithaflexiblesetofworkhours.Weusuallycreateasetofcorehourswhereeveryoneisatwork,bandwidthorworkhoursavailable,andthenasetofflexhourswhenpeoplecanbeatworkorcantaketimeoff.Individualshavetheopportunitytomodifytheirschedulewithintheworkhoursaslongastheycompleteasetnumberofhoursperdayorweekatwork.Flextimehasthepotentialtomotivateworkersbecauseitallowsthemmuchgreaterautonomywithregardtotheirschedule.Take

alookatExhibit4-5forasampleflextimeschedule.

Injobsharing(alsocalledworksharing)weallowtwo(ormore)peopletoshareonewholejob,includingtheworkloadandanybenefitsthatareassociatedwiththatjob.Jobsharingagainallowsgreaterautonomyintheindividual’sjob.

Exhibit4-4JobDesignOptions,Processes,andtheJCM

Exhibit4-5SampleFlextimeWorkSchedule35

Telecommutingallowsworkerstoworkfromalocationotherthanthecorporateoffice,usuallyfromhome.Telecommutingisanotherformofautonomy,butweneedtomakesurethattelecommutersgetopportunitiestoengagewithcoworkersandreceivefeedbackconcerningtheirwork,sinceanabsenceoftheseopportunitiesaretwoofthemajordrawbackstotelecommuting.36

Finally,acompressedworkweekmeansthatwetakethenormal5-day,40-hourworkweekandcompressitdowntolessthan5days.Onecommonexamplewouldbea4-day,10-hourperdayworkweek.

Eachoftheseadditionaltoolsallowsusto

designgreaterflexibilityintoourorganizationinonewayoranother.Asaresult,inmanycases,wecanimprovebothproductivityandjobsatisfactionandinturnlowerratesofabsenteeismandturnover—awin-winfortheorganizationandtheemployeewithinit.

WORKAPPLICATION4-7Giveoneexampleofhowanorganization,preferablyoneyouworkfororhaveworkedfor,usesanyoftheflexiblejobdesigntools.Statewhichoneisused,explainhowitisimplemented,anddiscusshowitaffectsemployeemotivation.

4-3ApplyingTheConcept

DesigningMotivationalJobsReviewthefollowingjobdesigntechniquesandwritethelettercorrespondingtoeachtechniquebeforethestatementexemplifyingit.

1. jobsimplification2. jobrotation3. jobenlargement4. jobenrichment5. workteams

_____10.Wouldyoulikemorejobvariety?Ifso,Icanaddthreenewtaskstoyourjobtomakeitlessrepetitive._____11.I’mgoingtoteachyoutobalancetheaccountssothatyoucandoitforCarloswhileheisonvacation._____12.Wouldyoulikemetodelegateanewtasktoyoutomakeyourjobmorechallenging?_____13.Domino’sPizzastoppedrequiringcustomerstosignacreditcardslipforunder$25._____14.I’mcreatinganewcrewwiththesevenofyou.Therewillnotbeaformalmanager;youwillsharethatresponsibility.Fromnowon,youdon’thaveamanager.So

sharethejobtogether.

HRForecastingHRforecastingandlaborrequirementsplanningareatthecoreofdeterminingourfutureemploymentneeds.37Throughforecasting,wewillmakedeterminations—basedonbothquantitativeandqualitativeinformation—ofwhattypesofjobsandhowmanyofeachtypewewillneedtofilloveraparticularperiodoftime.Ifwefailtogetitright,wewon’tgettherightpeopleinplaceatthetimewhentheyareneededandwillalwaysbechasingturnover,whichcauseslowerorganizationalproductivity.HRforecastingidentifiestheestimatedsupplyanddemandforthedifferenttypesofhumanresourcesintheorganizationoversomefutureperiod,basedonanalysisofpastandpresentdemand.

Beforewegetintoforecasting,weneedtounderstandacoupleofterms.Youalwaysneedtomakesurethatanyanalyticalprocessyouuseincludesvalidandreliablemeasures.

Ifyoudon’t,thenyourresultswillalwaysbesuspectandwillgenerallybeofverylittlevalue.Sowhatdothesetermsmean?

Reliability.Reliabilityidentifieshowconsistentaparticularmeasureis.Inotherwords,doesthemeasuregiveasimilarresulteverytimeitisused?Ifitdoes,thenitisprobablyreliable.Forinstance,ifyougiveatestofcomprehensiononasetofcompanytermsafterteachingthosetermsinthesamemannertoseveralgroupsofemployees,andiftheresultsineachgrouparesimilar,thenthetestismostlikelyreliable.

LO4-6DiscussthethreemostcommonquantitativeHRforecastingmethods.

SHRMM:2

ForecastingRequirementsandAvailabilities,GapAnalysis,etc.

SHRME:7

HRPlanning(SkillInventoriesandSupply/DemandForecasting)

Validity.Validityreferstowhetherornotwemeasuredwhatwethoughtwemeasured.Itisnotaseasyasitsoundsforsubjectivemeasures.Forexample,doesamotivationaltestactually,andaccurately,measurethelevelofmotivation?Ifwedon’tmeasurewhatwemeanttomeasure,ourtestwasnotvalid.

Also,ameasurecanbereliablebutnotvalid,butitcan’tbevalidifitisnotreliable.Forexample,ifyousteponalow-qualityhomescaleandweigh175,getoffandonagainseveraltimes,andweigh175everytime,thenthescaleisreliable.However,ifyougotoa

high-qualityscaleandweigh180repeatedly,thenthemeasurementsyougotfromthehomescalearereliablebutnotvalid.Soremembervalidityandreliabilityasyoudecideonthetoolsthatyouaregoingtouseintheforecastingprocess.

ForecastingMethodsForecastingshouldbecompletedintwodistinctsteps.First,wecompleteaquantitativeanalysisofourworkforceusingoneormoreofseveralmethods,andthenweadjusttheresultsofthequantitative(math)analysisusingqualitativemethods.Experienceisneededwhenanalyzingsituationsthatareuniqueordifferentfromwhathashappenedinourbusinessenvironmentinthepast,andqualitativeanalysislooksatthedifferencesbetweenthe“historical”andthe“now.”Let’sdefineeachtype.

QuantitativeForecasting.Aquantitativeforecastutilizesmathematicstoforecastfutureeventsbasedonhistoricaldata.Threecommonquantitativemethodsofforecastingaretrendanalysis,ratioanalysis,andregressionanalysis.38Let’stakeaquick

lookateachmethodinExhibit4-6.

Trendanalysisisaprocessofreviewinghistoricalitemssuchasrevenuesandrelatingchangesinthoseitemstosomebusinessfactortoformapredictivechart.Forexample,wecouldlookathistoricalrevenuesandrelatethoserevenuevolumestothenumberofpeopleintheorganizationforeachyear,oralternatively,wecouldanalyzehistoricalproductionlevelsandrelatethoselevelstothenumberofpeopleusedtoaccomplishthoselevelsofproduction.Eitherofthesewouldgiveusahistoricaltrendthatwecouldthenextendintothefuturetopredictthenumberofpeoplethatwouldberequiredforaparticularsalesorproductionlevel.39

Ratioanalysisistheprocessofreviewinghistoricaldataandcalculatingspecificproportionsbetweenabusinessfactor(suchasproduction)andthenumberofemployeesneeded.Itgenerallygivesusverysimilarresultstotrendanalysis,butitshouldbeabitmoreprecisebecausewearecomputingan

exactvaluefortheratio.

Regressionanalysisisastatisticaltechniquethatidentifiestherelationshipbetweenaseriesofvariabledatapointsforuseinforecastingfuturevariables.Wecanusestatisticalsoftwaretocreatetheregressiondiagram(mostHRISincludethiscapability).Thenitisjustaprocessoflookingatthevaluesalongthelineandapplyingthemtoyourcompany’ssituationinagivenyear.

SHRMG:13

Forecasting

HRforecasting Identifyingtheestimatedsupplyanddemandforthedifferenttypesofhumanresourcesintheorganizationoversomefutureperiod,basedonanalysisofpastandpresentdemand

QuantitativeforecastUtilizingmathematicstoforecastfutureeventsbasedonhistoricaldata

TrendanalysisAprocessofreviewinghistoricalitemssuchasrevenuesandrelatingchangesinthoseitemstosomebusinessfactortoformapredictivechart

RatioanalysisTheprocessofreviewinghistoricaldataandcalculatingspecificproportionsbetweenabusinessfactor(suchasproduction)andthenumberofemployeesneeded

RegressionanalysisAstatisticaltechniquethatidentifiestherelationshipbetweenaseriesofvariabledatapointsforuseinforecastingfuturevariables

SHRMG:10

QuantitativeAnalysis

J:12

TrendsandForecastinginHR

G:5

TrendandRatioAnalysisProjections

G:12

AnalyzingandInterpretingMetrics

QualitativeForecasting.Qualitativeforecastingistheuseofnonquantitativemethodstoforecastthefuture,usuallybasedontheknowledgeofapoolofexpertsinasubjectoranindustry.Weprovideourgroupofexpertswiththequantitativepredictionsthatwehavecreatedandaskfor

theirassessmentofthedata,takingintoaccountcircumstanceswithinourindustryandthegeneraleconomicclimatewhilecomparingthepresentsituationwiththehistoricalenvironmentonwhichthequantitativeevaluationsarebased.Theexpertswillthencometoaconsensusabouthowtoadjustthequantitativedatafortoday’senvironment.

Weneedtousebothquantitativeandqualitativeanalysistogetgoodforecastsforthefutureneedsoftheorganizationanditshumanresources.Wewilllookatbothforecastingmethodsandidentifywhetherweexpecttohaveasurplusorashortageofpeopleintheorganizationoverthenextfewyears.Morelikely,wewillfindthatwewillhaveasurplusofsometypesofpeopleandashortageofothers.Regardlessofthesituation,onceweknowwhattoexpect,wecansetupprocedurestocorrecttheexpectedproblem.

4-4ApplyingTheConcept

QuantitativeMethodsCompleteeachproblembelow:

_____15.TurntotheRegressionAnalysissectionofExhibit4-6.Assumethatin2012,youexpectarecessionandrevenuestodropto$24MM.Aroundhowmanyemployeeswillyouneed?

1. 1602. 1803. 2104. 230

_____16.Youhave253employees.Overthepastyear,therewere26absences.Whatistheapproximatepercentageandratioofabsenteeism?

1. 9.7%,1–102. 10%,1–103. 10%,1–1004. 12%,1–12

_____17.Youhave1,215employees.Overthepastyear,298leftthefirm.Whatistheapproximatepercentageandratioofturnover?

1. 4%,1–202. 40%,4–103. 22%,22–1004. 25%,1–4

_____18.TurntotheTrendAnalysis

sectionofExhibit4-6.Assumethatin2012,youexpectrevenuestobe$35MM.Aroundhowmanyemployeeswillyouneed?

1. 2102. 2303. 2504. 270

_____19.TurntotheRatioAnalysissectionofExhibit4-6.Assumethatin2015,youexpecttheproductionleveltoincreaseto$22,000,000.Aroundhowmanyemployeeswillyouneed,andhowmanynewworkersdoyouneedtoadd?

1. 2and112. 73and123. 74and134. 75and14

ReconcilingInternalLaborSupplyandDemandAftercompletionofthelaborrequirementsplanningprocess,weendupwitheitheranexpectedshortageorasurplusofpeopleineachtypeofjobintheorganization.Externaljobsupplyanddemandaffectthefrequencywithwhichpeopleleavetheirjobs,andhighturnovernegativelyaffectsorganizationalperformance.40Therefore,balancingoursupplyanddemandforlaboraffectsourfirm’sproductivity.Wehavetofigureouthowtomakesupplymatchupwithourexpecteddemand.

Regardlessofwhetherwehaveashortageorasurplus,wehavetoattempttogettherightnumbersofpeoplewiththerightskillsetsintoourorganizationattherighttime.Whatareouroptionstoaccomplishthis,andhowdoeseachoptionaffectthecompanyanditsworkforce?

Exhibit4-6QuantitativeForecastingAnalysis

OptionsforaLaborSurplusIfwearepredictingasurplusofpeoplegoingintothefuture,whatcanwedoaboutit?Wecan’tusuallyjusthangontoemployeesthataren’tneeded,becauseitistooexpensive.However,wedon’tnecessarilyhavetogetridofalargenumberofemployees,either.Howwehandlethesituationwilldependonhowsoonweareabletopredictthattherewillbeasurplus,anditwillalsodependonourstrategy,values,andphilosophy.Wehavetounderstandtheconsequencesofeachoptionandchoosewisely.

Acompanymaychoosetodownsize,orlayoffemployees,iftheyfacealaborsurplus.Thismeanstheycanterminateagroupofemployeeswithlittlewarningorjustification.

©iStockphoto.com/MarcusPhoto1

DownsizingandLayoffs.Ourfirstoptionmaybealayoff,especiallyifwehavelargenumbersofsurpluspeople.A

layoffisaprocessofterminatingagroupofemployees,usuallyduetosomebusinessdownturnorperhapsatechnologicalchange,withintenttoimproveorganizationalefficiencyandeffectiveness.Inalayoff,wearegenerallyallowedtoterminatetheemploymentofagroupofindividualswithverylittleadvancewarning,andweusuallydon’thavetoprovideanydisciplinaryorotherjustificationforwhatwearedoing.WemayhavetocomplywiththeWorkerAdjustmentandRetrainingNotificationAct(WARNAct),whichwewilldiscussinsomedetailinChapter9,butotherthanthat,wehavefewdocumentationneedsotherthanensuringthatthereisnoillegaldiscriminationinalayoffevent.41Wedohavetodocumentthemethodbywhichwedeterminedwhoshouldbeinthelayoff,anditwouldbewisenottobearbitraryinourselectionofindividuals.

Themostvaluableresultofalayoffisthattheresultingsavingsareimmediatelyaddedtobottom-linecorporateperformance.42

However,layoffscreatemanypotentialproblems,includingloweremployeemoraleandjobsatisfaction.43Soweendupwithalotofstressissuesinlayoffs,andthesecreateproblemsfortheorganization.

LO4-7Namethesevenmajoroptionsformanagingalaborsurplusandthesevenoptionsforovercomingalaborshortage.

Qualitativeforecasting Theuseofnonquantitativemethodstoforecastthefuture,usuallybasedontheknowledgeofapoolofexpertsinasubjectoranindustry

SHRMM:6

LaborSupplyandDemand

S:1

EmploymentDownsizing

S:5

WhenDownsizingIstheAnswer

S:9

ApproachestoReducingStaffSize

M:1

Downsizing/Rightsizing

S:13

ImportanceofFocusingonIndividualJobsvs.IndividualStaffMembers

S:14

Layoffs

S:4

WhyDownsizingHappens

PayReduction,WorkSharing,NaturalAttrition,HiringFreezes,Retraining,andTransfers.Asecondoptionforcuttingalaborsurplusisapayreductionforallorpartoftheworkforce.Supplyanddemandforvarioustypesoflabordrivethemarketvalueofthepeoplewhoprovidethatlabor.Ifthereisanoversupplyofpeopleinaparticularfield,orifnewtechnologyhasmadethejobeasier,thenthoseemployeesmaynotbeworthasmuchastheywere5or10yearsago.Inothercases,economicconditionsmaydemandacutinorganizationalexpenses,andlaboristhebiggestorganizationalexpenseinmanycompanies.44 Again,thisoptioncanbeaccomplishedfairlyquickly,butitcan

decreaseemployeemoraleorjobsatisfaction.

Athirdoptionforloweringlaborcostswithoutterminatingemployeesissomeformofjob-(orwork-)sharingarrangement.Wemaycutthehoursavailabletoeachworkerbecausefewerjobsareavailableinthecompany,butinsteadofcuttingworkers,wemaysplitonejobupamongmorethanoneworker.Thisway,nobodyislaidoff.However,alloftheworkerssuffertosomeextentbecauseofadecreaseinincome.Thereiscertainlysomesufferingintheworkforceduetoareductioninincome,butnobodylosesanentirepaycheck.Plus,whenthefirmcomesoutofarecession,italreadyhasenoughskilledworkerstomeettheincreaseinbusiness.

Next,wehavetheoptiontoallownaturalattritiontolowerorganizationalnumberswithouttheneedforalayofforpayreduction.Wecanjustallowpositionstostayunfilledasturnoveroccurs.Thisoption,alongwiththeslightlymorestringentoptionofahiring

freeze,causesournumberofemployeestodropslowly.Therefore,itcan’tbeusedinasituationwherespeedinreducingexpensesiscritical,butifwehavedoneourjobforecasting,wemayhaveenoughtimeforthisoptiontoworkforuswithoutputtingmassivestressonourworkforce.

Retrainingworkersandtransferringthemfromonejobtoanothermaybeoptionsinsomecircumstances.However,thisoptionwillonlyworkifwehavetoomanyemployeesinonetypeofjobandtoofewinanother.Iftherearenopositionswherewehaveashortage,retrainingworkerswillnotwork.Again,theprocessisalittleslowduetothefactthatthepersonhastoberetrainedinanewfield.Butifwehaveagoodworkerwhoiswillingtotryanewjob,andifapositionisavailable,thenusingthisoptioncanallowustoretainthatgoodemployee.

LayoffAprocessofterminatingagroupofemployees,usuallyduetosomebusinessdownturnorperhapsatechnologicalchange,withintentto

improveorganizationalefficiencyandeffectiveness

SHRMS:8

ConsequencesofEmploymentDownsizing

S:2

AlternativestoEmploymentDownsizing

S:7

AlternativestoDownsizing

EarlyRetirement.Thelastoptionthatwewilldiscusshereisearlyretirement.Earlyretirementcanbeavaluableoptioninsomecases.However,therecanbemanypitfallstousingearlyretirementtoreduceourworkforce.45Inanearlyretirementoffer,employeesaregiventhechoiceofleavingthecompanybeforetheywouldordinarilydoso(reachingthe“normal”retirementageof65,forinstance),

andinexchangeforleaving,theemployeewillreceivebenefitsofsometypefromtheorganization.

Therearesomegoodreasonstouseearlyretirementasanoptiontoreduceanemployeesurplus,butitisaslowmethodofgettingridofpeople,andwehavetobecarefulinplanningforandofferingearlyretirements.Problemswithearlyretirementmayincludetoomanyortoofewpeopletakingtheoffer,ortheperceptionofbeingforcedoutofworkduetoage,amongotherissues.46

Inasurplussituation,wewanttousetheoptionsthatwediscussedinthissectionfromthebottomup—startingwiththingslikeearlyretirementsandattrition,becausetheyaretheleastdisruptivetotheworkforceandallowustomaintainmotivationandjobsatisfactionlevelsmuchbetterthanthingslikelayoffsandpayreductions.Thiswillprovideuswiththebestlong-termresults.

4-1Ethicaldilemma:whatwouldyoudo?Asfirmsstruggletocompeteintheglobaleconomy,manyhavedownsized,especiallysincethelastrecession.Insomefirms,thepositionsformerlyheldbyfull-timeemployeesarefilledbypart-timeworkers.Usingpart-timeemployeessavescompaniesmoneybecausesuchemployeesdonotreceivemanybenefits(e.g.healthinsurance)incontrasttofull-timeemployees.Walmartisknownformaintainingaveryhighratioofpart-timetofull-timeemployeesasawayofkeepingcostsdown.Walmart’spolicyofusingmostlypart-timeworkersatminimumornearminimumwageisoneofthereasonsthechaincanofferlowerprices.

1. Isdownsizingethicalandsociallyresponsible?

2. Isusingpart-timeemployeesratherthanfull-timeonesethicallyandsociallyresponsible?

3. Wouldyoubewillingtopayhigherpricesatstores,suchasWalmart,sothatmorefull-timeworkerscouldreplacepart-timeworkers?

OptionsforaLaborShortageWhatifourforecastsshowanexpectedshortage?Whatweneedtoanalyzehereishowfastwecansolvetheproblem,butalsohowquicklywecanlowerournumberofemployeesagainifweneedto.Thebestoptionsherearemethodsthatarereallyfastinsolvingtheshortagebutthatalsocanbereversedquicklyifasurplusofemployeesstartstotakeform.Asopposedtothesurplussituationinthelastsection,wewanttoworkherefromthefirstoptionsdowntothebottom.Wewouldstartwithaskingfororrequiringovertimeandworkdownthelistaswehaveto,becauseagain,wewantthesmallestpossibledisruptiontoourworkforce.

Overtime.Ourfirstoption—thequickestandeasiestwaytofixapersonnelshortage—isovertime.Can

weforceyoutoworkovertime?Theanswerisyes.Nofederallawlimitstheoptiontorequireyoutoworka“reasonableamount”ofovertimeifyouareanemployeeoftheorganization.47Itworksuntilwegettothepointwherewestarttostressourpeopletoomuchbecausetheovertimebecomesexcessive.Whenstresslevelsgettoohigh,employees’workwillsuffer.48So,ifwestarttoseetoomuchstressamongourworkforce,weneedtodosomethingelsetorelieveourpersonnelshortage.Whatotheroptionsdowehave?

TemporaryorContractWorkers.Wecanfrequentlyusetemporaryorcontractworkerstoovercomeashort-termshortage,butweprobablydon’twanttousetemporaryworkersformorethanayearatmost,forreasonswewilldiscussshortly.Sincetherecessionof2008,manyemployersare

reluctanttohirefull-timeemployees,somanyfirmsareusingtempsandindependentcontractorswhoarenotlegallyemployedbythefirm.Atmorethan7%oftheworkforce,contractorsareanimportantandgrowingsegmentoftheUSpopulationandareincreasinglyprevalentthroughoutthedevelopedworld.49

Hiringtemporaryandcontractworkersisaquickfixforshortages.Andtheupsideisthathiringtemporaryhelpiseasytotakeback.Whenwenolongerneedthetemporaryworker,wejustreleasethatindividualbacktothetempagency.Forcontractworkers,weallowthecontracttolapseinordertoreleasethem.

However,therearesomecommonproblems.First,temporaryandcontractworkershavelittleornoloyaltytoyouandyourorganizationandmaynotbemotivatedtoworkhardbecausetheyaren’tstaying.50Theymaynotknowthespecificjobsinyourcompany,andtheygenerallydon’tknowthe

companyaswellasdoyourpermanentworkers.51Therecanalsosometimesbeaclashbetweentempworkersandpermanentemployees.

Tempsandcontractorscanalsocreatelegalproblemsfortheorganization.Ifanorganizationclassifiesaworkerasan“independentcontractor,”andexertssignificantcontrolovertheactionsofthatworker,thentheorganizationcanbejudgedguiltyofmisclassificationoftheworker.52Thatmeansthegovernmentcanpenalizetheorganizationfornotwithholdingemploymenttaxesonthe“employee”andnotpayingforrequiredbenefits,suchasworkers’compensationinsuranceandSocialSecuritywithholding.

Alongthesamelines,ifthecompanykeeps“temporary”employeeslongerthanayear,thenthoseworkersareprobablynotreallytemporary,andtheymaybeeligibleforfull-timeemploymentbenefits.Microsofthadtopayalmost$100milliontoabout10,000

workersthatithadclassifiedastemporary,53andFedExwascharged$319millioninunpaidemploymenttaxesandpenaltiesin2007becauseitmisclassifieddriversascontractworkers.54Thesearejustsomeoftheproblemswithtemporaryandcontractworkers.However,botharehighlyrevocableifwenolongerneedthem.

SHRMI:1

EmploymentRelationship:Employees,Contractors,TemporaryWorkers

RetrainingWorkers,Outsourcing,andTurnoverReduction.Theseoptionstakeabitlongertoputintoeffect.Wecanretrainworkers,butdoingsoisn’taquickresponsetoashortage.55Thisoptionisespeciallyusefulifwehaveasurplusofemployeessomewhereelse.Itismoderatelyfastandgenerallyeasytorevoke,becausetheworkersarestilltrainedtodotheiroldjobs.

Technologicalinnovationscanhelpacompanydealwithalaborshortagebyautomatingprocessesnormallyperformedbypeople.

©iStockphoto.com/ake1150sb

Outsourcingmaybeanotheroption.Wecanoutsourceanentirefunctionthatwecurrentlydoin-house.56Forinstance,wemightoutsourceallofourcomputer-programmingjobstoanoutsourcingcompanythatspecializesincomputerprogramming.This

optionismoderatelyfast,butitisnotextremelyfastbecausewehavetofindacompanythatcandothejob,researchthecompany,negotiatewithit,comeupwithacontract,andthenfinallygetittodotheworkwhenwewantitdone.

Nextisturnoverreduction.Iffewerpeoplevoluntarilyleavethanwehavepredicted,wecanreduceaprojectedshortage.57Buthowcanwereduceturnover?Wecanimproveworkingconditionsordootherthingsthatmaycauseourworkforcetobecomemoresatisfied.Wecanadjustworkhours(minimally),makebenefitspackagesbetter,andmaybemakeworkschedulesalittlebetter.Asdiscussed,wecanalsousejobdesignflexibility.Anyofthesemightcauseturnovertogodown.Butthiswon’thappenovernightbecauseittakessometimetochangepeople’sopinionsoftheorganization.Inaddition,thisoptionisverydifficulttotakebacklater.

SHRME:8

WorkManagement(WorkProcessesandOutsourcing)

NewHiresandTechnologicalInnovation.Ournextoptionistohirenewemployees.Butthisoptiontakesawhile,doesn’tit?Wehavetogothroughalongprocessofanalyzingthejob,recruitingpeople,selectingemployees,training,andworkingthroughalearningcurvetogetthemcapableofdoingthework.Wecanseethatthisisaslowmethodofresolvingaworkershortage.Itisalsonoteasytotakeback.

Finally,wemaybeabletoovercomeashortageofpersonnelthroughtechnologicalinnovation.Inotherwords,wemaybeableto

usemachinerythatcandothejobofpeople.Butagain,thisisaslowprocess,anditalsocannotberevoked.Wecan’tcreateorfindnewequipment,installit,andmakeitoperationalovernight.Also,ifwecreateagroupofrobotsthatarecapableofassemblingourproduct,wearenotgoingtostopusingthemandhireabunchofnewassemblyworkersagain.

TrendsandIssuesinHRMInthischapter ’strendsandissuessection,wewillreviewO*Netasajobanalysistoolinsomemoredetail.Secondly,wewillbriefyouonhoworganizationscan“thinksustainability”intheirworkflowanalysisandjobdesignprocesses.

O*NetasaToolforJobAnalysisHRmanagersneedlargeamountsofinformationtoanalyzethejobsintheirorganization.O*Netanditspartnersite,O*NetOnLine,provideinformationonnearly1,000jobsthatarecommontomanydifferentbusinessesandindustries.UsingtheO*NetToolkit(http://www.onetcenter.org/toolkit.html),managerscanlearnhowtheO*Netwebsiteworks.58Onceyouhavereviewedthetoolkit,youmightwanttotakealookatO*NetOnLineathttp://www.onetonline.org/.ThissiteprovidesasearchinterfacewiththeO*Netdatabase,usingavarietyofsearchoptions.59HRmanagerscanthenusethisinformationtocompleteajobanalysisandcreatejobdescriptionsandspecifications.Inaddition,theO*Netcharacteristicshelpinpricingeachjobtoprovideacompetitivecompensation

systemandlowervoluntaryturnoverinthecompany.SoO*Netisahandyfreeresourceforjobanalysis,jobdescriptions,andjobspecifications.

WorkflowsandJobDesignforSustainabilityAsinmanyotherareasofbusinesstoday,wecanfrequentlyincorporatesustainabilityinitiativesintoourworkdesignprocessestohelpuslimitoureffectontheenvironmentaswellassavetheorganizationtimeandmoney.Ifwedesignworkprocesseswithsustainabilityinmind,wecanidentifyprocesschangesthatwilllowerourimpactoncriticalnaturalresources.60Forexample,wemaybeabletouselesswaterinacoolingoperationbyusingamoreopendesignthatallowsforradiationalcoolinginsteadofusingwatertocoolthosesameparts.

Wecanalsoutilizesomeofourjobdesignoptions,suchastelecommuting,compressedworkweeks,andflextimeopportunities,tolowertheneedforourworkerstocommutetoandfromwork.61Wemayalsobeabletoloweroureffectontheenvironmentbyusing

atechniquecalledhoteling.62Hotelingoccurswhentheorganizationhaslessofficespacethanitwouldhaveinatraditionalofficearrangement(whereeveryonehasanassignedspace),soitusesasoftwareprogramthatallowsemployeesto“reserve”officespaceforparticularpartsoftheworkweekwhentheywillneedit.Hotelingcanlowerthetotalamountofofficespacethatweneed,andlowertheusageofallofthecommonservicesthatareneededforthatofficespace.Allittakesisalittlethoughttochangetheeffectofacompanyonitsenvironment.

Hoteling Whenanorganizationusesasoftwareprogramthatallowsemployeesto“reserve”officespaceforparticularpartsoftheworkweekwhentheywillneedit

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;

testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary4-1DescribetheprocessofworkflowanalysisandidentifywhyitisimportanttoHRM.

Westartourworkflowanalysisbydeterminingtheendresult.Onceweidentifytheresultweexpect,wecandeterminethestepsoractivitiesrequiredtocreatetheendresultthatwe’veidentified.Thisisbasicallyananalysisofthetasksthataregoingtohavetobeperformedinordertocreatetheoutputthatweexpect.Finally,wecanidentifytheinputsthataregoingtobenecessarytocarryoutthestepsandperformthetasks.Theinputsareknownasthe4Ms:machines(tools,equipment,andmachines),material(physicalresourcesusedinproduction),manpower(thepeopleneededinaparticularproductionprocess),and

money(thecapitalthatmustbespenttoperformourprocesses).

4-2Summarizethefourmajoroptionsavailableforthejobanalysisprocess.

Questionnairesaskquestionsthathelptoidentifythefunctionsthatareapartofaparticularjob,andthen,inmostcases,theyassignapointvaluetoeachofthosefunctions.Inthejobanalysisinterview,questionsareaskedverbally,usuallyoftheincumbent,andtheanswersarecompiledintoaprofileofthejob.Diarieshavetheworkersmaintainaworklog,ordiary,inwhichtheywritedownthetasksthattheyaccomplishastheygoabouttheirjob.Thislogbecomesthedocumentfromwhichwebuildthedescriptionofthejob.Wecanalsouseobservationoftheworkeratwork,whereanobservershadowstheworkerandlogstasksthatareperformedoveraperiodoftime.

4-3Discussthefourmajorapproaches

tojobdesign.Mechanisticjobdesignfocusesondesigningjobsaroundtheconceptsoftaskspecialization,skillsimplification,andrepetition.Biologicaljobdesignfocusesonminimizingthephysicalstrainontheworkerbystructuringthephysicalworkenvironmentaroundthewaythebodyworks.Perceptual-motorjobdesignattemptstomakesurethatworkersremainwithintheirnormalmentalcapabilitiesandlimitations.Motivationaljobdesignfocusesonthejobcharacteristicsthataffectpsychologicalmeaningandmotivationalpotential,anditviewsattitudinalvariablesasthemostimportantoutcomesofjobdesign.

4-4Identifyandbrieflydescribethecomponentsofthejobcharacteristicsmodel(JCM).

Thefivecorejobcharacteristicsincludeskillvariety,taskidentity,

tasksignificance,autonomy,andfeedback.Thefirstthreeleadcollectivelytothepsychologicalstateofexperiencedmeaningfulnessofwork,inwhichworkersthinkthattheirworkhasmeaning.Thefourthcorecharacteristicofautonomyleadstothepsychologicalstateofexperiencedresponsibilityforoutcomes.Finally,feedbackleadstothepsychologicalstateofknowledgeofresults—thepsychologicalfeelingthatwegetfromknowingtheresultsandthatinturncreatessatisfactionwiththeresultsofourwork.Allofthepsychologicalstatescollectivelyleadtotheoutcomes:motivation,performance,jobsatisfaction,absenteeism,andturnover.Thesecangoupordowndependingonthedesignofthejob.

4-5Explainthethreemajortoolsformotivationaljobdesign.

Jobsimplificationistheprocessof

eliminatingorcombiningtasksand/orchangingtheworksequencetoimproveperformance.Itmakesjobsmorespecialized.However,wemightmakethejoblessmotivationalifwesimplifytheworktothepointwheretheworkergetsbored.Jobexpansion,ontheotherhand,makesjobslessspecialized.Jobscanbeexpandedthroughrotation,enlargement,andenrichment.Flexibilityinjobdesignincludesflextime,jobsharing,telecommuting,andcompressedworkweeks,andallowsthemanagertousethesetoolstoincreaseworkermotivation.

4-6DiscussthethreemostcommonquantitativeHRforecastingmethods.

Trendanalysisallowsthecompanytolookathistoricaltrends—forinstance,whetheremploymentwentupordowninagivenyearandhowthenumberofemployeesrelatedtorevenueorproductivity—andmake

judgmentsfromthosetrends.Ratioanalysiscalculatesspecificvaluesbycomparingabusinessfactorwiththenumberofemployeesneeded.Regressionanalysisisastatisticaltechniqueinwhichweusearegressiondiagrammadefromhistoricaldatapointstopredictfutureneedspresentedwithay-andx-axis.

4-7Namethesevenmajoroptionsformanagingalaborsurplusandthesevenoptionsforovercomingalaborshortage.

Themajoroptionsformanagingsurplusinclude:alayoff,terminatingagroupofemployees;payreduction,whichlowerstherateofpayforgroupsofemployees;worksharing,wherewecuthoursavailabletoeachworker;naturalattrition,whereweloweremployeenumbersbynotrefillingjobswhenturnoveroccurs;ahiringfreeze,whereweallownaturalattrition,but

inaddition,wedon’tcreateanynewjobs,eveniftheyareneeded;retrainingandtransferringworkersfromonejobtoanother;andearlyretirement,whereemployeesaregiventhechoiceofleavingthecompanybeforetheywouldnormallyretire.Optionsforashortageinclude:overtime,ourbestoptionuntilwegettothepointwherewearestartingtostressourpeopletoomuch;ortemporaryworkerswhocanbeusedforshortperiods.Otheroptionsinclude:retrainedworkers,outsourcing,turnoverreduction,newhireemployees,ortechnologicalinnovation.

4-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermsbiologicaljobdesign,93hoteling,106HRforecasting,99jobanalysis,87jobcharacteristicsmodel,94jobdescription,88jobdesign,91jobexpansion,96jobsimplification,96jobspecification,88layoff,102mechanisticjobdesign,93motivationaljobdesign,94perceptual-motorjobdesign,94qualitativeforecasting,100quantitativeforecast,99ratioanalysis,99regressionanalysis,99trendanalysis,99workflowanalysis,86

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. _________isthetoolthatweusetoidentifywhathastobedonewithintheorganizationtoproduceaproductorservice.

2. _________istheprocessusedtoidentifytheworkperformedandtheworkingconditionsforeachofthejobswithinourorganizations.

3. _________identifiesthemajortasks,duties,andresponsibilitiesthatarecomponentsofajob.

4. _________identifiesthequalificationsofapersonwhoshouldbecapableofdoingthejobtasksnotedinthejobdescription.

5. _________istheprocessofidentifyingtasksthateachemployeeisresponsibleforcompletingaswellashowthosetaskswillbeaccomplished.

6. _________focusesondesigningjobsaroundtheconceptsoftaskspecialization,skillsimplification,andrepetition.

7. _________focusesonminimizingthephysicalstrainontheworkerbystructuringthephysicalworkenvironmentaroundthewaythebodyworks.

8. _________focusesondesigningjobsinwhichthetasksremainwithintheworker ’snormalmentalcapabilitiesandlimitations.

9. _________focusesonthejobcharacteristicsthataffectthepsychologicalmeaningandmotivationalpotential,anditviewsattitudinalvariablesasthemostimportantoutcomesofjobdesign.

10. _________providesaconceptualframeworkfordesigningorenrichingjobsbasedoncorejobcharacteristics.

11. _________istheprocessofeliminatingorcombiningtasksand/orchangingtheworksequencetoimproveperformance.

12. _________istheprocessofmakingjobsbroader,withlessrepetition.

13. _________identifiestheestimatedsupplyanddemandforthedifferenttypesofhumanresourcesintheorganizationoversomefutureperiod,basedonanalysisofpastandpresentdemand.

14. _________utilizesmathematicstoforecastfutureeventsbasedonhistoricaldata.

15. _________isaprocessofreviewinghistoricalitemssuchasrevenues,andrelatingthosechangestosomebusinessfactortoformapredictivechart.

16. _________istheprocessofreviewinghistoricaldataandcalculatingspecificproportionsbetweenabusinessfactor(suchasproduction)andthenumberofemployeesneeded.

17. _________isastatisticaltechniquethatidentifiestherelationshipbetweenaseriesofvariabledatapointsforuseinforecastingfuturevariables.

18. _________usesnonquantitativemethodstoforecastthefuture,usuallybasedon

theknowledgeofapoolofexpertsinasubjectoranindustry.

19. _________isaprocessofterminatingagroupofemployees,usuallyduetosomebusinessdownturnorperhapsatechnologicalchange,withintenttoimproveorganizationalefficiencyandeffectiveness.

20. _________occurswhentheorganizationhaslessofficespacethanitwouldinatraditionalofficearrangement(whereeveryonehasanassignedspace)andusesasoftwareprogramthatallowsemployeestoreserveofficespaceforparticularpartsoftheworkweekwhentheywillneedit.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Thinkofsomethingyoucouldmakeorbuild.Nowanalyzetheworkflowstomakethatitem,usingtheinformationinthebook.Don’tforgettoidentifywhatyouwouldneedineachcategoryofthe4Ms.

2. Thinkofajobthatyouhaveheldorthatwasheldbysomeoneyouknow.Ifyouweregoingtoanalyzethatjobusingoneofthemethodsinthebook,whichmethodwouldyouuseandwhy?

3. Canmorethanoneofthefourmainapproachestojobdesignbeusedatthesametimetodesignajob?Canyouprovideanexampleofhowthiscouldwork?

4. ArethereanysituationsinwhichyoumightdesignajobusingtheJCMandyetthejobwouldstillnotbemotivational?Whatcircumstancesmightcausethistohappen?

5. Doyouthinkthatusingflextime,telecommuting,jobsharing,orcompressedworkweeksisreallygoingtomotivateemployees?Whyorwhynot?

6. Haveyouseenjobsimplification,jobrotation,orjobexpansionbeingusedinyourworkplace?(Ifyouaren’tcurrentlyworking,useaworkplace

thatyouarefamiliarwith.)Diditworktomotivatetheemployees?Why?

7. Whichofthethreequantitativeforecastingmethodsdoyouthinkwouldgiveyouthemostaccurateforecast?Explainyourchoice.

8. Isalayoff,ordownsizing,everthebestoptiontoresolveaprojectedsurplusinanorganization?Justifyyouranswer.

9. Howmuchovertimeisreasonableinaweek?Howlongcanthecompanyexpectworkerstocontinuetoworkovertimebeforetheyseeemployeestresslevelsgettingsignificantlyhigherthannormal?

Case4-1GaugingEmploymentatHoneywellHoneywellisadiverse,differentiatedindustrialconglomeratewithsegmentssuchastransportationsystems,performancematerialsandtechnologies,aerospace,andautomationandcontrolsolutions,yetthecompanyisbestknownforitsthermostats.Accordingtothe2013Fortune500list,Honeywellranked78thoutofallUScompanies,witharevenueof$39billion.

In1999,HoneywellmergedwithAlliedSignalandPittwaybutencounteredproblemswhentheyrealizedthateachcompanypossesseditsownuniquecorporateculture.Duringthenextseveralyears,Honeywellfounditselfaddressingnewchallengeswhiletryingtoabsorbitsacquisitions.Forexample,environmental-relatedbusinessliabilitieshadneverbeenaddressedandnowrequiredrealattention,whilemanagersweredisinvestinginresearchanddevelopmentbecausetheirdivisionsshowedhigherprofits.Newproductdevelopmentceased.Honeywellalsoexperiencedhighturnoverinuppermanagement,havingthreedifferentCEOsin4years.63

Honeywell’smainfocusinthepastdecadehasbeenonresolvingtheseissuesbyfirstimplementingtheir“OneHoneywell”culture.Thisstrategyincreasedoverseassalesby10%whilealsohelpingthecompanybecome

moreawareofandresponsivetoitsenvironmentalresponsibilities.Investmentsinnewproductsandservicesincreasedwhileturnoverstartedtodecrease,withemployeesfillingmorethan85%ofthevacanciesintop-levelpositions.JustasHoneywellturnedthecornerin2008,theUnitedStatesenteredarecessionandHoneywell’sorderswerebeingcancelledorpostponed.Noneworderswerebeingplaced,andsalesweredecreasing.Asaresult,directcostsofproductionweredecreasingbecausethecompanysimplydidnotneedtopurchaserawmaterialstomakenewproducts.64

Inthemanufacturingindustry,thecostofpeoplecoversmorethan30%oftotalexpenses,andmostfirmsrespondedtotherecessionbyrestructuringtheirworkforcebyfiringthousandsofemployees.Cuttingcostsforproductionwasnotanoptionbecausealossofcustomersisamajorriskforthecompany;therefore,theonlyoptionleftwascuttingcoststhroughemployees.Honeywellknewthateventheworstrecessionsusuallylastabout12to18months,butthecompanywantedtobepreparedwhentheeconomystartedtoheal.

Withitsnewcultureinplace,Honeywelltookadifferentapproachthanitscompetitorsdid.Honeywellprojectedthepossibleimpactofeconomicrecoveryonitsbusiness,notingthatitwouldhavetorehiremanyoftheemployeesitwouldlayoffduringtherecession.Giventhisprojection,Honeywellthenfollowedadifferentmethodofrestructuringandletitsworkerstakefurloughs,thatis,temporaryunpaidleavesofabsence.Honeywellalsoknewthatfurloughswouldharmthe

moraleandloyaltyofitsemployees.Eventheemployeeswhostayedwouldbedistracted,thinkingthattheirownjobsmightbeatstake.Tobenefitfromfurloughs,Honeywelllimitedtheirusebyimplementingmorediligentperformancereviewsandavoidinghiringfornewpositions.

HoneywellCEODavidCotebelievedthatmostofhismanagersstilloverestimatedthesavingsfromlayoffsandunderestimatedhowdisruptivelayoffswouldbegiventhattheaverageemployeereceived6months’worthofseverancepay,meaningthatHoneywellwouldonlystartsavingmoney6monthsafterthefirmlaidoffanemployee.However,thevalueoftheemployees’contributionswasintangiblesincethefirmmightbelosingitsmostskilledemployees.TheresultsofkeepingthevaluableemployeeswerethatHoneywellbouncedbackquickerthanitscompetitorsdidaftertherecessionanditsbusinessincreasedataquickerpace.65

1. HowdoestheuseofHRforecastingreflectHoneywell’sstrategyandculture?

2. WhichquantitativeorqualitativemanpowerforecastingmethoddoyoubelieveHoneywellusedtodecidetomoveforwardwithfurloughsratherthanlayoffs?Explain.

3. WhatoptionsdidHoneywellusetoovercometheprojectedlaborsurplusduringtherecession?Werethereotheravailableoptions?

4. Comparedtolayoffs,doyouexpecttheimpactoffurloughstobehigherontheturnoverrateorlower?Explainyourreasoning.

5. Howmightjobanalysisandjobdesignminimize

theimpactoffurloughsonorganizationalperformanceandproductivity?Howdoeshotelingfitintothisscenario?

6. HowcouldCEOCoteusetrend/ratio/regressionanalysistosupporthiscontentionthatmostHoneywellmanagersoverestimatedtheirsavingsandunderestimatedhowdisruptivelayoffswouldbetothefirm’soperations?

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,LongIslandUniversitySchoolofBusiness,BrooklynCampus

SkillBuilder4-1JobAnalysis

ObjectiveTodevelopyourskillatcompletingajobanalysis;toimproveyourabilitytogetready

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—technical,business,andconceptualanddesignskills

2. SHRM2013CurriculumGuidebook—E:JobAnalysis/JobDesign

OverviewYouroutputistoarriveatschoolorwork.Yourinputs(4Ms)areeachandeverytaskyouperformuntilyouarriveatyourdestination.Throughyourjobanalysisflowchart,improvetheefficiencyofyourinputssoyoucangetmoredoneinlesstime,withbetterresults.

Step1.MakeaFlowchartListstep-by-stepexactlywhatyoudofromthetimeyougetup(orstartyourroutine)untilthetimeyoustartschoolorwork.Getuporstartearlier,say15minutes,togiveyoutimetocompleteyourflowchartwithoutmakingyoulate.BesuretonumbereachstepandlisteachactivityseparatelywithitsM(don’tjustsaygotothebathroom—listeachactivityinsequencewhileinthere).Forexample:

1.Getupat7:00—manpower2.Gotobathroom—manpower3.Takeshower—material4 .Dryhair—material...18.Drivecar—material19.Buycoffee—money20.Walkintoschoolat8:00—manpower

Step2.AnalyzetheFlowchartLaterintheday,whenyouhavetime,doajobsimplificationanalysisofyourflowchartofactivitiestodetermineifyoucandothefollowing:

—Eliminate:Areyoudoinganythingthatyoudon’tneedtodo?—Combine:Canyoumultitaskanysimpletasks,makefewertripstothebathroom,etc.?—ChangeSequence:Willyoubemoreefficientifyourearrangeyourflowchartoftasks?

3.DevelopaNewFlowchartBasedonyouranalysis,makeanewflowchartthateliminates,combines,andchangesthesequenceoftasksyouwillperformtogetreadymoreefficiently.

4.ChangeYourRoutineConsciouslyfollowthestepsofyournewflowchartuntilitbecomesyournewhabit.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

_______________________________________________________________________________________

_______________________________________________________________________________________

YourinstructormayaskyoutodothisSkillBuilderinclassinagroup.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

SkillBuilder4-2JobCharacteristicsModel(JCM)

ObjectiveTodevelopyourskillatimplementingtheJCM

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—technical,business,andconceptualanddesignskills

2. SHRM2013CurriculumGuidebook—E:JobAnalysis/JobDesign

PreparationSelectajobyouhavenoworhaveheldinthepast.UsingExhibit4-3:TheJobCharacteristicsModelandExhibit4-4:JobDesignOptions,Processes,andtheJCM,applytheseconceptstodoajobanalysisforyourjob.Besuretousetheexacttermsfromthetext.Thetwoexhibitsprovideagoodsummaryoftheprocessandterminology.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

_______________________________________________________________________________________

_______________________________________________________________________________________

Wouldyouchangeyourjobtomakeitmoremotivational?Ifso,howandwhy?

YourinstructormayaskyoutodothisSkillBuilderinclassinagroup.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

SkillBuilder4-3O*Net

ObjectiveTovisitO*NetandlearnhowtouseCareerExplorationToolsand/ortolearnmoreaboutajob.

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRManagementskills—technical,business,andconceptualanddesignskills

2. SHRM2013CurriculumGuidebook—E:JobAnalysis/JobDesign

PreparationTheinstructororstudentselectsoneorbothoptions:

1. Selectajobyouwouldliketolearnmoreabout,visithttp://www.onetonline.org,andsearchforthejob.Writeabriefreportidentifyingyourjobsearchandstatewhatyoulearnedaboutthejob.

2. Gotohttp://www.onetcenter.org.Clickthe“Products—CareerExplorationTools”link.Fromthedrop-downmenu,select“ComputerizedInterestProfile.”Intheoverview,clickeitherthefullO*NETInterestProfilerortheInterestProfilerShortForm.Click“ontheWeb.”ThentaketheInterestProfileandcompletetheself-assessmentasinstructedandgetyourresultsandprintthem.Writeabriefreportincludingyourresultsandidentifyingwhatyoulearnedaboutyourself.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

_______________________________________________________________________________________

_______________________________________________________________________________________

Yourinstructormayaskyoutodiscussyourresultsinagrouporasaclass.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

5RecruitingJobCandidates

©iStockphoto.com/asiseeit

ChapterOutlineTheRecruitingProcess

ExternalForcesActingonRecruitingEfforts

OrganizationalRecruitingConsiderations

WhatPoliciestoSetWhentoRecruitAlternativestoRecruitmentReachoftheRecruitingEffortSocialMediaRecruiting

InternalorExternalRecruiting?InternalRecruitingExternalRecruiting

ChallengesandConstraintsinRecruiting

BudgetaryConstraintsPolicyConstraintsandOrganizationalImageJobCharacteristicsandtheRealisticJobPreview(RJP)TheRecruiter–CandidateInteraction

EvaluationofRecruitingProgramsYieldRatioCostperHireTimeRequiredtoHireNewHireTurnoverNewHirePerformance

TrendsandIssuesinHRMTalentWarsGlobalKnowledgeWorkersasanOn-DemandWorkforce

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

5-1Describethemainexternalforcesactingonrecruitingefforts.PAGE1135-2Namethefivemainorganizationalrecruitingconsiderations.PAGE1155-3Identifythemajoradvantagesanddisadvantagesofbothinternalandexternalrecruiting.PAGE1165-4Summarizethemajorchallengesandconstraintsinvolvedintherecruitingprocess.PAGE1215-5Discussthebasicmethodsavailableforevaluatingtherecruitingprocess.PAGE1245-6DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE128

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindydescribesthedaythatAngietimidlyknockedatherdoorbeforeshecameintoheroffice.Angiesaid,“IknowIjuststartedherelastmonth,butI’mgivingyoumytwoweeks’notice.Ijustcan’tdothisanymore.”

“Whatseemstobetheproblem?”sheasked.

“Well,whenIacceptedthejobofqualityadministrativeassistant,Ineverexpectedtoactuallyhavetogototheunitstogatherinformationaspartofmywork.Beingaroundthepatientsmakesmeuncomfortable.”

Uh-oh.AngieandCindyjustexperiencedthefalloutfromaprocessbreakdownthatapparentlypreventedherfromgettingarealisticpreviewofherjobduties.Whydoesanhonestexchangeofinformationmatterwhenyouarerecruiting?Howdoesahighturnoverrateimpactyourcompany?ThefactorsyouneedtoconsiderasyouendeavortoattractandretainthebestqualifiedcandidatesarehighlightedinChapter5.

TheRecruitingProcessRecruitingistheprocessofcreatingareasonablepoolofqualifiedcandidatesforajobopening.Noticethatthisdefinitionidentifiesthefactthatweneedqualifiedapplicants.1Theprocessdoesn’tworkifthecandidatesweattractarenotqualifiedtodothework.Thus,agoodjobanalysis(Chapter4)isnecessarytohelpeveryoneinvolvedtoknowwhetheragivencandidateisaqualifiedmatchforagivenjobopening.

Thecostsassociatedwithrecruiting,selecting,andtrainingnewemployeesoftenadduptomorethan100%oftheirannualsalary,2soitisimportanttogetitrightthefirsttime.It’snotabouthowmanycandidateswecanattract,it’saboutfinding“qualified”recruits.Ifyouthinkaboutit,youwillrealizethatifyoufindtoomanyapplicants,itcoststheorganizationtoomuchtogothroughtheselectionprocess.Ontheotherhand,findingtoofewcandidates

allowsnorealselectionprocess.

Typically,agoodruleofthumbmightbetorecruitabout15to25qualifiedcandidatesforeachjobopening.That’sjustaruleofthumb,butitisprobablygoingtoallowareasonableapplicantpool.However,youmaygetmoreorlessifyoudon’ttargetyourrecruitingcorrectly.

Tofillanopening,potentialjobcandidatesmustgenerallybemadeawarethattheorganizationisseekingemployees.Theymustthenbepersuadedtoapplyforthejobs.InHRrecruiting,wewanttouseaseriesoftoolstoshowthecandidateswhytheymightwanttobecomeapartoftheorganization.Wewilldiscussthesetoolsaswegothroughtheremainderofthischapter.

ExternalForcesActingonRecruitingEffortsThinkaboutwhatishappeningaroundyourightnow.Istheunemploymentratehighorlow?Aretheregovernmentincentivestoincreasehiringoftheunemployed,orisgovernmentdoingverylittletoincreaseemployment?Istheavailablesupplyofpeoplewithadvancedskillsverylarge,oraretherenotenoughpeoplewithhigh-levelskillsetsavailabletocompanies?Generally,theexternalforcesactingonrecruitingfallintotwolargecategories:theavailablelabormarketandthesocialandlegalenvironment.

TheLaborMarket.Theavailabilityoftalenttofillourneedsdependsonseveralitemsinthelabormarket.3Thelabormarketistheexternalpoolofcandidatesfromwhichwedrawourrecruits.

LO5-1Describethemainexternalforcesactingonrecruitingefforts.

Recruiting Theprocessofcreatingareasonablepoolofqualifiedcandidatesforajobopening

SHRMI:2

ExternalInfluencesonStaffing:LaborMarkets,Unions,EconomicConditions,Technology

Supplyanddemandandtheunemploymentrate.First,wemustconsiderthesupplyanddemandfactorsinaparticularcategoryofjobs.Thisissueusuallytiesindirectlywiththeunemploymentrateinanarea.Everybusinessrecruitsprimarilyfromanidentifiablegeographicarea.Soweneedtoidentifyourrecruitingarea,whetherthatislocal,regional,national,orinternational,andthendeterminewhattheunemploymentrateisinthatarea.Ifunemploymentishigh,thejobofrecruitingisgenerallyeasierthanifunemploymentisverylow.

WORKAPPLICATION5-1Selectoneofyourjobsanddiscussthesupplyanddemandissues(theunemploymentrateandcompetitionbetweenemployers)thathadaneffectonyourjobsearch.

Competitors.Ifrecruitingcompetitionisverystrongforavailabletalentsuchasmechanicalengineers—forinstance,ifthereareasignificantnumberofcompetitorsandeachcompetitorneedsalargenumberofengineers—thenitwillbeamoredifficultrecruitingenvironment.4

SocialandLegalEnvironment.Thesocialenvironmentalsoaffectsourabilitytorecruitnewpeople.5Today,people

putmoreweighton“metime”andjobsatisfactionthantheydidinpastyears,andasaresult,candidateslookatthefirm’ssocialenvironmentwhendecidingwhetherornottoapplyforajobthere.Inmanycases,newemployeesalsoexpectahighlevelofbenefitsandgoodopportunitiesfortraininganddevelopment.6

Whenplanningtorecruitnewemployees,anorganizationneedstodecidehowitwillutilizesocialmediainrecruitmentefforts.

©iStockphoto.com/SeanShot

WealsohavetotakeintoaccountthelegalenvironmentandabidebyalloftheEEOlawsthatwediscussedinChapter3.Recallthatwemustavoidillegaldiscriminationinourrecruitingefforts.Therearealsolawsinsomesituationsthatlimitourabilitytolureemployeesawayfromcompetitorfirms.Inothercases,laboragreementsmaylimitourabilitytorecruit,oraunionmaybeabletoplacelimitsonourabilitytorecruitfromoutsideoftheunion’sranks.Manyotherfactors,suchasstatelaws,noncompeteagreements,andotherrequirementsmayalsolimitourabilitytorecruitinaparticularenvironment.

LabormarketTheexternalpoolofcandidatesfromwhichwedrawourrecruits

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

G.OutcomesMetricsandMeasurementsofHR

6.CalculatingandInterpretingYieldRatios

I.Staffing:RecruitmentandSelection(required)

2.Externalinfluencesonstaffing:labormarkets,unions,economicconditions,technology3.Externalrecruitment:recruiters,openvs.targetedrecruitment,recruitmentsources,applicantreactions,medium(electronic,advertisement),fraud/misrepresentation

OrganizationalRecruitingConsiderationsBasedonourknowledgeofthelabormarketandthelegalenvironment,wecanstarttoconsidertheinternalissuesthatcontrolourrecruitingprocesses.Wehavetosetrecruitingpoliciesinordertobeconsistent,inordertobefairandequitable,andsothatwecandefendourprocesseslegallyifitbecomesnecessary.So,whatdowehavetothinkabout,andinwhatlevelofdetail?

WhatPoliciestoSetWealwayshavetodeterminehowwearegoingtogothroughtherecruitingprocessbeforewestarttryingtorecruitnewmembersintoourworkforce.Thepoliciesthatwesetwilldetermineouractionsontheotherfourmajorrecruitingconsiderations.Amongotherthings,wehavetoanswerquestionsconcerningwhenwewillrecruitnewmembersintotheorganization,alternativestonewrecruits,wherewerecruit(local,national,global),andhowtoincorporatesocialmediaintoourefforts.Let’sdiscussthesefourprimaryitemswewillneedtoconsiderbeforetherecruitingprocessstarts.

LO5-2Namethefivemainorganizationalrecruitingconsiderations.

WORKAPPLICATION5-2Selectafuturejob(preferablyaftergraduation)anddescribeyoursocialexpectationswhenjobsearching.Whattypeoforganizationdoyouwanttoworkfor?Also,willtherebeanylegalrestrictionsonyourjobsearch?

WhentoRecruitYes!Werecruitwhenweneedsomeonetofillajob.Butit’snotthatsimple.Therearealternativestorecruitmenttomitigateaworkershortage,andwhichonewechoosedependsonabunchofdifferentfactors.Weneedtoidentifythepointsatwhichwewouldgenerallygothroughtheprocessofstartingandcarryingoutarecruitmentcampaign.Wedon’twanttogothroughalongrecruitingprocessandthenfigureoutthatwedidn’tneedto—wewouldjustbewastingtimeandmoney.

AlternativestoRecruitmentDowehaveaviableandfinanciallyfeasiblewaytosolveourshortageotherthanthroughrecruitment?Isthealternativelessexpensiveorbetterforourcircumstancesinsomeotherway?Alternativesmayincludeusingovertime,outsourcingsomework,orusingtemporaryorcontractworkersorotheroptionstomitigateashortage—atleasttemporarily,whicharecommonwithseasonalbusinesses.Weneedtoanalyzeeachoftheseoptionsbeforedecidingonnewhires,andweneedtocreateapolicyconcerningwheneachoftheseoptionsisuseful.

ReachoftheRecruitingEffortNext,weneedtoidentifyoureffectivelabormarket.Doweplantorecruitonlyfromlocalsources?Shouldweconsiderpeoplealloveraparticularregion(e.g.,themid-SouthorNewEngland)?Doweneedtorecruitnationallyorevenglobally?7Theanswer,again,is“Itdepends.”Canwefindtherightnumberandtypesofemployeesifweonlyrecruitlocally?Ifnot,wemaybeforcedtorecruitfromabroaderpooloftalent.Isthejobthatwearerecruitingforsospecializedthatweneedtorecruitfromallovertheworld?Wemustrememberthatitistime-consumingandexpensivetobringpeopletotheorganizationfromfarawaythough.Soweonlyexpandourgeographicrecruitingareawhenweneedto.

SocialMediaRecruitingManyfirmsarenowheavilyusingsocialmediasites,whichcanproviderecruiterswithmuchmorereachthantheyhadinthepast.8However,thisreachalsobringswithitsomesignificantissuesforthebusiness—suchashavingtoporeoverthousandsofrésumésinresponsetoasinglejobopening.Sotoavoidthisproblem,youhavetounderstandsocialmedia’sreachanduseitselectively,whetheryou’reajobseekerorarecruiter.Socialmediaprovidesanumberofvaluablerecruitingservices.First,itprovidesareachthatthecompanymaynotgetwithothermeanssuchasadvertisinginlocalnewspapersoronradioortelevision.Second,socialmediasiteslikeFacebookcanalsoprovidethecandidatewithinformationonourcompanyvaluesandculture.9Corporateprofileinformationcanhelpindividualsmakeabetterdecisionconcerningwhetherornottheywouldbecomfortableinourorganization,

whichinturnlowersthepossibilitythattheywilltakethejobandthenendupleavingwithinafewweeksormonths.Additionally,inmanycases,therecruiterortheindividualcandidatehasconnectionsonLinkedInorFacebookthatallowtherecruitertogetinformationontheotherpartyand,sometimes,getanintroduction.10

Thereareproblemswithsocialmediarecruiting,andsomeofthemaresignificantdangerstothecompany.Forinstance,thereisthepotentialfordiscriminationthroughdisparatetreatmentofindividualsbecauseofinformationpostedontheirFacebookorLinkedInsitesorontheirTwitterfeed.11Picturescanalsopotentiallyidentifyindividualsasmembersofaprotectedclass,andthosepicturesmaycausesubconsciousbiasonthepartofsomerecruiters.Anybias,whetherintentionalorunintentional,isadangertotheorganizationduringtherecruitingandhiringprocess.

WORKAPPLICATION5-3Selectafuturejob(preferablyaftergraduation)andstatethegeographicareainwhichyouwillapplyforjobs.

InternalorExternalRecruiting?Ageneralinternalrecruitingpolicylike“wepromotefromwithin”soundsgood,butwealsohavetorecruitexternallytofillatleastsomejobs.Sothequestionis,whichjobsdowefillwithcurrentemployees,andwhichjobsdowerecruitfromoutsidethefirm?Ifwesayourpolicyistopromotefromwithinandwehireanoutsidertofillamanagementposition,manyofouremployeeswillbegintothinkthatwedon’tfollowourpolicy.Theymightshowlessloyaltytotheorganizationbecausetheyfeelthattheorganizationfailedtoshowthemloyalty.However,ifourpoliciessaythatwewillgooutsideforrecruitswhenitisunlikelythatanyoneintheorganizationwouldhavetheskillsetnecessarytodothejobidentifiedinourjobspecification,thenwecanprovidealegitimateanswertosomeonewhoquestionsourrecruitingprocess.

Whenweareinstitutingnewprocessesorwehaveidentifiedsignificantresistancetochangeasanissueinasectionoftheorganization,wemaybringinnewpeoplewithnewideasanddifferentskills.Wemayalsoidentifyspecificoccupationsinourorganizationthatwilltypicallyberecruitedfromoutside,usuallyduetotheneedforaspecializedskillset(e.g.,nuclearplantoperator,corporateattorney,oremergencymedicaltechnician).Itisunlikelythatwewouldpromotefromwithintothesetypesofpositions.

Inthissection,wediscussinternalversusexternalrecruitingeffortsandtheadvantagesanddisadvantagesofeachapproach.

InternalRecruitingInternalrecruitinginvolvesfillingjobopeningswithcurrentemployeesorpeopletheemployeesknow.

InternalRecruitingSources.Therearetwocommontypesofinternalrecruiting:

Promotionsfromwithin.Manyorganizationspostjobopeningsonphysicalorelectronicbulletinboards,incompanynewsletters,andsoon.Currentemployeesmayapplyorbidfortheopenpositions.Employeereferrals.Employeesmaybeencouragedtoreferfriendsandrelativesforpositions.About40%ofnewhiresatGrouponhistoricallycomefromemployeereferrals.12Forhard-to-recruit-forjobs,somefirmspayabonus

toemployeeswhentheirreferredapplicantishired.

LO5-3Identifythemajoradvantagesanddisadvantagesofbothinternalandexternalrecruiting.

AdvantagesandDisadvantagesofInternalRecruiting.Isitgenerallyagoodideatorecruitfrominsidetheorganization?Whatarethemajoradvantagesanddisadvantagesofinternalrecruiting?

Advantagesincludethefollowing:

Possibleincreasesinorganizationalcommitmentandjobsatisfactionbasedontheopportunitytoadvancewithcommensurateincreasesinpay.Theinternalrecruitwillbeabletolearnmoreaboutthe“bigpicture”inthecompanyandbecomemorevaluable.

Theindividualalsohasshownatleastsomeinterestintheorganization,hasknowledgeofouroperationsandprocesses,andfeelscomfortablecontinuingemploymentwithinthecompany.Thecompanyhasexistingknowledgeoftheapplicantandarecordofthatperson’spreviouswork.Theorganizationcansavemoneybyrecruitinginternallybecauseofbothloweradvertisementcostsandlowertrainingcosts.Internalrecruitingisusuallyfasterthanexternalrecruiting.

Andherearesomeofthedisadvantages:

Thepoolofapplicantsissignificantlysmallerininternalrecruiting.Therewillstillbeajobtofill—theemployeewillmovefromsomewhereelseintheorganizationintothenewjob,sothatemployee’soldjobwillneedtobefilledaswell.

Successinonejobdoesn’tnecessarilymeansuccessinasignificantlydifferentjob,especiallyiftheemployeeispromotedtosuperviseformercoworkers.Anexternalcandidatemayhavebetterqualificationsforthejobopening.Currentemployeesmayfeelthattheyareentitledtothejobwhethertheyarecapableandqualifiedornot,especiallyifwehaveastrongpolicyofpreferringinternalcandidates.Andthebiggestthreattothecompany:Wemaycreateorperpetuateastrongresistancetochangeorstiflecreativityandinnovationbecauseeveryoneintheorganization,eventhe“newhires,”arepartoftheoldorganizationalculture.

Internalrecruiting Fillingjobopeningswithcurrentemployeesorpeopletheemployeesknow

ExternalRecruitingCompaniescommonlyrecruitpeoplefromotherfirmstosatisfytheirHRneeds.13Externalrecruitingistheprocessofengagingindividualsfromthelabormarketoutsidethefirmtoapplyforajob.

ExternalRecruitingSources.Torecruitqualifiedexternalcandidates,wehavetolookatthetypeofpersonthatwearetryingtofindandthengotothesourceorsourcesthatwillmostlikelyprovidethattypeofperson.OurexternalrecruitingoptionsarelistedwithasummaryofstrengthsinExhibit5-1.

SHRMI:3

ExternalRecruitment:Recruiters,Openvs.Targeted,Sources,etc.

Walk-ins.Qualifiedcandidatesmaycometoanorganization“cold”andaskforajob.Walk-insmaybegoodrecruitsforacoupleofreasons.First,theyhavealreadyselectedyourorganizationasanemploymenttarget,andsecond,therearenoadvertisingcostsassociatedwithwalk-ins.Sotheprocesscanoccurmuchmorequicklythanitwouldwithotherexternalrecruitingmethods.However,candidatesseekingprofessionalandmanagement-levelpositionsgenerallysendarésuméandcoverletteraskingforaninterview.

Educationalinstitutions.Theyaregoodplacestorecruitpeoplewhohavelittleornopriorexperiencebuthaveagoodgeneralskillset,suchasadegree.Dorecruiterscometoyourcollegetointerviewandhiregraduates?

Employmentagencies.Therearethreemajortypesofemploymentagencies:

Temporaryagencies,likeKellyServices,providepart-orfull-timehelpforlimitedperiods.Theyareusefulforreplacingemployeeswhowillbeoutforashortperiodoftimeorforsupplementingtheregularworkforceduringbusyperiods.SomeHRexpertsexpectthenumberofshort-andlong-termtempstocontinuetoincrease.14However,makesureyourtempsarenotreally

full-timeemployees,likeinourMicrosoftdiscussioninChapter4,oryoutoocanfacealawsuit.

Publicagenciesarestateemploymentservices.Theygenerallyprovidejobcandidatestoemployersatnocostorverylowcost.Toooften,thepublicagenciesgetreputationsashavensforthehard-coreunemployed—thosewhodonotwanttowork.However,theycanbeastrongsourceofgood-qualityemployees,especiallyinbadeconomicconditionswhenmanygoodworkerslosetheirjobs.

Privateemploymentagencies.Theyareprivatelyownedandchargeafeefortheirservicesofrecruitingcandidatesforyou.Privateagenciesaregenerallyusedforrecruitingpeoplewithpriorexperience,andherearesomedifferenttypesyoucanuse:

Generalemploymentagencies.Someofthemchargejobseekersfortheirservices,andotherschargetheemployer.Theyaregenerallyusedforlowerleveljobsthatrequireexperience.Contingencyagencies.Theyoffercandidatestotheemployerandarepaidwhenthejobcandidateishiredbytheemployer.Contingencyagenciesfrequentlyworkwithamoreskilledsetofclients,suchashigh-levelmanufacturingskillsormid-levelmanagementexperience.Retainedsearchfirmsorexecutiverecruiters.Theyarepaidtosearchforaspecifictypeofrecruitfortheorganizationandwillbepaidregardlessofsuccessintheirrecruitingefforts.Oftenreferredtoas“headhunters,”theyspecializeinrecruitingseniormanagersand/orthosewithspecifichigh-leveltechnicalskills,likehighlyspecializedengineersandIT/computerexperts.Theytendtochargetheemployeralargefeeandwillbeatleastpartiallypaidwhether

ornotthereisasuccessfulhire.

Jobfairscanbeaneffectivewaytoreachalargenumberofpotentialexternalrecruits.

©JOSELUISMAGANA/Reuters/Corbis

Externalrecruiting Theprocessofengagingindividualsfromthelabormarketoutsidethefirmtoapplyforajob

Advertising.

Asimple“HelpWanted”signinthewindowisanadvertisement.Newspapersareplacestoadvertisepositions,butadvertisinginprofessionalandtrademagazinesmaybemoresuitableforspecificprofessionalrecruiting.Therearealsoseveralonlinejobsearchwebsites,suchasIndeed.com,Monster.com,andCareerBuilder.com.Herearesomeadoptions:

Localmassmedia.IstheDailyPlanet(Thanks,Superman!),Channel5,ortheoldiesFMradiostationagoodoptionforyourrecruitingdollars?Asusual,itdependsonwhatkindofcandidateyouarelookingfor.Localadvertisinggenerallyworkstorecruitsemiskilledorskilledlineemployeesbutmaynotworkaswellforhighlyskilledmanagers.Adsareespeciallyusefulifyouneedalargenumberofrecruitsforaspecifictypeofjob.

Specializedpublications.Thesetargetspecificgroups—theWallStreetJournalorAPICSMagazinearetwoexamples.Therearemanytypesofindustrytradeandprofessional

publicationsyoucanusetorecruitthenichecandidatesyouarelookingfor.

TheInternet.ShouldyourcompanyputeveryjobopeningupontheInternet?Inmanycases,companiesarediscoveringthattheymaynotwanttoadvertiseeveryjobopeningontheInternetbecauseofitsreach.15Theyjustdon’thavethetimetowadethroughpossiblythousandsofapplicationsforasingleopening.Jobsrequiringcomputerorotherhigh-leveltechnicalskillswouldprobablyhavegoodpotentialforInternetrecruitment.Butyoumaynotfindafive-starchefontheInternetbecausetheymayuseotherjobsearchmethods.

SeeExhibit5-1forareviewofinternalandexternalrecruitingsources.

AdvantagesandDisadvantagesofExternalRecruiting.So,whataretheadvantagesanddisadvantages

ofexternalrecruiting?

Advantagesincludethefollowing:

Thefirstandbiggestadvantageisthemirrorimageofthebiggestdisadvantageininternalrecruiting—weavoidcreatingorperpetuatingresistancetochange,allowingafootholdforinnovativenewwaysofoperating.Wemaybeabletofindindividualswithcomplexskillsetswhoarenotavailableinternally.Wecanlowertrainingcostsforskilledpositionsbyexternallyhiringsomeonewiththerequisiteskills.Externalhireswillfrequentlyincreaseorganizationaldiversity.

Exhibit5-1MajorRecruitingSources

Whataboutdisadvantages?Therearecertainlypotentialproblemsinbringingoutsidersintothecompany:

Disruptionoftheworkteamduetointroducingsignificantlydifferentwaysofoperating.Externalrecruitingtakesmuchlonger,whichmeansitcostsmore.

Mightadverselyaffectcurrentemployees’motivationandsatisfactionduetotheperceivedinabilitytomoveupintheorganization.Likelywillincurhigherorientationandtrainingcoststhaninternalrecruiting.Thecandidatemaylookgreatonpaper,butwehavenoorganizationalhistoryontheindividual.

WORKAPPLICATION5-4Identifytherecruitingsourcethatwasusedtohireyouforyourcurrentjoborapastjobandexplainhowitwasused.

5-1ApplyingTheConcept

RecruitingSourcesUsingExhibit5-1:MajorRecruitingSources,writetheletter(A–J)ofwhichrecruitingsourceismostappropriateineachofthefollowingrecruitingsituations:

_____1.YouneedaCEOfromoutsidethecompany._____2.“Weneedmoreemployees,Jean.Doyouknowanyoneinterestedinworkingforus?”_____3.Weneedtohireanewhistoryprofessor._____4.Weneedanothercomputerprogrammer._____5.Aworkergothurtonthejobandwillbeoutforaweek._____6.Weneedanexperiencedclericalworker,butwedon’thaveanymoneyforads._____7.Weneedapersontoperformroutinecleaningservices,andexperienceisnotnecessary._____8.TheVPoffinanceneedsanewadministrativeassistant._____9.Wehaveasupervisorretiringinamonth._____10.Weliketohireyoungpeoplewithoutexperienceinordertotrainthemto

sellusingauniqueapproach.

ChallengesandConstraintsinRecruitingTheprocessofrecruitingistime-consumingandexpensive.Asaresult,wewanttopayattentiontotheeffectivenessofourrecruitingmethods.Wehavebudgetaryandotherconstraints,sowefacethechallengeofbalanceinfindingqualifiedcandidateswithoutspendingtoomuchandwithoutrecruitingtoomanyortoofewcandidates.Solet’sdiscusstheseissuesinthissection.

BudgetaryConstraintsWeobviouslyhavetolivewithinourbudgetsinallcases,andrecruitingisnoexception.Therearetimeswhenwewouldliketoflyhalfadozentop-notchrecruitsinfromaroundtheworldtointerviewforaposition,butsuchcostsaddupveryquickly.Generally,themorevaluetherecruitbringstothefirm,themorewecanaffordtospend.

LO5-4Summarizethemajorchallengesandconstraintsinvolvedintherecruitingprocess.

PolicyConstraintsandOrganizationalImageTherearemanyorganizationalpoliciesthatcanaffectourrecruitingefforts.Whetherwehaveapromote-from-withinpolicyornotaffectshowwerecruit.Ourpoliciesontemporary-to-permanentemployeeswouldalsoaffecthowwerecruitinmostcases.Dowehavepoliciesconcerningrecruitingandhiringrelativesofcurrentemployees?Ifso,thiswouldaffectourrecruitingefforts.Dowehaveanaffirmativeactionpolicyintheorganization?Ifso,itwilldictatemanyofourrecruitingprocedures.Andwecanhaveotherpoliciesthataffectrecruiting.

Wearealsoaffectedinourrecruitingeffortsbyourorganizationalimageinthemarketsfromwhichwesourceourrecruits.16Youmayknowofacompanyinyourlocalcommunitythatyouwouldnotapplytobecauseofitsbadreputation,andothersyou

wanttoworkfor.Thisisjustoneofmanyreasonswhywewanttomaintainastrongreputationinthecommunitiesthatweserve.

WORKAPPLICATION5-5Explainhowafirm’simageplayedaroleinyourapplyingforandacceptingajobyoucurrentlyholdorhaveheld.

JobCharacteristicsandtheRealisticJobPreview(RJP)Let’sfaceit.Noteveryjobweneedtofillisglamorous,andeveryjobhassomeaspectswe’drathernotdealwith.Weneedtorealizethatnoteveryonewants,orcanget,greatjobs.Somepeopleareveryhappyinlowleveljobsyoumayfindboring,andtheydoagreatjob.Thekeyistorecruit“qualified”candidates—peoplethatactuallywantthejobandwillstaywiththecompany.Onemistakecompanieshavemadeistomakethejobsoundbetterthanwhatitreallyis.Theymaysuccessfullyrecruitandhire,butwhentheemployeerealizeswhatthejobreallyis,theyleave.Thisturnoverwastesrecruitingtimeandexpenses,aswellastrainingcosts,whichbecomesaviciouscycle.

Jobcandidatesneedarealisticjobpreviewtounderstandwhatthejobisallabout.

©iStockphoto.com/PeopleImages

Mostcompanieshavecometotheconclusionthatrealisticjobpreviewsareanecessarypartoftherecruitingprocesstorecruitaqualifiedcandidatethatwillstaywiththefirm.Arealisticjobpreview(RJP)isareviewofallofthetasksandrequirementsofthejob,bothgoodandbad.Agoodjobanalysis(Chapter4)withaclearjobdescriptionshouldprovide

agoodRJP.Wehavefoundthat“givingapplicantsawarts-and-allpreviewofwhatajobentailsonaday-to-daybasiscanreduceturnovereffectivelybymakingsuretheapplicantisreallyagoodfitforthejob.”17ThereisstrongresearchevidencethatearlyturnoverinajobisdirectlyrelatedtofailuretoprovideanRJPforthatjob.18

5-1Ethicaldilemma:whatwouldyoudo?AndreJehan,PizzaSchmizzafounderoftheNorthwestchain,hasanunusualwayofrecruitingandselectingworkers.Homelesspeoplearegivenpizzaslicesandsodaandsometimesacoupleofdollarstocarryasignthatreads“PizzaSchmizzapaidmetoholdthissigninsteadofaskingformoney.”Jehanbelievesheishelpingthehomeless,sayingthatcarryingthesignshasbeenawin-winsituation,asthehomeless,manyofwhomhavementalillnessesorotherproblemsthatkeepthemfrombeingabletoholdajob,don’tfeelembarrassedorexploited;theylookforwardtotheworkandfood.However,DonaldWhitehead,formerExecutiveDirectorofTheNationalCoalitionfortheHomeless,saysJehanisexploitingthepeopleherecruitstoholdhissigns.

1. IsAndreJehanexploitingthehomeless?2. Isitethicalandsociallyresponsibletogive

homelesspeoplefoodforcarryingsigns?

Source:G.Williams,“WillWorkforPizza,”Entrepreneur(October2003),http://www.entrepreneur.com/article/65058.RetrievedOctober29,2013.

TheRecruiter–CandidateInteractionDoestherecruiter(orrecruiters)affectthejobcandidatesandtheirwillingnesstoapplyforajobinourorganization?Theobviousanswerisyes.Therecruiterisoneoftheprimaryfactorsresponsibleforanapplicantshowinginterestinourorganizationandourjobs.19Accordingtoonereport,“Recruiterswithhigherdegreesofengagementandjobfitdramaticallyoutperformtheirpeerswhoscorelowerinthoseareas.That’smeasuredbothinthequalityofhiresandinproductivity.”20Sowehavetobesuretohirequalifiedcandidatestobeourrecruiters;experiencedinternalpeopleusuallyworkoutbetterthanexternalcandidatesbecauseknowingtheorganizationhelpsthemgiveanRJP.

Ittakesgoodcommunicationsskillsforrecruiterstoaccuratelyassessifjob

candidatesareactuallyqualifiedforthejob—includingwhetherornottheyfittheorganizationalcultureandarelikelytostaywiththefirm.Sowhenhiringrecruiters,makesuretheyhaveastrongsetofcommunicationskills.Therecruitermustbeabletotalkwiththerecruits“ontheirlevel”inordertomakethemfeelcomfortablewiththeprocess.Recruitersneedtolearnwhentoaskprobingquestionsandwhentoliebackandletarecruittalk.Role-playingtrainingfortherecruiterisparticularlyeffectiveinteachingthisskill.21Anotherimportantcommunicationskilltoassessisactivelistening,whichistheintentionandabilitytolistentoothers,usethecontentandcontextofthecommunication,andrespondappropriately.Thismeansthatrecruitershavetowanttolistenandmusthavedevelopedtheiractivelisteningskillssothattheynotonlyhearthewordsthatrecruitsaresayingbutalsounderstandthecontextoftheconversations(whatthecircumstancesareandwhytheotherpersoniscommunicatingthisinformation)sothattheycanempathizewith

recruitsandvisualizewhytheyareprovidingthisinformation.22Empathyinthissituation(puttingyourselfinanother ’sposition)allowstherecruitertovisualizewhysomethingisbeingcommunicatedandiscriticaliftherecruiteristorespondcorrectly.

Therecruiter ’sjobalsoincludessuccessfullycommunicatingwiththehiringmanagersintheorganization.Thesameactivelisteningskillsthatserverecruitersininteractionswithanapplicantcanallowthemtomoreclearlydefinewhatthehiringmanagerwantsandneedsintheneworganizationalrecruit.Soweneedtocreatestrongtrainingprogramsincommunicationwithrecruitersintheorganization.23

WealsohavetotrainrecruitersintheprocessoftheRJP.TheyneedtounderstandthejobindetailsothattheycangivehonestanswersandanRJPofthejobtothepotentialcandidate.Inmanycasestoday,wemayhavearecruitingteamwithonepersonontheteamhavingthe“technical”knowledgeofthejob(maybethe

supervisorofthejob)andtheotherpersonhavingtheHR-relatedknowledgethatkeepsusfrominadvertentlyviolatinganylaws,regulations,orinternalpolicies.ThishelpsuswiththeRJPbecausethetechnicalpersoncanexplaindetailsthattheHRrecruiterwouldgenerallynotknoworunderstand.

Sorecruiting,selecting,andthentrainingourrecruitersisamajorfactorinouroverallrecruitingsuccesswithboththehiringmanagerandthecandidates.

WORKAPPLICATION5-6BrieflydescribetheRJPyoureceivedforyourpresentjoborapastjob.HowcouldtheRJPbeimproved?

Realisticjobpreview(RJP)Areviewofallofthetasksandrequirementsofthejob,bothgoodandbad

WORKAPPLICATION5-7Brieflydescribetheinteractionyouhadwiththerecruiterforyourcurrentjoborapastjob.Howcouldtheinteractionhavebeenimproved?

Activelistening Theintentionandabilitytolistentoothers,usethecontentandcontextofthecommunication,andrespondappropriately

5-1Selfassessment

CareerDevelopmentIndicatehowaccuratelyeachstatementdescribesyoubyplacinganumberfrom1to7onthelinebeforethestatement.7=strongagreement;1=strongdisagreement.

_____1.Iknowmystrengths,andIcanlistseveralofthem._____2.IcanlistseveralskillsthatIhavetoofferanemployer._____3.Ihavecareerobjectives._____4.Iknowthetypeoffull-timejobthatIwantnext._____5.Ihaveanalyzedhelp-wantedadsorjobdescriptions,andIhavedeterminedthemostimportantskillsIwillneedtogetthetypeoffull-timejobIwant._____6.Ihaveorplantogetapart-timejob,summerjob,internship,orfull-timejobrelatedtomycareerobjectives._____7.IknowthepropertermstouseonmyrésumétohelpmegetthenextjobIwant._____8.Iunderstandhowmystrengthsandskillsaretransferable,orhowtheycanbeusedonjobsIapplyfor,andIcangiveexamplesonarésuméandinaninterview._____9.Icangiveexamples(onarésuméandin

aninterview)ofsuggestionsordirectcontributionsImadethatincreasedperformanceformyemployer._____10.MyrésuméfocusesontheskillsIhavedevelopedandonhowtheyrelatetothejobIamapplyingfor,ratherthanonjobtitles._____11.MyrésumégivesdetailsofhowmycollegeeducationandtheskillsdevelopedincollegerelatetothejobIamapplyingfor._____12.Ihavearésuméthatiscustomizedtoeachpart-timejob,summerjob,orinternshipIapplyfor,ratherthanonegenericrésumé.

Addupthenumbersyouassignedtothestatementsandplacethetotalonthecontinuumbelow:

EvaluationofRecruitingProgramsWeneedtomeasureourrecruitingprocessesthesameaswemeasureeveryotherprocessintheorganization.ThisisanotherpointatwhichHRanalyticsskillsarebecomingsignificantlymoreimportant.Aswenotedabove,therecruitmentprocessisexpensive,andunlessweidentifyandcontrolthosecosts,thebeneficialresultsmayendupbeingoutweighedbythecosts.Butrecruitmentandsalarycostareaninvestment.Ifyouhirethebestpeople,likeGoogle,theirproductivitywillmorethanpayforitself.

SeeExhibit5-2foranoverviewoffiveevaluationmethodsthatwediscussinthissection.

YieldRatioOurfirstmeasurementoptionistherecruitingyieldratio—acalculationofhowmanypeoplemakeitthroughtherecruitingsteptothenextstepinthehiringprocess.Forexample,weadvertiseforajobopeningandreceive100résumésandapplications.Oftheseapplicants,50arejudgedtohavethebasicqualificationsforthejob.Asaresult,ouryieldratioontheadvertisementwouldbe50%(50ofour100applicantsmadeitthroughthefirstrecruitingstep).Aswithmostmetrics,wethencomparetohistoricaldataortoothercompanybenchmarkstoseehowwearedoingintheprocess.Ifourhistoricyieldratioforadvertisementsis40%,thenouradwasmuchmoreeffectivethanaverage.

LO5-5Discussthebasicmethodsavailableforevaluatingtherecruitingprocess.

SHRMG:6

CalculatingandInterpretingYieldRatios

CostperHireAnothermeasurethatyouprobablywanttouseishowmuchitcoststogeteachpersonhired,orcostperhire—whichiscalculatedbasedonthisformula:24Advertising+Agencyfees+Employeereferrals+Travelcostofapplicantsandstaff+Relocationcosts+Recruiterpayandbenefits=Totalcost

Totalcost÷Numberofhires=Costperhire

Forexample,whenneedingseveralnewcustomerservicerepresentatives,weweresuccessfulinrecruitingandhiring15fullyqualifiedapplicantsfortheopenpositions.Duringtherecruitingcampaign,thecompanyspent$140,000onalloftherecruitingcostscombined.Thecostperhirewastherefore$140,000/15=$9,333.33.

TimeRequiredtoHireTimerequiredtohireisprettyself-explanatory.Howmanydays/weeks/monthsdidittaketogetsomeonehiredintoanopenposition?IfourcompanyhasanewopeningonJune10andweareabletofillthepositiononAugust28,ourtimetohirewas79days([June]30−10=20+[July]31+[August]28=79).

Exhibit5-2RecruitingEvaluationMethods

YieldratioAcalculationofhowmanypeoplemakeitthroughtherecruitingsteptothenextstepinthehiringprocess

NewHireTurnoverEmployeeretentionremainsacriticalissuefororganizationsandHRmanagers.25Inmeasuringnew-hireturnover,weneedtoidentifyatimeframe.Wewouldusuallylookatturnoverwithinthefirst3to6months.Soweidentifyourtimeframeandthenmeasurehowmanynewrecruitscomparedtoallhiresduringthatperiodchosetoleavetheorganization.

Ifwehad30newhiresinthepastyearandtwoofthemleftagainwithin6monthsofbeinghired(weareidentifyingourturnoverwindowas6months),wecancalculatetheturnoverpercentageandthencompareittohistoricalaverages:2/30=6.7%new-hireturnoverrate.Ifourhistoricalnew-hireturnoveris10%,thenwehaveimproved,atleastduringthisannualcycle.

WORKAPPLICATION5-8Discusshowyourpresentemployerorapastemployerevaluatesitsrecruitingprograms.Ifyoudon’tknow,contacttheHRdepartmenttofindout.

NewHirePerformanceWecanalsoanalyzetheperformanceratingsofnewhiresversusallemployees.Therearemanywaystoevaluateemployees,butsupposeyouevaluateemployeesonanoverall4.0scale(asincollege).Further,let’sassumetheaverageemployeeintheorganizationisjudgedtobea3.0onour4-pointscale.Ifournewhiresareperformingsignificantlybelowtheaverage(say,at2.4),wemaywanttoanalyzewheretheyarenotbeingsuccessfulandprovidetrainingopportunitiestothemandallnewhiresgoingforwardtoincreasetheirchancesforlong-termsuccess.

Itisimportanttoevaluatetheperformanceofnewhiresagainstallemployeestounderstandhowtheyfitintheorganization,andmakeadjustmentsasnecessary.

©iStockphoto.com/NicolasMcComber

Tomakethemeasuremoreobjective,wecancalculatethepercentageofnewrecruitswhoperformaboveorbelowaverage.Youdividethedifferenceinperformancebynewrecruitscomparedtotheaverage.Let’susethenewrecruitaverageof2.4comparedtothe3.0

average:3.0−2.4=0.6;0.6/3.0=0.2or20%belowaverage.Don’tbotherworkingwithnegativenumbers.Youcaneasilyseeifthenewrecruitsareaboveorbelowaverage,sojustsubtractthesmallerfromthelargernumber.

TrendsandIssuesinHRMThefirstissuethatwewillcoverhereistheloomingworldwidetalentwar.Closelyconnectedtothisisoursecondtrend,creating“massivelyflexible”on-demandworkforces.

TalentWarsInarecentstudy,Accenturenotedthat“34percentofemployersworldwidearehavingdifficultyfillingopenpositions,and73percentcitelackofexperience,skills,orknowledgeastheprimaryobstacletorecruiting.”26HRexecutivesarealsoprojectingsignificantworkershortagesinmanyprofessionsin10majorindustriesby2020and2030.27

Asaresultofthislackofskillsandexperience,aglobalwarfortalenthasbecomeareality.Withtheshortageofskilled21stcenturyworkers,theonlywaytohaveanyrealchanceofrecruitingforopenknowledge-workerpositionsistorecruitineverycorneroftheglobe.Howdowefindthesehighlyskilledindividualsandgetthemtoapplyforjobsinourorganization?Wehavetounderstandlaborregulationsinallmarketswherewerecruit,immigrationlaws

concerningemployment,andhowpeoplesearchforworkineachareawherewerecruitsothatwecanadvertise“wheretheylook.”

HRanalyticsagaincomestotheforefrontinthiseffort.Employmentforecastingusesmorerobustdatamodelingandanalyticstoolsthanwehaveinthepast,andwearealsoabletouseanalyticalsearchestofindandsourcethetypesofpeoplewhohavebeenidentifiedthroughtheseforecasts.

Soglobalrecruitingisapotentialmethodforwinningthetalentwar.Moreandmore,wearegoingtofindthatglobalsearchesaretheonlymethodsoffindingthoseskilledworkersthatweneedforour21stcenturycompany.

WORKAPPLICATION5-9Discusshowyourpresentemployerorapastemployerusestechnologyinrecruiting.Ifyoudon’tknow,contacttheHRdepartmenttofindout.

5-2ApplyingTheConcept

RecruitingEvaluationMethodsDothemath.

11.YourcompanyhadanewopeningonMay5andyoufilledthepositiononJune25.Yourtimetohirewas_______days.12.Yourcompanyhired24peoplelastyear,and14ofthoseleftagainwithin3months.Yournewhireturnoveris_________.13.Theaverageofallnewhireappraisalslastyearwas4.3ona5-pointgradingscale.Theaverageofallappraisalsintheorganizationlastyearwas4.1.Therefore,newrecruitsare______%aboveor___%belowaverage.14.Anadvertisementforajobopeningreceives62applications.Ofthese,48havethebasicqualificationsrequiredforthejob.Theyieldratiowouldbe________.15.Youhired7workersanditcostyou$72,000.Thecostperhireis________.

GlobalKnowledgeWorkersasanOn-DemandWorkforceCloselyrelatedtotheglobaltalentwar,wewillincreasinglyseeamuchlargernumberofcontingentworkersasasegmentofouroverallworkforce.Thecoregroupofemployeeswilldotheworkthatrequirescontinuity,buttheywillbesurroundedbylargegroupsofcontractors,temporaryworkers,consultants,vendorsonpremises,outsourcingorganizations,andotherindividuals.28,29HRwillalsoneedtobecomemoreadeptatmanagingthesecontingentworkforces.30

Rightnow,thereisevidencethatthecontingentworkforceintheUnitedStatesissomewherebetween20%and25%ofallindividualsdoingeconomicwork.31Theseworkerscanbeavailabletothecompanyondemand,throughwebsitessuchasElanceand

Guru,throughtemporaryagenciesandotherservices,orthroughacompanydatabaseofavailableindividuals.

AccordingtoAccenture,this“newextendedworkforceisincreasinglymobile,global,andborderless,”32andassiststheorganizationwithtwocriticalitems:agilityinnumbersandtypesofworkersandaccesstoskilledtalent.AccesstothistalentwillbecomeamuchmoreimportantpartofHRrecruitinginthenearfuture.Wewillneedtocreatepartnershipswithorganizationssuchastemporaryagencies,schools,outsourcers,andevensupplierswhocanassistuswiththissourcing.Wewillalsoneedtobecomemuchbetteratmatchingworkerswithdiscretetasksandfollowingtheassignmentstomakesurethatresultsaresatisfactory.Thisprocessofanalysis,jobmatching,andfollow-upisgoingtobealong-termrequirementfor21stcenturyHRdepartments.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary5-1Describethemainexternalforcesactingonrecruitingefforts.

Themainexternalforcesaretheeffectivelabormarketandthesocialandlegalforcesthatactonusaswellasourpotentialrecruits.Theseforcesinclude(1)supplyanddemand,meaningwhetherthereareplentyofcandidatesfortheavailablejobsorwhethertherearemorejobsthancandidates,(2)theunemploymentrateintherecruitingarea,(3)competitorsandwhethercompetitionforavailableworkersisstrongorweak,and(4)thesocialandlegalenvironments,meaningthesocialfactorsthatrecruitsemphasizewhenweighingwhetherornottoacceptemploymentinaparticularcompanyandwhatlimitsareplacedonrecruitingeffortsby

lawsandregulations.5-2Namethefivemainorganizationalrecruitingconsiderations.

Thefiveconsiderationsareorganizationalpolicies,whenweshouldrecruitnewemployees,alternativestorecruiting,thereachoftherecruitingeffort,andhowtousesocialmedia.Policiessettheotherfouritems.Whentorecruittellsuswhetherornotweshouldfirstmitigateashortagewithotherorganizationaltactics,suchasovertime.Alternativesincludeusingovertime,outsourcingsomework,orusingtemporaryorcontractworkersorotheroptionstomitigateashortage.Reachdeterminesthegeographiclocationsthatwewillsearchfornewemployees.Finally,weneedtodeterminehowwearewillingtousesocialmediatoassistinourrecruitingefforts.

5-3Identifythemajoradvantagesanddisadvantagesofinternalandexternal

recruiting.Themajoradvantagesofinternalrecruitingincludeincreasesinorganizationalcommitmentandjobsatisfaction,theabilitytolearnmoreaboutthe“bigpicture”inthecompany,thefactthattheindividualfeelscomfortableworkingforthecompany,thefactthatthecompanyknowstheindividualandthatperson’sworkhistory,lowerrecruitingcosts,andarelativelyspeedyprocesscomparedtoexternalrecruiting.Disadvantagesincludethefactsthatthepoolofapplicantsissmaller,youwillhavetofilltheoldjobofthepersonyouhire,successinonejobdoesn’tnecessarilymeansuccessinadifferentjob,externalcandidatesmaybemorequalified,internalcandidatesmayfeelthattheyareentitledtothejob,andwemayperpetuateresistancetochangeandstifleinnovationandcreativity.

Advantagesofexternalrecruitingarethatweavoidperpetuatingresistancetochangeandencourageinnovationandcreativity,wemaybeabletofindindividualswithcomplexskillsetswhoarenotavailableinternally,therewillbelowertrainingcostsforcomplexpositions,andwehavethepotentialtoincreasediversity.Disadvantagesincludepotentialdisruptionoftheworkteam,thefactthatittakeslongerthaninternalrecruitingandcostsmore,thefactthatitmayadverselyaffectcurrentemployees’motivationandsatisfaction,higherorientationandtrainingcosts,andthefactthatthecandidatemaylookgreatonpaperbutmaynotperformafterbeinghired.

5-4Summarizethemajorchallengesandconstraintsinvolvedintherecruitingprocess.

Themostobviousconstraintismoney.Wehavetoavoidspending

toomuchontherecruitingprocess.Additionally,organizationalpoliciesalsoaffecthowwerecruit.Ourorganization’simagealsoplaysasignificantroleinourabilitytosourcethepeopleweneedfromthecommunitiesaroundus.Nextisthetypeofjob.Notalljobsarecleanorfun.Finally,ourselectionandtrainingoftherecruiterandtheirdeliveryofanRJPisamajorfactorinrecruitingsuccess.Wehavetofindanindividualwhohastheabilitytoactivelylistenandempathizewiththecandidate.

5-5Discussthebasicmethodsavailableforevaluatingtherecruitingprocess.

Therecruitingyieldratiocalculateshowmanypeoplemakeitthroughtherecruitingsteptothenextstepinthehiringprocess.Anothermeasureiscostperhire.Youalsomaywanttoanalyzetimerequiredtohire.New-hireturnoverisanothermeasureofsuccess.Ifwehavehigh

ratesofturnoverimmediatelyafterrecruitmentandselection,weprobablyneedtoreevaluateourrecruitingandselectionprocess.Finally,wecanalsoanalyzenew-hireperformanceratingsandcomparethemtotheorganizationalnorms.Ifournewhiresperformatasignificantlylowerlevelthanthenorm,wemaywanttoanalyzewheretheyarenotbeingsuccessfulandprovidetrainingopportunitiestoincreasetheirchancesforlong-termsuccess.

5-6DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermsactivelistening,123externalrecruiting,118internalrecruiting,117labormarket,114realisticjobpreview(RJP),122recruiting,113yieldratio,124

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. __________istheprocessofcreatingareasonablepoolofqualifiedcandidatesforajobopening.

2. __________isthetermfortheexternalpoolofcandidatesfromwhichwedrawourrecruits.

3. __________involvesfillingjobopeningswithcurrentemployeesorpeopletheyknow.

4. __________istheprocessofengagingindividualsfromthelabormarketoutsidethefirmtoapplyforajob.

5. __________isareviewofallofthetasksandrequirementsofthejob,bothgoodandbad.

6. __________istheintentionandabilitytolistentoothers,usethecontentandcontextofthecommunication,and

respondappropriately.7. __________isacalculationofhowmany

peoplemakeitthroughtherecruitingsteptothenextstepinthehiringprocess.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Shouldyou“shop”forgoodemployeeswhoareoutofworkinabadeconomy,andthenshouldyouterminateexistingemployeeswhoaren’tdoingtheirjobsverywellafterfindingagoodreplacement?Whatconsequencesofthiscourseofactioncanyousee?

2. Ifyouwereinchargeofyourcompany,wouldyouratherrecruitnewemployees,orwouldyouratherusesomeoftheothertoolsforaddressingashortageofemployeesthatwerediscussedinthisandthelastchapter?Why?

3. Inyourpersonalexperience,doyouthinkthatinternalrecruitingreallyimprovesorganizationalmorale,jobsatisfaction,andproductivity?Whyorwhynot?

4. Doyouthinkthattargetedorclosedrecruitingleadstothepotentialfordiscriminationinrecruitingefforts?Whyorwhynot?

5. WhenwouldyoudefinitelyusetheInternetasarecruitingtool,andwhenwouldyoudefinitelynotusetheInternettorecruit?Why?

6. Whatcouldanorganizationdotoimproveitsimageifithasabadreputationwithrecruits?

Categorizeyoureffortsintoimmediate-termandlonger-termitems.

7. Ifyouwereinchargeofyourcompany,whatwouldyoutellrecruiterstodoornotdotoenhancetheirrecruitingefforts?Why?

8. Doyouthinkthatyouareagood“activelistener”?Whyorwhynot,andwhatcouldyoudotobecomebetter?

9. Whatoptionsdoyouseeasalternativestorecruitinggloballyforknowledge-basedjobsinthecomingyears?

Case5-1LINKEDIN:HowDoestheWorld’sLargestProfessionalNetworkNetwork?In2003,LinkedInwaslaunchedtohelpthosewhofeltabitdisconnectedinthebusinessworldbycreatingaprofessionalnetworkwherememberscouldfindjobsfromthelabormarket,locatebusinessopportunities,andconnectwithotherprofessionals.Givenitsdifferentiationapproach,LinkedInbecamethedominantplayer,withover300millionmembersinmorethan200countries.Ithascontinueditsgrowthstrategythroughacquisitions,suchasthe2012purchaseofSlideShare—anapplicationthatallowsuserstoshareslideshowpresentations—forsome$119million.Inaddition,thecompanyhaslauncheditsTalentPipelineoffering,anewrecruiterproduct.Mobileapplicationsareanotherareaoffocusforthecompany;in2011,about15%ofmembervisitscamefrommobiledevices,andmobilepageviewswereupmorethan300%yearoveryear.LinkedInisalsorampingupitsinternationalexpansionactivities,havingexperiencedgrowthinIndia,Brazil,andChina.About60%ofitsmemberbasecomesfromoutsidetheUnitedStates,anditsserviceisavailableinFrench,German,Italian,Portuguese,andSpanish.Asareflectionofitsglobalfocus,LinkedInrecentlyopenedofficesin

London,Mumbai,andSydneyinadditiontoitspresenceinCanada,Ireland,andtheNetherlands.33

Throughthisgiantnetwork,membersareabletofindjobsfromthelabormarket,locatebusinessopportunities,andconnectwithotherprofessionals.LinkedInhasbecomeapowerfultoolforlargecompaniestofindnewtalentaswell.Unliketheotherjob-huntingsearchengineslikeMonsterorIndeed,LinkedInprovidestheopportunityforusersandemployerstonetworkwitheachother.CompanieslikeGoogle orHPusetheirownresourcesandtheirownsearchtoolsforheadhunting;however,forthemajorityofthehiringprocess,LinkedInisusedtogathermoreinformationaboutcandidates.LinkedIncancountexecutivesfromallFortune500companiesamongitsmembers,anditisbelievedthat90%ofFortune100companiesuseLinkedIn’scorporatetalentsolutionstorecruitemployees.34

Successfulgrowthrequireshiringnewemployees.Ironically,tomeettheincreasingdemandfortheirservices,LinkedInitselfneededtohirenewsoftwareengineers,salespeople,andcorporatemanagers.LinkedInmayhavealottoteachitscorporateusersabouthowtobenefitfromitsservices,yethowdoesLinkedInhireitsownemployees?

WhenLinkedInneedsanimmediatehireforavacantposition,itrequiresitsHRteamtodesign,implement,andmaintainthenetworkconfigurations,butitalsorequiresthemtocollaboratewithbusinessleaderstorecruitapplicantswhomeetthecompany’sobjectives.

LinkedInusesitsownwebsitealongwithaplantorecruitonlythebestforthecompanyintheleastamountoftimepossible.WheneverausercheckstheprofileofaLinkedInemployee,itislikelythattheuserwillseeanadvertisementforapossibleopeninginthecompany.Thegoalistoreachthewholelabormarketaboutthisvacancyandannounceittousersfamiliarwiththefirm’sservices.Thejobseekersthenrealizeitwouldbeeasierto“follow”LinkedIn’spagetocatchfurtheropenings,soitisnotasurprisethatLinkedIn’snumberoffollowershasmultipliedbyafactorof10duringthepast3years.LinkedInalsousesitsdatabasetogeneratelinksbetweenlocaljoblistingsandjobseekersforspecificindustries—notonlytosearchfortalentinnearbylocationsorwherethejobturnoverishigh,asinNewYorkCityorSiliconValley,butinplaceswherelaborsupply/demandismoreinbalance,asinWashington,D.C.,orDallas.35

Keypositionsinthecompany,inonecaseadatacentermanager,requiredfarmoretargetedrecruitinggiventhetechnicalnatureofthejobs.Jobspecificationsincluded15+yearsofmanagerialexperience,atleast3yearsinasimilarjob,aPhDincomputerscience,andprovenleadershipintheITworld.KnowingitcouldtakemorethanayearandahalftopersuadepeopletoleavetheircurrentjobandjoinLinkedIn,LinkedInnarroweddownitssearchbyfocusingononlycurrentjobseekers.Intheend,thesearchresultprovidedonlysevenrésumésthatmatchedthejob’scriteria—onlysevenidentifiablepeopleontheplanet!36

Questions1. HowdoesLinkedIn’sgrowthstrategyimpactthe

recruitmentfunctionofitsHRdepartment?2. OnewaythatLinkedInhasgrownisthrough

acquisition.Fromarecruitmentviewpoint,whyusethismethodofgrowthratherthaninternaldevelopment?

3. WhywouldafirmuseLinkedIn’sservicesratherthanthoseofatraditionalheadhunterortheirin-houserecruitmentspecialists?

4. WhatarealternativemethodsthatfirmscanemploytorecruitnewemployeesbesidesusingLinkedIn’sservices?

5. Whatisarealisticjobpreview,andhowmightLinkedInbeusedbyfirmstoprovidesuchapreviewtopotentialemployees?

6. EvaluateLinkedIn’ssearchforadatacentermanager.Howmightthecompanyhavehandledthissearchdifferentlyinordertoincreasethenumberofpotentialapplicants?

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,LongIslandUniversitySchoolofBusiness,BrooklynCampus

SKILLBUILDER5-1OnlineJobSearch

ObjectivesTodevelopyourjobsearchskillsandtolearnmoreaboutjobdescriptionsandspecifications

Togetyouthinkingaboutyourcareer

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—technical,business,andconceptualanddesignskills

2. SHRM2013CurriculumGuidebook—I:Staffing:RecruitmentandSelection

PreparationStudythestepsinthejobsearch,whichispreparationforthewrittenassignment.

Let’sdoanexerciserelatedtoyourprofessionaldevelopment.Employersrecruitjobcandidates,sowefocusonyou.

1. Thinkaboutajoborinternshipyouwouldliketohave.Youmayalsogetideaswhenyougotoajobsearchwebsite.

2. Gotoajobsearchwebsiteofyourchoice.Youmayusehttp://www.collegejournal.com(jobsandtipsfornewcollegegrads),http://www.collegerecruiter.com(careerteststoidentifypossiblejobs,internships,andentry-leveljobs),http://www.shrm.org(HRjobsandadvice),http://www.monster.com(simplyalistingofalltypesofjobs),andhttp://www.careerbuilder.com(jobsandadvice).Youmaywanttosearchusingotherwebsitesandusemorethanonejobsearchengine.Ifyouareinterestedinworkingforaspecificbusinessornonprofitorganization,youmayalsovisititswebsite.

3. Readaboutthejob,jobdescription,andspecifications.

4. YourprofessormaywanttheURLsyouusedinyourjobsearch.

WrittenAssignmentInstructions

Typetheanswerstothesethreequestions.

1. Whatjob(s)wereyousearchingfor,andwhichwebsite(s)didyouusetosearch?

2. Listthreeorfourthingsthatyoulearnedaboutjobsearching.

3. Howwillyouusethisinformationtogetajob?

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

YourinstructormayaskyoutodothisSkillBuilderinclassinagroupbysharingyouranswers.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

SKILLBUILDER5-2Résumé

ObjectiveTodeveloparésuméyoucanuseforinternshipsandpart-time,summer,andfull-timeemployment

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—technical,business,andconceptualanddesignskills

2. SHRM2013CurriculumGuidebook—I:Staffing:RecruitmentandSelection

PreparationWritingtherésumé:

Youmaygotoyourcollege’sCareerCenterand/orvisitProvenRésumésathttp://www.provenresumes.comforhelp.Youshouldreadthetipsbelowbeforewritingyourrésumé:

Typeoutyourrésumé,andkeepittoonepage,unlessyouhaveextensive“relevant”experience.Beforefinalizingyourrésumé,improveitbyusingtherésuméassessmentbelow,whichmaybeusedtogradeyourrésumé.

AnswertheserésuméquestionswithYes,Somewhat,orNo:

Within10seconds,canarecruiterunderstandwhatjobyouareapplyingforandthatyouhavethequalifications(skills/experienceandeducation)togettheposition?YoushouldnotusethewordIormeonarésumé.

ObjectiveDoesyourrésuméhaveanobjectivethatclearlystatesthepositionbeingappliedfor(suchassalesrep)?Thejobappliedforaffectsallsectionsofyourrésumébecauseyourrésuméneedstostatehowyouarequalifiedforthejob.Ifyoudon’tlistthejobyouareapplyingfor,yourrésuméwillmostlikelybetossedoutandyouwillnotgetajobwiththefirm.

Education(describerelevantcourses)

Ifeducationisyourmajorqualificationforthejob,istheredetailthatstatestheskillsdevelopedandcoursestakeninschoolthatqualifyyouforthepositionyou’reapplyingfor?Besuretostateyourdegree,major,andminorandconcentration,ifyouhavethem.Don’twriteBachelorofScienceorMasterofBusinessAdministration—useBSandnameofdegreeorMBA.Besuretolistyourmonthandyearofgraduation.Yourrésuméshoulddoagoodjoboffillingonepage.Ifyoudon’thaveextensiveexperience,listrelevantcoursesthatpreparedyouforthejobyouareapplyingfor.Forrelevantcourses,don’tjustincludeashoppinglist.Pickafew“relevant”coursesanddescribehoweachcoursequalifiesyouforthejoblistedinyourobjective.Soifyouwanttobeasalesrep,youshouldstatethatyouareamarketingmajor(orthatyoupursuedamarketingconcentration)andthatyouhavetakentheSalesandSellingcourse.Describetheskillsyoudevelopedinthesalesandotherrelevantcourses.Ifyoulistcomputercourses/skills,besuretolistprogramssuchasMicrosoftWord,Excel,Access,PowerPoint(itisoneword,nottwo),

Windows,SPSS,HTML,etc.Ifyou’veusedthemonthejob,saysowiththeprogramyouused.

ExperienceDoesyourrésumélistexperienceorskillsthatsupportthefactthatyoucandothejobstatedinyourobjective?Besuretolistnamesandaddressesofemployers,withmonthsandyearsonthejob.Ifyouwantthecompanytowhichyouareapplyingtocontactyourbossforareference,listyourboss’snameandtelephonenumberonyourrésumé.Don’tjustlistactivities,suchascuttinggrass.Focusongeneralskillsthatcanbeappliedtothejobyouwant.Trytoshowskills.Didyoudoanyplanning,organizing,leading(influencingothers,communicating,andmotivating),andcontrolling?Giveexamplesofyourskills.Forthesalesjobexample,ifanyofyourpastjobsdon’tincludesalesexperience,listsalesskillsdevelopedonthejob.Listcommunicationskillsthatyouusedwhileinteractingwithcustomersstatinghowyouusedthem.Alsostatethatyouenjoymeetingnewpeopleandthatyouhavetheabilitytoeasilyconversewithpeopleyoudon’tknow.

Accomplishments(NOTnecessarilyaseparatesectionandheading)

Doesyourrésuméclearlylistyouraccomplishmentsandvaluablecontributionsyoumadewhileattainingyoureducationand/orexperience?IfyouhaveahighGPA,youshouldlistitwithyoureducation.Ifyouareonacollegesportsteam,besuretolistitwithanyaccomplishments(suchasMaroonoftheWeek,captain,MVP,orselectiontoconferenceteams).Agoodplacetolistsportsisintheeducationsection.Listjobaccomplishmentslike“Increasedsalesby10%fromMaytoAugust2010,”“EmployeeoftheMonth,”and“Earnedhighesttipsbasedonsuperiorsalesskillsandexcellentcommunicationskillsusedwithcustomers.”Isyourrésuméneat,attractive,andfreeoferrors?Haveneatcolumnsandusetableswithoutgridlines.Usehigh-qualitybondpaperandinkcolorsforhardcopies.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

YourinstructormayaskyoutodothisSkillBuilderinclassinagroupbyshowingothersyourrésumé.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

6SelectingNewEmployees

©iStockphoto.com/shironosov

ChapterOutlineTheSelectionProcess

TheImportanceoftheSelectionProcessStepsintheSelectionProcess

Lookingfor“Fit”Personality-JobFitAbility-JobFitPerson-OrganizationFit

UniformGuidelinesonEmployeeSelectionProcedures

WhatQualifiesasanEmploymentTest?ValidandReliableMeasures

ApplicationsandPreliminaryScreeningApplicationsandRésumésPre-employmentInquiries

TestingandLegalIssuesTheEEOCandEmploymentTestingPolygraphandGeneticTestingWrittenTestingPhysicalTesting

SelectionInterviewsInterviewingTypesofInterviewsandQuestionsPreparingforandConductingtheInterview

BackgroundChecksCreditChecksCriminalBackgroundChecksReferenceChecksWebSearches

SelectingtheCandidateandOfferingtheJob

HiringTrendsandIssuesinHRM

SelectionWithaGlobalWorkforceHRISandtheSelectionProcess

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

6-1Describewhytheselectionprocessissoimportanttothecompany.PAGE1356-2Identifythethreemaintypesof“fit”intheselectionprocessandwhytheyareimportant.PAGE1376-3SummarizethemajorpointsintheUniformGuidelinesonEmployeeSelectionProcedures(UGESP).PAGE1396-4Discusstheuseofapplicationsandrésumésasselectiontools.PAGE1416-5Recallthemajortypesofwrittentestingavailableasselectiontools.PAGE1436-6Explainthevalueofselectioninterviews,includingthethreeprimarytypesofinterviews.PAGE1476-7Defendtheuseofvariousbackgroundchecksastestsforemployment.PAGE1506-8Listthetwobasicmethodsusedtomakefinalselectiondecisions.PAGE1536-9DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE157

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveInadiscussionofhiring,Cindynotesthattheprocessofmovingapersonfromjobcandidatetoemployeeisamatchinggameforboththecandidateandthecompany.Jobcandidateswanttoemphasizetheirattractivequalitieswhileminimizinganydrawbacks.Sometimes,itishardforanemployertodetermineif“whatyouseeisreallywhatyouget.”Istherealinethatshouldn’tbecrossedintheattempttogatherinformationaboutajobcandidate?

Shesays,“WhenSacha,ourfinancemanager,startedtalkingaboutvettingthecandidatesforheropenpositionbycheckingtheirFacebookaccounts,Iknewweneededtotalk.‘Butyoufindoutsomuchaboutpeoplebylookingattheirpage—mostlywhetherornottheyhavedonesomethingthatwoulddisqualifythem,’Sachasaid.”

IsthererealpotentialtoaccessviatheInternetcandidateinformationthatanemployershouldnothavepriortoofferingaposition?Whatarethepitfallstoavoidandlegalrestrictionsthatmustberespectedduringhiring?Chapter6coverstheprocessoneshouldfollowtoproperlyselectemployees.

TheSelectionProcessAftercompletingtherecruitingprocess,weneedtoselectonepersonfromthepooltofillourjobopening.Selectionisimportantbecausebadhirescanbecostly.1Firmsshouldalwaysseektohirethemosthighlyskilledemployeestomaximizetheiroutput,2butthereisoftenamismatchwhenthejobandpersondon’tfittogether,andproductivitysuffersasaresult.3Rememberthatinmostorganizationstoday,atleastoneofourcompetitiveadvantageswillbeouremployees,soifweputthewrongpeopleintothewrongjobs,wecanhavegreatdifficultyincarryingoutourstrategicplans.Soweneedtofocusonfit.4

Selectionistheprocessofchoosingthebest-qualifiedapplicantwhowasrecruitedforagivenjob.Aswithallotheremployeeorganizationaldecisions,wecanapplytheOUCHtesttodeterminewhetherornotwe

shoulduseaparticulartoolormeasureintheselectionprocess.TheOUCHtestwillgiveusaninitialanalysisofthemeasurebeingused,andwhetherweneedtodosomemoreinvestigationbeforewedecidetousethatspecificmeasureintheselectionprocess.

TheImportanceoftheSelectionProcessWhyistheselectionprocesssocriticaltotheorganization?Becauseofthenegativeconsequencesofbadhiringdecisions,whichareessentiallytheresultsofmismatchesbetweenjobsandemployees.Herearethreeofthosereasons.

BadHiresCostTimeandMoney.Firstandprobablymostnotably,ifwehiresomeonewhoisnotwillingorabletodothejobsuccessfully,wewillmostlikelyhavetogothroughthewholeprocessagaininaveryshorttime.Becauserecruitingandselectionissoexpensive,wemustworktoavoidthis.

LO6-1Describewhytheselectionprocessissoimportanttothecompany.

BadHiresResultinLowerProductivity.Haveyoueverseenorworkedwithabademployeewhodidapoorjobdoingtheminimumamountofworkpossible,resultinginpoorcustomerservice,andcreatingextraworkforyouand/orcoworkers?Justafewnewhireswhoshowthislackofconcernfortheorganizationanditscustomerscanbehighlycontagious.Prettysoon,othersmaydecide,“IftheycandotheabsoluteminimumandstillgetpaidwhatIgetpaid,thenwhyshouldIworksohard?”Oncethisoccurs,morale,jobsatisfaction,andorganizationalcommitmentcandropveryquickly.Youdon’twanttoputyourselfandyourorganizationin

suchaposition,soyoumustgiveyourfullattentiontomakingsureyouhireonlycandidateswhofitthejobs.

SelectionTheprocessofchoosingthebest-qualifiedapplicantwhowasrecruitedforagivenjob

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

B.EmploymentLaw(required)32.TheGeneticInformationNondiscriminationAct(GINA)36.FairCreditReportingAct(FCRA)39.Negligenthiring

E.JobAnalysis/JobDesign(required)3.Employmentpractices(recruitment,selection,andplacement)

I.Staffing:RecruitmentandSelection(required)

6.Initialassessmentmethods:Résumés,coverletters,applicationblanks,biographicalinformation,reference/backgroundchecks,geneticscreening,initialinterviews,minimumqualifications7.Discretionaryassessmentmethods8.Ability/jobknowledgetests,assessmentcenters9.Noncognitiveassessments(e.g.,personalityassessments,integritytests,situationaljudgmenttests,interestinventories)10.Structuredinterviews11.Contingentassessmentmethods:

Drugtesting,medicalexams12.Measurementconcepts:Predictors/criteria,reliability,validity13.Selectiondecisions:Ranking,grouping/banding,randomselection

Q.OrganizationalDevelopment(required—graduatestudentsonly)

14.SocialnetworkingX.WorkplaceHealth,Safety,andSecurity(secondary)

10.Testingforsubstanceabuse

BadHiresCanBeNegligentHires.AlmosteverystateinAmericarecognizesthislegalconcept,soHRmanagersmustunderstanditaswell.5Anegligenthireisalegalconceptthatsaysiftheorganizationhiressomeonewhomayposeadangertocoworkers,customers,suppliers,orotherthirdparties,andifthatpersonthenharmssomeoneelseinthecourseofworkingforthecompany,thenthecompanycanbeheldliablefortheindividual’sactions.

Forexample,ifyouhiredasalespersonwhohadacriminalrecordforassaultandtheythenassaultedacustomer,thecompanycouldbeheldliablefortheharmdonetothecustomerwhowasassaulted.Sowehavetomakeeverylegitimateattempttofindoutifcandidateshavethepotentialtobeadangertoothersandweedthemoutduringourselectionprocess.

SHRMB:39

NegligentHiring

WORKAPPLICATION6-1Selectanorganizationyouworkfornoworworkedforinthepastandgiveanexampleofhowamismatchofajobandanemployeeresultedinanegativeoutcome.

StepsintheSelectionProcessTheselectionprocessfollowsaseriesofstepsthatareillustratedinExhibit6-1.Notethatthisisageneralguideandthatonemayskipsomestepsintheprocessorperhapsnotfollowthemintheexactsequenceshown.Forexample,theremaynotbeanypreliminarytestingorinitialinterviewing,andtheremaynotbeanydrugscreeningorphysicalexam.

Ifyouthinkaboutitforaminute,theprocessstepsmakelogicalsense.Peopleapplyforjobs,andthenthefirmscreensthejobcandidatestonarrowdowntheselection.Thisscreeningmayincludeatestofsometypeandaninitialinterviewforthetopcandidates.

Beforewegetintothoseselectionstepsthough,let’sdiscusstheimportanceofselectingtheapplicantwhobestmatchesthejob,orwhatwecall“lookingforfit.”WealsoneedtobrieflydiscussthefederalUniform

GuidelinesonEmploymentSelectionProcedures(UGESP)thataffecthowweconducteachofthestepsintheselectionprocess.Oncewehavecoveredthesetwoitems,wecangointotheactualstepsoftheselectionprocess.

SHRMI:7

DiscretionaryAssessmentMethods

WORKAPPLICATION6-2Selectajobyouholdatpresentorheldinthepast,listeachstepintheselectionprocess,andstateifitwasorwasnotusedtohireyou.

Lookingfor“Fit”“Weholdthesetruthstobeself-evident,thatallmenarecreatedequal.”6Isthisatruestatement?ItiswhattheUSDeclarationofIndependencesays!However,weallknowthatpeoplearenotequal.Wealsoknowthatasmanagers,ifwetreatpeopleequally(thesame),thenwereallyaren’tdoingourjob.Managersaresupposedtogetthebestproductivityoutoftheirworkforce,butnoteveryonecandoeverythingequallywell.Sowehavetotreatpeopledifferentlybutfairlyinordertobesuccessfulinourjobs.Weneedtoattempttoassessthreethingsinthisprocess:personality-jobfit,ability-jobfit,andperson-organizationfit.Let’stakealookattheseitems.

Personality-JobFitOurpersonalitydefinestoagreatextentwhoweareandhowweactandreactincertainsituations.Weallhaveuniquepersonalities.Someofusarestronglyextrovertedandenjoy“workingthecrowd”inasocialsetting,whileothersmaybefairlyintrovertedandfeelextremelyuncomfortableinsuchanenvironment.Someofusdesiretotrynewthingsconstantly,whileothersdon’tlikechange.Personalityaffectsthethingspeopleenjoydoingandevenaffectsthewaythattheywork.Soyouhavetodoyourbesttoidentifycandidates’personalitytypesandputtheminpositionsthatwillbeenhancedbytheirparticularpersonalitytraits,suchasanoutgoingextrovertinsales.Thisiscalledpersonality-jobfit.7

Exhibit6-1StepsintheSelectionProcess

LO6-2Identifythethreemaintypesof“fit”intheselectionprocessandwhytheyareimportant.

SHRME:3

EmploymentPractices(Recruitment,Selection,Placement)

Negligenthire Alegalconceptthatsaysiftheorganizationhiressomeonewhomayposeadangertocoworkers,customers,suppliers,orotherthirdparties,andifthatpersonthenharmssomeoneelseinthecourseofworkingforthecompany,thenthecompanycanbeheldliablefortheindividual’sactions

Ability-JobFitAllofushaveacertainsetofphysicalandintellectualskills,andnotwopeopleareexactlyalike.Someofusareverycapableatworkingwithcomputers,whileothersaremorecapableatsalesorphysicalwork.Eachofusismoreskilledatsomethingsthanothers.

Managershavetoanalyzeacandidate’sabilitiesandlimitations.Usingthisinformation,themanagermusthiretherightpeopleandthenassignthemtothetypesofjobsforwhichtheyarebestsuited.Hereagain,ifweassignthewrongpersontoajob,wecaneasilyfrustratethatemployeeandasaresultcausemotivationandjobsatisfactiontodrop,whichinturnwilllikelycauselossesinproductivity.Sowehavetogettheability-jobfitright.8

WORKAPPLICATION6-3Selectapresentorpastjobofyoursandexplainindetailhowwellyourpersonalityandabilityfitordidnotfitthejobandhowwellyoufittheorganization.

Person-OrganizationFitFinally,wehavetoassesstheperson-organizationfitwhendecidingonwhichcandidatetoselect.9Person-organizationfitdealswiththeculturalandstructuralcharacteristicsoftheorganizationandhowwellthecandidatewillfitwithinthatstructureandculture.10Ifacandidateworksbestinadecentralizedorganizationwithstrongindividualrewardsystems,andifwearehiringpeopletoworkinatightlycontrolledandcentralizedteam-baseddivision,thenitisunlikelythatthecandidatewillbeableorwillingtoconformtotherequirementsofthecompanystructureandculture.Asaresult,suchcandidateswilllikelybeunhappyinthissituationandwillbemorelikelytoleaveassoonastheycanfindanotheropportunitythatmorecloselymatchestheirpersonality.

UniformGuidelinesonEmployeeSelectionProceduresTheUniformGuidelinesonEmployeeSelectionProcedures(UGESP)provideinformationthatcanbeusedtoavoiddiscriminatoryhiringpracticesaswellasdiscriminationinotheremploymentdecisions.Mostoftencalledsimplythe“UniformGuidelines,”theywerecreatedtoguideemployersintheireffortstocomplywiththefederallawsconcerningallemploymentdecisions,andespeciallytheselectionprocess.11

WhatQualifiesasanEmploymentTest?TheUGESPformalizeandstandardizethewayinwhichthefederalgovernmentidentifiesanddealswithdiscriminatoryemploymentpractices.Theydefinetheconceptof“testsforemployment”thatareusedineithertheselectionprocessorotheremploymentactions.Butwhatisatestforemployment?Itisaprettybroadterm.Theguidelinesdefineitasapplyingto

...testsandotherselectionprocedureswhichareusedasabasisforanyemploymentdecision.Employmentdecisionsincludebutarenotlimitedtohiring,promotion,demotion,membership(forexample,inalabororganization),referral,retention,andlicensingandcertification...Trainingortransfermayalsobeconsidered

employmentdecisionsiftheyleadtoanyofthedecisionslistedabove.12

Althoughtheguidelinesspecificallysaythatthey“applyonlytoselectionprocedureswhichareusedasabasisformakingemploymentdecisions,”13ifwelookcloselyatthedefinitionofemploymentdecisionabove,prettymuchanyemploymentprocedurethatwewouldusebecomesatestforemployment,whichmeansthatweneedtofollowtheUGESPguidelinesduringeverystepoftheselectionprocessandallotheractionswithemployees.

LO6-3SummarizethemajorpointsintheUniformGuidelinesonEmployeeSelectionProcedures(UGESP).

ValidandReliableMeasuresTheUGESPalsodiscussestheneedforanyemploymenttesttobevalidandreliable.Insimplelanguage,validityistheextenttowhichatestmeasureswhatitclaimstomeasure.TheUGESPnotesthat“usersmayrelyuponcriterion-relatedvaliditystudies,contentvaliditystudies,orconstructvaliditystudies”14tovalidateaparticularselectionprocedure.Butwhatarethesevaliditymeasures?

Criterion-RelatedValidity.Criterion-relatedvalidityisanassessmentoftheabilityofatesttomeasuresomeotherfactorrelatedtothetest.Forexample,SATscoresaredesignedtobeoneofthepredictorsofcollegesuccess.Inemployment,criterion-relatedvalidityoccurswhenwecanshowastrongrelationshipbetweenjob

candidates’scoresonatestandon-the-jobperformanceofthosecandidatesaftertheyarehired.15

Employmenttestsmustbedesignedtohavevalidandreliablemeasures,meaningthetestshouldactuallymeasurewhatitclaimsto,andthatitteststhesemeasuresconsistentlyforallparticipants.Otherwise,thetestmaynotprovideaccurateresults.

©iStockphoto.com/AJ_Watt

UniformGuidelinesonEmployeeSelectionProcedures(UGESP)Guidelinesthatprovideinformationthatcanbeusedtoavoiddiscriminatoryhiringpracticesaswellasdiscriminationinotheremploymentdecisions

ValidityTheextenttowhichatestmeasureswhatitclaimstomeasure

Criterion-relatedvalidityAnassessmentoftheabilityofatesttomeasuresomeotherfactorrelatedtothetest

ContentValidity.Contentvalidityisanassessmentofwhetheratestmeasuresknowledgeorunderstandingoftheitemsitissupposedtomeasure.Sowe

havetoshowthat“thecontentofaselectionprocedureisrepresentativeof[measures]importantaspectsofperformanceonthejob.”16Inotherwords,ourtesthastobeavalidmeasureofknowledge,skills,orabilitiesthataredirectlyapplicabletothejob,suchasanessaytestthatcontainsintentionalEnglisherrorstodeterminehowmanyerrorstheeditorcandidatecancorrectinasetperiodoftime.

ConstructValidity.Constructvaliditymeasuresatheoreticalconceptortraitthatisnotdirectlyobservable.Forconstructvaliditytobeapplicable,wemustdemonstratethat“(a)aselectionproceduremeasuresaconstruct(somethingbelievedtobeanunderlyinghumantraitorcharacteristic,suchaspersonalityandhonesty)and(b)theconstructisimportantforsuccessfuljobperformance.”17Forexample,intelligenceisaconstructthatismeasuredbyanIQtest,andresearchhassupportedtheIQ

test’svalidity.Intelligenceisamajorpredictorofjobperformance.However,theUGESPsaysthatthismethodofvalidationisfarmoredifficulttodemonstratethanaretheothertwooptions,soitwouldbebestifyoucanshowthatameasurehascriterion-relatedorcontentvalidity.Largecorporationsoftenusepersonality,honesty,andIQtypesoftests,butthetestsareusuallydevelopedandtestedwithsupportingvaliditybyconsultingfirms,andthereisafeeforeverytestgiven,soitcanbeexpensive.

Reliability.Reliabilityistheconsistencyofatestmeasure.Inadditiontobeingvalid,forameasuretobeusefulinanytypeofemploymenttesting,itneedstobereliable.

Reliabilitymeansthatthemeasureisconsistentinsomeway—perhapsconsistentwhenusedbytwodifferentpeople(calledinter-raterreliability)orconsistentovertime

(calledtest-retestreliability).Wewantourmeasureswhenweareworkingwithpeopletobereliablemeasures,meaningtheyshouldbeconsistentovertimeandbetweenpeople.18

WORKAPPLICATION6-4Selectapresentorpastjobofyoursandexplainwhichoneofthethreetypesofvaliditywouldbethemostrelevanttothatjob.

TheRelationshipBetweenReliabilityandValidity.Let’sputvalidityandreliabilitytogether.Ifatestisnotreliable,itcan’tbevalid.Forexample,ifajobcandidatestepsonourcompanyscaleandweighs150pounds,thenstepsoffandonagainandweighs155,thescaleisnotreliable.Howmuchdoesthecandidateactuallyweigh?Atestcanbereliablebutnotvalid,butitcan’tbevalidwithoutbeingreliable.Ifajobcandidatestepsonthecompanyscaleandweighs150poundsandthenweighs150poundsthreemoretimes,ourscaleisreliable.However,whatifwe

placethepersononamoreexpensive,betterscaleandthepersonweighs155?Thenourscaleisreliablebutnotvalidbecauseitdoesn’taccuratelymeasureaperson’sweight.

NowthatweunderstandthatweneedtoselectforfitandfollowtheUGESP,wearereadytodiscusstheselectionstepsillustratedinExhibit6-1.

SHRMI:12

MeasurementConcepts:Predictors/Criteria,Reliability,Validity

ContentvalidityAnassessmentofwhetheratestmeasuresknowledgeorunderstandingoftheitemsitissupposedtomeasure

ConstructvalidityAnassessmentthatmeasuresatheoreticalconceptortraitthatisnotdirectlyobservable

ReliabilityTheconsistencyofatestmeasurement

6-1ApplyingTheConcept

ValidityandReliabilityWritethelettercorrespondingtoeachofthefollowingbeforethesituationinwhichitisdiscussed.

1. criterion-relatedvalidity2. contentvalidity3. constructvalidity4. reliability

_____1.Ajobcandidatefailedajobapplicationtest,butsheclaimsthatthetestisnotfairandthatshecandothejob.Whattypeofevidencedoyouneedtoensurethatthetestisinfactagoodpredictorofjobperformance?_____2.Youarerunningalawfirmandrequireallyourlawyerstopassthebarexam.Whatdoesthebarexamneedtodotoindicateitisagoodtest?_____3.Youhavedevelopedanewsystemforpredictingfuturecompanysales.Yourbosswantssomeproofthatitworks._____4.AnNFLteammakesarecruittakeanintelligencetest.Therecruit’sscoreisbelowtheacceptablelevel,sotheteamrefusestohiretheplayer.Theplayercomplains,statingthathisintelligencescorehasnothingtodowithplayingfootball.

Whatevidencedoyouneedtosupportnothiringtheplayer?_____5.Youdecidedtoletthejobcandidateinsituation1abovetaketheapplicationtestagain.Thenextdayshetookthetestagain,andthescorewaswithinacoupleofpointsofherscoreonthefirsttest.Soyouagaindecidenottohireher.Whatevidencedoyouneedtosupportthisdecision?

ApplicationsandPreliminaryScreeningThefirststepintheselectionprocessistogetjobapplicantstofilloutanapplicationorsendintheirrésumé.Thenwedopreliminaryscreeningthatmayincludeaquickbackgroundcheck,testing,andinitialinterviewingtonarrowdowntheapplicantstothebestmatches,orfit,forthejob.Let’sdiscusstheapplicationandrésuméandwhatyougenerallycanandcan’taskduringthepre-employmentinquiries.

ApplicationsandRésumésCandidatesaretypicallyaskedtocompleteanapplicationformtoprovidebiographicaldata.19Weneeddatatoaidinselectingthebestpersonforthejob.20Evenincaseswhererésumésareappropriate,manycompaniestodayrequireacompletedapplicationinordertobeabletocomparecandidateseasierbecausetheinformationisinastandardformat;thisisneededforcomputerscanningofapplications,whichiscommonlyusedinlargeorganizations.Theapplicationand/orrésuméallowsustoidentifyyourbasicskillset,background,workhistory,education,andothergeneralinformation.

Whetheritisanapplicationorarésumé,weneedtoverifytheinformation.Thereisanecdotalevidencefromprofessionalrecruitersandbackgroundscreenersthatbetweenonethirdandonehalfofallapplicationsandrésumésincludesignificant

fictitiousinformation.21Andcompanieshavestartedtocheckthesedocumentsmuchmorethoroughlybecausetheyknowthatmanyoftheirapplicantswillembellishandoutrightlie—andtheproblemhasgottenworseovertheyears.22

LO6-4Discusstheuseofapplicationsandrésumésasselectiontools.

SHRMI:6

InitialAssessmentMethods:Résumés,etc.

Pre-employmentInquiriesOnajobapplicationorduringaninterview,nomemberofanorganizationshouldaskanyquestionsthatcanbeusedtoillegallydiscriminateagainstanapplicant,unlessthequestionsarebonafideoccupationalqualifications(BFOQs).Exhibit6-2listssomeinformationonwhatgenerallycanandcannotbeaskedduringtheselectionprocess.

Exhibit6-2Pre-employmentInquiries

Itmaybehardtomemorizethelist,buttokeepitsimple,everyoneinthefirmthatisinvolvedinrecruitingandselecting,notjustHR,shouldfollowtwomajorrulesofthumbtoavoiddiscriminationandapossiblelawsuit:

1. Everyquestionaskedshouldbejobrelated.Ifthequestionisnotjobrelated,thereisnoreasontoaskit,sodon’t.

2. Anygeneralquestionthatyouaskisoneyoushouldaskofallcandidates.

WORKAPPLICATION6-5Haveyouoranyoneyouknoweverbeenaskedanillegalquestiononanapplicationformorduringajobinterview?Whatwasthequestion?

6-2ApplyingTheConcept

Pre-employmentQuestionsUsingExhibit6-2andthegeneralguidelinenottoaskanyquestionsthatarenotjobrelatedunlesstheyareBFOQs,identifywhethereachquestioncanorcannotbeaskedonanapplicationformorduringajobinterview.

1. Legal(canask)2. Illegal(cannotaskduringpre-employment)

_____6.Whatlanguagesdoyouspeak?_____7.Areyoumarriedorsingle?_____8.Howmanychildrendoyouhave?_____9.Soyouwanttobeatruckdriver.AreyouamemberoftheTeamstersUnionrepresentingtruckdrivers?_____10.Areyoustraightorahomosexual?_____11.Haveyoueverbelongedtoaunion?_____12.Whatisyourdateofbirth?_____13.Haveyoubeenarrestedforstealingonthejob?_____14.Doyouownyourowncar?_____15.Doyouhaveanyformofdisability?_____16.AreyouamemberoftheKnights

ofColumbus?_____17.Canyouproveyouarelegallyeligibletowork?_____18.Areyoucurrentlyamemberofthemilitaryreserve?_____19.Whatisyourreligion?_____20.Howmuchdoyouweigh?

TestingandLegalIssuesAswenotedinChapter3,allofthefederalEEOlawsapplyto“anyemploymentaction,”soclearly,theyapplyinallselectiontests.Managersmustalsoknowthattherearesomeothersignificantlawsdealingwithallowablehiringpractices.Let’scompleteaquickreviewofEEOCrulesandvarioustestingoptions.

TheEEOCandEmploymentTestingTheUGESP(coveredabove)werecreatedtoprovidea“uniformfederalpositionintheareaofprohibitingdiscriminationinemploymentpracticesongroundsofrace,color,religion,sex,ornationalorigin.”23TheguidelineshavebeenformallyadoptedbythefederalEqualEmploymentOpportunityCommission(EEOC),theDepartmentofLabor,theDepartmentofJustice,andtheCivilServiceCommission.Assuch,theEEOCwillusetheseguidelinesanytimeitisfacedwithadiscrimination-in-hiringcomplaint.IftheEEOCinvestigatesacomplaintaboutemploymenttestingbeingdiscriminatory,thecompanywillhavetoprovideevidencetosupportthevalidityofthetestforthejobbeingfilled.Ifthecompanycan’tsupportthatthemeasureisvalid,itislikelythattheEEOCwillconsiderthetestadiscriminatoryhiring

practice.

LO6-5Recallthemajortypesofwrittentestingavailableasselectiontools.

PolygraphsandGeneticTestingPolygraphtestingcanonlybeusedinafewcircumstances.The1988EmployeePolygraphProtectionAct(EPPA)madeitillegaltouseapolygraphtotestemployeehonestyinmostcircumstances.However,therearetwoexceptionsforcorporationsandotherbusinesses(thereareotherexceptionsforgovernmentandnationalsecurity).24SeeExhibit6-3forasummaryofsomeoftheexceptions.

Genetictesting.AsdiscussedinChapter3,GINAistheGeneticInformationNondiscriminationAct(GINA),25whichprotectspeoplefromdiscriminationbyhealthinsurersandemployersonthebasisoftheirDNAinformation.Wehavetorememberthatthis

informationisprotectedandnotuseitinselectionprocesses.

Polygraphtestingcanonlybeusedinafewcircumstances.

©iStockphoto.com/Sproetneik

SHRMB:32

TheGeneticInformationNondiscriminationAct(GINA)

WrittenTestingWrittentestscanbeusedtopredictjobsuccess,aslongasthetestsmeetEEOCguidelinesforvalidityandreliability.Today,writtentestsareacommonpartoftheselectionprocess.26Infact,80%ofmidsizeandlargecompaniesusepersonalityandabilityassessmentsforentryandmidlevelmanagementpositionstohelpensuretherightfitbetweenthejobcandidateandthejob.27

SkillsTests.Skillstestscanbeeitherwrittenordoneinphysicalform.Awrittenskillstestissimplyanassessmentinstrumentdesignedtodetermineifyouhavetheabilitytoapplyaparticularknowledgesettodothejobyouareapplyingfor.HaveyouevertakenawrittentestonMicrosoftWordorPowerPoint?Ifso,youhavetakenawrittenskillstest.

Let’susetheOUCHtesttofindoutifweshoulduseatest.Isaskillstestobjective?CanwegiveyouatestonMicrosoftWord,forexample,andthenansweryesornoastowhetheryouknowhowtoindentanditalicize?Ifso,thetestisobjective.Isaskillstestuniforminapplication?Ifwegivethesametesttoeveryoneinthesamesituation,itis.Isitconsistentineffect?Ingeneral,theanswerisyes.However,wecancertainlydesignskillsteststhatarenotconsistentineffect,whetherwedosointentionallyorunintentionally,sowehavetovalidatethetest.Doesithavejobrelatedness—adirectrelationshiptotheprimaryaspectsofjobperformance?Iftheanswerisyes,itmeetstheOUCHtest.

SHRMI:9

NoncognitiveAssessments(e.g.,PersonalityAssessments,etc.)

SkillstestAnassessmentinstrumentdesignedtodetermineifyouhavetheabilitytoapplyaparticularknowledgeset

PersonalitytestAtestmeasuringthepsychologicaltraitsorcharacteristicsofapplicantstodeterminesuitabilityforperformanceinaspecifictypeofjob

InteresttestAtestmeasuringaperson’sintellectualcuriosityandmotivationinaparticularfield

PersonalityandInterestTests.Personalitytestsmeasurethepsychologicaltraitsorcharacteristicsofapplicantstodeterminesuitabilityforperformanceinaspecifictypeofjob.TheMyers-BriggsType

IndicatorandtheBirkmanMethodaretwocommonpersonalitytests.Interesttestsaresimilar,buttheymeasureaperson’sintellectualcuriosityandmotivationinaparticularfield.Ifthereisalegitimatereasonforhavingapersonwithaparticulartypeofpersonalityorcertainsetofinterestsinajob,thenweneedtosupportthevalidityandreliabilityofthetestforthosepersonalitytraitsorinterests.Ifwecan’tsupportarelationshipbetweentheseitemsandthejob,thenanapplicantcouldpotentiallytakethecompanytocourtfordiscriminatoryhiringpractices.28

Exhibit6-3ExceptionstotheEPPAforPolygraphTesting

WORKAPPLICATION6-6Haveyouoranyoneyouknowtakenawrittentestwhenapplyingforajoboronthejob?Ifso,statethetypeoftestanddescribeitscontent.

CognitiveAbilityTests.Cognitiveabilitytestsareassessmentsofgeneralintelligenceorofsometypeofaptitudeforaparticularjob.Hereagain,weneedtoensurethattheteststhatmaybeusedareprofessionallydeveloped,reliable,andvalidindicatorsofaparticularabilityorknowledgeset.Courtshaveupheldtheuseofcognitiveabilitytesting,evenwhensuchtestinghadapotentialdisparateimpact,aslongastheabilitybeingtestedwasdirectlyrelatedtoabusinessnecessityandwasjobrelated.29Ifyoucan’tvalidatethetest,don’tuseit.

HonestyorIntegrityTests.Thereareactuallytwotypesofhonestytests:pen-and-papertestsandpolygraphtests,alsoknownasliedetectortests—whichasstatedhaveverylimitedlegaluse.Dishonestemployeescanbenegligenthiresandoftenstealfromthecompanyorhurtitsimage,whichcanbeverycostly,soyouwanttodoyourbestnottohirethem.Honestyandintegritytestsarecertainlynotinfallible,andtheycanbefakedinsomecases.Buttheevidencesupportsthattheyhavevalueinidentifyingpeoplewhomaybelesshonestandallowingtheemployertoweedsomeoftheseindividualsoutoftheselectionprocess.30

PhysicalTestingPhysicaltestingcanalsohelpusselectthebestcandidateforcertainjobs.Physicaltestsaredesignedtoensurethatapplicantsarecapableofperforminginwaysdefinedbythejobspecificationanddescription.Physicaltestingwillgenerallybevaluablewheretherearesignificantphysicalskillsrequiredtoperformthejoborwherethereisasignificantsafetyrisk,creatingdangerfortheemployeeorothersbyworkinginajobforwhichtheyarephysicallyunqualified.Therearemanytypesofphysicaltesting,butwewilllimitourdiscussiontosomeofthemostcommonforms.

PhysicalSkillsTests.Theyaredesignedtodeterminewhetheryouhavetheskillsandabilitiestoperformaparticularsetofphysicaltasks.Physicalskills

testsmayincludetestsofstrengthand/orendurance,testsofeye-handcoordination,orotherphysicalabilities.Thesetestscanalsobeconductedinseveraldifferentforms,includingworksampletests,assessmentcenters,andsimulations.

Let’stakeacloserlookatsomeofthecommonformsofphysicaltesting.Worksamplesprovideasampleoftheworkthatthecandidatewouldperformonthejobandaskthecandidatetoperformthetasksundersometypeofcontrolledconditions.Asimpleexampleofaworksampletestmightbeaskingthecandidatetotypeaparticularletterandthenjudgingthespeedandaccuracyoftheresults.

Anassessmentcenterprovidesamorerigorousphysicaltestingenvironment.Assessmentcentersareplaceswherejobapplicantsundergoaseriesoftests,interviews,andsimulatedexperiencestodeterminetheirpotentialforaparticularjob.Forexample,atT-Mobile,youmighthaveto

assistafictitiouscustomerwhoismadabouthisbill,oryoumighthavetoprovidecustomerswithinformationaboutnewcompanyservices.SoanassessmentcenterusedbyT-Mobilemightgivetestsdesignedtomakecandidatesdemonstratehowwelltheycanuseseveraldifferentcomputersystemsdesignedtoobtainandcommunicatetheinformationthatcustomersneed.

Wecanalsousesimulations,whichallowustoputthepersonintoahigh-pressuresituationbutstillcontroltheenvironmentsothatwelimitthedangerandcost.Simulationsareveryvaluableincaseswherearealeventcouldbedangerous,oremotionallytaxingorcostalotofmoney.Simulatorsandevenvirtualrealityenvironmentsarebeginningtobeusedinmanysituationssuchasmilitarytrainingandteachingnewdoctorshowtoperformdifferenttypesofsurgery.31

SHRMI:8

Ability/JobKnowledgeTests,AssessmentCenters

CognitiveabilitytestAnassessmentofgeneralintelligenceorofsometypeofaptitudeforaparticularjob

PhysicaltestAtestdesignedtoensurethatapplicantsarecapableofperformingonthejobinwaysdefinedbythejobspecificationanddescription

Worksample Atestconductedbyprovidingasampleoftheworkthatthecandidatewouldperformonthejobandaskingthecandidatetoperformthetasksundersometypeofcontrolledconditions

AssessmentcenterAplacewherejobapplicantsundergoaseriesoftests,interviews,andsimulatedexperiencestodeterminetheirpotentialforaparticularjob

SimulationAtestwhereacandidateisputintoahigh-pressuresituationinacontrolledenvironmentsothatthedangerandcostarelimited

PhysicalExams.Ifthejobwillrequireheavyphysicalexertion,theremaybealegitimateneedtohaveindividualssubmittoaphysicalexamtoensurethattheyarehealthyenoughforthestress.(ThinkNFLlineman!)Inothercases,wemayberequiredbythestateorfederalgovernmenttohaveindividualswhoworkinspecificfieldstakeaphysicalexambeforetheyareallowedtoworkincertainjobssuchasdrivingaheavytruck(DOTphysical)orflyingaplane(FAAphysical).

However,wehavetobeveryawareofthepotentialfordiscriminationbasedondisabilityifwerequireaphysicalexamasaprerequisitetoworkinourorganization,somakesureanyphysicaltestisvalidordon’tuseit.

SHRMI:11

ContingentAssessmentMethods:DrugTesting,MedicalExams

DrugTesting.Althoughnotrequired,mostemployershavetherighttotestforawidevarietyofsubstancesintheworkplace.32Theprimaryreasonsfordrugtestingwillgenerallybeworkplacesafetyandproductivity—substanceabuserscommonlyhavemoreworkplaceaccidents,makemoreerrors,andmissmoredaysofwork,whichalsoplacesaburdenoncoworkers.

Butemployersneedtofollowsomeguidelinestostaywithinthelawinimplementationandmaintenanceofanydrug-testingprogramtheychoosetoimplement.In

general,testingmustbedonesystematicallyinoneoftwoforms:either“random”or“universal.”Testingcan’tbeselectiveinmoststates.Inotherwords,wecan’tdecidewewanttotest“AmyJones”becausewejustwantto.Testingcanbeuniversalinsomesituations(e.g.,afteraworkplaceaccidentoroninitialofferofemployment)andrandominothers(e.g.,quarterlydrugtestingofasampleoftheworkforce),butithastobeoneortheotherandwehavetospecifywhichoptionweuseineachsituation.

Moststatesnowrequirepriorauthorizationfordrugtesting.Inthecaseofapplicants,thisauthorizationisusuallypartofthelegalnoticesonthejobapplication.Forexistingemployees,itwillusuallybepartoftheemployeehandbook.Thedrug-testingpolicymustincludefull-disclosureofsubstanceabusetraining,whentestingwilloccur,substancestobedetected,anddisciplinaryactioniftestingpositive.Thepolicymayalsorequiretheemployerto“reasonablyaccommodate”employeeswhovoluntarily

submittoanalcoholordrugrehabilitationprogram.Inmoststates,thepolicyisnotallowedtoexemptmanagerialemployeesfromtesting.

Therecontinuestobediscussionofrecentstatelawslegalizingmedicinalorevenrecreationalmarijuanaandhowthisaffectscompanydrug-testingpolicies.Thesimplestansweristhattheselawsdonotcurrentlyaffectcompanydrugpolicies.Ineachcasewhereanindividualhaschallengedadetrimentalemploymentaction(includingterminationforapositivedrugtest)incourt,allthewayuptotheUSSupremeCourt(Ashcroftv.Raich),thedecisionhasbeenthatemployerscan“safelyrefusetoacceptmedicalmarijuanaasareasonablemedicalexplanationforapositivedrugtestresult.”33EmployersarealsonotrequiredtoaccommodateemployeeuseofmedicalmarijuanaundertheADA.

SHRMX:10

TestingforSubstanceAbuse

WORKAPPLICATION6-7Haveyouoranyoneyouknowtakenaphysicaltestwhenapplyingforajoboronthejob?Ifso,statethetypeoftestanddescribeitscontent.

Fitness-for-DutyTesting.Asignificantnumberofcompaniestodayareturningtofitness-for-dutytestsinplaceofmoreinvasivedrugtesting.Afitness-for-dutytestsimplyidentifieswhetherornotanemployeeisphysicallycapableataparticularpointintimeofperformingaspecifictypeofwork.34Federallawnotesthatwecanuseamedicalexamination“ifitisjobrelatedandconsistentwithbusinessnecessity.”35Forinstance,sometruckingfirmsusefitness-for-dutytestingbeforedriversareallowedtotakean18-wheeltruckoutoftheirterminals.Anotherplusforthistypeoftestingisthatitis

muchmoreacceptabletoemployeesthandrugtesting.

Testing,inallforms,canbetime-consumingandexpensive.Therefore,testinghastopayforitselfthroughitsabilitytohelpyouhireapplicantswhoareinfactagoodfitforthejobandtheorganization.Itmaysaveyoutimeandmoneybypreventingyoufromhiringandthenimmediatelylosingemployeeswhoareabadfit,preventingnegligenthires,andimprovingworkerproductivitybymaximizingthechanceofhiringgood-fitemployees.Thisjustifiestheinvestmentinthetest.SoasanHRmanager,youwillhavetomakedecisionsaboutwhetherornottestingisagoodinvestmentinyourparticularindustryandforhelpingyouselectthebestcandidateforthespecificjobsyouneedtofill.

Fitness-for-dutytestAtestidentifyingwhetherornotanemployeeisphysicallycapableataparticularpointintimeofperformingaspecifictypeofwork

6-3ApplyingTheConcept

TypeofTestWritebeforeeachjobsituationbelowthelettercorrespondingtothetypeoftestdescribed.

1. genetic2. skills3. personalityandinterest4. cognitiveability5. honestyorintegrity—polygraph6. physicalskills7. physicalexam8. drug

_____21.Aspartoftheselectionprocess,youwillhavetoanswerquestionswhilebeingmonitoredbythismachine._____22.Apaper-and-penciltestisadministeredsothatwecandeterminewhetheryouhavetherightcharacteristicstosucceedonthejob._____23.Youhavetoundergoanexambyourdoctortodeterminewhetheryoucanhandlethejob._____24.Togetthedrywallingjob,youwillhavetohang,tape,andpaste10sheetswhiledoingaqualityjob,allin3hours._____25.Partoftheselectionprocessistotakeourintelligencetest._____26.Partofthefirefightertestisto

carrythis50-pounddummyupthisladderin2minutesorless._____27.Youhavetogointhebathroomnowandputasampleofyoururineinthiscupsowecantestit._____28.Youneedtotakeatestsothatwecandetermineifyoumightgetanyknownillnessesordiseasesinthefuture.

SelectionInterviewsRememberthatduringtheselectionprocess,someoftheusualstepsmaybeskippedorcompletedoutofsequence.Whiletheinitialinterviewmaybeskipped,rarelywillacandidategetajobwithoutbeinginterviewedbyatleastoneperson.Manyorganizationstoday,suchasNike,PricewaterhouseCoopers,andGoogle,areusingtechnologytoenhancetheirabilitytoquicklycompletescreeninginterviews.36

InterviewingTheinterviewisusuallythemostheavilyweightedandoneofthelaststepsintheselectionprocess.37Togetajob,youneedtobeabletoacetheinterview,38butasamanager,youwillneedtoknowhowtoconductajobinterview.Sothispartofthesectioncanhelpyoudobothwell.YoucanpracticethisskillinSkillBuilder6-2.

Animportantfocusoftheinterviewistoassesstheapplicant’sfit(personality-,ability-,andperson-organizationfit).MorethanhalfofHRprofessionalsrankculture(person-organization)fitasthemostimportantcriterionattheinterviewstage.39YoucanalsopracticeyourinterviewerskillsinSkillBuilder6-1.

LO6-6Explainthevalueofselectioninterviews,includingthethreeprimarytypesofinterviews.

SHRMI:10

StructuredInterviews

TypesofInterviewsandQuestionsExhibit6-4showsthevarioustypesofinterviewsandquestions,whichwediscussinthissection.

TypesofInterviews.Threebasictypesofinterviewsarebasedonstructure.Inastructuredinterview,allcandidatesareaskedthesamelistofpreparedquestions.Inanunstructuredinterview,therearenopreplannedquestionsorsequenceoftopics.Inasemistructuredinterview,theinterviewerhasalistofquestionsbutalsoasksunplannedquestions.Thesemistructuredinterviewisgenerallypreferredbymostinterviewers.Ithelpsavoiddiscrimination(becausetheinterviewerhasalistofpreparedquestionstoaskallcandidates),butitalsoallowstheinterviewertoaskeachcandidate

questionsrelatingtothatperson’sownsituation.Theinterviewerdepartsfromthestructurewhenappropriate.Atthesametime,usingastandardsetofquestionsmakesiteasiertocomparecandidates.Theamountofstructureyoushouldusedependsonyourexperienceasaninterviewer.Thelessexperienceyouhave,themorestructureyouneed.

Manycompaniesnowusecomputerstoconductthefirstroundofinterviews.

©iStockphoto.com/Yuri

TypesofQuestions.Developingasetofconsistentquestionstoaskallcandidatescanhelpyouobjectivelycomparethecandidatesandselectthemostqualified.40Thequestionsyouaskgiveyoucontrolovertheinterview;theyallowyoutogettheinformationyouneedtomakeyourdecision.Remember,though,thatallquestionsshouldhaveapurposeandshouldbejobrelated.

Youmayusefourtypesofquestionsduringaninterview:

1. Closed-endedquestionsrequirealimitedresponse,oftenayesornoanswer,andareappropriatefordealingwithfixedaspectsofthejob.Examplesinclude“Doyouhaveaclass-onelicense?”and“Canyouproduceitifhired?”

2. Open-endedquestionsrequiredetailed

responsesandareappropriatefordeterminingcandidateabilitiesandmotivation.Examplesinclude“Whydoyouwanttobeacomputerprogrammerforourcompany?”and“Whatdoyouseeasamajorstrengthyoucanbringtoourcompany?”

3. Hypotheticalquestionsrequirecandidatestodescribewhattheywoulddoandsayinagivensituation.Thesequestionsareappropriateforassessingcapabilities.Anexamplewouldbe“Whatwouldtheproblembeifthemachinemadearingingsound?”

4. Probingquestionsrequireaclarificationresponseandareappropriateforimprovingtheinterviewer ’sunderstanding.Probingquestionsarenotplanned.Theyareusedtoclarifythecandidate’sresponsetoanopen-endedorhypotheticalquestion.Examplesinclude“Whatdoyoumeanby‘itwastough’?”and“Whatwasthedollarincreaseinsalesyouachieved?”

Today,HRinterviewerspreferbehavior-basedquestionsthataskcandidatestodescribehowtheyhandledspecificsituations.LaszloBock,Google’svicepresidentofpeopleoperations,notedinarecentinterviewthat“whatworkswellarestructuredbehavioralinterviews,whereyouhaveaconsistentrubricforhowyouassesspeople,ratherthanhavingeachinterviewerjustmakestuffup.”Oneofhissamplequestionsis“Givemeanexampleofatimewhenyousolvedananalyticallydifficultproblem.”41

Therearetwobasictypesofbehavior-basedquestions:situationalquestionsandbehavioral-descriptivequestions.Asituationalquestionputsyouinahypotheticalsituationthatyouwouldlikelyfaceinthejobyouareapplyingfor,anditasks,“Whatisyoursolutiontothisproblem?”Anexamplewouldbe“Youleadateamofmarketing,operations,andengineeringpeopleworkingonanengineeringdesignproblem.Twooftheengineershavesignificantlydifferentviewsconcerningthemethodofsolvingaproblem

inthedesignoftheitem.Howwouldyouinteractwiththetwoengineerstoresolvetheproblem?”Usingthisquestion,theintervieweristryingtofigureoutwhatyouwouldmostlikelydoinreallifetoresolveacomplexconflictwithinateam.42

Exhibit6-4TypesofInterviewsandQuestions

Ontheotherhand,abehavioraldescriptivequestionasksaboutsomethingspecificthatyouhavedoneinthepast.Mr.Bock’squestionabove—“Givemeanexampleofatimewhenyousolvedananalyticallydifficultproblem”—isanexampleofabehavioraldescriptivequestion.Itasksyoutotellthe

interviewerwhatyouactuallydidastheresultofaparticularsituation.What’sthevalueofthistypeofquestion?Rememberthatpastbehavioristhebestpredictoroffuturebehavior.Sowecanfindoutwhatyouhavedoneinthepastandwouldlikelydoinafuturedifficultanalyticalsituation.

WORKAPPLICATION6-8Selectoneofyourjobsandidentifythetypeofinterviewyouhadtogetit.Describehowtheinterviewwentintermsofitsstructure.

WORKAPPLICATION6-9Selectoneofyourjobsandidentifythetypeofinterviewquestionsyouwereasked.Foreachtypeofquestion,statesomeofthequestionsyouwereactuallyaskedduringtheinterview.

PreparingforandConductingtheInterviewCompletingtheinterviewpreparationstepsandtheinterviewingstepsshowninModel6-1andModel6-2willhelpyouimproveyourinterviewingskills.Thestepsarestraightforwardandself-explanatory,sowewillnotdiscussthem.

BackgroundChecksBackgroundchecksareneededtohelppreventnegligenthiresandbademployees.43Backgroundcheckscanbecomeratherexpensivedependingonwhichcheckswedoandhowoftenwehavetodothem,sotheyareusuallyleftuntilwehaveatleastnarroweddownthelistofcandidatestoafinalfew,orinsomecaseseventothefinalcandidate.Wemaythenofferemploymenttothecandidateconditionedonpassingvariousbackgroundchecks.Remember,though,thatyoucannotuseabackgroundchecktodiscriminateinviolationoffederalorstatelaws.44

Commonbackgroundchecksincludecreditchecks,criminalbackgroundchecks,referencechecks,andWebsearches.Inthissection,wedescribethem,andprovideguidelinesonwhentousethem.

CreditChecksAlthoughseveralstateshaverecentlyputlimitsonitsuse,45oneofthemostcommonlyusedbackgroundchecksisthecreditcheck.CreditchecksaresubjecttotheFairCreditReportingAct(FCRA),46whichrequiresthatemployersdisclosetotheapplicantthattheywillusecreditreportsforemploymentdecisions.Theactalsosaysthatiftheinformationonthecreditreportresultsinanadverseemploymentaction,theemployerhastogiveacopyofthereporttothepersonandinformtheapplicantofrightsunderFCRA,includingtherighttodisputethereport.FCRAlawsuitshavebeenontheriseoverthepastfewyears,withcompaniessuchasDisney,Domino’sPizza,Kmart,andDillard’sbeingaccusedofFCRAviolationsinhiring.47

Model6-1InterviewPreparationSteps

Model6-2InterviewingSteps

Creditcheckswillmostlikelybedoneifapplicantswillhaveaccesstoanymoneyoriftheywillworkwiththecompany’sfinancialinformation.Creditchecksmayalsobedonewithotheremployeestoevaluatetheirpersonalresponsibility—toseeiftheyhaveahabitofbeingdishonestincredittransactions.

Ahistoryofnotpayingbillstellstheorganizationthatthepersonislikelytobedishonestinotherwaysaswell.Doessomethinglikeabankruptcyonyourcreditreportautomaticallyknockyououtofcontentionforajob?No.Infact,bylaw,thecompanycan’trefusetohireyousolelybecauseofabankruptcy.48However,again,ifyourcreditreportshowsapatternoffailuretoliveuptoyourcreditobligations,thecompanycanandprobablywillusethatinformationtoremoveyoufromtheapplicantpool,aslongasstatelawsallowit.

LO6-7Defendtheuseofvariousbackgroundchecksastestsforemployment.

SHRMB:36

FairCreditReportingAct(FCRA)

6-1Selfassessment

InterviewReadinessSelectaprofessionaljobyouwouldliketoapplyfor.Onascaleof1to7(1=notconfident,7=totallyconfident),indicateforeachquestionhowconfidentyouarethatyoucangiveananswerthatwouldmakeapositiveimpressiononaninterviewer.

_____1.Whydidyouchoosethejobforwhichyouareapplying?_____2.Whatareyourlong-rangecareergoalsoverthenext5to10years?_____3.Whatareyourshort-rangegoalsandobjectivesforthenext1to2years?_____4.Howdoyouplantoachieveyourcareergoals?_____5.Whatareyourstrengthsandweaknesses?_____6.Whatmotivatesyoutoputforthyourgreatesteffort?Describeasituationinwhichyoudidso._____7.Whattwoorthreeaccomplishmentshavegivenyouthemostsatisfaction?Why?_____8.Whydoyouwantthisjob?_____9.Inwhatkindofanorganizationalculturedoyouwanttowork?_____10.Whydidyoudecidetoapplyforapositionwithourorganization?_____11.Whatdoyouknowaboutour

organization?_____12.Inwhatwaysdoyouthinkyoucanmakeacontributiontoourorganization?_____13.Whattwoorthreethingswouldbemostimportanttoyouinyourjob?_____14.Areyouwillingtorelocateforthejob?Doyouhaveanyconstraintsonrelocation?_____15.Describeasituationinwhichyouhadtoworkwithadifficultperson(anotherstudent,acoworker,acustomer,asupervisor,etc.).Howdidyouhandlethesituation?_____Total.Addupthenumbersyouassignedtoeachquestionandplacethetotalonthislineandonthecontinuumbelow.

Thesearecommoninterviewquestions,soyoushouldbepreparedtogiveagood,confidentanswertoeachofthem.Yourcareerservicesofficemayoffermockinterviewstohelpyouwithyourinterviewskillstohelpyougetthejobyouarelookingfor.

CriminalBackgroundChecksAllstatesallowcriminalbackgroundchecksinatleastsomecases.However,lawsvarysosignificantlyacrossjurisdictionsthatitisdifficulttoenumeratethecircumstancesinwhichcriminalbackgroundchecksareallowed.However,duetotheissueofnegligenthiring,mostcompaniestodaywillgenerallycompleteacriminalbackgroundcheckwhenitisallowed.Canorshouldacriminalrecordkeepanindividualfrombeinghired?Again,itdependsonwhattypeofconvictionitwas,howlongagoitoccurred,andwhattypeofjobtheindividualisbeingconsideredfornow.

Wewouldhaveamucheasiertimedefendingtheuseofacriminalbackgroundcheckforanindividualwhowouldhaveaccesstoproductsorfundsthatareeasilystolenthanwewouldinthecaseofsomeonewithnoaccesstoanythingofsignificantvalueinthecompany.

Similarly,wewouldbemorelikelytobeabletouseaviolentcriminalhistorytoruleoutanapplicantiftheapplicantwouldhaveaccesstochildrenorotherinnocentpersonswhocouldeasilybeharmedbytheemployee.Asalways,wehavetolookatallthecircumstancesandmakeadecisionbasedontheOUCHtestandthedefensibilityoftheselectiontoolthatweareconsidering.

ReferenceChecksReferencechecksincludenotonlycallstoreferencesthatareprovidedbytheapplicantbutalsoreferencelettersfromemployers,personallettersofrecommendation,andpossiblycoldcallstopreviousemployersandcoworkers.Butisareferencecheckgoingtobeofanyvalue,orarethereferencesthattheapplicantprovidesgoingtosayonlygoodthingsabouttheapplicant?

Thebasicansweristhatareferenceletterthatisrequestedbytheapplicantisalmostalwaysgoingtosaygoodthings.Theapplicantwillalmostneveraskanybodytoprovideareferenceunlesstheapplicantknowsthatthereferencewillbegood.Inaddition,though,wewanttocheckreferencesthatmightnothavebeengiventousbytheapplicantbutinsteadbypeoplesuchasformeremployersandcoworkers.

Whatisapreviousemployermostlikelygoingtotellyouifyoucallforareferencecheck?ThemostcommonHRanswerwillbeintheformof“Yes,he/sheworkedatthiscompany,from(date)to(date)in(jobtype)job.”Thisistoprotectthecompanyfrombeingsuedforprovidingdefamatoryinformationabouttheformeremployee—inotherwords,forhurtingtheindividual’sreputationunfairly.Overtime,companylawyershavefoundthatifcompaniesprovidemoreinformationthannotedabove,wecanbecomethetargetoflawsuits.Somostcompanieswon’tprovidemoreinformationthantheyhaveto.Aphoneconversationmaygetyousomeusefulinfo,butdon’texpectitinwriting.

WebSearchesFinally,withtheabilitytoaccessverylargeamountsofinformation,moreandmoreorganizationsareusingtheInternettodoresearchonjobcandidates.“Googling”acandidate’snameisbecomingastandardpracticeinmanyorganizations.49Anditistrulyamazingwhatthecompanyfindsinmanycases.

Shouldsocialmediabeusedasaselectiondevice?HRdepartmentsaregoingtousethetoolsthattheyhaveavailabletogetthebestpossiblepeople,sosocialmediawillmostlikelycontinuetobeonetoolthatisusedintherecruitingandselectionprocess.However,weneedtobeverycarefultoavoidusinginformationthatwouldbeillegalinconsiderationforemployment.Itwouldbeveryeasytofindoutinformationonsomeone’sreligion,race,gender,orotherfacetsofthatindividual’spersonallife—

factorsthatwouldbeillegaltoconsiderinthehiringprocess—thatmightallowacompanyrepresentativetomakeabiasedandevendiscriminatorychoice.50Mostlegalopinionsseemtofavortheemployerincaseswheretheremightbeaquestionofviolationofprivacyiftheemployerisdoingacheckofsocialmediatoavoidnegligenthires,butcompaniesneedtomakesurethattheyaredoingsoinanethicalandlegalequitablemanner,ortheycanbeconsideredliableforinvasionsofoff-dutyprivacy.51

Twowaysthatcompanieshavefoundtoavoidillegalbiasaretohaveeitheranoutsideagencydothesocialmediasearchorhaveacompanyinsiderwhohasnodecisionauthorityinhiringdothatsamesearchandbringonlyrelevantinformationtothepersonorpersonsdoingtheselection.52Thisseparatesthesearch(andanyitemsfoundthatwouldbeillegaltoconsider)fromtheselectionprocess.

Websearchesshouldbeusedcarefullyintherecruitingprocess,astheresultsofawebsearchmayrevealfactorsthatemployerscannotlegallyconsiderwhenmakingahiringdecision(suchasreligion,race,gender,maritalstatus,etc.).

©iStockphoto.com/shapecharge

Onapersonalnote,asapotentialjobapplicant,makesurethateverythingontheWebaboutyouisinformationthatyouarecomfortablewithacompanydiscoveringina

Websearch.Youmaynotbeputtingnegativethingsaboutyourselfonline,butyoualsoneedtomakesureyourfriendsaren’t,either.EmployerswillmostlikelydoaWebsearchonyouasacandidateintoday’sworld.Also,makesureyouremailaddressandtelephonemessageareprofessionalforjobsearching.

SHRMQ:14

SocialNetworking

WORKAPPLICATION6-10DoanInternetsearchonyourself.Didyoufindanymaterialthatyouorotherspostedthatyouwouldnotwantaprospectiveemployertofind?Areyouremailaddressandtelephonemessageprofessional?

SelectingtheCandidateandOfferingtheJobEvenwhenyoufollowallthestepsintheselectionprocess,youcan’tfindouteverythingaboutapotentialjobcandidate.Youmaywanttojustdiscoversomebasicsthattellyouwhetherornottheindividualisareallygoodfitforthejob.Thesemightincludethefollowingthreethings:

1. Doesthecandidatehavethebasicqualificationsforthejob—rightpersonality,ability,andperson-organizationfit?

2. Doesthecandidateactuallywanttodothejob,ordoesthispersonwantjustanyjob?Inotherwords,willthecandidatebesatisfiedwiththejobandstayforsometimeandbeaproductivehire?

3. Isthecandidatebasicallyhonest,andisthispersontellingthetruth?Ifnot,youcouldbelookingataproblememployee.

Therecruitermayknowthatbyfindingoutthesethreebasicthings,thecandidatewillbeavaluableadditiontotheorganizationandcanbetrainedtodoanyspecificjobthatisnecessary.

Therearetwobasicmethodsthatweusetomakefinalselectiondecisionsfortheorganization.Themultiple-hurdleselectionmodelrequiresthateachapplicantmustpassaparticularselectiontestinordertogoontothenexttest.Ifanapplicantfailstopassanytestintheprocess,thatpersonisimmediatelyremovedfromtherunning.Ontheotherhand,thecompensatoryselectionmodelallowsanindividualtodopoorlyononetestbutmakeupforthatpoorgradebydoingexceptionallywellonothertests.Again,eachstepintheselectionprocess(interviewsandbackgroundchecks)isatest.Usingthecompensatorymodelallowstheemployertorankeachofthecandidatesbasedontheiroverallscorefromallofthetesting.Theemployercanalsogroupcandidatesbasedonthissameinformation.

HiringSoafterallselectionactivitiesarecompleted,compareeachcandidate’squalificationstothejobspecifications,identifywhetherornotthispersonreallywantstodothejob,andanalyzewhetherornottheindividualhasbeenbasicallyhonestduringtheselectionprocess.Doallthistodeterminewhowouldbethebestfitforthejob.Besuretogetcoworkers’impressionsofeachcandidatewhenappropriatebecausetheywillhavetoworkandgetalongwithwhomeveryouhire(person-organizationfit),andtheycantellyouiftheythinkthepersonfitsandiftheywantthepersonontheirteamornot.Diversityshouldalsobeconsideredwhenselectingacandidate.

Tobringtheselectionprocesstoanend,contactthebestcandidateandofferthatpersonthejob.Ifthecandidatedoesnotacceptthejoboracceptsbutleavesafterashortperiodof

time,youcanfrequentlyofferthenext-bestcandidatethejob.

LO6-8Listthetwobasicmethodsusedtomakefinalselectiondecisions.

SHRMI:13

SelectionDecisions:Ranking,Grouping/Banding,RandomSelection

6-1Ethicaldilemma:whatwouldyoudo?SeveralrecentstatelawsandexecutiveordersatthefederallevelhavebroughtthetopicofLGBTindividualstotheforefrontofattentioninmanybusinesses,butasofthewritingofthistext,thereisnofederallawthatcurrentlyprohibitsworkplacediscriminationonthebasisofsexualorientation.53ApresidentialamendmenttoExecutiveOrders11246and11478did,however,recentlymakeitillegalforfederalagenciesandfederalcontractorstodiscriminatebasedonsexualorientationorgenderidentity,butnotinothercases.54

AssumethatyouarethehiringauthorityatacompanywhichisnotaffectedbyastatelaworpresidentialorderprotectingLGBTindividuals.YoudecidetocompleteaWebsearchofthetwoprimarycandidatesforajobopeningandfindthatoneofthetwoisobviouslyandverypubliclytransgender.InformationonLGBTissuesareallovertheirpersonalFacebookandothersocialmediapages.Theyappeartobeverymuchanactivistforthecause.

1. Woulditbeunethicaltousethisinformation

inyourhiringdecision?Whyorwhynot?2. Howwouldyouusetheinformationtosway

yourhiringdecision?3. Wouldyoudecidetohirethispersonifthey

werethebestqualifiedcandidate?Justifyyouranswer.

TrendsandIssuesinHRMLet’stakeabrieflookattheissueofselectionwithaglobalworkforceandtheuseofHRISintheselectionprocess.Eachoftheseissueshasaffectedtheprocessofselectioninasignificantwayduringthepastdecade,whichinturnhascausedHRmanagerstochangethewaytheywork.

SelectionWithaGlobalWorkforceHRhastobeverycarefulnottoviolateanylawswhenrecruitingandselectinganyonelocallyandespeciallyinternationally.Thereareseveralissuesofsignificancewhenselectingindividualsfromallovertheworld.Thefirstmajorissueistheprocessofimmigrationandworkvisas.Eachcountryhasitsownrequirementsforimmigrationandforforeignworkerswhowanttogainemploymentinthatcountry.TheHRmanageristypicallytheresponsibleindividualforidentifyingtherequirementsandmakingsurethattheindividualfulfillsthem.

Theorganization,throughtheHRdepartment,istypicallyresponsibleforassistingtheindividualwithfillingouttheformsandinmanycasesforsponsoringtheindividual’sworkvisa.ThemostcommontypeofprofessionalworkvisaintheUnitedStatesis

theH-1Bvisaforprofessionalemployees.TheHRdepartmentalsohastomaintainrecordsofthecompany’semployeesshowingalegalrighttoworkintheUnitedStatesinaccordancewiththeImmigrationReformandControlActof1986.

Inadditiontotheimmigrationandvisarequirements,organizationsthathireworkersinothercountriesfaceissueswiththeselectionprocessitself.Howdifficultisittogothroughtheprocessofidentificationofrecruits,selectiontesting,interviewing,andtheotherpiecesoftheselectionprocess?Inmanycases,theHRrepresentativemayneverevenseetheindividualwho’sbeinghired.Theremayalsobealanguagebarrier,andtherearealmostcertainlyculturaldifferencesbetweenthecandidate’shomecountryandtheorganizationinthehiringcountry.Eachofthesebarriersmustbeovercome,andeverycompanyhandlestheseissuesalittlebitdifferently.However,theHRmanagersmustunderstandandbeabletoworkwithintheglobalhiringenvironment.

Multiple-hurdleselectionmodelModelrequiringthateachapplicantmustpassaparticularselectiontestinordertogoontothenexttest

CompensatoryselectionmodelModelallowinganindividualtodopoorlyononetestbutmakeupforthatpoorgradebydoingexceptionallywellonothertests

HRISandtheSelectionProcessHumanresourceinformationsystems(HRIS)continuetobecomeincreasinglyvaluabletotheorganizationinallHRMfunctions,includingtheselectionprocess.HRISallowtheorganizationtoautomatemanyoftheselectionprocessessuchasapplications,initialscreening,testing,interviewing,andcorrespondingwiththecandidate.Theapplicationprocesscanevenbevariedfordifferenttypesofjobswithintheorganization.Oncetheapplicationsarein,manyofthesystemscanautomaticallyalerteachapplicanttotheneedtologintothecompany’ssiteforanyinitialtestingthatmayberequiredfortheposition.ThesystemcanbesetuptoscorethetestingandprovidetheHRrepresentativewithalistofthehighest-scoringcandidates.

Asyoucanquicklysee,theHRIScansavesignificantamountsofmoneyandtimeinthe

selectionprocess.Inaddition,thefactthattheinitialapplicationandtestingaredoneinanautomatedformallowstheorganizationtolimitanyhumanbiasthatmightoccurfromface-to-faceinteractionbetweentheHRrepresentativeandthecandidate,whichisobviouslysomethingthattheHRdepartmentneedstobeconcernedwith.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary6-1Describewhytheselectionprocessissoimportanttothecompany.

Selectionisimportantprimarilybecauseweneedthebestpossiblepersonineachjobinordertomaximizeproductivity.Unproductivemembersoftheorganizationcancauselowermotivationandjobsatisfactioninallofacompany’semployees.Second,organizationshavearesponsibilitytoavoidnegligenthires—peoplewhomayposeadangertootherswithintheorganization.Thecompanycanincurlegalliabilityifwedon’tscreenpotentialapplicantscarefully.

6-2Identifythethreemaintypesof“fit”intheselectionprocessandwhytheyareimportant.

Thethreetypesoffitare

personality-jobfit,ability-jobfit,andperson-jobfit.Theyareimportantbecausemanagersaresupposedtogetthebestproductivityoutoftheirworkforce.Butnoteveryonecandoeverythingequallywell,somanagershavetotreatpeopledifferently,butfairly,inordertoputtherightpersonintherightjob.Theydothisbyassessingthethreetypesoffitbetweenthepersonandthecompany.

6-3SummarizethemajorpointsintheUniformGuidelinesonEmployeeSelectionProcedures(UGESP).

TheUGESPprovidesguidelinesonhowtoavoiddiscriminatoryhiringpractices.Itidentifieswhatthefederalgovernmentconsiderstobeanemploymenttestandhowthosetestscanbeusedinmakingemploymentdecisions.TheUGESPalsoidentifiestheacceptabletypesofvaliditythatcanbeusedtovalidateemploymenttests,andit

notesthatthesetestsmustbereliable.

6-4Discusstheuseofapplicationsandrésumésasselectiontools.

Applicationsandrésumésareusedinafairlyinterchangeablemanner,exceptthattheapplicationgivesthecompanyinformationontheapplicantthatisinastandardformat.Thismakesiteasiertoquicklyscanandevaluatethedifferentapplicants.Applicationsalsotypicallyhavesomelegallanguageordisclosuresthatmustbeagreedtobytheapplicant.Bothdocumentsshouldbeusedtoreviewandverifyboththeworkexperienceandtheeducationoftheapplicant.Thisexperienceandeducationshouldalwaysbeverified,though,becauseevidenceshowsthatahighpercentageofpeopleexaggerateorlieonapplicationsandrésumés.

6-5Recallthemajortypesofwrittentestingavailableasselectiontools.

Themajortypesofwrittentestsareskillstests,whichevaluatethecandidates’abilitytoapplytheirknowledgetoaspecifictypeofproblem;personalitytests,whichevaluatetheapplicants’personaltraitsorcharacteristicssothattheycanbematchedupwithappropriatetypesofjobs;interesttests,whichidentifywhatanapplicantisinterestedinandthereforemostlikelymotivatedtolearn;cognitiveabilitytests,whichareassessmentsofintelligenceoraptitudeforaspecifictypeofwork;andhonestyorintegritytests,whichevaluatetheindividual’sphilosophyconcerningtheftandotherformsofdishonesty.

6-6Explainthevalueofselectioninterviews,includingthethreeprimarytypesofinterviews.

Theinterviewgivesthemanagerachancetomakeaface-to-faceassessmentofthecandidate,includingtheperson’sabilityto

communicate,andpersonality,appearance,andmotivation.Italsogivesthecandidateachancetolearnaboutthejobandtheorganization.Thethreeprimarytypesofinterviewsaretheunstructuredinterview,inwhichtheinterviewerhasnopreplannedquestionsortopics;thesemistructuredinterview,wheretheinterviewermayaskbothplannedandunplannedquestions;andthestructuredinterview,whereallcandidatesareaskedthesamesetofquestions.Mostinterviewerspreferthesemistructuredinterview.

6-7Defendtheuseofvariousbackgroundchecksastestsforemployment.

Creditchecksareoneofthemostcommonlyusedbackgroundchecks.Theyshouldnotautomaticallydisqualifyapersonforajob,butifacreditreportshowsapatternofdishonesty,thenitcanbevaluableasatoolforselection.Criminal

backgroundchecksmayormaynotbeallowedbystatelaw.Anycriminalconvictionshouldhavesomethingtodowiththeessentialjobfunctions,orweshouldnotuseittodisqualifyanindividual.Referencecheckswillusuallynotprovidealotofinformation,butweshouldcompletethemanywayincasetheydoprovidevaluableinformation.And,finally,Websearchesfrequentlyturnupinformationonthemorals,values,orhonestyofpotentialemployees;companiesusethesewhentheyareallowedunderstateandlocallaws.

6-8Listthetwobasicmethodsusedtomakefinalselectiondecisions.

Therearetwobasicmethodsthatcanbeusedtomakefinalselectiondecisionsfortheorganization.Themultiple-hurdleselectionmodelrequiresthateachapplicantmustpassaparticularselectiontestinordertogoontothenexttest.Ifan

applicantfailstopassanytestintheprocess,thatpersonisimmediatelyremovedfromtherunning.Thecompensatoryselectionmodelallowsanindividualtodopoorlyononetestbutmakeupforthatpoorgradebydoingexceptionallywellonothertests.Usingthecompensatorymodelallowstheemployertorankeachofthecandidatesbasedontheiroverallscorefromallofthetesting.

6-9DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermsassessmentcenter,145cognitiveabilitytest,145compensatoryselectionmodel,154constructvalidity,140contentvalidity,140criterion-relatedvalidity,139fitness-for-dutytest,146interesttest,144multiple-hurdleselectionmodel,154negligenthire,137personalitytest,144physicaltest,145reliability,140selection,136simulation,145skillstest,144UniformGuidelinesonEmployeeSelectionProcedures(UGESP),139validity,139worksample,145

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. _________istheprocessofchoosingthebest-qualifiedapplicantrecruitedforajob.

2. _________isalegalconceptthatsaysiftheorganizationselectssomeonewhomayposeadangertocoworkers,customers,suppliers,orotherthirdparties,andifthatpersonthenharmssomeoneelseinthecourseofworkingforthecompany,thenthecompanycanbeheldliablefortheindividual’sactions.

3. _________providesinformationthatcanbeusedtoavoiddiscriminatoryhiringpracticesaswellasdiscriminationinotheremploymentdecisions.

4. _________istheextenttowhichatestmeasureswhatitclaimstomeasure.

5. _________isanassessmentoftheability

ofatesttomeasuresomeotherfactorrelatedtothetest.

6. _________isanassessmentofwhetheratestmeasuresknowledgeorunderstandingoftheitemsitissupposedtomeasure.

7. _________measuresatheoreticalconceptortraitthatisnotdirectlyobservable.

8. _________istheconsistencyofatestmeasurement.

9. _________isanassessmentinstrumentdesignedtodeterminewhetheryouhavetheabilitytoapplyaparticularknowledgeset.

10. _________measuresthepsychologicaltraitsorcharacteristicsofapplicantstodeterminesuitabilityforperformanceinaspecifictypeofjob.

11. _________measuresaperson’sintellectualcuriosityandmotivationinaparticularfield.

12. _________isanassessmentofgeneralintelligenceorofsometypeofaptitudeforaparticularjob.

13. _________ensuresthatapplicantsarecapableofperformingonthejobinwaysdefinedbythejobspecificationanddescription.

14. _________meansthatweprovideasampleoftheworkthatthecandidatewouldperformonthejobandaskthecandidatetoperformthetasksundercontrolledconditions.

15. _________areplaceswherejobapplicantsundergoaseriesoftests,interviews,andsimulatedexperiencestodeterminetheirpotentialforaparticularjob.

16. ___________allowsustoputacandidateinahigh-pressuresituationbutstillcontroltheenvironmentsoastolimitthedangerandcost.

17. _________identifieswhetherornotanemployeeisphysicallycapableataparticularpointintimeofperformingaspecifictypeofwork.

18. _________requiresthateachapplicantmustpassaparticularselectiontestinordertogoontothenexttest.

19. _________allowsanindividualtodopoorlyononetestbutmakeupforthatpoorgradebydoingexceptionallywellonothertests.

CommunicationSkillsThefollowingcriticalthinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Doyouagreethatselectionofatop-qualitycandidateisacriticalprocessinorganizations,ordoyouthinkintensivetrainingafterthepersonisselectedismorevaluable?Explainyouranswer.

2. Shouldorganizationsbeheldliablebythejusticesystemfornegligenthires?Whyorwhynot?

3. Inyourmind,howcriticalistheconceptofperson-organizationfit?Whydoyouthinkso?

4. Aretherecasesotherthanthetwoinstancesnotedinthechapterwhencompaniesshouldbeallowedtousepolygraphtestsonemployees?Whenandwhy?

5. Doyoufeelthatit’sOKtotell“littlewhitelies”onrésumésandapplications?Whyorwhynot?

6. Arecompaniesovertestingapplicantsbyusingtheprocessesthatwerediscussedinthischapter?Explainyouranswer.

7. Arebackgroundchecks—includingcreditchecks,criminalhistorychecks,andlookingatacandidate’sFacebookpage—tooinvasive?Explainyouranswer.

8. IstheuseofHRISfornarrowingdownthelistofcandidatesandsendingformletters,including

rejectionletters,tooimpersonal?Whyorwhynot?

Case6-1NotGettingFaceTimeatFacebook—andGettingtheLastLaugh!InAugust2009,FacebookturneddownjobapplicantBrianActon,anexperiencedengineerwhohadpreviouslyworkedatYahooandApple .Morethan4yearslater,Facebookpaidhim$3billiontoacquirehis20%stakeofWhatsApp,astart-uphehadcofoundedimmediatelyafterFacebookrejectedhisjobapplication.55WhatsAppMessengerisaproprietary,cross-platforminstant-messagingsubscriptionserviceforsmartphonesandselectedfeaturephonesthatusetheInternetforcommunication.Inadditiontotextmessaging,userscansendeachotherimages,video,andaudiomediamessagesaswellastheirlocationusingintegratedmappingfeatures.56HowcouldFacebook,ahighlysuccessfulfirm,havemadesuchadrasticmistake?

Backin2009,BrianActonwasasoftwareengineerwhowasoutofworkforwhatseemedlikeaverylongtime.Hebelievedhehadwhatittooktomakeadifferenceintheindustry,buthiscareerdidnotworkoutasplanned.EventhoughhespentyearsatAppleandYahoo,hegotrejectedmanytimesbyTwitterandFacebook.57Actondescribedthedetailsoftheinterviewprocessthat

hefailedtodowellinasfollows:

Firstofall,interviewingapersonforajobthatrequirestechnicalskillsisdifficultforboththeinterviewerandtheinterviewee.Facebookisahighlydesirablefirmtoworkforandrequiresthebestskillsandtalentsfromalloftheirpotentialemployees.Itisthereforenotsurprisingthattheselectionprocessrivals,ifnottops,anycompanyintheindustry.Theprocessstartswithanemailoraphonecallfromarecruiterinresponsetoanonlineapplicationor[to]arecommendationfromafriendwhomayworkforFacebook.Sometimes,intheinitialchatonline,timedsoftwarecodingchallengesaresettofindthebestperformers.Ifthischatgoeswell,anapplicantwillgoontothenextlevel—aninitialin-personintervieworphonescreening.58

Inthisnexthurdle,theapplicantwillhavea45-minutechatwithafellowengineer/potentialcoworker,[with]whomheorshesharesthesameareaofexpertise.TheywilltellyouabouttheirjobandwhattheirroleisinFacebook;thentheyaskabouttheapplicant’srésumé,motivation,andinterests.Additionally,theapplicantwillbetestedabouthisorhertechnicalskills,codingexercises,andprogrammingabilities.59

Ifsuccessful,theapplicantwillbeinvitedforback-to-backinterviews.Thispartoftheprocessisverygruelingandstressfulsincealltheinterviewstake

placethroughoutasingleday.Thecandidatewillalsobeaskedtomanuallywriteaprogramonawhiteboardtomakesurethattheapplicantisknowledgeableaboutprogramwriting.Thegoalinthisfinalstepistoseehowoneapproachesaproblemandcomesupwithasolution[that]issimpleenoughtosolvein10–30minutesandcanbeeasilyexplained.60

Asapotentialcoworker,theapplicantwillbetestedintermsofunderstandingandexplainingcomplexideas,withmosttasksprojectrelatedandconstantlychanging.Thisrequiresemployeestopossessadiversifiedsetofskills.Thatisthereasonwhytheapplicantisnotonlytestedincodingskills...butalsotogaugeenthusiasmandmotivation.Theapplicant’sleadershipanddecision-makingskillsarealsoevaluatedasthecompanyseekstofindsomeonewhocanmakealargeimpactontheindustryandmakequickdecisions.61

Aftergoingthroughthisarduousprocess,BrianActonwasoneoftheengineerswhoreceivedanemailthat“regrettedtoinform”himthathedidn’tgettheposition.Yethestayedpositiveandtookadifferentpath,whichledhimtostarthisowncompany,WhatsApp.TeamingupwithYahooalumni,hedevelopedthemostpopulartext-messagingapplication,andthecompanywassoldtoFacebookforatotalof$19billionin2014.62Thisepiccomebackproveshowpersistenceandambitionplayahugeroleinjobhunting,butitalsoproveshowdifficultitistohiretherightemployeeevenwhenthat

personhasthebestskillset.63

Questions1. TheselectionprocessatFacebookconsistsof

threesteps.Whatarethosethreesteps,andwhichtypeofwrittentestsareapplicableforeach?

2. IfyouweretherecruiterresponsibleforthepreliminaryscreeningofapplicantstoFacebook,howwouldyoupreparefortheinterview?

3. Facebookgivesabatteryofteststotheapplicantalongseveralstepsoftheselectionprocess.Whatarethosetests,whataretheytestingfor,andhowmightFacebookensurethevalidityandreliabilityofthosetests?

4. PsychologicaltestingdidnotseemtobepartofFacebook’sselectionprocess.Howmightitusethistesting,whichtestsmightituse,andwhereintheprocessmightitusethem?

5. Fromwhatyouhaveread,whatarethecriteriaofselectionemployedbyFacebook?Aretheyvalidandreliable?HowmightthisexplainwhyActonwasnothired?

6. Agreeordisagreewiththisstatementbaseduponthiscase:“Nothiringtherightpersonisstillbetterthanhiringthewrongperson.”

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,LongIslandUniversitySchoolofBusiness,BrooklynCampus

SkillBuilder6-1InterviewQuestionsforUseWhenHiringaProfessortoTeachThisCourse

ObjectiveTodevelopyourabilitytodevelopinterviewquestions

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—technical,business,andconceptualanddesignskills

2. SHRM2013CurriculumGuidebook—I:Staffing:RecruitmentandSelection

PreparationAssumeyouarethedeanofyourcollegeandyouneedtohireaprofessortoteachthiscoursenextsemester.Developalistofatleast10questionsyouwouldaskthecandidatesduringajobinterviewfortheposition.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

YourinstructormayaskyoutodothisSkillBuilderinclassinagroupbysharingyourinterviewquestionsandcomingupwithagrouplistofquestions.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.Thismaybefollowedbytheprofessoractuallybeinginterviewedbyansweringgroupquestions.Oneofthecoauthorspreferstakingonequestionfromeachgroupatatimeuntilallquestions(withoutrepeat)areansweredorthetimeisup.Ofcourse,Igetthejobeverytime.

SkillBuilder6-2Interviewing

ObjectiveTodevelopyourabilitytodevelopinterviewquestions

Todevelopyourabilitytointerviewandtobeinterviewed

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—technical,humanrelations,business,andconceptualanddesignskills

2. SHRM2013CurriculumGuidebook—I:Staffing:RecruitmentandSelection

PreparationAssumeyouaretheHRdirectorandyouneedtohireanewcollegegradforanentry-levelHRposition.Becauseyouarenotalargecompany,youhaveasmallstaffandthenewhirewillhelpoutinawidevarietyofHRfunctions.Developalistofatleast10questionsyouwouldaskthecandidatesduringajobinterviewfortheposition.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

YourinstructormayaskyoutodothisSkillBuilderinclassbybreakingintogroupsoftwoorthreeandactuallyconductinginterviewsusingyourquestions.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

©iStockphoto.com/monkeybusinessimages

PartIIIDevelopingandManaging

7Training,Learning,TalentManagement,andDevelopment8PerformanceManagementandAppraisal9EmployeeRightsandLaborRelations

Practitioner’sModel

7Training,Learning,TalentManagement,andDevelopment

©PeterM.Fisher/Crave/Corbis

ChapterOutlineTheNeedforTrainingandDevelopment

TrainingandDevelopmentWhenIsTrainingNeeded?

TheTrainingProcessandNeedsAssessment

StepsintheTrainingProcessNeedsAssessmentEmployeeReadiness

LearningandShapingBehaviorLearningOperantConditioningandReinforcementShapingBehavior

DesignandDeliveryofTrainingOn-the-JobTraining(OJT)ClassroomTrainingDistanceorE-Learning

AssessingTrainingAssessmentMethodsChoosingAssessmentMethods

TalentManagementandDevelopmentCareersCommonMethodsofEmployeeDevelopmentAModelofCareerDevelopmentConsequences

TrendsandIssuesinHRMTheGamificationofTrainingandDevelopmentOutsourcingEmployeeTrainingandDevelopment

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

7-1Identifyeachofthecommonpointsinthetenureofemployeeswithintheorganizationwheretrainingmaybeneeded.PAGE1637-2Describethestepsinthetrainingprocessandtheirinterrelationship.PAGE1667-3Summarizethefourmethodsforshapingbehavior.PAGE1687-4Compareeachofthemajortrainingdeliverytypes.PAGE1717-5DiscusstheFour-LevelEvaluationMethodforassessingtrainingprograms.PAGE1757-6Listsomeoftheindividualandorganizationalconsequencesthatcanoccurasaresultoforganizationalcareerplanningprocesses.PAGE1777-7DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE183

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindytoldthestoryofJennifer,whohadworkedinthesamepositionfor10years.Jenniferhadalwaysbeenavaluableemployee,butlately,herproductivityandperformancehadstartedtodecline.Hersupervisor,Mandy,finallycalledherintofindoutwhatwaswrong.

Aftersomehesitation,Jennifersaid,“Totellthetruth,IfeellikeIaminarut.Ijustdon’tgetthesamesatisfactionfromdoingmyjobthatIusedtoget.”

“Iwishwe’dhadthistalksooner,”Mandyreplied,“butnowthatIknowhowyoufeel,thereissomethingwecando.Let’stakealookatsomeofthetrainingopportunitiescomingupthisquarter.Tellmewhattrainingclassesyoumightbeinterestedintaking.”

WhatifJenniferandMandyneverhadthattalk?DoyouthinkJenniferwouldhaveremainedatherjob?Chapter7looksattheinsandoutsofmanagingandretainingtalentthroughtraininganddevelopment.

TheNeedforTrainingandDevelopmentAfterwehirenewemployees,weneedtoteachthemabouttheorganizationanditsroutineprocessesandtodotheirnewjobs.Thereisarelationshipbetweentrainingandjobsatisfaction;1itdecreasesexpensiveturnover2andmakesitlesslikelythatemployeeswillengageinneglectfulbehavior.3

Effectivetraininganddevelopmentareinvestments,notexpenses,astheypayforthemselvesthroughcompetitiveadvantageandincreasedperformance.4Thisiswhycompaniesworldwideareinvestingheavilyintrainingandlong-termemployeedevelopment.5Asmanagers’skillsshouldalsobedeveloped,6leadershipprogramsandcoursesarecurrentlypopular.7Thisiswhybest-practicecompanies(e.g.,GE,IBM,and

Johnson&Johnson)provideleadershipprograms.8

Let’sbeginbydiscussingtraininganddevelopmentandthedifferencebetweenthem,followedbywhentrainingisneeded.

TrainingandDevelopmentInthischapter,wewilldiscussbothorganizationaltrainingandtheconceptofemployeedevelopment.Thetwoarerelatedbutseparatepiecesoftheorganization’sprocessesinvolvingthemanagementofitsemployees.Trainingistheprocessofteachingemployeestheskillsnecessarytoperformajob.Wetrainemployeestoprovidethemwiththeknowledge,skills,andabilities(KSAs)thattheycanputtoimmediateuse.

Somewhatincontrasttotrainingistheprocessofemployeedevelopment.Bothcollegesandcorporationshavebeencriticizedfornotdoingagoodjobofdevelopingourbusinessleaders.9ThisisoneofthereasonswhythisbookfocusesondevelopingHRskills,notjustknowledge.Employeedevelopmentisongoingeducationtoimproveknowledgeandskillsforpresentandfuturejobs.So,employeedevelopmentteachesour

workersskillsatthosetasksthattheywillneedtoknowtomoveintohigherleveljobs.Toremaincompetitiveintoday’sdynamicenvironment,organizationsmusthaveemployeeswhomaintainup-to-dateknowledgeandskills,anddevelopmentplaysanimportantroleinthiseffort.10

LO7-1Identifyeachofthecommonpointsinthetenureofemployeeswithintheorganizationwheretrainingmaybeneeded.

SHRME:5

TrainingandDevelopment

Q:16

TrainingEmployeestoMeetCurrentandFutureJobNeeds

Q:2

DevelopingHumanResources

WhenIsTrainingNeeded?HRmanagersshouldbeginbycompletinganeedsassessment.Wewilldiscussneedsassessmentsshortly,butlet’sreviewsomecommonpointsatwhichweshouldprobablycompleteaneedsassessmentandatleastconsiderprovidingtraining.

NewEmployeeOrientation.Orientation,usuallycalledonboardingtoday,istheprocessofintroducingnewemployeestotheorganizationandtheirjobs.Ourorientationintroducesthenewemployeetoallofthethingsthatexistwithintheorganizationalsocietyinordertobeabletogoabouttheirdailylives.Onboardingsocializationdoneeffectivelyincreasesjobsatisfactionandperformanceandreducesturnoverrates.11,12Manyorientationsemphasizecorporatevalues,culture,and

strengths.13Thissocializationprocessisimportanttobothnewcomersandorganizations,asthenewemployeeslearntheropesandunderstandwhatisexpectedfromthemastheyassimilateintotheorganizationandattempttobecomeproductivemembers.14Thus,jobandcareerorientationhavelong-lastingeffectsonnewemployeejobattitudesandsatisfaction,behavior,workmastery,andperformance.15

Orientationisanintroductionofthepersontothecompany.Whatdoweneedtothinkaboutwhenweintroducesomebodytothecompany?Weneedtothinkaboutintroducingthenewemployeetoallofthethingsthatexistwithintheorganizationalsocietythattheyareentering.Theprocessisverysimilartosomeonemovingtoadifferentcountryandhavingtoassimilateintoanewculture.Whatdopeopleneedtoknowinordertobeabletogoabouttheirdailylives,dotheroutinethingsthattheyneedtodo,andprovidefortheirownpersonalneeds?Orientationshould

bedesignedtoanswerallofthequestionsnecessarytoallownewemployeestointegrateintothe“society”thattheyareentering.

First,thenewemployeeneedstolearntheorganization’spolicies,procedures,rules,andregulations—muchlikelearningthelawsinsociety.Thesecondthingthatpeoplewouldprobablywanttoknowishowtoactandinteractwithothersinthenewsociety,soinadditiontointroducingtheemployeetothejobandhowtoperformitwithintheorganization,wewouldwanttotalktotheindividualabouttheunderlyingorganizationalstructureandculture,pluswheretogoandwhomtotalktoinordertogetcertainthingsdone.Sowhentheyhavequestions,whodotheygotoforanswers?Safetyandsecurityissueswillvarywiththetypeofenvironment,butneedtobecovered.

TheywouldalsolikelyneedtofilloutpaperworkwithHR,suchashomeaddressandpayrollinformation,andtogetanemployeeID.Wealsoneedtotellthemabouttheirpay

andbenefits,includingwhomtocontactwithHRquestions.

Partoftheproblemofhighturnoverratestodayispoororientation.Effectiveorientationresultsinlowerturnoverrates,16soorientationshouldbeprovidedoverasignificantperiodoftime,anywherefrom1to4weeksorevenmore,dependingonthecomplexityoftheorganizationandthejobs.SouthwestAirlineshasa90-dayorientation,Toyotahasa5-weekorientation,andHondahasa6-weekorientation.

However,inmostorganizations,theorientationprocessissignificantlyshorterthanthisandonereasonthatour21stcenturyorganizationssuffersignificantearlyturnoverofnewhires.Ifournewemployeeisfrustratedduetonotknowinghowtodothejoborhowtofixanissuewithpay,thelikelihoodofthatpersonleavingtheorganizationgoesupdrastically.Manyorganizationscouldsignificantlyreducenew-hireturnoverbymodestlyincreasingthe

orientationperiodfornewhires.

Training Theprocessofteachingemployeestheskillsnecessarytoperformajob

EmployeedevelopmentOngoingeducationtoimproveknowledgeandskillsforpresentandfuturejobs

OrientationTheprocessofintroducingnewemployeestotheorganizationandtheirjobs

WORKAPPLICATION7-1Selectajobyouholdinthepresentorheldinthepast.Didyoureceivebothtraininganddevelopmentorjusttraining?Explaininsomedetailwhyitwasoneorboth.

WORKAPPLICATION7-2Brieflydescribetheorientationyoureceivedforajob.Howcoulditbeimproved?

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

E.JobAnalysis/JobDesign(required)5.Traininganddevelopment

VocationalandcareercounselingNeedsassessmentCareerpathing

L.TrainingandDevelopment(required)1.Needsassessment3.Learningtheories:Behaviorism,constructivism,cognitivemodels,adultlearning,knowledgemanagement4.Trainingevaluation:Kirkpatrick’smodel5.E-learninganduseoftechnologyintraining6.On-the-jobtraining(OJT)7.Outsourcing(secondary)8.Transferoftraining:Designissues,facilitatingtransfer9.Employeedevelopment:Formaleducation,experience,assessment11.Theroleoftraininginsuccessionplanning

Q.OrganizationalDevelopment

(required—graduatestudentsonly)2.Developinghumanresources4.Equippingtheorganizationforpresentandfuturetalentneeds8.Measurementsystems11.Organizationallearning13.Outsourcingemployeedevelopment16.Trainingemployeestomeetcurrentandfuturejobdemands

T.HRCareerPlanning(secondary)1.Definitionofacareer2.Balancingworkandlife9.Careerdevelopment

NewJobRequirementsorProcesses.Thesecondcommonpointwheretrainingmaybenecessaryoccurswhenjobschangeinsomeform,eitherthesamejobortransferringtoanewone.Thechangemaybebasedondiscoveryofnewtechniquesortechnologiestoperformparticularworktomaketheworkmoreefficient.Theorganizationmayrequirenewprocessesor

proceduresorentirelynewjobs.Withanymajorjobchanges,weshouldconductatrainingneedsassessment,andwhenneeded,anappropriatetrainingprogramcanbedesignedandimplemented.

Remediation.Thethirdcommonpointatwhichmanagersneedtoinvestigatetherequirementforadditionaltrainingoccurswhentherehasbeensomefailureofanemployeeorsomeemployeestoperformsuccessfullyandmeetorganizationalstandards.Remediationisthecorrectionofadeficiencyorfailureinaprocessorprocedure.Inremediation,weworktocorrecttheactionsoftheindividualorindividualsresponsiblefortheprocessorproceduresothattheycansuccessfullycarryouttheactioninthefuture.

RemediationThecorrectionofadeficiencyorfailureinaprocessorprocedure

EmployeeDevelopmentforAdvancement.Finally,weneedtodevelopcurrentemployeeskillsandabilitiessothatemployeescanmoveintohigherleveljobswithintheorganization.Offeringdevelopmentopportunitiesgenerallydecreasesturnover.17Providingdevelopmentopportunitiesandsuccessionplanningistheonlywaytheorganizationcanbesustainableoverlongperiodsoftime.Itrequiresidentifyinghigh-potentialindividualsfordevelopmentandultimatelyadvancementintomanagerialandexecutiveslots.SosuccessionisanimportantfunctionoftheHRdepartment.Organizationsthatneglectsuccessionprocessesandemployeedevelopmentcanfindthemselvesatacompetitivedisadvantagewhenseniorpersonnelleavethefirmthrougheitherretirementorresignation.Althoughbothtraininganddevelopmentarecriticallyimportanttocompanysuccess,inthischapterwewillfocusmoreontrainingthan

development.

SHRML:11

TheRoleofTraininginSuccessionPlanning

TheTrainingProcessandNeedsAssessmentHowdoweknowwhoneedswhattraining,inwhatforms,andatwhatpoint;ifemployeesarereadyfortraining;andifourtraininghasbeeneffective?Weanswerthesequestionsinthissection,asweplanourtrainingprocessesverycarefully.Weneedtolookatwhat’scurrentlygoingonintheorganizationandhowthatdiffersfromwhatneedstohappeninthefuturetoaccomplishourstrategicbusinessgoals.Oncewedothis,wecananalyzethetypesoftrainingthatwillbenecessarytobuildnewknowledge,skills,andabilitiesforourworkforce.

StepsintheTrainingProcessThischapterisprimarilyorganizedtofollowthestepsinthetrainingprocess.Let’stakealookathowwegothroughthetrainingprocessinExhibit7-1.Hereisabriefdescriptionofthesteps,andweprovidemoredetailofeachstepthroughoutthechapterwithtitlessimilartothesteps.

Step1:Assessingneeds.Weconductaneedsassessmenttodeterminewhattrainingisnecessarytoimproveperformance.

LO7-2Describethestepsinthetrainingprocessandtheirinterrelationship.

Step2:Selectinghowtoshapebehavior.Weselectamethodbasedonlearningtheoriessothatwecanchangeemployeebehaviortoimproveperformance.

Step3:Designingtraining.Wedesignthetraininganddevelopmentbasedontheneedsassessment.Wemustdeterminewhichtrainingmethodswewillusetoshapeemployeebehavior,andwemustselectthedeliverymethod.

Thetrainingprocessbeginswithassessingtheneedsofthenewhire.

©iStockphoto.com/monkeybusinessimages

Step4:Deliveringtraining.Beforeweactuallyconductthetraininganddevelopment,wemustselectthedeliverymethod.

Step5:Assessingtraining.

Afterwecompletethetraining,ourlaststepistoassesshoweffectivethetrainingwasatdevelopingtheneededskillstodetermineoursuccessatshapingbehavior.

InterrelationshipoftheTrainingProcessSteps.NoteinExhibit7-1thateachofsteps2-3-4-5hasadouble-headedarrow;thisisbecauseallthestepsaresocloselyrelatedandbasedoneachotherthattheyarecommonlyplannedtogetherbeforeactuallydeliveringthetraining.Inotherwords,youareconstantlythinkingaheadandbehindyourcurrentstepinthetrainingprocess.Iftheassessmentofthetrainingrevealsthatthebehaviorhasnotbeenshaped(changed)asneeded,wemayhavetogobacktostep1andstartthetrainingprocessagain.

SHRMQ:4

EquippingtheOrganizationforPresentandFutureTalentNeeds

NeedsAssessmentThefirstmajorstepinthetrainingprocessistheneedsassessment.Aneedsassessmentistheprocessofanalyzingthedifferencebetweenwhatiscurrentlyoccurringwithinajoborjobsandwhatisrequired—eithernoworinthefuture—basedontheorganization’soperationsandstrategicgoals.Ifmanagementdoesnotmakethecorrectdiagnosis—likeamechanicworkingonyourcar—theymaycreatetrainingsolutionsthatdon’tsolvetheexistingproblem.Soifaneedsassessmentisnotdonecorrectly,noneoftheotherstepswillbesuccessful.Wemaynotshapethebehaviorneeded,thedesignanddeliverycanbewrong,trainingmaynotevenbeneeded,andtheassessmentoftrainingmaynotmeasurethedesiredoutcomewewantedtobeginwith.Onlybydiligentlygoingthroughtheprocessoflookingatthatchainofeventsinthestatusquocanamanageridentifywheretheprocesscanbechangedtoimproveorganizational

productivityandreachtheorganization’sgoals.

SHRME:5,L:1

NeedsAssessment

EmployeeReadinessAspartofourneedsassessment,themanagerneedstoevaluatetheemployeeswhowouldbetakingpartinthetraining.Employeesmayfeelinsecureabouttheirabilitytolearn,andtheymaythereforebeunwillingtoparticipateintrainingfornewprocesses.Wemustalsoevaluatewhethertheemployeesarephysicallyandmentallyreadytogothroughthetrainingprocesssuccessfully.Inotherwords,aretheyableandwillingtolearn?18Dotheyhavetheskillsandcompetenciesnecessarytosucceedinthistrainingprocess?

Ability.Wehavetodeterminewhetherornotouremployeesfeelthattheyareabletoparticipateinthetrainingprocess—dotheybelievetheycandoit.Self-efficacyiswhetherornotapersonbelievesthattheyhavethecapability

todosomethingorattainaparticulargoal.AsHenryFordsaid,ifyoubelieveyoucanorcannotdosomething—youarecorrect.

Exhibit7-1TheTrainingProcess

Ifemployeesfeelthattheyareunabletolearn,thenthejobofthemanagerbecomesoneofupgradingtheemployees’abilitiesifnecessaryandthenconvincingthemoftheircapabilities.Inaddition,themanagerhastoanalyzethetrueabilitiesandlimitationsofeachoftheemployeeswhomayparticipateinthetrainingprocess.Eachofushasphysical

andintellectualabilities,butatdifferentlevels.Managersmustmatchabilitiestojobs,sodon’tputemployeesinjobstheycan’tdoatthedesiredlevelofperformance—neversetupapersontofailandbedemotedorfired.

NeedsassessmentTheprocessofanalyzingthedifferencebetweenwhatiscurrentlyoccurringwithinajoborjobsandwhatisrequired—eithernoworinthefuture—basedontheorganization’soperationsandstrategicgoals

Self-efficacyWhetherornotapersonbelievesthattheyhavethecapabilitytodosomethingorattainaparticulargoal

WORKAPPLICATION7-3Describeyourself-efficacyforajobyouhaveorhavehad.Howdoesordidyourself-efficacyaffectyourjobperformance?

Willingness.Thesecondmajorpieceintheemployeereadinessequationiswhetherornotemployeesarewillingtolearnwhat’sbeingtaughtinatrainingprogram.Inotherwords,wehavetodeterminetheirmotivationtolearn.Therearemanyreasonswhyemployeesresistchange,includingiftheybelievethetrainingisnecessaryornot.Asignificantpartofwillingnesstolearnisbasedonthesupporttheindividualgetsfromthepeoplearoundthem,includingcoworkers,supervisors,andevenfamilymembers.Somanagersneedtoclearlyexplainwhythetrainingisneededand

howtheemployeeandorganizationwillbenefit.

LearningandShapingBehaviorStep2ofthetrainingprocessconsistsofselectinghowtoshapeorchangeemployeebehavior.Todothis,trainershavetounderstandhowpeoplelearn.Sointhissection,webeginbyexplaininglearning.Thenwediscussacommonlearningtheoryusedtoshapeemployeebehavior.Next,weputthetheoryintopracticeinExhibit7-2anddiscusshowtoshapeorchangeemployeebehavior.

LearningLearningcanbemanydifferentthings,butinabusiness,weusuallyneedtoknowthatouremployeeshavemasteredsomethingthatwearetryingtotrainthemtodo.Howdoweknowthattheyhavelearnedaparticularthing,then?Weknowbecauseofchangesintheirbehavioratwork.Soinourcase,learningisanyrelativelypermanentchangeinbehaviorthatoccursasaresultofexperienceorpractice.19Thereisvisibleevidencethatindividualshavelearnedsomethingbecausetheychangedbehavior—thewaytheyact,orwhattheydoandsay.Therearethreetypesoflearningtheories:classicalconditioning,operantconditioning,andsociallearning.

LO7-3Summarizethefourmethodsforshapingbehavior.

SHRMQ:11

OrganizationalLearning

SHRML:3

LearningTheories:Behaviorism,etc.

OperantConditioningandReinforcementLet’stakesometimenowtodiscussoneofthemostcommonlearningtheories:operantconditioningandreinforcement.Usingthistool,wewillthenshowyouhowtocauseemployeestodomoreofthethingsthatyouneedthemtodo,anddolessofothersbehaviorsthatlowerproductivityintheorganization.

Classicalconditioningsayswewillreactinvoluntarilytoastimulusintheenvironmentifweassociatethatstimuluswithsomethingelse.Forexample,ifyouheardasounditcancauseyoutobeafraidbecauseyourealizethatthesoundindicatesdangertoyou.Youhavebeeninvoluntarilyconditionedtothefeelingofdangerassociatedwiththatsound.OperantconditioningisB.F.Skinner ’stheorythatbehaviorisbasedontheconsequencesreceivedfrombehavinginasimilarwayatan

earlierpointintime.Skinnerfiguredouthowtogetpeopletobehavebasedonthereinforcementtheyreceive.Inotherwords,ifweactedinacertainwaypreviouslyandreceivedareward,wewilllikelyrepeatthatbehavior.If,however,weactedinaparticularwayandreceivedanegativeconsequence(punishment),thenwewillprobablynotrepeatthebehavior.Sociallearningisexperiencedthroughwatchingtheactionsofanotherpersonandwitnessingtheconsequencesofthoseactions.Ifyouseeapersonworkhardandgetaraise,youmayalsoworkhardtogetapayincrease.

WORKAPPLICATION7-4Doyouliketolearnnewthings?Describeyourwillingnesstolearnincollegeandtotrainonthejob.Willyouvoluntarilysignupforcompanytraininganddevelopmentprogramsthatarenotrequiredforyourjob?

Learning Anyrelativelypermanentchangeinbehaviorthatoccursasaresultofexperienceorpractice

7-1ApplyingTheConcept

LearningTheoriesReviewthethreelearningtheoriesbelowandwritethelettercorrespondingtoeachtheorybeforethestatement(s)illustratingit:

1. classicalconditioning2. operantconditioning3. sociallearning

____1.MyparentscontinuouslytoldmehowtobehaveproperlyasIwasgrowingup.Couldthatbewhycustomerscommentonmygoodmannersandsocialskills?____2.Igotcaughtsmokinginano-smokingareaandwasgivenaverbalwarning.I’mnotdoingitagainbecauseIdon’twanttogetintomoretroubleandpossiblyenduplosingmyjob.____3.Shellyisaveryhardworker,butI’veneverevenseenhergetasmuchasathank-youforherperformance.SowhyshouldIwork?____4.AfterseeingwhathappenedtoSean,youbetterbelievethatI’mkeepingmygogglesonwhenI’monthejob.____5.Icompletedtheprojectaheadofscheduleanddidanexcellentjob.Asaresult,mybossgavemeasincerethanksanda$100giftcertificatetoAmazon.com.I

learnedthatitisworthputtinginextraeffortfortheboss.

ShapingBehaviorWecanuseSkinner ’sconceptofoperantconditioningtoshapethebehaviorsoftheemployeesbyprovidingreinforcement(rewards)orpunishmentor,asathirdalternative,provideneither.TakealookatExhibit7-2andthefourmethodsofshapingbehavior.Wecanbreakthesemethodsdownintoaprocessofapplyingareward,removingareward,applyingpunishment,removingpunishment,orprovidingnoresponsetotheactionsoftheindividual.Ifweunderstandeachofthefourmethods,wecanusethemtocauseworkerstoactinwaysthatareconducivetotheimprovementandultimatesuccessoftheorganization.Let’sdiscusseachpartoftheexhibit.

PositiveReinforcement.ItisshownintheupperleftquadrantAin

Exhibit7-2.Positivereinforcementisprovidingarewardinreturnforaconstructiveactiononthepartofthesubject.Forexample,ifouremployeesdosomethingthatimprovesproductivity,wegivethemapositivereinforcementbonusasarewardtoencouragerepeatperformanceofmoresuggestedimprovements.Weshouldrealizethatpositivereinforcementisthemostcommonlyusedmethodofshapingemployeebehaviorwhenwetrainnewemployeestodotheirjobsandwhenexistingemployeesneedtolearnnewjobrequirementsandprocesses.Itisgenerallyconsideredthebestformofreinforcementbutisnotalwaysthebestoptionbasedonthesituation.

Exhibit7-2ShapingBehavior

WORKAPPLICATION7-5Giveexamplesofwhatyoulearnedinanorganizationthroughclassicalconditioning,operantconditioning,andsociallearning.

PositivereinforcementProvidingarewardinreturnforaconstructiveactiononthepartofthesubject

WORKAPPLICATION7-6Giveexamplesofhowanorganizationusespositivereinforcement,punishment,negativereinforcement,andextinctiontoshapeemployeebehavior.

NegativeReinforcement.Oursecondoptionwouldbetoavoidorremoveanoxiousstimulus(thelowerrightquadrantDintheexhibit),aprocesscallednegativereinforcement.Negativereinforcementisthewithdrawalofaharmfulthingfromtheenvironmentinresponsetoapositiveactiononthepartofthesubject.Negativereinforcementiscommonlybasedonrules,withpunishmentbeinggivenforbreakingtherules.Aruleitselfisnotapunishment;itisameansofgettingpeopletodooravoidaspecificbehavior,suchas

comingtoworkontime.Butiftheruleisbroken,punishmentisusuallytheconsequence,suchasaftercomingtoworklatefourtimes(rule)yougetfired(punishment).Wecertainlydon’twanttopunishemployeesforbreakingarulethattheydon’tknowexists,soduringnewemployeeorientationmakesureemployeesknowtheexpectedbehaviorsandtheconsequencesforbreakingrules.

Punishment.Incontrasttoreinforcement,wemaypunishbadbehaviors.Punishmentistheapplicationofanadverseconsequence,ortheremovalofareward,inordertodecreaseanunwantedbehavior.Onemethodofpunishmentwouldbetoremoveareward(thelowerleftquadrantCintheexhibit)asaresultofpeopledoingsomethingthattheyshouldn’thavedone.ThinkoftheNewEnglandPatriot’sTomBradybeinginitiallytoldhecouldn’tplayinthefirstfourgamesofthe2015football

season.

Alternatively,wecanapplyanoxiousstimulus(theupperrightquadrantBintheexhibit),whichisalsoconsideredtobepunishment.Anexampleherewouldbesuspendingaworkerwithoutpaybecauseofexcessiveabsenteeism.Bysuspendingtheworker,we’reapplyinganegativeresponse.Thenegativeresponsereceivedbytheworkerisdesignedtocauseadeclineinthebehaviorthatcreatedsucharesponse.Soinotherwords,punishmentcanbetheapplicationofsomethingbad(anoxiousstimulus)ortheremovalofsomethinggood(areward).

Weshouldrealizethatpunishmentisnotcommonlyusedduringtrainingofemployees;rather,itiscommonlyusedwhenemployeesknowhowtodothejobbutjustwillnotmeetthejobstandards,orwhenemployeesbreakaruleandgetdisciplinedfordoingso.WewilllearnmoreaboutwhenandhowtodisciplineemployeesinChapter9.

Extinction.Thelastoptiondoesn’tfitinthediagramitself,becauseit’stheabsenceofreinforcementorpunishmentofanykind.Extinctionisthelackofresponse,eitherpositiveornegative,inordertoavoidreinforcinganundesirablebehavior.Youmayhaveheardthephrase“Ignoreitanditwillgoaway.”Howdoesalackofresponsecausebehaviortobeshapedinawaythatwedesire?

Employeeswillsometimesexhibitproblembehaviortocauseareactionfromthemanagerorfellowemployees.Theemployeewhoexhibitsthebehaviormaydelightincausingothersconcernorconsternation.Forexample,themaleemployeewhocontinuallyaskshisfemalemanageraboutorganizationalsexualharassmentpoliciesinfrontofotherworkerstocauseherdiscomfortassheexplainsthepolicyismostlikelyintentionallyactingtocauseherembarrassment.Insuchacase,thefemalemanagermaybeableto

ignorethestimulusbehaviorandprovidenoreinforcement.Theemployee’sbehaviorwillmostlikelydeclineorgoawaycompletelybecauseitisnothavingthedesirednegativeeffectonthemanager.

NegativereinforcementWithdrawalofaharmfulthingfromtheenvironmentinresponsetoapositiveactiononthepartofthesubject

PunishmentTheapplicationofanadverseconsequence,ortheremovalofareward,inordertodecreaseanunwantedbehavior

ExtinctionThelackofresponse,eitherpositiveornegative,inordertoavoidreinforcinganundesirablebehavior

Shaping(Changing)Behavior.Ifyouunderstandthesemethodsofshapingbehavior,theybecomepowerfultoolsinyourmanagerialtoolboxforchangingbehaviortoincreaseperformance.Thesetoolsallowyoutocauseyouremployeestoactinwaysyouwantthemtoandavoidactinginwaysthatare

detrimentaltothemselves,theirdivisionordepartment,ortheorganizationasawhole.Nowlet’sdiscusshowtoincreaseanddecreasebehaviorstoincreaseperformance.

Managerscanshapethebehavioroftheiremployeestoimproveperformance.

©iStockphoto.com/asiseeit

IncreasingTargetedBehavior.Ifwewanttocausethebehaviortoincrease,thenwewanttousepositiveornegative

reinforcement(quadrantAorDinExhibit7-2).Reinforcement,whetherpositiveornegative,isdesignedtocauseanincreaseinthetargetedbehavior.

DecreasingTargetedBehavior.If,ontheotherhand,wewanttocauseaparticularbehaviortodecrease,wewouldusepunishment(ineitherofitsforms)orextinction(quadrantB,C,orEinExhibit7-2).Punishmentandextinctionaredesignedtocauseatargetedbehaviortodecreaseovertime.

DesignandDeliveryofTrainingRecallthatbackinChapter1weidentifiedfourimportantHRMskills:technical,humanrelations,conceptualanddesign(decisionmaking),andbusinessskills.Essentially,allofthetrainingmethodsareusedtodevelopspecificskillsthatcanbeclassifiedintooneofthesefourskillscategories.Oncewehavecompletedourneedsassessmentandselectedhowweplantoshapebehavior,wearereadytocompletestep3ofthetrainingprocess:designingthetrainingbyselectingtrainingmethodsandthendeliveringthetraining.Sointhissection,wewillpresentwhichtrainingmethodstousebasedonwhichtypesofskillswearedeveloping.Exhibit7-3presentsthetypeofskills,thetrainingmethodsappropriatefordevelopingeachskill,anddescriptionsofthetrainingmethods.

Beforeweactuallyconductthetraining,in

step4,theHRdepartmentorothertrainersalsohavetoselectthemethodsfortrainingdelivery.Thechoicewilldependtosomeextentonwhatinformationisbeingtransferred,aswellasontheoptionsthatareavailabletotheparticularorganization.Wealsoneedtolookatthebesttypeoftrainingtouseinordertomaximizetransferofknowledgewhileminimizingthecostofthetrainingprocess.Inthenextsections,wediscussourfouroptions:on-the-job,classroom,distance,andsimulationtraining.

On-the-JobTraining(OJT)On-the-jobtraining(OJT)isdoneattheworksitewiththeresourcestheemployeeusestoperformthejob.Themanager,oranemployeeselectedbythemanager,usuallyconductsthetrainingone-on-onewiththetrainee.Becauseofitsprovenrecordofsuccess,jobinstructionaltraining(JIT)—aspecifictypeofon-the-jobtraining—isapopulartrainingtypeusedworldwide.SeeModel7-1fortheself-explanatorystepsofJIT.

Exhibit7-3SkillsandTrainingMethods

Model7-1JobInstructionalTrainingSteps

LO7-4Compareeachofthemajortrainingdeliverytypes.

WORKAPPLICATION7-7Identifyanddescribethetrainingmethod(s)usedtotrainanddevelopyouforajobyouhaveorhavehad.

SHRML:6

On-the-JobTraining(OJT)

7-2ApplyingTheConcept

ShapingBehaviorReviewthefollowingmethodsofshapingemployeebehaviorandwritethelettercorrespondingtoeachbeforethesituation(s)illustratingit.

1. positivereinforcement2. punishment—givebadconsequence3. punishment—removereward4. negativereinforcement5. extinction

____6.BettyusedtogivemethatintimidatinglookwhenIassignedherataskshedidn’twanttodo,andthatbehaviormademeuncomfortable.SoIjustignoreditanddidn’tlethermakemefeeluncomfortable,andshestoppedgivingmethelook.____7.Youknowtherules.Thatbehaviorisgoingtocostyou$25.____8.Yougotthatangryladytocalmdownandleavethestoreasahappycustomer.Thisbehaviorleadstokeepingourcustomers.Thanks,keepupthegoodwork.____9.Ifyoudon’tstopbreakingthepricinggun,youwillhavetobuyanewone.___10.Iknowyouliketogetoutofworkforawhileandgetourlunches,butbecause

youmixeduptheordertoday,Santanawillgotomorrow.

7-1Selfassessment

YourLearningStyleBeloware10statements.Foreachstatement,distribute5pointsbetweentheAandBalternatives.IftheAstatementisverycharacteristicofyouandtheBstatementisnot,placea5ontheAlineanda0ontheBline.IftheAstatementischaracteristicofyouandtheBstatementisoccasionallyorsomewhatcharacteristicofyou,placea4 ontheAlineanda1ontheBline.Ifbothstatementsarecharacteristicofyou,placea3onthelinethatismorecharacteristicofyouanda2onthelinethatislesscharacteristicofyou.Besuretodistribute5pointsbetweeneachAandBalternativeforeachofthe10statements.Whendistributingthe5points,trytorecallrecentsituationsonthejoborinschool.

1. Whenlearning:_____A.Iwatchandlisten._____B.Igetinvolvedandparticipate.

2. Whenlearning:_____A.Irelyonmyhunchesandfeelings._____B.Irelyonlogicalandrationalthinking.

3. Whenmakingdecisions:_____A.Itakemytime._____B.Imakethemquickly.

4. Whenmakingdecisions:_____A.Irelyonmygutfeelingsaboutthebestalternativecourseofaction.

_____B.Irelyonalogicalanalysisofthesituation.

5. Whendoingthings:_____A.Iamcareful._____B.Iampractical.

6. Whendoingthings:_____A.Ihavestrongfeelingsandreactions._____B.Ireasonthingsout.

7. Iwoulddescribemyselfinthefollowingway:_____A.Iamareflectiveperson._____B.Iamanactiveperson.

8. Iwoulddescribemyselfinthefollowingway:_____A.Iaminfluencedbymyemotions._____B.Iaminfluencedbymythoughts.

9. Wheninteractinginsmallgroups:_____A.Ilisten,watch,andgetinvolvedslowly._____B.Iamquicktogetinvolved.

10. Wheninteractinginsmallgroups:_____A.IexpresswhatIamfeeling._____B.IsaywhatIamthinking.

Scoring:Placeyouranswernumbers(0–5)onthelinesbelow.Thenaddthenumbersineachcolumnvertically.Eachofthefourcolumnsshouldhaveatotalnumberbetween0and25.ThetotalofthetwoAandBcolumnsshouldequal25.

1._____A._____B.(5)  2._____A._____B.(5)3._____A._____B.(5)  4._____A._____B.(5)5._____A._____B.(5)  6._____A._____

B.(5)7._____A._____B.(5)  8._____A._____B.(5)9._____A._____B.(5)  10._____A._____B.(5)Totals:_____A._____B.  (25)_____A._____B.(25)Style:Observing Doing  Feeling Thinking

Thereisnobestorrightlearningstyle;eachofthefourlearningstyleshasitsprosandcons.ThemoreevenlydistributedyourscoresarebetweentheA’sandB’s,themoreflexibleyouareatchangingstyles.Understandingyourpreferredlearningstylecanhelpyougetthemostfromyourlearningexperiences.

DeterminingYourPreferredLearningStyle

Thefiveodd-numberedAstatementsrefertoyourself-descriptionasbeing“observing,”andthefiveodd-numberedBstatementsrefertoyourself-descriptionas“doing.”Thecolumnwiththehighestnumberisyourpreferredstyleoflearning.Writethatstylehere:___________

Thefiveeven-numberedAstatementsrefertoyourself-descriptionasbeinga“feeling”person,andthefiveeven-numberedBstatementsrefertoyourself-descriptionasbeinga“thinking”person.Thecolumnwiththehighestnumberisyourpreferredstyle.Writethatstylehere:_____________

Puttingthetwopreferencestogethergivesyouyourpreferredlearningstyle.Checkitoffbelow:

_____Accommodator(combinesdoingandfeeling)

_____Diverger(combinesobservingandfeeling)

_____Converger(combinesdoingandthinking)

_____Assimilator(combinesobservingandthinking)

7-3ApplyingTheConcept

TrainingMethodsForeachofthetrainingsituationsbelow,identifythemostappropriatetrainingmethod.UsethelettersathroughjfromExhibit7-3asyouranswers.

___11.Youwantyourcustomerservicestafftodoabetterjobofhandlingcustomercomplaints.___12.Yourlargedepartmenthasahighturnoverrate,andnewemployeesneedtolearnseveralrulesandregulationstoperformtheirjobs.___13.Youneedyournewemployeestolearnhowtohandlethetypicaldailyproblemstheywillfaceonthejob.___14.YouneedanemployeetoconductanInternetsearchtofindoutmoreaboutanewproductyouwanttobuyforthedepartment;youwantaspecialreport.___15.Youwantemployeestobeabletodoeachother’sjobwhentheytakevacations.___16.Youwanttoimproveyouremployees’abilitytosellproductstocustomersinthestoresothatcustomersdon’tendupleavingandbuyingtheproductsonline.___17.Youneedtopreparemiddle

managerstoadvancetoupper-levelmanagers.Youareconsideringhavingthemrunasimulatedcompanygettingquarterlyresults.

ClassroomTrainingOursecondcommontrainingoptionisclassroomtraining.Atrainingcourseincludescontent,instructionmethods,lessonplans,andinstructormaterials—andprovidesallthesematerialstoaqualifiedinstructorwhowillteachtheclass.

Organizationscanuseclassroomtrainingtoshareknowledge,skills,orideasconsistentlywitharangeofemployeesatonce.

©iStockphoto.com/track5

Classroomtrainingisgenerallyverygoodforconsistentlytransferringgeneralknowledgeortheoriesaboutatopictoalargenumberofpeople.Itisgenerallynotverygoodforteachingspecifichands-onskillsbecauseofthepassivenatureoflearninginaclassroom.However,itiseffectivewhenusingthesameequipmentthatisusedonthejob.

DistanceorE-LearningOurthirdoptionissomeformofdistancelearning—alsocallede-learning—ineitherasynchronousoranasynchronousformat.Synchronousdistancelearningoccurswhenallofthetraineessignintoaparticularwebsitewheretheirinstructortheninteractswiththemandteachesthetopicsfortheday.Incontrast,asynchronousdistancelearningisaprocessinwhichthestudentcansignintothetrainingsiteatanypointintimeandmaterialsareavailablefortheirstudies.Theinstructormayormaynotbeonlineatthesametimeasthestudent,butthere’snodedicatedconnectionbetweenthetwoforthepurposeofteachingtheinformation.

Distancelearning,similartoclassroomtraining,isalsovaluableforteachingbasicconceptsandprovidinggeneralinformationonthetopic.There’stypicallyevenlessinteractionbetweenaninstructorandtrainees

inthisformthaninclassroomtraining.

SHRML:5

E-LearningandUseofTechnologyinTraining

7-1Ethicaldilemma:whatwouldyoudo?Youarefamiliarwiththetraditionalinternshipmodel,inwhichastudentworksatanorganizationtogainexperienceandperhapsafull-timejobaftergraduation.Withtoday’stechnology,moreandmorecompaniesarehiringvirtualinternswhoworkremotelyfromtheircollegecomputers.Virtualinternsdoavarietyoftasks,includingsecretarialwork,softwareandwebsitedevelopment,andinformationtechnology(IT)projects.Mostvirtualinternsneverevensetfootinsidetheorganization’sfacilities.

EntrepreneursNatalyKoganandAviSpivakcofoundedNataviGuides,aNewYork-basedsmallbusiness,in2002topublishguidebooksforstudents.Natavihiresvirtualinternstowritestoriesandrecruitspeoplebypostingopeningswithcareerofficesatmorethan30universitiesnationwide.KoganestimatesthatNatavisaved$100,000inoverheadduringthefirstyearinbusinessbynothavingtofurnishofficespace,computers,andotherequipmenttointerns.

1. Whatarethebenefitsofvirtualinternshipstoemployersandtointerns?

2. Shouldastudentbegivencollegecreditfor

avirtualinternship,orshouldheorshereceiveonlypaywithoutcredit—apart-timejob?

3. Isitethicalandsociallyresponsibletouseinternsinsteadoffull-timeorpart-timeemployees?

4. Willtheuseofvirtualinternshipsbecomethenorm,orwillthepracticefade?

AssessingTrainingThefifthandlaststepofourtrainingprocess(Exhibit7-1)isassessment.Nomatterwhatthetrainingcovers,wealwayswanttoevaluatewhetherornotitachievedtheshapedbehavioridentifiedthroughourneedsassessment.Trainingcanbedesignedtocausechangesinavarietyofemployeeattitudesandbehaviors,andasaresult,itcanbeassessedinanumberofdifferentways,dependingonwhatweweretryingtoaccomplish.Inthissection,wepresentfourassessmentmethodsandhowtochooseanassessmentmethod.

AssessmentMethodsOneofthemostcommonassessmentoptionsiscalledtheFour-LevelEvaluationMethod.20Itmeasuresreaction,learning,behaviors,andresults.

Reactionevaluationsmeasurehowtheindividualrespondstotheactualtrainingprocess.Self-reportingmeasuresarequickandcommonmeasuresoftraining.21Participantssayhowtheyfeelaboutthetrainingprocess,includingthecontentprovided,theinstructors,andtheknowledgethattheygainedbygoingthroughtheprocess.Thisisthelowestleveloftrainingevaluation,anditisfrequentlydiscountedduetoitssubjectivityandbecausesomepeopleoverestimatetheircapabilities.22Certainly,reactionevaluationsarelessrigorousthansomeotherformsofevaluation,buttheystillprovidetheorganizationwithvaluablefeedbackconcerningthelearners’stateof

mindattheendofthetrainingprocessaswellastheirattitudetowardtheprocessandinstructoratitsconclusion.Studentcourseassessmentsareanexampleofreactionevaluations.

Learningevaluationsarelevel-twomeasuresdesignedtodeterminewhatknowledgetheindividualgained,whethertheylearnedanynewskillsbecauseofthetraining,andwhethertheperson’sattitudestowardtheirknowledgeorskillsethaschangedasaresultofthetraining.Learningevaluationsareeasilydoneusingquizzes,tests,andeventopic-baseddiscussionstoseewhetherornottheindividualgainedknowledgeofthesubjectbecauseofthetrainingprocess.

Organizationsarenowofferingtraininganddevelopmenttoemployeesanytime,fromanywhere—24/7/365.

©iStockphoto.com/ContentWorks

Behaviorevaluationsaredesignedtodeterminewhetherornotthetrainee’son-the-jobbehaviorschangedasaresultofthetraining.Behaviorevaluationsusuallytaketheformofobservationoftheindividualonthejob,aftercompletionofthetrainingprocess,toseeifthetraininghadadirecteffectontheindividual’spost-trainingjobperformance.Thebehaviorevaluationisspecifically

designedtoidentifywhetherornottheindividualisabletotransfertheknowledgegainedintonewskillsthattheythenuseintheirwork.

Resultsevaluationisusedtodeterminewhetherornotindividualbehavioralchangeshaveimprovedorganizationalresults—wasthetrainingworththetime,effort,andcost?Inotherwords,welookattheorganization’sbottomlinetodeterminewhetherornotproductivityhasincreased.ThisisthelevelatwhichROIismeasuredandevaluatedtoseewhetherornotthetraininghaspaidoffforthecompany.However,ROIisnottheonlythingthatwemeasureatthislevel.Otherresultsthatwemaymeasureincludeincreasedqualityofwork,lowerabsenteeismandturnover,reductionsinreworkandscrap,loweron-the-jobaccidentrates,andmanyothers.

LO7-5DiscusstheFour-LevelEvaluationMethodforassessingtrainingprograms.

SHRMQ:8

MeasurementSystems

SHRML:4

TrainingEvaluation:Kirkpatrick’sModel

WORKAPPLICATION7-8Whichtrainingassessmentmethodsareusedwhereyouworkorhaveworked?Giveexamplesofthetraininganditsassessmentmethod.

ChoosingAssessmentMethodsWhynotjustevaluateallofourtrainingprogramsateachofthefourlevels?Theprimaryreasonisthatitcoststheorganizationmoneytogothroughtheevaluationprocess.Infact,aswegofromlevelsonethroughfour,thecomplexityandcostofevaluatingthetrainingprocessincreaseswitheachlevel.

SHRML:8

TransferofTraining:DesignIssues,FacilitatingTransfer

7-4ApplyingTheConcept

TrainingAssessmentMethodsReviewthefollowingassessmentmethodsandwritethelettercorrespondingtoeachonebeforethesituation(s)whereitismostappropriate.

1. reactionevaluation2. learningevaluation3. behaviorevaluation4. resultsevaluation

___18.Youareasoftwaresalesmanagerandyouwantyournewsalesrepstobeabletodemonstratethevariousfeaturesofyoursoftware.___19.Youarearestaurantownerwhoinstalledanewfood-orderingcomputersystemwiththeobjectiveofspeedingupthetimeittakestoservemeals,soyouneedtotrainemployeesonhowtousethenewsystem.___20.YouaretheHRmanagerandwanttomakesurethatyourstaffunderstandswhatquestionstheycanandcan’tlegallyaskduringtheselectionprocess.___21.Youaretheservicedeskmanagerataretailstoreandneedtotrainemployeesonhowtoeffectivelydealwithangry

customerswhentheyreturnmerchandise.Youwanttheemployeestoremaincalmandsatisfythecustomer.___22.YouaretheHRmanagerresponsiblefordiversity,andyoudevelopatrainingprogramtohelpemployeesbetterunderstandeachotherandnotusestereotypessothattheycanworkwelltogether.

TalentManagementandDevelopmentNowlet’sdiscussdevelopingemployees.Weshouldrealize,however,thatdevelopmentprogramsalsofollowthesamefivestepsofthetrainingprocesslistedinExhibit7-1.Recallthatemployeedevelopmentdealsprimarilywithtrainingworkersforfuturejobs,nottheircurrentposition.Inthissection,wediscusscareers,commonmethodsofdevelopment,andamodelofcareerdevelopmentconsequences.

CareersHalfacenturyago,alargepercentageofpeoplewouldspendtheirentireworklifewithonecompany.Thisobviouslydoesnothappenveryoftentoday,asyouwilllikelyhaveseveralchangesincareerthroughoutyourworklife.

Sohowdowedefineacareerinthecurrentworkforce?“Acareeristheindividuallyperceivedsequenceofattitudesandbehaviorsassociatedwithwork-relatedexperiencesandactivitiesoverthespanoftheperson’slife.”23Whew!Let’sbreakthisdefinitiondownintoitssubcomponents.

“Individuallyperceived.”Thisdefinitionofthetermcareerreliesheavilyontheperceptionoftheindividualwhoismakingthejudgmentconcerningsuccessorfailureofthecareer.So,successor

failureisdeterminedwithintheindividual’sownmind.BacktoHenryFord—witheitherperception,youarecorrect.

LO7-6Listsomeoftheindividualandorganizationalconsequencesthatcanoccurasaresultoforganizationalcareerplanningprocesses.

SHRMT:1

DefinitionofaCareer

“Sequenceofattitudesandbehaviors.”Attitudeissimplyapositiveornegativeindividualjudgmentaboutaparticularsituation.Acareerconsistsofbothattitudesandbehaviors,soitisnotonlywhatyoudo;it’salsothewayyoufeelaboutwhatyoudoandhowwellyouthinkyou’vedoneovertime.Yourcareerattitudesandbehaviorswillmostlikelychangeovertime.

“Associatedwithwork-relatedexperiencesandactivitiesoverthespanoftheperson’slife.”

Soacareeralsoinvolvesallwork-relatedexperiencesandactivities.So,evennonworkactivitiesthatareworkrelated,suchastrainingoff-site,wouldbeincludedinourdefinitionofcareer.Wecanexpandthistosaythatanyinteractionoffamily,friends,andworkcouldhelpdefineyourcareer.Ifyoulikeyourjobbutsignificantpeopleputyourjobdown,youmaychangeyourattitude.

SHRMT:2

BalancingWorkandLife

CommonMethodsofEmployeeDevelopmentThereisaseriesofcommonmethodsthatorganizationsusetodevelopemployees,includingformaleducation,experience,andassessments.Let’sgothroughabriefdescriptionofeach.

FormalEducation.Formaleducationprovidesemployeeswiththeopportunitytoparticipateinprogramsthatwillimprovetheirgeneralknowledgeinareassuchasfinance,projectmanagement,orlogistics.Theseformaleducationopportunitiesincludesuchthingsasdegreeprogramsatcollegesanduniversities,certificateprograms,andshortcoursesofstudythatareavailablefrommanydifferentsources.Formaleducationcoursesmaybeheldwithanyofthetraininganddelivery

methodsdiscussedearlier.Manyorganizationspaypartorallofthecostofexternalformaleducationforemployees.

SHRMT:9

CareerDevelopment

SHRML:9

EmployeeDevelopment:FormalEducation,Experience,Assessment

Experience.Experience,asamethodfordevelopingtheindividual,wouldputthepersonthroughanumberofdifferenttypesofjob-relatedexperiencesovertime,suchasjobrotation.Thisallowsthepersontoseemoreofwhatgoesonwithintheorganizationandhoweachjobtiestoothers.Experience-baseddevelopmentcanalsoincludetheuseofcoachesormentorsfortheindividual.Theyworkwiththepersontoidentifyhowthesedifferentjobexperienceshelptheindividualtolearnandgrowwithintheorganization.24There’ssignificantevidencethatcareerexperience,teamexperience,andjob-related

skillsareallrelatedtohigherlevelsofteamperformance.25

Exposingemployeestoarangeofexperiencesonthejobisaneffectivewaytodeveloptheirskills.

©HeroImages/Creative/Corbis

CareerAsdefinedbyDouglasHall,theindividuallyperceivedsequenceofattitudesandbehaviorsassociatedwithwork-relatedexperiencesandactivitiesoverthespanoftheperson’slife

EmployeeAssessment.Thereareanumberofdifferentassessmenttoolsthatprovideindividualswithinformationabouthowtheythink,howtheyinteractwithothers,andhowtheymanagetheirownactionsandemotions.Theseassessmentsprovideinformationthatallowsthemtobetterunderstandhowtheycanmanageotherswithintheorganization.Someofthemorecommonmeasuresincludepsychologicalassessments,emotionalintelligencetests,andperformanceappraisals.Eachoftheseassessments,ifproperlyused,providesindividualswithinformationthatcanbeusedtomodifythewaythattheyinteractwithotherswithintheorganization.

AModelofCareerDevelopmentConsequencesBecausetheorganizationandtheindividualhavejointresponsibilityforcareerplanninganddevelopment,bothwillsuffersignificantconsequencesiftheplanningisn’tdonesuccessfully.Individualemployeesgothroughaseriesofcareerstagesastheyprogressthroughtheirworklife.Withineachofthesestages,theemployeehasdifferentneedsthattheorganizationmustmeetsotherelationshipbetweenthetwocanremainstableandtheworkerwillcontinuetobemotivatedtoproducefortheorganization.Organizationsmustrespondsuccessfullytotheindividualemployeebasedontheemployee’scurrentcareerstage.

Let’sdiscussthecommonlyidentifiedstagesofcareerdevelopment26summarizedinthefirstsectionofExhibit7-4.

Exploration.Theexplorationstageistheperiodoftimeduringwhichtheindividualisidentifyingthepersonalneedsthatwillbesatisfiedbyaparticulartypeofwork,thetypesofjobsthatinterestthem,andtheskillsetsnecessarytobeabletoaccomplishthosetypesofjobs.Thisstageisusuallyidentifiedasbeingbetweentheagesof15and24.

Establishment.Theestablishmentstageistheperiodwhentheindividualhasenteredintoacareerandbecomesconcernedwithbuildingaskillset,developingworkrelationships,andadvancingandstabilizingtheircareer.Theindividualstartstomakesignificantpersonalcontributionstotheircareerandbeginstocreaterelationshipsorallianceswithcoworkersthatallowthemtobecomemoresecurewithintheorganization.Thisstageisusuallyidentifiedasage25throughthemid-

40s.

Maintenance.Inthemaintenancestage,theindividualtypicallycontinuestoadvancebutbeginstoseekpersonalsatisfactioninthejobsthattheyperformfortheorganization.Thisisthephasewhereweseeindividualemployeesbegintoactasmentorsortrainerstotheiryoungercoworkersandtoacttoimprovetheorganizationanditsprocessesandpoliciesbecausetheyseeaneedtodoso.Thisstagecoverstheperiodfromthemid-40stoage60yearsoldorolder.

Exhibit7-4CareerStagesandtheHierarchyofNeeds

Disengagement.Thefourthstageisthedisengagementstage.Thisstagetypicallyshowslowerlevelsofoutputandproductivityastheindividualpreparesforlifeafterwork.Duringthisstage,becauseofthedesiretobalancenonworkwithworkactivities,theindividualmaybegintochoosetoworkonlyoneffortstheyfeelarenecessaryorworthyoftheirattention.Theymaycontinuetomentororsponsorotherindividuals’progressionthroughtheirowncareers.Thisstagegoesfromtheearly60stowhenevertheindividualfinallycompletelydisengagesfromtheorganization.

Let’stakealooknowatthesecondpartofExhibit7-4toillustratewhycareerstagesmattersomuchtomanagersintheorganization,andespeciallytoHRmanagement.WehaveaddedAbrahamMaslow’sHierarchyofNeedsbeloweachofthecareerstages.It’srathersurprisinghowcloselyMaslow’sneedshierarchymatchesupwithourcareerstages.

Whatarepeoplemostconcernedwithattheearliestcareerstage?Theyaretypicallymostconcernedwithphysicalandsafetyissues,right?Aretheyphysicallyabletogetthebasicthingsthattheyneedinordertoliveandwork—likemoneyforshelter,foodtoeat,fuelfortheircar?Aretheygettingpaidenoughtosurviveandbesafe?Then,astheygetintotheestablishmentandmaintenancestages,theybecomemoreconcernedwithsocialinteractionsandthengainingstatusandrecognition.Finally,astheymovetothedisengagementstage,theyaremoreconcernedwithhigher-levelesteemneedssuchasself-respect,achievementofpersonal

goals,andbeingabletodothethingsthattheythinkareimportant.So,weseepeoplegothroughthesedifferentmotivationalpointsintheirlifeastheygothroughtheircareer.

Nowthatweunderstandcareerstagesandhowthosestagesidentifywhatmightmotivateworkersinaparticularstage,let’smatchthoseupwithorganizationalHRstrategiesthatareavailabletoreinforceemployeebehavior.ThiswillgiveusageneralworkingmodelofhoworganizationalHRstrategiescancreateeitherpositiveornegativeconsequencesforboththeindividualandtheorganization,dependingonhowtheHRstrategiesareappliedinaparticularsituation.TakealookatExhibit7-5.Wehaveindividualcareerstagesidentifiedontheleftsideofthediagram.OntherightsidearesomeofthemajororganizationalHRstrategiesthatareavailable.DependingonhowtheHRstrategiesareapplied,andbasedontheindividual’scareerstageandmotivatingfactors,weendupwitheitherpositiveornegativeconsequencestoboththeindividualandtheorganization.

Exhibit7-5ConsequencesofCareerPlanning

IfweapplythecorrectHRstrategyorstrategiestoanindividualemployeebasedonthefactorsthatmotivatetheemployee,wecanimproveeachofthemajororganizationaldependentvariablesthatweidentifiedinChapter1—jobsatisfaction,productivity,absenteeism,andturnover.Inaddition,thereareseveralotherorganizationalfactorsthatcaneitherimproveordeclinebasedonthe

application(orlackthereof)ofthecorrectHRstrategy.Thesefactorsincludelaborcosts,organizationalsafety,employeelawsuits,andorganizationalreputation,amongothers.Soasyoucansee,iftheorganizationfailstoapplythecorrectstrategytomotivatetheemployee(basedontheemployee’scurrentcareerstage),theconsequencescanbesevere.

Ontheothersideofthediagram,theconsequencestotheemployeeareequallysignificant.IftheorganizationappliesthecorrecttypesofHRstrategiestodeveloptheemployeesuccessfullyovertime,individualfeelingsofaccomplishmentandachievementincrease,self-worthandself-relianceincrease,theemployee’ssenseofsecurityincreases,andtheirmoraleislikelytoincreaseduetohigherindividualsatisfactionlevels.Again,ifthestrategiesappliedareunsuccessful,eachoftheseindividualconsequencescanbecomenegative.Afterlookingatthemodel,itshouldbecomeobviousthatsuccessfullyapplyingHRstrategiestoindividualemployeesbasedon

theirpersonalmotivatingfactorsandcareerstageiscriticaltooverallorganizationalsuccessovertime.

Sonowyouknowwhyit’ssoimportanttocreatecareerpathsforouremployeeswithintheorganizationandprovideemployeedevelopmentopportunities.Ifwedothesethingssuccessfully,weendupwithaseriesofpositiveconsequencesforboththeorganizationandtheindividualsinvolved.Wehavebetterproductivity,betterjobsatisfactionandemployeeengagement,andlowerabsenteeismandturnover.However,ifwefailtodothesethingssuccessfully,aseriesofnegativeconsequencescanoccurthatultimatelycostboththeorganizationandtheindividualtimeandmoney.Employeedevelopmentisacriticalpieceintheorganizationalpuzzleinordertoprovidelong-termsuccess.

WORKAPPLICATION7-9Identifythelevelofcareerdevelopmentyouareon.UsingExhibit7-4,butinyourownwords,describeyourcareerstageandtheMaslowmotivationalissuesyouaredealingwithnow.

TrendsandIssuesinHRMThefirstissuethatwewilldiscussinvolvesthe“gamification”oftraininganddevelopment.Thenwewillbrieflylookattheever-more-commontrendofoutsourcingtraininganddevelopmentandotherfunctionsinorganizations.

TheGamificationofTrainingandDevelopmentOneofthetrendsintraininganddevelopmentintoday’sorganizationsis“gamification.”Infact,theFinancialPostofTorontosaiditisa“revolution”ineducatingworkers.27Inthetrainingworld,gamificationistheprocessofdesigningandutilizingvideoandothergametechnologytoteachtheplayerabusinessconcept.

Whatisthevaluegainedfromgamification?Themajoradvantagethatisgainedthroughgamificationoftrainingistraineeengagementinthetrainingprocess,especiallywiththemillennial-generationemployees.However,wearefindingthatgamificationalsoworkswithothergenerationsofemployeestomoreactivelyengagetheminthetrainingprocess.Oneofthekeychallengeswithtrainingalwayshasbeentogetpeopleengagedintheprocess.Usinggamificationisprovingtobe

oneofthemostimportantmeasurestogetpeopletolearn.

OutsourcingEmployeeTrainingandDevelopmentAswe’venotedearlierinthebook,outsourcinghasbecomethemajortopicofinteresttoorganizationsofallsizes.Infact,basedonarecentsurveybyADP,“91percentoflargecompaniesand80percentofmidsizedcompanies”saythatoutsourcingoneormoreHRfunctionsprovides“realvalue.”28OutsourcingofthetraininganddevelopmentfunctionsignificantlylagsotherfunctionsintheHRdepartment,though.29Evenso,modernorganizationsmustevaluatewhetherornotoutsourcingofthetraininganddevelopmentfunctionsmakessense.Ifthecompanycanreducecostsfortraininganddevelopmentaswellasimprovethequalityofthetrainingfunction,itmaymakesensefortheorganizationtoconsideroutsourcingofthesefunctions.

However,theorganizationmustcarefully

evaluatealloftheinformationinananalysisforpotentialoutsourcingofthetraininganddevelopmentfunction.Withoutthiscarefulevaluation,significantmistakescanbemadeandlargeamountsofmoneymaybespentwithouttheorganizationreceivingtherequisitebenefitsfromtheprocess.

SHRML:7;Q:13

OutsourcingEmployeeDevelopment

WORKAPPLICATION7-10Selectanorganizationyouworkfororhaveworkedfor.What,ifany,traininganddevelopmentfunctionsdoordiditoutsource—includingbringinginconsultstodevelopandconducttraininganddevelopment?Ifyouarenotsure,asktheHRtrainingspecialist.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary7-1Identifyeachofthecommonpointsinthetenureofemployeeswithintheorganizationwheretrainingmaybeneeded.

Themostcommonpointsatwhichmanagersshouldconsiderworkforcetrainingincludenew-employeeorientation,whichisusedtoacculturatenewemployeestotheorganizationanditscultureandtopreparethemtodotheirownjobwithintheorganization;whenprocessesorprocedureshavechanged;whenevertherehasbeensomefailuretoperformsuccessfully(remedialtraining);orwhenemployeedevelopmentopportunitiescomeup,allowingthecompanytodevelopcurrentemployees’skillsandabilitiessothattheyareabletomoveintohigher-leveljobswithin

theorganization.7-2Describethestepsinthetrainingprocessandtheirinterrelationship.

Thefirststepinvolvesconductinganeedsassessmenttoidentifythetypeoftrainingneeded.Thesecondstepinvolvesselectinghowtoshapeemployeebehavior.Thethirdstepinvolvesdesigningthetrainingbyselectingtrainingmethods.Thefourthstepinvolvesselectingthedeliverymethodanddeliveringthetraining.Thelaststepinvolvesassessingthetrainingtodetermineifemployeebehaviorhaschangedtoimproveperformance—ifnot,returntostepone.Thestepsaresocloselyrelatedandbasedoneachotherthattheyarecommonlyplannedtogetherbeforeactuallydeliveringthetraining.

7-3Summarizethefourmethodsforshapingbehavior.

Thefouroptionsforshapingbehaviorincludepositive

reinforcement,negativereinforcement,punishment,andextinction.Positivereinforcementinvolvestheapplicationofarewardinresponsetoaperson’sbehaviorinordertoincreasethechancesthatthatbehaviorwillberepeated.Negativereinforcementinvolvesthewithdrawaloravoidanceofanoxiousstimulus,oranegativething,inresponsetoaperson’spositivebehaviortoincreasethechancesthatthebehaviorwillberepeated.Punishmentoccurseitherwhenanoxiousstimulusisappliedorwhenarewardistakenawayinresponsetoanegativebehavior.Extinctionprovidesnoreinforcement,eitherpositiveornegative,totheactionsofthesubject.

7-4Compareeachofthemajortrainingdeliverytypes.

On-the-jobtraining(OJT)isdoneattheworksitewiththeresourcesthe

employeeusestoperformthejob,anditisconductedone-on-onewiththetrainee.Inclassroomtraining,theorganizationcreatesatrainingcourseandprovidesaqualifiedinstructortoteachtheclassinasinglelocationataspecifictime.Distancelearning,alsocallede-learning,allowsthestudentstosignintothetrainingsiteandprovidesmaterialstothemfortheirstudies.There’stypicallylessinteractionbetweenaninstructorandtraineethaninOJTorclassroomtraining.

7-5DiscusstheFour-LevelEvaluationMethodforassessingtrainingprograms.

Thefour-levelevaluationmethodmeasuresreaction,learning,behaviors,andresults.Inreactionevaluations,weasktheparticipantshowtheyfeelaboutthetrainingprocess,includingthecontentprovided,theinstructor(s),andtheknowledgethattheygained.

Learningevaluationsaredesignedtodeterminewhatknowledgewasgainedbytheindividual,whetheranynewskillshavebeenlearned,andwhetherattitudeshavechangedasaresultofthetraining.Behaviorevaluationsaredesignedtodeterminewhetherornotthetrainee’son-the-jobbehaviorschangedasaresultofthetraining.Inaresultsevaluation,wetrytodeterminewhetherornotindividualbehavioralchangeshaveimprovedorganizationalresults.ThisisthelevelatwhichROIwillbemeasuredandevaluated.

7-6Listsomeoftheindividualandorganizationalconsequencesthatcanoccurasaresultoforganizationalcareerplanningprocesses.

OrganizationalconsequencesincludeallofthemajororganizationaldependentvariablesthatweidentifiedinChapter1:jobsatisfaction,productivity,

absenteeism,andturnover.Inaddition,laborcosts,organizationalsafety,employeelawsuits,andorganizationalreputationcaneitherimproveordeclinebasedontheapplication(orlackthereof)ofthecorrectHRstrategy.Ontheemployeesideofthediagram,iftheorganizationappliesthecorrectHRstrategies,individualfeelingsofaccomplishmentandachievementincrease,self-worthandself-relianceincrease,theemployee’ssenseofsecurityincreases,andemployeemoraleislikelytoincreaseduetohigherindividualsatisfactionlevels.Ifthestrategiesareunsuccessful,eachoftheseindividualconsequencescanbecomenegative.

7-7DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthis

chapter ’skeyterms.

KeyTermscareer,177employeedevelopment,164extinction,170learning,168needsassessment,167negativereinforcement,170orientation,164positivereinforcement,169punishment,170remediation,165self-efficacy,167training,164

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. __________istheprocessofteachingemployeestheskillsnecessarytoperformajob.

2. __________isongoingeducationtoimproveknowledgeandskillsforpresentandfuturejobs.

3. __________istheprocessofintroducingnewemployeestotheorganizationandtheirjobs.

4. __________isthecorrectionofadeficiencyorfailureinaprocessorprocedure.

5. __________istheprocessofanalyzingthedifferencebetweenwhatiscurrentlyoccurringwithinajoborjobsincomparisonwithwhatisrequired—eithernoworinthefuture—basedontheorganization’soperationsandstrategic

goals.6. __________iswhetherpeoplebelieve

thattheyhavethecapabilitytodosomethingorattainaparticulargoal.

7. __________isanyrelativelypermanentchangeinbehaviorthatoccursasaresultofexperienceorpractice.

8. __________isprovidingarewardinreturnforaconstructiveactiononthepartofthesubject.

9. __________isthewithdrawalofaharmfulthingfromtheenvironmentinresponsetoapositiveactiononthepartofthesubject.

10. __________istheapplicationofanadverseconsequenceorremovalofarewardinordertodecreaseanunwantedbehavior.

11. __________isthetotallackofresponse,eitherpositiveornegative,toavoidreinforcinganundesirablebehavior.

12. __________istheindividuallyperceivedsequenceofattitudesandbehaviorsassociatedwithwork-relatedexperiencesandactivitiesoverthespanofaperson’s

life.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Isthecurrentlyavailableworkforcereallynotsufficientlytrainedtoparticipateinknowledge-intensivejobs?Whyorwhynot?

2. Thinkofandthenlistalloftheitemsthatyouthinkshouldbeincludedinanewemployeeorientation.Brieflyjustifywhyeachitemshouldbeincluded.

3. Brieflydescribeajobyouhaveorhad.Ifyouwerepromoted,whichtrainingmethod(s)wouldyouusetotrainthepersontodoyourcurrentjob?

4. Whichoneoftheprimarydeliveryoftrainingtypeswouldyouusetoteachbasicaccountingtoagroupofemployees?Justifyyouranswer.

5. Haveyoueverfilledoutanevaluationformforanemployeetrainingclass?Whichtypeofevaluationwasit?Whatevidenceledyoutothinkitwasthistype?

6. Whatmanagementtoolsorprocesseswouldyouuseinordertoevaluateyouremployeesforremediationtraining?

7. Doyouagreewiththedefinitionofacareerpresentedinthetext?Whyorwhynot?Howwouldyouchangeit?

8. Whichmethodofdevelopment,formaleducation,experience,orassessmentdoyouthinkismostvaluable?Justifyyourchoice.

9. IdentifyanddiscusstwoorthreewaysinwhichpoorapplicationofHRstrategies(Exhibit7-5)wouldcreatenegativeemployeeconsequences.

Case7-1GoogleSearch:BuildingtheProgramthatWritestheCodetoFindFemaleTalentGoogleInc.tookWebsearchingtoamuchmoresophisticatedlevelwhenitofferedtargetedsearchresultsfrombillionsofWebpages,basedonaproprietaryalgorithmthatallowedforgreatercustomizationthandidpriorengineslikeWebCrawlerandDogpile .Employingmorethan50,000people,Googlegeneratesmostofitsrevenuefromadvertisingsales.In2013,itsnetincomewascloseto$13billion,andthecompanyshowed60%revenuegrowthbetween2012and2014.Addedtothat,GooglehasbeenonthetopoftheFortune“BestPlacestoWork”listsince2012.30Googleisoneofthebestfirmsatmakingemployeesfeelwelcomedandsupported,butbeinginthetechnologyfield,thecompanyhadbecomea“boys’club,”withwomenconstitutingonly30%ofitsentireworkforce.

AlongsideGoogle,otherSiliconValleytechnologygiantslikeFacebook,Yahoo,andLinkedInrecentlydisclosedtheirgenderandracialdiversityratiosintheirworkplaces.Onaverage,Google’sworkforceconsistsofmorethan65%males,55%whites,and35%Asians.

Thegapsbetweenthesenumbersareevenwiderintechnology-relatedpositions.AsshowninitsMay2014report,itemploysonly2%blacksand3%Hispanics.Googleadmittedthatthisproblemrequiredimmediateaction.Google’ssharingofdemographicinformationisapromisingsignthatitiswillingtochange,butactionspeakslouderthanwords.

Googletookquickactionandperformeditsownsearch.Itfoundthatwomenwerelosinginterestincomputersciencesasacareeratanalarmingrate.Only14%ofthecomputersciencegraduateswerewomenin2013,andsurveysindicatedthatlessthan1%ofwomenexpressedanyinterestinmajoringincomputersciencesincollege.31Googlethenrecognizedthatitcouldnotusetraditionalrecruitmenttechniquestohirewomensincetheywerejustnotpresentinthelaborpool.

Googlealsoexamineditsownuniquehiringprocessesandconcludedthattheywerebothdifficultandtedious—womenwerenotemergingthroughtheseprocesses,andGooglecouldnotjustsitbackandhopetogainnewfemaleemployeesfromalaborpoolthatcouldnotsupplythem.32

Googledecidedtobefarmoreproactiveintheareaofwomenemployeedevelopmentandcommitted$50millionforbothresearchandsolutionstrategies.Itsresearchindicatedthatifwomenwereexposedtocodingatanearlyage,theywouldmorelikelylookfavorablyatacareerpathincomputerscience.33Google’sresearchalsonotedthatcomparedtothecompaniesledbymen,techcompaniesledbywomen

achieveda35%higherreturnoninvestmentand12%higherrevenue.34

Googleunderstoodthatitsanswertothislaborshortage,aswellastogreaterprofitability,wastoshowyounggirlshowinterestingaspectsofcomputersciencecouldbe,aswellashowlucrative,andtoinspirethemtopursueacareerinthisfield.Secondly,only10%oftheschoolsintheUnitedStatesofferedcomputersciencecourses,soaccesstothisfieldwasamajorproblem.Toachieveitsgoalofmorewomenintheworkforce,Googleinitiatedaprojectcalled“MadeWithCode”(MWC)thatwasdesignedtoattractwomentothesciencesandinthelongrundiminishpossiblegenderbiasesinitsownorganization,aswellasinthefield.35

MWCwaslaunchedasaneventinNewYorkCity,withtheparticipationofteenagegirlsfromlocalpublicschools;famousfemaleentrepreneurs;andmanyprofessionalwomenwhoutilizedcodinginthefilm,music,andfashionindustries.Toincreaseexposureandinspiration,GoogleisworkingcloselywithproducersandwritersintheScience&EntertainmentExchange tohavemorefemalecodersinmoviesandtelevisionseries.36

WiththeMWCprogramtargetingthepeoplewhonormallydidnothavetheaccessortheopportunitytopursueacareerincomputerscience,Googleprovidedacceleratedtech-trainingprogramstohelpthemsucceedinhigh-leveltechjobs.Googledidthisbyofferingfreecodingclassesonlinetopullextraordinarytalentfrom

thecitiessurroundingSiliconValley.37Italsoprovidedworkshopsthatfosteredstudentcollaborationonsimplecodingprojectslike3-Dprintedbracelets.Researchhasnotedthatwomenthriveinteamenvironments,andGooglewantedthemtounderstandthatteamworkisthecornerstoneofsoftwaredevelopment.Tothisend,Googlegaveanadditional3monthsoffreeaccesstoitsCodeSchooltowomen.38Googlehopesthattheoutcomeofitsprogramswillincreaseyoungergirls’involvementincomputerscienceandinthelongrunincreasewomen’svisibilityintheprofessionandatGoogle.

Questions1. Whatisaneedsassessment,andhowmight

Googleusethistooltoincreasethepresenceofwomeninitsworkforce?

2. SomemightarguethatGoogle’s“MadeWithCode”programhasredefinedtheconceptofemployeedevelopment.Agreeordisagreeandprovideanexplanationsupportingyourposition.

3. ExplainhowGoogle’sparticularsituationdemonstratestherelationshipbetweenemployeerecruitmentandemployeedevelopment,giventheabovediscussion.

4. ExplainhowGoogle’s“MadeWithCode”hasbecomeanintegralpartofitscareerplanning.

5. Howmighttheconceptsofself-efficacyandreinforcementtheoryhelpusbetterunderstandschoolgirls’relativelackofinterestincomputerscience?

6. AssumethatGoogleisultimatelysuccessfulandreceivesmorefemaleapplicants,whomitthenhires.Whatsuggestionsdoyouhaveformanagingthisnewtalentpool?

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,LongIslandUniversitySchoolofBusiness,BrooklynCampus

SkillBuilder7-1TheTrainingProcess

ObjectiveTodevelopyourabilitytoconductaneedsassessment,toselecthowtoshapeemployeebehavior,todesignatrainingprogrambyselectingtrainingmethods,toselectamethodtodelivertraining,andtochooseanassessmentmethod

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskill—conceptualanddesignskills

2. SHRM2013CurriculumGuidebook—L:Traininganddevelopment

AssignmentAsanindividualorgroup,selectajobandwriteoutyouranswers.Followthestepsinthetrainingprocessbelowtotrainapersontodothejob.

Step1:Needsassessment.Conductaneedsassessmentforthejobbydevelopingacompetencymodelidentifyingtheknowledge,skills,andabilitiesneededtodothejobsuccessfully.Step2:Selecthowyouwillshapebehavior.Besuretospecifyifyouwillusepositivereinforcement,punishment,negativereinforcement,orextinction.Statetherewardsand/orpunishment.Step3:Designthetraining.Selectanddescribeindetailthetrainingmethod(s)youwillusetoshapethebehavior.Step4:Deliverthetraining.Justselectoneofthefourmethodsofdeliverythatyouwillusetoconducttheactualtraininganddescribehowyouwilldeliverthetraining.Step5:Assessmentoftraining.Justselectoneofthefourassessmentmethodsanddescribeindetailhowyouwilldetermineifthetrainingdidinfactshapethebehavior.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

_______________________________________________________________________________________

_______________________________________________________________________________________

_______________________________________________________________________________________

YourinstructormayaskyoutodothisSkillBuilderinclassbybreakingintogroupsoffourtosixanddoingthepreparation.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

SkillBuilder7-2CareerDevelopment

ObjectiveTobegintothinkaboutanddevelopyourcareerplan

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskill—conceptualanddesignskills

2. SHRM2013CurriculumGuidebook—L:Traininganddevelopment

AssignmentWriteoutyouranswerstothefollowingquestions.

1. Doyounow,ordoyouwanttoworkinHRM?Why?Ifnot,whatcareerdoyouwanttopursue,andwhy?

2. IfyouwanttoworkinHR,basedonyourself-assessmentbackinChapter1orotherknowledge,listyourhighestlevelsofinterestinHRdisciplines.Ifnot,whatareyourhighestlevelsofinterests,functions,ordisciplineswithinyourchosencareer?

3. Whatmethodsofemployeedevelopment(formaleducation,experience-internshipsandjobs,andassessment)areyouusingtoprepareforyourcareer?

ApplyItWhatdidIlearnfromthisexercise?HowwillIusethisknowledgeinthefuture?

_______________________________________________________________________________________

_______________________________________________________________________________________

_______________________________________________________________________________________

YourinstructormayaskyoutodothisSkillBuilderinclassbybreakingintogroupsoftwotothreeanddiscussingyourcareerplans.Ifso,theinstructorwillprovideyouwithanynecessaryinformationoradditionalinstructions.

8PerformanceManagementandAppraisal

©iStockphoto.com/laflor

ChapterOutlinePerformanceManagementSystems

PerformanceManagementVersusPerformanceAppraisalThePerformanceAppraisalProcessAccuratePerformanceMeasures

WhyDoWeConductPerformanceAppraisals?

Communication(Informing)DecisionMaking(Evaluating)Motivation(Engaging)

WhatDoWeAssess?TraitAppraisalsBehavioralAppraisalsResultsAppraisals

HowDoWeUseAppraisalMethodsandForms?

CriticalIncidentsMethodManagementbyObjectives(MBO)MethodNarrativeMethodorFormGraphicRatingScaleForm

BehaviorallyAnchoredRatingScale(BARS)FormRankingMethodWhichOptionIsBest?

WhoShouldAssessPerformance?SupervisorPeersSubordinatesSelfCustomers360-DegreeEvaluations

PerformanceAppraisalProblemsCommonProblemsWithinthePerformanceAppraisalProcessAvoidingPerformanceAppraisalProcessProblems

DebriefingtheAppraisalTheEvaluativePerformanceAppraisalInterviewTheDevelopmentalPerformanceAppraisalInterview

TrendsandIssuesinHRMIsItTimetoDoContinuousAppraisals?Competency-BasedPerformance

Management

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

8-1Summarizethenecessarycharacteristicsofaccurateperformancemanagementtools.PAGE1908-2Identifyandbrieflydiscussthepurposesofperformanceappraisals.PAGE1938-3Discusstheoptionsforwhattoevaluateinaperformanceappraisal.PAGE1948-4Listthecommonlyusedperformancemeasurementmethodsandforms.PAGE1968-5Describetheavailableoptionsfortherater/evaluator.PAGE2008-6Namesomeofthecommonproblemswiththeperformanceappraisalprocess.PAGE2038-7Contrastevaluativeperformancereviewsanddevelopmentalperformancereviews.PAGE2068-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE210

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindyremarksthatalthoughperformanceevaluationcanbeuncomfortableforbothmanagersandemployees,failuretoaccuratelyandhonestlyevaluateperformanceisneveragoodchoice.Sherecallsthetimethatasupervisor,Annette,cametoseeher.

“IwanttofireChristine,”Annettesaidangrily.“Sheenteredthewronginvoicenumbersagain,andnowIhavetostayandcorrecthermistakes—again!”

“Isthiscommon?”Cindyasked.“Haveyouexpressedyourconcernsorinitiatedaperformanceimprovementplan?”

“Shedoesitallthetime,butIusuallydon’tcatchituntilaftersheisofffortheday,”Annettereplied.“Bymorning,itdoesn’tseemworthmytimegooveritwithher.”

“Howaboutherperformanceevaluation?”sheaskednext.“HaveyoubroughtChristine’spoorperformancetoherattentionatherannualevaluation?”

“Well,no,Ialwaysgiveallmyemployeesasatisfactoryrating—it’seasierthatway,”answeredAnnette.

WithouteverbringingChristine’sunacceptableperformancetoherattentionandthusgivingherachancetochange,firingorotherwiseseverelydiscipliningChristineatthispointwouldbequestionable.Howcanthisproblembeavoided?InChapter8,youwilllearnhowtocreateandutilizeaperformanceevaluationprocessthatworks.

PerformanceManagementSystemsItiscriticaltoevaluatehowwellournewlytrainedemployeesperformtheirjob.Therefore,performanceevaluationisanimportantpartofthejobsofmanagersandHRMstaff.1,2Inthissectionwediscussthedifferencebetweenperformancemanagementandperformanceappraisal,andwepresenttheperformanceappraisalprocess.

PerformanceManagementVersusPerformanceAppraisalThemostcommonpartoftheperformancemanagementprocess,andtheonewithwhichwearemostfamiliar,istheperformanceappraisal,orevaluation.(Inthischapter,wewillusethetermsperformanceevaluation,performanceappraisal,andjustappraisalinterchangeably.)However,theperformanceappraisalprocessisnottheonlypartofperformancemanagement.Performancemanagementistheprocessofidentifying,measuring,managing,anddevelopingtheperformanceofthehumanresourcesinanorganization.Performancemanagementisasystematicanalysisandmeasurementofworkerperformance(andcommunicationofthatassessmenttotheindividual)thatweusetoimproveperformanceovertime.

Netflixisonecompanythathasstoppeddoingformalperformanceappraisals.

©iStockphoto.com/JasonDoiy

Performanceappraisal(PA),ontheotherhand,istheongoingprocessofevaluatingemployeeperformance.Performanceappraisalshouldnotbesimplyaonce-ortwice-a-yearformalinterview.Itshouldbeanongoingprocess.Employeesneedregularfeedbackontheirperformance,3sogiveroutineandcandidassessments.4 Althoughwewillspend

mostofthechapterdiscussingperformanceappraisals,thereareseveralothersignificantpiecestoperformancemanagementthatwealreadycoveredinpastchaptersandwillcoverinfuturechapters.

Wediscussed“strategicplanning,”whichprovidesinputsintowhatwewanttoevaluateinourperformancemanagementsystem,inChapter2,andthemajormethodofidentifyingperformancerequirementsinaparticularjobwhenwewentthrough“jobanalysisanddesign”inChapter4.InChapter7,wediscussed“traininganddevelopment.”Additionally,wewilldiscussmotivatingemployees,coachingandcounseling,employeerelations,compensation,andotherpiecesinChapters9through14.Nowthatweunderstandthedifferencebetweenperformancemanagementandperformanceappraisal,let’slookattheperformanceappraisalprocess.

LO8-1Summarizethenecessarycharacteristicsofaccurateperformancemanagementtools.

SHRMQ:5

ImprovingOrganizationalEffectiveness

PerformancemanagementTheprocessofidentifying,measuring,managing,anddevelopingtheperformanceofthehumanresourcesinanorganization

SHRME:4

PerformanceManagement(PerformanceCriteriaandAppraisal)

SHRMQ:9

OngoingPerformanceandProductivityInitiatives

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

E.JobAnalysis/JobDesign(required)4.Performancemanagement(performancecriteriaandappraisal)

H.PerformanceManagement(required)

1.Identifyingandmeasuringemployeeperformance2.Sourcesofinformation(e.g.,managers,peers,clients)3.Ratererrorsinperformancemeasurement5.Performanceappraisals6.Appraisalfeedback7.Managingperformance

Q.OrganizationDevelopment(required—graduatestudentsonly)

5.Improvingorganizationaleffectiveness9.Ongoingperformanceandproductivityinitiatives

ThePerformanceAppraisalProcessExhibit8-1illustratestheperformanceappraisalprocess.Notetheconnectionbetweentheorganization’smissionandobjectivesandtheperformanceappraisal(PA)process.Herewebrieflydiscusseachstepoftheprocess.

Step1:Jobanalysis.Ifwedon’tknowwhatajobconsistsof,howcanwepossiblyevaluateanemployee’sperformanceinthatjob?WelearnedhowtodoajobanalysisinChapter4.

WORKAPPLICATION8-1Selectajobyouhaveorhavehad.Doyouordidyouknowtheorganization’smissionandobjectives?Brieflystatethemission.Ifyoudon’tknowit,findout.Doyouunderstandhowyourjobfitsorhelpstomeettheorganization’smissionandobjectives?Explaininsomedetail.

Step2:Developstandardsandmeasurementmethods.Wecan’tassessperformancewithoutstandardsandmeasuringtoseeifstandardsaremet.5WewilldiscussPAmethodsinthenextpartofthissection,andinthesection“HowDoWeUseAppraisalMethodsandForms?”wewilldiscussthesetopicsinmoredetail.

Step3:Informalperformance

appraisal—Coachinganddisciplining.Asitsdefinitionstates,PAisanongoingprocess.Whileaformalevaluationmayonlytakeplaceonceortwiceayear,peopleneedregularfeedbackontheirperformancetoknowhowtheyaredoing.6

Exhibit8-1ThePerformanceAppraisalProcess

PerformanceappraisalTheongoingprocessofevaluatingemployeeperformance

8-1Ethicaldilemma:whatwouldyoudo?

AcademicStandardsTheacademiccredit-hoursystemwassetupmanyyearsagotoensurethattherewouldbesomestandardizationacrosscollegesthroughoutthecountryandthatacademicsandemployershadthesameunderstandingoftheworkloadthatacollegestudenthadcarriedtoearnadegree.Thecredit-hoursystemwasbasedontheassumptionthatastudentwouldspend2hoursofpreparationforeachhourofin-classtime.Soastudenttakingfiveclassesshouldspend15hoursperweekinclassesandabout30hourspreparingforclasses,oratotalofabout45hoursaweek—whichisafull-timeschedule.

1. Howmanyhoursoutsideofclass,onaverage,doyouandotherstudentsyouknowspendpreparingforclasseachweek?

2. Arecollegeprofessorstodayassigningstudents2hoursofpreparationforeveryhourinclass?Ifnot,whydoyouthinktheyhavedroppedthisstandard?

3. Arestudentswhoareessentiallydoingpart-timework(thatis,attendingclassesbutdoinglittleacademicworkoutsideofclass)duringcollegebeingpreparedforacareeraftergraduation(witha40-to60-hourworkweek)?

4. Isitethicalandsociallyresponsiblefor

professorstodropstandardsandforcollegestoawarddegreesfordoinglessworkthanstudentsdid5,10,or20yearsago?

5. Areprofessorsthatinflategradesbeingethicalandsociallyresponsible?

Step4:Prepareforandconducttheformalperformanceappraisal.TheformalPAreviewwiththebossusuallyoccursonceorsometimestwiceayear,usingmeasurementforms.WewilldiscussthemlaterinthischapteralongwiththestepsofpreparingforandconductingthePA.

AccuratePerformanceMeasuresWeneedaccuratestandardsandmeasuresofemployeeperformancebothtoeffectivelyassessperformanceandtoletemployeesknowwheretheycanimprove.7Thisinturnshouldleadtotrainingemployeestodeveloptheskillstheyneedtoimprovetheirperformance.8

Also,tobeanaccuratemeasureofperformance,ourmeasuremustbevalid,reliable,acceptableandfeasible,specific,andbasedonthemissionandobjectives.Let’sdiscusseachofthoserequirementshere.

ValidandReliable.Wehavetocreatevalidandreliablemeasurementtobeaccurate.RecallthatwediscussedreliabilityandvalidityinChapter4

andChapter6.Validmeansthatameasureaccuratelymeasureswhatyouwantedtomeasure.Reliablemeansthemeasureisconsistenteachtimeweuseit.9

AcceptableandFeasible.Acceptabilitymeansthattheuseofthemeasureissatisfactoryorappropriatetothepeoplewhomustuseit.Tobeacceptable,anevaluationtoolmustalsobefeasible.10Isitpossibletoreasonablyapplytheevaluationtoolinaparticularcase,orisittoocomplexorlengthytoworkwell?Asanexample,ifthemanagermustfillouta25-pageformthathasverylittletodowiththejobbeingevaluated,themanagermaynotfeelthattheformisacceptableorfeasible,atleastpartiallyduetoitslength,eveniftheemployeesdo.Conversely,ifthemanagerfillsoutatwo-pageevaluationandfeelsitisatruemeasureofperformanceinanemployee’sjob,buttheemployeefeelsthattheevaluationleavesoutlargesegmentsofwhatisdoneinthework

routine,theemployeemaynotfeelthattheformisacceptableandfeasible.Ifeithermanagementoremployeesfeelthattheformisunacceptable,itmostlikelywillnotbeusedsuccessfully.

WORKAPPLICATION8-2Assesstheaccuracyofthemeasurementsofyourperformanceonyourlastperformanceappraisal.Besuretodescribethemeasures’validity,reliability,acceptability,andfeasibilitypluswhetherthemeasureswerespecificandbasedontheorganization’smissionandobjectives.

Specific.Theevaluationmeasuremustbespecificenoughsothateveryoneinvolvedcompletelyunderstandswhatisgoingwellandwhatneedstobeimproved.

BasedontheMissionandObjectives.Finally,aswitheverythingelsewedoinHR,weneedtoensurethattheperformance

managementprocessguidesouremployeestowardachievementofthecompany’smissionandobjectives.Thus,statingspecificobjectivessayingexactlywhateachpersonineachjobshouldachieve,ortheirperformanceoutcomes,leadstoaccurateassessmentthatcanincreaseperformance.Forsomeexamplesofinaccuratemeasuresofperformance,completeApplyingtheConcept8-1.

WhyDoWeConductPerformanceAppraisals?Let’sdiscussthreemajorreasons(communicating,decisionmaking,andmotivating)whyperformanceevaluationsarecompleted,andwhytheyaresocriticaltocontinuallyimprovingorganizations’performance.11

Communication(Informing)ThefirstmajorreasonforPAistoprovideanopportunityforformalcommunicationbetweenmanagementandtheemployeesconcerninghowthesupervisorbelieveseachemployeeisperforming.“Organizationscanpreventorremedythemajorityofperformanceproblemsbyensuringthattwo-wayconversationoccursbetweenthemanagerandtheemployee,resultinginacompleteunderstandingofwhatisrequired,whenitisrequired,andhowtheemployee’scontributionmeasuresup.”12Withinthistwo-wayinteraction,theprocessrequiresthatweprovidetheopportunityfortheemployeetospeaktousconcerningfactorsthatinhibittheirabilitytosuccessfullyperformtoexpectations.

Factorsinajobthatmanagementmaynotknowaboutcanincludelackoftraining,poorlymaintainedequipment,lackof

necessarytools,conflictwithinworkgroups,andmanyotherthingsthatmanagementmaynotseeonadailybasis.Wecanonlyresolveproblemswhenweknowaboutthem.Soyouneedtwo-waycommunicationwithyouremployeestofindoutwhenissueswithintheworkenvironmentarecausingalossofproductivitysotheycanbefixed.

LO8-2Identifyandbrieflydiscussthepurposesofperformanceappraisals.

8-1ApplyingTheConcept

MeasurementAccuracyBeforeeachofthesituationdescriptionsbelow,writethelettercorrespondingtotheaccuracycriterionforameasurethatisNOTmetinthesituation.

1. valid2. reliable3. accepted4. feasible5. specific6. basedonthemissionandobjectives

_____1.MybossisonmycasebecauseI’mnotproducingasmuchasIusedto.Butit’snotmyfaultthatthemachinejamsmoreoftenandthenIhavetostopworkingtofixit._____2.MybosssaidIhavetoevaluateall25ofmyemployeesfourtimesayearinsteadofonlyonce.ItoldherIdon’thavethetimetodoitthatmanytimes.It’sjustnotpossibletodoagoodreviewthatoftenwithoutcuttingbackonotherthingsthataremoreimportant._____3.MybosssaidIhaveabadattitudeandgavemealoweroverallperformancerating.IquestionedwhatmyattitudehadtodowithmyperformancebecauseIgetall

myworkdonewell,andbythedeadline._____4.Mybossaskedmetocompleteaself-evaluationformratingmyperformance.ButIdidn’tdoitbecauseitisherjob—Iletherdoit._____5.MybosstoldmethatIwasnotdoingaverygoodjob.ButwhenIaskedhimwhy,henevergavemeanydetailstosupporthisassessment.Goodanswer.

DecisionMaking(Evaluating)Accurateinformationisnecessaryformanagementdecisionmakingandisabsolutelycriticaltoallowthemanagertoimproveorganizationalproductivity.13WeuseinformationfromannualPAstomakeevaluativedecisionsconcerningourworkforce,includingsuchthingsaspayraises,promotions,training,andtermination.Whenwehavevalidandreliableinformationconcerningeachindividualwesupervise,wehavetheabilitytomakeadministrativeandperformancedecisionsthatcanenhanceproductivityforthefirm.

Motivation(Engaging)Weneedtomotivateouremployeestoimprovethewaytheywork,whichinturnwillimproveorganizationalproductivityoverall.14Butwhatismotivation,andarePAsnormallymotivational?Wedefinemotivationhereasthewillingnesstoachieveorganizationalobjectives.Weneedtoincreasethiswillingnesstoachievetheorganization’sobjectives,whichwillinturnincreaseorganizationalproductivity.

SHRMH:7

ManagingPerformance

WhatDoWeAssess?OurnextstepistofigureoutwhatneedstobeevaluatedinourPA.InHRterms,thePAshouldbebasedonourjobanalysis.15However,wecan’tevaluateeverything,sowehavetochoosewhatwewillfocusonbecausewhatgetsmeasuredandevaluatedgetsdone.16Ourthreeprimaryoptionsforwhattoevaluatearetraits,behaviors,andresults,solet’sdiscusstheminthissection.

TraitAppraisalsTraitsidentifythephysicalorpsychologicalcharacteristicsofaperson.TraitsofanindividualcanbepartofthePAprocess.Thereisevidencethattraits,includinginquisitiveness,conscientiousness,andgeneralcognitiveability,arevaluableinjobsthatrequiremanagementandleadershipskills.17,18However,wemustensurethatwefocusontraitsthathaveadirectrelationshiptotheessentialfunctionsofthejob,thattheyarewithinthecontroloftheindividual,andthattheyareaccuratemeasures.

GiveTraitstheOUCHTest.Whenmeasuringtraits,it’sdifficulttomeettheobjectiverequirementoftheOUCHtestbecauseitisdifficulttocreateaquantifiableandfactuallinkbetweencharacteristicslikeheightorjobenthusiasmandjob

performance.Ifweutilizedthesemeasuresinallcasesinemployeeevaluations,wewouldbeabletomeettheuniforminapplicationrequirementoftheOUCHtest.Thethirdtest—consistentineffect—wouldbeextremelydifficulttomeetduetothefactthatdifferentracial,ethnic,social,andgendergroupstendtohavedifferentphysicalandpersonalitycharacteristics.Remember,reliabilityisameasureofconsistency.Physicalandpersonalitycharacteristicshavelesstodowithsuccessinthejobthancertainbehaviorsdo.Soit’sdifficulttomeetthehasjobrelatednesstestinmostcases.Finally,itwouldbeverydifficulttogetdifferentsupervisorstoevaluatesubjectivetraitsthesamebecauseoftheirownpersonalitytraits.

LO8-3Discusstheoptionsforwhattoevaluateinaperformanceappraisal.

MotivationThewillingnesstoachieveorganizationalobjectives

TraitsThephysicalorpsychologicalcharacteristicsofaperson

ShouldWeMeasureTraits?AuthorKenBlanchardsaidthattherearetoomanyevaluationitemsthatcan’tbeobjectivelymeasured—suchasattitude,initiative,andpromotability.Therefore,it’simportanttoaskwhetherbothmanagersandemployeeswillagreewiththemeasuredratingasbeingaccurate.Thebottom-linetest(wewillcallittheBlanchardtest)isthis:Doeseveryoneunderstandwhytheyareassessedataspecificlevel(evaluation)andwhatittakes

togetahigherrating(development)?19Weshouldonlyassesstraitsthatmeetthebottom-linetestofhavingadirectandobviousobjectivemeasureablerelationshipbetweenthetraitandsuccessinthejob.

BehavioralAppraisalsOursecondoptionintheassessmentprocessistoevaluateemployeesbasedonbehaviors.Youwillrecallthatbehaviorsaresimplytheactionstakenbyanindividual—thethingsthattheydo.Behavioralappraisalsmeasurewhatindividualsdoatwork,nottheirpersonaltraitsandcharacteristics.Behaviorscanbedirectlyobserved,andasaresult,aremorelikelytobeavalidassessmentoftheindividual’sperformancethantraits.

GiveBehaviortheOUCHTest.Let’stakealookatabehavioralevaluationusingtheOUCHtest.Ingeneral,directlyobservingandevaluatinganactionissignificantlymoreobjectivethanmakinganattempttojudgeatraitlikeindividualeffort.Ifweappliedthesameevaluationofbehaviorstoalloftheindividualsinthesametypeof

job,wewouldhaveareasonablecertaintythatwewerebeinguniforminapplication.Thesamethingwouldbetruehereinevaluatingtheconceptofconsistentineffect.Tomeetthetestofhasjobrelatedness,wewouldneedtomakesurethatwechosebehaviorsthatwerenecessarilyapartofsuccessfullyaccomplishingatask;thebehaviorsneedtobedirectlyrelatedtotheessentialfunctionsofthejob.Sothebehavioralevaluationprocessisgenerallymorevalidandreliable.

ShouldWeMeasureBehavior?Themostusefulandthereforemostacceptablefeedbacktoemployeesisfeedbackonspecificjob-relatedbehaviors.20Asmanagers,though,westillneedtobecognizantofthefactthatabehavioralevaluationcanbeapoormeasureofworkperformanceifthebehaviorschosenarenotdirectlyapplicabletobeingsuccessfulinthejob;andBlanchardsaysithappensmoreoftenthanyoumaythink.Soaswithtraits,theBlanchardtestaskswhetheremployees

understandwhytheyareassessedataspecificlevel(evaluation)andwhatittakestogetahigherrating(development).21

ResultsAppraisalsOurfinaloptionistoevaluatetheresults,oroutcomes,oftheworkprocess.Resultsaresimplyameasureofthegoalsachievedthroughaworkprocess.Usingresultsasanevaluationmeasureprovidesmanagementwithanassessmentofthegoalsthatwereachievedinaparticularjobovertime.

CanWeAccuratelyMeasureResultsThatAffectJobPerformance?Resultsarecertainlyconcretemeasuresofperformance.However,theresultsofajobcouldhavebeenskewedbasedonfactorsthatwereoutsidethecontroloftheindividual.Forexample,standardscouldbesettooloworhigh,andequipmentandmachinesdon’talwaysworkcorrectly,andasaresult,employeescan’tdoasmuch,oranywork.But

donecorrectly,resultsprovidethecompanywithitsreturnoninvestment—itsinvestmentinthepeopleintheorganization.So,organizationsmeasureresults.

BehaviorsTheactionstakenbyanindividual

ResultsAmeasureofthegoalsachievedthroughaworkprocess

GiveResultstheOUCHTest.Resultsareaveryobjectivemeasureofperformance.Ifweapplythesameresults-basedmeasuretoeachsimilarjob,thenourmeasureisuniforminapplication.Themeasureofresultswouldalmostcertainlybeconsistentacrossdifferentgroupsofemployees,sowewouldalsomeettheconsistencyineffectrequirementoftheOUCHtest.Andofcourse,ifwearemeasuringtheresultsofwhathappensinajob,wearecertainlyprovidingameasurethathasjobrelatedness.Sowithaquickscan,wecanseethataresults-basedperformance

appraisalmeetstherequirementsoftheOUCHtestbetterthantraitsandbehavioroptions.

ShouldWeMeasureResults?Results-basedevaluations,likebehavior-basedevaluations,aretypicallyveryacceptabletoboththeemployeeandthemanager.Wecanbetterdefendresultsappraisalsthanwecandefendtheothertwooptions,evenincourt.Ittendstobeveryeasyfortheorganizationtogointoacourtroomandshowthatanindividual’sresultswereobjectivelylowerthanthoseachievedbyothersinthesameorsimilarjobs,ifnecessary.Theresults-basedevaluationwouldmostlikelybevalidandwouldusuallybereliable,assumingthatwewereabletotakeintoaccountfactorsoutsidetheindividual’scontrolthatnonethelessaffectjobperformance.Soagain,theBlanchardtestasks:Doeseveryoneunderstandwhytheyareassessedataspecificlevel(evaluation)andwhatittakestogetahigherrating(development)?22

HowDoWeUseAppraisalMethodsandForms?Theformalperformanceappraisalusuallyinvolvestheuseofastandardform,selectedordevelopedbytheHRdepartment,tomeasureemployeeperformance.Employeesneedtoknowthestandardsandunderstandwhatgoodperformancelookslike,andtheyneedtobeabletomeasuretheirownperformance.Ifyouarestuckwithaformthathassubjectivesections,workwithyouremployeestodevelopclear,accuratestandards.

Exhibit8-2liststhecommonlyusedperformanceappraisalmeasurementmethodsandformsanddisplaysthemonacontinuumbasedontheiruseinevaluativeanddevelopmentaldecisions.Inthissection,wediscusseachofthemeasurementmethodsandforms,startingwiththedevelopmentalmethodsandworkingtowardtheevaluative

ones.

Exhibit8-2PerformanceAppraisalMeasurementMethodsandForms

CriticalIncidentsMethodThecriticalincidentsmethodisaperformanceappraisalmethodinwhichamanagerkeepsawrittenrecordofthepositiveandnegativeperformanceofemployeesthroughouttheperformanceperiod.Thereisnostandardformused,soitisamethod.Everytimeanemployeedoessomethingverywell,likebeatingatoughdeadlineorkeepinganangrycustomerfromterminatingabusinessrelationshipwiththefirm,anotegoesintheemployee’sfile.Notesalsogointothefileeverytimetheemployee’sbehaviorhurtsperformance.Mostofuscan’tremembereventsthathappenedmorethanafewweeksago,sowerecordsignificantcriticalincidentsovertheentireperiodinordertodoagoodassessment.

Althoughcriticalincidentsarecommonlyusedfordevelopmentaldecisions,theyarealsousedforevaluativedecisions.Forlegal

purposes,alistofdocumentedcriticalincidentsisespeciallyimportanttohaveleadinguptheevaluativedecisionoffiringemployees.WewilldiscussdisciplineanddocumentationinChapter9.

Oneerrormanagerstendtomakeincriticalincidentsevaluationisfocusingonthenegativeactionsofemployees.Rememberthatagood,balancedevaluationincludesbothpositiveandnegativefeedback,solookforgoodperformance,notjustpoorperformance,andpraiseitwhenyouseeit.23RobertGrahamCEOMichaelBucklydoesittheoldfashionedwaywithafilefolderforeachofhisdirectreports,24 buttherearesoftwareprogramstotrackperformancethatshouldbeusedduringtheformalreview.

LO8-4Listthecommonlyusedperformancemeasurementmethodsandforms.

SHRMH:5

PerformanceAppraisals

WORKAPPLICATION8-3Selectajobyouhavehad.Didyourbossusecriticalincidentsinyourevaluations?Assesshowwellyourbossusedcoachingbetweenformalperformanceappraisalmeetingstoreviewyourperformance.

SHRMH:1

IdentifyingandMeasuringEmployeePerformance

8-2ApplyingTheConcept

AssessmentOptionsWritethelettercorrespondingtoeachofthefollowingassessmentoptionsformeasuringperformancebeforethesituationdescribingit.

1. traits2. behavior3. results

_____6.Ontheassessmentformquestionnumber7,“willingnesstotakeresponsibility,”I’mgivingyouanaveragerating._____7.Youhavetostaycalmandstopyellingatyourcoworkers._____8.Youonlysold25units3weeksinarow.Youknowthestandardis35,soI’mgivingyouaformalwarningthatifyoudon’tgetuptostandardin2weeks,youwillbefired._____9.Whenyoupromoteoneofthewomen,makesuresheisattractive.____10.I’mpleasedwithyourperformance.Itisonlyyoursecondweekonthejob,andyouarealreadyproducingthestandard10unitsperday.Idon’tthinkitwillbelongbeforeyouexceedthestandardandgetbonuspay.

ManagementbyObjectives(MBO)MethodThemanagementbyobjectives(MBO)methodisaprocessinwhichmanagersandemployeesjointlysetobjectivesfortheemployees,periodicallyevaluateperformance,andrewardemployeesaccordingtotheresults.MBOisathree-stepprocess,discussedbelow.

Step1:Setindividualobjectivesandplans.Themanagersetsobjectivesjointlywitheachindividualemployee.25TheobjectivesaretheheartoftheMBOprocessandshouldbeaccuratemeasuresofperformanceresults.Tobeaccurate,objectivesshouldbeSMART:Specific,Measurable,Attainable,Relevant,andTimebased.26Wedevelopedamodel

basedontheworkofMaxE.Douglas,andwehaveprovidedtwoexamplesinModel8-1thatwecanusewhensettingobjectivesforourselvesorothers.

CriticalincidentsmethodAperformanceappraisalmethodinwhichamanagerkeepsawrittenrecordofthepositiveandnegativeperformanceofemployeesthroughouttheperformanceperiod

Managementbyobjectives(MBO)methodAprocessinwhichmanagersandemployeesjointlysetobjectivesfortheemployees,periodicallyevaluateperformance,andrewardemployeesaccordingtotheresults

Step2:Givefeedbackandcontinuallyevaluateperformance.CommunicationisthekeyfactorindeterminingMBO’ssuccessorfailure,andemployeesshouldcontinuallycritiquetheirownperformance.27Thus,themanagerand

employeemustcommunicateoftentoreviewprogress.28

Step3:Rewardaccordingtoperformance.Employees’performanceshouldbemeasuredagainsttheirobjectives.Employeeswhomeettheirobjectivesshouldberewardedthroughrecognition,praise,payraises,promotions,andsoon.29Employeeswhodonotmeettheirgoals,solongasthereasonisnotoutoftheircontrol,usuallyhaverewardswithheldandevenpunishmentgivenwhennecessary.

Managersandemployeescansetobjectivestogether.

©iStockphoto.com/Yuri_Arcurs

NarrativeMethodorFormThenarrativemethodorformrequiresamanagertowriteastatementabouttheemployee’sperformance.Theremaynotbeanactualstandardformused,especiallyforhigh-levelprofessionalandexecutivepositions,buttherecanbeaform,soitcanbeamethodoraform.Anarrativegivesthemanagertheopportunitytogivetheevaluativeassessmentinawrittenformthatcangobeyondsimplycheckingaboxtodescribeanassessmentitem.Narrativescanbeusedalone,buttheyoftenfollowanobjectivepartoftheform.Althoughthenarrativeisongoing,itiscommonlyusedduringtheformalreview.Aletterofrecommendationisoftenanarrativemethod.

GraphicRatingScaleFormThegraphicratingscaleformisaperformanceappraisalchecklistformonwhichamanagersimplyratesperformanceonacontinuumsuchasexcellent,good,average,fair,andpoor.Thecontinuumoftenincludesanumericalscale,forexamplefromlevel1(lowestperformancelevel)to5(highest).Theself-assessmentandSkillBuilderexercise8-1useagraphicratingscaleform.

Thegraphicratingscaleformisprobablythemostcommonlyusedformduringtheformalperformanceappraisalbecauseitcanbeusedformanydifferenttypesofjobs,makingthisakindofone-size-fits-all(ornone)formthatrequiresminimaltime,effort,cost,andtraining.Butonthenegativeside,graphicratingscalesarenotveryaccuratemeasuresofperformancebecausetheselectionofoneratingoveranother,suchasanexcellentversusgoodrating,isverysubjective.

NarrativemethodorformMethodinwhichthemanagerisrequiredtowriteastatementabouttheemployee’sperformance

GraphicratingscaleformAperformanceappraisalchecklistformonwhichamanagersimplyratesperformanceonacontinuumsuchasexcellent,good,average,fair,andpoor

Behaviorallyanchoredratingscale(BARS)formAperformanceappraisalthatprovidesadescriptionofeachassessmentalongacontinuum

BehaviorallyAnchoredRatingScale(BARS)FormAbehaviorallyanchoredratingscale(BARS)formisaperformanceappraisalthatprovidesadescriptionofeachassessmentalongacontinuum.Aswithgraphicratingscales,thecontinuumoftenincludesanumericalscalethatrunsfromlowtohigh.However,BARSformsovercometheproblemofsubjectivitybyprovidinganactualdescriptionoftheperformance(behavior)foreachratingalongthecontinuum,ratherthanthatonesimpleword(excellent,good,etc.)thatgraphicratingscalesprovide.Adescriptionofeachlevelofperformancemakestheassessmentamoreobjective,accuratemeasure.

Model8-1SettingObjectivesModel

WhyareBARSformsprobablylesscommonlyusedthangraphicratingscales?It’spartlyeconomicsandpartlyexpertise.Thegraphicratingscalecanbeusedformanydifferentjobs,butBARSformshavetobecustomizedtoeverydifferenttypeofjob.AnddevelopingpotentiallyhundredsofdifferentBARSformstakesalotoftime,money,andexpertise.EvenwhenafirmhasanHRstaff,thequestionbecomes“IsdevelopingBARSformsthemosteffectiveuseofourtime?”Obviously,theanswerdependsonthetypesofjobsbeingevaluatedandtheresourcesavailabletocompletetheevaluationprocess.

HereisaverysimpleexampleofmakingagraphicratingscaleitemintothemoreobjectiveBARS.

Attendance—excellent,good,average,fair,poor

becomes

Attendance—numberofdaysmissed1,2,3–4,5,6ormore

Ineducation,thetrendistorequireteacherstodevelopBARS,calledgradingrubrics,sothatsubjectivegradingofessaysandcasestudiesaremoreobjective.Studentsusetherubrictodotheworkbymeetingthewrittendescriptiveofhoweachpartwillbegraded.Whengettingitbackwithagrade,studentsbetterunderstandwhytheygotthegradetheydidandhowtoimproveinthefuture.Haveyouseenandusedone?

WORKAPPLICATION8-4Selectanorganization,preferablyoneyouworkfororhaveworkedfor.Identifyandbrieflydescribetheassessmentmethodsand/orformsthatareusedtoassessemployeeperformance.

RankingMethodRankingisaperformanceappraisalmethodthatisusedtoevaluateemployeeperformancefrombesttoworst.Thereoftenisnoactualstandardformused,andwedon’talwayshavetorankallemployees.Thismethodcanbecontentious,asevidencedbyrecentannouncementsbyMicrosoftandYahoo.Inlate2013,Yahooannouncedthatitwasadoptingarankingsystem,30butlaterthesameday,Microsoftannouncedthatitwasdroppingitsforced-rankingsystem.31Delltriedforced-rankinganditturnedgoodemployeesintopoliticians,bademployeesintobackstabbers,colleaguesintoenemies,anddestroyedcollaboration—soDelldroppedit.32

Undertherankingmethod,themanagercomparesanemployeetoothersimilaremployees,ratherthantoastandardmeasurement.Anoffshootofrankingisthe

forceddistributionmethod,whichissimilartogradingonacurve.Predeterminedpercentagesofemployeesareplacedinvariousperformancecategories—forexample,excellent,5%;aboveaverage,15%;average,60%;belowaverage,15%;andpoor,5%.Theemployeesrankedinthetopgroupusuallygettherewards(araise,abonus,orapromotion),thosenotinthetoptendtohaverewardswithheld,andtheonesinthebottomgroupsometimesgetpunished.InSkillBuilder8-1,youareaskedtoranktheperformanceofyourpeers.

WhichOptionIsBest?Usingacombinationofthemethodsandformsisusuallysuperiortousingjustone.Fordevelopmentalobjectives,thecriticalincidents,MBO,andnarrativemethodsworkwell.Alternately,youcan’tdecidewhogetsthepromotionormeritraisewithoutanevaluativemethod.Soforadministrativedecisions,arankingmethodbasedontheevaluativemethods,andespeciallygraphicratingscalesorBARSforms,workswell.

Rememberthatthesuccessoftheperformanceappraisalprocessdoesnotjustlieintheformalmethodorformusedonceortwiceayear.Itdependsonthemanager ’shumanrelationsskillsinongoingcriticalincidentscoaching,anditalsodependsoneffectivemeasuresofperformancethatareaccurateenoughtoleteveryoneknowwhytheyareratedatagivenlevel(evaluative)andhowtheyshouldimprove(developmental)forthe

nextassessment.33

Ranking Aperformanceappraisalmethodthatisusedtoevaluateemployeeperformancefrombesttoworst

8-3ApplyingTheConcept

AppraisalMethodsandFormsStatewhichofthefollowingassessmentsisbeingdescribedineachofthegivensituations,writingeachassessment’scorrespondingletterbeforethesituation(s)inwhichitisdescribed.

1. criticalincidentsmethod2. MBOmethod3. narrativemethodandforms4. BARSforms5. graphicratingscaleforms6. rankingmethod

____11.Hankisnotdoingagoodjob,soyoudecidedtotalktohimaboutitandkeeptrackofhisperformanceregularly.____12.Youremployeesperformdifferenttasks.Youwanttocreateasystemfordevelopingeachofthem.____13.Saraismoving,hasappliedforajobatanothercompany,andaskedyouforaletterofrecommendation.____14.Youstartedanewbusinessayearago,andyouareextremelybusyfocusingonsales,butyouwanttodevelopaperformanceappraisalformyoucanusewithall14ofyouremployees,whodoavariety

ofjobs.____15.Youhavebeenpromoted,andyouhavebeenaskedtoselectyourreplacement.

WhoShouldAssessPerformance?Nowthatwe’velearnedthewhy,what,andhowoftheperformanceappraisalprocess,weneedtodiscusstheoptionsforchoosingaraterorevaluator.Thereareanumberofdifferentoptionsconcerningwhoshouldevaluatetheindividualemployee,andthedecisionneedstobebasedonaseriesoffactors.Let’stakealookatsixoptionsfordecidingwhoshouldevaluateanemployee.

SupervisorThemostcommonlyusedevaluatoristheimmediatesupervisorbecausesupervisorsaresupposedtoknowthelevelofperformanceoftheiremployees.However,thisisnotalwaysthecaseduetoproblemswithsupervisorperformanceassessments.

ProblemsWithSupervisorEvaluations.Manytimestoday,supervisorshavelittleornodirectcontactwiththeiremployeesbecausetheymaybeinadifferentbuilding,city,state,orevencountry.Virtualteams,Internet-linkedoffices,telecommuting,andotherfactorscausesupervisorstonotbeinconstanttouchwiththeiremployees.Whatifthesupervisordoesn’tevenknowwhatyou’resupposedtobedoinginyourjob?Whatifthere’sapersonalityconflict?

LO8-5Describetheavailableoptionsfortherater/evaluator.

SHRMH:2

SourcesofInformation(e.g.,Managers,Peers,Clients)

AvoidingSupervisorReviewProblems.Asimplewaytoovercometheseproblemsistohaveothersinadditionto(orinplaceof)thesupervisorassessperformance.Also,multiplemeasurescanmakeaperformanceassessmentmoreaccurate—validandreliable.Usingotherevaluatorsandmultiplemeasurescanhelpovercomepersonalbiasandprovideinformationthatsupervisorsdon’talwaysknowabout.

PeersInadditionto,orinplaceof,supervisors,thetrendistousingmoreteams,andteamscommonlyevaluateeachmember ’sperformance.34 Why?Peersoftenknowthejoboftheindividualemployeebetterthanthesupervisordoes,andtheyaremoredirectlyaffectedbytheemployee’sactions,eitherpositiveornegative.Inaddition,peerscanevaluatetheabilityoftheindividualtointeractwithotherssuccessfullyinagrouporteamsetting—somethingthatmaybeverydifficultforthesupervisortoseeunlesstheyareintimatelyinvolvedwiththegroup.

ProblemsWithPeerReviews.Peerevaluationscancauseproblemsbecausetheprocesscanbecomelessobjective.Also,thevalidityofpeerevaluationsisreallyunclear.35Personalityconflictsandpersonal

biasescanaffecthowindividualemployeesratetheirpeers.Amajorproblemiswithperception,becausemostofusseeourselvesasbeingbetteratourjobthanourbossandpeers.

AvoidingPeerReviewProblems.Becauseweknowthatproblemscanoccurwithinapeerevaluation,themanagercantaketheissuesintoaccountandadjustratingvaluesasnecessary.Forexample,ifapersonalityconflicthasoccurredbetweentwogroupmembersthatcausedthemtolowereachother ’sgrades,thosegradescanbeadjustedbasedonfeedbackfromothergroupmembers.Someresearchshowsthataspeersevaluateeachothermore,theirabilitytoproviderelevantandvaluablefeedbackincreases,asdoestheirpersonalconfidence.Sogivingemployeespracticeinpeerevaluationscanimprovethevalidityand

reliabilityofsuchevaluations.36Evenwiththepotentialforpersonalityconflictsandbias,peerevaluationscangiveusgoodinsightintotheinnerworkingsofagrouporteamwhenthesupervisorhasinfrequentcontactwiththeteam.

SubordinatesWecanalsohavetheemployeesevaluatetheirboss.Subordinateevaluationscangiveusgoodinsightintothemanagerialpracticesandpotentialmisstepsofpeoplewhooverseeothers.Asaresult,subordinateevaluationsmaygiveusvaluableinformationthatwewouldbeunabletofindoutusinganyothermeans.Haveyoufilledoutaformthatassessesprofessors?

ProblemsWithSubordinateReviews.Thereispotentialforbiashere,especiallyfromsubordinateswhohavebeendisciplinedbytheirsupervisor.Obviously,thesubordinatesmaytrytogetbackattheirsupervisorforgivingthemtasksthattheydidnotwanttoperformorfordiscipliningthemforfailureintheirjobs.Theremayalsobea

personalityconflict,orsomesubordinatesmaybebiasedagainsttheirsupervisorormanagerforotherreasons—recallperceptionproblems.

Ontheotherendofthescale,thesubordinatesmayinflatethecapabilitiesoftheirmanager,atleastpartlybecauseofalackofunderstandingofallthetasksanddutiesrequiredofthemanager.Infact,inarecentsurvey,abouttwothirdsofemployeesratedtheirmanagershigherthanthemanagersratedthemselves.37

AvoidingSubordinateReviewProblems.Inmanycases,aswegothroughagroupofsubordinateevaluations,wewillseeoneortwooutliersprovidingeitherveryhighorverylowmarksforthesupervisor.Insuchacase,weshouldprobablythrowthoseoutliersoutofthecalculationwhendeterminingoverallmarksforthesupervisor.It’s

surprisinghowoftentheseoutliersareextremelyeasytospotinasubordinateevaluationprocess.Anothersignificantissueinthecaseofsubordinateevaluationsisconfidentiality.Subordinateevaluationsmustbeanonymousoritisunlikelythatthesubordinateswillprovideanhonestevaluationoftheirsupervisor.Despitepotentialproblems,subordinateevaluationscanprovideuswithvaluableinformationaboutthesupervisor ’scapabilities.

SelfEverdoneaself-assessmentatwork?Virtuallyallofushaveinformallyevaluatedhowweperceivewearedoingonthejob,anditcanbepartoftheformalPAprocess.Asyouknow,everychapterofthisbookhasoneormoreself-assessments,andinoneforthischapter—SkillBuilder8-1attheendofthechapter—youwillassessyourperformanceonagroupproject.Ifyouwantto,youcandotheskill-buildernow.

ProblemsWithSelf-Assessments.Let’sfaceit,wetendtobebiasedinourself-perceptionbecauseweallwanttoviewourselfpositively.Asignificantportionoftheresearchevidenceseemstoshowthatindividualswithloweroveralllevelsofknowledgeandskillstendtoinflatetheself-

assessmentoftheirabilities.38Conversely,asindividualsbecomemoreknowledgeableandmoreskilled,theevidencetendstoshowthattheywilleitheraccuratelyestimateorevenunderestimatetheircapabilitiesintheirjobs.39,40,41

WORKAPPLICATION8-5Selectyourcurrentjoborapastjob.Identifywhohasorhadinputintoyourperformanceappraisal.

AvoidingSelf-AssessmentProblems.Hereagain,ifweknowthatself-evaluationstendtobeskewed,wecanmostlikelyadjustforthat.Inaddition,receivinginformationfromtheindividualconcerningtheirperceptionoftheirskillsetisextremelyvaluableinanumberofmanagementprocesses—includingplansfortraininganddevelopmentopportunities,providingworkassignments,andcounselinganddisciplinarymeasures.AsstatedintheBlanchardtest,boththemanagerandemployeeneedtoagreeonthelevelofperformanceandwhatittakesto

gettothenextlevel—it’scalledperceptioncongruence.

CustomersWemaywanttousecustomersasevaluatorswhentheindividualbeingevaluatedhasfrequentcontactwithinternalorexternalcustomers.Itdoesnotmatterwhatelsewedosuccessfullyifourcustomersareuncomfortablewiththeirinteractionswithouremployeesbecausetheycanusuallytaketheirbusinesselsewhere.Andeveninternalcustomerscancreatesignificantproblemswithinthefirmduetoconflictbetweendepartmentsordivisions.Sowemaywanttoaskinternalandexternalcustomerstoevaluatetheindividualswithwhomtheycomeintocontact.

ProblemsWithCustomerAssessments.Oneproblemwithcustomerevaluationsisthattheycommonlyusesimplegraphicrating

scales,whichwediscussedasbeingverysubjective.Also,customersareusuallynottrainedtodoanaccurateassessment,sobiasisaproblem.Fortheseandotherreasons,thepopularopinionisthatcustomerevaluationsarenegativelyskewed.However,researchshowsthatinsomesituations,customerevaluationsactuallyexceedinternalevaluations.42

AvoidingCustomerAssessmentProblems.Regardlessofproblems,customerevaluationsprovideuswithvaluableinformationconcerningouremployeeswhohavedirectcustomercontact.Andwecanalwaysadjusttheevaluationprocessknowingthatcustomerevaluationsmaybebiased.Haven’tweallbeenonthephoneandheardsomethinglike“thisconversationwillberecordedandusedfortrainingpurposes”?Thisistrue,butit’salsousuallyanevaluationandemployeesare

rewardedorpunishedbasedonhowtheydealwithcustomers.

360-DegreeEvaluationsInsomecases,theevaluationisexpandedtoeveryonethatanemployeecomesintocontactwiththrough360-degreefeedback.43The360-degreeevaluationanalyzesindividuals’performancefromallsides—fromtheirsupervisor’sviewpoint,fromtheirsubordinates’viewpoint,fromtheircustomers(ifapplicable),fromtheirpeers,andfromtheirownself-evaluation.The360-degreeevaluationwouldgenerallygiveusthemostaccurateanalysisofperformance.

Employeeswhofrequentlyinteractwithcustomersmaybeevaluatedbasedoncustomerevaluations,butthismethodmaypresentissuesofsubjectivity.

©iStockphoto.com/asiseeit

ProblemsWith360-DegreeEvaluations.Althoughconsideredthebest,360-degreeevaluationsarenotthemostpopularmethod

becauseofthetime,effortandmoneyneededtousethem.Also,someemployeeshavelittlecontactwithothers,makingthemunnecessaryanyway.

360-degreeevaluationAnevaluationthatanalyzesindividuals’performancefromallsides—fromtheirsupervisor’sviewpoint,fromtheirsubordinates’viewpoint,fromtheircustomers(ifapplicable),fromtheirpeers,andfromtheirownself-evaluation

Avoiding360-DegreeProblems.Unfortunately,therereallyisnosimplewaytoavoidtheseproblemsbesideswhatiscommonlydone—simplynotusing360-degreeevaluations.The360-degreeevaluationformattendstobemostvaluableifitisusedforpurposesofindividualdevelopment,ratherthantomakeadministrativeevaluativedecisions.44Agood360-degreefeedbacksystemcanprovide

specificsuggestionsabouthowtoimproveindividualcompetencies.”45Itcanalsogoalongwaytowardminimizingsomeofthemostcommonproblemswiththeperformanceappraisalprocess,whichwewillreviewinthenextsection.

PerformanceAppraisalProblemsDuringthePAprocess,wefacesomecommonproblems.However,wecantakemeasurestoavoidthemifweknowaboutthem.Sointhissection,wediscusstheproblemsfirstwithsimplewaystoavoideachofthemasanindividual.Thenwediscusswhattheorganizationcandotoovercometheseproblemsonanorganization-widebasis.Wecanactuallyovercomemultipleproblemswiththesamemethod.

CommonProblemsWithinthePerformanceAppraisalProcessLet’sbrieflydiscusseachofthecommonproblemsduringtheperformanceappraisalprocesslistedinExhibit8-3.

Bias.Biasissimplyapersonality-basedtendency,eithertowardoragainstsomething.PAbiasistowardoragainstanindividualemployee.Weallhavebiases,butsupervisorsespeciallycannotaffordtoallowtheirbiasestoenterintotheirevaluationofsubordinates.Thisiseasiersaidthandone.BiasesmakethePAprocesssubjectiveratherthanobjective,andtheycertainlyprovidetheopportunityforalackofconsistencyineffectondifferentgroupsofemployees.Soweneedtobeobjectiveandnotletourfeelingsoflikingor

dislikinganindividualinfluenceourassessmentofthatperson.

LO8-6Namesomeofthecommonproblemswiththeperformanceappraisalprocess.

SHRMH:3

RaterErrorsinPerformanceMeasurement

Stereotyping.Stereotypingismentallyclassifyingapersonintoanaffinitygroupandthenidentifyingthepersonashavingthesameassumedcharacteristicsasthegroup.Makinganyassumptionsaboutindividualemployeecharacteristicsbasedontheirsupposedmembershipinagroup,ratherthanexplicitlyidentifyingtheperformanceoftheindividual,createsthepotentialforsignificanterrorinevaluations.Soweneedtogettoknoweachemployeeasanindividualandobjectivelyevaluateactualperformance.

Exhibit8-3PerformanceAppraisalProblemsandAvoidingThem

BiasApersonality-basedtendency,eithertowardoragainstsomething

Stereotyping Mentallyclassifyingapersonintoanaffinitygroupandthenidentifyingthepersonashavingthesameassumedcharacteristicsasthegroup

HaloError.Thisoccurswhentheevaluatorformsagenerallypositiveimpressionofanindividualandthenartificiallyextendsthatgeneralimpressiontoanoverallevaluationoftheindividual.46(Alternatively,theevaluatorcanformanegativeinitialimpressionandextendittoformanoverallnegativeevaluation—this

issometimescalledthe“hornserror.”)Soweneedtorememberthatemployeesareoftenstronginsomeareasandweakerinothers,andweneedtoobjectivelyevaluatetheiractualperformanceforeachandeveryitemofassessment.

DistributionalErrors.Theseerrorsoccurinthreeforms:severityorstrictness,centraltendency,andleniency.Theyarebasedonastandardnormaldistribution,orthebellcurvethatweareallsofamiliarwith.Inseverityorstrictnesserror,theraterevaluatesjustabouteveryoneasbelowaverage.Centraltendencyerroroccurswhenjustabouteveryoneisratedaverage.Finally,leniencyerroroccurswhenjustabouteveryoneisratedasaboveaverage—likegradeinflation.Soweneedtogivearangeofevaluationsbecausewereallyaren’tallequalinourlevelofperformance,andeveryonecan’tbetheworstorthebest.

SimilarityError.Thiserror,alsocalled“likeme,”occurswhentheratergivesbetterevaluationstosubordinateswhomtheyconsidermoresimilartothemselvesandpoorerevaluationstosubordinateswhomtheyconsidertobedifferentfromthemselves.Weallhaveatendencytofeelmorecomfortablewithpeoplewhowefeelaremoresimilartoourselves,47andifwearenotcareful,wecanallowthisfeelingofcomfortwithsimilarindividualstobereflectedintheperformanceappraisalprocess.Soweneedtoevaluateallemployeesbasedontheiractualperformance,eveniftheyaredifferentfromusanddon’tdothingsthesamewaythatwedo.

ProximityError.Thiserrorstatesthatsimilarmarksmaybegiventoitemsthatarenear(inotherwords,proximateto)eachotherontheperformanceappraisalform,regardlessofdifferencesin

performanceonthosemeasures.Forinstance,ifwemarkthefirstthreeitemsas“meetsexpectations,”wetendtocontinuemarkingthesamewayondowntheform.Soweneedtobeobjectiveinevaluatingemployees’actualperformanceoneachandeveryitemontheassessmentform,andhavingreverseitemscalesreallyhelps.

RecencyError.Thisoccurswhentheraterusesonlythelastfewweeksofaratingperiodasevidencewhenputtingtogetherperformanceratings.Forinstance,ifawarehouseworkerhasbeenastrongperformerformostoftheappraisalperiod,butrightbeforehisannualevaluationheaccidentallysetafire,hemayberatedpoorlyduetorecencyerror.Soweneedtoevaluatetheemployeebasedontheirperformanceduringtheentireassessmentperiod.Usingthecriticalincidentevaluationmethodreallyhelpsavoidrecencyerror.

ContrastError.Heretheratercomparesandcontrastsperformancebetweentwoemployees,ratherthanusingabsolutemeasuresofperformancetoassesseachemployee.Forexample,theratermaycontrastagoodperformerwithanoutstandingperformer;then,asaresultofthesignificantcontrast,thegoodperformerseemstobe“belowaverage.”Soweneedtoevaluatetheindividualbasedontheiractualperformanceagainstanobjectivestandard.

WORKAPPLICATION8-6Selectyourcurrentjoborapastjob.Identifycommonmistakesyoursupervisormadewhenassessingyourperformance,duringeitheraninformalcoachingoraformalappraisalreview.

AvoidingPerformanceAppraisalProcessProblemsAsdiscussed,PAcanfailtoprovideanaccurateassessmentofthecapabilitiesandbehaviorsofindividualemployees.Thusfar,wehaveonlyprovidedsimplesolutionstohelpusovercometheseproblemsasindividuals.Buthowcanafirmavoidtheseproblemsonanorganization-widebasis?Let’sdiscusshowthefirmcanlimitthepotentialfortheappraisalprocesstogoastraybydevelopingaccurateperformancemeasures,trainingevaluators,andusingmultipleraters.

DevelopAccuratePerformanceMeasures.Asdiscussed,ifthePAmethodsandformsarenotaccuratemeasures,thentheentireprocesswillhaveproblems.Therefore,the

organizationshouldhaveitsownHRspecialistorhiredconsultantsdevelopanobjectiveassessmentprocessandmeasures.Let’sdiscussthreethingsHRspecialistscommonlydotohelpensureaccuratemeasures.

UseMultipleCriteria.HRmustensurethatwefocusonmorethanoneortwocriteriatoevaluateanindividual’sperformance.Weshouldgenerallyhaveatleastoneevaluationcriterionforeachmajorfunctionwithinanindividualjobsothatwehavetheabilitytolowertheincidenceofhalo,recency,andcontrasterrors,andwemayevenbeabletoaffectbiasandstereotypingbecauseofthefactthatmanycriteria,notjustoneortwo,arebeinganalyzed.

MinimizetheUseofTrait-BasedEvaluations.

Asnoted,trait-basedevaluationstendtobemoresubjectivethanbehaviorandresults-basedevaluations,andasaresult,theyshouldgenerallynotbeusedunlessthereisaspecificreasonwhyemployeesmustexhibitaparticulartraittobesuccessfulinajob.Byeliminatingtraits,welowertheincidenceofbias,stereotyping,andsimilarityerrors.

8-4ApplyingTheConcept

AvoidingAppraisalProblemsReviewthelistofcommonproblemsorerrorsandthenwritethelettercorrespondingtoeachonebeforethestatementdescribingorinvolvingit.

1. bias2. similarityerror3. stereotyping4. proximityerror5. haloerror6. recencyerror7. distributionalerror8. contrasterror

_____16.IgotalowerratingthanIdeservebecauseI’mnotafraidtospeakmymindtotheboss,andshedoesn’tlikeit._____17.I’msickandtiredofhearinghowmanyunitsSallyproducesandthatIshouldbemorelikeher._____18.ItoldmybossthatIthoughtIdeserveanexcellentrating,butshesaidthatshegiveseveryoneagoodrating._____19.Itendtotakeiteasyduringtheyear,butImakesuretoreallypushanddoagoodjobforthemonthofDecember,andthat’swhyIgotagoodperformancereview.

_____20.Iattendedalltheclassesandparticipatedintheclassdiscussions,sotheprofessorgavemeanAeventhoughmyfinalaverageonmytestscoreswasaB.

GivetheMeasurestheOUCHandBlanchardTests.Wealreadystatedthis,butthesetwotestsaresoimportantthattheybearrepeatinghere.WiththeOUCHtest,themeasurehastobeobjective,uniforminapplication,consistentineffect,andhavejobrelatedness.WiththeBlanchardtest,everyonemustunderstandwhytheyareassessedataspecificlevel(evaluation)andwhatittakestogetahigherrating(development).48

WORKAPPLICATION8-7Selectyourcurrentjoborapastjob.Identifyandexplainhowtheorganization’sperformanceappraisalprocessdoesordoesn’tuseeachofthethreemethodsofovercomingcommonperformanceappraisalproblems.Howcantheorganizationimprovetheprocess?

TrainEvaluators.Next,weshouldtrainourevaluatorstoavoidthecommonerrorsandproblemsthatoccurinperformanceassessmentandinhowtousethevariousmethodsandforms.

TrainEvaluatorstoOvercometheCommonProblemsofAssessment.

Throughtraining,theevaluatorbecomesawarethatthecommonerrorsoccurwithsomeregularity,sotheycanguardagainstthem.Mostemployeeswanttodoagoodjob,andoncetheyknowthattheseerrorsareroutinelymade,theywillmakeattemptstocorrectthem.

TrainEvaluatorstoUsetheMeasurementMethodsandForms.EvaluatorsshouldalsobetrainedtousethevariousPAmethodsandforms.Becausethecriticalincidentmethodisnotcommonlyusedasaformalassessmentmethod,evaluatorsshouldbetaughttouseittohelpovercomerecencyerror.EvaluatorsalsoneedtrainingtoeffectivelyuseMBOandtowriteagoodnarrative.Whenusingagraphicratingscale,theorganizationshouldprovidesometrainingfortheraterssotheybetterunderstandthedifferencesbetweentheworddescriptors

alongthecontinuum(excellent,good,etc.).BARSformsandrankingarefairlystraightforward,butsupervisorsneedtorealizethattheytooaresubjecttocommonproblemswhenselectingeachrating.

UseMultipleRaters.Atleastinsomecases,wecanhavemultipleratersevaluateanindividual.Aswenotedearlier,thisbecomesexpensiveveryquickly,sowemustdecidewhetherornotthevalueinherentinusingmultipleevaluatorsovercomesthecostoftheprocess.However,ifitdoes,usingmultipleevaluatorscanconquersomesignificantproblemsintheappraisalprocess,includingbiasandstereotyping.Inaddition,halo,similarity,andcontrasterrorsbecomelesslikely,anddistributionalerrorstendtoevenoutamongmultipleraters.Itisforthesereasonsthat360-degreeevaluationshavegainedfavorinmanyorganizations.

DebriefingtheAppraisalThedebriefingprocessiswherewecommunicatetoindividualsouranalysisoftheirperformance.Facebookmanagersarebeingtoldthatperformancereviewsshouldbe80%focusedonstrengths.49Recallthattherearetwomajorreasonsforassessingperformance:forevaluativedecisionsandfordevelopment.Wealsosuggestedbreakingtheformalperformanceappraisaldebriefingintotwoseparateinterviews.Inthissection,wewillbrieflydescribehowtoconductbothreviews.

TheEvaluativePerformanceAppraisalInterviewWhenpreparingforanevaluativeinterview,followthestepsoutlinedinModel8-2.Ourevaluationshouldbefair(meaningethicallyandlegallynotbasedonanyoftheproblemsdiscussed).50Ifwehavehadregularcoachingconversationswithouremployees,theyknowwheretheystand,51andourpreparationismostlydoneexceptforfillingouttheform.Soourrelationshipwiththeemployeewilldirectlyaffecttheoutcome.52Employeesshouldalsocritiquetheirownperformancethroughaself-assessmentusingthesameformastheevaluatorpriortothemeeting.53

Model8-2TheEvaluativePerformanceAppraisalInterview

ConductinganEvaluativeInterview.Duringtheinterview,encouragetheemployeetotalkandalsolistentothecritiqueoftheirperformance.54 Model8-2liststhestepsforconductinganevaluativeperformanceappraisalinterview.Instep1,weopenthemeetingwithsomesmalltalktoputthepersonatease.Theninstep2,wegooverourevaluationoftheitemsontheassessmentform.Instep3,weidentifytheemployee’sstrengthsandweaknesses,discussthem,andagreeonthem.Finally,instep4,weconcludetheinterview,whichmayinvolvemakingtheappointmentforthedevelopmentalinterview.

Model8-3TheDevelopmentalPerformanceAppraisalInterview

LO8-7Contrastevaluativeperformancereviewsanddevelopmentalperformancereviews.

SHRMH:6

AppraisalFeedback

TheDevelopmentalPerformanceAppraisalInterviewAftertheemployee’sperformanceevaluationiscompleted,youshouldprepareforthedevelopmentalinterviewbasedontargetingareasforimprovementyoualreadydiscussedintheevaluativeinterview.Yes,asamanageryouarebusy,andyoumayquestiontheneedforcoachingandthecostofseparateformaldevelopmentalinterviews,butthebenefitofspendingtimedevelopingemployeeswillleadtoincreasedperformanceandlowerturnoverinyourorganization.55

ConductingaDevelopmentalInterview.ThestepsarelistedinModel8-3.Again,step1startswithsmalltalktoopentheinterview.

Instep2,itisimportanttoagreeondevelopmentalobjectives.Aspartofstep3,theemployeeneedstobemadeawareofexactlywhatheorshemustdotoimproveandincreasetheratingonthenextreview,andyoumustalsolettheemployeeknowthatfollow-upprogressfeedbackisessentialforchangingbehavior.56Sostep4istosetupafollow-upmeetingtoreviewtheemployee’sprogress.Whenconductingsteps3and4,wedon’twanttheemployeeworkingontoomanythingsatonce,soweshouldkeepthenumberofobjectivesdowntothreeorfewerrelatedissues.Wecanalwaysaddnewobjectiveslater.Weendinstep5byconcludingtheinterviewwithsomepositiveencouragementtoreachtheobjectives.

Developmentalperformanceappraisalscanbetimeconsuming,butwillultimatelyleadtoincreasedperformanceandlowerturnover.

©iStockphoto.com/asiseeit

WORKAPPLICATION8-8Assesshowwellyourpresentorpastbosshelpeddevelopyourknowledge,skills,andcompetenciesthroughinformalcoachingand/ortheformalperformanceappraisalinterviews.Describehowthebosscouldimprove.

TrendsandIssuesinHRMThefirstiteminthistrendsandissuessectionaskswhetherwecanandshouldprovideemployeeswithcontinuousevaluationsoftheirperformance.Thenwediscusstherelativemeritsofcompetency-basedperformancemanagementandthemoretraditionaltask-basedevaluationofperformance.

IsItTimetoDoContinuousAppraisals?Oneofthemorerecentperformancemeasurementideasgainingtractionistousecontinuoustechnology-basedappraisalandfeedbackratherthanthetraditionalevaluationprocess.Inorganizationswhereresultscanbequantitativelymeasured,results-only-work-environments(ROWE)arebeginningtobeseen.Inaresults-only-work-environment,employeesareevaluatedonoutcomesonly(notonbehaviorsortraitsasinmosttraditionalevaluationprocesses).Outcomesarecontinuouslyevaluated,andthereisnowaitingforanend-of-yearperformanceappraisal.ForaROWEsystemtowork,though,goalshavetobequantifiablesothattheycanbespecificallymeasured.

Inotherorganizationswhereresultsarenotaseasytoquantify,feedbackonmemberbehaviorandoutcomescanbeconstantly

providedthroughtechnologiesavailabletoallteammembers.Eachmemberisexpectedtoprovidemeaningfulfeedbacktoallothermembersasaroutinepartoftheirwork.

Oneproblemwiththeabovemethodsisthatorganizationslegitimatelyuseappraisalstomakegooddecisionsabouttheiremployeesandemployeedevelopment.Ifperformanceappraisalsarenotcompleted,ornotcapturedattheorganizationallevel,theorganizationdoesn’thavevalidandreliableinformationwithwhichtomakegooddecisionsaboutthingssuchastraining,promotions,andpayraises.

WORKAPPLICATION8-9Selectanorganizationyouworkfororhaveworkedfor.Doesituseformalevaluations?Doyoubelievetheorganizationshouldorshouldnotconductformalevaluations?

Competency-BasedPerformanceManagementHistorically,theperformanceappraisalprocessevaluatesspecificemployeeskillsandtheemployee’ssuccessinusingthoseskills.Competency-basedperformance,ontheotherhand,evaluateslargesetsofcapabilitiesandknowledgethat,ifputtogooduse,canimproveorganizationalproductivitytoamuchgreaterextentthanjustdoingajobusinganexistingskillset.

Becauseofthenatureofworkintoday’scompanies,andthefactthatcompetenciesarebecomingasignificantissue,performancemanagementsystemsneedtoberedesignedsothatwecanevaluatetheskillsandcapabilitiesthataremostimportanttothebusiness.However,tosuccessfullyusecompetency-basedperformancemanagement,theorganizationhastomovefromananalysisandmeasurementoftheindividualtasks

withinaprocesstoamoreholisticevaluationoftheabilitytocombineandimproveactivitiestocreatethemostsuccessfulorganizationaloutcomes.

SHRMnotesthatdoingcompetency-basedevaluationsisnecessarytoalignperformancewithrewardsiftheorganizationisgoingtouseacompetency-basedpayandincentivesprogram.57Competency-basedpayprogramshavebeenshowntoalignindividualgoalsmorecloselywiththeorganization’soverallstrategicgoals.Becauseofthesefactors,competency-basedperformanceappraisalswilllikelycontinuetoincreaseasapercentageofoverallperformanceappraisalprocesses.

WORKAPPLICATION8-10Selectanorganizationyouworkfororhaveworkedfor.Doesitusecompetency-basedperformancemanagement?Doyoubelievetheorganizationshouldorshouldnotuseit?

WORKAPPLICATION8-11Forachange,let’slookatyourcollegeprofessors’gradinghabits.Aresomeprofessorshardgraders(meaningtheygivefewAs),areotherseasygraders(meaningtheygivelotsofAs),oraretheyallconsistent?Assumingthereisinconsistency,shouldthecollegeadministrationdictateaforcedgradedistribution?

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary8-1Summarizethenecessarycharacteristicsofaccurateperformancemanagementtools.

Theperformancemanagementtoolsandmeasuresthatweuseneedtobevalid,reliable,acceptable/feasible,andspecific.Avalidtoolmeasurestheprocessthatyouwantittomeasure.Areliabletoolworksinagenerallyconsistentwayeachtimeyouuseit.Acceptabilityandfeasibilitydealwiththetoolbeingsatisfactoryandreasonabletothepeoplewhouseitandalsocapableofbeingsuccessfullyappliedinaparticularsituation.Finally,aspecificmeasuredefinestheperformancewellenoughthatweunderstandthecurrentlevelofperformanceachievedandwhat,ifanything,theemployeesneedtodo

toimprovetheirperformancetocomplywithstandards.

8-2Identifyandbrieflydiscussthepurposesofperformanceappraisals.

Communicationisthefirstpurpose.Appraisalsneedtoprovideanopportunityforformaltwo-waycommunicationbetweenmanagementandtheemployeeconcerninghowtheorganizationfeelstheemployeeisperforming.Thesecondpurposeistogaininformationforevaluativedecisions.Weneedgoodinformationonhowemployeesareperformingsothatwecantakefairandequitableactionswithourworkforcetoimproveorganizationalproductivity.Providingmotivationfordevelopmentisthelastmajorpurpose.Usedcorrectly,appraisalscanmotivatebyprovidingopportunitiesfortheemployeestoimprovetheirperformanceover

time.8-3Discusstheoptionsforwhattoevaluateinaperformanceappraisal.

Ourthreeprimaryoptionsforwhattoevaluatearetraits,behaviors,andresults.Thereissomeevidencethatparticulartypesoftraitsarevaluableinjobsthatrequiremanagementandleadershipskills,butmanytraitshavebeenshowntohaveverylittlebearingonjobperformance,meaningtheyarenotvalidmeasuresofperformance.Wecanalsousebehaviorstoevaluateourworkers.Measuringbehaviorsisusuallyamuchbetterappraisaloptionbecausephysicalactionsorbehaviorscanbedirectlyobserved,andasaresult,theyaremorelikelytobeavalidassessmentoftheindividual’sperformance.Finally,wecanevaluateperformancebasedonresults.Resultsareaconcretemeasureofwhathashappenedintheorganization.However,resultsmay

beskewedbasedonfactorsthatareoutsidethecontroloftheindividualwhoisbeingevaluated.

8-4Listthecommonlyusedperformancemeasurementmethodsandforms.

Thecriticalincidentsmethodutilizesrecordsofmajoremployeeactionsoverthecourseoftheappraisalperiodtocompletetheemployeeevaluation.MBOusesobjectivesjointlysetbythemanagerandemployeetogaugeemployeeperformanceduringtheevaluationperiod.Inthenarrativemethod,themanagerwriteseitherastructuredorunstructuredparagraphabouttheemployee’sperformance.Graphicratingscalesprovideanumericalscalesothatthemanagercancheckoffwhereanemployeefallsonthecontinuum.BARSformsprovideadescriptionofthebehaviorsthatmakeupacceptableperformanceateachlevelonthescale.Finally,

rankingcreatesahierarchyofemployees,frombesttoworst.

8-5Describetheavailableoptionsfortherater/evaluator.

Itislogicaltochoosesupervisorsasevaluatorswhentheyhaveongoingcontactwiththesubordinateandknowthesubordinate’sjob.Whenthesupervisormaynotspendlotsoftimewiththeindividualemployee,peersmaymakebetterevaluatorsbecausetheymayknowthejoboftheindividualemployeebetterthanthesupervisordoesandmaybemoredirectlyaffectedbytheemployee’sactions.Subordinateevaluationscangiveusgoodinsightintothemanagerswhocontrolemployeesinourorganization.Wemaywanttousecustomersasevaluatorswhentheindividualbeingevaluatedhasfrequentcontactwiththosecustomers,becauseweneedtoknowhowcustomersfeelabouttheirinteractionswithour

employees.Self-evaluationisvaluableinanumberofmanagementprocesses,fromtraininganddevelopmenttocounselinganddisciplinarymeasures,amongothers.

8-6Namesomeofthecommonproblemswiththeperformanceappraisalprocess.

Personalbiasesandstereotypingaretwoofthemostsignificantappraisalproblems.Otherproblemsincludehaloerror,distributionalerrors(eitherthegradingistooharshortoolenient,oreveryoneisjudgedtobeaverage),similarityerror,proximityerror,recencyerror,andcontrasterror.

8-7Contrastevaluativeperformancereviewsanddevelopmentalperformancereviews.

Theevaluativeinterviewisareviewoftheindividualemployee’sperformanceoveracertainperiod.Theevaluationneedstobefairand

equitable,notbasedonbias.Theemployeemustbegiventheopportunitytotalkaswellaslistentothecritiqueoftheirperformance.Thedevelopmentalinterview,ontheotherhand,focusesonareasforimprovementovertime.Youshouldhaveemployeescomeupwiththeirownobjectivesandstrategiesforimprovement,andyoushoulddevelopyourownobjectivesforthem.

8-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermsbehaviorallyanchoredratingscale(BARS)form,198behaviors,195bias,203criticalincidentsmethod,197graphicratingscaleform,198managementbyobjectives(MBO)method,197motivation,194narrativemethodorform,198performanceappraisal,191performancemanagement,190ranking,199results,195stereotyping,203360-degreeevaluation,202traits,194

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. ________istheprocessofidentifying,measuring,managing,anddevelopingtheperformanceofthehumanresourcesinanorganization.

2. ________istheongoingprocessofevaluatingemployeeperformance.

3. ________isthewillingnesstoachieveorganizationalobjectives.

4. ________identifythephysicalorpsychologicalcharacteristicsofaperson.

5. ________aretheactionstakenbyanindividual.

6. ________isameasureofthegoalsachievedthroughaworkprocess.

7. ________isaperformanceappraisalmethodinwhichamanagerkeepsawrittenrecordofpositiveandnegativeperformanceofemployeesthroughout

theperformanceperiod.8. ________isaprocessinwhichmanagers

andemployeesjointlysetobjectivesfortheemployees,periodicallyevaluateperformance,andgiverewardsaccordingtotheresults.

9. ________requiresamanagertowriteastatementabouttheemployee’sperformance.

10. ________isaperformanceappraisalchecklistonwhichamanagersimplyratesperformanceonacontinuumsuchasexcellent,good,average,fair,andpoor.

11. ________isaperformanceappraisalthatprovidesadescriptionofeachassessmentalongacontinuum.

12. ________isaperformanceappraisalmethodthatisusedtoevaluateemployeeperformancefrombesttoworst.

13. ________analyzesindividualperformancefromallsides—fromthesupervisor ’sviewpoint,fromthesubordinates’viewpoint,fromcustomers’viewpoints(ifapplicable),

frompeers,andusingtheemployee’sownself-evaluation.

14. ________isapersonality-basedtendency,eithertowardoragainstsomething.

15. ________consistsofmentallyclassifyingapersonintoanaffinitygroupandthenidentifyingthepersonashavingthesameassumedcharacteristicsasthatgroup.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Otherthangivinganannualevaluation,whatwouldyoudotomanagetheperformanceofyouremployees?Explainwhy.

2. Whatwouldyoudoasthemanagerinordertomakesurethatyouremployeesknewthestandardsthattheywouldbeevaluatedagainst?Explainyouranswer.

3. Doyoureallythinkthatitispossibleforaperformanceappraisaltobemotivational?Whyorwhynot?

4. Canyouthinkofasituationinwhichatrait-basedevaluationwouldbenecessary?Explainyouranswer.

5. Youareinchargeandyouwanttoevaluateagroupofassemblyworkers.Whowouldyouchooseastheevaluator(s)?WhataboutevaluatingtheDirectorofOperations—whowouldyouchoosetodothat?Explainyouranswer.

6. Howwouldyouminimizethechancesthatstereotypingcouldaffecttheevaluationprocessinyourcompany?

7. Whichofthesolutionstoperformanceappraisal

problemswouldyouimplementfirstifyouwereincharge?Second?Why?

8. Whatwouldyoudotomaketheperformanceappraisaldebriefingmorecomfortableandlessconfrontationalforyouremployees?Howdoyouthinkthiswouldhelp?

9. Doyouagreethatannualperformanceappraisalsshouldbediscontinuedincompanies?Defendyouranswer.

Case8-1Amazon.com:SellingEmployeePerformanceWithOrganizationandLeadershipReviewAmazon.com,whichstartedasthebiggestonlinebookstore,hasbecomeahouseholdnamebyexpandingrapidlyintheretailmarket.Itoffersmillionsofmovies,games,music,electronics,andothergeneralmerchandiseproductsinseveralcategories,includingapparelandaccessories,autoparts,homefurnishings,healthandbeautyaids,toys,andgroceries.Shopperscanalsodownloade-books,games,MP3s,andfilmstotheircomputersorhandhelddevices,includingAmazon’sownportablee-reader,theKindle.Amazonalsooffersproductsandservices,suchasself-publishing,onlineadvertising,ane-commerceplatform,hosting,andacobrandedcreditcard.58

Tokeepthismegastorerunningatafastpace,Amazonhired115,000employeeswhogenerated$74billionin2013.TargetandHomeDepotmadeacombinedincomeofcloseto$74billioninthesameyear,yettheyemployedmorethan340,000peoplebetweenthemin

theirretailstores.59WhydoesAmazononlyneedonethirdofitscompetitors’laborforcetoproducethesamerevenue?Liketheothermegaretailer,Wal-Mart,Amazonhasdeliveredcreativebusinesssolutionstotheirownprocessestocontinuouslyincreasetheiroperatingeffectiveness.However,theirstrategyfocusesonenhancingthecustomershoppingexperienceandprovidingexcellentcustomerserviceratherthanprovidingthelowest-pricedproducts.Tomeettheircustomers’needs,Amazonmustdelivermorespeedandefficiencyinitsgiantwarehouse.Theyusemoreautomatedworkprocessesthatreducethecompany’soperationalcostsandalsoincreaselaborefficiencyandemployeesafety.

ThequalityofAmazon’swarehouselaborhasbecomethecriticalissueinthefirm’ssuccess,andhence,hiringandretainingthebest,mostsuitablecandidatesforthecompany’smanuallaborpositionsisakeysuccessfactor.Thatbeingsaid,Amazon’sturnoverrateattheselowest-rankedpositionsintheorganizationishighsinceAmazonletsgoofitslowest-performingemployeestomakeroomfornew,moreappropriatecandidateswhilepromotingtheverybest.Todetectthelowest-andhighest-performingemployees,AmazoninitiatedaperformanceevaluationsystemcalledtheOrganizationandLeadershipReview(OLR).60

OLRactuallyhastwomaingoals:(1)findingfutureleadersandpreparingthemtobeabletofacethemostchallengingtaskspresentedinafast-pacedworkenvironment;and(2)determiningthe10%ofemployeeswhoaretheleasteffectiveandtakingnecessary

correctiveactionwiththem.OLRstakeplacetwiceayeartograntpromotionsandfindtheleasteffectiveemployees.61Onlythetop-levelmanagersattendthesemeetings,wheretherecouldbetworeasonswhyanemployee’snamemaybementioned.Eithertheemployeeisbeingconsideredforapromotion,ortheemployee’sjobmightbeatstake.

OLRsstartwiththeattendeesreadingthemeetingagenda.Thensupervisorssuggestthemostdeservingsubordinatestobeconsideredforpromotion.Allexecutivesintheroomevaluatethesesuggestionsandthendebatethealternatives.Promotionsaregivenattheend.Duringtheprocess,insteadofusingharddata,executivestendtoevaluateemployees’performanceonthebasisofpersonal,anecdotalexperiences.Anyoneinthemeetingmaydenyapromotion;therefore,ambitiousemployeesseekingapromotionshouldalsobeveryfriendlywiththeirboss’speers.Ifanemployee’ssupervisorcannotpresentthatworkerwellenough,another’sfavoritesubordinatewillgetthepromotion.62

Intermsofpromotion,AmazonCEOJeffBezosexpectsthemanagerstosettheperformancebarquitehightoallowonlythemostexceptionaltalenttoprogress.63Promotionsareprotectedbywell-writtenguidelines,whichfocusondeliveryandimpactbutnotoninternalpolitics.Peoplespendlesstimecampaigningfortheirownpromotions,andtopperformersarehighlycompensatedbaseduponthequalityoftheirwork.64Therefore,onlyafewpromotionsareavailableeachyear,andreceivingpositivefeedbackfromasupervisor

isquiterare.Theapprovalthatemployeesgetfromtheirsupervisorisnotenoughtoearnapromotion;employeesstillhaveto“fight”forapromotion,whichmaynotoccurimmediately.

Questions1. DoyouthinkOLRsincreaseemployee

motivation?Ifnot,whywouldAmazonconductsuchperformanceappraisals?

2. Howmightraterbias,stereotyping,andtraitsappraisalimpacttheaccuracyofOLR?Couldthisbecorrected?Ifso,how?

3. Giventhedifferingappraisalsystemsdescribedinthischapter,whichappraisalsystemsmostcloselyresembleOLR?

4. Givenyouranswertotheabovequestion,whatappraisalsystemdoyouthinkwouldbestmeetAmazon’sobjectivesofretainingthebestemployeeswhiletakingcorrectiveactionwiththebottom10%?

5. Amazonisahigh-technologyfirm.HowmightituseelectronicperformancemonitoringtosupplementtheOLRprocess?

6. WhataretheadvantagesanddisadvantagesofhavingperformancereviewslikeOLRthatonlyinvolveone-waycommunication,ratherthanMBO?

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,SchoolofBusinessBrooklynCampus,LongIslandUniversity

Self-AssessmentandSkillBuilder8-1PeerandSelf-AssessmentsThisexerciseincludestheusualself-assessmentforeachchapter,plusanevaluationofpeersanddevelopingmeasuresofperformance.

ObjectiveTodevelopyourskillatassessingyourperformanceandthatofyourpeers

Todevelopyourskillatdevelopingmeasuresofperformance

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskill—conceptualanddesignskills

2. SHRM2013CurriculumGuidebook—H:Performancemanagement

AssignmentPart1—Self-AssessmentDuringyourcollegecourses,youmostlikelyhadtodosomeformofgroupassignments,andyou’vealsodonegroupassignmentsinthiscourse.Selectonegroupyouworkedwith,andbasedonyourperformanceinthatgroup,doaself-evaluationusingtheratingscaleformbelow.

Evaluator(you)_____________________________________(Self-Evaluation)

Thisexercisecanstopwithjustaself-assessment,oritcancontinuetoalsoincludepeerevaluations.

AssignmentPart2—PeerReview

1. Part2beginsbyconductingapeerevaluationusingtheaboveformforeachoftheothermembersinyourgroup,butusingthisheadingfortheform:

GroupMember____________________________________(PeerEvaluation)Eithercopytheaboveformforeachgroupmember,doyourassessmentonanysheetwithoutusingtheform,orhaveyourinstructorprovideyouwithmultipleformsthatyoucancompleteforeachgroupmember.

2. Below,rankeachgroupmember(includingyourself)basedontheirperformance.Thefirstpersonyoulistshouldbethebestperformer,andthelastpersonyoulistshouldbetheleasteffectiveperformer,basedontheperformanceappraisalabove.Ifmembersarecloseorequalinperformance,youmayassignthemthesameranknumber,butyoumustlistthebetteronefirst.

3. Totherightofeachgroupmember(includingyourself),placetheoveralllettergrade(A−F)youwouldassigntothatmemberbasedontheperformanceappraisal.Youmaygivemorethanonememberthesamegradeifthoseindividuals

deservethesamegrade.Youmayalsouseplusandminusgrades.

SkillBuilder8-2DebriefingtheAppraisalNote:Thisexerciseisdesignedforgroupsthathavebeenworkingtogetherforsometimeaspartofthecourserequirements.ItisacontinuationofSkillBuilder8-1.Basedonyourpeerevaluations,youwillconductperformanceappraisalsforyourgroupmembers.

ObjectiveTodevelopaplantoimproveyourteamperformance,andtodevelopyourskillsinconductingperformanceappraisals

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskill−Conceptualanddesignskills

2. SHRM2013CurriculumGuidebook—H:Performancemanagement

AssignmentYouwillbeboththeevaluatorandevaluatee.Gettogetherwithgroupmembersandhaveeachmemberselectaletter,beginningwiththeletterA.Pairoffasfollows:AandB,CandD,EandF,etc.Ifthegroupconsistsofanoddnumberofpeople,eachmemberwillsitoutoneround.AshouldconducttheevaluationinterviewforB,CshouldconducttheevaluationinterviewforD,etc.,usingtheforminSkillBuilder8-1.TheevaluatorsshouldfollowuptheevaluationinterviewwiththedevelopmentalinterviewtogivesuggestionsonimprovingB,D,andF’sperformance(besuretofollowtheevaluativeanddevelopmentalinterviewstepsinModels8-1and8-2).Makesureyouareevaluatorsandevaluatees;donotbepeershavingadiscussion.Whenyoufinish,orwhentheinstructortellsyoutimeisup,reverserolesofevaluatorsandevaluatees.B,D,andFwillbecomethenewevaluatorsforA,C,andE.

Whentheinstructortellsyouto,orwhentimeisup,formnewgroupsoftwoanddecidewhowillbetheevaluatorsfirst.Continuechanginggroupsoftwountileverygroupmemberhasappraisedandbeenappraisedbyeveryothergroupmember.

ApplyItWhatdidIlearnfromthisexperience?HowwillIimprovemygroupperformanceinthecourse?HowwillIusethisknowledgeinthefuture?

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9EmployeeRightsandLaborRelations

©iStockphoto.com/AnnaBryukhanova

ChapterOutlineManagingandLeadingYourWorkforce

TrustandCommunicationJobSatisfaction

MeasuringJobSatisfactionDeterminantsofJobSatisfaction

CommonlyAcceptedEmployeeRightsRightofFreeConsentRighttoDueProcessRighttoLifeandSafetyRightofFreedomofConscience(Limited)RighttoPrivacy(Limited)RighttoFreeSpeech(Limited)

ManagementRightsCodesofConductEmployment-at-Will

Coaching,Counseling,andDisciplineCoachingCounselingDisciplining

LegalIssuesinLaborRelationsTheRailwayLaborAct(RLA)of1926TheNationalLaborRelationsAct(NLRA)of1935(WagnerAct)TheLaborManagementRelationsAct(LMRA)of1947(Taft-HartleyAct)TheWorkerAdjustmentandRetrainingNotificationActof1988(WARNAct)

UnionsandLaborRightsUnionOrganizingLaborRelationsandCollectiveBargainingGrievancesDecertificationElections

TrendsandIssuesinHRMFacebook,Twitter,etc.@Work:AreTheyOutofControl?NonunionWorkerProtectionandtheNLRB

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

9-1Explainthevalueoftrustandcommunicationinemployeerelations.PAGE2189-2Discusstheprimaryreasonwhymeasuringjobsatisfactionissodifficultandthebesttoolforgettingemployeestotellthetruthabouttheirlevelofsatisfaction.PAGE2209-3Identifythecommonlyacceptedindividualrightsintheworkplace.PAGE2239-4Listsomerightsthatmanagementhasinmodernorganizations.PAGE2259-5Contrastthecoaching,counseling,anddisciplineprocessesusedinorganizations.PAGE2269-6DescribethemajorlaborrelationslawsintheUnitedStatesandthemainreasonswhywehaveeachlaw.PAGE2319-7Discusswhatmanagementcannotdoinattemptingtolimitunionorganizingefforts.PAGE2349-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE239

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindysays,“Ifitisn’tdocumented,itdidn’thappen.”

That’sacommonexpressioninhealthcaresettings,anditstressestheimportanceofrecordkeepingforpatientcare.Thesameholdstrueformanagementofpersonnelissues.

“I’vehaditwithJeremy!”LeonardexplodedwhenCindyreturnedhisphonecallonemorning.“I’vetoldhimamilliontimeshowtorunthisreport,andhewon’tfollowmyinstructions!Ifhemakesonemoremistake,that’sit—he’soutofhere.”

“Whoa,Leonard,”Cindysoothed.“Youknowourpolicyadvisesprogressivediscipline.AreyoudocumentingyourissueswithJeremy?Haveyoutriednondisciplinarycounselingorawrittenwarning?”

“Idon’thavetimeforallthatnonsense,”scoffedLeonard.“IshouldbeabletofireanyemployeeIwant!”

“Ifyouhaven’tbeenkeepingrecordstobackupyourmanagementofJeremy’sperformanceissues,

dischargeisnotyourfirstoption.”Cindycautioned.

Forthesakeofdueprocessindisciplinarymatters,supervisorsmustdocumentthatanemployeewasinformedofperformanceissuesandgivenanopportunitytoimprove.YouwillfindhelpfulinformationonemployeeversusmanagementrightsandrelatedlegalrequirementsinChapter9.

ManagingandLeadingYourWorkforceNomatterwhatelsehappensinanorganization,managersandemployeeshavetoworktogethertoaccomplishsetsofgoals.1Forthistohappensuccessfully,peopleinorganizationsmustbeabletocommunicatewitheachother.2Communicationallowsustocontroltheworkenvironment,giveandreceiveimportantinformation,expresshowwefeelaboutasetofcircumstances,andmotivateourselvesandothers.Inaddition,wheneverpeoplehavetocommunicatetoaccomplishagoal,thesenderandreceivermustestablishtrusttoavoidcreatingbarriersinthecommunicationprocess.3Inthissection,webeginwithanoverviewoftrustandcommunicationsandthenprovidedetailsofsendingandreceivingmessageswhencommunicating.

TrustandCommunicationTrustissimplyfaithinthecharacterandactionsofanother.Inotherwords,itisabeliefthatanotherpersonwilldowhattheysaytheywilldo—everytime.Thereisevidenceofa“crisisoftrust”inbusinesstoday.4ConsultantJackWelchsaidtrust“isenormouslypowerfulinanorganizationandpeoplewon’tdotheirbestwithoutit.”5Sohowdowegetotherstotrustus?Wemustdowhatwesaywewilldoconsistently,overaperiodoftime.Trustisabsolutelynecessarytostrongmanagement-laborrelations,andresearchshowsthatcompaniesthathavethetrustoftheiremployeeshave“lowerturnover[and]higherrevenue,profitability,andshareholderreturns.”6

Trusttakesawhiletocreate,butonlytakesaninstanttoloseifwedon’tcomethroughfortheotherperson.Soifwewanttoimproveothers’leveloftrustinus,weneedtobeopen

andhonestwithpeople.7Ifpeoplecatchyouinalie,theymaynevertrustyouagain.Togainandmaintaintrustandcredibility,alwaysgetthefactsstraightbeforeyoucommunicate,andthensendclear,completemessages.8

Communicationistheprocessoftransmittinginformationandmeaning.Thismeaningcanbetransferredverbally,nonverbally,orinwriting.Weareexpectedtoworkwellingroupsandcommunicatewithease.9Opencommunicationsareneededfortheorganizationtobesuccessful,10andgoodmanagersaregoodcommunicators.11Ifyouthinkaboutcreatingtrust,opencommunicationisanecessarypartoftheequationof“doingwhatyousayyouwill.”

ListeningSkills.Listeningiscrucialforeffectivecommunicationtooccur.12Ifsomeoneweretoaskusifwearegoodlisteners,mostofuswouldsayyes.However,unfortunately,a

recentsurveyfoundthatthenumberonethinglackinginnewcollegegradsislisteningskills.13Oneofthebiggestproblemsinthe21stcenturyworkenvironmentisthefactthatconstantmultitaskingisdegradingourabilitytopayattentionandlistenforverylong.14However,therearewaystoimproveyourskillsinreceivingcommunications.Findouthowgoodalisteneryouarebycompletingthelisteningskillsself-assessment.

LO9-1Explainthevalueoftrustandcommunicationinemployeerelations

WORKAPPLICATION9-1Selectapresentorpastbossanddescribehowmuchyoutrustthatperson.Besuretogivespecificexamplesofthingsyourbossdid,ordidn’tdo,thatcreatedordestroyedyourtrust.

TrustFaithinthecharacterandactionsofanother

WORKAPPLICATION9-2ReviewyouranswerstotheListeningSelf-Assessment.Whatareyourtwoweakestareas,andhowwillyouimprovethem?

CommunicationTheprocessoftransmittinginformationandmeaning

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

A.EmployeeandLaborRelations(required)

1.Disciplinaryactions:Demotion,disciplinarytermination8.Unionmembership9.Union-relatedlaborlaws10.Union/managementrelations11.Uniondecertificationanddeauthorization12.Collectivebargainingissues13.Collectivebargainingprocess16.Grievancemanagement17.Strikes,boycotts,andworkstoppages18.Unfairlaborpractices19.Managingunionorganizingpoliciesandhandbooks21.Attitudesurveys22.Investigations27.Employeerecords

B.EmploymentLaw(required)12.TheNationalLaborRelationsActof1935(NLRA)13.TheLaborManagementRelationsActof1947(LMRA)

14.TheRailwayLaborActof1926(RLA)16.TheWorkerAdjustmentandRetrainingNotificationActof1988(WARNAct)19.Employeeprivacy20.Employerunfairlaborpractices30.Employment-at-willdoctrine

C.Ethics(required)5.Guidelinesandcodes6.Behaviorwithinethicalboundaries

H.PerformanceManagement(required)

8.Diagnosingproblems9.Performanceimprovementprograms

I.Staffing:RecruitmentandSelection(required)

14.Joboffers:Employment-at-will,contracts,authorizationtowork

M.WorkforcePlanningandTalentManagement(required)

3.Retention:Involuntaryturnover,outplacementcounseling,alternativedisputeresolution4.Retention:Voluntaryturnover,jobsatisfaction,withdrawal,alternatives

Q.OrganizationDevelopment(required—graduatestudentsonly)

1.Coaching

9-1Selfassessment

ListeningSkillsForeachstatement,selecttheresponsethatbestdescribeshowoftenyouactuallybehaveinthewaydescribed.PlacetheletterA,U,F,O,orSonthelinebeforeeachstatementtoindicateyourresponse.

A=almostalways U=usually F=frequently O=occasionally S=seldom

_____1.Iliketolistentopeopletalk.Iencourageotherstotalkbyshowinginterest,smiling,nodding,andsoforth._____2.Ipaycloserattentiontopeoplewhoaresimilartomethantopeoplewhoaredifferentfromme._____3.Ievaluatepeople’swordsandnonverbalcommunicationabilityastheytalk._____4.Iavoiddistractions;ifit’snoisy,Isuggestmovingtoaquietspot._____5.WhenpeopleinterruptmewhenI’mdoingsomething,IputwhatIwasdoingoutofmymindandgivethemmycompleteattention._____6.Whenpeoplearetalking,Iallowthemtimetofinish.Idonotinterrupt,anticipatewhattheyaregoingtosay,orjumptoconclusions._____7.Ituneoutpeoplewhodonotagreewithmyviews._____8.Whileanotherpersonistalkingoraprofessorislecturing,mymindwandersto

personaltopics._____9.Whileanotherpersonistalking,Ipaycloseattentiontothatperson’snonverbalcommunicationsoIcanfullyunderstandwhattheyaretryingtocommunicate.____10.Ituneoutandpretendtounderstandwhenthetopicisdifficultformetounderstand.____11.Whenanotherpersonistalking,IthinkaboutandpreparewhatIamgoingtosayinreply.____12.WhenIthinkthereissomethingmissingfromorcontradictoryinwhatsomeonesays,Iaskdirectquestionstogetthepersontoexplaintheideamorefully.____13.WhenIdon’tunderstandsomething,IlettheotherpersonknowIdon’tunderstand.____14.Whenlisteningtootherpeople,Itrytoputmyselfintheirpositionandseethingsfromtheirperspective.____15.Duringconversations,Irepeatbacktotheotherperson,inmyownwords,whattheotherpersonsays;IdothistobesureIunderstandwhathasbeensaid.

Ifpeopleyoutalktoregularlyansweredthesequestionsaboutyou,wouldtheyhavethesameresponsesthatyouselected?Tofindout,havefriendsanswerthequestionsusingyournameratherthan“I.”Thencompareanswers.

Todetermineyourscore,dothefollowing:

Forstatements1,4 ,5,6,9,12,13,14,and15,giveyourself5pointsforeachA,4 foreachU,3foreachF,2foreachO,and1foreachS.

Forstatements2,3,7,8,10,and11,giveyourself5pointsforeachS,4 foreachO,3foreachF,2foreachU,and1foreachA.

Writeyourscoreforeachletterresponseonthelinenexttotheletter.Nowaddupyourtotalnumberofpoints.Yourscoreshouldbebetween15and75.Notewhereyourscorefallsonthecontinuumbelow.Generally,thehigheryourscore,thebetteryourlisteningskills.

9-1ApplyingTheConcept

CommunicationsIdentifywhethereachstrategylistedbelowisaneffectiveorineffectiveaidtocommunications.

1. effective2. ineffective

_____1.Whenlisteningtoinstructions,ifyoudon’tunderstandsomethingbeingsaid,youshouldnotdoorsayanythinguntilyouhavereceivedtheentiresetofinstructions._____2.Youshouldrepeatbackwhattheotherpersonsaidword-for-wordwhenyouparaphrase._____3.Afteryoufinishgivinginstructions,youshouldensureunderstandingbyaskingtheperson,“Doyouhaveanyquestions?”_____4.Whengivinginstructions,youshouldtellthereceiveryourcommunicationobjectivebeforegivingthedetailsofwhatistobedonetocompletethetask._____5.Weshouldmultitaskwhilereceivingmessagesface-to-facesothatwecangetmorethanonethingdoneatatime.

JobSatisfactionRememberthatjobsatisfactionisimportanttousbecauseitaffectsmanyotherfactors,includingourdependentvariablesfromChapter1—productivity,absenteeism,andturnover.15Studieshavealsofoundthatdissatisfiedemployeesaremoreapttobreaktherulesandsabotageperformance,andmorethanhalfofallUSemployeesareunsatisfiedwiththeirjobs.16,17Soweneedtoknowhowsatisfiedourworkforceisatanypointintime.

MeasuringJobSatisfactionJobsatisfactioncanbemeasuredthroughanorganizationaldevelopmentsurvey,butwehavetorememberthatasurveyisanindirectmeasurement.Sincejobsatisfactionisanattitude,wecan’tdirectlyseeormeasureit—wehavetoaskemployeesabouttheirattitudes.

Becauseofquestionsoftrustbetweenemployeesandmanagement,it’salwaysagoodideatoensurethatanyjobsatisfactionsurveysareadministeredinacompletelyanonymousformatbecauseemployeesaremuchmorelikelytotellthetruthwhentheytakethesurvey.Therearetwocommontypesofjobsatisfactionsurveysorquestionnaires.Let’sbrieflyrevieweachofthemnow.

Exhibit9-1FemaleFacesScale

Source:“Developmentofafemalefacesscaleformeasuringjobsatisfaction”byRandallB.DunhamandJeanneB.Herman,JournalofAppliedPsychology,60(5),October1975,629–631.

Jobsatisfactioneffectsmanyfactorswithinanorganization.Employerswhokeeptabsontheiremployees’levelsofjobsatisfactionmayseehigherratesofproductivityandlowerratesofabsenteeismandturnover.

©iStockphoto.com/JackF

TheFacesScaleofJobSatisfactionMeasurement.Thefirstandsimplersurveyiscalledthe“facesscale.”18Alltheemployeeisaskedtodoiscirclethefacethatmostcloselymatchestheiroverallsatisfactionwiththeirjob.Exhibit9-1showsanexampleofthefacesscale.

LO9-2Discusstheprimaryreasonwhymeasuringjobsatisfactionissodifficultandthebesttoolforgettingemployeestotellthetruthabouttheirlevelofsatisfaction.

SHRMM:4

Retention:VoluntaryTurnover,JobSatisfaction,Withdrawal,Alternatives

SHRMA:21

AttitudeSurveys

TheQuestionnaireJobSatisfactionMeasurement.TakealookatExhibit9-2,whichshowssomeofthequestionsfromtheJobSatisfactionSurvey(JSS).19Therearemanydifferentsurveysofthistype.Somefirmsdeveloptheirown,buttheJSSisoneofonlyafewthathavebeenshowntobevalidandreliable.20

DeterminantsofJobSatisfactionAlthoughcompensation(payandbenefits)isimportanttojobsatisfaction,researchhistoricallyhasnotstronglysupportedtheideathatpayistheprimarydeterminantofjobsatisfaction,orthatpeopleinhigh-payingjobsaremoresatisfiedthanthoseinlow-payingjobs.22Accordingtorecentstudies,thetopreasonsforjobdissatisfactionarethatemployeesdon’tliketheirsupervisor,theyfeelpowerless,theydon’thaveanysayintheirwork,andtheydon’tfeelliketheygetrecognitionfortheirwork.23,24Millennialswillnotworkforabadboss.25

SevenmajordeterminantsofjobsatisfactionarepresentedinSelf-Assessment9-2:JobSatisfaction.Completeittofindoutwhatisimportanttoyouandyourownlevelofjobsatisfaction.Youcanhaveanoverallhigh

levelofjobsatisfactionandstillnotlikesomeaspectsofyourjob;thisiscommon.

Exhibit9-2SampleofJobSatisfactionSurvey(JSS)Questions21

WORKAPPLICATION9-3Identifythethreemostimportantdeterminantsofyourjobsatisfaction,andexplainwhytheyareimportanttoyou.

9-2Selfassessment

JobSatisfactionSelectapresentorpastjob.Identifyyourlevelofsatisfactionwiththatjobbyplacingacheckattheappropriatepositiononthecontinuumforeachdeterminantofjobsatisfaction.

OverallJobSatisfaction

Whendeterminingyouroveralljobsatisfaction,youcannotsimplyaddupascorebasedontheabovesevendeterminantsbecausetheyaremostlikelyofdifferentimportancetoyou.Rankyourtopthreefactorsbelow:

1.____________________________________________________________________________

2.____________________________________________________________________________

3.____________________________________________________________________________

Now,thinkaboutyourjobandtheabovefactors,andrateyouroverallsatisfactionwithyourjobbelow:

9-2ApplyingTheConcept

JobSatisfactionCorrectlymatcheachstatementwithitsdeterminantofjobsatisfaction,writingthelettercorrespondingtoeachdeterminantbeforethestatementassociatedwithit.

1. personality2. workitself3. compensation4. growth5. coworkers6. management7. communications

_____6.Thereisajobopeninginthemetalfusionshop,andIamgoingtoapplyfortheposition._____7.Ireallyenjoyfixingcarstohelppeoplegetaround._____8.I’mmadatmymanagerbecausehedidn’tgivemethegoodperformancereviewthatIdeserved._____9.OfcourseIcandothattaskforyou.____10.ThethingIlikebestaboutmyjobisthepeopleIworkwith.

CommonlyAcceptedEmployeeRightsProvidingemployeeswithreasonablerightsintheorganizationhelpsthemtoremainsatisfiedwiththeirwork.Inthissection,wediscusssixemployeerights;seeExhibit9-3foralist.26Let’sbreakdowneachofthesixrightsindividuallyinseparatesections.

RightofFreeConsentIndividualsinamodernorganizationhavetherightoffreeconsent,whichistherightoftheindividualtoknowwhatthey’rebeingaskedtodoandtheconsequencesofthatactiontotheindividualorothers.Theorganization’sdutyistoensurethattheindividualvoluntarilyagreestodoaparticularjobortaskfortheorganization,makingthemfullyawareofeverythinginvolved.

Exhibit9-3EmployeeRights

1Notethatthesethreerightshavelimitations.

LO9-3Identifythecommonlyacceptedindividualrightsintheworkplace.

WORKAPPLICATION9-4Giveanexampleofhowyourpresentorpastemployermetyourrighttofreeconsent.Whatdidyouconsenttodoonthejob?Haveyouevernotconsentedtodosomethingonthejob?Ifyes,giveanexampleofwhatyourefusedtodo.

RighttoDueProcessWehavedueprocesssothatemployeesarenotpunishedarbitrarily.27Iftheorganizationcontemplatesadisciplinaryaction,theemployeehasarighttoknowwhattheyareaccusedof,toknowtheevidenceorproofthereof,andtotelltheirsideofwhathappened.WewillreviewdueprocessandtheseventestsforJustCauseshortly,butdueprocessisbasicallytheconceptofprovidingfairandreasonabledisciplinaryactionsasconsequencesofanemployee’sbehavior.

Organizationshaveadutytoprovidetheiremployeesarighttolifeandsafetyonthejob.

©iStockphoto.com/BostjanT

RighttoLifeandSafetyEveryemployeewithintheorganizationhasarighttobeprotectedfromharm,tothebestoftheorganization’sability.In1948,theUnitedNationsdeclaredthateveryindividualhasarighttolife,liberty,andsecurityofperson.28Securityofpersonbasicallymeanspersonalsafety.Sotheorganizationhasageneraldutytoseethateveryemployeeisprotectedfromharmwhenworkingwithintheorganizationbecausetheindividualhasarighttolifeandsafety.

RightofFreedomofConscience(Limited)Employeesgenerallyshouldnotbeaskedtodosomethingthatviolatestheirpersonalvaluesandbeliefs,aslongasthesebeliefsgenerallyreflectcommonlyacceptedsocietalnorms.Aperson’sconsciencedetermineswhatthatpersonconsiderstoberightandwrong.Theorganizationhasageneraldutytoavoidforcinganindividualtodosomethingthattheyconsidertobewrong,eithermorallyorethically,andtheindividualhasarighttoavoiddoingthingswithintheorganizationthatwouldviolatetheirpersonalvaluesandbeliefs.

WORKAPPLICATION9-5Giveanexampleofwhenemployeeswereencouragedtoconductunethicalorillegalactivities.Trytogiveanexamplefromanorganizationwhereyouworkorhaveworked,butotherwise,giveanexamplefromanothersource,suchasthenewsmedia.

RighttoPrivacy(Limited)Thisrightprotectspeoplefromunreasonableorunwarrantedintrusionsintotheirpersonalaffairs.Thisgeneralrighttoprivacywouldincludetheemployee’srighttohavetheirpersonnelfiles,otheremployeerecords,and/orprivateareasoftheirworkplace(suchasapersonallocker)keptprivate,toanextent.However,iftheemployerfeelsthattheremightbeahazardtoothers,thenalockerorotherpersonalspace(e.g.,adesk)couldbesearched.

SHRMA:27

EmployeeRecords

SHRMB:19

EmployeePrivacy

RighttoFreeSpeech(Limited)TheFirstAmendmenttotheUSConstitutionguaranteestherighttofreedomofspeech.Whatmostpeopledon’tunderstand,though,isthattheFirstAmendmentonlyappliestothegovernmentnotbeingallowedtocontrolfreespeech.Intheworkplace,individualfreedomofspeechislimited,basedonmanyyearsofcaselaw.Withintheorganizationitself,individualsshouldbefreetoexpressconcernsordiscontentwithorganizationalpolicieswithoutfearofharm.

However,manytypesofspeechhavenoprotection.Iftheindividualemployeeexercisestherighttofreedomofspeech,andif,inthecourseofthataction,theemployeeharmstheorganizationorotheremployees,thentheorganizationhasarighttodisciplinetheemployeebasedontheharmthattheemployeedidtoothers.

WORKAPPLICATION9-6Howdoyoufeelaboutemployeescommunicatingnegativethingsabouttheorganizationtooutsiders?Shouldmanagementmonitoremployeespeechandtakeactiontostopnegativespeech?

9-3ApplyingTheConcept

EmployeeRightsReviewthelistofrightsbelowandwritethelettercorrespondingtoeachrightbeforethestatementinvolvingthatright.

1. freeconsent2. dueprocess3. lifeandsafety4. freedomofconscience5. privacy6. freespeech

____11.TheHRmanagermademesignthisformbeforeIcouldstartthejob,statingthatshehadtoldmeaboutthepossiblesideeffectsfromtheleadpaintremoval.____12.Ienjoywritingnegativecommentsonlineaboutmybossandcompany.____13.I’mgoingtoteachyouhowtousetherifle.Rulenumberoneistoalwaysmakesurethisleverisdownsoyoudon’tfirethegunbyaccident.____14.Youcan’tdisciplinemeforthisminorsafetyviolation.I’mgoingtothelaboruniontostopyoufromdoingit.____15.Letmekeepworkinginsecurity.Idon’twanttoworkinthebar,eventhoughitpaysbetter,becausedrinkingisagainstmyreligion.

____16.Getoutofmylockernow.Youhavenorighttosearchitwithoutmypermission.

ManagementRightsOrganizations,likeindividuals,haverightswithinthelargersociety.Organizationalrightstendtobebasedonthenecessityfortheorganizationtoprotectitselfanditsemployeesfrompersonsthatmightdothemharm,whetherintentionallyorunintentionally.Incaseswheresuchharmmayoccur,theorganizationhastherighttolimitindividualemployeerights.Let’sbrieflydiscusstwoadditionalsignificantmanagementrights.

CodesofConductManagersoforganizationshavearighttocreateandrequirecompliancewithacodeofemployeeconduct.Thecodeofconductistheorganization’smechanismforidentifyingtheethicsandvaluesofthefirm,anditservesasaguidetoindividualaction.29Employeesaremoreunethicalwhentheybelievetheywillnotgetcaughtandpunished.30Acodeofconductgivesanemployeeapracticaltoolfordeterminingwhetherornotanactionthattheyarecontemplatingiswithintheacceptableboundariesofconductwithintheirorganization.

LO9-4Listsomerightsthatmanagementhasinmodernorganizations.

SHRMC:5

GuidelinesandCodes

SHRMC:6

BehaviorWithinEthicalBoundaries

Employment-at-WillCurrently,undercommonlaw,“employmentrelationshipsarepresumedtobe‘atwill’inallUSstatesexceptMontana.”31Theconceptofemployment-at-willallowsthecompanyortheworkertobreaktheworkrelationshipatanypointintime,withorwithoutanyparticularreason,aslongasindoingso,nolawisviolated.Thismeanstheemployerdoesnothavetohavecause(reasons)toterminateanemploymentrelationshipwithanindividualworker.

However,employment-at-willisinrealityafairlyweaklawbecausecourtsinmanyjurisdictionsintheUnitedStateshaveformanyyearsruledthatemployment-at-willislimited.Thecourtshavespecificallystatedthattherearethreestandardexceptionstoemployment-at-will.32

Publicpolicyexceptionsincludesuchthings

asbeingterminatedforfilingalegitimateworker ’scompensationclaim,refusingtolobbyforaparticularpoliticalcandidatejustbecauseyourbosslikesthecandidate,orrefusingtoviolateaprofessionalcodeofethics.

Evidenceofanimpliedcontractbetweentheemployeeandtheemployerisanotherexception.Forinstance,ifthecompanyweretonoteinitsemployeehandbookthat“ourorganizationvalueshardwork,andmanyofouremployeeswhoperformwellhavebeenwithusformanyyears,”thatmightbeconsideredanimpliedcontractstating,“Ifyouworkhard,wewillcontinuetoemployyou.”Thisimplicationofacontractcouldnegatetheemployment-at-willrightsoftheemployer.

Alackofgoodfaithandfairdealingisthethirdexception.Iftheemployerdoessomethingthatwillbenefitthembutwillsignificantlyharmtheindividualemployee,thatactionwouldcreatealackofgoodfaithandfairdealing.Forinstance,wemight

releasea38-year-oldemployeecitingemployment-at-willshortlybeforetheybecomeeligibleforacompany-sponsoredretirementplaninordertohireayounger(andcheaper)employeeinthesamepositionandthusnothavetopaytheretirementbenefits.Thiswouldbelackofgoodfaithandfairdealing,eventhoughitwouldnotbeaviolationofagediscriminationlaws.

SHRMB:30

Employment-at-WillDoctrine

SHRMI:14

JobOffers:Employment-at-Will,etc.

Employment-at-willConceptallowingthecompanyortheworkertobreaktheworkrelationshipatanypointintime,withorwithoutanyparticularreason,aslongasindoingso,nolawisviolated

Coaching,Counseling,andDisciplineAsdiscussedinChapter8,managersneedtocontinuallycoachvirtuallyallemployeestoimproveperformance.Inthissection,wediscussemployeedevelopmentthroughcoaching,counseling,disciplining,and(ifnecessary)termination.

CoachingCoachingincludesavarietyofbehavioraltechniquesandmethodstohelpimproveperformance.33Goodcoachingalsoimprovescommunicationsandrelationships.34Coachingistheprocessofgivingmotivationalfeedbacktomaintainandimproveperformance.Feedbackisintendedtopraiseprogress,toredirectinappropriatebehavior,andtocounselemployeesonhowtoimprove.35Employeeswhoaregivenmoreimmediate,frequent,anddirectfeedbackperformathigherlevelsthanthosewhoarenotgivensuchfeedback.36

TheCoachingModel.Coachingisawaytoprovideongoingfeedbacktoemployeesabouttheirjobperformance.37However,askmanagerswhattheytendtoputoffdoing,andthey’lllikely

saythattheyputoffadvisingweakemployeesthattheymustimprovetheirperformance.Procrastinatingmanagersoftenhopethattheemployeeswillturnaroundontheirown,onlytofind—oftentoolate—thatthesituationjustcontinuestogetworse.Partoftheproblemisthatmanagersdon’tknowhowtocoachorarenotgoodatcoaching,38sowehaveprovidedasimplefour-stepcoachingmodelthatyoucanusetoimproveperformanceinModel9-1.39

LO9-5Contrastthecoaching,counseling,anddisciplineprocessesusedinorganizations.

SHRMH:9

PerformanceImprovementPrograms

SHRMQ:1

Coaching

WORKAPPLICATION9-7Assessyourpresentorpastboss’scoachingskills.Didthebossfollowthestepsinthecoachingmodel?

CounselingWhenyouarecoaching,youarefine-tuningperformance.Butwhenyouarecounselinganddisciplining,youaredealingwithanemployeewhoisnotperformingtoorganizationalstandards.Goodorganizationsrealizetheneedtohelpemployeeswithproblems.40

Model9-1CoachingModel

Whenmostpeoplehearthetermcounseling,theythinkofpsychologicalcounselingorpsychotherapy.Thattypeofsophisticatedhelpshouldnotbeattemptedbyanoncounselingprofessionalsuchasamanager.Instead,managementcounselingistheprocessofgivingemployeesfeedback(sotheyrealizethataproblemisaffectingtheirjobperformance)andreferringemployeeswith

problemsthatcannotbemanagedwithintheworkstructuretotheorganization’semployeeassistanceprogram.

Employersmayuseasetofstandardtests—amechanismcalledjustcase—forprovidingdisciplinaryaction.

©iStockphoto.com/vm

ProblemEmployees.Problememployeeshaveanegativeeffecton

performance.41Goodhumanresourcemanagementskillscanhelpyouavoidhiringproblememployees,42butevenso,youwillmostlikelyhavetoconfrontproblememployeesasamanager.43Problememployeesdopoor-qualitywork,theydon’tgetalongwithcoworkers,theydisplaynegativeattitudes,andtheyfrequentlycomeinlateordon’tshowupforwork.44

Amanager ’sfirstobligationistotheorganization’sperformanceratherthantoindividualemployees.Nottakingactionwithproblememployees—becauseyoufeeluncomfortableconfrontingthem,becauseyoufeelsorryforthem,orbecauseyoulikethem—doesnothelpyouortheemployee.45Notonlydoproblememployeesnegativelyaffecttheirownproductivity,buttheyalsocausemoreworkformanagersandotheremployees.Problememployeesalsolowermorale,asothersresentthemfornotpullingtheirownweight.Thus,itiscriticaltotakequickactionwithproblememployees.46

Coaching Theprocessofgivingmotivationalfeedbacktomaintainandimproveperformance

SHRMH:8

DiagnosingProblems

DiscipliningYoushouldtrycoaching,thencounseling,indealingwithaproblememployee.However,ifanemployeeisunwillingorunabletochangeorarulehasbeenbroken,disciplineisnecessary.47Disciplineiscorrectiveactiondesignedtogetemployeestomeetstandardsandthecodeofconduct.Themajorobjectiveofcoaching,counseling,anddiscipliningistochangebehavior.48Secondaryobjectivesmaybetoletemployeesknowthatactionwillbetakenwhenstandingplansorperformancerequirementsarenotmet,andtomaintainauthoritywhenchallenged.

Buthowdoweknowasmanagersthatwearebeingfairinapplyingdiscipline?Let’stakealookatonemechanismfordeterminingwhetherornottodisciplineanerrantemployeeandwhatlevelofdisciplineisappropriate—JustCause.

JustCauseisactuallyasetofstandardtestsforfairnessindisciplinaryactions—teststhatwereoriginallyutilizedinuniongrievancearbitrations.However,manyothercompanieshaveadoptedthetestsforJustCauseintheirownnonuniondisciplinaryprocessestotrytoensurefairness.

TheseventestsforJustCauseareasfollows:

1. Didthecompanygivetheemployeeforewarningorforeknowledgeofthepossibleorprobabledisciplinaryconsequencesoftheemployee’sconduct?

Withthistest,webasicallywanttodeterminewhetherornottheemployeewasgivenanyknowledgebeforehandthattheactionwasprohibited.

2. Wasthecompany’sruleormanagerialorderreasonablyrelatedto(a)theorderly,efficient,andsafeoperationofthecompany’sbusinessand(b)theperformancethatthecompanymight

properlyexpectoftheemployee?

Herewewanttofindoutwhethertherulewasreasonable.Wealsolookatwhetherornottheemployeeshouldbeexpectedtoactinacertainmannerinordertofollowtheruleororder.

3. Didthecompany,beforeadministeringdisciplinetoanemployee,makeanefforttodiscoverwhethertheemployeedidinfactviolateordisobeyaruleororderofmanagement?

Test3dealswithinvestigationoftheallegedinfraction.If,uponinvestigating,thesupervisorfindsthatthereisreasonableevidencethattheindividualdidviolatetherules,thenwe’vepassedthethirdtest.

4. Wasthecompany’sinvestigationconductedfairlyandobjectively?

Areweutilizingfacts,figures,and

knowledgeoftheevents(theOUCHtest),oristhesupervisorbasingtheinvestigationonsomeemotionalreactiontothesupposedinfraction?

5. Uponinvestigation,wastheresubstantialevidenceorproofthattheemployeewasguiltyascharged?

Substantialevidenceisalargebodyofcircumstantialinformationshowingthattheindividualprobablycommittedtheoffense.Inadisciplinaryaction,wedon’thavetomeetcourtstandardsofproofofguilt.Ifwehaveproof,thenwemeetthistest,butifwehavesubstantialevidence,westillmeettherequirementsoftest5.

6. Hasthecompanyapplieditsrules,orders,andpenaltiesevenhandedlyandwithoutdiscriminationtoallemployees?

Test6triestoidentifywhetherornottheruleisappliedinanequitablemanner.Ifthecompanypunishesonepersonforan

infractionwithawrittenreprimandandpunishesanotherpersonforthesameinfractionwithadisciplinarydischarge,thenthecompanymaynothavebeenevenhandedinitsdisciplinaryaction.Doesthismeanthatwehavetopunisheverypersonintheexactsamewayfortheexactsameinfraction?Theanswerisno—andthatiswherewegetintotest7.

7. Wasthedegreeofdisciplineadministeredbythecompanyinaparticularcasereasonablyrelatedto(a)theseriousnessoftheemployee’sprovenoffenseand(b)therecordoftheemployee’sservicewiththecompany?

Test7iswhereweareallowedtoprovideadifferentpunishmenttodifferentpeoplebasedonpasthistory.Soifwehavetwoemployeeswhohavecommittedthesameinfractionandoneoftheemployeeshasneverbeenintroublewhiletheotherhasrepeatedlycommittedthesameinfraction,thenwehavetheflexibilityto

provideadifferentpunishmentforthetwodifferentoffenders.

GuidelinesforEffectiveDiscipline.Exhibit9-4listseightguidelinesforeffectivediscipline.

Managementcounseling Theprocessofgivingemployeesfeedback(sotheyrealizethataproblemisaffectingtheirjobperformance)andreferringemployeeswithproblemsthatcannotbemanagedwithintheworkstructuretotheorganization’semployeeassistanceprogram

Discipline Correctiveactiondesignedtogetemployeestomeetstandardsandthecodeofconduct

JustCause Asetofstandardtestsforfairnessindisciplinaryactions—teststhatwereoriginallyutilizedinuniongrievancearbitrations

SHRMA:22

Investigations

WORKAPPLICATION9-8AssesshowwellyourbossandtheorganizationyouworkorworkedforfollowstheJustCausestandards.

ProgressiveDiscipline.IfdisciplineisdeemednecessaryaftergoingthroughtheJustCausestandards,whattypeofdisciplineiswarranted?Progressivedisciplineisaprocessinwhichtheemployerprovidestheemployeewithopportunitiestocorrectpoorbehaviorbeforeterminatingthem.Itistypicallyonlyusedincasesofminorbehavioralinfractionssuchasarrivinglatetoworkorinsubordinationwithasuperior.

Exhibit9-4GuidelinesforEffectiveDiscipline

Theprogressivedisciplinarystepsare(1)informalcoachingtalk,(2)oralwarning,(3)writtenwarning,(4)suspension,and(5)dismissal.Insomelimitedcases,wemayaddasixthoptionbetweensuspensionanddismissal.Let’sbrieflydiscusseachstepinprogressivediscipline.

Progressivediscipline Aprocessinwhichtheemployerprovidestheemployeewithopportunitiestocorrectpoorbehaviorbeforeterminatingthem

Step1:Informalcoachingtalk.Aswenoted,thefirststepinprogressivedisciplineisaninformalcoachingtalk.Inaninformaltalk,thesupervisormayseean

employeecominginlatetoworkandjustaskthemwhatisgoingonandwhytheyarelate.Typicallythemanagerwon’tevenwritedownarecordingofsuchconversationsfortheirownuse,althoughtheycandosointhecriticalincidentfile(Chapter8).They’rejustinaninformationgatheringandrecognitionmodeatthispoint,andtheyhopetoavoidanyfurtherdisciplinaryproblems.

WORKAPPLICATION9-9Describeprogressivedisciplinewhereyouworkorhaveworked.

Step2:Oralwarning.Inthesecondstep,thesupervisorformallytellstheemployeethattheirbehavioriscurrentlyunacceptableandalsotellsthemwhattheyneedtodotocorrectthebehavior.Inthissituation,eventhoughthesupervisordoesnotwriteareportfortheindividualtosign,theywillkeepaformalrecordintheirownfilesofthisconversation.Theoralwarningisthefirstofourformalmethodsofdisciplininganemployee.

WORKAPPLICATION9-10Assesshowwellyourbossandtheorganizationwhereyouworkorhaveworkedfollowstheeightguidelinesforeffectivediscipline.

Step3:Writtenwarning.Thethirdstepisawrittenwarning.Inthissituation,thesupervisorwritesupthefactsofthesituation.Theyidentifytheunacceptablebehaviorfortheindividualandidentifywaystocorrectthebehavior.Thesupervisorthenspeakswiththeemployeeusingthewrittendocumenttoassisttheemployeeincorrectingtheiractions.Typicallyhere,weasktheemployeetosignthewrittenwarning,acknowledgingthattheiractionsareunderreviewandnotcurrentlyacceptable.Thissignedpaper(documentation)isthenputintotheemployee’spermanentfile.49

9-4ApplyingTheConcept

GuidelinesforEffectiveDisciplineIdentifywhichguidelineisbeingfollowed—ornotbeingfollowed—inthefollowingstatements.UsetheguidelinesinExhibit9-4astheanswers,writingtheletteroftheguideline(A–H)onthelinebeforethestatementinvolvingit.

____17.“Areyoukiddingme?Canyoureallyfiremejustforbeinglateforworkonce?”____18.“Ididn’tknowthatI’mnotsupposedtomakeapersonalcallwhileI’mworking.Can’tyouletitgothisonetime?”____19.“Somedays,mybosscommentsaboutmybeinglate,butotherdays,shedoesn’tsayanythingaboutit.”____20.“Let’sgetbacktothewaythingswerebeforeIhadtodisciplineyou,OK?”____21.“Let’sgotomyofficesothatwecandiscussyourruleviolationnow.”____22.“Imissedit.WhywasthebossyellingatRita?”____23.“Thebosscomesbackfrombreaklateallthetimeandnothinghappenstohim;sowhydoIgetintroubleforbeinglate?”____24.“WhenIcometoworklate,themanagerreprimandsme.ButwhenLatoyais

late,nothingiseversaid.”____25.“Thebossgavemeawrittenwarningforbeinglateforworkandplaceditinmypermanentrecordfile.”

Step4:Disciplinarysuspension.Asafourthstep,wemaymoveontoadisciplinarysuspensionoftheemployeeforaperiodoffromonedaytotypicallyamaximumofoneweek.Mostcompaniesuseanunpaidsuspension,butsomecompanieshaveexperimentedwithapaiddayoffastimefortheemployeetofigureoutwhetherornottheywishtocontinueworkingfortheorganization.Thereissomeevidencethatthesepaidsuspensionswork,althoughtheconclusionsareslightlymixed.

OtherOptionsBeforeTermination.

Next,wehaveacoupleoflimitedoptionswenotedatthetopofthissection—optionsthatwouldtypicallynotbeusedbutmightbevaluableincertaincases.

Wecansometimesdemoteanindividualtoalowerpositionintheorganization.Insomecases,thismaybevaluablebecausetheemployeemaybeoverwhelmedatthehigher-levelposition.Ingeneral,however,demotioncreatesevenmorejobdissatisfactionwithintheindividualemployee,andwemayseetheirperformancedeteriorateevenfurther.

Alternatively,wemaychooseinsomecasestotransferanemployeefromonepartoftheorganizationtoanother.Theonlytimewhenyoushoulduseatransferasaprogressivedisciplinemeasurewouldbewhenyouknowthatthereisapersonalityconflictbetweentheemployeeandanotheremployeeortheirsupervisor.Transfersshouldneverbeusedsimplytogetridofaproblememployeefromyourdepartmentordivision.Ifthisisthereasonforthetransfer,themanagershould

nottransfertheemployeebutshouldcorrecttheproblembehavior.

SHRMA:1

DisciplinaryActions:Demotion,DisciplinaryTermination

Step5:Termination.Thelastresortisdischarge.Iftheemployee’sbehaviordoesnotimproveovertimeasaresultofverbalandwrittenwarnings,suspensions,demotions,oratransfer,wemaybeforcedtolettheemployeego.However,ifwefollowedtheprogressivedisciplineprocess,wewillhavesufficientevidencetolimittheemployee’sopportunitytobringanunlawfulterminationlawsuitagainstus.

Model9-2TheDisciplineModel

SHRMM:3

Retention:InvoluntaryTurnover,etc.

9-1Ethicaldilemma:whatwouldyoudo?

DiscipliningEthicalBehaviorUnfortunately,somemanagersareunfair/unethicalincoaching,counseling,and/ordiscipliningemployees.Also,someemployeesarerewardedforbeingunethical,whileothersaredisciplinedforbeingethical.Forexample,someautorepairshopspayacommissionforworkdone,somechanicsarepaidmoreiftheygetcustomerstobuypartsandservicestheydon’tneed.Mechanicswhohaveabelow-averagenumberofrepairsmaybeconsideredunderachieversandmaybepressured,throughdiscipline,toperformunneededrepairwork.Similarly,thoseinthemedicalfieldmaypushunnecessarytestsoreventreatments.

1. Hasamanagereverbeenunfair/unethicalincoaching,counseling,ordiscipliningwhereyouworkorhaveworked?Ifso,explainthesituation.

2. Haveyoueverbeeninorknownofasituationinwhichpeoplewererewardedforbeingunethicalanddisciplinedforbeingethical?Ifso,describethesituation.

3. Isitethicalandsociallyresponsibleforfirmstoestablishcontrolsthatrewardunethicalbehavioranddisciplineethicalbehaviortomakemoremoney?

4. Hasanyoneyouknowofbeenunfairly/unethicallyterminated?Ifso,explainthesituation.

TheDisciplineModel.Thereisasimplefive-stepdisciplinemodelthatworksverywell.Youshouldfollowthestepsofthedisciplinemodeleachtimeyoumustdisciplineanemployee.ThefivestepsaresummarizedinModel9-2.

Termination,ordismissal,isthemostseriousformofdisciplinaryaction.Let’squicklylookatsomeoftheoffensesthatmightbecausefordismissalimmediatelyuponcompletionofaninvestigationofthefacts.

WORKAPPLICATION9-11Assesshowwellyourpresentorpastbossusedthedisciplinemodelwithemployees.

GrossNegligenceandSeriousMisconduct.Organizationssetuptheirownrules,listingviolationsthataregroundsforimmediateterminationwithoutprogressivediscipline.Forexample,manyfirmsliststealingmoneyorotherassetsfromtheorganizationascauseforimmediatedismissal.Incompaniesthatpromoteopenandhonestcommunications,theremightbearulethatanyonecaughtlyingwillbefired.

Twoofthemorecommonsituationsinwhichwemightimmediatelydismissemployees

wouldbeincasesofgrossnegligenceorseriousmisconduct.Grossnegligenceisaseriousfailuretoexercisecareintheworkenvironment.Itisarecklessdisregardforcircumstancesthatcouldcauseharmtoothers—alackofconcernforsafetyorlife.Soifinthecourseofwork,someonefailedtoexercisecareinawaythatwouldbelikelytoharmorkillothers,thentheywouldbeguiltyofgrossnegligence.

Seriousmisconductisalittledifferentfromgrossnegligence.Wherenegligenceisafailuretotakecare,misconductisintentionallydoingsomethingthatislikelytoharmsomeoneorsomethingelse.So,seriousmisconductisintentionalbehaviorthathasthepotentialtocausegreatharmtoanotherortothecompany.Anexampleofseriousmisconductisbringingaweapontowork.Thesetypesofincidentscouldbecauseforterminationoftheindividualresponsible—ofcourseonlyafteraninvestigationtoensurethattheyactuallydidwhattheyareaccusedof.

WORKAPPLICATION9-12Giveexamplesofreasonswhyemployeescanbeterminatedwhereyouworkorhaveworked.

LegalIssuesinLaborRelationsAswithmostmanagementprocesses,anumberoflegalissuesaffectlaborrelations.Therearelawsandregulationsthatdealwithunions;thatidentifywhattheorganizationhastodointheeventofalayoff;thatgoverncollectivebargaining;andmanygovernmentagencyrulingsthatlimitorganizationalrightsinmanagingtheworkforce.Inthissection,wewillintroduceyoutothemajorlaborlawsintheUnitedStates.SeeExhibit9-5forabriefoverviewofthefivemajorlaborlaws.

TheRailwayLaborAct(RLA)of1926TheRailwayLaborActwasoriginallyenactedtosignificantlylimitthepotentialforrailroadstrikestoaffectinterstatecommercebyhinderingthegeneralpublic’sabilitytoprocuregoodsandservices.RailroadsweretheprimarymeansofmovingtheUSmailaswellasgoodsfromonestatetoanotherin1926.Airlineswereaddedtotheactin1936becausemuchoftheUSmailwasbeginningtobedeliveredwiththehelpofairlines,andanairlinedisruptionwouldaffectthedeliveryofthemail.

Exhibit9-5MajorLaborLaws

Theactalsoprovidesprotectionforworkers’righttojoinaunion,50anditrequiresthatinso-calledmajordisputes—disputesinvolvingratesofpay,workrules,orworkingconditions—managementandlabormustparticipateinanegotiationandmediationprocessbeforealaborstrikemaybecalled.Astrikeisacollectiveworkstoppagebymembersofaunionthatisintendedtoputpressureonanemployer.Thisnegotiationprocessisdesignedtoforcethetwopartiesto

cometoanagreementwithoutresortingtoastrike,inalmostallcases.

LO9-6DescribethemajorlaborrelationslawsintheUnitedStatesandthemainreasonswhywehaveeachlaw.

SHRMA:9

Union-RelatedLaborLaws

Grossnegligence Aseriousfailuretoexercisecareintheworkenvironment

SeriousmisconductIntentionalbehaviorthathasthepotentialtocausegreatharmtoanotherortothecompany

SHRMB:14

TheRailwayLaborActof1926

A:10

Union/ManagementRelations

A:17

Strikes,Boycotts,andWorkStoppages

TheNationalLaborRelationsAct(NLRA)of1935(WagnerAct)TheNationalLaborRelationsAct(NLRA;frequentlycalledtheWagnerAct)wasthefirstmajormodernlawtodealwiththelegalissueofunionsinthegeneralworkforce(workerswhowerenotcoveredbyspeciallawssuchastheRailwayLaborAct)intheUnitedStates.Inpart,theactstates,

Employeesshallhavetherighttoself-organization,toform,join,orassistlabororganizations,tobargaincollectivelythroughrepresentativesoftheirownchoosing,andtoengageinotherconcertedactivitiesforthepurposeofcollectivebargainingorothermutualaidorprotection...51

TheNLRAwasconsideredtobeveryone-sidedbyemployersbecauseitidentified“unfairlaborpractices”(prohibitions)foremployersbutidentifiednounfairlaborpracticesforemployeeunionsorlabororganizations.

SomeemployerunfairlaborpracticesidentifiedbytheNLRAincludethefollowing:

1. Interferingwith,restraining,orcoercingemployeesintheexerciseoftherightsguaranteedintheNLRA

2. Dominatingorinterferingwiththeformationoradministrationofanylabororganization,orcontributingfinancialorothersupporttoit

3. Discriminatinginregardtohiringortenureofemploymentoranytermorconditionofemploymenttoencourageordiscouragemembershipinanylabororganization(withsomespecificexceptions)

4. Dischargingorotherwisediscriminating(retaliating)againstanemployeebecause

thatpersonhasfiledchargesorgiventestimonyundertheNLRA

5. Refusingtobargaincollectivelywiththelegitimaterepresentativesofemployees

TheNLRAisenforcedbytheNationalLaborRelationsBoard(NLRB),whichwascreatedbytheact.Accordingtoitswebsite,theNLRBhasfiveprimaryfunctions:conductingelections,investigatingcharges,seekingresolution,decidingcases,andenforcingorders.52FormoreinformationabouttheNLRB,visititswebsiteathttp://www.nlrb.gov.

SHRMB:12

TheNationalLaborRelationsActof1935(NLRA)

SHRMA:18,B:20

EmployerUnfairLaborPractices

Strike Acollectiveworkstoppagebymembersofaunionthatisintendedtoputpressureonanemployer

TheLaborManagementRelationsAct(LMRA)of1947(Taft-HartleyAct)TheLaborManagementRelationsAct(LMRA),alsocalledtheTaft-HartleyAct,waspassedasanamendmenttotheNLRA.WhereastheNLRAidentifiedaseriesofemployeerightsandemployerunfairlaborpractices,theLMRAattemptedtorebalanceemployerandemployeerightsbyidentifyingunfairlaborpracticesonthepartofunionsandlabororganizations.Unfairunion/laborpracticesincludethefollowing:53

1. Restrainingorcoercing(a)employeesintheexerciseoftheirrightsguaranteedintheNLRAor(b)anemployerintheselectionofhisrepresentativesfornegotiations

2. Causingorattemptingtocauseanemployertodiscriminateagainstan

employeewhoisnotaunionmember3. Refusingtobargaincollectivelywithan

employer,providedtheunionistheelectedrepresentativeofitsemployees

4. RequiringduesthattheNLRBfindsexcessiveordiscriminatory

5. Picketingorthreateningtopicketanemployerforthepurposeofforcingtheemployertobargainwiththelabororganization,unlessthelabororganizationiscertifiedastheemployees’representative

TheLMRAalsooutlawedseveraltypesofunionactionsthathadbeenusedsincepassageoftheWagnerAct.Theseincludedjurisdictionalstrikes,54 whichunionmembersusedtopushcompaniestoprovidethemwithcertaintypesofjobs;wildcatstrikes,55whereindividualunionmembersparticipatedinstrikesthatwerenotauthorizedbytheunion;secondaryboycotts,56inwhichaunionparticipatinginastrikeagainstacompanywouldpressureotherunionstoboycott

organizationsthatdidbusinesswiththatcompany;andclosedshops,whichprovidedfor“thehiringandemploymentofunionmembersonly.”57Inaddition,thelawlimitedunionshops,58whereeveryemployeewasrequiredtobecomeamemberoftheunionwithinacertaintimeperiod.Finally,theLMRAprovidedthatsupervisorshadnorighttobeprotectediftheychosetoparticipateinunionactivities,soifasupervisorparticipatedinunionizingactivities,thecompanywasallowedtoterminatethem.

Inadditiontothelimitationsonunionsandlabor,theLMRAcreatedmechanismsfordecertifyingunionsthroughanelectionprocess,anditallowedthestatestopassaright-to-worklaw.Right-to-worklawsworkdirectlyagainstunionshopsbydeclaringthateveryemployeeinacompanyhasarighttowork,eveniftheychoosenottojointheunionrepresentingtheshop.59Unionshopscannotbesetupinstatesthatpassright-to-worklaws.

SHRMB:13

TheLaborManagementRelationsActof1947(LMRA)

TheWorkerAdjustmentandRetrainingNotificationActof1988(WARNAct)TheWorkerAdjustmentandRetrainingNotificationActwasdesignedtoprotectworkersinthecaseofaplantclosingorlarge-scalelayoff.Theactrequiresmanagementtogiveemployeesnoticeofaplantclosingorlayoffatleast60daysaheadoftimeifmorethan50peoplewillbelaidoffandiftherearemorethan100full-timeemployeesattheworkplace.AllworkersareentitledtonoticeunderWARN,includinghourlyandsalariedworkersaswellasmanagers.60

Thepenaltyprovisionoftheactsaysthatanemployerwhofailstoprovidenotice“isliabletoeachaggrievedemployeeforanamountincludingbackpayandbenefitsfortheperiodofviolation,upto60days,”plusa

fineofupto$500perdayofviolation.61So,ifwelaypeopleoffwithlessthan60days’notice(forexampletoavoidthepossibilityofsabotage),wehavetopaythemasiftheywerestillemployedforthe60daysanyway.

SHRMB:16

TheWorkerAdjustmentandRetrainingNotificationActof1988(WARNAct)

UnionsandLaborRightsWorkersintheUnitedStatesenjoymorerightsandfreedomsthandoworkersinmanyothercountries,includingtherighttoformandbecomemembersofunions.However,manybusinessesdonothavelaborrelationsaspartoftheirHRprocess.Let’stakealookatunionsandtheirimpactonorganizations.

UnionOrganizingToday,mostunionmembersintheUnitedStatesarepublicsectoremployeessuchasteachersandpoliceofficers.62Laborunionmembershipintheprivatesectorhasdecreaseddramaticallyinthepast40yearsintheUnitedStates,tothepointwhereonlyabout6.6%oftheprivatesectorUSworkforcebelongtoaunion.63

Ifemployeesdecidetheywanttojoinaunion,theywillgothroughaunionorganizingprocess(Exhibit9-6).Inthisprocess,employeeswillselectauniontorepresentthemandthenaskforavoteofemployeesconcerningwhetherornottheydesiretoberepresentedbytheunion.Theprimarymethodforunionelectionsisasecretballot.TheNLRAisthefederallawgoverningunionorganizingandelectionsinprivatefirms.64

Exhibit9-6TheUnionOrganizingProcess

Anelectionisauthorizedifatleast30%oftheemployeesinanappropriatebargainingunitsignauthorizationcardsallowingauniontonegotiateemploymenttermsandconditionsontheemployees’behalf.TheunionthenpresentsthesecardstotheNLRBasanelectionpetition.Oncethishappens,“theNLRBsharplylimitswhatmanagementcansayanddo.Violatingtherulesisanunfairlaborpractice,andtheunionislikelytocomplaintotheNLRBaboutanysuchviolationsandusethemagainsttheemployerintheunionorganizingcampaign.”65

TheNOTIPSRules.WhatpracticesareprohibitedafterprovidingtheauthorizationcardstotheNLRB?AlotoforganizationsusetheacronymNOTIPStoidentifywhatthecompanyanditsmanagerscan’tdo.NOTIPSstandsfornoThreats,noInterrogations,noPromises,andnoSpying.66

Thereisalsoonefinallimitationonactionsbytheorganizationanditsmanagersinthelast24hourspriortotheunionauthorizationelection.Managementisprohibitedfromholdinggroupmeetingswithemployeeswhowillvoteonunionizationduringthis24-hourperiod.

Oncetheelectionisheld,asimplemajorityofthosevotingdeterminesthesuccessorfailureofthecampaign.Inotherwords,ifonly51workersinabargainingunitof200vote,andif26ofthevotersdesireunionmembership,thenmembershipintheunionwillbeauthorized.

LO9-7Discusswhatmanagementcannotdoinattemptingtolimitunionorganizingefforts.

SHRMA:8

UnionMembership

9-5ApplyingTheConcept

LaborLawsIdentifyeachstatementbythelawitisdiscussing,writingthelettercorrespondingtoeachlawbeforethestatementdiscussingit.

1. RLAof19262. NLRAof19353. LMRAof19474. WARNof1988

____26.Featherbeddingisillegal.Theunioncan’tputinthecontractthatwehavetopayforservicesthatwereallydon’tget.WeshouldcallintheNationalLaborRelationsBoardtoinvestigate.____27.IthinkweshouldcallintheNationalLaborRelationsBoardtoinvestigatetheactionthatmanagementistakingtostopusfromunionizing.____28.Thecompanycan’tgiveusanoticetoday,withourpaychecks,thatourfactoryisbeingclosednextweekandall500ofuswillbewithoutajob.____29.Aspilots,weshouldn’tgoonstrike.Let’sgettheNationalMediationBoardtohelpus.

WORKAPPLICATION9-13Describeyourexperiencewithaunion.Ifyouhavenoexperience,interviewsomeonewhohasunionexperiencetofindouttheirviewsoftheunion.Whatdotheylikeanddislikeabouttheunion?

SHRMA:12

CollectiveBargainingIssues

A:13

CollectiveBargainingProcess

A:19

Managingunionorganizingpoliciesandhandbooks

LaborRelationsandCollectiveBargainingLaborrelationsaretheinteractionsbetweenmanagementandunionizedemployees.Sincetherearemanymorenonunionizedthanunionizedemployees,mostorganizationsdon’thavetodealwithlaborrelationsaspartoftheirhumanresourcessystems.

Model9-3TheEmployeeComplaintResolutionModel

Collectivebargainingisthenegotiationprocessresultinginacontractbetweenunionemployeesandmanagementthatcoversemploymentconditions.Themostcommonemploymentconditionscoveredincontractsarecompensation,hours,andworkingconditions,butacontractcanincludealmost

anyconditionthatbothsidesagreeto.Jobsecuritycontinuestobeamajorbargainingissueformanyunions.67

LaborrelationsTheinteractionsbetweenmanagementandunionizedemployees

GrievancesAsstipulatedinaunioncontract,agrievanceisaformalcomplaintconcerningpay,workingconditions,orviolationofsomeotherfactorinacollectivebargainingagreement.Grievanceprocedureshelpprotectemployeesagainstarbitrarydecisionsbymanagementregardingdiscipline,discharge,promotions,orbenefits.Theyalsoprovidelaborunionsandemployerswithaformalprocessforenforcingtheprovisionsoftheircontracts.The“testsforJustCause”mentionedearlierareusedifagrievanceinvolvesquestionsoffairnessindisciplinaryactions.

Asamanager,whenyouhaveanemployeecometoyouwithacomplaint,youcanfollowthestepsinModel9-3:TheEmployeeComplaintResolutionModel.Notethatinstep2,youdon’thavetoagreeandimplementtherecommendation,andinsteps4and5,unlesstheemployeeistotallywronginthe

complaint,youshouldtrytoresolvethecomplaint.

SHRMA:16

GrievanceManagement

WORKAPPLICATION9-14Describeacomplaintthatyoubroughttoyoursupervisorandhowitwashandled.Ifyouhaveneverhadacomplaint,interviewsomeonewhohasanddescribethecomplaintandhowitwashandled.

DecertificationElectionsDecertificationelectionscanbeheldtoremoveaunionastherepresentativeofcompanyworkers.Thiscannothappenwithinayearofapreviousfailedattemptatdecertification,andmanagementofthecompanycan’teverbringadecertificationpetitionuponitsown.Managementcannotevendirectlyencouragethisactiononthepartoftheemployees,butitcanprovideinformationtoemployeesregardingdecertificationprocessesiftheyrequestit,“aslongasthecompanydoessowithoutthreateningitsemployeesorpromisingthembenefits.”68

Whathappensinadecertificationprocess?First,30%ofcoveredemployeesmustsignapetitionfordecertificationoftheunion.Oncethishappens,theelectionprocessproceedsinprettymuchthesamewayastheprocessforvotingforunionrepresentation.

SHRMA:11

UnionDecertificationandDeauthorization

Collectivebargaining Thenegotiationprocessresultinginacontractbetweenunionemployeesandmanagementthatcoversemploymentconditions

Grievance Aformalcomplaintconcerningpay,workingconditions,orviolationofsomeotherfactorinacollectivebargainingagreement

TrendsandIssuesinHRMIt’stimetotakealookatthischapter ’strendsandissues.Ourfirstissueforthischapterconcernsemployees’useandpotentialmisuseofsocialmediaappsatwork.Secondly,wewillreviewsomerecentNLRBregulatoryinterpretationstoprotectnonunionemployees.

Facebook,Twitter,etc.@Work:AreTheyOutofControl?Howdosocialmediatoolscreatepotentialproblemsintheworkplace?Oneoftheissueswithsocialmediasitesisthefactthatthey’realmostinstantaneousintheirabilitytobroadcastinformationabouttheorganizationtotheoutsideworld,whichcancauseanynumberofproblems,includingthelossoftradesecrets,harmtothecompany’sreputation,thedisseminationofinappropriateorunprofessionalpostsaboutthecompany,bullyingorharassment,andpublicstatementsinconsistentwiththecompany’spublicstance.69Asecondissueisthecompanytimethatemployeescanwastewhenparticipatinginsocialmediainteractionsratherthandoingtheirwork.Ifleftunchecked,thiscancauseaseriouslossofproductivitywithinthefirm.

WhenWalmartfiredemployeesfornotshowingupforwork,theNLRBchargedthecompanyforviolatingemployees’righttostrike.

©Benjamin.g.robinson/Wikimedia

Sowhatcanwedoaboutsocialmediaatwork?AccordingtoarecentSHRMarticle,theorganizationneedstoensurethatithasastrict“lackofprivacypolicy”70toletemployeesknowthattheyhavenoexpectation

ofprivacyinsocialmediacommunicationsinassociationwiththeirworkplace.Guidelinesonsocialmediauseshouldbeputintoacomprehensivepolicythatnotesthattheindividualisresponsiblefortheirpostsandthatpoststhatharmotheremployeesortheorganizationcouldresultindisciplinaryaction.Socialmediatoolsaddgreatvaluetothecompany,buttheymustbemanagedthesameasanyotherbusinesstools.

NonunionWorkerProtectionandtheNLRBLet’stakeaquicklookathowtheNLRBistryingtobecomemorerelevantinnonunionworkenvironments.TheNLRBsaysthatworkershavearighttoengagein“protectedconcertedactivities”intheworkplaceandhasbeguntobackemployeeactionsthatwerehistoricallyconsideredillegal.OneexampleistheseriesofshortstrikesagainstWalmartduringthebusyperiodleadinguptotheChristmasholidays.Walmartsaidthattheemployeesviolatedcompanyrulesbynotshowingupforworkandfiredsomeemployeesforfailingtofollowcompanyrules.TheNLRBchargedWalmartwithretaliatingagainstemployeeswhoexercisedtheirrightsundertheNLRA.71TheBoardnotedthatworkershavearighttostrike,butWalmartsaidtheintermittentnatureoftheemployees’actionsmadeitimpossibletotell

astrikefromjustbeingabsentwithoutnotice.

Walmartsaysthatsuchstrikesareintendedtointerferewithitsbusinessanditscustomersandthattheunionsbackingtheshortstrikesareprohibitedfromtakingsuchactionsbyfederallaw(theLMRA).72Insomecases,statecourtshaveagreed.However,theNLRBcontinuestopushtheissueofworkers’rightstostrikewiththecompany.Wewillhavetoseehowthisissuewillberesolvedoverthenextfewmonthsoryears,butlaborrightscouldbesignificantlyexpandedorsignificantlylimitedbasedonthedecisionsoftheadministrativelawjudgefromtheNLRBandultimatelybydecisionsfromthefederalcourts.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;

watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary9-1Explainthevalueoftrustandcommunicationinemployeerelations.

Trustisabsolutelynecessarytostrongmanagement-laborrelations.Researchshowsthatcompaniesthathavethetrustoftheiremployeeshavelowerturnover,higherrevenue,profitability,andshareholderreturns.Assoonastrustgoes,loyaltytothecompanygoeswithit.Opencommunicationsareneededfortheorganizationtobesuccessfulbecausewecan’tdowhatwesaywewillunlesswecommunicate.

9-2Discusstheprimaryreasonwhymeasuringjobsatisfactionissodifficultandthebesttoolforgettingemployeestotellthetruthabouttheirlevelofsatisfaction.

Jobsatisfactionisanattitude,nota

behavior.Wecanexperiencebehaviorsdirectly,whilewecanmeasureattitudesonlyindirectly.Becauseofthis,wemustusesomeformofsurveyandasktheemployeesabouttheirjobsatisfactionlevel.Whenusingjobsatisfactionsurveys,wehavetoensurethattheyareanonymousoremployeeswillmostlikelynottellthetruthabouttheirsatisfactionlevels.

9-3Identifythecommonlyacceptedindividualrightsintheworkplace.

Thecommonlyacceptedrightsofindividualswithintheworkplaceincludethefollowing:Rightoffreeconsent—therightoftheindividualtoknowwhattheyarebeingaskedtodo,andtheconsequencesofdoingitRighttodueprocess—arighttonotbepunishedarbitrarilyorwithoutreason.Generally,weusetheseventestsforJustCausetoprotectthis

right.Righttolifeandsafety—therightofeveryoneintheorganizationtobeprotectedfromharmwhileworkingRightoffreedomofconscience—ageneralrighttonotbeforcedtoviolatetheindividual’spersonalvaluesandbeliefsonthejobRighttoprivacy—arighttoprotectionfromunreasonablesearchesorintrusionsintotheirpersonalspaceatworkRighttofreespeech—freedomtoexpresstheiropinionsorconcernswithintheorganization,withoutfearofharmingtheirworkrelationship

9-4Listsomerightsthatmanagementhasinmodernorganizations.

Wediscussedtwomajormanagementrights.Managementfirsthasarighttocreateandenforceanemployeecodeofconduct.Theorganizationcanalsoidentifytherelationshipwithworkersasoneofemployment-at-will,whichbasically

allowseitherpartytobreaktherelationshipatanytime,evenwithoutstatingareason.Theserightsareofferedbasedontheneedformanagerstobeabletoprotecttheorganizationandtheemployeesfromunnecessarydangerorharm.

9-5Brieflycontrastthecoaching,counseling,anddisciplineprocessusedinorganizations.

Coachingisdesignedtogiveemployeesfeedbacktoimprovetheirperformanceovertime.Thisfeedbackingeneralshouldbedesignedtoimprovetheemployee’smotivationtoperformfortheorganization.Themanagementcounselingprocessisdesignedtoprovideemployeeswithfeedbacksothattheyunderstandthattheirperformanceisnotcurrentlyatanacceptablelevel,andit’sdesignedtoprovidethemwithguidanceonhowtoimprovetheirperformanceovertime.Incaseswhereanemployeeis

unwillingorunabletochangeorarulehasbeenbroken,disciplineisnecessary.Disciplineiscorrectiveactionappliedinordertogetemployeestomeetorganizationalstandards.

9-6DescribethemajorlaborrelationslawsintheUnitedStatesandthemainreasonswhywehaveeachlaw.1. TheRailwayLaborActof1926was

enactedtoforcenegotiationbetweenlaborandmanagement,firstinrailroadsandlaterintheairlines,topreventshutdownofthesecriticalservices.

2. TheNationalLaborRelationsActof1935wasthefirstmajorlawtodealwiththerightsoflabortoformunionsinthegeneralworkforceandcollectivelybargainwithemployers.Itidentifiedunfairlaborpracticesformanagementinnegotiatingwithlabororganizations.

3. TheLaborManagementRelationsActof1947wasanamendmentto

theNLRAthatfocusedonunfairlaborpracticesonthepartofunionsandotherlabororganizations.Itoutlawedorrestrictedavarietyofstrikesandboycotts,anditalsoallowedthestatestopassright-to-worklaws.

4. TheWorkerAdjustmentandRetrainingNotificationActof1988requiredthatorganizationswithcertainqualifyingcharacteristicsshouldprovide60days’noticewhenlayingoffmorethan50peopleorclosingaplant.

9-7Discusswhatmanagementcannotdoinattemptingtolimitunionorganizingefforts.

NOTIPSisanacronymthatstandsforNoThreats,NoInterrogations,NoPromises,andNoSpying.Thismeansfirstthatemployerscannotthreatentoterminateemployeesfromtheirjobs,threatentoclosetheplant,orthreatenemployeesinanyothermannerduringtheperiod

priortoalaborelection.Secondly,employerscannotcalltheindividualemployeesinquestionaboutunionorganizingactivitiesoneithertheirpartorthepartofotherswithintheorganization.Third,managementcannotpromisethatifemployeesvoteagainstunionization,theorganizationwillprovidethemwithbenefitsbecauseoftheirvotes.Finally,managementcannotspyonindividualemployeestakingpartinunionorganizingevents,eitherthroughplantingindividualsinsuchmeetingsorthroughelectronicorothermeans.

9-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermscoaching,226collectivebargaining,236communication,219discipline,227employment-at-will,225grievance,236grossnegligence,231JustCause,227laborrelations,235managementcounseling,227progressivediscipline,228seriousmisconduct,231strike,232trust,218

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. ________isfaithinthecharacterandactionsofanother.

2. ________istheprocessoftransmittinginformationandmeaning.

3. __________allowsthecompanyortheworkertobreaktheirworkrelationshipatanypointintime,withorwithoutanyparticularreason,aslongasindoingso,nolawisviolated.

4. __________istheprocessofgivingmotivationalfeedbacktomaintainandimproveperformance.

5. __________istheprocessof(a)givingemployeesfeedbacksotheyrealizethataproblemisaffectingtheirjobperformanceand(b)referringemployeeswithproblemsthatcannotbemanagedwithintheworkstructuretothe

organization’semployeeassistanceprogram.

6. __________iscorrectiveactiontogetemployeestomeetstandardsandthecodeofconduct.

7. __________isasetofstandardtestsforfairnessindisciplinaryactions;thesetestswereoriginallyutilizedinuniongrievancearbitrations.

8. __________isaprocesswherebytheemployerprovidestheemployeewithopportunitiestocorrectpoorbehaviorbeforetheindividualisterminated.

9. __________isaseriousfailuretoexercisecareintheworkenvironment.

10. __________isintentionalemployeebehaviorthathasthepotentialtocausegreatharmtoanotherortothecompany.

11. ________isacollectiveworkstoppagestagedbymembersofaunionthatisintendedtoputpressureonanemployer.

12. ________consistsoftheinteractionsbetweenmanagementandunionizedemployees.

13. ________isthenegotiationprocess

resultinginacontractbetweenunionemployeesandmanagementthatcoversemploymentconditions.

14. ________isaformalcomplaintconcerningpay,workingconditions,orviolationofsomeotherfactorinacollectivebargainingagreement.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Whatactionswouldyouconsidertaking,otherthanincreasingpay,ifjobsatisfactionsurveydatashowedthatyouremployees’satisfactionlevelwasdroppingsignificantly?

2. Doyouthinkthatorganizationsshouldprovidemorerightsorfewerrightstoemployeesthanthoselistedinthechapter?Ifmore,whatwouldyouadd?Iffewer,whichrightsdoyouthinkareunimportant?

3. Shouldcompaniesmakeastrongattempttoneverviolatetheprivacyrightsofanemployee?Whyorwhynot?

4. Doyouthinkcodesofconducthaveanyeffectonemployees’activities?Whatwouldmakethemmoreorlesseffectiveinanorganization?

5. Isemployment-at-willfair,orshouldcompanieshavetohavealegitimatereasontodischargetheiremployees?Justifyyouranswer.

6. Shouldcoaching,counseling,anddisciplineprocessesbeutilizedbythefirm,orshouldwejustterminatetheemploymentofworkerswhoarenotdoingtheirjob?Explainyouranswer.

7. Doyoufeelthatprogressivedisciplineprocesses

actuallyworktoimproveemployeeperformanceinmostcases?Whyorwhynot?

8. Doyouthinkitiseverokayforemployeestostrikeagainstanemployer?Ifso,inwhatcircumstances?Ifnot,why?

9. Assumethatyouareafairlyhigh-levelmanagerinyourcompanyandthatoneofyouremployeescomestoyoutotellyouthatotheremployeesareattemptingtounionizethecompany.Whatwouldyourinitialactionsbe,andwhy?

Case9-1OFF-DUTYMISCONDUCTThesmallSouthwesterncityofHappyHollow,withapopulationofapproximately17,000people,isamodernbedroomcommunitythatislocatedjusta15-minutedriveawayfromamajorcity.HappyHollowmaintainsafiredepartmentwithonefirestationservinganareaof12squaremiles.Itisstaffedwith15full-timefirefightersand15volunteerfirefighters.TheInternationalAssociationofFireFighters(IAFF)representsallpermanent,full-timeemployeesofHappyHollows’sfiredepartment.

Fouryearsago,TimNelsonwashiredasafirefighterandlicensedparamedicforHappyHollow’sfiredepartment.Previously,heworkedfor3yearsasafirefighterforanothersmallcity.Aftergettingoffworkat4:30p.m.oneevening,hejoinedafriendatarestaurantinthemajorcitya15-or20-minutedrivefromwherehelivesandworks.Nelsonandhisfriendhaddinnerandseveraldrinksattherestaurantandstayedthereuntilaftermidnight,whenNelsondrovethefriendhomeandthenstartedonthedrivetohisownhome.

Uponreceivingcallsat12:43a.m.aboutsomeonedrivingerraticallyinapickuptruckatahighrateofspeed,HappyHollow’spolicedepartmentdispatcheda

policeofficertoinvestigate.OfficerBrianJonesobservedsomeonedrivingthedescribedtruckatanexcessiverateofspeed.Hefollowedforapproximatelyone-halfmilewhileobservingerraticdrivingbeforestoppingthetruck.OfficerJonesdetectedastrongodorofalcoholcomingfromthepickuptruckwhenheapproachedit.OfficerJonesthenrecognizedthedriverasfirefighterNelson,whoappearedfatigued,withred,wateryeyes.HenoticedthatNelsonhaddifficultyperformingthesimpletaskofretrievinghisdriver’slicenseandproofofinsurancecoverage,andhisspeechwasslurred.OfficerJonesconcludedthatNelsonappearedtobeintoxicated.Meanwhile,anotherFordpickuptruckandasecondcitypatrolvehicledrivenbySgt.DavidMartinezarrivedonthelocation.ThedriverandpassengerintheotherpickupadvisedthepoliceofficersthatthetruckdrivenbyNelsonhadsideswipedtheirvehiclebeforebeingstoppedbyOfficerJones,andtheyalsosaidthatNelsonhadfailedtostopaftertheaccident.Thecollisioncauseddamagetobothtrucks,rippingthemirrorsfromthepassengersideofthetruckdrivenbyNelsonandthedriver’ssideoftheothertruck.

OfficerJonesdeterminedthattherewasprobablecauseforarrestandadvisedNelsonthathewasbeingarrestedfordrivingundertheinfluence(DUI)andleavingthesceneofanaccident.Uponarrivalatthepolicestation,NelsonelectedtorefusetosubmittoaBreathalyzertestformeasuringhisbloodalcohol.HewascitedforaDUIandleavingthesceneofanaccidentresultinginpropertydamagetoanothervehicle.Hewasbookedintojailandstayedforafewhoursbeforehewasreleasedonbond.

FirefighterandparamedicTimNelsonwassubsequentlyplacedonadministrativeleavewithpaywhilethematterwasbeinginvestigated.Followinga3-dayinvestigation,thefiredepartmentheldapredisciplinaryhearingwhereNelsonhadanopportunitytofurtherdescribehisversionofwhathadhappenedleadinguptohisearly-morningarrest.Nelsondescribedfeelingasuddenjoltwhenhistruckhitsomethingwhilehewasdrivinghome,butheclaimedthathedidnotknowwhathehitorifhehitanythingatall.Nelsonacknowledgedthathehadtoomuchtodrinkthateveningandthatheshouldhavehadsomeonedrivehimhome.Hesaidthat,althoughtheincidenthadoccurredwhilehewasoffduty,hewaswillingtodoanythingnecessarytokeephisjob.

FiredepartmentchiefCalvinMoorepointedoutthathehadknownthatNelsonhadbeenpreviouslyarrestedforaDUIwhileworkingasafirefighterfortheothersmallcitybutthathehadhiredNelsonasafirefighterfortheHappyHollowFireDepartmentanyway.ChiefMooreexplainedthathehadalreadygivenNelsonasecondchancewhenhehiredhim,andhewasunwillingtogiveNelsonathirdchance.ChiefMoorestatedthatNelsonhadviolatedseveralrulesandpoliciesofthefiredepartmentandhadfailedinhisobligationtothepublicasafirefighterandparamedicbynotstoppingtochecktoseeifhehadinjuredanyoneinthecollisionthathecausedthatnight.Theincidentalsogarneredsignificantmediaattention,includingreportsinHappyHollow’slocalnewspaperandonatleastonenewsreportfromalocaltelevisionstation—thuspotentiallyunderminingthepublic’strustintheHappyHollowfiredepartment.Forthesereasons,ChiefMooreinformedNelsonthathis

employmentwasbeingterminated“forcause.”

TheunionfiledagrievanceallegingthatNelson’spunishmentwastooseveresincetheincidentoccurredwhilehewasoffduty.TheunionrequestedNelson’sreinstatementwithpunishment,suchasareasonablesuspensionwithoutpayandawarning.Thecity’smanagementrespondedthattheyhadadutytoensurethepublictrustinthefiredepartment.Theyalsosaidthatthecity’srulesandpolicies,aswrittenintheunion-managementlaboragreement,stated,“Employeesshallconductthemselvesoffdutyinsuchamannerastoshowrespectasamemberofthefiredepartment.ConductunbecomingamemberoftheHappyHollowFireDepartmentwillbesubjecttodisciplinaryaction,uptoandincludingdismissal.”

Questions1. Mayanemployertakedisciplinaryaction

(includingdischarge)againstanemployeeforillegaloff-dutymisconduct?

2. Whichparticularemployeerightsdiscussedinthechaptermaybeassertedbytheemployeeandhislaborunionrepresentativeinthiscase?

3. Whatrightsdoesthecitymanagementhaveinthiscase?

4. Whenconductinganinvestigationofanemployee’soff-dutymisconduct,whatareimportantfactorsfortheinvestigatortoconsiderbeforerecommendingdisciplinaryaction?

5. Whenconsideringdisciplinaryactionforanemployee’soff-dutymisconduct,whatdifferencewoulditmakeifanemployeeisorisnotrepresentedbyalaborunion?

CasecreatedbyRobertWayland,UniversityofArkansasatLittleRock

SkillBuilder9-1Coaching

ObjectiveTodevelopcoachingskillusingthecoachingmodel

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Conceptualanddesign2. SHRM2013CurriculumGuidebook—L:

Traininganddevelopment

Procedure1(2–4minutes)Breakintogroupsofthree.Makesomegroupsoftwo,ifnecessary.Eachmemberselectsoneofthefollowingthreesituationsinwhichtobethemanagerandadifferentoneinwhichtobetheemployee.Ineachsituation,theemployeeknowsthestandingplans;theemployeeisnotmotivatedtofollowthem.Youwilltaketurnscoachingandbeingcoached.

ThreeProblemEmployeeSituations

1. Employee1isaclericalworkerwhousesfiles,asdotheother10employeesinthedepartment.Theemployeesallknowthattheyaresupposedtoreturnthefileswhentheyarefinishedsothatotherscanfindthemwhentheyneedthem.Employeesshouldhaveonlyonefileoutatatime.ThesupervisornoticesthatEmployee1hasfivefilesonthedesk,andanotheremployeeislookingforoneofthem.

2. Employee2isaserverinanicecreamshop.Theemployeeknowsthatthetablesshouldbecleanedupquicklyaftercustomersleavesothatnewcustomersdonothavetositatdirtytables.It’sabusynight.Thesupervisorfindsdirtydishesontwoofthisemployee’soccupiedtables.Employee2issocializingwithsomefriendsatoneofthetables.

3. Employee3isanautotechnician.Allemployeesknowthattheyaresupposedtoputapapermatonthefloorofeachcarsothatthecarpetsdon’tgetdirty.WhentheservicesupervisorgotintoacarEmployee3repaired,thecardidnothaveamatandtherewasgreaseonthecarpet.

Procedure2(3–7minutes)Prepareforcoachingtoimproveperformance.EachgroupmemberwritesanoutlineofwhattheywillsaywhencoachingEmployee1,2,or3,followingthestepsbelow:

1. Describecurrentperformance.2. Describedesiredperformance.(Don’tforgetto

havetheemployeestatewhyitisimportant.)3. Getacommitmenttothechange.4. Followup.

Round1(5–8minutes)Role-playing.ThemanagerofEmployee1,theclericalworker,coachesthatemployeeasplanned.(UsetheactualnameofthegroupmemberplayingEmployee1.)Talk—donotreadyourplan.Employee1shouldputthemselvesintheworker’sposition.Boththemanagerandtheemployeewillhavetoadlib.Thepersonnotplayingaroleistheobserver.Thispersonmakesnotesastheobserverforeachstepofthecoachingmodellistedabove.Themanagershouldcoachtheemployeeandtrytomakepositivecommentsandpointoutareasforimprovement.Theobservershouldgivethemanageralternativesuggestionsaboutwhatcouldhavebeensaidtoimprovethecoachingsession.

Feedback.Theobserverleadsadiscussionofhowwellthemanagercoachedtheemployee.(Thisshouldbeadiscussion,notalecture.)Focusonwhatthemanagerdidwellandhowthemanagercouldimprove.Theemployeeshouldalsogivefeedbackonhowtheyfeltandwhatmighthavebeenmoreeffectiveinmotivatingchange.Donotgoontothenextinterviewuntilyouaretoldtodoso.Ifyoufinishearly,waitfortheotherstofinish.

Round2(5–8minutes)SameasRound1,butchangerolessothatEmployee2,theserver,iscoached.Thejobisnotmuchfunifyoucan’ttalktoyourfriends.Asthesupervisor,coachEmployee2.Again,theobservergivesfeedbackafterthecoaching.

Round3(5–8minutes)SameasRounds1and2,butchangerolessothatEmployee3,theautotechnician,iscoached.Asthesupervisor,coachEmployee3.Again,theobservergivesfeedbackafterthecoaching.

ApplyItWhatdidIlearnfromthisexercise?HowwillIusethisknowledgeinthefuture?

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SkillBuilder9-2Disciplining

ObjectiveTodevelopyourabilitytodisciplineanemployeeusingthedisciplinemodel

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Conceptualanddesign2. SHRM2013CurriculumGuidebook—L:

Traininganddevelopment

Note thatthisisacontinuationofSkillBuildingExercise9-1.Coachingdidn’twork,andyouhavetodisciplinetheemployee.

Procedure1(2–4minutes)Breakintogroupsofthree.Makesomegroupsoftwo,ifnecessary.EachmemberselectsoneofthethreesituationsfromSkillBuilder2.DecidewhowilldisciplineEmployee1,theclericalworker;Employee2,theicecreamshopserver;andEmployee3,theautotechnician.Alsoselectdifferentgroupmemberstoplaytheemployeebeingdisciplinedandtheobserver.

Procedure2(3–7minutes)Prepareforthedisciplinesession.WriteabasicoutlineofwhatyouwillsaytoEmployee1,2,or3;followthestepsinthedisciplinemodelbelow.

1. Refertopastfeedback.(Assumethatyouhavediscussedthesituationbefore,usingthecoachingmodel.)

2. Askwhytheundesiredbehavioroccurred.(Theemployeeshouldmakeupanexcusefornotchanging.)

3. Administerthediscipline.(Assumethatanoralwarningisappropriate.)

4 . Getacommitmenttochange,anddevelopaplan.5. Summarizeandstatethefollow-up.

Round1(5–8minutes)Role-playing.ThemanagerofEmployee1,theclericalworker,disciplinesthatemployeeasplanned.(Usetheactualnameofthegroupmemberplayingtheemployee.)Talk—donotreadyourplan.Boththemanagerandtheemployeewillneedtoadlib.Asthesupervisor,disciplineEmployee1.

Thepersonnotplayingaroleistheobserver.Thispersonmakesnotesonthefivestepsofthedisciplinemodelabove.Foreachofthesteps,trytomakeastatementaboutthepositiveaspectsofthedisciplineandastatementabouthowthemanagercouldhaveimproved.Givealternativethingsthemanagercouldhavesaidtoimprovethedisciplinesession.Remember,theobjectiveistochangebehavior.

Feedback.Theobserverleadsadiscussionofhowwellthemanagerdisciplinedtheemployee.Theemployeeshouldalsogivefeedbackonhowtheyfeltandwhatmighthavebeenmoreeffectiveinmotivatingchange.Donotgoontothenextinterviewuntilyouaretoldtodoso.Ifyoufinishearly,waituntiltheothersfinishorthetimeisup.

Round2(5–8minutes)SameasRound1,butchangerolessothatEmployee2,theicecreamserver,isdisciplined.AsEmployee2,putyourselfintheworker’sposition.Asthesupervisor,disciplineEmployee2.Astheobserver,givefeedback.

Round3(5–8minutes)SameasRounds1and2,butchangerolessothatEmployee3,theautotechnician,isdisciplined.AsEmployee3,putyourselfintheworker’sposition.Asthesupervisor,disciplineEmployee3.Astheobserver,givefeedback.

ApplyItWhatdidIlearnfromthisexercise?HowwillIusethisknowledgeinthefuture?

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PartIVCompensating

10CompensationManagement11EmployeeIncentivesandBenefits

Practitioner’sModel

10CompensationManagement

©iStockphoto.com/minemero

ChapterOutlineCompensationManagement

TheCompensationSystemMotivationandCompensationPlanning

OrganizationalPhilosophyAbilitytoPayWhatTypesofCompensation?PayforPerformanceorPayforLongevity?Skill-BasedorCompetency-BasedPay?At,Above,orBelowtheMarket?WageCompressionPaySecrecy

LegalandFairnessIssuesinCompensation

FairLaborStandardsActof1938(Amended)PayEquityandComparableWorthOtherLegalIssues

JobEvaluation

ExternalMethodJobRankingMethodPoint-FactorMethodFactorComparisonMethod

DevelopingaPaySystemJobStructureandPayLevelsPayStructure

TrendsandIssuesinHRMAShiftFromBasePaytoVariablePayTheTechnologyofCompensation

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

10-1Describeexpectancyandequitytheoriesastheyapplytocompensation.PAGE24710-2Identifythesevenbasicissuesthatmakeuptheorganizationalphilosophyoncompensation.PAGE25110-3DiscussthethreemajorprovisionsoftheFLSA.PAGE25310-4Namethethreetypesofjobevaluationdiscussedinthetextanddiscusswhethertheyaremoreobjectiveorsubjectiveinform.PAGE25810-5Explaintheconceptofapaystructure.PAGE26010-6DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE269

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindytellsthestoryofwhenDrewwalkeddejectedlyintoherofficeandfloppeddowninthenearestchair.

“Iheartheyhiredanewpayrollclerk—thesamejobI’vebeendoingforfiveyears—andthisnewpersonisgoingtobepaidmorethanImake!I’vebeenaloyalemployeeforyearsandhaven’thadarealraisesinceIstarted.Isthatfair?”

Cindycouldn’tfaultDrewforhisfeelings,andsheknewitwaspasttimethecompanyexamineditscompensationguidelines.

Onceyouhaveanestablishedpayscale,isitreallyimportanttoreexamineyourcompensationlevels?Whatisthesolutionwhenthegoingmarketrateforapositionoutdistancesyoursetpayscale?Chapter10answersthesequestionsandmoreasitdemonstratesthereasonswhycompensationmanagementissovitaltoattractingandretainingyourbestemployees.

CompensationManagementCompensationcostsarefrequentlythelargestpartoftotalcostsattoday’sfirms.Compensationcostsarealsorising.1AccordingtotheUSBureauofLaborStatistics,averagecompensationcostsrosenearlyadollarperhourfromMarch2013toMarch2014.2Compensationisthetotalofanemployee’spayandbenefits.Abusinessdesignsandimplementsacompensationsystemtofocusworkerattentiononthespecificeffortstheorganizationconsidersnecessarytoachieveitsdesiredgoals.3However,ifrewardsaretobeusefulinstimulatingdesiredbehavior,theymustalsomeetthedemandsofemployeeswhosebehaviorthey’reintendedtoinfluence.4

Compensationaffectstheprocessofbothattractingandretainingemployees.5Arecentsurveyrevealedthatforthefirsttimeinseveralyears,payisnowidentifiedby

employeesasthetopreasonforjobsatisfaction,overtakingjobsecurityasthetopdriverofsatisfactionin2013.Infact,payiscurrentlyeitherfirstorsecondinimportancetoallfourmajorgenerationsofemployeescurrentlyintheworkforce—veterans,babyboomers,generationX,andmillennials—soHRmustpayattentiontofairandequitablecompensationforcompanyemployees.6

TheCompensationSystemThecompensationsystemofanorganizationincludesanythingthatanemployeemayvalueanddesireandthattheemployeriswillingandabletoofferinexchange.Thisincludesthefollowing:

1. Compensationcomponents.Allrewardsthatcanbeclassifiedasmonetarypaymentsandin-kindpaymentsconstitutethecompensationcomponent.

2. Noncompensationcomponents.Allrewardsotherthanmonetaryandin-kindpayments(e.g.,companycafeteriasandgyms)constitutethenoncompensationcomponent.

TypesofCompensation.Therearefourbasicpartsofacompensationsystem:

1. Basepay.Thisistypicallyaflatrate,eitherasanhourlywageorsalary.Manyemployeesconsiderthistobethemostimportantpartofthecompensationprogram,anditisthereforeamajorfactorintheirdecisiontoacceptordeclinethejob.

2. Wageandsalaryadd-ons.Thisincludesovertimepay,shiftdifferential,premiumpayforworkingweekendsandholidays,andotheradd-ons.

3. Incentivepay.Alsocalledvariablepay,incentivepayispayforperformance,anditcommonlyincludesitemssuchaspieceworkinproductionandcommissionedsales.WewilldiscussincentivesindetailinChapter11.

4. Benefits.Thisisindirectcompensationthatprovidessomethingofvaluetotheemployee.Benefitsmayincludehealthinsurance;paymentstoemployeesiftheyareunabletoworkbecauseofsicknessoraccident;retirementpaycontributions;andprovisionofawidevarietyofdesiredgoodsandservicessuchas

cafeteriaservice,tuitionreimbursement,andmanyotheritems.WewillalsodiscussbenefitsindetailinChapter11.

LO10-1Describeexpectancyandequitytheoriesastheyapplytocompensation.

CompensationThetotalofanemployee’spayandbenefits

WORKAPPLICATION10-1Selectajob.Identifythecompensationyoureceivedthereindetail.

CompensationsystemAnythingthatanemployeemayvalueanddesireandthattheemployeriswillingandabletoofferinexchange

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

B.EmploymentLaw(required)8.TheFairLaborStandardsActof1938(FLSA)

E.JobAnalysis/JobDesign(required)2.Jobevaluationandcompensation(grades,paysurveys,andpaysetting)6.Compliancewithlegalrequirements

Equalpay(skill,effort,responsibility,andworkingconditions)andcomparableworthOvertimeeligibility(exemptvs.nonexemptwork)

G.Outcomes:MetricsandMeasurementofHR(required)

11.BenchmarkingI.Staffing:RecruitmentandSelection(required)

16.EmploymentbrandK.TotalRewards(required)A.Compensation

1.Developmentofabasepaysystem2.Developingpaylevels3.Determiningpayincreases

4.Roleofjobanalysis/jobdesign/jobdescriptionsindeterminingcompensation6.Compensationofspecialgroups(e.g.,executives,sales,contingentworkers,management)7.Internalalignmentstrategies8.Externalcompetitivenessstrategies9.Legalconstraintsonpayissues10.Monitoringcompensationcosts11.Unionroleinwageandsalaryadministration12.Minimumwage/overtime13.Paydiscriminationanddissimilarjobs14.Prevailingwage15.Motivationtheories:Equitytheory,reinforcementtheory,agencytheory

10-1ApplyingTheConcept

TypesofCompensationReviewthetypesofcompensationandthenwritethelettercorrespondingtoeachonebeforethestatement(s)describingit.

1. basepay2. wageandsalaryadd-ons3. incentivepay4. benefits

____1.I’dliketoworkforafirmthatwillhelppayformetogetmymaster’sofbusinessadministration(MBA)degree.____2.Ionlygetpaid$11anhour,soI’mlookingforabetterjob.____3.Ilikegettingpaidthesameeachweek.Ithelpsmetobudgetmyexpenses.____4.IlikebeingpaidforeverysaleImake,butmypaydoesvaryfromweektoweek.____5.Ilikeworkingnightsbecauseitpaysmore.

DirectVersusIndirectCompensation.

Thefirstthreecompensationcomponents—basepay,add-ons,andincentivepay—areknownasdirectcompensation.Theseformsofcompensationgodirectlytotheemployeesaspartoftheirpaycheck.Benefitsareindirectcompensation,soemployeesdon’tgetanyfundsfromabenefitsprogram.Benefitsareusuallypaidforbythecompany;employeesneverseethosefundsandmostdon’trealizehowcostlytheyareforthefirm.

Infor-profitbusinesses,wewanttodesignthemixofdirectcompensationandindirectcomponentsthatprovideuswiththebestproductivityreturnforthemoneyspent.However,todothat,weneedtounderstandsomethingaboutthemotivationalvalueofourcompensationsystem.Let’stakealookatafewtheoriesthathelpusunderstandhowcompensationsystemscanmotivateourworkerstoperformtothebestoftheirability.

MotivationandCompensationPlanningWhenwelookatdesigningcompensationprograms,weneedtorememberthatwearetryingtomotivatetheemployeetodothethingsthatweneedthemtodo,consistently,overaperiodoftime.Probablythemostsignificanttheoriesthathelpincompensationplanningareexpectancytheoryandequitytheory.7

ExpectancyTheory.Expectancytheoryisaprocesstheoryofmotivation.Thismeansthatwegothroughacognitiveprocesstoevaluatesomethingorasituation.Expectancytheoryproposesthatemployeesaremotivatedwhentheybelievetheycanaccomplishataskandthattherewardsfordoingsoareworththeeffort.ExpectancytheoryisbasedonVictorVroom’s

formula:Motivation=Expectancy×Instrumentality×Valence.8

Forcompensationpurposes,wehaveintentionallysimplifiedthetheorytoshowhowitaffectsaperson’smotivationtoperform.Expectancyistheperson’sperceptionoftheirabilitytoaccomplishorprobabilityofaccomplishinganobjective.Generally,thehigherone’sexpectancy,thebetterthechanceformotivation.Instrumentalityistheperceptionthataparticularlevelofperformanceislikelytoprovidetheindividualwithadesiredreward.Valencereferstothevalueapersonplacesontheoutcomeorreward,becausenotallpeoplevaluethesamereward.Onethingthatweneedtorememberhereisthatthethreecomponentsofthetheory—valence,instrumentality,andexpectancy—aremultiplicative,soifanyoneofthethreeisnearzero,themotivatingpotentialislow,andtheindividualhasalmostnomotivationtoperform!9ForanillustrationofexpectancyinactionseeExhibit10-1.Therefore,asmanagers,ifwehelpemployees

getwhattheywant,theywillgiveustheworkwewanttohelpmeettheorganizationalgoals.10

Exhibit10-1ExpectancyTheoryandCompensation

Compensationprogramsshouldbedesignedtomotivateemployeestoperformconsistentlyoveraperiodoftime.

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SHRMK:A15

MotivationTheories:Equity,Reinforcement,AgencyTheories

WORKAPPLICATION10-2Giveanexampleofhowexpectancytheoryhasaffectedyourmotivationorthatofsomeoneyouworkwithorhaveworkedwith.Besuretospecifytheexpectancyandvalence.

ExpectancytheoryAtheoryproposingthatemployeesaremotivatedwhentheybelievetheycanaccomplishataskandthattherewardsfordoingsoareworththeeffort

EquityTheory.Peopleincompaniesapplyequitytheoryconstantly—wealldo.11Equitytheory,particularlytheversiondevelopedbyJ.StacyAdams,proposesthatpeoplearemotivatedtoseeksocialequityintherewardstheyreceive(outcomes)fortheirperformance(input).12Soingeneral,equitytheoryproposesthatemployeesaremotivatedwhentheratioof

theirperceivedoutcomestoinputsisatleastroughlyequaltothatofotherreferentindividuals.Employeesaremoremotivatedtoachieveorganizationalobjectiveswhentheybelievetheyarebeingtreatedfairly,13especiallyregardingpayequity.14

Accordingtoequitytheory,peoplecomparetheirinputs(effort,loyalty,hardwork,commitment,skills,ability,experience,seniority,trust,supportofcolleagues,andsoforth),theirfinancialrewards(pay,benefits,andperks),andintangibleoutcomes(praise,recognition,status,jobsecurity,senseofadvancementandachievement,etc.)tothoseofrelevantothers.15Arelevantothercouldbeacoworkeroragroupofemployeesfromthesameordifferentorganizations.16

Noticethatthedefinitionsaysthatemployeescomparetheirperceived(notactual)inputsandoutcomes.17Equitymayactuallyexist,butifemployeesbelievethatthereisinequity,theywillchangetheirbehaviortocreatewhat

theyconsidertobeequity.Employeesmustperceivethattheyarebeingtreatedfairly,relativetoothers.Managerscanalsohelpcontrolemployeeperceptionsoffairness.18Perceptionsofinequityhurtattitudes,commitment,andcooperation,therebydecreasingindividual,team,andorganizationalperformance.19Thisperceivedinequityisoftenusedasajustificationforunethicalbehavior.20

Whenemployeesperceiveinequity,theyaremotivatedtoreduceitbydecreasinginputorincreasingoutcomes.Acomparisonwithrelevantothersleadstooneofthreeconclusions,whichcancauseproblems.Theemployeeiseitherunderrewarded,overrewarded,orequitablyrewarded.21Whenemployeesperceivethattheyareunderrewarded,theymaytrytoreducetheinequitybyincreasingoutcomes(e.g.,requestingaraiseorcommittingtheft),decreasinginputs(doinglesswork,beingabsent,takinglongbreaks,etc.),or

rationalizing(findingalogicalexplanationfortheinequity).Whenmostemployeesperceivethattheyareoverrewardedtheyrationalizeitinsomewayandacceptit.Whenemployeesperceivethattheyareequitablyrewarded,theyaremotivatedtocontinuetoputforththesameeffortfortheorganizationsolongastheyarecontentthatinputsandoutcomesareinbalance.22

Rememberthis:Peoplearegenerallynotreallymotivatedtoworkharderbyequity;rather,theyaredemotivatedifitdoesn’texist.SoHRmanagersneedtounderstandthatpeoplewillbedemotivatediftheyfeel(perceive)thattheyarenotbeingtreatedfairly,especiallyregardingcompensation.23Asaresult,wehavetousethisinformationwhenwebegintostructureourcompensationplan.Weneedto“buildin”andadvertiseequitytominimizetheproblemsassociatedwithequitytheory.

SHRMK:A7

InternalAlignmentStrategies

SHRMK:A8

ExternalCompetitivenessStrategies

EquitytheoryTheorythatemployeesaremotivatedwhentheratiooftheirperceivedoutcomestoinputsisatleastroughlyequaltothatofotherreferentindividuals

WORKAPPLICATION10-3Giveanexampleofhowequitytheoryhasaffectedyourmotivationorthatofsomeoneyouworkwithorhaveworkedwith.Besuretospecifyifyouwereunderrewarded,overrewarded,orequitablyrewarded.

OrganizationalPhilosophyInadditiontounderstandingourcompensationoptionsandhowtheymotivateemployees,weneedtoidentifywhatourcompensationphilosophywillbe.Let’sdiscusssomeofthesemajororganizationalissuesthatwewillneedtoevaluatebeforewecansetupourcompensationsystem.

AbilitytoPayProbablythefirstthingweneedisanhonestassessmentofhowmuchwecanafford,orarewillingtoafford,topayouremployees.Thismeansweneedtocompleteanassessmentofestimatedrevenuesfrombusinessoperationsanddeterminewhatpercentageofrevenuescanorshouldrealisticallygotowardcompensationcostsoverthelongterm.Why?Becauseifwehavetocutcompensation,employeesmaybelievewebrokeourpromisestothem,andthatwillmostlikelyleadtointensedemotivationandpotentiallyhighratesofturnover.24

LO10-2Identifythesevenbasicissuesthatmakeuptheorganizationalphilosophyoncompensation.

SHRMK:A10

MonitoringCompensationCosts

WhatTypesofCompensation?Wenotedearlierinthechapterthatwehavefourbasiccomponentstocompensation—basepay,wageadd-ons,incentives,andbenefits.Weneedtodeterminehowtodividethefundsavailablebetweeneachofthecomponents.

TherearesomelegalrequirementsforcertainmandatorybenefitssuchasSocialSecurity,sotheselegalrequirementshavetobedealtwith“offthetop”—theyhavetobesubtractedfromtheavailablefunds.Oncethisisdone,weneedtodeterminehowmuchdirectcompensationwillbeintheformofbasepayandhowmuchwillbeincentivepay.

Finally,weneedtoconsidervoluntarybenefits.Weneedtoanalyzecompetitionwithinthelabormarketandwhatbenefitseachofourclosecompetitorsprovidesbecausewewillmostlikelyhavetoapproximatelymatch

thebenefitsthatareprovidedbythosecompetitors.25

WORKAPPLICATION10-4Assesstheabilitytopayofanorganizationyouworkorworkedfor.Explainhowyoucameupwithyouranswer.

PayforPerformanceorPayforLongevity?Inbreakingdownbasepayversusincentives,wewillneedtolookatwhetherourorganizationisgoingtohaveaperformancephilosophyoralongevityphilosophy.Somecompaniespaypeoplemoreforlongevityorseniority,meaningaccumulatingyearsofservicewiththefirm,byprovidingpromotionsandraisesovertime(assumingthatwemeetminimalorganizationalstandards)regardlessofperformancebecausewehavebeenaloyalmemberoftheorganization.Othercompanies,however,paymoreforperformance—forcompletingcertaintasksordoingcertainthingsfasterorbetterthanaverage,notjustforbeingthereandbeingloyaltothefirm.26

WORKAPPLICATION10-5Selectajobyouhaveorhavehad.Didthefirmpayforperformanceorlongevity?Explainindetail.

Skill-BasedorCompetency-BasedPay?Ifwedecidetouseskill-basedorcompetency-basedpay,wewillpaymembersoftheworkforceforindividualskillsorcompetenciesthattheybringtowork,whetherornotthoseskillsarenecessaryfortheindividualstodotheircurrentjob.Competenciesinvolvetheindividual’slevelofknowledgeinaparticulararea,whileskillsinvolvetheabilitytoapplythatknowledgesetinthatfield.Examplesofcompetenciesincludesuchthingsasanunderstandingofnegotiationandcollaboration,orproblem-solvinganddecision-makingexpertise.Examplesofskillsrelatedtothesecompetencieswouldincludetheabilitytoactuallynegotiatecontractagreements,applyprinciplesofphysicstoanewequipmentdesign,ormakeahigh-qualitydecisionbasedongoodanalysisofasituation.Witheithermethod,wearepayingouremployeesfor

knowledge,skills,andabilitiesthattheymaynotnecessarilyeveruseintheorganization,sowehavetoaskwhetheritisvaluabletohavepeoplewiththeseextraskillsets.

At,Above,orBelowtheMarket?Thenextitemwemustdetermineiswhetherwewillpayabovemarket,atmarket,orbelowmarket.Wemightdecidetopayabovemarkettoattractbetterworkersandenhanceouremploymentbrand.Wewantgoodemployeestohaveastrongincentivetoworkforus,andonewaytoenhanceouremploymentbrandistopayabovethemarketrate.27Wealsowantbetterproductivityoutofourworkforceifwepaymoreforemployees.Butdobetterworkersgenerallyhavehigherlevelsofproductivity?Thereisevidencesupportingthatthisisthecase.Efficiencywagetheorysaysthatifacompanypayshigherwages,itcangenerallyhirebetterpeoplewhowillinturnbemoreproductive.28Becausewehavehigher-qualityemployees,wegetaproductivityincreasethatmorethanoffsetsthehighercostofemployingthem.29

Wouldwenecessarilygetlowerproductivityfromourworkforceifwepaidbelowthemarket?Ingeneral,yes,butnotalways.Ifourfirmisinanindustrywhereunemploymentishigh,itiseasytofindreplacementworkers,andifmostpositionsrequirealow-levelskillset,wemaybeabletogetawaywithpayinglessthanaverage.

HighlysuccessfulcompanieslikeGoogle,Facebook,Starbucks,andCostcopayaboveaveragetohirethebest,whereasmostcompaniesshootforaverage,andcompanieslikeWalmartandMcDonald’swithlower-skilledworkerstendtopaybelowaveragecomparedtootherindustries,butgenerallyhavetopayclosetothesamecompensationasdirectcompetitorstoattractandretainemployees.Youmayhaveheardthatrestaurantemployeesarepressingforaminimumwageof$15anhour,andthatcompaniesareturningtotechnology/machinestoreplaceemployeesthattakeordersandcollectpayment.

SHRMI:16

EmploymentBrand

WORKAPPLICATION10-6Selectajobyouhaveorhavehad.Didthefirmprovideabove-average,average,orbelow-averagecompensation?Explainhowyoucameupwithyouranswer,usingcomparisonstocompetitors.

WageCompressionWagecompressionisanotherconcerninsettingupandmaintainingapaystructure.Wagecompressionoccurswhennewemployeesrequirehigherstartingpaythanthehistoricalnorm,causingnarrowingofthepaygapbetweenexperiencedandnewemployees.30Webringworkersintotheorganizationinbothgoodeconomictimesandbad.Whentheeconomyisdoingpoorlyandwagesaredepressed,peoplewillgenerallyacceptjobsforlessthantheywouldiftheeconomyweredoingwellandhigher-wagejobswereavailable.Sinceraisesarefrequentlybasedonanemployee’sinitialsalaryorpayrate,thosewhostartatlowerpaythanothersmaystaythatwayovertime,andpayinequalityforthesameworkmayincreaseovertimeaswell.

Starbuckspaystheiremployeesaboveaveragerates.Thiscouldbetomotivateemployeestoworkharderortocreateareputationforvaluingtheiremployees.

©iStockphoto.com/AnnaBryukhanova

Wemaycreateasituationwhereworkerswithlesstimeonthejobmightbepaidnearlyasmuchas,ormorethan,employeeswhohaveworkedforusformanyyears.Thiswagecompressioncanweakenthedesiredlink

betweenpayandperformance,creatingsignificantdissatisfactiononthepartoflong-termemployeesbecauseofthepaydifferential.31Mostcompaniesandorganizationsdon’tsetouttodothis—theyjustfallintoit.32Ifweunderstandwagecompressionwhencreatingapaystructurefortheorganization,wecanavoidatleastsomeofthedissatisfactionassociatedwiththepaydifferentialsbetweenshort-termandlong-termemployees.

WagecompressionWhennewemployeesrequirehigherstartingpaythanthehistoricalnorm,causingnarrowingofthepaygapbetweenexperiencedandnewemployees

PaySecrecyRecallourdiscussionofequitytheoryearlierinthechapter.Oneofthethingssomecompaniesdotoavoidequityissuesisdemandpaysecrecy,whichmeansrequiringemployeestonotdisclosetheirpaytoanyoneelse.Butisitlegaltotellemployeesthattheycan’tdiscusstheirpaywithanyoneelse?Overthepastseveralyears,theNLRBhasconsistentlyruledthatcompaniesmaynotdisciplineworkerswhorevealinformationabouttheirpayandotherworkconditionsaslongastheworkersareparticipatingin“protected,concertedactivity.”Inaddition,PresidentObamasignedanExecutiveOrderin2014(EO13665)prohibitingpaysecrecypoliciesinfederalgovernmentcontractors,withpotentiallossofgovernmentcontractsaspunishmentforfailuretocomply.So,enforcingpaysecrecyclausesisbecomingmoredangeroustocompanies.

WORKAPPLICATION10-7Selectajobyouhaveorhavehad.Didpeopleknowhowmuchotheremployeesmade,orwastherepaysecrecy?

LegalandFairnessIssuesinCompensationThereareanumberoffederalandstatelawsthatdirectlyorindirectlyaffectpayandcompensationsystems.Virtuallyeveryequalemploymentopportunity(EEO)lawidentifiescompensationasoneoftheemploymentactionswherediscriminationisprohibitedifitisbasedonaprotectedcharacteristic.Sowehavetokeeptheselawsinmindaswesetupourpaysystem.SeeExhibit10-2foralistofsomeofthemajorEEOlawsandlegalconceptsthatcovercompensation.

FairLaborStandardsActof1938(Amended)BesidestheEqualPayActandtheotherEEOlaws,therearesomelawsthatdealspecificallywithcompensationissues.ThegrandfatheroftheselawsistheFairLaborStandardsAct(FLSA).ThemajorprovisionsoftheFLSAcoverminimumwage,overtimeissues,andchildlaborrulesformostUS-basedbusinesses.33Let’scompleteaquickreviewoftheFLSA.

Exhibit10-2MajorEEOLawsandLegalConcepts

MinimumWage.ThefirstmajorprovisionoftheFLSAconcernsthefederalminimumwage.Theminimumwageisthelowesthourlyrateofpaygenerallypermissiblebyfederallaw.Thefederalminimumwagein2015formostemployeesintheUnitedStateswas$7.25perhour.34ThisisadjustedperiodicallybyCongress,buttheFLSAsetstheminimumwageprovision.Somestatesandevencitieshavesettheminimumwagehigherthanthe

federalrate.YoumayhavenotedthatSeattle,Washington,recentlysetthecity’sminimumwageat$15perhour,andseveralotherlargecitiesaroundtheUnitedStatesareconsideringsimilarlegislation.Inaddition,asofthiswriting,theDepartmentofLaborhadrecentlyraisedtheminimumwageforfederalcontractworkersto$10.10perhour.35

LO10-3DiscussthethreemajorprovisionsoftheFLSA.

SHRMB:8

TheFairLaborStandardsActof1938(FLSA)

SHRMK:A12

MinimumWage/Overtime

WORKAPPLICATION10-8Selectajobyouhaveorhavehad.Whatistheminimumwageinyourstate?Doesthefirmpayitslowest-levelemployeesbelow,at,orabovethestateminimumwage?

ExemptorNonexempt.Doeseveryonegetpaidatleasttheminimumwagefortheirarea?Notexactly.Therearesomeexemptionstotherules.36Ifsomeoneisexempt,bythedefinitionsintheFLSA,theyareexemptfromtheminimumwagerequirement,overtimeprovisions,orchildlaborrulesorpossiblyallthree.Peoplenotmeetinganyoftherequirementsforanexemptionarecallednonexemptandmustbepaidminimumwage,overtime,etc.

Asanexample,workerswhomostpeople

knowarecommonlyexemptincluderestaurantservers.Thecurrentminimumwageforserversis$2.13perhour.37Serversnormallyexpecttogetalargeportionoftheirwagesintips.TheFLSAsaysthatwecanpaytippedemployeesaminimumof$2.13perhouraslongastheirtipsmakeupthedifference.Soifsomebodyinarestaurantworks20hoursinaweekanddoesnotmakeanaverageof$5.12anhourintips,itisillegaltopaythatperson$2.13.Therearealsootherexemptionsforindividualswhoarelive-inchildcareproviders,newspapercarriers,seasonalworkers,etc.Infact,therearehundredsofexemptions.IfyouwouldliketoreviewsomeoftheexemptionsintheFLSA,youcangototheDepartmentofLaborwebsiteathttp://www.dol.gov/elaws/esa/flsa/screen75.asp

Thereisasetofquickguidelinesthatcanbeusedtodetermineexemptandnonexemptpersonsatwork.Ifyoumakeunder$23,660,youareprettymuchguaranteedtobenonexemptundertheprovisionsoftheFLSA

asofJune2015.38“Highlycompensatedemployees”paid$100,000ormore(andatleast$455perweek)areprettymuchautomaticallyexemptfromtheminimumwageandovertimerulesiftheyregularlyperformatleastoneofthedutiesofanexemptexecutive,administrativeemployee,orprofessionalemployeeidentifiedinthestandardtestsforexemption.39Ifanindividualispaidmorethan$23,660butlessthan$100,000,thentheemployeeusuallymustmeetasetofspecific“dutiestests”inordertofallwithinanexemptioncategory(seeExhibit10-4).ThereisaproposalbytheDepartmentofLabortoincreasetheminimumforexemptworkerstoapproximately$970perweek,oraround$50,000annually,andtheamountforhighlycompensatedemployeestoroughly$122,000peryear,buttheseamountsarestillinaproposedphaseatthefederallevel.

WORKAPPLICATION10-9Giveexamplesofjobsthatareexemptandnonexempt.Besuretostatewhytheyareclassifiedassuch.

Minimumwage Thelowesthourlyrateofpaygenerallypermissiblebyfederallaw

SHRMK:A6

CompensationofSpecialGroups(e.g.,Executives,Sales,etc.)

10-2ApplyingTheConcept

EmployeeExemptionsIdentifyeachjobasgenerallybeingconsideredexemptornotfromminimumwageorovertimepay(writeaorbbeforeeachjobtype).

1. exempt2. nonexempt

_____6.Automechanic_____7.Fruitpicker_____8.Workeronaforeign-flagcruiseship_____9.Librarian____10.Taxidriver____11.Realestateagent____12.Bellpersonatahotel____13.Computerprogrammer(paidmorethan$27.63perhour)____14.Hairdresser____15.Bankteller

Overtime.Overtimeisahigherthanminimum,federallymandatedwage,requiredfornonexempt

employeesiftheyworkmorethanacertainnumberofhoursinaweek.OvertimeissetbytheFLSAas150%oftheindividual’snormalwagesforallhoursinexcessof40hoursworkedinacalendarweek.Withfewexceptions,ifanonexemptemployeeworksmorethan40hoursinaweek,thatemployeeiseligibleforovertime.

Contrarytowhatmanypeoplethink,theFLSAhasnorequirementforpayinganythingmorethantime-and-a-halfforanyovertimework.41Employersarealsonotrequiredtoprovidepaidholidays,vacation,orextrapayforworkingonweekendsoronholidaysunderfederallaw,althoughseveralstatesnowhaverulescoveringthesesituations.

SHRME:6

ComplianceWithLegalRequirements:OvertimeEligibility

WORKAPPLICATION10-10Selectajobyouhaveorhavehad.Whogetspaidovertime,why,andhowmuch?

ChildLabor.TheFLSAalsohasrulesontheuseofchildlabor,meaningworkersunder18yearsold.Ifindividualsare18orolder,wecanusetheminanynormalemploymentsituation.However,wecanonlyemploy16-and17-year-oldsinnonhazardousjobs,althoughtheirworkhoursareunrestricted,andtherearesignificantlydifferentrulesfor14-and15-year-olds.

Minorsage14and15mayworkoutsideschoolhoursfornomorethan“threehoursonaschoolday,18hoursinaschoolweek,eighthoursonanon-schoolday,and40hours

inanon-schoolweek.”42Theycan’tstartworkbefore7:00a.m.orworkafter7:00p.m.,exceptfromJune1throughLaborDay,whentheycanworkuntil9:00p.m.Jobstheycanworkarelimitedtoretail,foodservice,andgasolineserviceatestablishmentsspecificallylistedintheFLSAregulations.Employees14and15yearsoldmaynotworkovertime.Whiletherearesomeexceptionstotheserulesforbusinessessuchasfamilybusinessesorfamilyfarms,thesearethegeneralguidelinesforchildlabor.

WORKAPPLICATION10-11Selectajobyouhaveorhavehad.Doestheorganizationhirechildlabor?Ifso,why,andwhatdothechildlaborersdo?

EmployeeMisclassificationUndertheFLSA.Misclassificationofemployeesasexemptfromminimumwageorovertimeisoneofthemostcommonareaswherecompaniesgetintoserioustrouble.Justpayinganemployeea“salary”andthenworkingthatpersonforunlimitedhoursisobviouslyillegalunderthegeneralexemptionFLSArulesnotedabove.

Exhibit10-3DutiesTestsforGeneralEmployeeExemptions

Source:USDepartmentofLabor,retrievedJuly6,201540

Sowhydoesmisclassificationoccur?Obviously,companieswanttosavemoney.Manyemployersthinkthatiftheyputyouonsalary,theydon’thavetopayovertime—sotheyputyouonasalaryandworkyou70hoursperweek.Anothercompanymightsay,“Allmypeopleareprofessionals,sotheyareallexempt.”Butthisisrarelypossibleinreality,ifyoulookattheFLSArulesforexemption.BreakingFLSAlawscanresultincostlycivilpenalties,andrepeatedoffensescanevenlandyouinjail.

Overtime Ahigherthanminimum,federally

mandatedwage,requiredfornonexemptemployeesiftheyworkmorethanacertainnumberofhoursinaweek

WORKAPPLICATION10-12Selectanorganizationyouworkatorhaveworkedat.Couldcomparableworthworkatthatorganization?Whyorwhynot?

PayEquityandComparableWorthOneofthemorecontroversialissuesincompensationiscomparableworth.Comparableworthistheprinciplethatwhenjobsaredistinctlydifferentbutentailsimilarlevelsofability,responsibility,skills,andworkingconditions,theyareofequalvalueandshouldhavethesamepayscale.AccordingtotheEEOC,womenearnanaverageof77centsforeverydollarthatmenearn.43Thisisoneofthemajorreasonsthatcomparableworthcontinuestobeanissueinbothbusinessandgovernment.Whileequalpayforequalworkisthelaw(EPAof1963),comparableworthisnotcurrentlyfederallawexceptinsomeverylimitedcases.

Comparableworthdictatesthatjobswithsimilarlevelsofability,responsibility,skills,andworkingconditionsshouldofferthesamepayscale.

©iStockphoto.com/eli_asenova

Comparableworthissimply“similarpayforsimilarwork.”WhilethissoundsalmostliketheequalpayforequalworkstipulatedbytheEqualPayAct,thedoctrineofcomparableworthsaysthatifwecancompareyourjob

withthatofanotherperson,andifthetwojobsaresimilarbutnotthesame,thenweshouldpayyouasimilarwagebutnotnecessarilyexactlythesamewage.Sothisconceptismuchbroaderthanequalpay.

Aswenoted,though,thereareafewexceptionswherecomparableworthislaw.Somestateshavepassedcomparableworthlegislationthatappliestostate,county,andcityagencies.Ifindividualsareemployedbythestateoranothergovernmentagency,theyaresubjecttocomparableworthassessmenttodeterminetheirpaylevels.SomestatessuchasWashingtonandCaliforniahavealsoattemptedtopasscomparableworthlawsforbusinesses,buttheyhavenotsucceededyet,atleastpartiallybecauseofthemarketvaluefactorforjobs.Let’sfacemeasurement,reliability,andvalidityissues.Itisverydifficulttocompareafactoryjobtoanofficejob.Andasdiscussed,manycompaniesareworkingtogetmorewomenandminoritiesintobetterpayingjobsratherthantryingtofigurecomparableworth.

SHRMK:A13

PayDiscriminationandDissimilarJobs

SHRME:6

ComplianceWithLegalRequirements:EqualPayandComparableWorth

OtherLegalIssuesAnumberofotherfederallawsplacecontrolsonpayandbenefits.RecallfromChapter9thattheNationalLaborRelationsAct(NLRA)allowscollectivebargainingonthepartofworkerswhojoinaunion.SincetheNLRAallowsemployeestobargaincollectivelywiththeiremployersforwages,benefits,andworkingconditions,inlimitedcasestheworkerscanagreetoaworkweekthatislongerthan40hours.Thewagespaidmustbesignificantlyhigherthantheminimumwage,andotherconditionsapply,butitispossibleforthecollectivebargainingunittoagreetomorethana40-hourworkweek.44Someunioncontractsalsorequiremandatoryovertimewithpay.

Mandatoryemployeepensionandbenefitslegislationalsoincludesthefollowing:

SocialSecurity

Workers’compensationUnemploymentinsuranceFamilyandMedicalLeaveAct(FMLA)PatientProtectionandAffordableCareAct(ACA)EmployeeRetirementIncomeSecurityAct(ERISA—mandatoryforemployerswhoofferpensionplans)HealthInsurancePortabilityandAccountabilityAct(HIPAA—mandatoryforemployerswhoofferhealthinsurance)

WewilldiscusseachoftheselawsfurtherinChapter11.

SHRMK:A9

LegalConstraintsonPayIssues

SHRMK:A11

UnionRoleinWageandSalaryAdministration

JobEvaluationDecidinghowmucheachjobisworthinacompanyisdifficult.Therearetwoapproachestothis—internalandexternal—thoughtheymaybeusedtogether.Firstwediscusstheexternalmethod,followedbythreeinternalmethods.

ExternalMethodAnexternalapproachinvolvesfindingoutwhatotherorganizationspayforthesameorsimilarjobsthroughavailablepaysurveys,andsettingpaylevelsbasedonmarketpricing.Thevastmajorityoffirmsusethisexternalapproachtoidentifyingpaylevels.45Ontheotherhand,aninternalapproachusesjobevaluation.Jobevaluationistheprocessofdeterminingtheworthofeachpositionrelativetotheotherpositionswithintheorganization.Organizationscommonlygroupjobsintopaylevelsorgrades,andthehigherthegradeofthejob,thehigherthepay.Acommonexampleofthistypeofgroupingisthefederalgovernment’sGSratings.

Howdoweaccomplishajobevaluation?Thereareseveralways,butmethodsusuallyinvolverankingjobs,orassigningpointstoactivitiesthatoccurwithinajobandtotalingthepointsforthejob.Oncethisisdone,we

canplacethejobinahierarchy,calledajobstructure,andcreateourpaygrades.Let’sdiscusssomeofthemorepopularjobevaluationmethods.

LO10-4Namethethreetypesofjobevaluationdiscussedinthetextanddiscusswhethertheyaremoreobjectiveorsubjectiveinform.

SHRME:2

JobEvaluationandCompensation(Grades,PaySurveys,andPaySetting)

SHRMK:A4

RoleofJobAnalysis/JobDesign/JobDescriptionsinDeterminingCompensation

JobevaluationTheprocessofdeterminingtheworthofeachpositionrelativetotheotherpositionswithintheorganization

JobRankingMethodJobrankingissimplytheprocessofputtingjobsinorderfromlowesttohighest,intermsofvaluetothecompany.Whendoingjobranking,weutilizethejobdescriptionsthatwediscussedinChapter4toidentifythefactorsineachjobandthenrankthosejobsbasedontheircontentandcomplexity.Weusuallydojobrankingwithoutassigningpointstodifferentjobs.SowemightstartatthetopoftheorganizationwiththeCEOasthehighest-rankingpersonandthenworkallthewaydowntothelowest-skilledhousekeepingjob.

Butifyoulookatthismethodforasecond,youwillseethatsomebodyhastodecidethevalueofeachjobanddosowithoutanyquantitativefactors.Therefore,thisdeterminationrequiresjudgmentandishighlysubjective.Thismeansitisdifficulttodefendifwehavetodosoincourt.

Point-FactorMethodAsecondtypeofjobevaluationispoint-factormethods,whichattempttobecompletelyobjectiveinform.Theybreakajobdownintocomponentslikeparticularskillsorabilities,andthentheyassignanumberofpointstoeachcomponentbasedonitsdifficulty.Thesecomponentsareusuallyreferredtoascompensablefactors.

Manyofthecompensablefactorswillbecommonamonganumberofdifferentjobs,sooncewehaveidentifiedthenumberofpointsthefactorisworth,wecanthentransferthatsamevaluetoallotherjobswherethefactorispresent.Thevalueofthepoint-factorjobevaluationmethodisthatwecandifferentiatejobsbasedonthedifficultyorintensityofeachfactor,soitbecomeseasiertodeterminethetotalvalueofthejobinaquantitativeform.

FactorComparisonMethodThefactorcomparisonmethodcombinesthejobrankingandpoint-factormethodstoprovideamorethoroughformofjobevaluation.46Thismodelissomewhatsimilartothepoint-factormethodinthatitassignspointstocompensablefactors.However,thefactorcomparisonmethodfirstidentifiesagroupofbenchmarkjobs—positionsthatareidentifiedandevaluatedinalargenumberoforganizationsandthatcangenerallybefoundinmostpaysurveys.

Examplesofbenchmarkjobsinclude“TrainingSpecialistI,”“AccountantII,”“LendingOfficerI,”or“HotelRegistrationClerk.”Thesebenchmarkjobsarethenanalyzedinsomedetailbasedontheircompensablefactors.Wethenrankthebenchmarkjobsinorder,andwefinallycompareallotherjobsintheorganizationtothebenchmarkjobstodeterminewhereeach

onefitsintherankings.Hereagain,theprimarymethodofdeterminingthemonetaryvalueofajobisthroughtheanalysisofthecompensablefactors.

WORKAPPLICATION10-13Selectanorganization.Identifyanddescribewhichofthefourjobevaluationmethodsareusedinthatorganizationtodeterminepay.

10-1Ethicaldilemma:whatwouldyoudo?

ExecutiveCompensationIn2013,theCEO-to-workerpayratiowas331:1andtheCEO-to-minimum-wage-workerpayratiowas774:1.Oracle’sCEOmadeanestimated$189,000perhourinoneyear.Aminimumwagefull-timeemployeeatWalmartwouldhavetowork1,372hourstoearnasmuchastheWalmartCEOmakesinonehour.Somesaytopexecutivesarebeingoverpaid.Fortune500CEOsallmakemillions.

However,noteveryoneagrees.Incapitalistcountries,talentedCEOs,likeinprosports,areentitledtofetchtheirprice.Topexecutivesshouldbepaidmultimillion-dollarcompensationpackages;afterall,ifitweren’tforeffectiveCEOs,companieswouldnotbemakingthemillionsofdollarsofprofitstheymakeeachyear.CEOsdeserveapieceofthepietheyhelpcreate.

1. Doexecutivesdeservetomake300timesmorethantheaverageworker?

2. Isitethicalformanagerstotakelargepayincreaseswhenlayingoffemployees?

3. Isitethicalformanagerstogetpayraiseswhentheircompanieslosemoney?

4. Arecompaniesbeingsociallyresponsiblewhenpayingexecutivespremiumcompensation?

Sources:InformationtakenfromtheAFL-CIO’swebsiteathttp://www.aflcio.org/corporatewatch/paywatch/pay/index.cfmaccessedMarch26,2015,2013;R.Lowenstein,“IsAnyCEOWorth$189,000perhour?”BusinessWeek(February20–26,2012),8–9;R.FismanandT.Sullivan,“InDefenseoftheCEO,”WallStreetJournal(January12–13,2013),C1–C2;E.D.SmithandP.Kuntz,“SomeCEOsaremoreequalthanothers,”BusinessWeek(May6–12,2013),70–73.

10-3ApplyingTheConcept

JobEvaluationReviewthelistofjobevaluationmethodsandthenwritethelettercorrespondingtoeachmethodbeforeeachstatementbelow.

1. external2. jobranking3. point-factor4. factorcomparison

____16.IusetwomethodstogethertodeterminehowmuchtopayeachpositionbecauseI’manHRprofessional.____17.Ilookatthejobanddeterminethespecificskillsneededtodothejob,andthenIaddupthetotalpointvalueoftheskillstosetthepay.____18.Tofigureouthowmuchtopaythedataentryperson,I’mcheckingtheSHRMdata.____19.Iplacedallthejobsinrankorder,fromtheonethatwasworththemosttotheonethatwasworththeleast,inordertodeterminehowmuchtopayforeachposition.____20.Allofthecompaniesinourindustrypayessentiallythesamehourlywage.

DevelopingaPaySystemWell,wehavefinallygottentothepointwherewecanstarttodevelopournewpaystructure.Remember,though,allofthethingsthatwehadtoreviewanddecideonfirst.TakealooknowatExhibit10-4toseehoweachofthoseitemscomestogethertoallowustocreateapaystructureandindividualpayratesforeachjob.

JobStructureandPayLevelsApaystructureisahierarchyofjobsandtheirratesofpaywithintheorganization.47Itallowsustoidentifywhatthepayrangeisforeachjob.Oncewehavecompletedtheprocessofcreatingapaystructure,wewillhavethepayrangeforeveryjobinthehierarchy.Fromthat,managerscandetermineindividualcompensationlevelsbasedontheemployee’sperformance,seniority,skills,andanyothersignificantfactors.

Apaystructureiscomposedofbothajobstructureandpaylevels.48Thejobstructureiswhatgivesusourjobhierarchy.Aswenotedinthejobevaluationsectionofthischapter,thejobstructureisthestackingupofthejobsintheorganization,fromthelowesttothehighestlevel.Eachofthejobswithinthejobstructurewillendupataparticularpaylevel.Ontheotherhand,apaylevel(frequentlycalledapaygrade)canbemadeupofmany

differentjobs,andeachpaylevelhasamaximumpayrateandaminimumpayrate.

Exhibit10-4CreationofaPayStructureandIndividualPayRates

CreationofPayLevels.

Toestablishpaylevelsanddeterminethemaximumandminimumpayratesparticularjobs,wewillhavetolookatsomemarketfactors.Welookatproductmarketcompetitionandlabormarketcompetitionbecauseifwedon’tpayattentiontoexternalequityorfairness,wearegoingtohavetroublefillingmanyofourjobs.

LO10-5Explaintheconceptofapaystructure.

SHRMK:A1

DevelopmentofaBasePaySystem

Paystructure Ahierarchyofjobsandtheirratesofpaywithintheorganization

SHRMK:A2

DevelopingPayLevels

ProductMarketCompetitionandLaborMarketCompetition.Tosettheminimumvalueforaparticularpaylevel,wehavetolookattheapplicablelabormarketcompetition,meaninglaborsupplyversusdemandforlabor.Ifwegraphcompensationforagiventypeofworkversusthenumberofworkersinthelabormarketwhocandothattypeofwork,theplacewherethetwolinescrossistheaveragepayforthatwork.PerExhibit10-5,whenthesupplyoflaborequalsthedemandforthatlaborintheworkforce,wehaveequilibrium.Themarketwillpayaboutwhattheworkersdemandtobe

paidorworkerswhohavethenecessaryskillswon’tbewillingtofillthejob.

Whathappenswhentherearemoreworkersavailablethanjobs?Themarketcangetsomeofthemtoworkforlessthanthenormalrate(wherethelinescross)becausethoseworkersneedtoworkandearnaliving.Sotheaveragecompensationwillmostlikelygodownbecausewewillhaveanoversupplysituation.Conversely,ifwehavemorejobsavailablethanwehaveworkers,wewillusuallyhavetopaymoretoattractthelimitednumberofworkerswiththeskillsetsthatwerequire.Ineithercase,labormarketcompetitionwillsettheminimumpaythataworkerwillrequireinordertocometoworkforus—butitcanbeamovingtargetthatwehavetotrack.

Exhibit10-5SupplyandDemandCurve

Ontheotherhand,howdowedeterminethetopofthepaylevel?Wehavetolookatsomethingcalledproductmarketcompetition.Thisisbasicallyafunctionofthevalueoftheproductorservicethatweselltothecustomer.49Anexamplewillhelpmakeitclear.Let’ssaywemanufactureutilitytrailers(seeExhibit10-6).Thepublicwillpayabout$500forour5-by8-footutilitytrailers.Tomaketheproblemsimple,wewillpretendthatweonlyhaveacoupleofcomponentsthatgointomakingthattrailer:laborandmaterials.Let’sassumethatallofthematerialsaregoingtocost$250.

Whatdowehaveleftforlabor?Dowehave$250?No!Wealsohavesomeotherindirectcostslikeoverhead,don’twe?Andwewouldliketomakeaprofit,right?Soifweestimateallofourothercostsat$50,wenowhave$200left.Wecanpaylabor$200ifweonlywanttobreakeven.However,ifwewanttomakeanymoney,wehavetopaylessthan$200forlabor.Assumethatourpersonwhomakesthetrailermakes$20perhourandittakesthem8hourstobuildatrailer—$160forthe8hoursoflaborcosts.Sowehavea$40profitleft,orabout8%before-taxprofit.

Yourassemblercomestoyouandsays,“Boss,Ineedaraise.”Whatdoyoujustabouthavetotelltheemployee?“Wecan’tpayyoumore.”Ifourtrailerispricedat$800andacompetitor ’straileris$500,almosteveryonewillbuythecompetitor ’strailer.Wecan’tchargemuchmorethanthenormalrateforaproductorservice.Thelaborisonlyworthsomuchmoney,becausethesalepriceofthegoodorservicehastocoverthecostofthelabor.So,productmarketcompetitionsetsthe

topofthepaylevelformosttypesofjobsinthecompany.

Exhibit10-6ProductMarketCompetitionLimits

Exhibit10-7,then,showsthatwehaveamaximumandaminimumlevelofpayforaparticularclassofjobs,withlabormarketcompetitionsettingthebottomoftherangeandproductmarketcompetitionsettingthetopoftherange.Remember,though,thatthisisasimplifiedexample—theremaybeotherfactorsinvolvedaswell.

BenchmarkingPaySurveyData.

Next,welookatbenchmarksfromthepaysurveydatathatwereviewedearlierandputthosebenchmarkjobsintothepaylevelwheretheybelong(thebluedotsinExhibit10-7).Onceweplacesomebenchmarkjobsinaplotofourpaylevels,wecangetamarketpayline(sometimescalledapaycurve)—alinethatshowstheaveragepayatdifferentlevelsinaparticularindustry(seeExhibit10-8).WeusethebenchmarkstoseewhetherornotwhatwearedoingisOK.Iftherangeiscorrect,wehavesuccessfullycreatedapaylevel;ifnot,wehavetofigureoutwhatiswrongwithourrange.

Aftergoingthroughthisprocessforaparticularpaylevel,weendupwitharaterange,whichprovidesthemaximum,minimum,andmidpointofpayforacertaingroupofjobs.Oncetherangeiscreated,wecangoinandaddtotherangeanyotherjobsthatareatapproximatelythesamelevelbasedonourearlierjobevaluations.

SHRMG:11

Benchmarking

SHRMK:A14

PrevailingWage

PayStructureAllright!Nowwehaveourfirstpaylevel.Sowhatdowedonow?Westarttolaypaylevelsoutnexttoeachother,creatingapaydispersion.50Again,lookatExhibit10-8.Wetakeourfirstpaylevelandputitdown:bottom,midpoint,andtop.Thebottomoftherangeforthefirstlevelwillprobablybenearminimumwageinmostcases.Thenoursecondtierwillstart,andbeyondthatwillbethethirdandthefourth,andsoon.

Noticethattherangesoverlapeachother.Whydotheyoverlap?Takealookatthemarketpayline.Itwouldhavetogoexactlythroughthecornersofeachpaylevelifthelevelsdidn’toverlap.Thatdoesn’tgiveusmuchwiggleroomonwhichtobasepeople’spayrates,doesit?Sothemajorreasonfortheoverlapistogivethecompanysomeflexibilityineachperson’spaywithinaparticularpaylevel.

Exhibit10-7PayLevels

Exhibit10-8PayStructure

Oncewesetupourpaylevels,wecanplottheactualpayforpeopleintheorganization.TheseareindicatedinExhibit10-8asblackdots.Weidentifywheretheseactualpaylevelsfallwithinthepaystructure,andwewillsometimesseethatwehavesomeoneplottedoutsideourpaylevelranges—eithertoohighortoolow.Individualpayratesthatfall

outsidethepayrangeonthehighsidearecalledred-circlerates(reddotsinExhibit10-8),andthosethatarelowerthanthebottomofthepayrangearegreen-circlerates(greendotsinExhibit10-8).Ifwefindagreen-circlerateforanindividual,thecorrectthingtodoistoraisetheindividual’spaytoatleasttheminimumforthatpaylevel,becausewearenotpayingthemfairlyfortheirskillset.51

Butwhatshouldwedoaboutared-circlerate?Weprobablywon’tcutsomeone’spay,butwewillnotbeabletopaythemanymoreunlesstheymoveuptoahigherskilllevel,andthereforeahigherpaylevel.Forinstance,ifourassemblerismaking$24perhour,themaximumforhispaylevelis$20,buthewantsapayraiseandhasn’thadoneinseveralyears,wewillhavetotellhimno.However,wecanalsotellhimthatifheiswillingtobecomeasupervisor,hecangetthechancetoraisehispayratebecausetheskilllevelforasupervisorishigherthanthatofanassembler.

Understandingpaylevelsandpaystructure

allowsustoprovidegoodanswerstoemployeesaboutwhytheirpayissetatacertainlevel.Ifaworkerdecidestobecomeasupervisor,thatemployeeisworthmoreandwecanpaymore.Soweareabletotelltheemployee,“Thejobisn’tworthanymorethanwhatyouarebeingpaid,”insteadofsaying,“Youarenotworthanymorethanthat.”

DelayeringandBroadbanding.Atrendformanyyearsnowhasbeentolowerthenumberofpaylevelsusingoneoftwooptions—eitherdelayeringorbroadbanding.Delayeringistheprocessofchangingthecompanystructuretogetridofsomeoftheverticalhierarchy(reportinglevels)inanorganization.Ontheotherhand,broadbandingisaccomplishedbycombiningmultiplepaylevelsintoone.52Whenwelowerthenumberofpaylevelsthatwehavetodealwith,managingthepayprocessissimpler.Ittakesalongtimetocreate,maintain,andevaluate20paylevels,wheninsteadwecan

havejust5broadbands.Italsoallowsmorecapacitytorewardoutstandingperformers.Becausewehavetallerandwiderlevels,thereismorepayflexibilitywhilestayingwithintheboundariesofthepaylevel.

TakealookatwhathappenstothepaystructureinExhibit10-9whenweconvertitintoabroadbandpaystructure.Thenewbroadbandpaystructurecombinesthefirsttwopaylevels,thethirdandfourthlevel,andfinallythefifthandsixth,makingthreelevelsinsteadofsix.Thiscausesourred-andgreen-circleratestodisappear.Italsocreatesgreaterabilitytoadjustthepayofpeoplebasedontheirperformanceandability.Finally,itlowerstheadministrativeburdenofmaintainingthecompensationsystem.

Exhibit10-9BroadbandingofMultiplePayLevels

Sowhenwearedonewiththepaystructure,wewillhavecreatedthathierarchyofjobsthatwementionedearlier—fromlowesttohighest.Andasyouhaveprobablyalreadyguessed,muchofthisworkisnowdoneusingcomputers.OncetheHRIShavethenecessarydata,wecancreatemostofourpaystructureusingexistingcompanyinformation.Inmany

cases,theHRIScanidentifythemarketpaylineandprovideothercompensationinformation,too.

Raterange Themaximum,minimum,andmidpointofpayforacertaingroupofjobs

WORKAPPLICATION10-14Selectanorganization.Identifytheraterangeforacategoryofjobs.

SHRMK:A3

DeterminingPayIncreases

Delayering Theprocessofchangingthecompanystructuretogetridofsomeoftheverticalhierarchy(reportinglevels)inanorganization

Broadbanding Combiningmultiplepaylevelsintoone

10-1Selfassessment

CompensationManagementSatisfactionThisexerciseisalsoagoodreviewofthechapter,asitusesmostoftheimportantconcepts.Selectanorganizationthatyouworkorhaveworkedforandselectyourlevelofsatisfactionwitheachofthefollowingpartsofthecompensationmanagementsystem,onascaleof1to5.

_____1.Basepay_____2.Wageandsalaryadd-ons_____3.Incentivepay_____4.Benefits_____5.Meetingexpectancytheory_____6.Meetingequitytheory_____7.Whatthefirmactuallypaysbasedonitsabilitytopay_____8.Payforperformancevs.longevity_____9.Whatthefirmpaysbasedonbeingbelow,at,orabovemarket-levelpay____10.Wagecompression____11.Paysecrecy____12.MeetingtheFairLaborStandardsAct____13.Payequityandcomparableworth____14.Thesystemusedforjobevaluation____15.Jobstructure

____16.Paylevels____17.Benchmarking____18.Paystructure____19.Payraises____20.Benefitincreases____Totalthepointsandplacethescoreonthecontinuumbelow.

Thehigherthescore,thegreateryourlevelofsatisfactionwiththecompensationmanagementsystemoftheorganization.However,tomostemployees,whatreallymattersmostisanswerstoquestionsregardingtheirownpayandbenefits(compensation),andweallaremoresatisfiedwhentheseincrease.

Thinkaboutthepeopleyouworkedwithasagroup.Youcanselectthegroup’slevelofsatisfactionwitheachquestion.Wouldtheiranswersvaryfromyours?Wouldthesatisfactionlevelvarybythelevelintheorganization—amongexecutivesversusnonmanagers,bydepartment,oramongothergroupings?

TrendsandIssuesinHRMWhattrendsareweseeinginthecompensationofour21stcenturyworkforce?Onetrendisastrongshiftfrombasepaytovariablepaycomponents.Second,welookathowtechnologyisallowingustokeepbettertrackofourcompensationprograms.

Newtechnologyforanalyticprogramshelpcompaniesassesstheircompensationprograms.

©iStockphoto.com/IzabelaHabur

AShiftFromBasePaytoVariablePayAswenotedearlierinthischapter,thereappearstobeashiftawayfromallorthemajorityofanindividual’sincomebeingprovidedintheformofbasepaytowardalargerpercentageofthatincomebeingprovidedinvariableforms.Whatreasonsdocompanieshavefortheshifttowardincentivecompensation?Oneofthebiggestreasonsistolowertherisktothecompanywhenmarketsfailoreconomiesgointorecession.

Howdoesincentivecompensationdothis?Ifalargepercentageofanemployee’spaycomesfromincentivesforproductivity,thenwhendownturnsoccur,thecompanywillnothavetopayoutasmuchinoverallcompensationasisnecessaryinbettereconomicconditionssincethecompanywon’tbeproducingasmuchduringtherecession.AnillustrationofthisfactistherecentrecessionintheUnited

States(andmostoftherestoftheworld).Ina2010salarysurvey,itwasnotedthat“spendingonvariablepayasapercentageofpayrollforsalariedexemptworkerswas11.3percent,downfromarecordhighof12.0percentin2009.”However,accordingtoa2013AonHewittreport,astheeconomyrecovered,“Ninetypercentofcompaniesofferabroad-basedvariableplayplanandexpecttospend12.0percentofpayrollonvariablepayforsalariedexemptemployeesin2014.”53

Thisprovidesevidencethatwhencompaniesweresufferingfromrecession,paid-outincentivesdropped,andastheeconomyrecovered,incentivesincreased.Sotheemployees,insteadofemployers,beartheriskofvariablecompensationbasedonchangingbusinessconditions.

TheTechnologyofCompensationSincecompensationistypicallyoneofthelargestcostsinmostorganizations,managementneedstobemindfulofwhatitgetsforitsmoney.AswithsomanyotherHRpractices,weneedtolookatthingslikereturnoninvestment(ROI)fromcompensationprograms.Newanalyticalprogramsallowustoanalyzecompensationprogramsinmoredetailthanhashistoricallybeenpossible.Theseprogramsandsystemscantakedatafrommultiplesources—includingexternalpaysurveys,benchmarkjobs,governmentdatabases,andcompanysources—andprovideuswiththeabilitytomeasureandmonitororganizationalcostsandbenefits.

HRISanalyticalprogramsallowustomeasuretheeffectivenessofincentivesandcompareourcompensationinformationwithindustrymetrics.Theyalsohelpensure

compliancewithvariousstateandfederallaborlawsandwithregulationsoncompensation,benefits,andmedicalleave.Theycanloweradministrativecostsofmanagingandmaintainingcompensationprogramsandcanalsohelpcreatehigherorganizationalproductivity,whichcaninturnimproveemployeesatisfactionlevels,especiallywhenincentiveprogramsareinplacetorewardproductivityincreases.

SogivenallofthecapabilitiesofHRISprogramsincompensationmanagement,companieshavetolookveryhardatthecostsandbenefitsofthesesystems.Moreandmore,itisbecomingcriticaltohavethesetoolsavailableinordertoensurecomplianceandimproveperformance.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’ve

mastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary10-1Describeexpectancyandequitytheoriesastheyapplytocompensation.

Expectancytheory—Employeesexpecttoputforthsomeformofeffortatwork.Thiseffortisexpectedtoresultinsomelevelofperformance.Theperformancelevelisthenexpectedtoresultinsometypeofreward,andifitdoes,theemployeeexpectstoputoutmoreeffort.Therewardhastobesignificanttotheindividual,andaslongasitis,theemployeewillcontinuetoputouteffort.Soemployeeswilleitherbemotivatedbytheiroutcomes,includingcompensation,orbedemotivatedbythem.Equitytheory—peoplecomparetheirinputs(thethingstheydointheorganization)andoutcomes(the

thingsthattheyreceivefromtheorganization)tothoseofrelevantothers.Ifemployeesbelievethatthereisinequity,theywillchangetheirworkbehaviortocreateequity.Employeesmustperceivethattheyarebeingtreatedfairly,relativetoothers.Compensationisobviouslyalargepartoftheperceivedoutcomes.

10-2Identifythesevenbasicissuesthatmakeuptheorganizationalphilosophyoncompensation.1. Abilitytopay.Thisisanhonest

assessmentofhowmuchwecanafford,orarewillingtoafford,inordertocompensateouremployees.

2. Typesofcompensation.Thisreferstothemixofthefourbasiccomponentsofcompensation—basepay,wageadd-ons,incentives,andbenefits—thatweemploy.Wemustdivideavailablefundsamongthecomponents.

3. Payforperformanceorlongevity.

Willwepaypeoplebasedonorganizationalloyalty/tenure,orwillwepaybasedonperformanceintheirjobs?

4. Skillorcompetency-basedpay.5. At,above,orbelowthemarket.What

willourgeneralpaystructurelooklike,andwhy?

6. Wagecompression.Thislowersthepaydifferentialbetweenlong-termandnewlyhiredemployees.

7. Paysecrecy.Willweutilizepaysecrecyclausesinemploymentcontracts?Paysecrecymayallowustohideactualwageinequitiesfromemployees,butithasthepotentialtocreatedissatisfactionanddemotivation.

10-3DiscussthethreemajorprovisionsoftheFLSA.1. Minimumwageratesidentifythe

lowesthourlyrateofpaygenerallyallowedundertheFLSA.Therearemanyexemptions,butifapersonisnonexempt,minimumwagewill

apply.2. Overtimeratesarealsorequiredfor

personswhoarenonexempt.However,therearedifferentexemptionsforovertimethanthereareforminimumwage,soHRmanagersmustcheckthelawtodeterminewhowillhavetobepaidovertime.

3. ChildlaborrequirementswithintheFLSAidentifythejobsandallowableworkinghoursforindividualsbetween14and18yearsold.Sixteen-and17-year-oldscanonlybeemployedinnonhazardousjobs,buttheirworkhoursareunrestricted.However,14-and15-year-oldscanonlyworkoutsideschoolhours,andthejobsthattheyareallowedtodoarelimitedtoretailandotherservicepositions.Theymaynotworkovertime.

10-4Namethethreetypesofjobevaluationdiscussedinthetextanddiscusswhethertheyaremore

objectiveorsubjectiveinform.1. Thejobrankingmethodissimply

theprocessofputtingjobsinorderfromlowesttohighestorviceversa,intermsofvaluetothecompany.However,ithaslimitedusefulnessbecauseitissubjective.

2. Point-factormethods,ontheotherhand,attempttobecompletelyobjectiveinform.Theybreakajobdownintocomponentskillsorabilities,knownasfactors,andthenapplypointstoeachfactorbasedonitsdifficulty.

3. Thefactorcomparisonmethodcombinestherankingandpoint-factormethodstoprovideamorethoroughformofjobevaluation.Itidentifiesbenchmarkjobsandthenanalyzesandrank-ordersthem.Wethencompareallotherjobsintheorganizationtothebenchmarkjobstodeterminewhereeachonefitsintherankings.

10-5Explaintheconceptofapay

structure.Apaystructureiscreatedbylayingoutourpaylevels,onenexttotheother.Theentiregroupofpaylevelscreatesthepaystructure.Benchmarkjobscanbeplottedonthepaystructuretogetamarketpayline—alinethatshowstheaveragepayatdifferentlevelsinaparticularindustry.Oncepaylevelsareset,wecanactuallyplotemployeeratesofpayonthepaystructuretoseeifanyareplottedoutsideourpaylevelranges,eitherhighorlow.Individualswhofalloutsideourpayrangetothehighsidearepaidred-circlerates,andthosewhofalloutsidelowarepaidgreen-circlerates.Eachoftheseratesshouldbereviewedandcorrectedifnecessary.

10-6DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthis

chapter ’skeyterms.

KeyTermsbroadbanding,265compensation,247compensationsystem,248delayering,265equitytheory,250expectancytheory,249jobevaluation,258minimumwage,254overtime,255paystructure,260raterange,263wagecompression,252

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. ________isthetotalofanemployee’spayandbenefits.

2. ________includesanythingthatanemployeemayvalueanddesireandthattheemployeriswillingandabletoofferinexchange.

3. ________proposesthatemployeesaremotivatedwhentheybelievetheycanaccomplishataskandtherewardsfordoingsoareworththeeffort.

4. ________proposesthatemployeesaremotivatedwhentheratiooftheirperceivedoutcomestoinputsisatleastroughlyequaltothatofotherreferentindividuals.

5. ________occurswhennewemployeesrequirehigherstartingpaythanthehistoricalnorm,causingnarrowingof

thepaygapbetweenexperiencedandnewemployees.

6. ________isthelowesthourlyrateofpaygenerallypermissiblebyfederallaw.

7. ________isahigherthanminimum,federallymandatedwage,requiredfornonexemptemployeesiftheyworkmorethanacertainnumberofhoursinaweek.

8. ________istheprocessofdeterminingtheworthofeachpositionrelativetotheotherpositionswithintheorganization.

9. ________isahierarchyofjobsandtheirratesofpaywithintheorganization.

10. ________providesthemaximum,minimum,andmidpointofpayforacertaingroupofjobs.

11. ________istheprocessofchangingthecompanystructuretogetridofsomeoftheverticalhierarchy(reportinglevels)inanorganization.

12. ________isaccomplishedbycombiningmultiplepaylevelsintoone.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Doyoubelieveitisalwaysnecessarytoprovideincentivesaspartofapaystructure?Whyorwhynot?

2. AstheHRmanager,wouldyoupaymoreattentiontoexpectancytheoryorequitytheoryindesigningyourcompensationsystem?Why?

3. Ifyourcompanyhadpromisedanincentiveprogramrightbeforetherecessionof2007–2008,andiftherecessionmadeitimpossibleforthecompanytopayemployeeswhattheyhadbeenpromised,thenhowwouldyouexplainthistoyourworkforcetokeepthemmotivated?

4. Wouldyouratherhavehigherpayorbetterbenefits?Why?

5. Wouldyoueverconsiderpayingbelowthemarketrateforemployeesifyouhadcontrolofwages?Whyorwhynot?

6. HowwouldyouapproachaCEOorcompanypresidentwhoinsistedonclassifyingnonexemptworkersasexempt?WhatwouldyousaytogettheCEOtostopthispractice?

7. Doyouthinkthatcomparableworthshouldbemadefederallaw?Whyorwhynot?

8. IfyouweretheleadHRmanagerinyourcompany,wouldyoueverconsidersettingpaylevelsbyjustusingexternalpaysurveysandnointernalanalysis?Whataretheadvantagesanddisadvantagesofthis?

9. AstheheadofHR,wouldyouratherchangenarrowpaylevelsintobroadbands?Canyouthinkofanydisadvantagestodoingso?

Case10-1EmployeeRed-LiningatCVS:TheHaveandtheHaveNotCVSCaremarkisthesecond-largestdrugstorechainintheUnitedStates(justbehindWalmart).Itemploys286,000peoplein45statesundertheCVSlogo,anditoperatesmorethan7,600drugstores.In2013,CVS’ssalesexceeded$126billion,butitsnetincomewasonlyaround$4.6billion,forabouta3.6%profit—aboutthemedianprofitfortheindustry.54

Aswouldanyotherpubliccorporation,CVSwantedtoincreaseitsprofitabilityforstockholdersandregainitspositionastheindustryleader.Onemethodofincreasingprofitsiscuttingoperationalcosts,andCVSdecidedtodojustthat.Itadjustedemployeeannualpayraisesbyplacinganearningsceilingonsalaries,andanyemployeesearningthehighesthourlywageintheirjobclassificationbecameineligibleforaraise.

Besidestheobviouscostsavings,whyputa“redline”onwages?Themaingoalwastoadjustthehighest-paidemployees’compensationtothejobmarketaverageand,withthesesavings,provideraisestotheemployeeswhowerepaidbelowthataverage.ThephilosophywasthatasaCVSemployee,oneshouldexpectlowerraises(ornoneatall)ifoneisearningmuchmorethanone’s

colleagues.Soonceanemployeereachedtheredline,thatpersonreceivednoadditionalcompensation.

CVSexecutivesknewthatthenewcompensationpolicywouldnegativelyimpactsomeoftheirmostloyalemployees,yettheexecutivesfeltthattheyneededtodrawalineonsalariesinordertomakethemostoflimitedcompensationdollars.Whattheydidnotfigurewasthatthepolicymostlyhurttheemployeeswhohadbeenworkingtherethelongest.Worse,thesesameemployeesfearedretaliationiftheypubliclycriticizedthenewpolicy.Howwoulditlooktotheotherlower-paidemployees(andworse,thepublicatlarge)ifthehighest-paidemployeescomplainedabouttheirlackofraises?

Nationwide,theminimumwageissetat$7.25perhour,butthewagemanagementguidelinesofCVSaredifferentinmostregionsdependingontheminimumwageineachstate.Lowest-rankedemployeeswithexceptionalskillswouldreceivea4 .75%raiseonanannualbasisiftheyweremakingminimumwage.However,ifanemployeewithexceptionalskillsinthesamepositionwasalreadyearning$12.50anhour,thatpersonwouldnotreceivearaise,havingalreadycrossedtheredline.55Withemploymentatwill,thepossibilityofbeinglaidoff,andatoughjobmarket,wherewouldtheseemployeesgetsuchhigh-payingjobsintheretailandserviceindustries?Itwasbetterforthemtokeepquietabouttheirpayandstayinacompanythattheywerecomfortablewith.56

Wageratesdependonemployees’rank,anditisno

secretthattheCEOisgoingtobepaidmuchmorethanthecompany’saverageworker.ThisisbecausetheCEOjobrequiresamoredemandingsetofskillscomparedtotheaveragestorejob,andtheworkloadofaCEOismuchmoredemanding.Butiftherangeofcompensationissogreat,itmaydiscourageemployeeswhoarepaidless.57

Someethicalandlegalconcernsarosewhenthesesamered-linedemployeesfoundoutthatthisnewcompensationpolicydidnotseemtoapplytothetop-levelexecutives.TheCEOofCVSwaspaidatotalof$23millionin2013,includingbonusesandadditionalperks.Heearneda26%raisefromthepreviousyear,andthatwasalmost800timesmorethanthemedianincomeofaCVSemployee.Thered-linedemployeessawaninequitablepaysituation,withtherichgettingricherbecausetheywereallowedaraisewhilethein-storeemployeeshadacapontheirincome.TheCEO’ssalarypackagewastiedtothecompany’sperformance,andaccordingtoCVSspokespersonCarolynCastel,“Lastyear,CVSCaremarkhadanoutstandingyearandcontinuedtodeliverstrongfinancialresultsandenhancedreturnstoshareholdersinachallengingeconomicenvironment,performingfavorablyagainstourpeergroupinseveralkeyareas.”58

Questions1. Describethepaystructureandcompensation

systemforaCVSstoreemployee.HowmightthispaystructurebedifferentfromthatoftheCEOofthefirm?

2. DefinetheraterangeofCVSemployees.Howwouldyouchangethepaystructuretoencourageperformance,especiallyforred-linedemployees?

3. Intermsofexpectancyandequitytheories,describehowthered-linepolicywillaffectthemotivationofemployees.

4. Inlightofthered-linepolicy,whatwasCVS’sphilosophytowardemployeeperformance,compensation,andlongevity?

5. IfyouwereCVS’sCEO,knowingthatyouhavetoreducecostsandbalanceemployeewages,whatothermeasureswouldyoutakebesidesfreezingraisesforthehighest-paidemployees?

6. WhywouldthefirmimplementanHRpolicythatitknewwouldnegativelyaffectitshighest-paidemployees?Diditperhapshaveahiddenagenda?

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,SchoolofBusinessBrooklynCampus,LongIslandUniversity

SKILLBUILDER10-1JobEvaluation

ObjectiveTodevelopabetterunderstandingofthejobevaluationprocess

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Technical,conceptualanddesign,andbusinessskills

2. SHRM2013CurriculumGuidebook—K:Totalrewards

AssignmentStep1.Youdecidedtoopenarestaurantandpub,andyouhavefivejobcategories:

Owner/manager:Youaretheowner,performingallthemanagementfunctionsandalsogreetingandseatingpeopleasyouoverseeallactivities.Waitstaff:Theytakefoodordersandbringfoodtocustomers.Cook:Theypreparethefood.Helpers:Theybustables,washdishes,helpinfoodpreparation,andbringfoodtosomecustomers.Bartenders:Theymakethedrinksforboththediningandbarareas.

Rankthejobsfrom1to5,with5beingthehighest-rankingjoband1beingthelowest.

Step2.Usingthetablebelow,rankeachjobforeachofthefivefactorscommonlyusedinjobevaluations.

Step3.Thefivefactorsarecommonlyweightedsincesomearemoreimportantthanothers.

1. Intheabovetableinthebottomrow—FactorRank—nowrankthefivefactorsfrom1to5,with5beingthemostimportantand1beingtheleastimportant.

2. Thefivefactorscanalsobeweightedaspercentages.Forexample,basedonatotalof100%,thehighest-ratedfactorcouldbeweightedat40%,thenthenext-highestcouldberatedat30%,followedby20%,andtheothertwoat5%each.Soalsoincludeyourpercentage-basedweightsforeachfactor,likeintheexample.

Peoplegenerallywillnotagreeonalltherankings,andthatisamajorreasonwhythereisvirtuallyalwaysacommitteethatconductsjobevaluations.

Step4(optionalduetodifficulty).Assignpayvaluestoeachofthefivefactorsandweightthemtodeterminepaylevelsforeachjob.

ApplyItWhatdidIlearnfromthisexperience?HowwillIusethisknowledgeinthefuture?

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SKILLBUILDER10-2ProductMarketCompetitionLimits

ObjectiveTodevelopabetterunderstandingofproductmarketcompetitionlimits

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Technicalandbusinessskills

2. SHRM2013CurriculumGuidebook—K:Totalrewards

AssignmentCompletethemathproblemsbelow:

_____1.Yourproductsellsfor$1,000.Materialscost$300,laborcosts$300,andoverheadcosts$200.Whatisyourprofitindollarsandasapercentage?_____2.Yourproductsellsfor$750.Materialscost$250,laborcosts$300,andoverheadcosts$150.Whatistheprofitindollarsandasapercentage?_____3.Yourproductsellsfor$1,000.Materialscost$300andoverheadcosts$200.Whatisthemaximumamountyoucanpaylabortomakea$100profitwitha10%return?_____4.Yourproductsellsfor$750.Materialscost$250andoverheadcosts$150.Whatisthemaximumamountyoucanpaylabortomakea10%profitreturnonthesalesprice?_____5.Yourproductsellsfor$800.Materialscost$300andoverheadcosts$200.Whatisthemaximumamountyoucanpaylabortomakea15%profitreturnonthesalesprice?

11EmployeeIncentivesandBenefits

©iStockphoto.com/Georgijevic

ChapterOutlineTheValueofIncentivesandBenefitsIndividualIncentives

AdvantagesandDisadvantagesofIndividualIncentivesIndividualIncentiveOptions

GroupIncentivesAdvantagesandDisadvantagesofGroupIncentivesGroupIncentiveOptions

ExecutiveCompensationTheDodd-FrankWallStreetReformandConsumerProtectionActof2010ExecutiveIncentives

StatutoryBenefitsSocialSecurityandMedicareWorkers’CompensationUnemploymentInsuranceFamilyandMedicalLeaveActof1993ThePatientProtectionand

AffordableCareActof2010StatutoryRequirementsWhenProvidingCertainVoluntaryBenefitsVoluntaryBenefits

PaidTimeOffGroupHealthInsuranceRetirementBenefitsOtherEmployeeBenefits

FlexibleBenefit(Cafeteria)PlansTrendsandIssuesinHRM

IncentivestoActUnethically?PersonalizationofHealthCare

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

11-1Identifytheadvantagesanddisadvantagesofindividualincentives.PAGE27511-2Identifytheadvantagesanddisadvantagesofgroupincentives.PAGE27811-3Discusstheissueofwhetherornotexecutivecompensationistoohigh.PAGE29111-4Summarizethemajorstatutorybenefitsrequiredbyfederallaw.PAGE28311-5Namethemainstatutoryrequirementsthatmustbefollowediforganizationschoosetoprovidehealthcareorretirementplansfortheiremployees.PAGE28511-6Describethemaincategoriesofvoluntarybenefitsavailabletoorganizations.PAGE28711-7Listtheorganization’soptionswhenprovidingflexiblebenefitplanstoemployees.PAGE29111-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE296

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindyreflects:Whethertheeconomyisupordown,yourstaremployeescanalwaysfindanotherjob.ThiskeepsHRdepartmentslookingforwaystokeeptheirbestemployeesmotivatedandengagedintheirpositions.

OneofCindy’scolleagues,Terry,isabigadvocateofincentivepayandgoodbenefitspackages.“Weneedtolookatwaystorewardourexceptionalemployeesnowwithoutexpandingourbaselaborcostsintofutureyears,”Terrysaidatoneoftheirstrategymeetings.“I’veseenevidencetosupportthecasethatemployeesworkharderiftheyknowtheyhaveafairchanceofbeingrewardedforthatextraeffort.”

“Well,I’veheardlotsofcomplaintsagainstincentivepay,”saysBill,anothermemberoftheirdepartment.“I’mnotsurewewanttoopenourcompensationprogramtothoseissues.”

Arestrongincentiveandbenefitspackagesagoodidea?TheprosandconsplusthemethodsofimplementationaredetailedforyourconsiderationinChapter11.

TheValueofIncentivesandBenefitsWediscussedthebasicpaysystemandhowourcorewagesorsalariesaresetinChapter10,sonowwediscussincentivesandbenefits.Let’sbeginwithareviewofvariablepay,alsoknownasincentives.Variablepayiscompensationthatdependsonsomemeasureofindividualorgroupperformanceorresultsinordertobeawarded.Therearetwobasicchoicesinincentivepay—individualorgroup-basedincentives.

LO11-1Identifytheadvantagesanddisadvantagesofindividualincentives.

IndividualIncentivesIndividualincentivesreinforceperformanceofapersonwitharewardthatissignificanttothatperson.Theyarebasedonoperantconditioningandreinforcementtheoryandaredesignedtomotivatetheindividualemployeetodomorethantheminimumwhileonthejob.Wewanttobeabletorewardourbestemployeessothattheyfeelthattheyarebeingrecognized,1andindividualincentivesallowustodothat.

AdvantagesandDisadvantagesofIndividualIncentivesTakealookatExhibit11-1forabrieflistofadvantagesanddisadvantagesofindividualincentiveplans.

VariablepayCompensationthatdependsonsomemeasureofindividualorgroupperformanceorresultsinordertobeawarded

WORKAPPLICATION11-1Selectajob.Assesstheadvantagesanddisadvantagesofofferingincentivesforyourjobandwhetherthecriteriaaremetforindividualincentivestobeeffectiveatmotivatingemployees.

SHRMK:A5

PayPrograms:MeritPay,etc.

IndividualIncentiveOptionsTherearefivecommonoptionsforindividualincentiveprograms.Let’stakeabrieflooknowateachoftheseindividualincentiveoptions.

Bonus.Abonusisalumpsumpayment,typicallygiventoanindividualattheendofatimeperiod.2Abonusdoesnotcarryoverfromoneperiodtothenext.Howwouldabonusprogramhavetobedesignedinordertomotivateincreasedperformance?Wewouldneedtoidentifyspecificandmeasurablegoalsthattheindividualcouldaffect.3Iftheythenreachedthemeasurablegoal,theywouldreceivethebonus.

WORKAPPLICATION11-2Selectajob.Doestheorganizationofferbonuses?Ifnot,howcoulditofferbonusestoeffectivelymotivateemployees?Assesstheadvantagesanddisadvantagesofofferingbonusesatyourorganization.Shoulditofferbonuses?

Commissions.Commissionsarewell-knownincentivetoolsforsalesprofessionals.Acommissionisapaymenttypicallyprovidedtoasalespersonforsellinganitemtoacustomerandisusuallypaidasapercentageofthepriceofanitemthatissold.Ifyousella$100productandyouareona10%commission,youwouldreceive$10forthatsale.Salespeoplesometimesworkonstraightcommission,wheretheyonlygetpaidwhentheysellanitem,ortheycanbepaidasalaryplus

commission.

Exhibit11-1IndividualIncentivePlanAdvantagesandDisadvantages

WORKAPPLICATION11-3Selectajob.Doestheorganizationoffercommissions?Ifnot,howcoulditoffercommissionstoeffectivelymotivateemployees?Assesstheadvantagesanddisadvantagesofofferingcommissionsatyourorganization.Shoulditoffercommissions?

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

B.EmploymentLaw(required)7.EmployerRetirementIncomeSecurityActof1974(ERISA)9.FamilyandMedicalLeaveActof1993(FMLA)33.COBRA:ConsolidatedOmnibusBudgetReconciliationActof198534.AmericanRecoveryandReinvestmentActof2009(ARRA)37.HealthInsurancePortabilityandAccountabilityAct(HIPAA)of1996

K.TotalRewards(required)A.Compensation

5.Payprograms:Meritpay,pay-for-performance,incentives/bonuses,profitsharing,groupincentives/gainsharing,balancedscorecard15.Motivationtheories:Equitytheory,reinforcementtheory,agencytheory

B.EmployeeBenefits1.Statutoryvs.voluntarybenefits2.Typesofretirementplans(defined

benefit,definedcontribution,hybridplans)3.Regulationofretirementplans(FLSA,ERISA,PensionProtectionActof2006)4.Typesofhealthcareplans(multiplepayer/singlepayer,universalhealthcaresystems,HMOs,PPOs,fee-for-service,consumer-directed)5.Regulationofhealthinsuranceprograms(COBRA,HIPAA,HealthMaintenanceOrganizationActof1973)6.Federalinsuranceprograms(Old-Age,Survivor,andDisabilityInsurance[OASDI],Medicare)7.Disabilityinsurance8.Educationalbenefits10.Family-orientedbenefits12.Lifeinsurance15.Timeoffandotherbenefits16.UnemploymentInsurance18.Financialbenefits(gainsharing,groupincentives,teamawards,meritpay/bonuses)19.Managingemployeebenefits(costcontrol,monitoringfutureobligations,actionplanning,strategicplanning)21.Paidleaveplans22.Workers’compensation

MeritPay.Thenextincentiveoptioniscalledmeritpay.Meritpayisaprogramtorewardtopperformerswithincreasesintheirannualwagethatcarryoverfromyeartoyear.Meritpayworksasfollows:Thecompanyannouncesa“meritpool”availableforpayincreasesinagivenperiod,usuallyannually.Themeritraiseswillbegiventothetopperformersinthecompanybasedonperformanceevaluations.Frequently,individualswhoreceiveeitheroutstandingorexcellentmarkswillgetmeritincreasesabovetheaverage,whileaverageperformerswillgetalowerraiseandthosewhoreceivebelow-averagemarkswillgetnoraiseatall.

MeritpayAprogramtorewardtopperformerswithincreasesintheirannualwagethatcarryoverfromyeartoyear

11-1ApplyingTheConcept

IndividualIncentiveOptionsPlacetheletteroftheindividualincentiveonthelinenexttothescenarioillustratingit.

1. bonus2. commissions3. meritpay4. piecework5. standardhour6. nonmonetaryawards

____1.I’manautomechanicatadealership,andwehaveasetamountoftimetocompleteeachtypeofrepairwork.IcompleteajobbeforeastatedtimesothatIcangoontothenextcarandgetpaidextraforbeingfasterthantheaverageguy.____2.Ijustsoldthattop-of-the-lineBMWM3.Ican’twaittogetmypaythisweek.____3.I’mthetopproducerintheentiredepartment,soIwillgetanextraraiseforhighperformancethisyear.____4.Thebossgavemeaplaqueandcheckfor$5,000infrontoftheentirecompanyatourannualmeeting.____5.Thebossjustthankedmeforgetting

ashipmentthatwasbehindscheduleoutontimetoday.

PieceworkPlans.Pieceworkorpiece-rateplansareoneofthesimplestformsofcompensation,andtheycanactasanincentivetoproduceatahigherlevelbecausethemoreworkersproduce,themoretheygetpaid.Ina“straightpiece-rate”compensationsystem,theemployeegetspaidforevery“piece”thattheycomplete.4A“differentialpiece-rate”systemprovidestheemployeewithabasewagetocompleteacertainamountofwork,andiftheyproducemorethanthestandard,adifferentialwageispaidfortheextrapiecesproduced.

Employeespaidoncommisionarepaidbasedonhowmanysalestheymake.Thisisacommonincentivetool.

Jupiterimages/Pixland/Thinkstock

StandardHourPlans.Inastandardhourplan,eachtaskisassigneda“standard”amountofworktimeforcompletion.5Theindividualdoingthejobwillgetpaidbasedonthestandard(expected)timetocompletethejob,butgoodworkerscan

frequentlycompletetheworkinlessthanthestandardamountoftime.Iftheydo,theycangetpaidforanhourofworkwhileworkinglessthananhouroftime.

GroupIncentivesIndividualincentiveprogramsobviouslyworkwellinsomecases.However,groupincentivestendtoworkbetterinanumberofothersituations.

AdvantagesandDisadvantagesofGroupIncentivesWhataretheadvantagesanddisadvantagesofgroupincentiveplans?SeeExhibit11-2foralist.

LO11-2Identifytheadvantagesanddisadvantagesofgroupincentives.

WORKAPPLICATION11-4Selectajob.Assesstheadvantagesanddisadvantagesofofferingincentivesforyourworkgroupandwhetherthecriteriaaremetforgroupincentivestobeeffectiveatmotivatingemployees.

GroupIncentiveOptionsIndividualincentivescanworkwell,butcanweusegroupincentivestomotivatehigherlevelsofperformancefromgroups?Afterall,inmostofour21stcenturycompanies,groupsandteamsarethenorm.Let’stakealookatsomeofthemorecommongroupincentiveoptions.

Exhibit11-2GroupIncentivePlanAdvantagesandDisadvantages

ProfitSharingPlans.

Profitsharingprogramsprovideaportionofcompanyproceedsoveraspecificperiodoftime(usuallyeitherquarterlyorannually)totheemployeesofthefirmthroughabonuspayment.Theprogramsaredesignedtocauseeveryoneinthecompanytofocusontotalorganizationalprofitability.7

Onemajorissuewithprofitsharingasamotivatoristhatitisfocusedontotalorganizationalperformanceandprofitability.Iftheemployeedoesn’tknowwhattodoinordertoincreaseprofits,whatwilltheydodifferentlyintheirjob?Theansweris“absolutelynothing.”Soprofitsharinginmanycasesdoesnotprovidethecompanywiththeexpectedboostinproductivity.8

SocialloafersIndividualswhoavoidprovidingtheirmaximumeffortingroupsettingsbecauseitisdifficulttopickoutindividualperformance

WORKAPPLICATION11-5Selectajobatafor-profitcompany.Doestheorganizationofferprofitsharing?Ifnot,howcoulditofferaprofitsharingplantoeffectivelymotivateemployees?Assesstheadvantagesanddisadvantagesofofferingprofitsharingatyourcompany.Shoulditofferaprofitsharingplan?

SHRMK:B18

FinancialBenefits(Gainsharing,GroupIncentives,etc.)

11-2ApplyingTheConcept

GroupAdvantagesandDisadvantagesIdentifyeachstatementbyitsgroupadvantageordisadvantage.

Advantages

1. Promotesbetterteamwork2. Broadensindividualoutlook3. Requireslesssupervision4. Iseasiertodevelopthanindividualincentive

programs

Disadvantages

e.Socialloafingcanoccurf.Individualoutputmaybediscountedg.Outstandingperformersmayslackeneffortsh.Groupinfightingmayarise

____6.Whathappened?LatoyaandKatieusedtogetalongsowell.Nowtheyareconstantlybickering.____7.Katrina,youarenotbeingfairtotherestofusbynotdoingyourfairshareofthework.____8.Nowthatweuseateam-based

process,themanagerdoesn’tcheckuponuslikesheusedto.____9.Byassemblingtheproductasateam,weactuallyincreasedproductionby20%.___10.IknowI’mthebest,butnoneofthedepartmentmembersworkveryhard,sowhyshouldI?

GainsharingPlans.Analternativetoprofitsharingisagainsharingprogram.Gainsharingissimilartoprofitsharingbecausethe“gain”issharedwiththeemployeeswhohelpedtocreatethegain.However,gainsharingcanbeaccomplishedusinganyorganizationalfactorthatmakes,orcosts,thecompanymoneyandthatcanbeanalyzedandmodifiedforperformanceimprovement.9Someofthemorecommongainsharingoptionsareincreasedrevenues,increasedlaborproductivityorlowerlaborcosts,improvedsafety(fewerlost-timeaccidents),returnonassetsorinvestment,andincreasedcustomer

satisfaction.

EmployeeStockPlans.Therearealsostockownershipplansthatmayworkwellasgroupincentives.Thefirstisanemployeestockownershipplan(ESOP).AnESOPultimatelyallowsatleastpartofthestockinthecompanytobeearnedbytheemployeesoveraperiodoftimebasedonsomeformula.10Forexample,ifyouworkforthecompanyforayear,youmightget10sharesofstock,andforeveryadditionalyearofemployment,youwouldreceive10%morethantheyearbefore.AnESOPhasthepotentialtobeanincentivetothecompany’semployees,becausetheybecomepartownersofthefirm.

Second,stockoptionsmaybeofferedtoanemployeetoallowthemtobuyacertainnumberofsharesofstockinthecompanyataspecifiedpointinthefuture,butatapricethatissetwhentheoptionisoffered.11Theintent

hereistomotivatetheemployeestoworktoimprovethevalueofthecompanysothatwhentheoptiontobuythestockcomesupattheagreeduponfuturedate,thepriceofthestockhasincreased,givingtheemployeemorevaluethanwhattheypaidfor.

Lastly,stockpurchasingplansaresimilartostockoptions,butinsteadofgivingyoutheoptiontobuystockinthefuture,theyletqualifyingemployeesbuythestockessentiallyanytime,usuallyatadiscount.ESOPs,stockoptions,andstockpurchasinggiveemployeesownershipinthecompany,withtheintentthattheemployeeswillactmorelikeownersofthecompanythansimplyemployees.

ProfitsharingprogramsProgramsthatprovideaportionofcompanyproceedsoveraspecificperiodoftime(usuallyeitherquarterlyorannually)totheemployeesofthefirmthroughabonuspayment

WORKAPPLICATION11-6Selectajobatafor-profitcompany.Doestheorganizationofferstockoptionsand/orstockownership?Ifnot,howcoulditofferoneortheothertoeffectivelymotivateemployees?Assesstheadvantagesanddisadvantagesofofferingstockoptionsandstockownershipatyourcompany.Shoulditofferstockoptionsand/orastockownershipplan?

11-1Ethicaldilemma:whatwouldyoudo?

AcademicGradesandIncentivesGradesarenotactuallypay,buttheyaremeanttobeanincentivetodowellacademicallyincollege.Gradereportsarebasedonindividualperformance,butinsomecoursespartofthegradeisbasedongroupwork.

RecalltheEthicalDilemmaaboutacademicstandardsinChapter8.Successfulmanagersestablishandmaintainhighexpectationsforalltheiremployees.AsLouHoltzsaid,weneedtosetahigherstandard.Today,itisgenerallyagreedthatstudentsaredoinglessworkwhilegettinghighergrades(gradeinflation)than10or20yearsago,basedonacontinuingtrendofloweringofstandards.

1. Asanincentive,whataffectdoyoubelievegradeshaveonperformance,anddoesgradeinflationaffecttheincentivetodowell?

2. Hasgroupworkbeenpartofyourgradeinanyofyourcourses?Ifso,howdiditaffectyourperformance?

3. Doyoubelievegroupworkshouldincreaseaspartofstudentgrading?Whyorwhynot?

4. Doyoufindconsistencyamongyourprofessors’standardsintermsoftheworkrequiredintheircoursesandthegradesgiven,ordosomeprofessorsrequirealotmoreworkandsomegivelotsofAsandotherslotsoflowergrades?Shouldcollegestakeactiontoimproveconsistencyamongprofessors’standards?Ifso,whatshouldtheydo?

5. Arestudentswhoareputtinginlesstimeandgettinghighergradesbeingwellpreparedforacareerwithhighstandardsaftergraduation?

6. Isitethicalandsociallyresponsibleforprofessorstodropstandardsandforcollegestoawardhighergradestodaythantheydid10or20yearsago?

7. Shouldcollegestakeactiontoraisestandards?Ifso,whatshouldtheydo?

11-3ApplyingTheConcept

GroupIncentiveOptionsPlacetheletterofthegroupincentiveoptiononthelinenexttothematchingdescription.

1. profitsharing2. gainsharing3. ESOP4. stockoptions5. stockpurchasing

____11.Ourgroupincentiveoptiongivesusabonusattheendoftheyearbasedonhowprofitablewewerefortheyear.____12.Ourgroupincentiveoptionplanallowsmetogetstockandputitinmyretirementaccountwithoutpayinganythingforit.____13.Ourgroupincentiveoptionplanworkedlikethis.Themanagertoldusthatifwecouldcutcostinourdepartmentby5%,asagroupwewouldget5%ofthesavingstothecompanydistributedevenlyamongus.____14.Ourgroupincentiveoptionallowsmetobuycompanystockfor10%lessthanthemarketvalue.____15.Ourgroupincentiveoptionplanallowsmetobuy$50sharesofthecompanystockforonly$13apiecenextyear.

11-1Selfassessment

CompensationOptionsAnswereachquestionbasedonhowwellitdescribesyou:

____1.Ienjoycompetingandwinning.____2.Iusuallyworkfasterthanothers.____3.Ilikeworkingalonemorethanbeingpartofagroup.____4.Idon’tneedtohaveapproximatelythesamepayeveryweek;varyingincomeisfine.____5.Ienjoymeetingnewpeopleandcanstrikeupaconversationwithmostpeople.____6.Itakerisks.____7.Iwouldprefertogetalargesumofmoneyallatonceratherthanmanysmallerpayments.____8.I’mthinkinglongtermformyretirement.____9.Ilikeworkingtowardasetofgoalsandbeingrewardedforachievingthem.___10.IlikeknowingthatIamoneofthebestatwhatIdo(meritpayandpraise).

Thereisnosimplesumtoadduphere.Althoughwewouldalllovetohaveahighwageorsalarywithlotsofincentivepayontopofit,thisisnottherealityinmostjobstoday.Ingeneral,thehigheryournumberof“describesme”statements,themoreopenyouareto

incentivesversuswages/salaries.Belowisanexplanationofeachstatement.

Item1:Ifyoudon’tlikecompetingandwinning,youmaybemorecomfortableinajobwithawageorsalary;youusuallyhavetocompeteforincentiveslikemeritraises.Item2:Ifyouarenotfasterthanothers,pieceworkandstandardhourincentivesmaynotbeyourbestoption.Item3:Commissions,piecework,andstandardhoursareoftenbasedonindividualperformance.Item4:Wagesandsalariesgiveyouafixedincome,whereasincentivesprovideavariableincome.Item5ischaracteristicofcommissionsalespeople.Item6:Ifyoudon’tlikerisk,incentivescanberisky.Item7:Gettingalargesumatoncetendstoinvolveabonus,profitsharing,orgainsharingincentives.Item8:ESOPsareretirementplans,andstockpurchasescanbe,too.Item9reflectsgainsharingandbonuses.Item10reflectsmeritpayandpraise.

ExecutiveCompensationNomoderndiscussionofcompensationiscompletewithoutatleasttouchingonthetopicofexecutivecompensation.Executivesdriveorganizationalperformancemorethananyotheremployee.CEOslikethelateSteveJobsofApplehavethepowertomakeorbreakacompany.12WhenJobsretiredinAugustof2011anddiedshortlythereafter,Applestocklostnearlyathirdofitsmarketvalue(about$120billion!)inayear.13Researchclearlylinksmanagerialleadershiptoconsequencesforboththeindividualandorganizations,includingfinancialperformance.Soitmakessensethatexecutivesarewellpaidfortheirmanagerialanddecision-makingskills.Buthasexecutivepaygottenoutofline?

Inordertoevenattempttoanswersuchaquestion,weneedtolookatwhatexecutivesarepaidtodo.Executivesarepaidtomakedecisionsfortheorganizationandtoguideit

towarditsgoals.Andthedecisionsthatexecutivesarepaidtomakearenoteasydecisions,suchaswhatproductstosellandwheretosellthem.Successfulexecutiveleadershiprequiresahighlevelofinherentintelligence,knowledge,andskillstoanalyzesomuchinformation,andsignificantexperienceinmakingdecisionsofsimilartypesandconsequences.

Sincelaborisalwaysatleastpartlypricedbasedonsupplyanddemand,andthereareveryfewexecutiveswiththehigh-levelskillsnecessarytorunlargefirms,theseindividualsarealwaysgoingtobeworthquiteabitofmoneytothefirm.However,thisisnottosaythattherehavenotbeensomeseriousexcessesinexecutivepay,especiallywhenCEOpayhasincreasedwhileemployeesweretakingpaycutsandgettinglaidoff.14Oneresultofexcessiveexecutivecompensationresultedinfederallegislationonexecutivecompensation—theDodd-FrankWallStreetReformandConsumerProtectionAct.

ExecutiveslikeYahoo’sMarissaMayerarepaidwelltomakemajororganizational

decisionsandguidetheirorganization’svisionandgoals.

©TechCrunch/Flickr/WikimediaCommons

TheDodd-FrankWallStreetReformandConsumerProtectionActof2010TheDodd-FrankActplacednewlimitsonexecutivepayinpubliccorporationsandalsoaddedrequirementsforreportingofbothcompensationandshareholderinvolvementwithexecutivecompensation.15Let’slookatthemajorprovisionsoftheact.

Shareholder“SayonPay”and“GoldenParachute”Votes.Amongthemostsignificantrequirementsisthatshareholdersmustbeallowedtovoteoncompensationpackagesfortheirexecutiveofficersatleastonceevery3years.Thisprovisioniscalled“sayonpay.”Whilethevoteisnonbinding,itcanstillputpressureonexecutivestomaintaincompensationinline

withorganizationalperformance.

Shareholdersalsohaveavoteonwhat’scalled“goldenparachutes”forexecutives.Goldenparachutesprovideexecutiveswhoaredismissedfromamergedoracquiredfirmwithtypicallylargelumpsumpaymentsondismissal.Thistoolisusedtodiscourageatakeoverofthefirm,becausethecostofthetakeoverbecomesmuchhigherduetothehighpayouttotheseexecutives.

LO11-3Discusstheissueofwhetherornotexecutivecompensationistoohigh.

WORKAPPLICATION11-7WouldyousaytheCEOofanorganizationyouwork(ed)forisoverpaid,underpaid,orpaidfairlyforthecontributionmadetothefirm?

ExecutiveCompensationRatios.OtherprovisionsinDodd-FrankincludearequirementthateverypubliccompanydisclosethetotalcompensationoftheCEOandthetotalmediancompensationofallemployeesandprovidearatioofthesetwofigures.16Italsorequirescompaniestoprovideinformationontheratiobetweenexecutivecompensationandthetotalshareholderreturnofthecompanyeachyear,whichallowsshareholderstomoreeasilyevaluatetheperformanceoffirmsinwhichtheyholdstock.

Theactalsorequiresthatpubliccompaniesestablishpoliciesto“clawback”incentivesifthecompanyhastorestatefinancialinformationthatisdetrimentaltothefirm’svalue.17Inotherwords,ifthecompanypaidanexecutiveincentivebasedonitsfinancialstatementsandthenhadtodiscloselaterthatthosestatementswerenotaccurate,companypolicywouldrequirethatanyincentivespaidouttotheexecutivesbegivenbacktothecompany.

WORKAPPLICATION11-8WouldyousaytheDodd-FrankActwillhelp,hurt,orhavenoeffectonanorganizationyouworkorhaveworkedfor?

ExecutiveIncentivesSomeofthemostcommonincentivesthatareusedinexecutivecompensationarestockincentives.18Theyaresupposedtocausetheexecutivetoacttoincreasethevalueofthecompanyovertime,becauseifthisisdone,theexecutive’sstockbecomesmorevaluable.

Short-termandlong-termbonusesattachedtocompanyperformancegoalsareanotherpopularincentiveforexecutives.19Finally,executivesgenerallyreceivecompensationintheformofperquisitesor“perks.”Perquisitesareextrafinancialbenefitsusuallyprovidedtotopemployeesinmanybusinesses.Whileperksarenottechnicallyincentivepay(theyaregenerallyclassedasbenefits),theydoservetoenticetop-levelexecutivestoconsideracceptingjobswithinanorganizationinsomecases.

SHRMK:A15

MotivationTheories:Equity,Reinforcement,AgencyTheories

GoldenparachutesProvisionforexecutiveswhoaredismissedfromamergedoracquiredfirmoftypicallylargelumpsumpaymentsondismissal

PerquisitesExtrafinancialbenefitsusuallyprovidedtotopemployeesinmanybusinesses

StatutoryBenefitsSoincentivesareimportanttoemployeeperformance,butmanyemployeespaycloseattentiontocompany-providedbenefits.Somebenefitsarestatutory(mandatory),duetofederalandstatelaws,butsomeareoptional,basedonthedesiresofthefirm.Therearealsolawsthatapplyifthecompanychoosestoprovidecertainnonmandatorybenefits.Let’sdoareviewofstatutorybenefitsfirst.

SocialSecurityandMedicareByfarthelargestofthestatutoryprograms,inbothsizeandcosttoemployers(andemployees),areSocialSecurityandMedicare.ThecombinedcostoftheOld-Age,Survivors,andDisabilityInsurance(OASDI)andMedicareprogramswasover$1.4trillionin2015.20

BothemployersandemployeesarerequiredtoprovidefundsforSocialSecuritybenefits.Sincetheseprogramsaresocomplex,thebestthatwecandointhisintroductorytextistoprovidesomegeneralinformationontheprograms.

TheemployerandemployeejointlypayintoSocialSecuritythroughwithholdingsfromtheemployee’spaycheckandamandatoryemployerpayment.Eachofthempaysa7.65%taxontheemployee’stotalpayperpayperiod,with6.2%goingintoOASDIand

1.45%oftheemployee’spayintotheMedicarefund.

Retirement.Onceanemployeebecomeseligibleandmeetstheretirementagerequirements,theycanreceiveamonthlycheck.AtwhatageareyoueligibleforSocialSecurityretirement?Ifyouwerebornin1937orearlier,youareeligibleforretirementatage65.Ifyouwerebornin1960orlater,yourretirementageis67.Forthosebornbetween1937and1960,itisbasedonaslidingscale.

LO11-4Summarizethemajorstatutorybenefitsrequiredbyfederallaw.

SHRMK:B1

Statutoryvs.VoluntaryBenefits

K:B19

ManagingEmployeeBenefits

K:B10

Family-OrientedBenefits

WORKAPPLICATION11-9IdentifytheincentivestheCEOofanorganizationyouworkorhaveworkedforreceives.

DisabilityandSurvivorBenefits.Thesecomponentsarereallybasicallythesamebenefit.Ifanemployeebecomesdisabledordiesandisotherwiseeligible,theperson,ortheirsurvivors,willgetpaymentseachmonthroughlyequaltowhattheemployeewouldhavegotteninretirementbasedontheirhistoricalearnings.

WORKAPPLICATION11-10Lookatyourlastpaystub.HowmuchwastakenoutforSocialSecuritytaxandMedicaretax?Howmuchdidyouremployerpay?

Medicare.Finally,thereistheMedicarecomponentofSocialSecurity.IndividualsbecomeeligibleforhealthcarethroughMedicareatthesametimeastheireligibilityforSocialSecurityretirementbegins.Medicareisnotcompletelyfreetotheretireethough.Thecoveredpersonhastopaycopaymentsanddeductibles,andthereareotherout-of-pocketcostsinvolvedwithMedicare.

SHRMK:B6

FederalInsurancePrograms(OASDI,Medicare)

Workers’CompensationThenextstatutorybenefitisworkers’compensation,aninsuranceprogramdesignedtoprovidemedicaltreatmentandtemporarypaymentstoemployeeswhocannotworkbecauseofanemployment-relatedinjuryorillness.“Employment-related”meansthattheillnessorinjuryhadtodowiththeworker ’sactionsforthecompany,althoughtheinjuryorillnessdidn’thavetohappenwhilethepersonwasactuallyatwork.

Theworkers’compensationprogramispaidforbyemployersandisatypeof“no-fault”insurance,whichmeansthatnomatterwhichparty—theemployerortheemployee—wasatfaultinanaccident-orillness-relatedsituation,theinsurancewillbepaidouttothepartyharmed.Ratesareprimarilydeterminedbythreefactors:

1. Occupations.Someoccupationsare

muchmoreriskythanothers.Forinstance,itcostsalotmoretoinsurefirefighters,policeofficers,orconstructionworkersthanitdoestocoverofficeworkers.

2. Experienceratings.Anexperienceratingisameasureofhowoftenclaimsaremadeagainstaninsurancepolicy.Itiscalculatedonthefrequencyandseverityofinjuriesthatoccurwithinthatparticularcompany.Themorefrequentandseveretheclaimsare,thehigherthecostofinsurance.Experienceratingscansignificantlyaffectacompany’sworkers’compensationcosts.

3. Levelofbenefitspayable.Injuredworkerswillgetcompensatedbasedontheirstate’sworkers’compensationratingmanual.Individualstatessettheratesforinjurieswithinthestate’sboundaries,andtheseratesaffectthecostofworkers’compensationinsurance.

SHRMK:B22

Workers’Compensation

WORKAPPLICATION11-12Howwouldyouratetheriskofoccupationalinjuryorillnesswhereyouworkoratanorganizationwhereyouhaveworked?Isithigh,moderate,orlow?Why?

UnemploymentInsuranceThethirdstatutorybenefitisUnemploymentInsurance.UnemploymentInsurance(UI)providesworkerswholosetheirjobswithpaymentsfromUIfundsforaspecifiedperiodoftime.Thebasicfederaltaxrateis6.2%ofwagesearned(in2011)forthefirst$7,000inindividualwages,butcanbereducediftheemployerpaysstateunemploymenttaxesontimeandavoidstaxdelinquencies.

Hereagain,asinworkers’compensation,thetaxrateisaffectedbythecompany’s“experiencerating.”Employerswhotendtoterminatemoreemployeeshaveahigherexperienceratingand,asaresult,ahigherUItaxrate.21Sowithinthesamestate,someemployerswillpaymuchmoreinUItaxesthanotheremployerswill.

AnindividualbecomeseligibleforUIiftheywereterminatedfromemployment—either

throughdownsizing,layoff,orotherprocesses—andinmostcasesiftheyworkedinfourofthelastfivequartersandmetminimumincomeguidelinesineachofthosequarters.

WhatwillmakethemineligibleforUI?

Theindividualquitvoluntarily.Theyfailtolookforwork.Theywereterminated“forcause”(becausetheydidsomethingwrong).Theyrefusesuitablework(workcomparabletowhattheyweredoingpriortobeingterminated).They,asamemberofaunion,participateinastrikeagainstthecompany(inmoststates).Theybecomeself-employed.Theyfailtodiscloseanymoniesearnedinaperiodofunemployment.

SHRMK:B16

UnemploymentInsurance

FamilyandMedicalLeaveActof1993(FMLA)ThenextmandatorybenefitisFamilyandMedicalActleave(FMLA).FMLArequiresthattheemployerprovideunpaidleaveforan“eligibleemployee”whentheyarefacedwithanyofthefollowingsituations:22

Leaveof12workweeksina12-monthperiodfor...

Thebirthofachildandtocareforthenewbornchildwithin1yearofbirthTheplacementwiththeemployeeofachildforadoptionorfostercareandtocareforthenewlyplacedchildwithin1yearofplacementTocarefortheemployee’sspouse,child,orparentwhohasaserioushealthconditionAserioushealthconditionthatmakestheemployeeunabletoperformtheessential

functionsoftheirjobAnyqualifyingexigencyarisingoutofthefactthattheemployee’sspouse,son,daughter,orparentisacoveredmilitarymemberon“coveredactiveduty”

TheFamilyandMedicalLeaveActof1993providesunpaidleaveforcertain“eligibleemployees”tocareforfamilyissuessuchasbirths,adoptions,illnesses,andinjuries.

©iStockphoto.com/USGirl

or...

Leaveof26workweeksduringasingle12-monthperiodtocareforacoveredservicememberwithaseriousinjuryorillnessiftheeligibleemployeeisthespouse,son,daughter,parent,ornextofkintotheemployee(militarycaregiverleave)

Anyprivatesectoremployeriscoveredundertheactiftheyhave50ormoreemployeeswhoworkedatleast20weeksduringtheyear,workingwithina75-mileradiusofacentrallocation.Theactexempts“salariedeligibleemployee(s)...amongthehighestpaid10%oftheemployeesemployedbytheemployerwithin75milesofthefacilityatwhichtheemployeeisemployed”23fromjobprotectionsiftheytakeFMLAleave,though,becauselossoftheseindividualsforasmuchas12weekscouldbesignificantlydisruptivetothecompany.TakealookattheUSDepartmentofLaborFMLAwebpage(http://www.dol.gov/whd/fmla/)formoreinformationonmanagingFMLAleave.

SHRMB:9

FamilyandMedicalLeaveActof1993(FMLA)

Experiencerating Ameasureofhowoftenclaimsaremadeagainstaninsurancepolicy

ThePatientProtectionandAffordableCareActof2010(ACA)ThelastmandatorybenefitisthePatientProtectionandAffordableCareActof2010.Ingeneral,thisactrequiresthatallemployerswithmorethan50employeesprovidetheirfull-timeemployeeswithhealthcarecoverageorfacepenaltiesforfailingtodoso.24

Onelesser-knownprovisionofthelawisthatemployeesnotcoveredbyahealthcareplanatworkwillberequiredtogotothestatehealthexchangewheretheycanpurchaseindividualcoverage.Individualswhofailtogaincoveragewillbefined,withthemaximumindividualfinesetat$695in2016.YoucanfindoutmoreabouttheACAbygoingtotheofficialsiteathttp://www.hhs.gov/healthcare/index.html.

StatutoryRequirementsWhenProvidingCertainVoluntaryBenefitsLet’stakealooknowatsomelegalrequirementsthatapplyifwechoosetoprovidecertainbenefitstoouremployees.Theserequirementsmayapplyifweprovideouremployeeswithhealthinsuranceorcompany-sponsoredretirementplans.

ConsolidatedOmnibusBudgetReconciliationActof1985(COBRA).Ifemployerschoosetoprovidehealthinsurance,wehavetoabidebytheConsolidatedOmnibusBudgetReconciliationAct(COBRA).COBRAisalawthatrequiresemployerstooffertomaintainhealthinsuranceonindividualswholeavetheir

employment(foraperiodoftime).Theindividualformeremployeehastopayforthefullcostoftheinsurance(plusupto2%foradministrationoftheprogram),buttheemployerisrequiredtokeeptheformeremployeeontheirgroupinsurancepolicy.

COBRAappliestocompanieswith20ormorefull-timeequivalentemployees.Itisrequiredtobeofferedtobothterminatedemployeesandthosewhovoluntarilyquit,inmostcases.

LO11-5Namethemainstatutoryrequirementsthatmustbefollowediforganizationschoosetoprovidehealthcareorretirementplansfortheiremployees.

SHRMK:B5

RegulationofHealthInsurancePrograms(COBRA,HIPAA,HMOActof1973)

COBRAAlawthatrequiresemployerstooffertomaintainhealthinsuranceonindividualswholeavetheiremployment(foraperiodoftime)

SHRMB:33

COBRA

HealthInsurancePortabilityandAccountabilityActof1996(HIPAA).TheHealthInsurancePortabilityandAccountabilityAct(HIPAA)isanotherhealthinsurancelawthatappliesifthecompanyprovideshealthinsurancetoitsemployees.WhatarethegeneralprovisionsofHIPAA?

First,healthinsuranceis“portable.”Thismeansthatifwehadgrouphealthinsuranceatourpreviousemployerandifournewemployerhashealthcarecoveragefortheiremployees,theyarerequiredtoprovideuswiththeopportunitytoparticipateintheir

healthinsuranceplan.

Secondisaccountability.HIPAAprotects“theprivacyofindividuallyidentifiablehealthinformation”frombeingdisclosedtounauthorizedindividuals.25Italsoprovidesthatemployersareaccountabletoensurethesecurityofpersonalhealthinformation.SoCOBRAandHIPAAaremandatoryifweasanemployerofferhealthinsurancetoouremployees.

SHRMB:34

AmericanRecoveryandReinvestmentActof2009(ARRA)

SHRMB:37

HIPAA

EmployeeRetirementIncomeSecurityActof1974(ERISA).Thefirsttwogovernmentmandatesthatwediscussedwerecontingentonfirmactionsincompaniesthatchoosetoprovidegrouphealthinsurancetotheiremployees.However,ERISAcoversemployerswhoprovideagroupretirementplanand/orgrouphealthinsurance.HerearethemajorprovisionsofERISA.

Eligibility.Ifthecompanyprovidesanemployeeretirementplan,theguidelinesinERISAsaythattheplanhastobeavailabletoallemployeesover21yearsofagewhohaveworkedinthecompanyfor1year.

Vesting.AsecondmajorprovisionofERISAisvesting.Vestingprovidesforamaximumamountoftimebeyondwhichtheemployeewillhaveunfetteredaccesstotheirretirementfunds,bothemployeecontributionsandemployercontributions.ERISAidentifiesthemaximumamountoftimethatthecompanycanretaincompanycontributionstotheemployee’sretirementaccount.Iftheemployerputsmoneyintotheemployee’sretirementaccount,thatemployermustvesttheemployeeinallemployercontributionsbyoneoftwooptionaldeadlines:

100%ofemployercontributionsattheendof5yearsofcontributionstotheplan;or20%ofemployercontributionsfromtheendofyear3throughtheendofyear7.

Portability.Theportabilityruleallowsustotakeourretirementfundandmoveitfromoneemployertoanotherqualifiedfund.Theemployercannotrequirethatwekeepthefundswiththem,orundertheircontrol.

Fiduciaryresponsibility.ERISAalsorequiresthatadministratorsandmanagersofbothretirementandhealthcareplansmeetcertainfiduciarystandardsofconduct.Fiduciaryresponsibilitysimplymeansthatthepersonhasanobligationtoprovidesoundandreasonablefinancialadvicetotheclients(employees)oftheseplans.

PBGC.ThelastbigprovisionofERISAisthecreationofthePensionBenefitGuaranteeCorporation(PBGC).ThePBGCisagovernmentalcorporationwhosepurposeistoinsure“definedbenefit”retirementfunds(whichwewillcovershortly)fromfailureifemployersgobankruptorareforotherreasonsnotabletoprovidepromisedretirementbenefits.ThePBGCmaynotfund100%ofwhatwaspromisedinthespecificretirementplan,butit“guarantees‘basicbenefits’earnedbeforetheplan’sterminationdate”ortheemployer ’sdateofbankruptcy.26

SHRMB:7

ERISA

SHRMK:B3

RegulationofRetirementPlans(FLSA,ERISA,etc.)

WORKAPPLICATION11-12Which,ifany,statutoryrequirementsgoverningcertainvoluntarybenefitswouldbemandatorywhereyouworkorhaveworked?

Vesting Amaximumamountoftimebeyondwhichtheemployeewillhaveunfetteredaccesstotheirretirementfunds,bothemployeecontributionsandemployercontributions

PBGCAgovernmentalcorporationestablishedwithintheDepartmentofLaborwhosepurposeistoinsureretirementfundsfromfailure

11-4ApplyingTheConcept

StatutoryBenefitLawsPlacetheletteroftherelevantstatutorybenefitlawonthelinenexttothestatementbelow.

1. FMLA2. ACA3. COBRA4. HIPAA5. ERISA

____16.Idon’ttrustmycompany’sfinancialfuture,soIlikethislawbecauseitwillallowmetomovemyfundsoutofmycompanyfundtoanewaccountwiththestockbrokerofmychoice.____17.Ilikethislawbecauseitwillallowmetotaketimeofffromworktotakecareofmysickmother.____18.I’mgoingquitandlookforanewjob,soIlikethislawbecauseIneedtocontinuetohavehealthinsurancewhileIsearchforanewjob.____19.Icurrentlyhavehealthinsuranceandmedicalproblems,butwhenIchangejobs,thenewcompanycan’trefusetogivemeinsurancebasedonanymedicalproblemsIhavewhenIjointhefirm.____20.I’moutofschoolandalmost25,soIlikethislawthatallowsmetocontinue

onmyparents’insuranceplan.

VoluntaryBenefitsInadditiontomandatorybenefits,almostallemployersprovidesomegroupofvoluntarybenefitstotheiremployees.Companiesevaluatetheirworkforceandthefundsavailabletothecompanyandchoosethevoluntarybenefitpackagesthatwillbestallowthemtomaintainasatisfiedandengagedworkforce.Let’sdiscusssomeofthemorecommonvoluntarybenefits.

PaidTimeOffPaidtimeoff(PTO)benefitsincludeagroupofoptionssuchasvacationtime/annualleave,severancepay,personaltimeoff,sickdays,andholidays.Somecompaniesprovideanall-encompassingPTOplanthatallowstheemployeetousetheirpaidtimeoffinanywaytheywish,whetherforsickdaysorvacation,holidays,orforanyotherpurpose.Othersapportiontheavailabledaysforvacation,sicktime,holidays,andothers.27Theaveragecostofpaidtimeoffis$1forevery$10indirectwages.NoneofthePTObenefitsismandatorybasedonfederallawintheUnitedStates,butbeawarethatsomestateshavepassed,orarecurrentlyattemptingtopass,mandatorysickleaveandeveninsomecasesannualleavelaws.Let’sdoaquickreviewofthemostcommontypesofPTO.

VacationorAnnualLeave.

ThemajorityofUSfirmsprovidepaidvacationstotheiremployees,accordingtotheUSBureauofLaborStatistics.Infact,about93%ofemployersprovidepaidvacationinsomeform—eitherasastand-alonebenefitoraspartofaPTOplan—totheirfull-timeworkforce.28Theaveragetimeprovidedisabout10daysafter1yearofservicein2012,and17daysafter10yearsofservice.29

LO11-6Describethemaincategoriesofvoluntarybenefitsavailabletoorganizations.

SHRMK:B15

TimeOffandOtherBenefits

SickLeave.ThenextmostpopularPTOissickleave.Approximately86%ofemployersintheUnitedStatesprovidesickleaveofsometypetotheiremployees.30Paidsickleavecanofferemployeesrelieffromlossofincomeassociatedwithhavingtomissworkduetoanillness.

SHRMK:B21

PaidLeavePlans

HolidayPay.Nearlyallemployersprovideforatleastsomepaidholidayswiththeirworkforce.Companiescanbesubjecttochargesofdiscriminationifthereisculturalorreligiousdiversityinthefirmandthecompanydoesnothaveflexibilityondaysavailableforholidaypay.Becauseoftheseissues,somecompaniesprovide“floating”holidayssothattheemployeecanpickwhichdaystheywillobserveasholidaysduringtheworkyear.

WORKAPPLICATION11-14Identifythepaidtimeoffbenefitsofferedwhereyouworkorhaveworked.

PaidPersonalLeave.Finally,manycompaniestodayprovidetimeoffforavarietyofpersonalneeds.Personalleaveisaneffortonthepartoftheorganizationtomaintainorimprovejobsatisfactionandorganizationalcommitmentonthepartoftheiremployees.

GroupHealthInsuranceTheUSBureauofLaborStatisticsreportedthat68%ofprivate-industryworkersreceivemedicalcarebenefitsandthatemployersofferinghealthinsurancepaidanaverageof81%ofthecostofpremiumsforsinglecoverageand69%ofthecostforfamilycoveragein2013,31andthatnumberhasgrownsignificantlywiththeadventoftheACA.Let’slookatthemajortypesofgrouphealthinsurance.

TraditionalPlans(AlsoCalledFee-for-Service).Traditionalhealthcareplanstypicallycoverasetpercentageoffeesformedicalservices—foreitherdoctorsorin-patientcare.Themostcommonpercentagesplitbetweentheinsuranceplanandtheindividualis80/20.Inotherwords,iftheemployeehastogotothe

hospitalandischarged$10,000forservices,theinsurancewouldpay$8,000andtheindividualwouldberesponsiblefortheother$2,000.Traditionalplanstypicallydonotcoverpreventivecare,suchasanannualphysicalexam.Theydo,however,givetheemployeealotofchoiceofhealthcareproviders,buttherearesomeseriousissueswithpotentialout-of-pocketcosts,sotheyaren’tusedmuchanymore.

SHRMK:B4

TypesofHealthCarePlans

HealthMaintenanceOrganizations(HMOs)areahealthcareplanthatprovidesbothhealthmaintenanceservicesandmedicalcareaspartoftheplan.HMOsareamanagedcareprogram.Thisprovidesthepatientwithroutinepreventivecarebutrequiresthatareviewofspecificcircumstancesconcerningtheindividualandtheirhealthconditionbecompletedbeforeanysignificantmedicaltesting,medicalprocedures,orhospitalcareisapproved.Managedcareplansgenerallyrequirethattheemployeeandtheirfamilyusedoctorsandfacilitiesthatareinthemanagedcarenetwork.

PreferredProviderOrganizations(PPOs)areakindofhybridbetweentraditionalfee-for-serviceplansandHMOs.Theyhavesomeoftheadvantagesanddisadvantagesaswellassomeoftherequirementsofboth.PPOshavenetworksofphysiciansandmedicalfacilities,justlikeHMOs.PPOsactlikeHMOsinthattheyprefer(butdonotrequire)thatyouhaveaprimarycarephysician(PCP)withintheirmedicalnetworkandthatyougotothatdoctorbeforegoingelsewhereformedicalcare.Theyalsoprovidepreventivecareservicestotheirinsuredmembers,similartoHMOs,andhavesimilarcopaymentsandannualdeductibles.

However,PPOsaremoresimilartotraditionalplansinthattheydonotrequirethatyouhaveareferralfromthePCPtoseeaspecialist.Theywillalsoallowyoutoseeanyproviderofcareeitherinoroutsidethenetwork,althoughyoumayberequiredtopay

alargerpercentageofthecostofcareifyouchoosetogobeyondthenetworkofphysiciansandfacilities.

TraditionalhealthcareplansPlansthatcoverasetpercentageoffeesformedicalservices—foreitherdoctorsorin-patientcare

HMOAhealthcareplanthatprovidesbothhealthmaintenanceservicesandmedicalcareaspartoftheplan

Preferredproviderorganizations(PPOs)Akindofhybridbetweentraditionalfee-for-serviceplansandHMOs

HSAorMSAAplanallowingtheemployerandemployeetofundamedicalsavingsaccountfromwhichtheemployeecanpaymedicalexpenseseachyearwithpretaxdollars

HealthorMedicalSavingsAccounts(HSA/MSA)aresavingsaccountsforhealthcareservices.AnHSAorMSAallowstheemployerandemployeetofundamedicalsavingsaccount

fromwhichtheemployeecanpaymedicalexpenseseachyearwithpretaxdollars.Themoneyinthisaccountisusedtopayformedicalservicesfortheemployee(andtheirfamily,ifdesired)overthecourseofthatyear.OneofthebigadvantagesofHSAsandMSAsisthatmoneyremainingintheaccountattheendoftheyearcanusuallyberolledovertofutureyearswithoutpayingataxpenalty.32InanHSA,youpaythefullcostofmedicalservicesusedfromtheHSAaccount.Therearenocopayments;therearenodeductibles.

HSAsarealsoportable,sowecantakeourHSAbalancewithusifwechangeemployers.OneofthebenefitstocompaniesusinganHSAorMSAisthatitcausestheemployeetounderstandthefullcostofprovidinghealthcarefortheyearbecausethefullcostofcareiscomingoutoftheemployee’spocketthroughtheuseoftheHSAdebitcard.Itisthoughtthattheymightpaymoreattentiontounnecessarymedicalexpenses,suchasgoingtothedoctor ’sofficewhentheyhaveacoldorcutafinger.

High-deductiblehealthplan(HDHP).OneoftheproblemsthatyoucanquicklyseewithanHSAisthatmedicalservicesinaparticularyearcouldcostmuchmorethanafewthousanddollars,especiallyifyouhadsurgery.However,federalrulesonHSAsandMSAsrequirethatemployeeswhohavetheseaccountsalsoparticipateinan“HDHP.”Ahigh-deductiblehealthplan(HDHP)isa“majormedical”insuranceplanthatprotectsagainstcatastrophichealthcarecostsandinmostcasesispaidforbytheemployer.AverycommonHDHPwouldpayformedicalcostsinanygivenyearthattotalmorethan$10,000.SoifanindividualexceededtheamountofmoneyintheirHSA,theywouldberesponsibleforout-of-pocketcostsupto$10,000,atwhichtimetheHDHPwouldtakeoverandpayalloftheremainingcostsoftheindividual’shealthcarefortheyear.OneofthebigadvantagesofHSAsandMSAsisthattheindividualcangotoanyphysicianormedicalfacility.TherearenoHMOnetworksandnopreferredproviders.

WORKAPPLICATION11-14Selectacompanythatoffershealthinsuranceandidentifythetypeofinsuranceitoffers.

RetirementBenefitsAccordingtotheBureauofLaborStatistics,employer-providedretirementplansareavailableto74%ofallfull-timeworkersand37%ofpart-timeworkersinprivateindustry.33Retirementbenefitsarecategorizedintotwotypes.

DefinedBenefitVersusDefinedContributionPlans.Adefinedbenefitplanprovidestheretireewithaspecificamountandtypeofbenefitsthatwillbeavailablewhentheindividualretires.Forinstance,asimpledefinedbenefitplanmightprovidethatemployeeswhoworkinthecompanyfor25yearswillget60%oftheaverageoftheirtwohighestyearsofpay.Inaddition,theywillreceive1%moreforeveryadditionalyearthattheywork.Soifthesameemployeeworkedfor35years,they

wouldreceive70%oftheaverageoftheirtwohighestyearsofpay.Becauseitisadefinedbenefitretirementplan,theemployeeknowsexactlywhattheirretirementpaymentwillbe.

Unlikeadefinedbenefitplan,underadefinedcontributionplantheemployeedoesnotknowwhattheirretirementbenefitwillbe.Definedcontributionplansidentifyonlytheamountoffundsthatwillgointoaretirementaccount,notwhattheemployeewillreceiveuponretirement.Ifthoseretirementfundsareinvestedsuccessfully,growingsignificantlyovertime,theindividual’sretirementaccountwillbeabletopaymuchhigherbenefitsthanifthefundsarenotinvestedsuccessfullyanddon’tgrowverymuch.

Employer-providedretirementplansgiveworkersafinancialcushionaftertheyretire.

©iStockphoto.com/PeopleImages

Shiftfromdefinedbenefittodefinedcontributionplans.Definedbenefitplansusedtobethemostcommontypeofretirementplan,buttheyhavebeenovertakenbydefinedcontributionplans—somewouldsayforlegitimatebusinessreasons.Providingadefinedcontributionretirementplantoemployeesshiftstheinvestmentriskfromthe

companytotheindividualemployee.Let’slookatacoupleofcommondefinedcontributionretirementprograms.

High-deductiblehealthplan(HDHP)A“majormedical”insuranceplanthatprotectsagainstcatastrophichealthcarecostsandinmostcasesispaidforbytheemployer

DefinedbenefitplanAplanprovidingtheretireewithaspecificamountandtypeofbenefitsthatwillbeavailablewhentheindividualretires

11-5ApplyingTheConcept

GroupHealthInsurancePlacetheletterofeachtypeofhealthinsuranceoptionofferedonthelinenexttothestatementdescribingit.

1. Traditional2. HMO3. PPO4. HSA5. MSA

____21.Idon’tlikethenewinsuranceplanbecauseIcanonlygotodoctorsandhospitalsthatareapprovedbytheplan.IhavetostopseeingmydoctorandstartwithanewonethatI’massignedto.____22.Ihaveexpensivehealthproblems,andmyinsuranceplanrequiresmetopay20%ofmyhealthcarecosts,makingitveryexpensiveforme.____23.IlikemyinsuranceplanbecauseI’mhealthyandpaythefullcost,butIdon’tuseitalleveryyearandithasaccumulatedincaseIneeditsomeday.____24.Ihavethesameinsurancedealthatyouhave(#8),butmycompanyonlyhas25employees.____25.Idohavecopaysanddeductibles,butatleastIcangotoanydoctoror

hospitalIwanttooatanextracost.

401(k)Plans.Themostwell-knownretirementplaninUScompaniestodayisthe401(k).401(k)accounts,or403(b)accountsfornonprofits,areavailabletonearlyallemployeesofcorporationsaswellasmostself-employedpersons.A401(k)retirementplanisasavingsinvestmentaccount.

Boththeemployeeandtheemployerareallowedtocontributefundseachyeartotheemployee’s401(k)account,withtheemployeeallowedtocontributeuptoamaximumof$17,500(foranemployeeunder50yearsofagein2014).34 Contributionsaremadeona“pretaxbasis.”Thismeansthatwhenfundsareputintotheaccount,theydonotcountastaxableincomefortheindividual.Oncetheindividualretiresandbeginstoremovefundsfromtheaccount,theypayincometaxeson

thedistributionsfromtheaccount.

Matchingcontributions.Manyemployersthatoffera401(k)provideamatchingcontributionuptoasetmaximum.Forexample,anemployermightallowa100%matchofemployeecontributionsuptoa$2,000maximum.Soiftheemployeeput$2,000oftheirsalaryintotheretirementaccountoverthecourseoftheyear,thisplustheemployer ’smatchingfundswouldtotal$4,000ayeartotheindividual’sretirementaccount.

SHRMK:B2

TypesofRetirementPlans

IRAsandRothIRAs.AnIRAisanIndividualRetirementAccount.UnderUSlaw,anypersonwhopaystaxescancontributetoanIRA,andthecontributionsaretax-free(subjecttoamaximumannualincomelimit).Inotherwords,theyreduceyourtaxableincomebythefullamountofthecontributionintheyearinwhichtheyarecontributedtotheaccount.

BothIRAsandRothIRAscansupplementtheamountthatanindividualiscontributingtoacompany-sponsored401(k)account,becauseyouareallowedtocontributetoboth.Anindividualcancontributeamaximumof100%oftheirincomeupto$5,500peryear

(in2014)intoastandard,orRoth,IRA.35

TheRothIRAisbasicallythesametypeofaccountasaregularIRAwiththeexceptionthattheRothIRA“front-loads,”orrequiresthatwepaythetaxesimmediatelyforfundsputintotheretirementaccount.Ifweput$4,000intoaRothIRAin2015andwereinthe25%federaltaxbracket,wewouldpay$1,000intaxfor2015,butwhenwewithdrewthesefundsuponretirement,theywouldbetax-free.WiththestandardIRA,youpaynotaxonthefundswhenyoucontributethem,butyoupaytaxesatyourcurrenttaxratewhenthosefundsarewithdrawn.

WORKAPPLICATION11-15Selectacompanythatoffersretirementbenefitsandstatethetypeofplanitoffers.Ifitisadefinedbenefit,describetheplan.Ifitisadefinedcontribution,identifytheoptionselectedandiftheemployeroffersanymatchingcontributions,whattheyare.

DefinedcontributionplanAplanprovidingonlytheamountoffundsthatwillgointoaretirementaccount,notwhattheemployeewillreceiveuponretirement

OtherEmployeeBenefitsHealthinsuranceandretirementaccountsaretwoofthemostsignificant,andmostexpensive,benefitsprovidedbyorganizations.Buttherearemanyotherbenefitsthatcanbeofferedtoacompany’semployees.Let’slookatafewofthosenow.

Employeeinsuranceoptions.LifeInsurance.Manyfirmswillprovidegrouptermlife(GTL)insurancepoliciestoprovideforsurvivorsofanemployeewhodieswhileemployedbythecompany.GTLprovidesforasurvivorpaymenttooccuronlyiftheemployeediesduringthetermthatiscoveredbytheinsurancepolicy.Itisalsoavaluablebenefittotheemployerbecausetheyreceiveataxdeductionforupto$50,000incoverageifitcomplieswithIRSregulations.36Afairlystandardbenefitherewouldbe1to2

timestheindividual’sannualcompensation.

DisabilityInsurance.Theotherlarge-scaleinsurancebenefitinmanycompaniesisdisabilityinsurance.Thisinsurancecanbeeithershort-orlong-terminnature,andsomecompaniesofferbothoptions.

Short-termdisabilityisinsuranceagainstbeingunabletoworkforupto6monthsduetoillnessorinjury.Thisisvaluablebecausemostlong-termdisabilitypoliciesdonotprovidereplacementincomeuntiltheemployeecompletesa180-day“eliminationperiod”(aperiodduringwhichtheyareunabletowork).Short-termcoverageclosesthis6-monthgap.

Long-termdisabilitypoliciescoveremployeeswhoareunabletoworkformorethan6monthsduetoillnessorinjury.Long-termdisabilityisdesignedtoreplaceaportionofthedisabledemployee’sincome(typically50%–60%)forextendedperiodsoftime,orevenpermanently.37

SHRMK:B12

LifeInsurance

SHRMK:B7

DisabilityInsurance

EmployeeServices.Companiesmayprovideawidevarietyofemployeeservicesasbenefitsfortheirworkforce.Educational(ortuition)assistanceisonecommonbenefitinthisgroup.In2013,roughly60%ofallcompaniesprovidedsomeformofeducationalassistancetotheiremployees.38

Othercommonemployeeservicesincludeon-sitechildcareorchildcarevouchers;eldercareassistance;company-providedfitnessfacilitiesorvouchersformembershipsoutsidethebusiness;organization-sponsoredsportsteams;servicestomitigatecommutingcostsorpublicorprivatetransportation

vouchers;cafeteriasormealvouchers;plustoomanyotherstoname.

Employeeservicesareprovidedinordertominimizedisruptionstotheemployee’sworklife.Iftheemployeeisn’tworriedabouttheirchildren(becausethecompanyhasadaycarefacilityonsite),theycanconcentrateonwork.Iftheydon’thavetodealwithfiguringoutwheretheycanparkdowntown,theyarelessstressedwhentheystarttheirday.Companiesdon’tprovidetheseservicesbecausetheyliketogivemoneyaway.Theyprovideemployeeservicestolowerstressandallowemployeestoconcentrateonthejob.

Beforewegoontodiscusshowtoadministerandcommunicatebenefits,let’sreviewthelistofbenefitsdiscussedsofarinExhibit11-3.Notethatthereareanunlimitednumberofvoluntarybenefits,butonlysomemajoronesarelistedhere.

SHRMK:B8

EducationalBenefits

WORKAPPLICATION11-16

Selectacompanythatoffersvoluntarybenefits.Besidespaidtimeoff,retirement,andhealthandemployeeinsurance,whatotherbenefitsdoesitoffer?

FlexibleBenefit(Cafeteria)PlansInasurvey,87%ofrespondentssaidthatflexibilityintheofferedbenefitspackagewouldbeextremelyorveryimportantindecidingwhethertotakeanewjobornot.39Weneedtoallowatleastsomeflexibilityinourbenefitssystemsothatitcanbepartiallytailoredtotheneedsoftheworker.Whatisaflexiblebenefitsplan,commonlyknownasacafeteriaplan?Mostcafeteriaplansfallintooneofthreecategories—eachwithitsownadvantagesanddisadvantages.

Exhibit11-3EmployeeBenefits

ModularPlans.Theemployeehasseveralbasicmodulesfromwhichtheycanchoosetoprovideasetofbenefitsthatmatchtheirlifeandfamilycircumstances.Eachmodulehasadifferentmixofinsurance,employeeservices,andretirementoptions.Theemployeechoosesamodulethatmostcloselymeetstheirneeds.Theremaybeamoduleforyoungsingle

employeesthatmaximizesworkflexibilitywithmoretimeoffforpersonalactivities,buthasminimalornobenefitsinareassuchasfamilyhealthplans,childcare,ordental.Anothermodulemightbedesignedforfamilieswithyoungchildren,whileathirdmightbesetupforolderworkerswhosechildrenaregrown.

LO11-7Listtheorganization’soptionswhenprovidingflexiblebenefitplanstoemployees.

11-2Selfassessment

SelectingEmployeeBenefitsAssumeyouaregraduatingwithyourcollegedegreeandgettingyourfirstoranewfull-timejob.Theorganizationgivesyouthelistbelowandasksyoutorankorderthelistofemployeebenefitsfrom1(themostimportanttoyou)to11(theleastimportanttoyou).

________Paidtimeoff(vacations,sickandpersonaldays,holidays)________Healthinsurance(traditional,HMO,PPO,HSA/MSA)________Retirementbenefits(401[k]or403[b],IRAorRothIRA,SEP)________Employeeinsurancecoverage(life,disability,others)________Educational(ortuition)assistance(gettingyourMBAorotherdegreeorsometypeofcertificationorlicenselikethePHRandSPHR,CPA,orFICF)________Childcare(on-siteorvouchers)________Eldercare(on-siteorvouchers)________Fitness(organization-providedfitnessfacilitiesorvouchersformemberships)________Organization-sponsoredsportsteams(softball,basketball,bowling,golf,etc.)________Commuting(workshuttles,company-providedorpaidparking,“green”vehicle

allowances,publicorprivatetransportationvouchers)________Meals(freeorlow-costmealsonsiteormealvouchers)

Thereisnoscoringasthisisapersonalchoice.Thinkaboutyourselectiontoday.Willyourpriorityrankingchangein5,10,15,or20years?

Core-PlusPlans.Inacore-plusplan,wehaveabasesetofbenefits,calledthecore,thatareprovidedtoeveryone,andthenemployeesareallowedtochooseotheroptionstomeetpersonalneedsanddesires.Thecorebenefitsprovidebasicprotectionforallofthecompany’semployeesinareassuchashealthandlifeinsurance,andmaybeaminimumamountofretirementfunding.Theremainingbenefitsareavailablefortheemployeetopickandchooseotheroptionsthatmatchtheirpersonalneeds.

Full-ChoicePlans.

Thefull-choiceplansprovidecompleteflexibilitytotheorganizationalmember.Eachemployeecanchooseexactlythesetofbenefitsthattheydesire,withinspecifiedmonetarylimitations.Thisistrulyacafeteriaplaninthatemployeescanchooseanyofferedbenefittheywantwithoutamodularorcoresetofbenefits.However,therearesomesignificantproblemswithfull-choiceplansforboththeindividualandtheorganization.Employeesmaychoosethewrongmixofbenefits,ortheymaytrytomanipulatethesystembyonlychoosingabenefit–suchasdentalcare–inayearwhentheyknowtheywillhaveasignificantexpenseinthatarea.Throughthismanipulationofthebenefitssystem,theoverallcosttotheorganizationforprovidingthesebenefitscangoupsignificantly.

Thebottomlineisthatflexibleplansarereallygaininggroundbecauseourworkforceismuchmorediversethanitusedtobe.Benefitsneedtomatchtheneedsofourworkers,butwehavetorememberthatthe

moreflexibletheplan,themoreexpensiveitis.

WORKAPPLICATION11-17Selectacompanythatoffersaflexiblebenefitplan.Identifyitstypeanddescribethemajorbenefitoptionswithinthatcategoryofflexibility.

11-6ApplyingTheConcept

FlexibleBenefitPlansPlacetheletterofthetypeofflexibleplanonthelinenexttostatementthatdescribesit.

1. modular2. core-plus3. full-choice

____26.Idon’tthinkourbenefitplanisfairbecauseIusemyspouse’shealthinsuranceplanandIjustlosethebenefit.Tobefair,IshouldbeabletousethemoneyforotherbenefitsIwant.____27.Isurewishwegotmoreofourcompensationinbenefits,butatleastwithmybenefitpackage,IcanchooseanybenefitIwanttoeveryyear.____28.Mybenefitplanhasfivepackages,andIgettopickanyoneofthemthatIwanteveryyear.Butit’sdifficulttoselectone.____29.Idefinitelywanttogethealthcareandretirementbenefits,andit’snicetohavetheoptionofselectingafewotherbenefitswithasetdollarvalue.____30.ThehardpartaboutmybenefitplanisthattherearesomanyoptionstochoosefromthatIhaveahardtimeselectingtheonesImayreallyneed.

TrendsandIssuesinHRMHereweexplorehowincentivepaycancauseunethicalactionsonthepartofmanagersandemployeesandthetrendtowardpersonalizationofemployeehealthcareplans.

IncentivestoActUnethically?Whatcausedthegreatestrecessionofthelast80years?ThatiswhatalotofpeoplewereaskingwhenthefinancialcrisishittheUnitedStatesin2008–2009.Well,atleastpartofitwascausedbyincentiveprograms.Recallthatanyincentiveprogramisdesignedtocausepeopletobemotivatedtoactacertainwaybecausetheywantareward.Sohowdidthiscontributetothefinancialcrisis?

Mortgageincentivesbothtoindividualslookingtobuyhomesandtobanksandotherfinancialfirmscreateda“housingbubble”around2005–2006.Mortgagebrokersencouraged,andinsomecasesevencoached,individualstoapplyforloansthatwereofgreaterthannormalriskbecauseofhistoricallylowinterestratesandbecausethebrokersreceivedincentivebonusesforprovidingtheloans.40

Thiswasthecaseinmanylargebanks,andasaresult,theymaderiskierandriskierloanstoindividualmortgageapplicants.Thiswasassistedbyrelaxationofdocumentationrequirementsatthefederallevel,butitwasdrivenprimarilybythebonuspaymentsattachedto“writing”themortgages.Manyexecutivesinthelargeinternationalbanksalsohadtheirannualincentivebonusesbasedonassetsundertheircontrolinsteadofbasedonlong-termincreasesinthevalueofthefirm.Thisputfurtherpressureonemployeestowriteloansthatincreasedthevalueoftheassetsunderthebank’scontrol.

Thiswas,withoutadoubt,oneofthecontributingfactorstothemeltdown.Bonuspaymentscreatedasituationwhererationalindividualsactedunethicallybecauseoftheincentivestheyreceivedfortakingsuchactions.Incentivepaymentshavethepotentialtoleadtosuchunethicalactions,sowealwayshavetoguardagainstthemwhenwedesignourincentiveprograms.

PersonalizationofHealthCare“ThehealthcaresystemintheUnitedStateswillchangemoreinthenextfivetosevenyearsthanithasinthelast50,”accordingtoJeffBauer,a“healthfuturist.”41Byallavailableevidence,heiscorrect.Individualswillcontinuetogainmorecontrolovertheirownhealthandtheirhealthcareplanningoverthenextseveralyears.Fromappstohealthservicesshopping,andfinallytomanagingongoinghealthcarecosts,theindividualwillcontinuetogainpowerastheybecomeclosertothehealthcareproviderbyusingtechnology.

Smartphoneappscontinuetoevolveasamechanismformanagingpersonalhealthcare.Wenowhaveappsforcheckingsymptoms;appsforcheckingandtrackingheartrate,bloodpressure,andothervitalinformation;appstointerfacedirectlywithmedicalserviceproviderswithoutgoinginto

adoctor ’soffice;andmanyothersthathelpusmanageourhealth—andthenumberandtypesofthesetoolscontinuestogrowatarapidrate.42

Shoppingforthebestplansforyouasanindividualwillalsocontinuetogeteasierasinformationbecomesmorereadilyavailableonline.AndmanagingcostwillalsobecomeeasierasmoreofusmovetoHSA/MSAandHDHPs,wherewedirectlycontrolmedicalexpenditures.

Thistrendtowardindividualizationofhealthcarewillcontinuetoexpandinthefuture.Theredoesn’tappeartobeanyevidencethatwearegoingtogobacktothedayswhenyourhealthcaredecisionsweremadecompletelybyotherpeople.Socompanyemployeeswillneedtobecomemoreknowledgeableabouttheirhealthcareoptions,whichmeansHRwillhavetoeducatethem.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary11-1Identifytheadvantagesanddisadvantagesofindividualincentives.

Individualincentivesmakeiteasytoevaluateeachindividualemployee;theyprovidetheabilitytochooserewardsthatmatchemployeedesires;theypromotealinkbetweenperformanceandresults;andtheymaymotivatelessproductiveworkerstoworkharder.Disadvantagesincludethefactthatmanyjobshavenodirectoutputs,makingithardtoidentifyindividualobjectives;wemaymotivateundesirablebehaviors;thereisahigherrecord-keepingburdenthaningroupincentives;andindividualrewardsmaynotfitintheorganizationalculture.

11-2Identifytheadvantagesanddisadvantagesofgroupincentives.

Groupincentiveshelpfostermoreteamwork;theybroadentheindividual’soutlookbylettingthemseehowtheyaffectothers.Theyalsorequirelesssupervisionandareeasiertodevelopthanindividualincentives.Disadvantagesincludethepotentialforsocialloafing;thepossibilitythatwewilldiscountindividualeffortsandoutput;thefactthatoutstandingperformersmaylessentheirefforts;andthepotentialforgroupinfighting.

11-3Discusstheissueofwhetherornotexecutivecompensationistoohigh.

Thereisnodoubtthatinsomecases,executivecompensationhasgottenoutofcontrol.Thereisevidencethatatthehighestlevels,itcanbemorethan200timestheaverageemployee’spay.However,researchshowsthatoverallexecutivepayonlyrunsabout5.4timesthepayofanaverageemployeeinmostfirms,whichmeansthatasageneralrule,

executivepayisprobablynotoutofline,consideringthepressureonexecutivestoperformatthehighestlevelallthetime.

11-4Summarizethemajorstatutorybenefitsrequiredbyfederallaw.

SocialSecurityandMedicare—SocialSecurityiscomposedofOld-Age,Survivors,andDisabilityInsurance(OASDI)programs,andMedicareisthenationalhealthcareprogramfortheelderlyordisabled.Workers’compensationisaprogramtoprovidemedicaltreatmentandtemporarypaymentstoemployeeswhoareinjuredonthejoborbecomeillbecauseoftheirjob.UnemploymentInsuranceisafederalprogrammanagedbyeachstatetoprovidepaymentsforafixedperiodoftimetoworkerswholosetheirjobs.FMLAisleavethatmustbeprovidedbytheemployertoeligibleemployeeswhentheyortheir

immediatefamilymembersarefacedwithvariousmedicalissues.Theleaveisunpaid,buttheemployermustmaintainhealthcoveragefortheemployeewhiletheyareonleave.ACArequiresthatallemployerswithmorethan50employeesprovidehealthinsurancefortheirfull-timeemployeesorfacesignificantpenaltiesleviedbythefederalgovernment.

11-5Namethemainstatutoryrequirementsthatmustbefollowediforganizationschoosetoprovidehealthcareorretirementplansfortheiremployees.

COBRAisalawthatrequiresemployerstooffercontinuationofhealthinsuranceonindividualswholeavetheiremploymentforupto18to36months,iftheemployeeiswillingtopaythepremiumcostoftheinsurancepolicy.HIPAArequiresthat,iftheemployee

hadhealthinsuranceattheiroldjobandthenewcompanyprovideshealthinsuranceasabenefit,itmustbeofferedtotheemployee.Inotherwords,theindividual’shealthinsuranceis“portable.”HIPAAalsorequiresthatcompaniestakecaretoprotectthehealthinformationofemployeesfromunauthorizedindividuals.ERISAlaysoutrequirementsthatmustbefollowediftheemployerprovidesaretirementorhealthcareplan.ERISAdetermineswhoiseligibletoparticipateandwhentheyareeligible,providesrulesfor“vesting”oftheemployee’sretirementfunds,requiresportabilityofthosefunds,andrequiresthatthefundsaremanaged“prudently”bythefiduciarythatmaintainsthem.

11-6Describethemaincategoriesofvoluntarybenefitsavailabletoorganizations.

Majorvoluntarybenefitsincludepaidtimeoff,grouphealthinsurance,retirementplans,otherinsurancecoverage,andemployeeservices.Paidtimeoffcomesinvariousforms,suchassickleave,vacationtime,holidays,andpersonaldays.Grouphealthinsuranceprovidesemployeeswithhealthcarecoverage,andretirementplansallowthemtosavefortheirownretirement,sometimeswithsomehelpfromtheorganization.Otherinsuranceincludesgrouptermlifeinsurance,short-andlong-termdisabilitypolicies,dentalandvisioninsurance,groupautomobileandhomeownersinsurance,andmanymore.Finally,employeeservicescanincludeamassiverangeofoptionsfromeducationalassistancetochildoradultdaycare,gyms,cafeterias,andtoomanyotherstolist.

11-7Listtheorganization’soptions

whenprovidingflexiblebenefitplanstoemployees.

Companiescanchoosemodularplans,core-plusplans,orfull-choiceplans.Modularplansprovideseveralbasicmodulesfromwhicheachemployeechooses.Thereisnootheroptionoutsideoneofthemodules.Core-plusplansprovideabasesetofbenefitstoallemployees(thecore)andthenotheroptionsthattheemployeecanchoosefromfreelytomeettheirpersonaldesiresandneeds.Full-choiceplansallowtheemployeecompletefreedomofchoice,buttheycomewithsomepotentialproblemssuchas“moralhazard,”“adverseselection,”andhighmanagementcosts.

11-8DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermsCOBRA,285definedbenefitplan,289definedcontributionplan,290experiencerating,284goldenparachutes,282high-deductiblehealthplan(HDHP),289HMO,288HSAorMSA,288meritpay,277PBGC,286perquisites,282preferredproviderorganizations(PPOs),288profitsharingprograms,279socialloafers,278traditionalhealthcareplans,288variablepay,275vesting,286

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms:

1. __________iscompensationthatdependsonsomemeasureofindividualorgroupperformanceorresultsinordertobeawarded.

2. __________isaprogramtorewardtopperformerswithincreasesintheirannualwagethatcarryoverfromyeartoyear.

3. __________areindividualswhoavoidprovidingtheirmaximumeffortingroupsettingsbecauseitisdifficulttopickoutindividualperformance.

4. __________provideaportionofcompanyproceedsoveraspecificperiodoftime(usuallyeitherquarterlyorannually)totheemployeesofthefirmthroughabonuspayment.

5. __________provideexecutiveswhoaredismissedfromamergedoracquired

firmoftypicallylargelumpsumpaymentsondismissal.

6. __________areextrafinancialbenefitsusuallyprovidedtotopemployeesinmanybusinesses.

7. __________isameasureofhowoftenclaimsaremadeagainstaninsurancepolicy.

8. __________isalawthatrequiresemployerstooffertomaintainhealthinsuranceonindividualswholeavetheiremployment(foraperiodoftime).

9. __________providesforamaximumamountoftimebeyondwhichtheemployeewillhaveunfetteredaccesstotheirretirementfunds,bothemployeecontributionsandemployercontributions.

10. __________isagovernmentalcorporationestablishedwithintheDepartmentofLaborwhosepurposeistoinsureretirementfundsfromfailure.

11. __________areplansthatcoverasetpercentageoffeesformedicalservices—foreitherdoctorsorin-patientcare.

12. __________isahealthcareplanthatprovidesbothhealthmaintenanceservicesandmedicalcareaspartoftheplan.

13. __________areakindofhybridbetweentraditionalfee-for-serviceplansandHMOs.

14. __________allowstheemployerandemployeetofundamedicalsavingsaccountfromwhichtheemployeecanpaymedicalexpenseseachyearwithpretaxdollars.

15. __________isa“majormedical”insuranceplanthatprotectsagainstcatastrophichealthcarecostsandinmostcasesispaidforbytheemployer.

16. __________providetheretireewithaspecificamountandtypeofbenefitsthatwillbeavailablewhentheindividualretires.

17. __________identifyonlytheamountoffundsthatwillgointoaretirementaccount,notwhattheemployeewillreceiveuponretirement.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Wouldyouratherbegiventheopportunitytoreceiveincentivesbasedonindividualperformanceorgroupperformance?Doesitdependonthesituation?Why?

2. Wouldyouratherworkonacommissionbasisifyouwereinsales,orwouldyouratherhaveasalary—oracombinationofboth?Why?

3. Wouldyoupersonallyratherparticipateinaprofitsharingplanoragainsharingplan?Why?

4. Doyouthinkincentiveprogramsingeneralreallywork?Whyorwhynot?

5. Wouldyouratherhavebetterbenefitsandamodestsalaryorahighsalaryandlowerlevelsofbenefits?Why?

6. Basedonwhatisinthechapter,shouldtheACAfederalhealthcarelegislationremaininitscurrentform,orshouldwerescindtherequirementthatemployersand/oremployeeshavetopayafineiftheemployeeisnotcoveredbyahealthcareplan?Explainyouranswer.

7. IsthevestingrequirementinERISAtoolong,tooshort,orjustaboutright?Whydidyouanswerthewaythatyoudid?

8. ShouldtheUnitedStatesmandateacertainamountofpaidtimeoffperyearasmanyothercountriescurrentlydo?Whyorwhynot?

9. Doyouthinkthatintoday’sworkforceitisbecomingnecessarytohavea“full-choice”flexiblebenefitsplan?Whyorwhynot?

Case11-1GoogleSearchesSASfortheBusinessSolutiontoHowtoCreateanAward-WinningCultureStatisticalAnalysisSystemInstituteInc.(SAS)isaprivatelyheldcompanythatdevelopssoftwaretoprovidebusinesssolutionsfortheirclients.Asof2013,theyemployedmorethan14,000peopleandreportedrevenuesof$3billion.Foundedin1976,theyhavemaintainedhighprofitsduringthefiverecessionssincethen.Theyhavealsomaintainedagrowthrateofmorethan10%peryearfrom1980to2000.43Besidespostingimpressivegrowth,SAShasmadeitontotheFortune“BestCompaniestoWorkFor”listforalmosttwodecades.Googlehasmadeittothetopofthislistforthepast3years,buttheydonothesitatetoconfessthattheyimplementedSAS’smodelintheirHRpractices.YetwhywouldGoogle,averysuccessfulfirminitsownright,copySAS?44

PerhapsGooglemimicsSASbecausethecompany’sachievementsarebuiltuponaculturethatkeepstheiremployeessatisfiedandmotivated.Feelingecstatic

aboutthecompany’sculturalenvironment,SASemployeesarehighlymotivated,intenselyloyal,andverydedicatedtodeliveringonlythehighestperformanceresults.Why?AccordingtotheCEO/cofounder,JamesGoodnight,SASfunctionslikeatrianglewherehappyemployeesareessentialforgreatcustomerserviceandgreatcustomerserviceisthekeytoasuccessfulbusiness.EmployeesknowthatSASwillprovideanythingthatwillincreaseproductivityorinspiretheirimagination.Forexample,morethan3,000piecesofartaredisplayedthroughoutitspremises,andtwofull-timeartistsareemployedtokeeptheenvironmentupdated.45Bytestingtheirperks,SASrealizedthatthesetypesofbenefitsarekeyfactorstotheirhighlyprofitablebusiness.

OneadvantageofrunningaprivatebusinessisthatCEOJamesGoodnightdoesnothavetheobligationtoanswertoshareholders,aboardofdirectors,oranyoneonWallStreetandthereforecantakesomecalculatedriskswhenitcomestobuildingthatcutting-edgeculture,aculturethatfocusesoncreatinganenvironmentthatfostersoriginalityandinnovationandkeepsemployees’mindssharp.Softwaredevelopmentisamentallychallengingbusiness,andthereforetheproperenvironmentisneededtofostercreativityandthinkingoutsidethebox.ThegoalofSASistocreateastress-freeenvironmentfortheiremployeessotheyenjoybeingatwork,andSASdoesthisbyprovidingaworkenvironmentwithasmuchcomfortandconvenienceaspossible.46Whatarethefoundationsofastress-freeenvironment?

SASprovidestheiremployeescompetitivepay,discretionarybonuses,medicalcare,retirementplans(401[k]),profitsharing,anddisabilitybenefits.SASalsoprovidesavastamountofwhatarecalled“conveniencebenefits,”whichareveryappealingtojobapplicants.ThesenewbenefitsbeganwithfreeM&MseveryWednesdayandlaterincludedanodresscodepolicyandnospecificworkinghourswhenemployeeshavetoclockinorclockout.47

Inaddition,themainheadquartersinNorthCarolinaprovidesemployeeswithanon-site,state-of-the-artfitnesscenter,aswimmingpool,tenniscourts,andevenagolfcourse.Thefollowingno-costamenitiesarealsoavailable:dry-cleaning,cardetailing,daycareprogramsforemployees’children,andacafeteriathatserves2,500mealsperlunchwithnoreservedroomforexecutives.InSASthereisawork/lifecenterthatprovidescarefortheelderly,helpsmanagefinancialdebts,andhandlespersonalproblemslikedivorce.SASprovidesin-househealthbenefitsandamenitiesfreetoalltheiremployees.Theyonlyrequireanemployeetopay20%ofthebillwhenseeinganoutsidespecialist.

SAS’scultureandbenefitsprogramshaveledtoaremarkablylowemployeeturnoverrateof3%.48Butgoodlucklandingajobthere:Theyreceivemorethan15,000applicationsperyear!49

Questions1. WhatarethestatutorybenefitsSASmustoffer

everyemployee?Whatdefinedbenefitsdotheyofferbeyondthoserequirements?

2. SASoffersanarrayofemployeebenefits,especiallyattheirmainheadquarters.Whatmightbetheirrationaleforprovidingsuchservicestotheiremployees?

3. Whatwouldyousuggestifutilizationanalysisindicatedthatonlyafewemployeesusedthoseadditionalbenefits,suchasthework/lifecenter?

4. WhatseemstobetheweakestpartofSAS’sbenefitspackage?Whatwouldyoudoinsteadofofferingthatparticularbenefit?

5. WhatadditionalamenitiesmightSASoffertheiremployees?Why?

6. Howdoestheir3%turnoverrateimpacttrainingandrecruitingexpenses?

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,SchoolofBusinessBrooklynCampus,LongIslandUniversity

SKILLBUILDER11-1DevelopingaCompensationwithIncentivePlan

ObjectiveTodevelopabetterunderstandingofcreatingmotivationalincentives.

SkillsTheprimaryskillsdevelopedthroughthisexerciseare:

1. HRManagementskill—Technical,conceptualanddesign,andbusinessskills

2. SHRM2013CurriculumGuidebook—K:Totalrewards

Afterafewyearsofsellingnewcars,youmanagedtogetthefundingtostartyourownsmallnewcardealershipasasoleproprietorship.Yourstartingstaffingof10employeeswillbeasfollows:

Youaretheownermanagerandwilloverseeeverything.Youwillalsobethesalesmanageranddosomeselling.Salesstaff.Threesalespeoplereportingdirectlytoyou.ServiceandPartsManager.Youwillhaveonepersonsupervisethemechanicsanddetailer.Mechanics.Threemechanicstoworkonthecars.Detailer.Onepersontocleanthecars,helpoutthemechanics,andworkinparts.Officestaff.Twopeopletoanswerphones,greetcustomers,makeupthebillsandcollectmoneyfromsalesandservice,anddootherpaperworkincludingbookkeeping.Theywillreporttoyou.

PreparingforExercise11-1—Developanincentivesystem

1. Whattypeofcompensationwilleachclassificationofemployeereceivefortheirwork?Willyougivethemawage,salary,orincentivepay(commissions,piecework,orstandardhour)?

2. Willyougiveincentives(recognitionandothernon-monetaryincentives,meritpay,bonuses,profitsharing,gainsharing,ESOPs,stockoptionand/orstockpurchaseplans)?

3. Astheonlyexecutive,whatwillyourcompensationpackageinclude?

SKILLBUILDER11-2DevelopingFlexibleEmployeeBenefitPlans

ObjectiveTodevelopyourskillatdesigningflexiblebenefits.

SkillsTheprimaryskillsdevelopedthroughthisexerciseare:

1. HRManagementskill—Technical,conceptualanddesign,andbusinessskills

2. SHRM2010CurriculumGuidebook—K:Totalrewards—EmployeeBenefits

Assignment1. UsingExhibit11-3:EmployeeBenefits,the

“VoluntaryBenefits”column,astheHRbenefitsmanager,selectthebenefitstobeofferedinthreedifferentmodularplans.Besuretoidentifythetargetgroupforeachofthethreemodules.

2. AgainusingExhibit11-3,astheHRbenefitsmanager,developacore-plusbenefitsplan.

SKILLBUILDER11-3SelectingFlexibleEmployeeBenefitPlans

ObjectiveTodevelopyourskillatselectingflexiblebenefits.

SkillsTheprimaryskillsdevelopedthroughthisexerciseare:

1. HRManagementskill—Technical,conceptualanddesign,andbusinessskills

2. 2.SHRM2010CurriculumGuidebook—K:Totalrewards—EmployeeBenefits

AssignmentAsanemployee,rankorderthevoluntarybenefitsfrom1beingmostimportantto9beingtheleastimportanttoyouinSelf-AssessmentExercise13-1.

©iStockphoto.com/Yuri_Arcurs

PartVProtectingandExpandingOrganizationalOutreach

12WorkplaceSafety,Health,andSecurity13OrganizationalEthics,Sustainability,andSocialResponsibility14GlobalIssuesforHumanResourceManagers

Practitioner’sModel

12WorkplaceSafety,Health,andSecurity

©iStockphoto.com/mumininan

ChapterOutlineWorkplaceSafetyandOSHA

TheOccupationalSafetyandHealthAct(OSHAct)

TheOccupationalSafetyandHealthAdministration(OSHA)

NationalInstituteofOccupationalSafetyandHealth(NIOSH)

EmployeeHealthEmployeeAssistancePrograms(EAPs)andEmployeeWellnessPrograms(EWPs)ErgonomicsandMusculoskeletalDisorders(MSDs)SafetyandHealthManagementandTraining

StressFunctionalandDysfunctionalStressStressManagementTheStressTug-of-War

WorkplaceSecurityCyberSecurity

GeneralSecurityPolicies,IncludingBusinessContinuityandRecovery

WorkplaceViolenceSocialMediaforWorkplaceSafetyandSecurityEmployeeSelectionandScreening

TrendsandIssuesinHRMEmployeeWellnessBullyingintheWorkplace

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

12-1IdentifytheresponsibilitiesofbothemployersandemployeesunderthegeneraldutiesclauseoftheOSHAct.PAGE30312-2DescribethetypesofviolationsthatOSHAlooksforininspections.PAGE30512-3DiscussEAPsandEWPsandwhattheirvalueistocompaniesandemployees.PAGE31012-4Comparefunctionalanddysfunctionalstressandhowtomanagedysfunctionalstress.PAGE31212-5Listthetopconcernsforsecurityintheworkplacetoday.PAGE31612-6Explainwaysinwhichcompaniescanmaketheworkplacesaferforemployees.PAGE31812-7DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE322

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveDescribingherworkplace,Cindysays:Webelieveasafeandhealthyworkplaceisaright—whetheryouworkinafactoryoranoffice.Isitalsoanemployer’sresponsibilitytoprovidefortheiremployees’mentalhealth?Noteveryonemayseeitasanobligation,butthereisgreatbenefitinassistinganemployeewhosepersonalissuesmaybeimpactingtheirjobperformance.

“IthinkIamgoingtohavetotaketimeoff,”Nancyconfessedtheotherday.“Ijustcan’tseemtomanageeverythinggoingoninmylife,andIcan’tconcentrateatwork.”

“Iknowthingsaretoughwiththedivorce—butcanyoureallyaffordtomissworkrightnow?”hercoworkerChloequeried.“HaveyouseentheinformationHRpostedabouttheEmployeeAssistanceProgram?Let’sgetthecontactinformation.It’scompletelyconfidentialandavailabletoyouandyourfamily.Perhapstheycanhelp.Inthemeantime,youcantalktoyoursupervisoraboutthenewflexibleworkhoursuntilthingsarebetter.”

Couldthislevelofsupport“save”agood

employee?Learnmoreabouttheissuesandethicsbehindworkplacehealth,safety,andsecurityinChapter12.

WorkplaceSafetyandOSHAWenowhaveaworkforcethatisfairlycompensated,welltrained,andproductive.Thenextmajormanagementconcernistokeepthemsafeandhealthysothattheycancontinuetoperformathighlevels.Thischapterwillfirstfocusonfederalworkplacesafetylawsandregulationsaswellasthegoverningagenciesforindustrialsafetyandhealth.Laterinthechapter,wewillcoveremployeehealthissues—includingemployeeassistanceandemployeewellnessprograms,andstress—andhowtheyaffectouremployees.Finally,wecovertheincreasinglyimportanttopicofworkplacesecurity.

TheOccupationalSafetyandHealthAct(OSHAct)

Safetyaffectsrecruitmentandretention,1anditisamajorproblemgloballyashundredsofemployeesdieonthejobeachyear.2Tohelpprotectemployees,theOccupationalSafetyandHealthAct(OSHAct)of1970requiresemployerstopursueworkplacesafety.Workplacesafetydealswiththephysicalprotectionofpeoplefrominjuryorillnesswhileonthejob.EmployersmustmeetallOccupationalSafetyandHealthAdministration(OSHA)safetystandards,maintainrecordsofinjuriesanddeathsduetoworkplaceaccidents,andsubmittoon-siteinspectionswhennotified.Thosewhodonotcomplyaresubjecttocitationsandpenalties,usuallyintheformoffines.3

Didyouknowthatemployerscangotoprisonforwillfullyfailingtomaintainsafework

environments?YoumayhaveheardthatthewallsofabuildingthatwasbeingdemolishedinPhiladelphiain2013cavedinonaSalvationArmystore,killingsixpeople.Thecompanyinthatcase,CampbellConstruction,hasbeencitedforwillfulviolations(wewilldiscussthistermshortly)oftheOSHAct,andthegeneralcontractor,GriffinCampbell,haspersonallybeenchargedwiththird-degreemurderinthatcaseandcouldbejailedforfailingtofollowaseriesofsafetyprocedures.WillfulviolationsoftheOSHActthatcauseadeatharedirectlypunishablewithafineofupto$500,000fortheorganizationand$250,000andupto6monthsinprisonforanindividualwhoisfoundculpable.

Today,theHRdepartmentcommonlyhasresponsibilityforensuringthehealthandsafetyofemployees.HRMworkscloselywithotherdepartmentsandmaintainshealthandsafetyrecordsalongwithmanagingsafetytrainingprograms.Itiscriticalthatyouknowthesafetyrules,besureyouremployeesknow

them,andenforcethemtopreventaccidents.Inadditiontomanyspecificrequirementsintheact,thegeneraldutiesclauseinOSHAthatcoversallemployersstatesthateachemployer4

1. shallfurnishaplaceofemploymentthatisfreefromrecognizedhazardsthatarecausingorarelikelytocausedeathorseriousphysicalharmtoemployees;

2. shallcomplywithoccupationalsafetyandhealthstandardsandallrules,regulations,andordersissuedpursuanttothisActwhichareapplicabletohisownactionsandconduct.

Thegeneraldutiesclausealsostatesthateachemployeehasadutytocomplywithoccupationalsafetystandards,rules,andregulations.

In1970,theyearthatOSHAwaspassed,job-relatedaccidentsaccountedformorethan14,000workerdeathsintheUnitedStates.5Thegoodnewsisthattherateoffatalwork

injurieshasfallen,butthebadnewsisthatin2013,therewerestill4,585fatalities6andabout3millioninjuriesorillnesses,halfofwhichrequiredtimeawayfromwork.7Thisisarateofalmost3.4per100equivalentfull-timeworkers.RecallfromChapter1thatabsenteeismisoneofthemajorconcernsofallmanagers,andbyallowinginjuriesandoccupationalillnessestooccur,wearecontributingtothatabsenteeism.So,losingthismanyworkdays,aswellasnearly4,600lives,hastobeaconcerntoallofus.

LO12-1IdentifytheresponsibilitiesofbothemployersandemployeesunderthegeneraldutiesclauseoftheOSHAct.

SHRMB:26

TheOccupationalSafetyandHealthActof1970(OSH)

WorkplacesafetyThephysicalprotectionofpeoplefrominjuryorillnesswhileonthejob

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

B.EmploymentLaw(required)26.TheOccupationalSafetyandHealthActof1970(OSHA)

C.Ethics(required)6.Behaviorwithinethicalboundaries14.Abusivebehavior—Workplacebullying

E.JobAnalysis/JobDesign(required)6.Compliancewithlegalrequirements

Ergonomicsandworkplacesafety(workhazardsandmitigation)

K.TotalRewards(required)B.EmployeeBenefits

9.Employeeassistance/wellnessprograms17.Wellnessprograms

X.WorkplaceHealth,Safety,andSecurity(secondary)

1.OSHAcitationsandpenalties(required)2.Disasterpreparation,continuity,andrecoveryplanning3.Employeehealth

4.Inspection5.Protectionfromretaliation6.Safetymanagement7.Securityconcernsatwork9.Datasecurity11.Ergonomics

TheOccupationalSafetyandHealthAdministration(OSHA)OSHAisthedivisionwithintheDepartmentofLaborthatischargedwithoverseeingtheOSHAct.Itwascreatedto“assuresafeandhealthfulworkingconditionsbysettingandenforcingstandardsandbyprovidingtraining,outreach,educationandassistance.”8OSHAhasbroadauthoritytoinvestigatecomplaintsandimposecitationsandpenaltiesonemployerswhoviolatetheOSHAct.

WhatDoesOSHADo?OSHAisresponsibleforsettingfederalsafetyandhealthstandardsandpromulgatingthosestandardstoemployers.OSHAisalsoresponsibleforoccupationalsafetyandhealthinspections.Inspectionsaremadewithoutanyadvancenoticetotheemployerandaredonebasedonthefollowingissues(inpriorityorder):9

ImminentdangerCatastrophes(fatalitiesorhospitalizationsofmorethanthreeemployees)WorkercomplaintsandreferralsTargetedinspections(suchascompanieswithhighinjuryrates)Follow-upinspections

Inspectorsmustidentifythemselvesandtelltheemployerthereasonfortheinspectionuponarrivalattheworksite.Theemployer

candecidenottoallowtheinspectionwithoutaninspectionwarrant(acourtorderestablishingOSHA’sprobablecausefortheinspection).

LO12-2DescribethetypesofviolationsthatOSHAlooksforininspections.

WORKAPPLICATION12-1Identifyanyunsafeorunhealthyworkingconditionsthatyouhaveobservedinanyorganization(business,sports,school,etc.).

EmployerandEmployeeRightsandResponsibilitiesUnderOSHAGeneralrightsofemployersandemployeesareshowninExhibit12-1.WewanttomakesurethatcompanymanagementalwaysstayswithintheirrightsininteractionswithOSHA.

EmployerRights.Duringaninspection,theemployerhasarighttogettheinspector ’scredentials,includingtheirnameandbadgenumber,andtoreceiveinformationonthereasonfortheinspection—eithertheemployeecomplaintortheprograminspectioninformation.Theemployeralsohastherighttorefusetoallowtheinspectionwithoutawarrantbeingprovided,butthisisgenerallynotaverygoodideaonanumberoflevels.Besidesmakingitlooklikethecompanymighthavesomething

tohide,itwastestime,andtheinspectorwillbelesslikelytoassisttheemployerinimmediatelycorrectingdiscrepanciesthatmightbefoundduringtheinspection—whichwillultimatelyoccuranywayafterthewarrantisprovided.Ingeneral,itmakesmoresensetoallowtheinspectiontogoon,inaccordancewithOSHArules.10

Exhibit12-1EmployerandEmployeeRightsandResponsibilitiesUnderOSHA

Source:OSHA

Soassumingthattheinspectionisallowed,weneedtobeawareofsomethingsthatwehavearighttoandshoulddoduringtheinspection.Iftheinspectionisbeingconductedduetoaworkercomplaint,wehavetherighttogetacopyofthecomplaint(withouttheemployee’sname),andwewanttodosobecausewewanttoknowwhatisbeingalleged.Secondly,wehavearighttohaveacompanyrepresentativeaccompanyinspectorsastheygothroughtheirsitevisit,andwe,astheHRrepresentative,wanttoaccompanythem.

Thereareafewreasonstoaccompanytheinspector.First,wewanttounderstandanyviolationsthattheinspectorfindsandnotesbecausesometimes,nomatterhowhardapersontriestodescribeaproblem,itwillbeunclearunlessweseeitourselves.Secondly,inmanycaseswecanimmediatelyfixadiscrepancysuchaslooselinesorhosesstrungacrossaworkspace.Althoughthe

discrepancywillalmostsurelystillbenoted,theinspectorwillseethatwearewillingtocomplywiththelawandOSHAregulationsquicklyandtothebestofourability.Thiswillingnesscankeepminorinfractionsfrombecomingmajorinfractions.Third,wewanttomakesurethattheinspectionstayswithinthescopenotedinthecomplaintortheprograminspectionguidelines.Wedon’treallywanttheOSHArepresentativewanderingallovertheworksite,andwehavearighttolimittheirmovementstoonlycovertheinspectionscope.

Anemployerrepresentativealsohasarighttobepresentwhentheinspectorisinterviewingemployees(unlesstheinterviewisprivatebyrequestoftheemployeebeinginterviewed)andtherighttostopinterviewsthatarebecomingconfrontationalordisturbingtheworkenvironment.

Theemployeralsohasarighttoinformtheemployeesoftheirrightsduringtheinspection.Theinspectorwillprovidethe

employerwithalistofdiscrepanciesuponcompletionoftheirinspection.Afteraninspection,employershavearighttocontestanycitationsthattheyreceivethroughOSHA.

SHRMX:4

Inspection

12-1ApplyingTheConcept

EmployerRightsandResponsibilitiesUnderOSHARespondyesornotoeachquestionregardingemployerrightsandresponsibilities.

1. Yes2. No

____1.Isitpermissibletoasktheinspectorthereasonfortheinspection?____2.HenrygotusintotroublewithOSHA,soisitOKtodemotehim?____3.IsitOKtotakesomenotesduringtheOSHAinspection?____4.DoesOSHArequireustoinformandtrainemployeesaboutexistinghazardsintheworkplace?____5.DoesOSHArequireustokeeprecordsofwork-relatedinjuriesorillnesses?____6.DoesamemberoftheHRstaffhavetoaccompanytheOSHAinspectorduringthesitevisit?____7.Canwerequireemployeestobuytheirownsafetyequipment?

EmployeeRights.Employeerightsduringinspectionsincludetherighttorefusetobeinterviewed,orifanemployeeagreestoaninterview,theycanrequestthatanemployerrepresentativebepresentorthattheinterviewbeheldinprivate.Theemployeealsohastherighttolegalrepresentationduringtheinterviewiftheyrequestit,andtheycanendtheinterviewatanypointintimejustbyrequestingthattheinterviewbediscontinued.Finally,employeeshavearightagainstcompanyretaliationfortakingpartinaninterviewwiththeinspectorandtellingthetruth.

SHRMX:5

ProtectionFromRetaliation

HazardCommunicationStandards.OSHArequiresthatallemployersmaintaininformationateachworksitethatdescribesanychemicalhazardsthatmaybepresenton-site.AnewsetofHazardCommunicationStandards(HCS)wasestablishedin2012andcanbefoundontheOSHAwebsite(http://www.osha.gov).Underfederallaw,“Allemployerswithhazardouschemicalsintheirworkplacesarerequiredtohaveahazardcommunicationprogram,includingcontainerlabels,safetydatasheets,andemployeetraining.”13SafetyDataSheets(SDS)aredocumentsthatprovideinformationona

hazardouschemicalanditscharacteristics.TheOSHA-requiredSDSformatisprovidedinExhibit12-2.TheSDSprovidesemployeeswithaquickreferencetothehazardsofworkingwithaparticularchemicalcompound.ElectronicversionsofSDSareacceptable,aslongastherearenobarrierstoimmediateaccessattheworksite.

Exhibit12-2SafetyDataSheets(SDS)Format14

Source:OSHA

Violations,Citations,andPenalties.OSHAviolationsincludethefollowing:15

Willful—aviolationinwhichtheemployerknewthatahazardousconditionexistedbutmadenoefforttoeliminatethehazardSerious—aviolationwherethehazardcouldcauseinjuryorillnessthatwouldmostlikelyresultindeathorsignificantphysicalharmOtherthanserious—aviolationwhere

anyillnessorinjurylikelytoresultfromthehazardisunlikelytocausedeathorseriousphysicalharm,buttheviolationdoeshaveadirectimpactonemployees’safetyandhealthDeminimis—violationsthathavenodirectorimmediatesafetyorhealthdanger.Thisdoesnotresultincitationsorpenalties.Failuretoabate—violationswheretheemployerhasnotcorrectedapreviousviolationforwhichacitationwasissuedandthesettlementdatehaspassedRepeated—violationswheretheemployerhasbeenpreviouslycitedforthesametypeofviolationwithintheprevious5years

TheNationalInstituteofOccupationalSafetyandHealth(NIOSH)worksonaglobalscaletounderstandandpreserveworkplacesafetybyconductingresearchandprovidingrecommendationsonworkplacesafetymeasures.

©NationalInstituteforOccupationalSafetyandHealth(NIOSH)/CreativeCommons/WikimediaCommons

Willfulandrepeatedviolationscanbringtheemployeruptoa$70,000fineforeachviolation,evenwithoutaseriousinjury

occurringbecauseoftheviolation.Failuretoabateviolationscancosttheemployerasmuchas$7,000perdaywhiletheviolationcontinuestoexist,andseriousviolationscanalsocosttheemployera$7,000fine.

SafetyDataSheetsDocumentsthatprovideinformationonahazardouschemicalanditscharacteristics

12-2ApplyingTheConcept

EmployeeRightsandResponsibilitiesUnderOSHARespondyesornotoeachquestionregardingemployeerightsandresponsibilities.

1. Yes2. No

____8.IsitOKtoobjecttothetimeframeforcorrectionofdiscrepanciesofOSHAstandards?____9.CanOSHAmakemyemployermaintainworkingconditionsfreefromanyhazards?___10.IfIseehazardousconditions,doesOSHAstatethatIhavetotellmysupervisor?___11.DoIhavetowearthisbackbrace?Itisheavyanduncomfortable,andIcan’tmoveaswellwithiton.___12.IfIreporthazardousconditionstoHR,doIhavetotellthemwhoIam?___13.IfanOSHAinspectorinterviewsme,canIcoverupforthecompanyandsaywefollowedOSHAguidelinessowedon’tgetintotrouble?

___14.DoIhavetotellmysupervisorIjustgothurt?Idon’twanthimtobemadatmeformakinghimdoallthepaperwork.

SHRMX:1

OSHACitationsandPenalties

WORKAPPLICATION12-2Identifyanyorganization(business,sports,school,etc.)thatwascitedand/orpenalizedfornotmeetingOSHAstandards.Besuretoprovidedetailsofthesituation.

NationalInstituteofOccupationalSafetyandHealth(NIOSH)NIOSHworksundertheumbrellaoftheCentersforDiseaseControlandPrevention(CDC).NIOSHwasalsocreatedaspartofthe1970OSHAct,anditsmissionisglobalinscope.“[NIOSH]isthefederalagencythatconductsresearchandmakesrecommendationstopreventworkerinjuryandillness.”16NIOSHnotesthreemajorgoalsinitsstrategicplan:17

Conductresearchtoreducework-relatedillnessesandinjuries.Promotesafeandhealthyworkplacesthroughinterventions,recommendations,andcapacitybuilding.Enhanceinternationalworkplacesafetyandhealththroughglobalcollaborations.

NIOSHroutinelyworkswithworldwidegovernmenthealthlaboratoriesandothermembernationsintheWorldHealthOrganization(WHO)toidentifyworkplaceissuesthatcancauseillnessorinjuryandtocreatestandardsfortheWHOmembercountries.NIOSHalsoworkshandinhandwithOSHAtoidentifyworkplaceillnessesandtotrackdiseasesthatcanbepassedfromonepersontoanotherintheworkenvironment.Itdoesresearchonoccupationalsafetyandhealthtopicsfromergonomics(wewilldiscussthisshortly)toMRSA(methicillin-resistantStaphylococcusaureus)infectionsandworkplaceviolence.NIOSHresearchfrequentlyprovidesthedatathatOSHAusestocreatenewworkplacestandardsandregulations.

EmployeeHealthMeetingOSHArequirementsisnecessary,buttherearemanyotheraspectstomaintaininggoodemployeehealth.Employeehealthisthestateofphysicalandpsychologicalwellnessintheworkforce.Wehavetoconsiderbothphysicalandpsychologicalhealthinordertohaveastrongworkforce.Weneedtoprovideouremployeeswiththeabilitytomaintainboth.Inthissection,wearegoingtocompleteaquickreviewofsomeoftheotherphysicalandpsychologicalissuesintoday’sworkplace.

EmployeeAssistancePrograms(EAP)andEmployeeWellnessPrograms(EWP)TwosignificantemployeeservicesthatcanassistwithemployeementalandphysicalhealthareEmployeeAssistancePrograms(EAPs)andEmployeeWellnessPrograms(EWPs),alsoknownasWorkplaceWellnessPrograms(WWPs).EAPsandEWPscontinuetogrowinpopularityintheUnitedStatesandothercountriesaroundtheworld,mostlikelybecausecompaniesareseeingbenefitsfromtheuseofsuchprograms.18

EAPs.AnEAPisasetofcounselingandotherservicesprovidedtoemployeesthathelpthemtoresolvepersonalissuesthatmayaffecttheir

work.Morethanhalfofprivatesectorworkershaveaccesstoanemployeeassistanceplan(EAP).19AnEAPisdesignedtoassistemployeesinconfrontingandovercomingproblemsintheirpersonallifesuchasmaritalproblemsordivorce,financialproblems,substanceaddictions,emotionalproblems,andmanyotherissues.Employerspayfortheseservicesbecausetheyhelpretainvaluableemployeesand,asaresult,savethecompanymoney.20,21

EAPsareconfidentialservices.TheemployeecancontacttheEAPandreceivecounselingand/ortreatment.Insomecases,EAPsmayberegulatedbyfederallaws,includingtherequirementsofERISAandCOBRA,soHRpersonnelneedtobeawareofthisfact.

LO12-3DiscussEAPsandEWPsandwhattheirvalueistocompaniesandemployees.

SHRMX:3

EmployeeHealth

SHRMK:B9

EmployeeAssistance/WellnessPrograms

SHRMK:B17

WellnessPrograms

EmployeehealthThestateofphysicalandpsychologicalwellnessintheworkforce

EAPAsetofcounselingandotherservicesprovidedtoemployeesthathelpthemtoresolvepersonalissuesthatmayaffecttheirwork

EWPPlansdesignedtocatertotheemployee’sphysical,insteadofpsychological,welfarethrougheducationandtrainingprograms

EWPs.EWPsaredesignedtocatertotheemployee’sphysical,insteadofpsychological,welfarethrougheducationandtrainingprograms.Wellnessprogramsofferhealtheducation,trainingandfitness,weightandlifestylemanagement,andhealthriskassessment

servicestoemployees.Theobviousgoalisimprovingthehealthofourworkforce,butwhy?CompanieslikeJohnson&JohnsonclaimEWPshavesucceededinslowinghealthcarecostincreases.22EWPscanreturnfrom$2to$6inlowerhealthcareandlostproductivitycostsforeverydollarspent.23AnotherinterestingeffectofEWPsappearstobelowerturnover:“Healthyemployeesstaywithyourcompany.”24 Sowellnessprogramsprovideemployerswithhighreturnoninvestmentandhelpwithproductivity,absenteeism,andturnover.Nowondercompaniescontinuetoinstitutetheseprograms.

WORKAPPLICATION12-3SelectanorganizationthatoffersanEmployeeAssistanceProgram(EAP)andEmployeeWellnessProgram(EWP).Describetheprogramofferings.

ErgonomicsandMusculoskeletalDisorders(MSDs)AccordingtoOSHA,“Ergonomicsisthescienceoffittingworkplaceconditionsandjobdemandstothecapabilitiesoftheworkingpopulation.”25TheCDCidentifiesthegoalofergonomicsasbeingto“reducestressandeliminateinjuriesanddisordersassociatedwiththeoveruseofmuscles,badposture,andrepeatedtasks.”26Workplaceergonomicsfocusesondesignofjobsandworkspacestolimittherepetitivestressesthatemployeesfaceindoingtheirdailywork.OSHAprovidesemployerswithasetofvoluntaryguidelinesonergonomicsintheworkplace.ThesevoluntaryguidelinestooktheplaceofanearliersetofmorerigidrulesfromOSHAonergonomicsthatwererescindedbyCongressin2001.27

SeveralindustriesdostillhavespecificsetsofguidelinesprovidedbyOSHAthough.OtherindustrieshavethegeneralsetofvoluntaryguidelinespublishedbyOSHA.28ItiswisefortheorganizationtoknowOSHA’svoluntaryguidelinesforyourindustry,eventhoughtheearlierergonomicsrulewasrescinded,because“undertheOSHAct’sGeneralDutyClause,employersmustkeeptheirworkplacesfreefromrecognizedserioushazards,includingergonomichazards.Thisrequirementexistswhetherornottherearevoluntaryguidelines.”29

Itjustmakessensetopayattentiontoergonomics.Musculoskeletaldisorders(MSDs)“affectthebody’smuscles,joints,tendons,ligaments,andnerves”30andcanoccurinmanydifferentworkenvironments.Theycantakeatollonemployeeproductivitywhenworkerssufferfromtheseissues.MSDsincludeacommonlyknownrepetitivestressinjury(RSI)calledcarpaltunnelsyndromewherethenervesinthewristbecomeinflamed

andpainful,makingmovementdifficult.

ButalargenumberofotherproblemsfallundertheMSDcategory,includingotherRSIslikerotatorcuffsyndrome,tenniselbow,carpetlayer ’sknee,andmanyothers.31Alloftheseproblemshavethepotentialtocosttheorganizationmoneyintheformoflostproductivityaswellasworkers’compensationclaims.Sopayingattentiontoergonomicsatworkcanbothimproveproductivityandsavethecompanymoney.

ReviewtheCornellUniversityergonomicsprogramcalledCUErgoifyouhaveaninterestinergonomics.Thesitehasalargenumberoftoolstohelpdesignjobsthatarelessstressfulonemployees;foralisting,gotoitswebsiteathttp://ergo.human.cornell.edu.

SHRME:6

ComplianceWithLegalRequirements:ErgonomicsandWorkplaceSafety

SHRMX:11

Ergonomics

WORKAPPLICATION12-4Identifypotentialergonomicsandmusculoskeletaldisorders(MSDs)inanindustrythatyouworkinorwanttoworkin.

SafetyandHealthManagementandTrainingHRmanagersneedtounderstandOSHArulesandstandardsinordertobeabletomaketheworkplaceassafeaspossible,andofferingEAPsandEWPsandstressmanagementtraining(ournextsection)ispartofsafetyandhealthmanagement.

Bykeepingthenumberofaccidentsandincidentslow,welowerabsenteeismplusincreasejobsatisfaction.Byimprovingtwoofourfourmostimportantvariablesatwork—absenteeismandjobsatisfaction—wearealmostassuredofincreasingproductivityovertime.ThisisyetanotherwaythatHRMcanassistinreachingorganizationalgoalswhileusingtheleastamountoforganizationalresourcespossible.

SHRMX:6

SafetyManagement

ErgonomicsAccordingtoOSHA,“thescienceoffittingworkplaceconditionsandjobdemandstothecapabilitiesoftheworkingpopulation”

StressPeopleoftenhaveinternalreactionstoexternalenvironmentalstimuli.Stressisthebody’sreactiontoenvironmentaldemands.Thisreactioncanbeemotionaland/orphysical.AccordingtoForbes,35%ofAmericanshavethoughtaboutleavingajobbecauseofstressatwork,and42%haveactuallydoneso!32AsstatedinChapter1,absenteeismiscostly,andthereisasignificantrelationshipbetweenabsenteeismandworkplacestress.33Inthissection,wediscussfunctionalanddysfunctionalstress,howtomanageit,andthestresstug-of-war.

FunctionalandDysfunctionalStressWhat’sthedifferencebetweenfunctionalanddysfunctionalstressandtheconsequencesofdysfunctionalstress?

FunctionalStress.Stressisfunctional(alsocalledacutestress)whenithelpsimproveperformancebychallengingandmotivatingpeopletomeetobjectives.Peopleperformbestundersomepressure.Whendeadlinesareapproaching,adrenalineflowsandpeoplerisetotheoccasion.Stressactuallyprovidesgreaterstrengthandfocusthanwethinkwearecapableof—solongasweareincontrolofit.34

LO12-4Comparefunctionalanddysfunctionalstressandhowtomanagedysfunctionalstress.

WORKAPPLICATION12-5Describeanysafety,health,andstresstrainingofferedbyanorganization,preferablyoneyouworkorhaveworkedfor.

DysfunctionalStress.Ontheotherhand,toomuchstressisdysfunctionalbecauseitdecreasesperformance.Stressorsarefactorsthatmay,ifextreme,causepeopletofeeloverwhelmedbyanxiety,tension,and/orpressure.Stressthatisconstant,chronic,andseverecanleadtoburnoutoveraperiodoftime.35Burnoutisaconstantlackofinterestandmotivationtoperformone’sjob.Burnoutresultsfromtoomuchstress.Stressthatissevereenoughtoleadtoburnoutisdysfunctionalstress.36Butstressisanindividualmatter.Somepeoplearebetterathandlingstressthanothers.37

WORKAPPLICATION12-6Assessyourabilitytodealwithstress.Identifywhenyoutendtogetstressedandthenegativeconsequencesyouexperiencefromdysfunctionalstress.

CausesofStress.Herearesixcommonreasonsforworkplacestress:Personality(completeSelf-Assessment12-1todetermineifyouareaTypeAorTypeB),OrganizationalCultureandChange(highlycompetitiveculturesandchangearestressful),Management(abadbosscanstressemployees),Typeofwork(somejobsaremorestressful),andRelationships(jerkscancauseyoustress).ThecausesofstressarealsolistedinExhibit12-4,theStressTugofWar.

NegativeConsequencesof

DysfunctionalStress.HRmanagersneedtounderstandandbeabletorecognizethesymptomsofstress,andespeciallydysfunctionalstress,becauseitcausesmentalandphysicalhealthproblems.38Morethan80%ofAmericanssaidtheywerelessproductiveatworkbecauseofstress.Stresscostsanestimated$300billionayearinabsenteeism;decreasedproductivity;employeeturnover;accidents;andmedical,legal,andinsurancefees.39Stresscausesheadaches,depression,andillness.40Herearesomeotherthingsdysfunctionalstressdoestous:Itweakensourimmunesystem,itmakesussickmoreoften,itagesussowelookolder,itmakesusfatter,itdecreasesoursexdrive,itruinsoursleep,anditcanevenkillus.41Stress,likeperception,isanindividualmatter.Inthesamesituation,onepersonmaybeverycomfortableandstress-free,whileanotherfeelsstressedtothepointofburnout.

StressManagementWhenwecontinuallyfeelpressuredandfearthatwewillmissdeadlinesorfail,weareexperiencingstress.Wecanlimitjobstress,42andmanyfirmsaremakingwellnessatopprioritythroughtrainingemployeesinstressmanagement.43EWPsfrequentlyprovidestressmanagementprogramsforemployees.Stressmanagementistheprocessofreducingstressandmakingitfunctional.Herearesixstressmanagementtechniquesthathaveprovenvaluableinstressreduction.44

TimeManagement.Generally,peoplewithgoodtimemanagementskillsexperiencelessjobstress.VinceLombardi,thefamousfootballcoach,said,“Planyourworkandworkyourplan.”Rememberthatprocrastinatinggivesusmoretimetothinkaboutwhatwehavetodoandto

getstressedbeforestarting,sostartingearlierlowersstress.It’sahugereliefwhenwefinishthetask.45Ifweareperfectionists,wemaydoahigh-qualityjob,butperfectionismstressesusasweperformthework,sosometimesit’sOKtodefinewhatis“goodenough”andstopthere.

StressThebody’sreactiontoenvironmentaldemands

StressorsFactorsthatmay,ifextreme,causepeopletofeeloverwhelmedbyanxiety,tension,and/orpressure

BurnoutConstantlackofinterestandmotivationtoperformone’sjob

12-1Selfassessment

PersonalityTypeAorBandStressIdentifyhowfrequentlyeachitemappliestoyouatworkorschool.Placeanumberfrom1to5onthelinebeforeeachstatement.

5=usually 4=often 3=occasionally 2=seldom 1=rarely

_______1.Ienjoycompetition,andIwork/playtowin._______2.Iskipmealsoreatfastwhenthereisalotofworktodo._______3.I’minahurry._______4.Idomorethanonethingatatime._______5.I’maggravatedandupset._______6.IgetirritatedoranxiouswhenIhavetowait._______7.Imeasureprogressintermsoftimeandperformance._______8.Ipushmyselftoworktothepointofgettingtired._______9.Iworkondaysoff.______10.Isetshortdeadlinesformyself.______11.I’mnotsatisfiedwithmyaccomplishmentsforverylong.______12.Itrytooutperformothers.______13.Igetupsetwhenmyschedulehasto

bechanged.______14.Iconsistentlytrytogetmoredoneinlesstime.______15.ItakeonmoreworkwhenIalreadyhaveplentytodo.______16.Ienjoywork/schoolmorethanotheractivities.______17.Italkandwalkfast.______18.Isethighstandardsformyselfandworkhardtomeetthem.______19.I’mconsideredahardworkerbyothers.______20.Iworkatafastpace.______Total.Addupthenumbersyouassignedtoall20items.Yourscorewillrangefrom20to100.Indicatewhereyourscorefallsonthecontinuumbelow.

Thehigheryourscore,themorecharacteristicyouareoftheTypeApersonality.Theloweryourscore,themorecharacteristicyouareoftheTypeBpersonality.

TheTypeApersonalityischaracterizedasfast-moving,hard-driving,time-conscious,competitive,impatient,andpreoccupiedwithwork.TheTypeBpersonalityisprettymuchtheoppositeofTypeA.Ingeneral,peoplewithTypeApersonalitiesexperiencemorestressthanpeoplewithTypeBpersonalities.IfyouhaveaTypeApersonality,youcouldendupwithsomeoftheproblemsassociatedwithdysfunctionalstress.

Relaxation.Relaxationisanexcellentstressmanagementtechnique,andweshouldrelaxbothonandoffthejob.Laughterreleasesstress-reducingendorphinsthatlowerbloodpressure,relaxmuscles,stimulateourbrain,improveourmood,andincreaseouroxygenintake—solaughitup.46Inaddition,understandthateachofushasourownwayofrelaxing.Itdoesn’tmatterhowyourelax,aslongasyourelaxinawaythatissoothingtoyou.Exhibit12-3listsmusclerelaxationexercisesthatwecandoalmostanywhere.

Aerobicexerciseisaneffectivewaytomitigatestressandtameanxiety.

©iStockphoto.com/kjekol

Nutrition.Goodhealthisessentialtoeveryone’sperformance,andnutritionisamajorfactorinhealth.Underlyingstresscanleadtoovereatingandcompulsivedieting,andbeingoverweightisstressfulonthebody.Unfortunately,around34%ofAmericansareobese,whileanother32%areoverweight.47Menwithawaistover40inches,andwomenover35inches,aretwiceaslikelytodieaprematuredeath.48ObesitycostsUSbusinessesabout$45billionayearinmedicalexpensesandlostproductivity.49

Weshouldwatchourintakeofjunkfoods,whichcontainfat(friedmeatandvegetables,includingFrenchfriesandchips),sugar(pastry,candy,fruitdrinks,andsoda),caffeine

(coffee,tea,soda),andsalt.Eatmorefruitsandvegetablesandwholegrains,anddrinkwaterandpurejuices.Realizethatpoornutrition;overeating;andtheuseoftobacco,alcohol,anddrugstoreducestressoftencreateotherstressfulproblemsoveraperiodoftime.

Exhibit12-3RelaxationExercises

WORKAPPLICATION12-7Identifyyourmajorcausesofstress;thenselectstressmanagementtechniquesyouwillusetohelpovercomethecausesofyourstress.

12-1Ethicaldilemma:whatwouldyoudo?

ObesityandSmokingBeingoverweightandsmokingplacesstressonthebody,andpoornutritioncontributestoobesity.Obesityisontheincrease,anditisamajorcontributortotherisingcostofhealthcare,asissmoking.HealthofficialsaretryingtopersuadeAmericanstoquitsmokingandloseweight.Thegovernmenthasreleasedpublicserviceadstoconvincepeopletostopsmokingandgetinshapeandeatright.

1. Isthereprejudiceanddiscriminationagainstobesepeopleand/orsmokersatwork?

2. Isitethicalandsociallyresponsibleforthegovernmenttotrytogetpeopletostopsmokingandloseweightthroughadsandothermethods?

3. Shouldtaxmoneybespentonadstopromotenotsmoking,exercise,andhealthyeating?

4. WhatisthereasonfortheincreaseinobesityintheUnitedStates?Somepeopleblamerestaurantowners(likeMcDonald’sanditspriorsuper-sizeit)andotherfoodmarketers(CokeandPepsi,Frito-Lay)fortheobesityproblem.Somesayconsumerslovejunkfood,justwanttoovereat,theydon’tcareaboutbeingobese,andaretoolazytoexercise.Whatdoyouthink?

5. Shouldthegovernmentpasslawstorequirejunkfoodtobehealthier?Ifso,whatshouldthelawsrequire?

6. Shouldthegovernmentpasslawstorestrictwherepeoplecansmokeand/orpreventpeoplefromsmoking?Ifso,whatshouldthelawsrequire?

Exercise.Contrarytothebeliefofmany,properexerciseincreasesourenergylevelratherthandepletingit.Ifwearestressedforanyreason,thefastestwaytotameouranxietycanbephysicalactivity.Infact,exerciseisusuallymoreeffectivethanantidepressantsinmakingmoderatedepressiondisappear.50

Aerobicexercise,inwhichweincreasetheheartrateandmaintainitfor30minutes,isgenerallyconsideredthemostbeneficialtypeofexerciseforstressreduction.Fastwalkingorjogging,biking,swimming,andaerobicdanceorexercisefallintothiscategory.Playingsportsandweightliftingarealso

beneficialandcanbeaerobicifwedon’ttakemanybreaksandwecross-trainbymixingweightswithotheraerobicexercises.

PositiveThinking.Peoplewithanoptimisticpersonalityandattitudegenerallyhavelessstressthanpessimistsbecausethoughtsofgloomanddoom(whichareoftendistortedanyway)leadtostress.51Oncewestarthavingdoubtsaboutourabilitytodowhatwehavetodo,webecomestressed.Makestatementstoyourselfintheaffirmative,suchas“Thisiseasy,”and“Iwilldoit.”Repeatingpositivestatementswhiledoingdeepbreathinghelpsusrelaxandincreaseperformance.

SupportNetwork.Reachingouttosupportivefamily,friends,andcolleaguesinournetworkcanhelpreducestress.52Sowecanfindaconfidantatwork,

orpeopleoutsideoftheworkplace,andtalkthingsthrough.53Beingoutofwork-lifebalanceisstressful,socultivateasupportivenetworkoffamily,friends,andcolleaguestohelpmaintainthatcriticalwork-lifebalance.54

TheStressTug-of-WarThinkofstressasatug-of-warwithyouinthecenter,asillustratedinExhibit12-4.Ontheleftarecausesofstresstryingtopullyoutowardburnout.Ontherightarestressmanagementtechniquesyouusetokeepyouinthecenter.Ifthestressbecomestoopowerful,itwillpullusoffcentertotheleft,andwemaysufferburnoutanddysfunctionalstresswithlowperformance.Ifthereisnostress,wetendtomovetotherightandjusttakeiteasyandperformatlowlevels.Thestresstug-of-warisanongoinggame.Ourmainobjectiveistostayinthecenterwithfunctionalstress,whichleadstohighlevelsofperformance.55

Exhibit12-4TheStressTug-of-War

Ifwetrystressmanagementbutstillexperiencelong-termburnout,weshouldseriouslyconsidergettingoutofthesituation.Askyourselftwoquestions:Ismylong-termhealthimportant?Isthissituationworthhurtingmyhealthfor?Ifyouansweryesandnorespectively,achangeofsituationsmaybeadvisable.Careerchangesareoftenmadeforthisreason.

WorkplaceSecurityWorkplacesecurityisthemanagementofpersonnel,equipment,andfacilitiesinordertoprotectthem.Whileworkplacesafetydealswiththeissueofminimizingoccupationalillnessandinjury,workplacesecuritycoverstopicssuchasviolenceintheworkplace,bombthreats,managementofnaturalandman-madedisasters,risktocompanycomputersystemsandintranets,andmanyotherissues.Workplacesecurityisconcernedwithmitigatingtheseriskstotheorganizationanditsmembers.SecuritasSecurityServicesUSA,alargesecurityfirm,identifiedcybersecurity,workplaceviolence,businesscontinuityplanning,andemployeeselectionandscreeningasthetopsecuritythreatstobusinesses.Priorto2010,workplaceviolencehadbeenthenumberoneconcernformorethan10years,butcybersecurityreplaceditasthenumberoneconcernin2010.56Let’stakeabrieflookatsomeofthesemajorworkplace

securityissuesinorderofconcern.

CyberSecurityLet’sdoaquickreviewofsomeoftheissuescompaniesfacetodaywithcybersecurity,fornon-ISexperts.Cybersecurityistheuseoftoolsandprocessestoprotectorganizationalcomputersystemsandnetworks.Thistopichasbeeninthenewsconstantlyforthepastseveralyears,withconcernsthatamateurandprofessionalhackers,hacktivists,terroristorganizations,andevensomegovernmentsareworkingtobreakintocompanycomputersystemsforavarietyofpurposes.TheUSattorneygeneralrecentlyaccusedhackersworkingfortheChinesegovernmentofhackingUScompanies,includingWestinghouse,Alcoa,andtheUnitedSteelWorkersUnion.57Everycompanyhastobeconcernedwiththisissueanddowhatitcantopreventbecomingavictim.

HRMisespeciallyconcernedwithoutsiderspenetratingcompanycomputersystemsthat

havesensitiveemployeeinformationonthem,suchasinformationonmedicalrecords,payrollandbankingdata,andotherpersonaldata.HRmanagersmustworkwithcompanysecuritymanagerstoputupstrongroadblockstooutsiderswhoseektoentersystemswiththistypeofdata.Whiletherearenofoolproofsystems,wehavetodothebestthatwecantomakeitashardaspossibleforhackersorotherunauthorizeduserstofindandexploitemployeedata.Obviously,theHRmanagerwon’tbethepersontoresearchandimplementthistypeofcomputersecurity,butwedoneedtoknowthatitisanissueandworkwithourcompany’scomputersecuritymanagerstomakeitashardaspossibletogetaccessfromunauthorizedusers.

LO12-5Listthetopconcernsforsecurityintheworkplacetoday.

WorkplacesecurityThemanagementofpersonnel,equipment,andfacilitiesinordertoprotectthem

SHRMX:7

SecurityConcernsatWork

SHRMX:9

DataSecurity

12-3ApplyingTheConcept

StressManagementTechniquesPuttheletterofthetechniquebeingusedonthelinenexttothecorrespondingstatement.

1. timemanagement2. relaxation3. nutrition4. exercise5. positivethinking6. supportnetwork

____15.“I’vebeenstressedout,soIhavebeenprayingmorelately.”____16.“I’vebeenworkingonpositiveaffirmations,soIhavebeenrepeatingtomyselfthat‘Icanmeetthedeadline.’”____17.“I’mnottooorganized,soI’vestartedusingato-dolist.”____18.“I’vebeentakingawalkatlunchtimewithLatoya.”____19.“I’vebeengettingupearlierandeatingahealthybreakfast.”____20.“Ihaveabadboss,soI’vebeentalkingtomycolleagueTomabouther.”

GeneralSecurityPolicies,IncludingBusinessContinuityandRecoveryCommondisastersandemergenciesmightincludesucheventsasfires,floods,earthquakes,severeweather,tsunamis,terroristattacks,bombthreats,andmanyothers.Somearedependentonthecompany’sgeographiclocation,whileothersareuniversalpossibilities.Onethingissure,though—disastersandemergencieshappenwithoutwarning,creatingasituationinwhichthenormalorganizationalservicescanbecomeoverwhelmedorevendisappear.YoumayrememberthenuclearcrisisinFukushima,Japan,whenatsunamiwipedoutelectricalpowertoanuclearplantandthen,becausetherewasnopowertopumpwater,severalofthereactorsmelteddown.

Duringsuchacrisis,companiesrequireaset

ofprocessesthataddresstheneedsofemergencyresponseandrecoveryoperations.TheJapanesepowercompany,TEPCO,didnothavesufficientprocessesforsuchadisaster.Toaddressthesetypesofemergencies,thecompanyshouldestablishanemergencyresponseplan,whichprovidesguidelinesforimmediateactionsandoperationsrequiredtorespondtoanemergencyordisaster,andtheseguidelinesneedtotakeintoconsiderationeverythingthatacompanycanthinkofinordertoprovidetheappropriateplan.

Theoverallprioritiesofanyplaninanyemergencyordisastershouldbethese:

Protecthumanlife;prevent/minimizepersonalinjury.Preservephysicalassets.Protecttheenvironment.Restoreprogramsandreturnoperationstonormal.

ButwhatpartdoestheHRMprofessionalplay

inthisplanningprocess?HRMshouldbepartofthemanagementteamthatdeterminesthegoalsoftheplan.Oncethegoalsaredetermined,HRcanagainhelpoperationalmanagementtostaffthevariouskeypositionsinthedisasterrecoveryteamsbyunderstandingthetypesofpeoplethatarenecessarytodothesejobsundercrisiscircumstances.

Additionally,HRistypicallyresponsibleforthetrainingfunctioninthecompany,andeveryoneintheorganizationneedstobetrainedontheplananditsprocesses.Thetrainingshouldalsobecomepartofthenewemployeeorientation(Chapter7)sothatallpersonnelareawareofthecorrectresponsestopotentialemergencies.TherearemanyexamplesofgoodemergencyresponseandbusinessrecoveryplansoutthereontheInternetforfree.Allthecompanyneedstodoisfindagoodsampleandmodifyitfortheirparticularcircumstancesandthelikelydisastersthatwouldoccurbasedontheirgeographiclocations.

OnefinalthingthatHRMneedstodetermineiswhereextraassistancemightcomefromifneededbecauseofadisasteroremergency.Forinstance,ifsevereweatherweretokillandinjureanumberofcompanyemployees,griefcounselingservicesmightbecomenecessary.Mostcompaniesdon’troutinelyhavegriefcounselorsonhand,butinthistypeofsituationmayneedaccesstosuchcounselorsveryquickly.HRMcanthinkoflikelysituationsandtheiraftermathsanddeterminewherethesetypesofservicesmightbeprocurediftheneedpresenteditself.OnepotentialproviderinatleastsomecasesmightbethevendorthatservicesthecompanyEAP.RecallthatEAPsareservicesforthepsychologicalwell-beingofouremployees.Therefore,theymayhavetheneededpersonneltohandlethepsychologicalaftermathofadisaster.

SHRMX:2

DisasterPreparation,Continuity,andRecoveryPlanning

CybersecurityTheuseoftoolsandprocessestoprotectorganizationalcomputersystemsandnetworks

WorkplaceViolenceHRmanagersreportincreasingviolencebetweenemployees,statingitcanhappenanywhere.Anddon’tthinkthatthisisjustanissueofviolentmen.Womencommitnearlyaquarterofallthreatsorattacks.Therehasalsobeenanincreaseinviolencebetweenoutsidersandemployees,suchascustomersshootingemployeesandothercustomers.Morethanonein10workplacefatalitiesisfromhomicide,andhomicideistheleadingcauseofdeathforwomenintheworkplace.58Thekeytopreventingworkplaceviolenceistorecognizeandhandlesuspiciousbehaviorbeforeitturnsviolent.59

SignsofPotentialViolence.Workplaceviolenceisrarelyspontaneous;itismorecommonlypassive-aggressivebehaviorinrisingsteps,relatedtoan

unresolvedconflict.Employeesdogivewarningsignsthatviolenceispossible,soitcanbepreventedifwelookforthesesignsandtakeactiontodefusetheangerbeforeitbecomesviolent.60

Takeverbalthreatsseriously.Mostviolentpeopledomakeathreatofsomekindbeforetheyact.Ifwehearathreat,orhearaboutathreatfromsomeoneelse,talktothepersonwhomadethethreatandtrytoresolvetheissue.Watchnonverbalcommunication.Behaviorsuchasyelling,gestures,orotherbodylanguagethatconveysangercanalsoindicateathreatofviolence.Talktothepersontofindoutwhat’sgoingon.Watchforstalkingandharassment.Itusuallystartssmall,butitcanleadtoviolence.Putastoptoit.Watchfordamagetoproperty.Ifanemployeekicksadesk,punchesawall,andsoon,talktothepersontogettothereasonforthebehavior.Peoplewho

damagepropertycanbecomeviolenttocoworkers.Watchforindicationsofalcoholanddruguse.Peoplecanbeviolentifundertheirinfluence.GetthemoutoftheworkplaceandgetthemprofessionalhelpfromtheEAPifit’sarecurringproblem.Includetheisolatedemployee.Itiscommonforviolentpeopletobeemployeeswhodon’tfitin,especiallyiftheyarepickedonorharassedbycoworkers.Reachouttothisemployeeandhelpthemfitinorgetthemtoaplacewheretheydo.Lookforthepresenceofweaponsorobjectsthatmightbeusedasweapons.Youmaytrytalkingtothepersonifyoufeelsafe,butgetsecurityinvolvedifyoufeeltheleastbitunsafe.

Securityisofconcerntoorganizationstoday.

Stockbyte/Thinkstock

LO12-6Explainwaysinwhichcompaniescanmaketheworkplacesaferforemployees.

OrganizationalPreventionofViolence.Thenumberonepreventivemethodistotrainallemployeestodealwithangerandpreventviolence,61whichiswhatyouarelearningnow.However,thestartingplaceiswithawrittenpolicyaddressingworkplaceviolence,andazero-tolerancepolicyisthebestpreventivepolicy.FromtheHRmanager ’sperspective,itisveryimportanttotakequickdisciplinaryactionagainstemployeeswhoareviolentatwork.Otherwise,aggressionwillspreadintheorganization,anditwillbemoredifficulttostop.Managersespeciallyneedtoavoidusingaggressionatworkbecauseemployeesmorereadilycopymanagers’

behaviorthanotheremployees’.

AsdiscussedinChapter9,theorganizationshouldhaveasystemfordealingwithgrievances,anditshouldalsotrackincidentsofviolenceaspartofitspolicy.Organizationscanalsoscreenjobapplicantsforpastorpotentialviolencesothattheyarenothired.Theyshouldalsodevelopagoodworkenvironmentaddressingtheissueslistedaboveascausesofviolence.Demotions,firing,andlayoffsshouldbehandledinahumanewayfollowingtheguidelinestodealwithanger,andoutplacementservicestohelpemployeesfindnewjobscanhelpcutdownonviolence.

SocialMediaforWorkplaceSafetyandSecurityOrganizationsaroundtheworldareestablishingsecurityalertsystemstobeusedinthecaseofacompanyemergencyofanytype,includingaviolentindividualorgrouponorganizationproperty.ThesystemsuseexistingtechnologylikeTwitterandtextmessagingtoprovideimmediatewarningstoallpersonswhoaresigneduptoreceivealerts,andtheycanevengivetheminformationonwhatstepstotaketoremainsafeinsuchsituations.Thesesystemshavealreadyundoubtedlysavedlivesinviolentincidentsinmanycompanies,andit’snotthatexpensive,soanycompanywithoutsuchasystemshouldprobablylookatinstallingthecapabilityassoonasfeasible.

EmployeeSelectionandScreeningWediscussedtoolsconcerningemployeeselectionandscreeninginChapter6,butweneedtoberemindedofsomeofthemagainherebecauseoftheirimportancetocompanysecurity.Thefirsttoolthatwewanttomakesurethatweuseinemployeescreeningisbackgroundchecks.Recallthatwecanbeheldliableformonetarydamagesifweareguiltyofa“negligenthire.”Onewaytoguardagainstsuchahireisthroughtheconsistentuseofcriminalbackgroundchecksthatspecificallylookforahistoryofviolentactionsorthreatsofviolenceonthepartofanapplicantoremployee.

Websearchescansometimesturnupnegativeinformationonanapplicantthatmayshowthattheyareapotentialsecurityrisk,evenwhencriminalchecksdonot.Inaddition,creditchecksmightshowevidenceofa

historyofunethicalbehaviorthatwouldmakeitmorelikelythatanapplicantmightbeunscrupulous,andmightevenintentionallyharmotheremployeesifhired.Sowedohavesometoolsavailable,aslongasthestateinwhichthecompanyislocatedallowssuchchecks.

Inadditiontobackgroundchecks,substanceabusetestingcanprovideuswithatooltominimizethesecuritydangersinourcompany.AswenotedinChapter6,“Mostemployershavetherighttotestforawidevarietyofsubstancesintheworkplace,”62andtheformerheadoftheWhiteHouseOfficeofNationalDrugControlPolicyhassaidthatthe“issueofdrugsintheworkplaceisanunderstatedcrisisthatresultsin$200billioninlostproductivityannually.”63AccordingtoSHRM,“Substanceabusepreventionisanessentialelementofaneffectiveworkplacesafetyandsecurityprogram.Properlyimplementedpreventiveprograms—includingdrugandalcoholtesting—protectthebusiness

fromliability.”64 TheUSDepartmentofJusticenotedthat“thelinkbetweendruguseandcrimehasbeenwell-documentedinrecentyears.”65Screeningoutsubstanceabusersintheapplicantstagecanminimizesecuritythreatstotheorganizationbecausethereisstrongevidencethatatleastsomesubstanceabuserswillcommitcrimes,includingviolentcrimesatworkinmanycases.

TrendsandIssuesinHRMWhataresomeofthesignificanttrendsandissuesinworkplacesafetyandhealth?First,wearegoingtoexploreemployeewellnessinabitmoredetail.Thenwewilltakealookatonesignificantprobleminmodernworkplaces—bullyingbehavior.

EmployeeWellnessThereisstrongevidencethatAmericans(andpeopleinmanyothercountries)donotexerciseenough.MorethanathirdofAmericansareobese,withmanymoreoverweight.66Employeewellnessprograms(EWPs)worktohelpouremployeesbecomemorehealthyandfitandtolowertheincidenceofthesetypesofhealthproblems,socompaniesarepromotingthem.

Anyexerciseisbetterthannone.Gettingpeopleupandmovingisvaluabletoorganizationsbecause“sittingisthesmokingofourgeneration.”67AresearchstudybytheNationalInstitutesofHealthsaysthat“sittingforprolongedperiodscancompromisemetabolichealth”andthat“toomuchsittingisdistinctfromtoolittleexercise.”68

AlthoughEWPsarebeneficial,currentresearchstatesthatatleastsomeofthe

benefitsthathavebeenreportedarenotvalidmeasures.Still,companiesshouldconsiderwellnessprogramsfortheirworkforce—evenifthecost-benefitrelationshipisbasically1:1.Theperipheralbenefitsoflowerabsenteeismandhigherproductivityandjobsatisfactionwilllikelyleadtoatleastanindirectbenefitfromsuchprograms.

BullyingintheWorkplaceHaveyoueverbeenthevictimofabully—ontheschoolplaygroundoratwork?Theyear2013wasaneye-openingyearforbothemployersandemployeeswhoareconcernedwith,orhavebeenvictimsof,bullying.

Bullyingbehaviorshavebeenfoundtobefourtimesmorecommonthansexualharassment,69buttherearestillnolawsatthenationallevelintheUnitedStatesthatdealdirectlywithbullyingasanoffense.70Therearecertainlywaysinwhichmanagerscanuseexistinglawswhenbullyingbehaviorsarebasedonprotectedclasscharacteristics(e.g.,race,religion,disability,etc.)orotherillegalactionssuchasassaultorsexualharassment,butthereisnofederallawdirectlyassociatedwithworkplacebullying.

HRmanagersneedtoknowthestateandlocallawsthatcanbeusedforbullyingbehaviors,

buttheyalsoneedtoaddresstheissueincompanyhandbooksandprovidetrainingonprocessesthatshouldbeusedifsomeonesuspectsbullyingbehaviorsorarethemselvesavictimofsuchbehavior.Hereisabasicsetofstepsthatweneedtoputintoplaceinordertostopbullyinginourcompany:

1. Developapolicyonbullying,definingtheconceptandmakingitclearthatbullyingbehaviorwillnotbetolerated.

2. Trainallemployeesonthepolicyonaroutinebasis—typicallyatleastonceperyearanduponhiringofnewemployees.

3. Developmechanismsforreportingbullyingbehaviorsthatareoutsidethenormalchainofcommand,sincebullyingfrequentlyoccurswithsupervisorswhohavecontroloverotheremployees.

4. InvestigateallreportedincidentsofbullyingusingtheJustCauseproceduresthatwediscussedinChapter9.

5. Takeprompt,fairdisciplinaryactionwiththoseindividualswhohavebeen

foundtobeguiltyofbullyingbehaviors,whetherseniormembersoftheorganizationorsubordinateindividuals.

SHRMC:6

BehaviorWithinEthicalBoundaries

SHRMC:14

AbusiveBehavior—WorkplaceBullying

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary12-1IdentifytheresponsibilitiesofbothemployersandemployeesunderthegeneraldutiesclauseoftheOSHAct.

Employershavetoprovideemployeeswithaplaceofemploymentfreefromrecognizedhazardsthatarecausingorarelikelytocausedeathorseriousphysicalharmandarerequiredtocomplywithoccupationalsafetyandhealthstandardsidentifiedintheact.Employeesalsohaveadutytocomplywithoccupationalsafetystandards,rules,andregulationsinallcaseswhileatwork.

12-2DescribethetypesofviolationsthatOSHAlooksforininspections.

Violationsincludethefollowing:Willful—wheretheemployerknewthatahazardous

conditionexistedbutmadenoefforttoeliminatethehazardSerious—wherethehazardcouldcauseinjuryorillnessthatwouldmostlikelyresultindeathorsignificantphysicalharmOtherthanserious—whereanyillnessorinjuryincurredisunlikelytocausedeathorseriousphysicalharm,buttheviolationdoeshaveadirectimpactonsafetyandhealthDeminimis—violationsthathavenodirectorimmediatesafetyorhealthdangerFailuretoabate—wheretheemployerhasnotcorrectedapreviousviolationforwhichacitationwasissuedandthesettlementdatehaspassedRepeated—theemployerhasbeencitedforthesametypeofviolationwithin5years

12-3DiscussEAPsandEWPsandwhat

theirvalueistocompaniesandemployees.

EAPsandEWPsbothhelpemployeeswiththeirwork-lifebalance.EAPsprovideconfidentialcounselingandotherpersonalservicestoemployeestohelpthemcopewithstresscreatedbypersonalissuesrelatedtoeitherworkorhomelife.EWPshelpemployeeswiththeirphysicalwellness.Theyprovideprogramstoemployeessuchashealtheducation,trainingandfitnessprograms,weightmanagement,andhealthriskassessments.

12-4Comparefunctionalanddysfunctionalstressandhowtomanagedysfunctionalstress.

Functionalstresshelpstoimproveperformancebychallengingandmotivatingpeopletomeetorganizationalobjectives.Peopleperformbetterundersomepressure.However,toomuchstressis

dysfunctional.Dysfunctionalstressmaycausepeopletofeeloverwhelmedbyanxiety,tension,orpressureandcanleadtoburnout.Stressmanagementtechniquesincludegoodtimemanagementskills,theabilitytorelaxonceinawhile(inwhateverformyouchoose),goodnutrition,moderateamountsofexercise,positivethinkingskills,andastrongpersonalsupportnetwork.Allofthesetoolshelpuscopewithstresssuccessfully.

12-5Listthetopconcernsforsecurityintheworkplacetoday.

Thefourbiggestconcernsofemployerstodayarecybersecurity,workplaceviolence,businesscontinuityplanning,andemployeeselectionandscreening.Cybersecuritydealswiththecompany’scomputerandnetworksecurity.Workplaceviolenceisanothermajorissuebecauseofthe

continuingriseinincidentsofworkplaceviolence.Third,businesscontinuityplanninghasbecomeamuchmoresignificantissuetomostemployersinthepast10years,partlybecauseofterrorismthreatsbutalsobecauseofanumberoflarge-scaleenvironmentalandnaturaldisastersworldwide.Finally,employeeselectionandscreeninghavebecomemoreofanissuebecauseoftheproblemofnegligenthiresandthepossibilityforincreasedworkplaceviolenceifweallowindividualswhohaveahistoryofviolenceintoourorganization.

12-6Explainwaysinwhichcompaniescanmaketheworkplacesaferforemployees.

Thefirstthingthatneedstohappeniswehavetotraineveryonetodealwithangerandpreventviolence.Next,weneedtohave,andfollow,writtenpoliciesonworkplaceviolence.Azero-tolerancepolicyis

thebestpreventivepolicy.Whenviolenceoccurs,takeswiftdisciplinaryactionagainstviolentemployees.Wealsoneedtohaveastrongsystemfordealingwithemployeegrievancesthatshouldalsoallowustotrackincidentsofviolence.Finally,demotions,firing,andlayoffsshouldbehandledinahumanewaytopreventdisplacedanger.

12-7DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermsburnout,312cybersecurity,317EAP,310employeehealth,310ergonomics,311EWP,310SafetyDataSheets,308stress,312stressors,312workplacesafety,304workplacesecurity,316

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. _________isthephysicalprotectionofpeoplefrominjuryorillnesswhileonthejob.

2. _________aredocumentsthatprovideinformationonahazardouschemicalanditscharacteristics.

3. _________isthestateofphysicalandpsychologicalwellnessintheworkforce.

4. _________isasetofcounselingandotherservicesprovidedtoemployeesthathelpthemtoresolvepersonalissuesthatmayaffecttheirwork.

5. _________aredesignedtocatertotheemployee’sphysical,insteadofpsychological,welfarethrougheducationandtrainingprograms.

6. _________isthescienceoffittingworkplaceconditionsandjobdemandsto

thecapabilitiesoftheworkingpopulation.

7. _________isthebody’sreactiontoenvironmentaldemands.

8. _________arefactorsthatmay,ifextreme,causepeopletofeeloverwhelmedbyanxiety,tension,and/orpressure.

9. _________isaconstantlackofinterestandmotivationtoperformone’sjob.

10. _________isthemanagementofpersonnel,equipment,andfacilitiesinordertoprotectthem.

11. _________istheuseoftoolsandprocessestoprotectorganizationalcomputersystemsandnetworks.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Aresomenumberofoccupationalillnessesandinjuriesanacceptablepartofdoingbusiness?Whyorwhynot?Explainyouranswers.

2. DoyouforeseeasituationinwhichyouwouldeverrefusetoallowanOSHAinspectoronyourworksite?Whyorwhynot?

3. WhatactionswouldyoutakeifyouwerethecompanyrepresentativeaccompanyinganOSHAinspectorwhofoundaseriousviolationinyourcompany?Explainyouranswer.

4. DoyouthinktheOSHAandNIOSHoccupationalsafetyandhealthrequirementsgenerallymakesense?Whyorwhynot?

5. Ifyouwereincharge,wouldyouputanEAPintoplaceatyourcompany?HowaboutanEWP?Whyorwhynot?

6. Doyouthinkthatyousufferfromtoomuchstress?Nameafewthingsthatyoucoulddotominimizethedysfunctionalstressinyourlife.

7. Gothroughtheprocessofhowyouwouldtrainyouremployeesonanewbusinesscontinuityanddisasterrecoveryplan.Whatdoyouthinkthemostimportantpartofthetrainingwouldbe?

Why?8. Shouldsmokingbebannedinallbuildingswhere

smokersandnonsmokershavetoworktogether?Whyorwhynot?

9. Whatprogramswouldyouputintoeffectasaleaderinordertomakeyouremployeesunderstandthatoccupationalsafetyandhealtharecriticaltoamoderncompany?

Case12-1Nike:TakingaRunatFixingOutsourcedWorkerSafetyDuringthepasttwodecades,manufacturingcompanieshavereliedmorethaneveronlow-wageworkersintheFarEastasanalternativetohighlaborcostsinordertoremaincompetitiveinworldmarkets.However,thesemultinationalcompanieshavebeencriticizedfortheirinsensitivitytowardtheirsubcontractedemployees’workingconditions.ABangladeshiminimumwageofabout$38amonthisappealingtomajorcorporationsasithelpsthemexpandinternationallyatlowcost;theyspentabout$1trilliononoutsourcingtherein2014.However,Bangladesh’sworkersafetyrecordposesabigthreattothereputationsofthecompaniesthatconductbusinessinthiscountry.Eventhecompaniesthateffectivelymadeeffortstowardimprovingsafetyconditionsarenowatrisk,astheproblemsinBangladesharewidespreadandrisingthroughoutthegarmentindustry—acaseinpointbeingthefootweargiantNike.71

In2014,Nikewasworth$66billionandmanufacturedgoodsinmorethan740factoriesworldwidewithsalesof$24billion.72Foundedin1971,Nikebecametheindustryleaderindesigningandmanufacturingshoes,

apparel,equipment,andaccessoriesbecausetheymanufacturedhigh-quality,high-pricedgoodswithlowmanufacturingcosts.Thesecostswerekeptlowbycontractingoverseaslow-costlabor,anideathatthecofounderandchairmanofthecompany,PhillipH.Knight,cameupwithwhenhewaspursuinghisMBA.Nikesettheindustrytrendforoutsourcingmanufacturing;backin1971,4%ofUSfootwearwasmadeoverseas,butasof2014,thathadrisento98%.73

Nikegrewrapidlyinthe1970swiththeirstrengthinhigh-quality,low-costproducts,butsoonthecompanybecameatargetforprotestors.Inthe1990s,manyconsumersralliedagainstNike’shorrendousoverseasfactoryworkconditions.Asreportedbythepress,Niketooknoresponsibilityforthesefactoryemployees’worksurroundings,statingthatsincetheirmanufacturingwasoutsourcedandtheydidnotownthesefactories,theythereforecouldnotbeheldaccountableforthesafetyproblemsorlaborconditionsthere.74

MereproteststhatbeganwithNike’ssweatshopsintheearly1990scontinuedupuntilthetwofatalincidentsthattookplaceinBangladesh.InNovember2012,112workerswerekilledbyafireinaNike-contractedfactorybecausetheyweretrappedbehindlockeddoors.TheninApril2013,another1,129deathsoccurredafteranoutsourcedfactorycollapsedontopofitsworkersduetoanunstableinfrastructure.Companieswhooutsourcedproductionoverseastothesefactoriesdidnotacceptresponsibilityfortheiractions(exceptforWaltDisneyCo.);thesefirmsclaimedthattheywereinfactsurprisedtoseethattheirbrandedapparelwas

foundinthefactoryrubble.Thesecalamitiesepitomizedtheworstcharacteristicsofsubcontractingandindicatedtheneedforathoroughoverhauloftheentireindustry,includingfactoryowners,laborunions,andrelatedgovernmentagencies.75TheBangladeshigarmentassociationmetwiththerepresentativesofthesefirmstodiscussasolutionstrategy;however,onlytwomajorbrandswerewillingtosignanyagreement.Therestofthecompaniesfoundittoocostlytoimplementthesuggestedchangesanddecidedtofixtheproblemsontheirown.76

Nikefortunatelyimplementedtheirownwork-safetyprogram,ProjectRewire,evenbeforetheincidentshadoccurred.ThisprogramgaveNikecontrolovertheirsubcontractedemployees’workenvironments.Initially,Nikestartedbyremovinghazardousmaterials,suchastoxicsolventsandmoleculargases,fromtheirproducts,therebyreducingpossibleexposurehealthissues.Thisalsotargetedtheirconcernaboutglobalwarmingandtheenvironment.Theythenexaminedtheirsupplychaininordertominimizeworkersafetyissues.Theyeliminatedexcessiveovertimeforfactoryworkers,increasedthehoursofsafetytraining,andreevaluatedtheircontractswiththefactories,continuingtodobusinessonlywiththosefirmsthatwerecommittedtoworkersafetyandtheenvironment.77

Nikeisn’t“doingit”justyet.TheWorkerRightsConsortium,anonprofitgrouppartiallyfundedbyuniversitiesthatmonitorfactoriesproducingcollegeathleticgear,haspublishedreportson16ofNike’ssupplierssince2006allegingviolationsofovertimeand

workerabuse.InAugustof2013,theConsortiumsentanemailtoNikeaskingwhyitdidn’ttakeactionafteritwastoldoneofitssuppliersinBangalore,India,hadn’traisedwagesforits10,000workersafteragovernment-mandatedincrease.ANikespokespersonconfirmedthefactoryhadfailedtocomplywithwagerulesandsaidworkerswerecompensatedlater.78

Questions1. Nikeproductsaremadebyover1,000,000

workersin744factoriesworldwide.Howcanthecompanymonitorworkersafetyandhealthissuesatalloftheselocations?

2. IfNikewasmanufacturingtheirproductsintheUnitedStatesinthesamewaytheywerebeingmadeinoverseasfactories,whichOSHAlawswouldhavebeenviolated?

3. IntermsofEmployeeWellnessPrograms,howdidNikeimproveworkingconditionsforoverseasemployees?

4. Whatergonomicprinciplesmightbeappliedtofactoryworkingconditionstoimproveoperationalsettingsandreduceemployeestress?

5. ProjectRewirerepresentsamajorcommitmentbyNiketoimproveoutsourcedemployeeworkingconditions.Whatmoreshouldthecompanydo,inyouropinion,toincreaseworkplacesafetyforthesefactoryworkers?

6. Formanyfirms,“thebottomline”isthedrivingforcebehindmanystrategicdecisions.Howdoesbeinga“differentiator”helpNikedeterminehowmuchtheyshouldspendonoverseasworkersafety?

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,SchoolofBusinessBrooklynCampus,LongIslandUniversity

SKILLBUILDER12-1DevelopingaStressManagementPlan

ObjectiveTodevelopyourskillatmanagingstress

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Conceptualanddesign2. SHRM2013CurriculumGuidebook—X:

Workplacehealth,safety,andsecurity

AssignmentWriteouttheanswerstothesequestions:

1. Identifyyourmajorcausesofstress.2. Howdoyoucurrentlymanagestress?3. Selectstressmanagementtechniquesyouwilluse

tohelpovercomethecausesofyourstress.

13OrganizationalEthics,Sustainability,andSocialResponsibility

©iStockphoto.com/stevecoleimages

ChapterOutlineEthicalOrganizations

EthicsDefinedContributingFactorstoUnethicalBehaviorEthicalApproaches

CodesofEthicsCreatingandMaintainingEthicalOrganizations

CorporateSocialResponsibility(CSR)CSRDefinedStakeholdersandCSRLevelsofCorporateSocialResponsibility

SustainabilityHRandOrganizationalSustainabilitySustainabilityTrainingTheSustainable21stCenturyOrganization

TrendsandIssuesinHRMSustainability-BasedBenefits

DoesDiversityTrainingWork?

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

13-1Discussthetermethics,includingcommonelementsofthedefinitionPAGE32713-2IdentifyanddiscusseachfactorrequiredinagoodcodeofethicsPAGE33313-3Describethe“businesscase”forcorporatesocialresponsibility(CSR)PAGE33713-4ReviewtheconceptofsustainabilityinabusinesscontextPAGE34013-5DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummaryPAGE346

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveReflectingonethics,Cindysays:Therearemanydefinitionsofethicsandmanyshadesofgrayintheirinterpretations.Somedecisionsmaybelegalbutnot“fair,”justifiablebutnot“correct,”andsometimesitishardtodeterminewhoshouldevenbesettingthestandards.Iprefertocompareethicalbehaviortobehavingwithintegrity.MydefinitionisC.S.Lewis’sobservation:“Integrityisdoingtherightthing,evenwhennooneiswatching.”Businessdoesnotalwaysbehavewithintegrity,asweknowfromscandalssincetheturnofthecentury.In2002,alackofintegritywasexemplifiedbyEnronanditsaccountingmisrepresentations;in2007,itwasthebankingindustryandthesubprimemortgagemorass.Eachtimenewrulesandregulationsareputintoplacetopreventsuchethicalabusesfromeverhappeningagain.Butittakesmorethanreactiverulesandregulations.Toreallymakeadifferenceinbusinessbehavior,weneedtobeginwithourselves—wecanchartthecourseforabetterfuture.Chapter13takesanin-depthlookatwhatyouneedtoknowaboutbusinessethics.

EthicalOrganizationsDoesitpaytobeethical?Thesimpleanswerisyes.Researchshowsapositiverelationshipbetweenethicalbehaviorandleadershipeffectiveness.1Mosthighlysuccessfulpeopleareethical.2Beingethicalmaybedifficult,butithasitsrewards.3Itactuallymakesyoufeelbetter.4Honestpeoplehavefewermentalhealthandphysicalcomplaints,lessanxietyandbackpain,andbettersocialinteractions.5Onthereverseside,unethicalbehavioriscostly,asitcontributedtothe2007-2008financialcrisisthatresultedintheworldeconomiesgoingintorecession.6Ithaslong-termnegativeconsequencesforcompanies,includinglossofreputation,legalfees,andfines.7Also,salesdeclines,increasingcostofcapital,marketsharedeterioration,andnetworkpartnerlosscanallbetheresultofunethicalcorporatebehavior.8Somecompanieshaveevengoneoutofbusiness.

Thus,therehavebeenstrongandrecurringcallsformoreethicalbusinesspracticesglobally.Toimproveethics,businessschoolshavedoubledthenumberofethics-relatedcoursestohelpstudentspreparetofaceethicaldilemmasduringtheircareers.9Butwhatisethics,andwhatbusinesspracticesare,orshouldbe,considered“ethical”?

EthicsDefinedBeforewedefineethics,completeSelf-Assessment13-1todeterminehowethicalyourbehavioris.

Ethicshasbeendefinedinmanybooksandarticles.Let’sdoaquickreviewhereofsomeofthecommondefinitionsofethicsandthenseeifwecanapplythosedefinitionstobusinessethics.

“Ethicsisareflectiononmorality,thatis,areflectiononwhatconstitutesrightorwrongbehavior.”10“[Ethicsis]theprinciples,valuesandbeliefsthatdefinerightandwrongdecisionsandbehavior.”11“Ethicsisasetofmoralprinciplesorvalueswhichisconcernedwiththerighteousnessorwrongnessofhumanbehaviorandwhichguidesyourconductinrelationtoothers.”12

Youmightnoticethatthesedefinitionsallhavesomecommonelements:morals,values,beliefs,principlesofconduct.Soforourpurposes,ethicsistheapplicationofasetofvaluesandprinciplesinordertomaketheright,orgood,choice.Soethicsalsomustincludepersonalintegrityandtrustinthecharacterandbehaviorofothers.Integritymeansbeinghonest.Solying,cheating,andstealingareunethicalbehaviors.Ifyouarenothonest,thetruthwilleventuallycatchupwithyou.13Andwhenitdoes,youwilllosethetrustofpeopleandhurtyourrelationshipsforaverylongtimebeforeyouwillbeabletoearntheirtrustback—ifyouevercan.14Rememberthecommonelementsaboveaswereviewsomefactorscontributingtounethicalbehaviorandlearnaboutafewethicalapproaches.

LO13-1Discussthetermethics,includingcommonelementsofthedefinition.

WORKAPPLICATION13-1Thinkingofbusinessleaders,preferablywhereyouworkorhaveworked,doyoutrustthemtoactethically?Whyorwhynot?

SHRMR:2

Ethics

ContributingFactorstoUnethicalBehaviorLet’sdiscusssomeofthereasonswhyunethicalbehavioroccurs—orwhydogoodpeopledobadthings?

PersonalityTraitsandAttitudes.Youprobablyalreadyrealizethatsomepeoplehaveahigherlevelofethicsthanothers,asintegrityisconsideredapersonalitytrait.Unfortunately,acultureoflyinganddishonestyisinfectingAmericanbusinessandsocietyasthesebehaviorshavebecomemorecommonandaccepted.15Somepeopleliedeliberately,basedontheattitudethatlyingisnobigdeal;somepeopledon’tevenrealizethattheyareliars.16

EthicsTheapplicationofasetofvaluesandprinciplesinordertomaketheright,orgood,choice

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

C.Ethics(required)1.Rulesofconduct2.Moralprinciples4.Organizationalvalues7.Facingandsolvingethicaldilemmas9.Complianceandlaws11.Conflictsofinterest12.Useofcompanyassets13.Acceptanceorprovidingofgifts,gratuities,andentertainment

F.ManagingaDiverseWorkforce(required)

3.Agingworkforce10.Gay,lesbian,bisexual,transgender(GLBT)/sexualorientationissues

R.Corporate/SocialResponsibilityandSustainability(secondary)

2.Ethics8.Community/employeeengagement10.ThebusinesscaseforCSR

13-1Selfassessment

HowEthicalIsYourBehavior?Forthisexercise,youwillrespondtothesamesetofstatementstwice.Thefirsttimeyoureadthem,focusonyourownbehaviorandthefrequencywithwhichyoubehaveincertainways.Onthelinebeforeeachstatementnumber,placeanumberfrom1to4 thatrepresentshowoftenyoudothatbehavior(orhowlikelyyouwouldbetodoit)accordingtothefollowingscale:

FrequentlyNever

Thenumbersallowyoutodetermineyourlevelofethics.Youcanbehonest,asyouwillnottellothersinclassyourscore.Sharingethicsscoresisnotpartoftheexercise.

Next,gothroughthelistofstatementsasecondtime,focusingonotherpeopleinanorganizationthatyouworkfornoworoneyouhaveworkedfor.PlaceanOonthelineafterthenumberofeachstatementifyouhaveobservedsomeonedoingthisbehavior;placeanRonthelineifyoureportedthisbehaviorwithintheorganizationorexternally:O=observed,R=reported.

InCollege

____1.____Cheatingonhomeworkassignments____2.____Cheatingonexams____3.____Submittingasyourownworkpapersthatwerecompletedbysomeoneelse

OntheJob

____4.____Lyingtootherstogetwhatyouwantortostayoutoftrouble____5.____Comingtoworklate,leavingworkearly,takinglongbreaks/lunchesandgettingpaidforthem____6.____Socializing,goofingoff,ordoingpersonalworkratherthandoingtheworkthatyouaregettingpaidtodo____7.____Callinginsicktogetadayoffwhenyouarenotsick____8.____Usinganorganization’sphone,computer,Internetaccess,copier,mail,orcarforpersonaluse____9.____Takinghomecompanytoolsorequipmentwithoutpermissionforpersonaluse___10.____Takinghomeorganizationalsuppliesormerchandise___11.____Givingcompanysuppliesormerchandisetofriendsorallowingfriendstotakethemwithoutsayinganything___12.____Applyingforreimbursementforexpensesformeals,travel,orotherexpensesthatweren’tactuallyincurred___13.____Takingaspouseorfriendsouttoeatoronbusinesstripsandchargingtheirexpensestotheorganizationalaccount___14.____Acceptinggiftsfrom

customers/suppliersinexchangeforgivingthembusiness___15.____Cheatingonyourtaxes___16.____Misleadingacustomertomakeasale,suchaspromisingrapiddeliverydates___17.____Misleadingcompetitorstogetinformationtousetocompeteagainstthem,suchaspretendingtobeacustomer/supplier___18.____Takingcreditforanotheremployee’saccomplishments___19.____Sellingmoreofaproductthanthecustomerneedsinordertogetthecommission___20.____Spreadingrumorsaboutcoworkersorcompetitorstomakeyourselflookbetter,soastoadvanceprofessionallyortomakemoresales___21.____Lyingforyourbosswhenaskedortoldtodoso___22.____Deletinginformationthatmakesyoulookbadorchanginginformationtomakeyourselflookbetter___23.____Allowingyourselftobepressured,orpressuringothers,tosignoffondocumentsthatcontainfalseinformation___24.____Allowingyourselftobepressured,orpressuringothers,tosignoffondocumentsyouhaven’tread,knowingtheymaycontaininformationordescribedecisionsthatmightbeconsideredinappropriate___25.____Ifyouweretogivethisassessmenttoacoworkerwithwhomyoudonotgetalong,wouldsheorheagreewithyouranswers?Ifyouranswerisyes,writea4 onthelinebeforethe

statementnumber;ifyouranswerisno,writea1ontheline.

Aftercompletingthesecondphaseoftheexercise(indicatingwhetheryouhaveobservedorreportedanyofthebehaviors),listanyotherunethicalbehaviorsyouhaveobserved.Indicateifyoureportedthebehavior,usingR.

26.________________________________________________________________________27.________________________________________________________________________28.________________________________________________________________________

Note:Thisself-assessmentisnotmeanttobeaprecisemeasureofyourethicalbehavior.Itisdesignedtogetyouthinkingaboutethicsandaboutyourbehaviorandthatofothersfromanethicalperspective.Alloftheseactionsareconsideredunethicalbehaviorinmostorganizations.

Anotherethicalaspectofthisexerciseisyourhonestywhenratingyourbehavior.Howhonestwereyou?

Scoring:Todetermineyourethicsscore,addupthenumbersforall25statements.Yourtotalwillbebetween25and100.Placethenumberthatrepresentsyourscoreonthecontinuumbelow.Thehigheryourscore,themoreethicalyourbehavior.

MoralDevelopment.Thisreferstodistinguishingrightfromwrongandchoosingtodotherightthing.17Ourabilitytomakeethicalchoicesisrelatedtoourlevelofmoraldevelopment.18Therearethreelevelsofpersonalmoraldevelopment.Atthefirstlevel,thepreconventionallevel,apersonchoosesrightandwrongbehaviorbasedonself-interestandthelikelyconsequencesofthebehavior(rewardorpunishment).Thispreconventionallevelis:It’sallaboutme—I’lltakeadvantageofyoutogetwhatIwant.Thosewhoseethicalreasoninghasadvancedtothesecond,conventionallevelseektomaintainexpectedstandardsandliveuptotheexpectationsofothers.Mostpeopleareonthislevelanddoastheothersintheirgroupdo—theyeasilygiveintopeerpressuretoactethicallyorunethically.Thoseatthethirdlevel,thepostconventionallevel,makeanefforttodefinemoralprinciplesforthemselves;regardlessofleadersorgroupethics,theydo

therightthing.Peoplecanbeondifferentlevelsfordifferentissuesandsituations.19

WORKAPPLICATION13-2Giveanexampleofunethicalbusinessbehaviorfromyourpersonalexperienceorthenewsandthereasongiventojustifyit.

13-1ApplyingTheConcept

LevelofMoralDevelopmentPlacetheletterofthelevelofmoraldevelopmentonthelinenexttothestatementthatillustratesit.

1. preconventionallevel2. conventionallevel3. postconventionallevel

____1.Ilietocustomerstosellmoreproductsbecausetheotherssalesrepsdoit,too.____2.IlietocustomerssothatIcansellmoreproductsandgetlargercommissionchecks.____3.Idon’tlietocustomersbecauseitisunethicaltolie.____4.CarlsaystoJohn,“You’renotsellingasmuchastherestofus.Youreallyshouldlietocustomerslikewedo.Ifthebossaskswhyyouaren’tsellingasmuchastherestofus,you’dbetternottellhimwelie,oryouwillbesorry.”____5.KarensaystoJohn,“Tellingliestocustomersisnobigdeal—we’rehelpingthembuyagoodproduct.”

TheSituation.Incertainsituations,itcanbetemptingtobeunethical,20suchaswhenyouarenegotiating.21Unsupervisedpeopleinhighlycompetitivesituationsaremorelikelytoengageinunethicalbehavior.Unethicalbehavioroccursmoreoftenwhenthereisnoformalethicspolicyorcodeofethicsandwhenunethicalbehaviorisnotpunished.Inotherwords,peoplearemoreunethicalwhentheybelievetheywillnotgetcaught.22Unethicalbehaviorisalsomorelikelywhenperformancefallsbelowaspirationallevels.Peoplearealsolesslikelytoreportunethicalbehavior(blowthewhistle)whentheyperceivetheviolationasnotbeingseriousorwhentheyarefriendsoftheoffender.Ittakeshighmoralresponsibilitytobeawhistle-blower.

JustificationofUnethicalBehavior.

Mostpeopleunderstandrightandwrongbehaviorandhaveaconscience.Sowhydogoodpeopledobadthings?Mostoften,whenpeoplebehaveunethically,itisnotbecausetheyhavesometypeofcharacterflaworwerebornbad.Justabouteveryonehasthecapacitytobedishonest.23Werespondto“incentives”andcanusuallybemanipulatedtobehaveethicallyorunethically,ifyoufindtherightincentives.24Theincentivecanbepersonalgainortoavoidgettingintotrouble.25

Fewpeopleseethemselvesasunethical.Weallwanttoviewourselvesinapositivemanner.Therefore,whenwedobehaveunethically,wejustifythebehaviortoprotectourself-conceptsothatwedon’thavetofeelbad.26Ifweonlycheatalittle,wecanstillfeelgoodaboutoursenseofintegrity.27Takealookatsomecommonjustificationsforourunethicalbehavior:

Everyoneelsedoesit—weallpadtheexpenseaccount.

Ididitforthegoodofothersorthecompany—Icookedthebookssothecompanylooksgood.Iwasonlyfollowingorders—mybossmademedoit.I’mnotasbadastheothers—IonlycallinsickwhenI’mnotsickonceinawhile.Disregardordistortionofconsequences—NoonewillbehurtifIinflatethefigures,andIwillnotgetcaught.AndifIdo,I’lljustgetaslaponthewristanyway.

13-2ApplyingTheConcept

JustifyingUnethicalBehaviorPlacetheletterofthejustificationgivenforengaginginunethicalbehavioronthelinenexttothestatementexemplifyingit.

1. Everyoneelsedoesit.2. Ididitforthegoodofothersorthe

company.3. Iwasonlyfollowingorders.4 . I’mnotasbadastheothers.5. Disregardordistortionofconsequences.

____6.Don’tblameme.Itwastheboss’sideatodoit.Ijustwentalongwithit.____7.It’snobigdealthatIlietocustomersbecausenoonegetshurt.Infact,I’mhelpingthembuyagoodproduct.____8.Ichangedthenumberssothedepartmentwilllookgoodonourquarterlyreporttotopmanagement.____9.Yes.Idolietocustomers,butit’sthewaywedobusinesshere.___10.Idotakesomeofthecompanyproducthome,butItakealotlessthantheothers.

EthicalApproachesSeveralcommonethicalapproaches,orguidelines,existtohelpyoumakeethicalchoices.Understandingsomeofthecommonapproacheswillhelpyouresolveethicaldilemmasthatyouwillcertainlyfaceatwork.Let’sdiscussfourguidestoethicalbehaviorbelow.

Followingguidestoethicalbehaviorwillhelpyouaddressissuesintheworkplaceinthebest

waypossible.

©iStockphoto.com/skynesher

GoldenRule.“Dountoothersasyouwouldhavethemdountoyou.”MostsuccessfulpeoplelivebytheGoldenRule.28Thisisamoralprincipleinvirtuallyeveryreligioustextintheworld.Followingthegoldenrulewillhelpyoutobeethical.Theworldcouldliterallybechangedovernightifpeoplewouldfollowthissimplerule.

Four-WayTest.RotaryInternationalusesafour-waytesttodetermineethicalbehavior:29(1)Isitthetruth?(2)Isitfairtoallconcerned?(3)Willitbuildgoodwillandbetterfriendship?(4)Willitbebeneficialtoallconcerned?Iftheanswersareyes,thentheactionisprobably

ethical.

Stakeholders’ApproachtoEthics.Thestakeholders’approachtriestocreatewin-winresultsforallstakeholdersaffectedbythedecision.ThisistheapproachputforthbyWarrenBuffettatBerkshireHathaway,knownasoneofthemostethicalorganizationsinbusinesstoday.Exhibit13-1givesthestatementtakenfromBerkshire’sCodeofBusinessConductandEthics.

So,ifyouarecomfortabletellingpeoplewhoareaffectedbyyourdecisionwhatyouhavedecided,itisprobablyethical.Butifyoukeeprationalizingthedecisionandtrytohideitfromothers,itisquitelikelyunethical—atleasttosomeoftheaffectedstakeholders.Youcan’talwayscreateawinforeveryone,butyoucantry.

SHRMC:7

FacingandSolvingEthicalDilemmas

DiscernmentandAdvice.Researchshowsthatmakingadecisionwithoutusinganethicalguideleadstolessethicalchoices.31Usingethicalguidesatthepointofmakingadecisionhelpskeepyouhonest.32Ifyouareunsurewhetheradecisionisethical,youcancheckthecompanycodeofethics/conductandtalktoyourboss,higher-levelmanagers,andotherpeoplewithhighethicalstandards.Ifyouarereluctanttoaskothersforadviceonanethicaldecisionbecauseyoumaynotliketheiranswers,thedecisionmaynotbeethical.

Exhibit13-1BerkshireHathawayCodeof

BusinessConductandEthics30

Eachoftheaboveapproachesshouldcueyoutothinkaboutsomeconceptsthatwehavepreviouslydiscussedinthistext—trust,integrity,andconsistency.IfyourecallourconversationabouttrustinChapter9,youwillrememberthattrustis“faithinthecharacterandactionsofanother.”Doesthatsoundfamiliarwhenyoutakealookatthedefinitionsofethicsabove?Withouttrust,wecannotsuccessfullymanageintheorganizationforverylong,sowehavetodowhatwesaidwewoulddoconsistentlyovertimeinordertogetourstakeholderstotrustus—theOUCHtesthelps.

Integrity(honestlydoingwhatyousayyouwilldo)andtrust(theexpectationthatyouwillcontinuetodoso)areimportanttomanagersinthefirmbecauseresearchshowsthatcompanieswhohavethetrustofemployees

havelowerturnoverandhigherrevenue,profitability,andshareholderreturns.Rewardingpersonalrelationshipsarealsobasedonintegrityandtrust.Buthowdowegetotherstobetrustworthyandmakedecisionsbasedonprinciples,values,beliefs,andcharacter?Mostorganizations(likeBuffet’sBerkshireHathaway)todayuseacodeofethics,sometimescalledacodeofconduct,toprojectthevaluesandbeliefsoftheorganizationtotheiremployees.

WORKAPPLICATION13-3Describeanyguidelinesyouuse,orwilluseinthefuture,tohelpyoumakeethicaldecisions.

13-3ApplyingTheConcept

EthicalApproachPlacetheletteroftheapproachtomakingethicaldecisionsonthelinenexttothestatementthatillustratesit.

1. GoldenRule2. Four-waytest3. Stakeholders’approach4. Discernmentandadvice5. Codeofethics

___11.I’mamemberofRotaryInternational,andIuseitsapproachwhenImakedecisions.___12.WhenImakedecisions,IfollowtheguidelinesthecompanygaveallofustousetomakesureI’mdoingtherightthing.___13.Itrytomakesurethateveryoneaffectedbymydecisionsgetsafairdeal.___14.ItrytotreatpeoplethewayIwantthemtotreatme.___15.Hi,Latoya.Whatdoyouthinkofmydecisionabouthowtohandlethiscustomer’scomplaint?

CodesofEthicsEverycultureendorsesanethicalwaytolive.33Followingthecodeofethicsisactuallyanethicalapproach.TheHoustonChronicleprovidesagoodtemplateontheirhttp://chron.comwebsiteforanorganizationalcodeofethicsthatincludesthefollowingfactorslistedandquoted:34

Valuesareourbasicconceptsofgoodandbad,orrightandwrong.Valuescomefromoursocietyandculture.Everyculturehasconceptsofrightandwrong,althoughthesevaluesdovarysomefromculturetoculture(wewilldiscussthisfurtherinChapter14).TheChroniclearticlenotesthat“aprimaryobjectiveofthecodeofethicsistodefinewhatthecompanyisaboutandmakeitclearthatthecompanyisbasedonhonestyandfairness.”

Principlesareabasicapplicationofour

values.Weapplyprinciplestospecificsituationsinordertocomeupwithasetofactionsthatweconsidertobeethical.Anexamplewouldbetomaintainpersonalintegrity.Thisisobviouslybasedontheapplicationofthevaluesofhonestyandintegrity.Anotherexamplewouldbetheprincipletotreatallemployeesfairly,whichwouldmatchupwiththevalueofequality.

Managementsupport,andespeciallytopmanagementsupport,isabsolutelycriticaltoasuccessfulcodeofethics.Ifseniormanagerspaynoattentiontothecodeofethics,subordinatemanagersandemployeeswillpaynoattentionaswell.Inaddition,weneedtoencouragereportingofunethicalbehaviortomanagement.Theopen-doorpoliciesandprocessesthatallowtheanonymousreportingofethicsissuesshouldbeincludedinthecode.Theseprocesseshelpmanagementmaintainandupholdthecodeacrosstheorganization.

PersonalResponsibility.

Thisistheconceptthateveryoneintheorganizationisresponsiblefortheethicalconductofbusiness,notjust“theboss.”Personalresponsibilityalsoreferstoaccountabilityforone’sownactions,soweneedtoidentifytheconsequencestoanemployeeiftheyviolatethecodeofethics.Wehaveapersonalresponsibilitytoreportothers’violationsofthecodetotheappropriateauthority.

LO13-2Identifyanddiscusseachfactorrequiredinagoodcodeofethics.

SHRMC:4

OrganizationalValues

SHRMC:2

MoralPrinciples

ValuesOurbasicconceptsofgoodandbad,orrightandwrong

PrinciplesBasicapplicationofourvalues

SHRMC:1

RulesofConduct

Compliance.Thecompliancefactorcanidentifyapplicablelawsorindustryregulationsthatmustbeadheredtoaspartofthecodeofethics.Certainly,theOSHAct,theSarbanes-OxleyAct,andtheDodd-FrankActwouldapplytoprettymuchallpubliccompanies,butotherlawsandregulationsapplytocertainindustriesandgroups,soweneedtonotetheminthecodeaswell.Thisisjustanotherreinforcementoftheannualtrainingthatwehavetodoregardingeachlaworregulationthatcoversourbusinessandindustry.

Rememberthatthecodeofethicsisimportantbecauseacultureofmisconductcanresultin

higherturnoverandlowerproductivityandprofitability,35aswellascostlylegalproblems.Managementalwayshastotaketheleadinbeingethical,oremployeeswillnotperform.

CreatingandMaintainingEthicalOrganizationsThecodeofethicsisafirststrongstepinmaintaininganethicalorganization,butasalreadynoted,managersmustleadethically.However,istheright(ethical)choicealwaystheobviouschoice?Unfortunately,itisnotthateasy.Peoplethatweinteractwithcontinuallygiveustheopportunitytobeunethicalbyprovidinguswithpersonaladvantagesthathelpusbutdonothelptheorganization—forinstance,byofferingusgifts.Inordertounderstandwhatmanagersshoulddoinsuchsituations,weneedtolookatwhattheycando,basedonauthority,responsibility,andaccountability.Let’slookattheseconceptsinanorganizationalsetting.

Authority.Authorityistherighttogiveorders,enforce

obedience,makedecisions,andcommitresourcestowardcompletingorganizationalgoals.Soauthorityallowsmanagerstotellpeoplewhoworkforthemwhattodoandtohowtouseorganizationalresources.

SHRMC:11

ConflictsofInterest

Responsibility.Responsibilityistheobligationtoanswerforsomething/someone—thedutytocarryoutanassignmenttoasatisfactoryconclusion.Soresponsibilitymeansthat,whenwearegivenauthority,wehavetoacceptaposition-basedobligationtousethoseresourcesthatwearegiventohelptheorganizationmeetitsgoals.

WORKAPPLICATION13-4Describeacodeofethics,preferablywhereyouworkorhaveworked.Provideacopyifpossible.

Accountability.Accountabilityisthepersonaldutytosomeoneelse(ahigher-levelmanagerortheorganizationitself)fortheeffectiveuseofresourcestocompleteanassignment.Inotherwords,themanagercanbeheldpersonallyliableforfailingtouseresourcesinthewaythattheyshouldtohelptheorganization.Unethicalbehavioroftenhaspersonalnegativeconsequences,36suchasgettingintotroubleatwork,beingfired,andevengoingtojail.Ifyougetawaywithunethicalbehavior,itcanbecontagiousandleadtomoreandlargertransgressions.37Onapersonallevel,thistendstohappenwith

cheatingonpersonalincometaxes.Peoplestartcheatingjustalittle,andwhentheydon’tgetcaught,theycontinuetoincreasethecheating.WhentheyeventuallygetauditedbytheIRS,theypaylargefinesandinterestcharges,andevencriminalchargesforfraud.

Peoplewhocookthebooksoftenstartbybelievingthatitisnobigdeal,theywillhitthenumbersthenextquarter/yearandmakeitupandnoonewilleverknow(wewillnotgetcaught),andnoonewillgethurt.Butinmostcases,ashappenedatEnron,younevercatchup.SobecarefulnottostartdowntheroadusingunethicalbehaviorbecauseyoumaynotbeabletomakeaU-turn.Youwillmostlikelyeventuallygetcaught,andyoutoocanendupfiredandeveninjail.

PeterDrucker,thenotedmanagementauthor,said,“Whoeverclaimsauthoritytherebyassumesresponsibility.”38Inordertobeallowedtousetheauthoritygiven,thepersonmustacceptresponsibility.Bothoftheseconceptsaretiedtothepositionofthe

managerintheorganization.Inotherwords,ifyouhavethepositionofHRmanager,youmaybegivensometypesofauthority(forinstance,authoritytorequireannualEEOandsexualharassmenttrainingprograms).However,youhavetoaccepttheresponsibilitytocarryoutthesetrainingprograms—thebuckstopshere,withyou.Ifyoudonotaccepttheresponsibilityfordoingso,thentheauthorityneedstoberescinded(youneedtobetakenoutofthepositionofHRmanager).

Authorityandresponsibilityalwaysneedtobebalanced.Thisisoneofthemostcommonfailuresinorganizations.AnexamplewouldbeaCEOwhorequiressubordinatemanagerstotakeresponsibilityfortheirdepartment’sexpendituresbutdoesn’tgivethemauthoritytovetopurchases.Thisisrequiringthesubordinatetoacceptresponsibilitywithoutcommensurateauthority.Orconsiderthesalesmanagerwhousestheirauthoritytorequiresubordinatestocompleteminortasksthattakeuplargeamountsoftimeandthenprovidesthesesubordinateswithapoorevaluationfor

failuretosell.Thisisusingpositionalauthoritywithouttakingresponsibility.Sowehavetotrytomakesurethatthesefactorsarebalancedandthatthepersonacceptstheirresponsibilities.

Ifyouacceptresponsibility,youbecomeaccountable(personallyliable)fortheeffectivecompletionoftheaction.InthecaseaboveoftheHRmanagerandtraining,youwouldhavepersonalaccountabilityevenifsomeoneelsewhoworksforyouactuallydoesthetraining.Accountabilitygoesbeyondanobligationtodosomethingfortheorganization.Itnowrequiresthatthepersonbeheldtoaccountfortheiractions—thattheygivereasonswhytheydidordidnotdoacertainthingandjustifyhowtheiractionshelpedtheorganizationreachitsgoals.Soauthorityandresponsibilitygivemanagersrightsandobligationsbasedontheirjobinthecompany,butaccountabilityconcernswhentheycanbepunished—insomecasesevengotoprison—iftheydonotexercisetheirauthorityinaresponsiblemanner.

Aswenotedabove,weconstantlyhavetheopportunitytomakedecisionsthatwillbenefitusasanindividualbutdoharmtotheorganization,peers,oroursubordinates.Ifyouapplytheconceptofresponsibilitytothesituation(anobligationtousethoseresourcestobenefittheorganization),thenitiseasytoseethatyouarebeingunethical.Ifyouthencontinueanyway,theconsequencesofyouractionsmightcauseyoutobeheldaccountablebytheorganizationandpotentiallydisciplinedorevenfiredifyoumisuseresourcestoagreatextent.

AuthorityTherighttogiveorders,enforceobedience,makedecisions,andcommitresourcestowardcompletingorganizationalgoals

ResponsibilityTheobligationtoanswerforsomething/someone—thedutytocarryoutanassignmenttoasatisfactoryconclusion

AccountabilityThepersonaldutytosomeoneelse(ahigher-levelmanagerortheorganizationitself)fortheeffectiveuseofresourcestocompleteanassignment

SHRMC:13

AcceptanceorProvidingofGifts,Gratuities,andEntertainment

Managersfaceethicalquestionsonadailybasis.Shouldyouchooseafavoriteemployeetodoovertimeworkinsteadoftheemployeewhoisbestforthejobbecauseyouknowyourfavoriteneedsextramoney?Shouldyoutellthemanagerofanotherdepartmentaliebecauseyouhaven’tcompletedaprojectyet?Wehavetolearntoapplytheconceptsofauthority,responsibility,andaccountabilityconstantlyinordertoavoidunethicalactions,andindoingso,wewillgainthetrustofothersintheorganization.Wehavetoknowtheappropriateuseofcompanyassetsand

whatconstitutesmisuseofthoseassetsaswell.Whataresomeofthemostcommonethicalissuesthatbothmanagersandtheircompanieshavetodealwithonanongoingbasis?

SHRMC:12

UseofCompanyAssets

Bribery.Abribeisapaymentmeanttocausesomeonetomakedecisionsthatmayhelpapersonoranorganizationbutdosignificantharmtootherorganizationsorotherstakeholdersinthedecision.InarecentcasewhereaUScompanywasdeterminedtobeactingillegally,clothingcompanyRalphLaurenagreedtopaya$1.6millionfineforbribingArgentinianofficialsfrom2005to2009.39

13-1Ethicaldilemma:whatwouldyoudo?

BribesAnAmericanbusinesspersonworkinginaforeigncountrycomplainedtoalocaltelephonemanagerthatthetechnicianshowedupandaskedforabribebeforeinstallingthephone.Thebusinesspersonrefused,sothetelephoneworkerleftwithoutinstallingthephone.Thetelephonecompanymanagertoldthebusinesspersonthatthematterwouldbeinvestigated,forafee(bribe).

1. Isitethicalandsociallyresponsibletopaybribes?

2. Shouldthebusinesspersonhavepaidthebribetogetthephoneinstalled?

3. Areyouawareofanybribesintheworkplace?Ifso,describethesituationwithoutlistingtherealnamesofpeopleandcompaniestoprotecttheiridentity.

Corruptpaymentstogovernmentofficials.Thistypeofpaymentisdesignedtoallowthecompanytoavoidscrutinyoftheiractionsby

governmentagenciesortofacilitateadesiredcompanyaction,suchasbuildinganewfactoryinanenvironmentallysensitivearea.CorruptionatthehighestgovernmentlevelswascommonformanyyearsundertheregimeofPresidentSuhartoofIndonesia;ifyouweregoingtodobusinessinIndonesia,youhadtopaybribestogovernmentofficialsandmembersoftheSuhartofamily.Butithassincebeencleaneduptoasignificantextentbytheleadersthathavefollowedhim.

Employmentandpersonnelissues.Whotofireorhire,promotions,andchangesincompensationandworkingconditionsallcanbeaffectedbymanagerialdecisions,whichinturnwillaffectproductivity,absenteeism,andturnoverinthecompany.Walmartisagoodexampleofacompanythathasbeenidentifiedashavingmanagersthatusebiasinmakingpersonneldecisions.40In

addition,inmanycountries,practicessuchastheuseofchildlaborandforcedlaborbyconvictsarecommon,andmanyotherdiscriminatorylaborpracticesoccur,butmanyofthesepracticesarenotonlyunethicalbutillegalinothercountries.

Marketingpractices.Dishonestmarketingpracticescanruincorporatereputationsandevencausethemtofail.41CountrywideFinancialisanexcellentexampleofacompanythatmadebillionsofdollarsbyunethicalmarketingoflow-documentationandno-documentationloanstoindividualsduringthehousingboomoftheearly2000s,anditwasstillindangerofbankruptcy,evenafterbeingpurchasedbyBankofAmerica,aslateas2013.42

Impactontheeconomyandenvironment.

Unethicalpracticesonthepartofmanyfinancialfirms(includingCountrywide)arethoughttobethemaincauseofthemassiverecessionthatstartedinlate2007.Inaddition,pastpracticesinmanyindustrieshavehadalong-lasting(ifnotpermanent)effectontheenvironmentaroundtheworld.Examplesincludetheuseofasbestoslongafterweknewthehealthhazards,strip-miningleadingtomassivefloodinginmanycountries,orrecentconcernsthatsomepesticideproducersarepossiblycreating“superbugs”thatwillbepesticideresistant.43

Employeeandcustomerprivacy.Duetoadvancementsintechnology,theabilitytogatherandmaintainlargeamountsofpersonaldatahasbecomecommoninorganizations.Useofsuchdatamustbeforlegitimatebusinesspurposesonly.YoumayrecallthatFacebookreceivedahugenumber

ofcomplaintswhentheydecidedtoexperimentontheirusersbyshowingthemhappierorsaddernewsfeedsontheirpersonalpages.44Manyofthesecustomersfeltasthoughthiswasnotdoneforalegitimatebusinesspurpose.Therearealsomanycompanieswhonowmonitorallemployeecommunicationoncompanycomputersandotherdevices.Isthisuniversalmonitoringethical,orisitaninvasionofemployeeprivacy?

ThefounderofathleticapparelcompanyLululemonblamedtheircustomersfora

perceivedflawintheirproduct,bringingthecompany’scorporatesocialreponsibilityintoquestion.

©WestportWiki/CreativeCommons/WikimediaCommons

Ofcourse,alloftheinformationthatwehavediscusseddoesnogoodunlessanduntilthemanagermakesthechoicetodotherightthing—makestheethicaldecision.Andthisisnotalwayseasy.Inmanycases,thereisnosinglerightorwrongdecision—itisshadesofgray.Onedecisionmaybemoreethical,butitstillharmssomestakeholders,whiletheotherdecisionharmsmorepeopleandhasfewerbeneficiaries.

Thequestiontoaskyourselfisn’twhethertheethicalguidelinespresentedhelpinmakingethicalchoices;rather,willyouusetheethicalguidelinestomaketherightdecisions?Hereisthesimplesttakeawaythatwecanprovideyou:Ifyoudon’tthinkaboutmakingtheethicaldecisionbeforeasituationarisesthat

requiresyoutohaveintegrity,youwillprobablymaketheexpedientdecision(thedecisionthatgivesyouthegreatestbenefitordoesyoutheleastpersonalharm)andnottheethicaldecision,andyouwillknowthisbecauseyourationalizethedecisionandwillnotbewillingtotellotherswhatisgoingonandwhatdecisionyouhavemade.Sofollowingtheethicalapproachesincludingthecodeofethicsdoeshelpusmakeethicaldecisions.

CorporateSocialResponsibility(CSR)Ethicsandcorporatesocialresponsibility(CSR)arecloselyrelated,asbeingsociallyresponsiblemeansgoingbeyondlegalandeconomicobligationstodotherightthingsbyactinginwaysthatbenefitsociety.CSRisanumbrellatermforexploringtheresponsibilitiesofbusinessanditsroleinsociety.45CSRhasbeeninthenewsconstantlyforthepastseveralyears.Manyofthebusinessproblemsthathaveoccurred—fromtheearly-2000sfinancialcrisistoWalmart’srecentbriberyscandal46totheLululemonfounderblamingwomenwithbigthighsforhistoo-sheeryogapants47—havebeencausedatleastinpartbyalackofcorporatesocialresponsibility.Let’sreviewthisconceptandthentakealookatsomeofthestakeholdersthatareaffectedbyCSR.

CSRDefinedTheconceptofcorporatesocialresponsibilityisbasedonthebeliefthat“companieshavesomeresponsibilitiestosocietybeyondthatofmakingprofitsfortheshareholders.”48Socorporatesocialresponsibilityistheconceptthatorganizationshaveadutytoallsocietalstakeholderstooperateinamannerthattakeseachoftheirneedsintoaccount.Inotherwords,companiesneedtolookattheireffectsonsocietyandallcorporatestakeholders,notjustshareholders.Theymustprovideemployeeswithsafeworkingconditionsandwithadequatepayandbenefits.Companiesmustprovidesafeproductsandservicestocustomers.Forsociety,thecompanyshouldimprovethequalityoflife,oratleastnotdestroytheenvironment.Thecompanymustcompetefairlywithcompetitorsandworkwithsuppliersinacooperativemanner.Itmustabidebythelawsandregulationsofgovernment.Atthesametime,thecompany

mustprovideshareholderswithareasonableprofit.Withoutprofits,itisdifficulttobesociallyresponsible.

TheBusinessCaseforCSR.Doesitpaytobesociallyresponsible?Theanswerisyes.Ifitdidn’t,wouldvirtuallyalloftheFortune500companieshaveformalCSRprograms?49CSRcanimprovestockreturns.50Withachoiceoftwoproductsofsimilarpriceandquality,80%ofsurveyedcustomerssaidtheyarewillingtobuythemoresustainableoption.51Beingsociallyirresponsiblealsohasnegativeconsequences,asitgivesthecompanyanegativereputationthatleadstomoredifficultyinattractingcustomers,investors,andemployees,anditcanleadtocostlylawsuits.52Moneycanbemadeagain,butanegativereputationcantakeyearstoimprove,andagoodreputationmaybelostforever.53Visityourfavoritelargecorporation’swebsiteandyouwillmostlikelyfindalinkstatinghowthefirmengagesin

CSR;itisevenincludedinmostcompanies’annualreports,whereitisoftencalledasocialauditbecauseitisameasureofsocialbehavior.

SothebusinesscaseforCSRisbasedontheabilityoftheorganizationtohelporharmvariousstakeholdergroupsandtheabilityofallstakeholdergroupstohelporharmthecompany.Eachstakeholdergrouphasdifferent—andsometimescompeting—interests,buttheorganizationmustbalancethese“socialresponsibilities”amongallofthegroups.Ifwehelpshareholdersmakemoremoneytothedetrimentofsociety,governmentstakeholderswillstepinandsanctionthecompany.Ifwehelpcustomersbysourcingitemsfromquestionablesuppliers,thecommunitymaygetangrywithusandputpressureoncustomerstostopdoingbusinesswithus.Everygrouphastobethoughtofinamoderncompany,muchmoresothaneverinhistory.

Finally,forthoseofyouwhoareconsidering

“whetherornotallofthisCSRisreallynecessary,”rememberthatitis“hardtohide”nowwiththeimmediateavailabilityofmountainsofinformation.Evenifyoutrytoburyinformationinsidetheorganization,itisquitelikelytogetoutbecauseofthepoweroftheWebanditsabilitytoconnectpeoplewhomaybeinterestedinwhatyourcompanyisdoing.ThinkabouthowrapidlyTwitterforwardsinformationtousersandhowcomprehensiveLinkedIniswhenitcoverscompanyissues.Soifyouthinktheinformationwon’tgetout,youmaywanttothinkagain.

LO13-3Describethe“businesscase”forcorporatesocialresponsibility(CSR).

CorporatesocialresponsibilityTheconceptthatorganizationshaveadutytoallsocietalstakeholderstooperateinamannerthattakeseachoftheirneedsintoaccount

SHRMR:10

TheBusinessCaseforCSR

SHRMR:8

Community/EmployeeEngagement

StakeholdersandCSRInadditiontobeinggoodpublicpractice,CSRisalsobeingcodifiedmoreofteninlawintheUnitedStatesandinothercountries.Thereareanumberofcorporatecompliancelawswrittenbystateandfederalgovernmentstakeholders,manyofwhichwehavealreadydiscussed.TheDodd-FrankWallStreetReformandConsumerProtectionAct(Chapter11),theOSHAct(Chapter12),theFairLaborStandardsAct(Chapter10),andmanyothershavealreadybeencovered,andwewillbrieflyreviewanothersignificantcompliancelawinChapter14calledtheUSForeignCorruptPracticesAct.Youwillhavetobecomefamiliarwitheachofthemajorcompliancelawsaswellasthoseothercomplianceregulationsinyourstateorcountryasyoubeginyourcareer.

Manyemployeestakeholdersubgroupsarealsobeginningtoreceivemuchmoreattention

thanhashistoricallybeenthecase.Amongthesegroupsareolderworkers,womenandminoritiesinmanagementandtheexecutivesuite,lesbian/gay/bi/transgender(LGBT)employees,andamoreraciallyandethnicallydiverseemployeepool.Publicpressurehascontributedtotheinterestsoftheseandothergroupsinorganizations,andthereforecompaniesarehavingtofigureouthowtomeettheneedsofthesestakeholdersintheorganization.

IncreasingDiversity.Itisnowtrue:ThemajoritygroupintheUnitedStatesisaminorityinatleastonearea.ThebirthrateofCaucasianchildrenisnowlessthan50%ofthetotalbirthrate.54 In10states,whitechildrenareaminority,andin23states,minoritiesnowmakeupmorethan40%ofthechildpopulation.55Onein12children(8%)borninAmericaistheoffspringofillegalimmigrants,andthosechildrenareUScitizens.56ThetotalCaucasian

populationthroughouttheworld,includingAmerica,isdecreasingastherearemoredeathsthanbirths,57andthepercentageofthepopulationthatisCaucasianisdecreasing.58Byaround2040,lessthanonehalfofthetotalUSpopulationwillbeCaucasian.59By2060,itisestimatedthatCaucasianswillbe43%oftheUSpopulationand1in3peoplewillbeHispanic.60Whatdoesthisshiftmeantotheorganization?Itmeansthatemployeediversitywillcontinuetogrowandwewillhavetobecomebetteratmanagingthatdiversitythanwehavebeeninthepast.

SHRMC:9

ComplianceandLaws

SHRMF:3

AgingWorkforce

SHRMF:10

LGBT/SexualOrientationIssues

LevelsofCorporateSocialResponsibilityClearly,intoday’ssociety,thequestionisnotwhetherbusinessshouldbesociallyresponsibleandtakeallstakeholdergroupsintoaccount.Instead,thequestionis,atwhatlevelofCSRshouldthebusinessoperate?BusinessesdovarygreatlyintheirsocialresponsibilityactivitiesbasedontheoveralllevelofCSRatwhichtheydecidetooperate.61ManagerscanchoosetooperatethebusinessatoneofthreelevelsofCSR.SeeExhibit13-2foranillustrationofthethreelevels.

1. LegalCSRfocusesonmaximizingprofitswhileobeyingthelaw;itfocusesonincreasingsalesandcuttingcoststomaximizereturnstostockholders.Indealingswithmarketstakeholders,thesefirmsmeetalloftheirlegalresponsibilities,suchasfulfillingcontractobligationsandproviding

legallysafeproductswhilehonoringguaranteesandwarranties.Theydowhatittakestobeatthecompetitionlegally.Indealingwithnonmarketstakeholders(societyandgovernment),theyobeyallthelawsandregulations,suchasnotpollutingmorethanthelegallimitsandmeetingallOSHAstandards.

2. EthicalCSRfocusesonprofitabilityanddoingwhatisright,just,andfair.Providingethicalleadershipandavoidingquestionablepracticesmeandoingmorethanisrequiredindealingwithmarketstakeholders,suchastreatingemployeesrightandpayingthemfairwages,providingsaferproducts,notsqueezingsuppliers,andcompetingtowinbusinessethically.Thesecompaniesmeetreasonablesocietalexpectationsandexceedgovernmentlawsandregulationstobejustandfairtostakeholders.

3. BenevolentCSRfocusesonprofitabilityandhelpingsocietythroughphilanthropy.ThishighestlevelofCSRisalsocalled“goodcorporatecitizenship.”Benevolent

firmsarephilanthropic,givinggiftsofmoney,orotherresources,tocharitablecauses.Employeesareexpected,encouraged,andrewardedforbeingactivevolunteersinthecommunity,oftenoncompanytime.

Exhibit13-2LevelsofCorporateSocialResponsibility

WORKAPPLICATION13-5Selectabusiness,preferablyoneyouworkorhaveworkedfor,andidentifyhowitissociallyresponsibleonaspecificissue.

WORKAPPLICATION13-6Selectabusiness,preferablyoneyouworkorhaveworkedfor,andidentifyitslevelofcorporatesocialresponsibility.Besuretoexplainyouranswerwithexamplesofspecificthingsitdoes.

SustainabilitySustainabilitypracticesarepartofCSR.Sustainabilityinvolvesmeetingtheneedsofthecurrentgenerationwithoutcompromisingtheabilityoffuturegenerationstomeettheirneeds.62Sustainabilityisnowacommonbusinessterm,63andbasedonthegravityofenvironmentalproblems,itisanimportanttopicforallcountries.64Countriesandbusinessesarerealizingthateconomicgrowthandenvironmentalsustainabilitycanworktogether.65Somepeopleevenrefertothetriplebottomline:concernforprofit,society,andtheenvironment.

Societyexpectssustainabilityandformanagerstouseresourceswiselyandresponsibly;protecttheenvironment;minimizetheamountofair,water,energy,minerals,andothermaterialsfoundinthefinalgoodsweconsume;recycleandreusethesegoodstotheextentpossibleratherthan

drawingonnaturetoreplenishthem;respectnature’scalm,tranquility,andbeauty;andeliminatetoxinsthatharmpeopleintheworkplaceandcommunities.66Thus,includingsustainabilityinmanagingthebusinessisbeingsociallyresponsible.

Whatdoesbusinessneedtodoinordertobeconsideredsustainable?Organizationsuseupresourcesinthecourseoftheiroperations.Anyresourcethatisusedmustbereplenishedoritdisappearsforever.Inyearspast,itwasthoughtthatresourcesweresoabundantthatwecouldneverusethemup,butwenowknowbetter.Therearealreadyshortagesofsomecriticalitemsnecessaryforthesurvivalofpeople,andotherspecies,overthelongterm—shortagesofgooddrinkingwaterinsomeareas,forinstance.Asthisiswritten,thestateofCaliforniaissufferingfromaseveredrought,anditisbecomingmoredifficulttogetwaterresourcesintothehandsofthestate’spopulationofmorethan39millionpeople,oraboutoneeighthoftheentireUSpopulation.Soforsustainability,oceanwater

isbeingconvertedtofreshdrinkingwater,butnotfastenoughyet.

HRandOrganizationalSustainabilityOrganizationshavetopracticesustainabilityintoday’sbusinessenvironment.Wecannotaffordtowasteresourcesthataredifficulttoreplace.

SustainabilityPracticesandGreenCompanies.Sustainabilityissuesinfluenceactivitiesinthebusinessworld.67Agreencompanyactsinawaythatminimizesdamagetotheenvironment.Withthecurrentworldwideenvironmentalproblems,manynewventureshavebeencreatedingreenmanagement.68Socialentrepreneursaretakingadvantageofsustainabilityfornewbusinesses.Largecorporationsarealsoengaginginsustainabilitypracticesinabigway.Anew

corporatetitlehasemerged—chiefsustainabilityofficer(CSO).CSOsareinchargeofthecorporation’senvironmentalprograms.Nearlyallofthe150world’slargestcompanieshaveasustainabilityofficerwiththerankofvicepresidentorhigher.69

Walmartisaleaderinsustainability.Backin2010,itstatedthatitwouldcutsome20millionmetrictonsofgreenhousegasemissionsfromitssupplychainbytheendof2015.70Walmart’srequirementsofreducedwastefrompackaginghavecreatedindustry-widereforms.71Itessentiallypressuresallofitsthousandsofsupplierstomeetitssustainabilitystandards.EventhegreenestcompaniestouttheirclosetiestoWalmartintheirpromotionalmaterials.72Walmartisalsoworkingwithtruckmanufacturerstobuildenergy-efficienttrucks.However,manycompaniesarenotyetdoingwhattheyshouldintermsofsustainablebusinesspractices.73

LO13-4Reviewtheconceptofsustainabilityinabusinesscontext.

WORKAPPLICATION13-7Selectanorganization,preferablyoneyouworkorhaveworkedfor.Describeitssustainabilitypracticeefforts.

TheNeedforManagementCommitment.Sustainablepracticesrequireastrongcommitmentbycompaniesinordertocreatethenecessaryfollow-throughatalllevelsofthecompany.Aswithanyotherethicalissue,wehavetogetthemostseniorlevelofmanagementtocommittosustainabilityandwalkthetalk.Theprocessofsustainabledesignrequiresthateveryonethinkaboutwhatresourcesarebeingusedineveryactionthatthecompanytakes.

Ben&Jerry’shasalong-termreputationforbeingconcernedwithsustainabilityandCSR

issues.

©iStockphoto.com/KennethWiedemann

Sustainabilitygoalsandobjectivestiedtothecompanystrategyareanessentialpartoftheeffortsto“greenthecompany,”andHRmustplayitspartintheseefforts.Performanceevaluationsofallmanagersshouldcontainitemsrelatingtotheirsustainabilityefforts,andinmanycasespartoftheirincentivecompensationmaybetiedtothoseefforts.Ittakestenacitytomakeanyprogramtakeholdinanorganization,andtheefforttobecomesustainableisnodifferentthanwithanyotherprogram.HRmanagersalsoneedtoimplementsustainabilitytrainingtoinformandguideallemployeesintheirsustainabilityefforts.Let’stakealookatsustainabilitytrainingnow.

SustainabilityMeetingtheneedsofthecurrentgenerationwithoutcompromisingtheabilityoffuturegenerationstomeettheirneeds

SustainabilityTrainingLookbackjustafewyearsandyouwouldprobablyfindthattherewereveryfewsustainabilitytrainingprogramsinmajorcorporations.Fortunatelyforallofus,thisisnolongerthecase.WhileaverysmallnumberoforganizationshavebeenconcernedwithCSRandsustainabilityformanyyears(forexampleBenandJerry’sIceCream,foundedin1978),mostlargerbusinessesdidn’tbecomeconcernedwithsustainabilityprogramsuntilabouttheturnofthe21stcentury.However,theconceptofsustainabilityisincreasinglyviewedasprovidingvalueto“thesocalledtriplebottomlineofeconomic,social,andenvironmentalperformance.”74

Organizationswithsustainabilityprogramstendtogainthetrustoftheircustomersandsurroundingcommunities.Bydoingso,theseorganizationsmaygaincompetitiveadvantageovertheirrivalswhoarelessorientedtothe

sustainabilityofthecommunityandtheenvironment.Becauseasustainableorganizationembodiesthevaluesofitscustomersandcommunity,thosecustomersandcommunitymembersbecomewillingtoprovidereciprocalconcernfortheorganization.Thiscancreatesignificantloyaltytotheorganizationanditsbrands.

However,itcanbeextremelydifficultfororganizationstoembedtheconceptofCSRandsustainabilitythroughoutthefirm.Asustainabilitymind-setmustbeincorporatedintothecorporateculture,andthatcanonlytypicallyhappenfromthetopoftheorganizationdown.75Soanyorganizationalsustainabilitytrainingprogrammustbeginatthetopandchangethecultureoftheexecutivesandmanagers.StrongorganizationalculturesthathavesustainabilityasoneoftheircoreconceptscanbegintocreateacollectivecommitmenttoCSRandsustainabilitywithintheentireworkforce.Buthowdocorporationsdisseminatethiscultureofsustainabilitydownintotheemployee

ranks?

Certainly,trainingthatinvolvesidentificationoftheconceptofsustainabilityandhowtheorganizationcanaffectitsenvironmentplaysalargepartindisseminatingthisinformation.Inaddition,theorganizationmaychoosetoprovideallemployeeswithinformationinthecompanycodeofconduct/ethicsthatidentifiessustainabilityasoneofthecoreprinciplesofthefirm.

Inconjunctionwiththetrainingandcodeofconduct,theorganizationmustmeasuretheimpactoftheirsustainabilityprogramstoallowmodificationstothoseprogramsifnecessary.Changesincompanypoliciesandprocedures,aswellasorganizationalstructure,mayalsoassistinimprovingsustainabilitywithintheorganization.Againthough,trainingonthechangesinpolicies,procedures,andstructuremustoccurinordertomodifythoseemployees’behaviors.Iftheorganizationsucceedsinthesetrainingefforts,corporatesustainabilityeffortswillbe

likelytosignificantlyimproveovertime.

WORKAPPLICATION13-8Selectanorganization,preferablyoneyouworkorhaveworkedfor.Describehowitisusingtraininganddevelopmenttomeetthechallengesofsustainability.

TheSustainable21stCenturyOrganizationThereisevidencethatmorethan4outof5customersareconcernedwithsustainabilityandthatmoreofthemtodayarewillingtoavoiddoingbusinesswithcompanieswhodonotpayattentiontotheirCSRandsustainability.Sowhatwilloursustainable21stcenturycompanylooklike?Whatdoorganizationalleadersneedtoknow?Unfortunately,thereisnosingleanswertothisquestion.However,wedoknowsomeofthethingsthatcompaniesneedtothinkaboutintheirquesttobecomemoresustainable.

MITSloanManagementReviewandTheBostonConsultingGroupresearchbusinesssustainabilityonanannualbasis.Accordingtothisresearch,86%ofcompaniessaythatsustainabilityinitiativesarenecessaryinordertobecompetitiveintoday’smarkets.76Otherarticlesnotethat“theconceptofsustainability

ismovingfrom‘nicetohave’to‘needtohave,’”77andthat“thereisanentireecosystemofstakeholderswhocare.Governmentscare.Investorscare.Employeescare.”78Evidenceshowsthatcompaniesaregoingtohavetobecomemoretransparentintheireffortstocreatesustainableproducts,becausesocialmediaisgoingtocausethosecompaniestobeheldmoreresponsibleandaccountablefortheirdecisionsthataffecttheenvironment.

Leadingcompaniesarealreadystartingtoputtheirsustainabilityeffortsoutinfullviewoftheircustomersaswellastheirdetractorstoshowwhattheyaredoing.Insomecases,theyareevenasking,“Whatelsecanwedo?”Patagoniaisdoingthisthrough“TheFootprintChronicles,”which,accordingtotheirwebsite,“examinesPatagonia’slifeandhabitsasacompany.Thegoalistousetransparencyaboutoursupplychaintohelpusreduceouradversesocialandenvironmentalimpacts.”79Butwhatcanyourcompanydoif

ithasnotyetjumpedonthetransparencybandwagon?

TheWorldBusinessCouncilforSustainableDevelopment(WBCSD)providesareasonablycompactsetoftakeawaysinits“Action2020”document:80

1. Getbusinesstobuyintolong-termgoalsforsustainability.

2. Changethenatureofthedebatefromattacksandcounterattacksoncompanysustainabilityinitiativestothesciencebehindtheneedforsustainablebusinesspractices.

3. Speaktherightlanguage—thelanguageofbusiness.Thismeansputtingtheinformationintothebusinesscycleof“plan,do,check,act.”

4. Worktowardbuildingpartnershipsandcollaboration,becausethatistheonlywaytohavealarge-scaleeffectontheenvironment.

5. Makesolutions“opensource”andallowallentitieswhocanbenefitfromthemto

usethem.

Wherecanyougoformoreinformation?Therearemanygoodsourcesfordataandinformationoncorporateenvironmentalimpactandsustainability.Exhibit13-3providesyouwithinformationonsomeofthemajorsiteshostingthisinformation.

Nowthatyouhavesomeworkingknowledgeofethics,CSR,andsustainabilityandwheretofindmoreinformation,let’smoveontothischapter ’strendsandissues.

Exhibit13-3InternetResourcesforCorporateSustainability

TrendsandIssuesinHRMLet’stakealookatsomesustainability-basedbenefitsavailableinorganizationstoday,followedbyalookatthevalueofdiversitytraining.

Sustainability-BasedBenefitsOneareathathasseenrecentinterestissustainability-basedbenefitprograms.Anumberofcompaniesarelookingatoptionsforprovidingbenefitstotheiremployeesthatassistwithimprovingenvironmentalstabilityandsustainabilityoverthelongterm.Theseprogramscanrangefromproviding“credits”toemployeesforridingbicyclesorpublictransportationtoworkallthewaytosharingthecostsofcarsorhomeappliancesthatlowerenergyusage.

Benefitsthatwilllowertheemployee’sindividual“carbonfootprint”helptheenvironmentandhelptheemployeebecausesuchbenefitsalmostalwayslowertheemployee’scostofliving.AnexampleisaprogramcalledHEALArkansas.ThisprogramwasstartedbytheAddisonShoeFactorywhentheylearnedthatmanyoftheiremployeesspentuptohalfoftheirincomeon

energybills.85TheHEALprogramisnowofferedthroughthestateofArkansastoselectedbusinessesandprovides“facilityauditsandzerointerestretrofitfinancingofenergyefficiencyimprovementsfortheirfacilities.”86Thecompaniesinturnmustusepartoftheirenergysavingstohelpemployeeswithhomeauditsandretrofittingofappliances,windows,andotherenergy-savingitemsbyprovidingtheemployeeswithzero-interestloansforsuchimprovements.

Companiesmayalsoprovideavarietyofother“green”subsidiessothatemployeescanhelptheenvironment.Thesemightincludeassistancetoemployeeswithpurchasingrenewableenergyoptionsfortheirhomessuchassolarcellsorhybrid,electric,oralternativefuelvehicles.Eventelecommutingcanbeasustainabilitybenefitbecauseitlowersthenumberofemployeescommutingtowork.Soemployersjustneedtouseabitofimaginationandagoodsearchenginetofindwaysinwhichtheycanencouragesustainablepracticesonthepartoftheiremployeesas

wellaspracticesthattheycanputintoeffectwithinthecompany.

WORKAPPLICATION13-9Selectanorganization,preferablyoneyouworkorhaveworkedfor.Identifyanysustainability-basedbenefitsitcurrentlyoffers,ifany,andstatesomebenefitsitcouldoffer.

DoesDiversityTrainingWork?Competitiveorganizationsalwaysneedtoworktomaximizethetalentpoolfromwhichtheycandrawrecruits.If,infact,theorganizationarbitrarilylimitsthenumberandtypesofrecruitsthroughartificiallimitsonorganizationaldiversity,itrestrictsitsabilitytodrawonthebesttalentavailablefromtheat-largeworkforce.However,mostorganizationstodayacceptthefactthatunmanageddiversitycandecreaseemployeecommitmentandengagement,lowerjobsatisfaction,increaseturnover,andincreaseconflict.Organizationsmustcreateaculturalchangeinorderfordiversitytrainingtobesuccessful.Butsinceculturalchangeisverydifficult,manyorganizationstrytoshortcuttheprocessandasaresultendupwithfailedprograms.87

Howcanorganizationscreateanddelivera

diversitytrainingprocessthathasachanceofbeingsuccessful?Commondiversityinitiativesincludesuchthingsasdiversityrecruitment,diversitytraining,andformalmentoringprograms.However,pluggingtheseprogramsintoorganizationaltrainingwithoutprovidingaprocessbywhichtheycanbeintegratedintothedailyactivitiesofthemembersoftheorganizationwilllikelyleadtominimal,ifany,success.

Itisimportantfororganizationstomanageworkplacediversity,buttakingshortcutsindiversitytrainingisnottheanswer.

©iStockphoto.com/RawpixelLtd

Diversitytraininghasbeenaroundinsomeformsincethe1960s.Initsearlierdays,diversitytrainingprimarilyfocusedonorganizationalcompliancewithequalopportunitylaws.Lateron,diversitytrainingmovedthroughasequenceofoptions—fromattemptingtoassimilatedifferentindividualsintoanorganizationalculture;throughattemptingtomakeemployeessensitivetoothersandtheirdifferences;andmorerecentlytotryingtocreateinclusionofallindividuals,fromallbackgrounds,intotheorganization.88

Throughouteachphaseofdiversitytraining’sexistence,itseffectivenesshasbeenquestionedbymanyorganizationsandresearchers.Evidence,though,appearstobegrowingthatdiversitytrainingdoesaddvaluetotheorganization,bothsociologicallyandeconomically.89,90Thebottomlineisthatmostmajorcorporationsbelievethatdiversityaddssignificantvaluetotheirorganizations,

bothfromtheperspectiveofprovidingdifferentviewpointsandsolutionstoproblems,andfromtheperspectiveofprovidingtheorganizationwithalargertalentpoolinaperiodwhenqualifiedapplicantsarebecominglessandlessavailableintheat-largeworkforce.

WORKAPPLICATION13-10Selectanorganization,preferablyoneyouworkorhaveworkedfor.Describehowitisusingtraininganddevelopmenttomeetthechallengesofanincreasinglydiversifiedworld.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesatSAGEedge.

ChapterSummary13-1Discussthetermethics,includingcommonelementsofthedefinition.

Therearemanydefinitionsofethics,buttheyallhavesomecommonelements.Thecommonelementsincludetheconceptsofmorals,values,beliefs,andprinciples.Theseinturnleadtotheneedforpersonalintegrityandtrustinthecharacterofanother,orwewon’tbelievethattheywillactethicallyiftheyhaveanopportunityforself-enrichmentattheexpenseofothers.

13-2Identifyanddiscusseachfactorrequiredinagoodcodeofethics.

Valuesarethefirstfactor.They“definewhatthecompanyisaboutandmakeitclearthatthecompanyisbasedonhonestyandfairness.”Principlesapplyourvaluesto

specificsituationstoidentifyactionsthatweconsiderethical.Managementsupportiscriticalbecauseifseniormanagersdonotpayattentiontothecode,otherswillnoteither.Personalresponsibilityidentifiesthefactthateveryoneispersonallyaccountablefortheirownbehaviorandisexpectedtoactethically.Finally,complianceidentifiesapplicablelawsandregulationsthatguideethicalbehaviorinspecificindustries.

13-3Describethe“businesscase”forCSR.

CSRsaysthatorganizationshaveadutytoallstakeholderstooperateinamannerthattakeseachoftheirneedsintoaccount.Allstakeholdersmeansall—notjustshareholdersorexecutives.ThebusinesscaseforCSRisbasedontheabilityoftheorganizationtohelporharmvariousstakeholdergroupsandofthosestakeholdergroupsinturnto

helporharmthecompany.Eachstakeholdergrouphasdifferent—andsometimescompeting—interests,buttheorganizationmustbalancethese“socialresponsibilities”amongallofthegroupsinordertosucceed.

13-4Reviewtheconceptofsustainabilityinabusinesscontext.

Sustainabilitymeansmeetingtheneedsofthecurrentgenerationwithoutcompromisingtheabilityoffuturegenerationstomeettheirownneeds.Businessmustpracticesustainabilitytodaybecausesomanyresourcesarebeingoverusedtothepointwheretheycannotbereplenishedandwillultimatelydisappearunlesswequicklychangeourpractices.Sustainabilitygoalsmustbecreatedandmanagedlikeanyotherorganizationalgoalinordertoimprovebusinesssustainability.

13-5Definethekeytermsfoundinthe

chaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermsaccountability,334authority,334corporatesocialresponsibility,337ethics,328principles,333responsibility,334sustainability,340values,333

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms.

1. __________istheapplicationofasetofvaluesandprinciplesinordertomaketheright,orgood,choice.

2. __________areourbasicconceptsofgoodandbad,orrightandwrong.

3. __________areabasicapplicationofourvalues.

4. __________istherighttogiveorders,enforceobedience,makedecisions,andcommitresourcestowardcompletingorganizationalgoals.

5. __________istheobligationtoanswerforsomething/someoneorthedutytocarryoutanassignmenttoasatisfactoryconclusion.

6. __________isthepersonaldutytosomeoneelsefortheeffectiveuseofresourcestocompleteanassignment.

7. __________istheconceptthatorganizationshaveadutytoallsocietalstakeholderstooperateinamannerthattakeseachoftheirneedsintoaccount.

8. __________involvesmeetingtheneedsofthecurrentgenerationwithoutcompromisingtheabilityoffuturegenerationstomeettheirneeds.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Doyouthinkthetermethicsisoverusedintoday’sbusinessenvironment?Justifyyouranswer.

2. WillapplyingtheGoldenRulealwaysresultinadecisionthatyoucandefendas“ethical”?Whyorwhynot?

3. Canyouthinkofsituationswheresomeonemightviolatethecodeofethicsinacompanybutshouldnotbepunishedforit?Giveexamples.

4 . Usingtheconceptsofauthority,responsibility,andaccountability,canyouexplainwhatshouldhappentoanindividualwhomisusescompanyresourcesforpersonalgain?Provideanexample.

5. Doyouagreethatcompanieshaveadutytostakeholdersotherthantheirshareholders?Ifso,justifywhoelsetheyareobligatedtoandwhy.

6. Canyouidentifyonecasewhereyouthinkthegovernment(stateorfederal)isthemostimportantstakeholderofafirm(donotusethegovernmentasacustomerbutasanotherexternalstakeholder)?Explainyouranswer.

7. Issustainabilityjustamarketingtooltogetpeopleto“thinkgreen,”orisitanecessary

businesstool?Defendyouranswer.8. Howwouldyoumotivatepeopleinyour

organizationtopracticesustainability?Bespecificwiththemanagerialtoolsthatyouwoulduse.

Case13-1Microsoft,Nokia,andtheFinnishGovernment:APromiseMade,APromiseBroken?Attheturnofthe21stcentury,Microsoftseemedinvincibleasbothafirmandanoperatingsystem,andcontrolledthetechindustrybycompletelyovershadowingitsnemesis,Apple.AfterlaunchingsuccessfuloperatingsystemslikeWindowsXPand2000,thecompanygainedwealth,recognition,andpowerbycreatinganearmonopolyoverpersonalcomputingdevices.91Althoughtheywerenotthepioneersofuser-friendlyoperatingsystems(accoladestoApplefordevelopingthefirstmassmerchandisedsystem),theywereenjoyinga97%marketshare.In2000,personalcomputersweretheonlyavailablenoncommercialcomputingdevicesandMicrosoftdominatedthemall.92

Asof2005,thedemandforsmartphonesstartedtoincreaseandthemarketincreasedopportunitiesfornewentrants.Microsoft’sdeclinestartedin2007afterAppleintroducedthefirstiPhone.ThemarketwasmovingawayfromMicrosoft’sproducts;comparedtoApple’sMacoperatingsystem,WindowsVistawasbarely

holdingupandwasconsideredinferiortoitspredecessor,WindowsXP.AppleshowedtremendousgrowthoverthenextdecadeandWallStreetannouncedthatApplewasvaluedhigherthanMicrosoftin2010.GooglethenintroduceditsAndroidsystemtocompetewithApple’siPhoneOS.Thisnewsystemwasadoptedbytheotherhalfofthesmartphoneindustry.Asalateentrant,MicrosoftintroducedtheirfirstWindowsPhonein2010andthenextyear,theyannouncedtheircommitmenttoFinnishexpertiseinthetelecommunicationssectorbypartneringwithNokiaandfunctioningasoneteam.ThisarrangementpermittedallNokiadevicestouseMicrosoftoperatingsystems,whichreintroducedMicrosofttothesmartphonemarket.93

By2013,therewereapproximately2.5billioncomputingdevices,includingtablets,thatweredominatedbythreecompanies:Microsoft,Google,andApple.Thetotalnumberofpersonalcomputersaleshadyettoreach500million,butsmartphoneshadalreadysoldmorethan1.5billionunitsoveradecade.94Smartphoneshaddominatedthetechindustryasthemajoriteminthepersonalcomputermarket.Apple’siPhonewasahugesuccess,whichcreatedbillionsofdollars’worthofsupplementaryrevenuefrommobileapplications.Inthisrespect,Apple’siTunesandSamsung’salignmentwithGoogleenhanceduserexperienceswithsmartphones.Microsoft,ontheotherhand,wasnotpreparedforthesuddenshiftinthemarket,andalthoughstillatechgiant,theywereclearlycaughtoffguard.

Withitsmarketcapat20%,Microsoftdesperately

wantedtoregainmarketshare.TheyinstalledanewCEOwhowastaskedwithrealigningthecompanyunderthe“OneMicrosoft”vision.Thecompanywasreadytochangeitsbusinessmodel,toincreasethespeedofinnovation,increaseefficiency,andrebuildthecompanyculture.TothatendtheyannouncedOffice2013,anewoperatingsystemcalledWindows8.1,andXboxOne,theirnewgamingconsole.95

In2013,theagreementbetweenMicrosoftandNokiabecamemorethanapartnershipasMicrosoftbidtoacquireNokiaina$7.2billiondeal.Foundedin1865,NokiaisaFinnishtelecommunicationsandtechnologycompanythatengagedmorethan90,000employeesandreportedaround$12billioninannualrevenues.ThiswasabigmoveforMicrosoftsinceNokiahadexperienceditsowndeclinesasindicatedbyitsstocksdroppingby80%inthepriorfewyears.Bothcompanieshadignoredthewindsofchangeandbothpaidthepriceforlettingtheircompetitorsslidepastthem.96

TheacquisitionofNokia,however,wasdelayedbynumerouslegalissueswiththeFinnishgovernment,whoapprovedthedealwiththeunderstandingthatlayoffswouldnotbeforthcoming.Thepurchasewasfinallyapprovedbythenumerousinternationalgovernmentalregulatoryagenciesinthefirstquarterof2014.Withpurchaseinhand,Microsoftfelttheynowhadgoodaccesstothemobilephoneindustrywith$50billioninannualsales.Threemonthsafterthedealwasinked,Microsoft’sfirstmajoractionwastolayoff18,000peopleintheirworkforce.Thiswasthelargestlayoffinthetechindustry,butithelpedMicrosoftsaveabout

$600millionayear.97

FinnishPrimeMinisterAlexanderStubbreceivedacallinJuly2014fromStephenElop,theheadofMicrosoftCorp.’sdevicebusinessandaformerNokiaCorp.chiefexecutive.ElopalertedhimthatMicrosoftwouldcut1,100ofthe4,700jobsinFinlandthatcamewithitspurchaseofNokia’smobilephoneoperations.Mr.Stubbcalledthelayoffs“extremelyregrettable”andsaidthegovernmentwoulddoallitcouldtocushiontheblowtothoseaffected.FinnishpoliticiansissuedstatementscallingonMicrosofttoshowsocialresponsibilityandofferretrainingandgenerousseverancepackagestothepeopleitwasdismissing,somethingthatNokiahasdoneinthepastinFinlandandabroad.SomewentfurtherandaccusedMicrosoftofrenegingonthepromisesitsupposedlymadeaboutjobsecurityandFinland’splaceinitsstrategy.“Youcansaywewerebetrayed,”saidFinland’snewlymintedministeroffinance,AnttiRinne,aSocialDemocrat.98

Questions1. WhoareMicrosoft’skeystakeholdersinthis

case?Why?2. UsingthefiveforcesmodelfromChapter2,

describehowthechangesinthecomputertechnologyindustryimpactedMicrosoft’sabilitytocompete.WhichforcemostnegativelyimpactedMicrosoft?Why?

3. WhatseemstobeMicrosoft’sethicalapproach?Howdoesthisapproachseemtoimpacttheirhumanresourcemanagementdecisions?

4. Describetheconflictbetweenstakeholders’interestsandtheFinnishgovernment’sperceptionofMicrosoft’slackofsocialresponsibilitytoNokia’semployees.Whomdoyousidewithandwhy?

5. Insteadoflayoffs,whatifMicrosoftdecidedtodecreasethetotalcompensationtoNokiaemployees.Whatpartofthatpackagewouldyoudecreaseandwhy?

6. Besideschangingthecompensationpackage,whatotherhumanresourcemanagementoptionsmightMicrosoftconsiderratherthanlayoffs?

CasecreatedbyHerbertSherman,PhD,andTheodoreVallas,DepartmentofManagementSciences,SchoolofBusinessBrooklynCampus,LongIslandUniversity

SKILLBUILDER13-1EthicsandWhistle-Blowing

ObjectiveTodetermineyourlevelofethics

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Conceptualanddesignskills

2. SHRM2013Competencies—C:Ethics

AssignmentForthisexercise,firstcompleteSelf-Assessment13-1inthechapter(page329).

DiscussionQuestions1. Whoisharmedandwhobenefitsfromthe

unethicalbehaviorsinitems1through3?2. Foritems4to24,selectthethree(circletheir

numbers)youconsiderthemostunethical.Whoisharmedbyandwhobenefitsfromtheseunethicalbehaviors?

3. Ifyouobservedunethicalbehaviorbutdidn’treportit,whydidn’tyoureportthebehavior?Ifyoudidblowthewhistle,whatmotivatedyoutodoso?Whatwastheresult?

4. Asamanager,itisyourresponsibilitytoupholdethicalbehavior.Ifyouknowemployeesaredoinganyoftheseunethicalbehaviors,willyoutakeactiontoenforcecompliancewithethicalstandards?

5. Whatcanyoudotopreventunethicalbehavior?6. Aspartoftheclassdiscussion,shareanyofthe

otherunethicalbehaviorsyouobservedandlisted.

Youmaybeaskedtopresentyouranswerstotheclassorsharetheminsmallgroupsinclassoronline.

SKILLBUILDER13-2CodeofEthicsandCorporateSocialResponsibility

ObjectiveTobetterunderstandabusiness’sethicsandCSR

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Conceptualanddesignskills

2. SHRM2013Competencies—C:Ethics

AssignmentSelectaspecificbusiness.Itcanbeoneyouworkforor,betteryet,oneyouwouldliketoworkforinthefuture.Makesurethecompanyyouselectmeetsthefollowingcriteria:ItmusthaveawrittencodeofethicsandoperateatthebenevolentlevelofCSR.

Goonlinetothecompany’swebsiteandgetacopyofitscodeofethicsanditsreportonitscorporatesocialresponsibilityprograms.Besuretoidentifyanyofitssustainabilitypractices—thisinformationmaybeataseparatelink.

Bepreparedtomakeareportonyourcompany’scodeofethicsandCSRtotheentireclassorinasmallgroup.

14GlobalIssuesforHumanResourceManagers

©iStockphoto.com/zhudifeng

ChapterOutlineGlobalizationofBusinessandHRM

ReasonsforBusinessGlobalizationIsHRMDifferentinGlobalFirms?

Legal,Ethical,andCulturalIssuesInternationalLaborLawsUSLawNationalCulture

GlobalStaffingSkillsandTraitsforGlobalManagersStaffingChoice:Home-,Host-,orThird-CountryEmployeesOutsourcingasanAlternativetoInternationalExpansion

DevelopingandManagingGlobalHumanResources

RecruitingandSelectionExpatriateTrainingandPreparationRepatriationAfterForeignAssignments

CompensatingYourGlobalWorkforce

PayIncentivesinGlobalFirmsBenefitProgramsAroundtheWorld

TrendsandIssuesinHRMGlobalizationofBusinessIsaTrend!TheWorldwideLaborEnvironment

LearningOutcomesAfterstudyingthischapter,youshouldbeabletodothefollowing:

14-1Discussthereasonsforincreasingbusinessglobalization.PAGE35114-2DescribethefivedimensionsofHofstede’sModelofCulture.PAGE35714-3Nametheadvantagesanddisadvantagesofparent-country,host-country,andthird-countrynationalsforinternationalassignments.PAGE36014-4Explainthetwomajortypesoftrainingthatyoushouldgenerallyprovidebeforeexpatriateassignments.PAGE36214-5Definetheoptionsforcompensationofexpatriateworkers.PAGE36414-6DefinethekeytermsfoundinthechaptermarginsandlistedfollowingtheChapterSummary.PAGE369

Masterthecontent.Usetheonlinestudytoolsatedge.sagepub.com/fundamentalsofhrmtoreview,practice,andimproveyourskills.

Practitioner’sPerspectiveCindysays:Oneofthebiggestchangesinbusinesshasbeentheexplosionoftheglobalmarketplace.Businessdoesn’tcompeteacrossthecountry,butaroundtheworld.AmericanstendtobeEurocentric(theviewpointthatWesterncivilizationissuperior).Wemustrecognizethatforeignculturesdeservetobevaluedinthesamemannerasadiverseworkforceisvalued,andthatwhatisacceptablebehaviorintheUnitedStatescanbeanythingbutinanothercountry.

ZacisanassistantmanagerforKawasakiHeavyIndustries,aglobalcompanywithUSmanufacturingplants.AfterescortingUSemployeestocompanymeetingsinJapan,Zachassomeamusingstoriestotell.Hisfavoriteisaboutthefellowwhowentaroundwavingandsaying“Hi”toeveryone.HiinJapanesemeansyes,soimaginehowstrangethisliteral“yes-man”appeared.Anotherinterestingdifferenceisgivingandreceivingbusinesscards.IntheUnitedStates,onewouldusuallyputabusinesscardawayafterreceivingit,butinJapan,thatwouldbeconsideredextremelyrude.Thereonemustleavethecardlyingonthetableuntilallbusinessisconcluded.

WhatwillyoudiscoveraboutglobalissuesinChapter14?

GlobalizationofBusinessandHRMWeliveinaworldthatisdynamicallygloballyinterconnected.1Themajorfactorincreasingthecomplexityoftheenvironmentistheglobalizationofmarkets.2ThinkaboutthecomplexityofFedEx’senvironment,deliveringtomorethan220countriesandterritories.3Therefore,ithastofollowtherulesandregulationsofdifferentgovernmentsincountrieswithdifferenteconomies,laborforces,societies,andsoon.Therearesignificantculturaldifferencesbetweencountriesandregions.Infact,inmanycases,therearemultipleculturesinasinglecountry.Allofthismakesglobalbusinessmorechallenging.Clearly,tobesuccessful,companiesneedgloballeaders.4Today’smanagers—andstudentsofmanagement—cannotaffordtounderestimatetheimportanceoftheglobalenvironmentto

business.5Let’stakealookathowHRMhastobemanageddifferentlyinglobalfirms.

ReasonsforBusinessGlobalizationOverthepast40years,ourenvironmenthasconspiredtomakeiteasiertomovebothgoodsandpeople,alongwithabstractideasandconcreteknowledge,acrossbordersandaroundtheworld.Inturn,businessmustadapttothisnewenvironment.Therearemanyreasonswhybusinessishavingtoadapttoglobalizationonascaleneverseenbefore.Let’squicklyreviewsomeofthemajorreasonsforthis.

IncreaseBusiness.Let’sfaceit:Mostlargecorporationswanttocontinuetogrow.IfyouareamajorcorporationlikeCoca-Cola,isthereanyplaceinAmericatoexpand?No,themarketissaturated.Also,theUSpopulationisonly318.74million,asmallfractionoftheworld’s

populationof7.19billion.6Soiflargecorporationswanttogrow,theyhavetoglobalize.However,businessesofallsizesalsohavegrowthpotentialiftheygoglobal,somanysmallerbusinessesareconductinginternationalbusiness.

LO14-1Discussthereasonsforincreasingbusinessglobalization.

SHRMO:1

GlobalBusinessEnvironment

TheGlobalVillage.Theglobalvillagereferstocompaniesconductingbusinessworldwidewithoutboundaries.Thewordvillageimpliessomethingsmallandemphasizesthattheworld,althoughverylarge,isbecomingsmallerthroughtechnology.TechnologyandtheInternethavechangedthewaybusinessisconductedintheglobalvillage.Initsfirst30days,Amazon.comwentglobal,recordingsalesinall50USstatesand45othercountries.7

DecliningTradeBarriersand

theWTO.TheWorldTradeOrganization’s(WTO)“…primarypurposeistoopentradeforthebenefitofall.”8ItisaforumforgovernmentstonegotiatetradeagreementsastheWTOenforcesasystemoftraderulesamongits161membergovernments.9Visithttp://www.wto.orgforupdatedinformationabouttheWTO.BecausetheWTOanditspredecessorshavebeensoeffectiveatloweringtradebarriers,internationaltradehasopeneduptobusinessesthatwouldnothavebeenabletocompeteinternationallybeforetheseorganizationsandagreementsexisted.

DecliningBarriersofDistanceandCulture.Inthe1950s,itwasdifficulttotransportgoodsacrosscountrybordersandoveroceans.Itwasalsodifficulttocommunicate

betweenonelocationandanother.But—thingshavechanged!Communicationtomostpartsoftheworldisnearlyinstantaneous.YoucandialupyourfriendinChina,orgetontheInternetanduseawebcamtoseeexactlywhatiswrongwithyourproductionequipmentinShanghai,China,andprovideinstructionsonhowtofixitinafewminutes.Ifyouneedtosendexpertstotheplant,theycanbeanywhereintheworldinaboutaday.

SHRMHRcontentSeeAppendix:SHRM2013CurriculumGuidebookforthecompletelist

C.Ethics(required)3.Individualversusgroupbehavior17.ForeignCorruptPracticesAct

F.ManagingaDiverseWorkforce(required)

5.Languageissues13.Culturalcompetence

K.TotalRewards(required)B.EmployeeBenefits

11.Globalemployeebenefits14.Outsourcing(secondary)

O.Globalization(required—graduatestudentsonly)

1.Globalbusinessenvironment2.Managingexpatriatesinglobalmarkets3.Cross-borderHRmanagement4.Repatriatingemployeespostinternationalassignment6.Inshoring7.Offshoring/outsourcing9.Cross-culturaleffectiveness

TheRiseofTradeBlocs.Tradeblocsaregroupsofcountrieswhoformanassociationforthepurposeoffacilitatingmovementofgoodsacrossnationalborders.Thesetradeblocsallowfree,orlow-cost,passageofgoodsamongmembernationstoencouragecompaniestospecializeincertaintypesofgoodstobecomemoreefficientandthereforelowerthecostofthosegoodstoallmembercountries.SeeExhibit14-1foralistofmajortradeagreements.

Ifyouarenotpartofthebloc,tradebarrierstendtobesignificant,andtheywillraiseyourcostofdoingbusinesswiththecountriesinthebloc.Onemethodofgettingaroundthebarriersistobecomepartofthebloc.Thisisusuallyaccomplishedbyhavingbusinessoperationsinatleastonecountrywithinthebloc,whichwillmakeyourcompanyadefactomemberoftheblocandreduceoreliminatethisbarrier.Socompanieswillnowfrequentlybuildfactories,assemblyfacilities,

componentplants,orotherfacilitieswithintheblocinordertoovercomethetradebarrierassociatedwiththattradebloc.

WORKAPPLICATION14-1Identifyaglobalbusiness,oneyouhaveworkedforifpossible.Discussthereasonsitwentglobal.

ToRemainCompetitive!Thelastreasonforbusinessglobalizationissimple:

Globalcorporationsvs.Domesticorganizations=One-sidedcompetition

Inmanycases,ifadomesticfirmiscompetinghead-to-headwithaglobalfirm,thecompetitionisseriouslyone-sided.Theglobalfirmwillsourceallofitsresourcesfromwherevertheyarethemostefficient.Iftheglobalcompanysourcesrawmaterials

fromonecountryforhalfthecost,componentproductioninanothercountryfor75%ofthecost,andlaborfromathirdcountryfor25%ofthecostofthedomesticcompetitor,whoisgoingtowinthebattleforthecustomers?Thedomesticfirmisatanabsolutecostdisadvantageversustheglobalfirm.Thecustomerwillnotpaydoublethepriceforthesamegoodofthesamequality,nomatterwhereitismade!BuyAmericanproductsisagoodslogan,butmostpeopledon’tevenknowthecountryofownershipofmostproducts.CompleteSelf-Assessment14-1tofindouthowknowledgeableyouare.

Exhibit14-1MajorTradeAgreements

WORKAPPLICATION14-2Selectabusiness,preferablyoneyouwork(ed)fororwanttoworkfor,andidentifyreasonswhyitisaglobalbusiness.

TradeblocsGroupsofcountrieswhoformanassociationforthepurposeoffacilitatingmovementofgoodsacrossnationalborders

14-1Selfassessment

ProductsbyCountryofOriginForeachitem,determinethecountryoforigin.IfyouransweristheUnitedStates,placeacheckintheleft-handcolumn.Ifit’sanothercountry,writethenameofthecountryintheright-handcolumn.

1.ShellisownedbyRoyalDutchShelloftheNetherlands.2.NestléisheadquarteredinSwitzerland.3.UnileverisBritish.4 .NokiawasaFinnishcompanybutwasacquiredbyUSMicrosoftinSeptember2013.5.L’OrealisFrench.6.Johnson&JohnsonisaUScompany.7.BurgerKingisBrazilianowned.8.SamsungisSouthKorean.9.BayerisGerman.10.Anheuser-BuschInBevisBelgianowned.11.Volvoand12.AMCarebothChineseowned.

Howmanydidyougetcorrect?

IsHRMDifferentinGlobalFirms?“Tofunctioneffectivelyinamulticulturalglobalbusinessenvironment,individualsandorganizationsmustbecapableofadaptingsmoothlyandsuccessfullyacrossculturalboundaries.”10Thismeansthatastheorganizationexpandsbeyonditsoriginalborders,employeesneedtolearntochangetheirpersonalperceptionsfromalocalfocustowardabroaderconceptofsociety.Theyneedtobecomecapableculturalchameleons—abletochangeontheflyasnecessaryinordertointeractwithotheremployees,customers,vendors,andanyotherstakeholders—tomanagethebusiness.Yet,theevidenceshowsthatthisisoneofthemostsignificantweaknessesofindividualswhohaveabusinessdegreebuthavelittleworkexperience.11

Companiesnearlyalwaysstartoutsmalland

local—theyhaveoneshoporstoreinonetowninasinglecountry.Whenmanagingthis“simple”organizationstructure,thecomplexityisminimal.Generally,alldecisionsaremadebytheboss.Aswegetlargerandmorecomplex,managementintheorganizationhastochangeandadapttothatcomplexitybylooseninguponcentralizedauthoritysothatthingscangetdoneinareasonabletimeframe.

Ultimately,inmanyindustriesatleast,thecompanywillconsiderinternationaloperationsofsometypetogainanadvantageoveritscompetitors.Andalongwiththecreationofaninternationalpresence,thecomplexityofthefirmgoesupevenmore.ThisisthepointatwhichHRmustbecomeadifferentandmorecomplexdepartment.InternationaloperationsrequireustorethinkeverymajorfunctioninHRM.Forexample:

Staffing.Home-country,host-country,andthird-partyemployeesallrequiredifferentsourcing,training,disciplinary

actions,andcompensationandmayrequiremanyotherdifferencesinmanagement.Training.Fromorientationtocultureandreligion,tolanguageproblemsandmanaginginfrastructure,trainingwillneedtobemodified.Forinstance,safetytrainingwillneedtobeprovidedinmultiplelanguagesinmanycases,anditwillhavetobeaccomplishedsoastocomplywithmultiplecountrylawsandregulations.Employeeandlaborrelations.Differentcountries’lawsconcerningemployeerelationsrequireHRtobecomecompetentinlegalissueswherethecompanyoperates.Manycountries’laborlawsarestronglyorientedtowardprotectionoftheindividualemployee—muchmoresothanintheUnitedStates—andtheHRmanagermustbecomecompetentinalloftheselegaldifferences.Inaddition,culturalattitudesandnationallawsalsoaffectwhenandhowemployeesaredisciplined.

Compensation.Shouldthecompanypaylocalaveragewages,home-countryaveragewages,orotherwagelevels?Howdoincentivesworkwithemployeesfromdifferentcultures?

Globalorganizationsaremoreeffectiveifemployeesfromdifferentculturesareabletointeractwitheachotherinmeaningfulways.

©iStockphoto.com/gremlin

Thesearejustafewofthemanyissuesthatmustbetakenintoaccountaswemovefroma

single-countrybusinesstoaglobalfirm.Throughouttherestofthischapter,youwilllearnmoreaboutglobalHRMfunctions.

Legal,Ethical,andCulturalIssues

“Ifyouseeinanygivensituationonlywhateverybodyelsecansee,youcanbesaidtobesomucharepresentativeofyourculturethatyouareavictimofit.”

—USSenatorS.I.Hayakawa

Legal,ethical,andespeciallyculturalissuesalsohavetobeexaminedbycompaniesconsideringglobaloperations.TheHRdepartmenthasresponsibilityformanyoftheseissues,includinginternationallaborlaws,organizationalethicspolicies,andculturaltraining—forbothnationalcultureadaptationandcorporatecultureorientation.

InternationalLaborLawsAsthecompanybeginstooperateinmorethanonecountry’smarket,themanagers,includingHRmanagers,havetoensurethatthecompanycomplieswitheachcountry’slegalrequirements.ThemajorHRlawstendtobeintheareasofstaffing,laborrelations,anddisciplinaryaction/termination.Employmentandlaborlawindifferentcountriesishighlycomplex.Yourorganizationwillneedtodosignificantresearchbeforemovinganyoperationsintoanothercountrytoavoidviolatingthatcountry’slaborlaws.

14-1Ethicaldilemma:whatwouldyoudo?

BuyAmericanYoumostlikelyhaveheardtheslogan“BuyAmerican.”ManylaborunionsurgeAmericanstobuyproductsmadeintheUnitedStatesbecausethathelpsretainjobsforAmericanworkers.Ontheotherhand,someAmericansaskwhytheyshouldbuyAmericanproductsiftheycostmoreortheirqualityorstyleisnotasgoodasthatofforeign-madeproducts.Butasyou’veseen,itisn’talwayseasyforconsumerstoknowthecountryofownershipofmanyproductstheybuy.

1. 1.IsitethicalandsociallyresponsibletoaskpeopletobuyAmerican?

2. Isitethicalandsociallyresponsibletobuyforeignproducts?

3. DoyouattempttobuyAmerican?Whyorwhynot?

USLawYouknowthatmostorganizationswithintheUnitedStatesaresubjecttoavarietyofEEOlaws.ButareemployeesofforeigncompaniesworkingintheUnitedStatessubjecttothesamelaws,andareemployeesofUScompaniesoperatinginothercountriessubjecttotheselaws?Again,theEEOCgivesusguidanceonthesesituations.

AccordingtotheEEOC,

AllemployeeswhoworkintheU.S.oritsterritories...areprotectedbyEEOlaws,regardlessoftheircitizenshiporworkauthorizationstatus.EmployeeswhoworkintheU.S.oritsterritoriesareprotectedwhethertheyworkforaU.S.orforeignemployer.12

SoifyouareintheUnitedStatesoraUS

territory,youarecoveredbyUSEEOlaws.

ButwhataboutAmericansworkingoutsidetheUnitedStates?AccordingtotheEEOC,“U.S.citizenswhoareemployedoutsidetheU.S.byaU.S.employer—oraforeigncompanycontrolledbyaU.S.employer—areprotectedbyTitleVII,theADEA,andtheADA.”However,“U.S.employersarenotrequiredtocomplywiththerequirementsofTitleVII,theADEA,ortheADAifadherencetothatrequirementwouldviolatealawofthecountrywheretheworkplaceislocated.”13Finally,ifyouareemployedbyaforeigncompanyinacountryotherthantheUnitedStates,thelawsofthatcountrywouldapply,soyouwouldnothavetheprotectionofUSEEOlawsinsuchacase.

TheUnitedStatesalsohasalawspecificallyaddressingcorruptionandbriberybyUSnationalcompanieswhileoperatinginothercountries.TheForeignCorruptPracticesAct(FCPA)barsUS-basedorUS-listedcompaniesfrombribingforeignofficialsin

exchangeforbusiness.TheFCPAalsorequirescompaniestokeepaccuratebooksandrecordsconcerningtheirforeignoperations.However,itissometimeshardtotellthedifferencebetweenalegitimatebusinessexpenseandabribe.14 Soglobalcompaniesneedtoclarifythedifferenceintheircodeofethics,topmanagersmustsetagoodexample,andpenaltiesforunethicalandillegalbehaviormustbeenforced.

Rememberthatdifferentcountrieshavedifferentemploymentlawsbasedonthatcountry’svalues,principles,andethicswhichmustbeobeyed.SothinkaboutthecomplexityfacingtheHRexecutiveworkingforamultinationalcompanydoingbusinessinmorethan100countries!Thus,multinationalsneedHRlegalspecialistsineachcountry.

SHRMC:17

ForeignCorruptPracticesAct

WORKAPPLICATION14-3DoyoubelieveinbuyingAmericanproducts?DoyoutrytobuyonlyAmericanproducts,andshouldyou?

ForeignCorruptPracticesActLawbarringUS-basedorUS-listedcompaniesfrombribingforeignofficialsinexchangeforbusiness

NationalCultureRecallthatwediscussedorganizationalcultureinChapter2.Allofthatinformationalsoappliestonationalculture,butnationalcultureisevenmorepowerfulinmanycases.Itiswhatpeoplehaveknowntheirentirelives,andliketheoldadageaboutafishinwaternotknowingthatthereisanyotherpossibleenvironment,peoplewhohavelivedtheirlivesinoneculturemanytimesdon’tevenrealizethatthereareotheroptionsforvalues,beliefs,andculture.Thisviewoftheworldiscalledparochialism—anarrow-mindedviewoftheworldwithaninabilitytorecognizeindividualdifferences.Managersinglobalorganizationscannotsurvivewithaparochialviewoftheworld.

Differencesinnationalcultureinfluencetheeffectivenessofdifferentmanagerialbehaviors.Theseculturaldifferencesrequireresponsesthatarebasedonthecountryin

whichyouaredoingbusiness.Forinstance,singlingoutandpraisinganindividualworkerinJapanistantamounttoyellingatanAmericanemployeeontheshopfloor.Japan,asahighlycollectivistculture(wewilldiscussthismomentarily),doesnotsingleouttheindividualforeitherpraiseordisciplineinapublicsetting.

Inanothercontext,wouldyoumanagefemaleemployeesthesamewayinaMuslimcountrysuchasIranasyouwouldintheUnitedStates?Wouldfemalemanagersleadothersinthesamewayasmalemanagersinthiscase?WouldtheymanagemalesubordinatesinthesamewayastheirUScounterpart?It’snecessaryformanagers(inallcountries,andallorganizations)tounderstandtheneedtoadjusttheirmethodsandtheirstyletotheregion/country/communityinwhichtheywillbeoperating.

Soifyouaregoingtohavetomanageinaninternationalsetting,youwillneedtounderstandtheculturesthatyouaredealing

with.Buthowdoexpatriateemployeesknowhowtoactinanotherculture?

Hofstede’sModelofNationalCulture.Let’slookatawaythatwecanclassifycountryculturesinordertodeterminehowtotrainmanagerstosuccessfullyworkwithemployeesinthatculture—Hofstede’smodelofnationalculture.

Inthe1960sGeertHofstedeidentifiedfivedimensions—eachofwhichallowsacountryculturetobeplottedalongacontinuum.Eachdimensionwasmeasuredonascaleof0to100,with100beingthehighestexhibitionofthatdimension.(MorecountrieswereaddedtoHofstede’smodelinlateryears,resultinginsomescoresmovingabove100.)Let’slookatthedimensionsofthemodelinExhibit14-2.

WhatisthevalueinknowingthatRussiancultureisorientedtowardtheshortterm,

Japanishighlymasculine,andIndiaismoderatelycollectivist?Thevalueinthemodelisinknowinghowsignificantthedifferencesarebetweentwocountries’cultures.Thegreaterthedifferenceinthetwoculturesoneachofthedimensions,themoredifficultitistobringemployeesfromonecultureintotheothertoworktogethereffectively.

Similarly,puttingemployeesfromthesetwoculturestogethertoaccomplishanytaskislikelytofailunlesstheyaregivenculturaltrainingbeforeworkingtogether.TheHRdepartmentistypicallychargedwithcross-culturaltrainingofemployeeswhowillbeworkingoutsidetheirnativeculture.(Onasidenote:Ifyouevergetboredandwanttowatchaprettygoodmovieaboutextremecultureclash,watchafilmfromthe1980scalledGung-HowithMichaelKeaton.Youwillquicklyseewhyculturaldifferencesmatterinbusiness.)

Exhibit14-2Hofstede’sModelofNational

Culture15

Source:TheHofstedeCentre

SHRMF:13

CulturalCompetence

LO14-2DescribethefivedimensionsofHofstede’smodelofculture.

SHRMC:3

IndividualVersusGroupBehavior

WORKAPPLICATION14-4Giveanexampleofculturaldiversityyouhaveencountered,preferablyatwork.

ParochialismAnarrow-mindedviewoftheworldwithaninabilitytorecognizeindividualdifferences

14-1ApplyingTheConcept

GlobeDimensionsPlacetheletteroftheHofstededimensionofculturaldiversityonthelinenexttothestatementexemplifyingit.

1. Power-Distance(lowvs.high)2. Individualism(vs.Collectivism)3. Masculinity(vs.Femininity)orAssertiveness

(vs.Nurturing)4. UncertaintyAvoidance(highvs.low)5. Long-TermOrientation(vs.Short-Term

Orientation)

____1.Thepeopleseemtoprefersportslikesoccerandbasketballtosportslikegolfandtrack-and-field.____2.Managersplacegreatimportanceonstatussymbolssuchastheexecutivediningroom,reservedparkingspaces,andbigoffices.____3.Managersprovidepoorworkingconditionstomaximizeprofits.____4.Employeesgetnervousandstressedwhenchangesaremade.____5.Managersfocusonquarterlyandannualearningstomeetanalysisexpectations.

GlobalStaffingAsyoucansee,operatingabusinessonaglobalscalerequiressomecomplexskills.Howarewegoingtostafftheorganizationwithpeoplewhohaveboththeabilityandthedesiretoworkinthistypeofenvironment?Wewillneedtorecruitpeoplewithspecificskills.Wewillalsohavetomakesomechoicesaboutwhattypesofemployeeswearegoingtorecruit,andfromwhichcountries.Thenwewillhavetodeterminewhattrainingisnecessaryforthemtobesuccessful.ThesechoicesbytheHRMcandeterminethesuccessorfailureofourglobalorganization.

SkillsandTraitsforGlobalManagersGoingbacktoChapter1,youprobablyrememberthatall“managersrequireamixoftechnical,humanrelations,conceptualanddesign,andbusinessskillsinordertosuccessfullycarryouttheirjobs.”Ininternationalassignments,alloftheseskillsetscandifferfromwhatamanageroremployeewouldtypicallylearninordertodotheirjob.Thewayworkiscarriedout—forinstanceinahighpower-distanceculturewhereemployeesexpecttoreceiveandcarryoutorderswithoutquestion—mayaffectthewayamanagerdoestheirjob,soanAmericanmanagergoingintoahighpower-distanceculturewouldneeddifferenttechnicalskillsthannormal.Certainlywithmultiplecultures,probablyspeakingmultiplelanguages,managerswillneedverystronghumanrelationsskills,andevenconceptualanddesignskillsmayneedtovaryfromwhatthe

managerwouldconsider“normal”indifferentcultures.Andfinally,aswehavealreadynoted,businessskillscanbesignificantlydifferentduetothevarianceinlaws,regulations,andbusinessstructuresindifferentcountries(thinkofthekeiretsuandchaebolpartnershipsinsomeAsiancountries).

Whenstaffingaglobalorganization,managersneedtolookforcandidateswithspecificskillsthatlendthemselvestooperatingonaninternationalscale.

©iStockphoto.com/XavierArnau

Butwhatelsedoweneedtotakeintoaccountbeforesendingsomeonetoanothercountrytoworkwithormanageothers?Companiesmaywantpreviousinternationalexperienceintheemployeesthattheyareconsideringsendingonassignmentsoutsideoftheirhomecountry.Thefeelingisthatpeoplewhohavemadetheadjustmentbeforewillhaveaneasiertimeadjustingtoyetanotherenvironment.Thisisnotalwaystrue,butitcanhelptohaveahistoryoflivingindifferentcultures.Cultureshock(wewilldiscussthisshortly)isthoughttodecreaseaspeopleareexposedto,andlivein,multipledifferentcultures.Thiscanbeadvantageoustoboththeindividualandtheorganizationbecausetheindividualcansettleinandbecomemoreproductivesooneriftheydonothavetolearnhowtobehavewithintheculture.

WenotedinChapter8thatitissometimesnecessarytoevaluateindividualtraitswhenevaluatingouremployees.Thisisoneofthosecaseswhereitisindeednecessary.“Personalitytraitshavebeenwidelyregarded

asamongthemostimportantpotentialfactorsleadingtoexpatriateadjustment,”17soaglobalassignmentisonesituationinwhichwewillneedtoattempttoassessthetraitsofthepeopleweareconsideringsendingtoanothercountrytolive.Someverystrongevidencesaysthatexpatriateswillfitintoaculturebetteriftheirpersonalitytraitsmatchupwellwiththeculture’smostsignificantcharacteristics.18

Suitabilityofimmediatefamilywhowillaccompanytheemployeeisalsoimportant.Wehavetoconsidertheentirefamilywhenmakinganinternationalassignmentunlesstheassignmentwillbe“unaccompanied,”orwithoutthefamily.Iftheydoaccompanytheemployee,theywillneedtobeassessedforsuitabilityanddispositionaswellasbeingtrainedrightalongwiththeemployee.

Alloftheassessmentthatwewillaccomplishpriortosendinganindividualonaninternationalassignmentisdesignedtoidentifythe“fit”oftheindividualwiththe

assignment.Rememberthatwealsodiscussedpersonality-jobfitandperson-organizationfitalongwithability-jobfitinChapter6.Personality-jobfitandperson-organizationfitwillneedtobemeasuredandanalyzedinconjunctionwithapotentialinternationalassignmentjustasifwewerehiringthepersonintotheorganizationfromtheoutsideworld.Theywillhavetoadapttotheorganizationandthejobinaverydifferentenvironmentfromtheonethattheyarecomingfrom,andthereisahighriskoffailureinthejobifwedon’tdotheanalysissuccessfully.

Finally,languageabilityissomethingthatmayneedtobetakenintoconsideration.Thiswilldependontheassignment,thedifficultyoflearningthelanguage,thebenefitsoflanguagetraining,andotherconsiderations,butwedohavetoatleastidentifythepossibleneedfortheemployeetospeakthenativelanguageofthepeopleintheassignmentlocation.

WORKAPPLICATION14-5Howwouldyouassessyourpersonalityfit,familysituation,andlanguageabilityintermsofanoverseasassignment?Areyouinterestedinworkinginanothercountry?Ifso,inwhichcountry(ies)wouldyouliketowork?

SHRMF:5

LanguageIssues

StaffingChoice:Home-,Host-,orThird-CountryEmployeesOurnextconsiderationiswherewewillsourcetheindividualfromforaninternationalassignment.Wehavethreegenericoptions,eachofwhichmaybethebestinsomecircumstances:

Parent-(home-)countrynationals—PeoplewhoworkfortheorganizationinthecountrywheretheorganizationisheadquarteredHost-countrynationals—PeoplewholiveinadifferentcountrywhereaworkassignmentwilltakeplaceThird-countrynationals—Peoplewhohappentohaveaskillsetneededforaninternationalassignmentbutwhoarenotcitizensofeitherthehomeorhostcountry

Eachofthethreestaffingoptionshas

advantagesanddisadvantages.19Let’sidentifywhatyoumightneedtoknowinordertoconsidereachoptioninExhibit14-3.

LO14-3Nametheadvantagesanddisadvantagesofparent-country,host-country,andthird-countrynationalsforinternationalassignments.

OutsourcingasanAlternativetoInternationalExpansionAsanalternativetoexpandingthehomeorganization,outsourcingisonewayinwhichorganizationscanmanageworkwithoutcreatingadirectinternationalsubsidiary.Outsourcingistheprocessofhiringanotherorganizationtodoworkthatwaspreviouslydonewithinthehostorganization.Inquiteafewcases,theorganizationtowhichweoutsourceaparticularprocesswillbelocatedinanothercountry.Inthiscase,theoutsourcingisoftenreferredtoasoffshoring.Nikeoutsourcesmakingallofitsproducts,asitdoesn’townanymanufacturingfacilities.

Exhibit14-3AdvantagesandDisadvantagesofParent,Host,andThird-CountryNationals

Source:Dörrenbächer,C.,Gammelgaard,J.,McDonald,F.,Stephan,A.,&Tüselmann,H.(2013).Staffingforeignsubsidiarieswithparentcountrynationalsorhostcountrynationals?InsightsfromEuropeansubsidiaries(No.74).WorkingPapersoftheInstituteofManagementBerlinattheBerlinSchoolofEconomicsandLaw(HWRBerlin).

Ontheotherhand,intheUnitedStatesandmanyotherdevelopedcountries,therehasbeenarecentgovernmentalpushtoreturn

jobsthathavebeenoffshoredtothehomecountry.Thisiscalledonshoring(youmayalsoseethetermsinshoringandreshoring).Onshoringistheprocessofshutteringoperationsinothercountriesandbringingworkbacktothehomecountrytoincreaseemploymentthere.Insomecasesthisonshoringmakessense,butinothersitmaynot.However,itisalsoanethicalquestioninthemindsofasignificantnumberofhome-countrycitizens.

Theethicalquestionineachofthesecasesfirstinvolvesthepotentialforjoblossorgainwithinthehomeorganizationbecauseofshippingjobsoverseas.Inthecaseofoffshoring,thefirmmaycutentiredivisions’worthofemployeesandsendthatworktotheoffshoreorganization.ManyUSfirmsdidthiswithcustomerserviceoperationsintheearly2000s,butyoumayalsorecallthatseveralhigh-profilefailuresoccurredinoffshoring,suchasDellmovingseveralthousandjobsbacktotheUnitedStatesaftersignificantcustomercomplaintsaboutsupport.

Secondarily,companieshavetobeconcernedwithdoingwhatisbestfortheirshareholdersandinfacthaveafiduciaryresponsibilitytodoso.Asaresult,evenwhenthereispressurefromgovernmentstoreshorejobs,companieshavetoconsiderthisoptionverycarefullybeforetakingthatstepbecausemakingsomeproductsathomecoststoomuchtocompeteglobally.

Outsourcing Theprocessofhiringanotherorganizationtodoworkthatwaspreviouslydonewithinthehostorganization

SHRMK:B14

Outsourcing

O:6

Inshoring

O:7

Offshoring/Outsourcing

WORKAPPLICATION14-6Selectaglobalbusiness.Doesitproduceproductsinitshomecountry?Shouldithavemoreinshoring?

SHRMO:3

Cross-BorderHRManagement

DevelopingandManagingGlobalHumanResourcesOncewehavedeterminedthatwearegoingtoexpandinternationally,weneedtoensurethatouremployeeswillbeabletosuccessfullyintegrateintoanothercountrycultureandcompletetheirassignments.Weneedtoselecttherighttypesofindividuals,trainthemappropriately,andsupportthemduringtheirinternationalassignments.Finally,wewillhavetomakesurethattheyreintegrateintothehome-countryoperationsoncetheyreturnfromtheassignment.Let’slookatsomedetailsonhowwecandothat.

Becausehiringanexpatriateemployeecomeswithsignificantcosttotheorganization,itisimportanttoprovideexpatriateswithculturalandcommunnicationtrainingsotheyareabletodotheirjobswell.

©iStockphoto.com/IzabelaHabur

RecruitingandSelectionWementionedtheproblemswithfindingknowledgeworkersinChapter1.Thiscontinuingissueiscausingmoreandmorecompaniestosourceemployees,includingmanagers,fromwherevertheycanfindthem.Iftheyhavetobuildafacilityinanothercountrytofindenoughoftheseworkers,thenthatiswhattheywilldo.Intoday’sworldeconomy,wherethoselow-skilledjobsaregoingawayandweareconstantlysearchingforknowledgeworkers,wehaveseenashifttosourcingskilledemployeesfromanycountrywheretheycanbefoundandmovingthemtothelocationswheretheyaremostneeded.Manyofthe“lesser-developedeconomies”arenowdevelopingatarapidrateandhavebecomesourcesoftalentedknowledgeworkers.20

Onshoring Theprocessofshutteringoperationsinothercountriesandbringingworkbacktothehome

country

ExpatriateTrainingandPreparationCarlosGhosn,theCEOofRenault-NissanAlliance,saidinarecentinterview:

Youhavetoknowhowtomotivatepeoplewhospeakdifferentlanguages,whohavedifferentculturalcontexts,whohavedifferentsensitivitiesandhabits.Youhavetogetpreparedtodealwithteamswhoaremulticultural,toworkwithpeoplewhodonotallthinkthesamewayasyoudo.21

Anexpatriateisanemployeewholeavestheirhomecountrytogoworkinanothercountry.Asdiscussed,theycanbehome-,host-,orthird-countryemployees.Thecostofexpatriatesisveryhigh,sowehavetocarefullyselectanddevelopthese

employees.22

CulturalTraining.Preparingemployeesforexpatriateassignmentswillprimarilybeatrainingprocess,andthebiggesttrainingissuewillusuallybecross-culturaltraining.Cultureshockcanoccurwhenwemovefromoneculturetoanother.Thiscultureshockcancausesignificantproblemsfortheexpatriateemployee,andinfact,thereisevidencethatupto50%ofemployeesfailtocompletetheirinternationalassignment,withthemajorreasonbeinganinability(onthepartoftheemployeeorfamilymembers)toadapttoculturaldifferences.23Thisinabilitytoadaptmaybebecausetheparentcompanydoesnotsupporttheemployeeandfamilymembersinlearningtheculturethattheywillhavetoliveinforanextendedperiodoftime.24Alternately,itmaybeduetoabadselectionprocess,aswenotedaboveinthesectiononpersonalitytraits.25Regardless,cultureshock

isoneofthemainreasonsforearlyterminationofaninternationalassignment.Butwhatiscultureshock?LookatadiagraminExhibit14-4tohelpexplain.

Ifpeopleknowwhattoexpectandhavesometraininginhowtoadapt,theproblemsassociatedwithhostilityanddepression(month4-7+)canbelessened.Theywillnotgoaway,buttheycanbelessened,andthislesseningmaybeenoughtoallowemployeestoultimatelyadaptandbeabletofinishtheirassignment.“Effectivepre-departuretrainingisessentialtosupporttheemployeetoadapttoanewcultureandcountry—aswellasanewjob.”26

SHRMO:2

ManagingExpatriatesinGlobalMarkets

LO14-4Explainthetwomajortypesoftrainingthatyoushouldgenerallyprovidebeforeexpatriateassignments.

Expatriate Anemployeewholeavestheirhomecountrytogoworkinanothercountry

SHRMO:9

Cross-culturalEffectiveness

CommunicationTraining.Expatsfrequentlyrequirebothlanguagetrainingandothercommunicationtraining(verbal,nonverbal,andsymbolic).Communicationcanbedifficultevenwheneveryoneisspeakingthesamelanguage.Itbecomesmuchmoredifficultwhenthereismorethanonelanguagebeingspokenandalsowhenyouhavedifferentnonverbalandsymboliccuesbasedondifferentcultures.Soindividualsneedtobetrainedonhowtomanagetheirbodylanguageandothernonverbalcues.

Exhibit14-4CultureShock

Symboliccommunicationisusingitemsthatwesurroundourselveswith.Itcanbeatypeofclothingorhat;itcanbeacrucifixnecklace;it

canbejewelryorbodypiercings,oreventhetypeofvehiclethatyoudrive.Everythingthatwesurroundourselveswiththatthenconveysmeaningtoothersispartofsymboliccommunication,anditcanhaveverydifferentmeaningsindifferentcultures.YouwouldnotwanttohaveavisiblecrucifixinmanyMuslimcountries.IfyoudrivealargeSUVinothercountries,youmaybeconsideredtobeadrugdealer.Soouremployeesneedtrainingonthevariousformsofsymboliccommunication.

WORKAPPLICATION14-7Assumeyouweregoingtobecomeanexpatriate.Whatquestionswouldyouhaveaboutgoingtoliveandworkinanothercountry,andwhatspecifictrainingwouldyouliketohave?

RepatriationAfterForeignAssignmentsWouldyoucaretoguesswhatislikelytohappenafteralengthyinternationalassignmentwhenanindividual(andpossiblytheirfamily,too)returnstotheirhomecountry?Theyaregoingtogothroughanothercultureshock.Thesameadjustmentwillbenecessaryastheyreturnhomebecausetheyhaveadaptedtoanothercultureandotherwaysofdoingeverydaythings.Soreacculturationtrainingwillmostlikelybenecessary.

Repatriationgenerallyshouldincludeaseriesofstepsthatneedtooccurinordertogettheemployeebackintothehome-countryworkroutine.Theseitemsincludethefollowing:27,28

Reentrytraining,includingculturaltraining(thingschangeinseveralyears

—evenifyouaremovingbacktoyourhomeculture!)Jobplacementintoapositioncommensuratewiththeemployee’slevelofexpertiseandthatwillusetheirknowledge,skills,andabilitiesdevelopedduringtheirassignmentinthehostcountryPossiblymentoringassistanceandothersupporttohelpthereturningemployeereintegratequickerandmoresuccessfullyAshowofappreciationfortheemployee’sinternationalserviceandfacilitationofknowledgetransfertootherswhomaybenefitfromabetterunderstandingofthehostcountryanditsculture

Repatriationisacriticalactivitybecausethereisstrongevidencethattherearehighlevelsofvoluntaryturnoverofrepatriatesoncetheycompletetheirinternationalassignmentsandreturntothehome.Becausetheprocessofpreparingexpatriatesandsendingthemto

anothercountryisasignificantexpensefortheorganization,weneedtoimprovetheoddsthatournewlyreturnedemployeeswillstaywiththefirmoncetheydoreturn.

SHRMO:4

RepatriatingEmployeesPostInternationalAssignment

CompensatingYourGlobalWorkforceTheobviousfirstquestionaboutcompensationinaglobalenvironmentiswhethercompensationinvariouscountriesneedstobedifferentand,ifso,whyandhowdowecompensateaglobalworkforcefairly.Inthissection,let’sdiscussthecomponentsofacompensationsystemwediscussedinChapters10and11(pay,incentives,andbenefits)astheyrelatetoaglobalworkforce.

PayWeneedtocompensatedifferentlygloballybecauseeachcountryhasadifferentstandardandcostofliving.Ifwewanttokeephigh-qualitymanagersandworkersinourorganizationwhileaskingthemtoworkincountriesaroundtheworld,weneedtocompensatethemfairly.Butwhatisfair?Isitfairtotakeamanagerfromahigh-costcountryandsendthemtoalocationthathasalowercostofliving(UnitedStatestoChina),andoncetherelowertheirpaytomatchthelocalnorm?Ifyouwerethemanager,wouldyouacceptthis?

Compensatingaglobalworkforcecanbeadifficulttask.

Photodisc/Thinkstock

Conversely,ifwebringamanagerfromalow-costeconomytoahigher-costenvironment,weprobablyneedtoincreasetheirpaytomatchthecountryorregioninwhichtheywillbeworking.However,ifwereturnthemtotheirhomecountryorlocation,shouldwelowertheirpaybacktotheoriginalrate?Anotherquestionconcernsthecurrency

inwhichtheemployeewillbepaid.Shouldwepayouremployeesintheirhomecurrency,orshouldwepaytheminthelocalcurrencywheretheyareassigned?

Asyoucansee,compensationofaglobalworkforcebecomesprettycomplexveryquickly.Let’sdiscusssomeoptionsforpayingexpatriates.

BalanceSheetApproach.Usingthebalancesheetapproach,theorganizationcontinuestopaytheindividualatarateequivalenttotheirhome-countrysalarywhileprovidingallowancesduringanoverseasassignmenttoenablethatemployeetomaintaintheirnormalstandardofliving.Obviously,thisisonlynecessarywhenanindividualismovingtoahigher-costenvironmentandoutoftheirhomecountry.

LO14-5Definetheoptionsforcompensationofexpatriateworkers.

Split-PayApproach.Avariantonthebalancesheetapproachistousesplitpay.29Infact,abouthalftheorganizationsinarecentsurveysaidthattheyusesplitpayaspartoftheircompensationstrategy.30Splitpayisaprocesswheretheorganizationpaystheindividualpartlyinhome-countrycurrencyandpartlyinthecurrencyoftheirworklocation.Thisallowstheindividualtolowercurrencyexchangeraterisksinmovingmoneyfromonelocationtoanotherandtopayobligationsinboththeirhomelocationandtheirworklocationmucheasierthanifalltheirpaywereinonecurrency.

OtherApproaches.Otheroptionsforcompensatingemployeesoninternationalassignmentsincludeanegotiationapproach,wheretheemployerandemployeemutuallyagreeonacompensationpackage;alocalizationapproach,wheretheexpatriate’scompensationisbasedonlocal(host-country)norms;andalumpsumoption,whichpaystheexpatriatealumpsumofmoneytouseonitemssuchastaxes,vehicles,housing,andsimilaritemsduringtheirassignment.31

Compensationwhereworkersareoperatingallovertheworldisaverydifficultprocess.However,HRmustplayapartintheanalysisandimplementationofacompensationsystemthatwillallowthecompanytoattractandretainhigh-qualitymanagersandemployeesfortheirfacilities.Theonlywaytodothis,basedonourdiscussionsofoperantconditioningandreinforcementaswellasequityandexpectancytheories,istoprovide

reasonableandfairreturnstothoseemployeesforthejobthattheydo.

WORKAPPLICATION14-8Assumeyouweregoingtobecomeanexpatriate.Whatquestionswouldyouhaveaboutyourpay,andwhichpaymethodwouldyouwanttohave?

IncentivesinGlobalFirmsEffectivegloballeadersareavitalassetthatcanofferacompetitiveadvantagewithinorganizationstoday.32FormerCEOMikeDukeofWalmartsaidthathisbiggestchallengewastocontinuetodeveloptheleadershiptalenttogrowthecompanyaroundtheworld.33Butdoincentiveprogramsworkthesameworldwide?Theanswer,briefly,is“No,buttheyarebecomingmoresimilarovertime.”Infact,insomeemerging-marketcountries,variablepayisahigherproportionofoverallcompensationthaninmostdevelopedmarkets.34However,inothercountries,variablepaystillhasnegativeconnotations,especiallyasanindividualincentive.Manycountries’culturesdonotmeshwellwithindividualincentiveprograms,andsomedonotreadilyacceptevengroupincentiveprograms.35

Themainthingthatcompensation

professionalsneedtounderstandisthatwecannotprovidethesametypesofincentivestoemployeesregardlessoftheorganizationalandcountrycultureandstructure.Wehavetounderstandthefunctionof“significance”inexpectancytheoryandalwaysmakesurethatoursystemrewardsaresignificantandacceptabletoouremployees.

WORKAPPLICATION14-9Assumeyouweregoingtobecomeanexpatriate.Wouldyoupreferstraightsalaryortohaveincentives?Whattypeofincentivewouldenticeyoutotakeanoverseasassignment?

14-2ApplyingTheConcept

GlobalCompensationPlacetheletterofthetypeofcompensationonthelinenexttothecorrespondingexample.

1. balancesheet2. split-pay3. negotiation4. localization5. lumpsum

_____6.I’mgoingoverseasfora6-monthassignment,andtheyaregivinghalfthemoneyinUSdollarsandhalfineuros._____7.I’mgoingoverseasfora6-monthassignment,andtheyarepayingmeintheothercountry’scurrency,theeuro._____8.I’mgoingoverseasfora6-monthassignment,andtheyarecontinuingtopaymeineuros,buttheyarealsogivingmeaUSdollarallowanceforthehighercostoflivinginNewYork._____9.I’mgoingoverseasfora6-monthassignment,andwearehavingameetingtodiscussmycompensationforwhileI’maway.____10.I’mgoingoverseasfora6-monthassignment,andtheyaregivingmeonechecktopayfortheentiretimeI’maway.

BenefitProgramsAroundtheWorldIfwejustthinkaboutit,benefitprogramsmustadapttothepartoftheworldinwhichouremployeesworkandlive.Foronething,somecountriesmandatecertainbenefitsthatarenotrequiredinothercountries,andwehavenochoicebuttoofferthem.Inothercases,thelivingconditionsmaybesuchthatdifferentbenefitpackagesjustmakesense.Let’stakealookatsomeexamplesofdifferencesthatwemightseeinbenefitprogramsinvariouspartsoftheworld.

Duetogovernmentlaws,companiesinmanyoftheEuropeanUnioncountrieshavetoprovidemorebenefitsthanintheUnitedStates.Retirementbenefitsvaryamongcountries,withsomegovernmentsprovidingastrongcentralizedretirementsystem(Australiaisagoodexample)andothersprovidingverylittleinthewayofcentralized

retirementplanningandsavings.Evenincountrieswherethereisastrongcentralgovernmentplan,mostemployeesareconcernedthattheyhavenotsavedenoughforretirement.Onereasonforthisisthatpeoplearelivinglongertodaythaneverbefore—allacrosstheglobe.Anotherissueisthatinmostcountries,thepopulationisplanningonretiringatanearlieragethanhashistoricallybeenthecase.Thiscombinationoflivinglongerandretiringearlieriscreatingthepotentialforagapinretirementplanfunding.Moreandmorecompaniesareworkingwithemployeestonarrowthisgapthroughaseriesofoptions.

Asignificanttrendisthemovebycompaniestowardofferingmore,andalargervarietyof,voluntarybenefitsthatarefullypaidbytheemployee,insteadoftheemployerprovidingatleastpartofthemoneytocoverthecostofsuchbenefits.InBrazil,forexample,almostathirdoffemaleemployeesexpressedinterestinaccidentandpensionfundsforwhichtheywouldpay100%ofthecost.Likewise,in

Mexico,56%ofworkerssaidthattheywouldlikeawiderchoiceofvoluntarybenefits,andaboutonefourthsaidthattheywouldpaythefullcostforlife,disability,andhealthinsurance.36

Eveniftherearesomesignificantdifferencesinbenefitplansaroundtheworldduetodifferinggovernmentpolicies,theconsensusisthatagoodbenefitpackageisapowerfulforceinemployeesatisfactionandretention—andemployeesgloballylikeflexiblebenefitssothattheycanchoosethebenefitstheywantandneedthemost.Employersworldwidewouldbewellservedtostartformalcommunicationswiththeiremployeestofindoutwhattypesofbenefitswillbestservetoimprovesatisfactionandretentionintheirorganizations.

SHRMK:B11

GlobalEmployeeBenefits

TrendsandIssuesinHRMInthissection,wewilltakealookatacoupleofglobalizationissues.Thefirstissueiswhetherornotglobalizationisafadingtrendandwhatmanagersneedtodoaboutit.Thesecondishowlabororganizationsareincreasinglyaffectingemployeerelationsintheglobalenvironment.

GlobalizationofBusinessIsaTrend!WehavebeentalkingabouttheeffectofglobalizationonHRMforanentirechapternow,butisitreallyallthatimportanttothecompaniesthatyouwillbeworkingfor?Theevidencesaysthatitis.Forbesmagazinenotedthat“themajorcauseof[businessmodel]disruptionistherapidadvancementoftechnologyandglobalization,whichallowsnewbusinessmodelstobeintroducedatanever-increasingrateandwithrapidlydecliningcosts.”37ArecentDeloitteConsultingreportalsonotesthattheBRICeconomies“collectivelyquadrupledtheirGDP”inthefirstdecadeofthe21stcentury,comparedtoan18%increaseintheUnitedStatesandtheUnitedKingdomandanincreaseoflessthan10%inGermanyandJapan.38

Atthesametime,though,evidenceisalso

prettystrongthatsomedevelopedcountriesareretrenchingabitwhenitcomestointernationaloperations.Governmentsareputtingpressureonbusinesstoreshoresomeoftheiroperationsaftertherecessionof2007–2008,andglobaltradehasactuallyshrunktojustoverhalfofwhatitwasasapercentageofglobalGDPbeforetherecessionoccurred.39Atthesametime,instabilityofsomecountrieshasmadedoingbusinessinthoselocationsmuchmorerisky,sothereisevidenceofsomecompaniespullingbackhereaswell.Butdon’tthinkglobalbusinessisgoingtogoawayanytimesoon.Evenwithretrenchmentofbusinessesinthedevelopedeconomiesaftertherecentrecession,59%of1,200CEOsinanothersurveysaidthattheyplantoincreasethenumberoftheirinternationalassignmentsaspartoftheirHRstrategy.40

Sothebottomlineisthatwhilecompaniesmayretrenchsomejobsbacktotheirhomecountries,itappearsthatsomeproductionandservicejobswillcontinuetobemovedoutof

homecountriestootherlocationsaroundtheworldtotakeadvantageofcapitalcostsavings.Thismeansthatmanagers,includingHRmanagers,aregoingtohavetocontinuegettingmorecapableintrainingandpreparingemployeesforinternationalassignments.

TheWorldwideLaborEnvironmentIntheglobalvillage,developing-countryunionizationisjustbeginning,anditisexpandingquickly.Forexample,inChinaangrymigrantworkershaveusedtheInternettoorganize.Chinahas348millionusers,whichismorethanthetotalpopulationoftheUnitedStatesataround309million,41andithas787millionmobilephonesavailabletohelpworkersorganize.Let’stakeaquicklookattwocountriesaroundtheworldandhowunionscanaffectworkprocesses.

Brazil.Brazil’slaborregulationstendtofavortheemployeeovertheemployerandprovidestrongprotectionforunions.WhileunionmembershiphasfallenovertheyearsintheUnitedStates,Brazilhasseenasignificant

increaseinunionizedworkersinthepastseveralyears.Thenumberofunionizedworkersstoodat18.35%in2005,upfrom16.73%in2001.42Laborisalsoguaranteedtherighttostrikeintheconstitution,andlaboragreementscaneitherbeinwriting“ormaybeimpliedfromtherelationshipbetweenanindividualandthecompany.”43LaborlawsinBrazilalsorequireanydisputesbetweenmanagementandworkers“tobesettledinlabortribunalsratherthaninthecompaniesinvolved,solittlespaceisleftfordirectnegotiationsbetweenemployersandemployees.”44

WORKAPPLICATION14-11Doyouwanttohaveaglobalassignmentaspartofyourcareer?

SouthKorea.SouthKorea’slawsconcerninglaborrelationsaresimilartothoseintheUnitedStates.TheSouthKoreanTradeUnionActallowsworkerstoorganize,collectivelybargain,andactinconcerttoachievelaborgoals.However,formanyyearsthegovernmenthaddirectcontrolofthemajorlaborunioninthecountry.Thisisnotsoanylonger,andasamatteroffact,SouthKoreapassedlegislationthatallowsmultipleunionstorepresentdifferentworkerswithinthesameorganization.SouthKoreanemployersareconcernedthatrelationswithemployeeswilldeteriorateduetothismultipleunions

system.45

Aswecanquicklyseefromthesampleofcountriesabove,unioninfluenceaffectsrelationshipsbetweenlaborandmanagementinsignificantlydifferentwaysindifferentcountries.Forthoseworkinginabusinessthatoperatesinmultiplecountries,thesedifferencesinlaborlawswillbesignificant.Youmayhavetobecomewellinformedonthedifferinglawsconcerninglaborrelationsandunionrepresentationineachofthecountriesinwhichyourfirmworks.

Gettheedgeonyourstudiesatedge.sagepub.com/fundamentalsofhrm

Readthechapterandthentakeadvantageoftheopen-accesssiteto

takeaquiztofindoutwhatyou’vemastered;testyourknowledgewithkeytermflashcards;watchvideostocapturekeychaptercontent.

REVIEW,PRACTICE,andIMPROVEyourcriticalthinkingwiththetoolsandresourcesat

SAGEedge.

ChapterSummary14-1Discussthereasonsforincreasingbusinessglobalization.

Themainreasonistoincreasebusiness,whichisaidedbytheworldbecomingaglobalvillagewheregoods,ideas,services,andknowledgeflowfreelyacrossnationalborders,creatinggreaterdemandforproducts.Barrierstotradehavebeenminimizedcomparedtohistoricalnorms,eventhoughthereisaseriesoftradeblocsthatoperateinmultiplecountries.Barrierstotransportation,communication,andculturehavealsolessened.Butthebiggestreasonforglobalizationistoremaincompetitive.

14-2DescribethefivedimensionsofHofstede’smodelofculture.

Power-distanceisthedegreeto

whichsocietiesacceptthatpeoplewillhavedifferentpowerbecauseoftheirabilitiesandsocialstatus.Individualistculturesbelieveinthevalueoftheindividualandjudgetheindividual,whilecollectivistculturesbelievethatthegroupistheunitofvalueinsociety,nottheindividual.Masculinesocietiesvalueperformance,winning,competition,andsuccess,whilefemininesocietiesvaluerelationshipsbetweenmembersandqualityoflifemorethanwinning.High-uncertaintyavoidancecultureswilldowhatevertheycantominimizeriskstomembersofthesociety,andlow-uncertaintyavoidancecultureswillnottrytomitigatetheserisksnearlyasmuch.Finally,short-termsocietiesfocusonimmediateorshort-termoutcomes,whilelong-termsocietiesfocusonsavingforthefuture,thrift,andpersistence.

14-3Nametheadvantagesand

disadvantagesofparent-country,host-country,andthird-countrynationalsforinternationalassignments.

Parent-countrymembersusuallyknowtheorganizationbetter,knowthestrategyandstructure,andcommunicatebetter.However,language,compensationissues,culturalbarriers,andnationallawsonincomemaybedisadvantages.Host-countrynationalspresentadvantageswithrespecttothelanguage,culture,compensationissues,andlocallawsandregulations,buttheymaynothavethecompanyknowledgethatisneeded,maybelessloyaltothefirm,andcouldhaveproblemscommunicatingwiththehomeoffice.Third-countrynationalsallowustohirethebestpersonforajobandmaybelessexpensiveinsomecases.Theymayalsosharealanguageorsimilarculturewiththehost-countryoffice.Disadvantages

includehost-countrylawsconcerningthird-partyemployees,incomeandothertaxrules,andpotentiallackofknowledgeofcompanyproceduresandculture.

14-4Explainthetwomajortypesoftrainingthatyoushouldgenerallyprovidebeforeexpatriateassignments.

Thetwotypesoftrainingareculturaltrainingandcommunicationtraining.Culturaltrainingshowstheemployeewhatcultureshockisandhowtomanageitduringanexpatriateassignment.Inabilitytoadapttoanothercultureisoneofthemajorreasonsthatemployeesfailtocompleteforeignassignments.Communicationtraining,includinglanguagetrainingifnecessary,helpstoovercomesomeoftheproblemsassociatedwithinternationalassignments.Traininginnonverbalandsymboliccommunicationisespeciallyimportant.

14-5Definetheoptionsfor

compensationofexpatriateworkers.Thebalancesheetapproachisoneofthemostcommonmethods.Thisiswheretheemployeeispaidtheirhomesalary,butallowancesareprovidedto“balance”thedifferentcostsassociatedwiththeoverseasassignment.Anotheroptionissplit-pay,wherepartofthecompensationispaidbasedonthehome-countrynormandpartispaidintheassignment-countrycurrencytominimizeexchangeraterisk.Wecanalsouseastraightnegotiationapproach,wherethecompensationpackageisagreedtoupfront;alocalizationapproach,wherecompensationisbasedonthehost-countrystandards;oralumpsumapproach,whereasetamountofmoneyisgiventotheemployeetouseonuniqueexpensesassociatedwithanassignmenttoaparticularcountry.

14-6Definethekeytermsfoundinthe

chaptermarginsandlistedfollowingtheChapterSummary.

CompletetheKeyTermsReviewtotestyourunderstandingofthischapter ’skeyterms.

KeyTermsexpatriate,362ForeignCorruptPracticesAct,356onshoring,361outsourcing,360parochialism,357tradeblocs,353

KeyTermsReviewCompleteeachofthefollowingstatementsusingoneofthischapter ’skeyterms:

1. _________aregroupsofcountrieswhoformanassociationforthepurposeoffacilitatingmovementofgoodsacrossnationalborders.

2. _________barsUS-basedorUS-listedcompaniesfrombribingforeignofficialsinexchangeforbusiness.

3. _________isanarrow-mindedviewoftheworldwithaninabilitytorecognizeindividualdifferences.

4. _________ishiringanotherorganizationtodoworkthatwaspreviouslydonewithinthehostorganization.

5. _________istheprocessofshutteringoperationsinothercountriesandbringingworkbacktothehomecountry.

6. _________isanemployeewholeavestheirhomecountrytogoworkinanother

country.

CommunicationSkillsThefollowingcritical-thinkingquestionscanbeusedforclassdiscussionand/orforwrittenassignmentstodevelopcommunicationskills.Besuretogivecompleteexplanationsforallanswers.

1. Doyouexpectthatglobalizationofbusinesswillcontinuetoexpand?Whyorwhynot?

2. Isitfairtoutilizetheleastexpensive“capitalresources,”nomatterwheretheycomefrom?Why?

3. Shouldtariffsandothertradebarriersbeincreasedinordertoprotectjobsinthehomecountry?Whyorwhynot?

4. DoyoubelievethatHofstede’sculturemodelisaccurate?Ifnot,whatwouldyouchangetomakeitmoreusefulintrainingpeopletoworkinadifferentculture?

5. Isknowingthelocallanguagealwaysnecessarywhenworkinginternationally?Why?

6. Whowouldyouratherassigntomanageaforeignofficeofyourbusiness?Wouldyouratherhaveahome-country,host-country,orthird-countrynational?Why?

7. Shouldcompaniesreshoremorejobsthathavebeenmovedoverseas?Whataretheprosandconsofdoingso?

8. Wouldyoueverconsidersendingsomeonetoworkinanothercountrywithoutculturaltrainingif

youweretheHRmanager?Ifso,inwhatcircumstances?

9. Whichoptionforcompensationwouldyouwantifyouwereassignedbyyourcompanytoworkinanothercountry?Why?

Case14-1IBM(I’veBeenMoved)atHSBC:KeepingCompensationCompetitiveWithECAInternationalHSBCisoneoftheworld’slargestbankinggroupsbyassets(andtheleaderincustomerdeposits,withmorethan$1trillion),withHSBCHoldingsowningsubsidiariesthroughoutEurope,HongKong,andtherestoftheAsia/Pacificregion,theMiddleEastandAfrica,andtheAmericas.Alltold,thecompanyhassome7,200locationsinmorethan80countries.Itsactivitiesincludeconsumerandcommercialbanking,creditcards,privatebanking,investmentbanking,andleasing.ItsNorthAmericanoperationsincludeHSBCUSA,HSBCBankCanada,HSBCBankBermuda,andGrupoFinancieroHSBCinMexico.46

Witharound9,500officesin85countriesandterritories,employeeworkandlifebalancesatisfactionisaninternationalenterpriseandrequiresconstantvigilance.EmployeesatHSBCareextremelyconsistentinhighlightingtheenormousbenefitsthatthecompany’sHRpoliciesandworkexperiencesbringtotheircareers.Theyindicatethattheglobalnatureofthebankbringstremendousinternationalexposuretotheroleofemployeesatthebank,rightfromthestart.“The

makeupandstrategyofthebankallowsyoutohaveconstantexposuretointerestingandcomplexinternationaloperations,”explainsoneemployee.“ThebestthingaboutthisjobisseeinghowintrinsicallylinkedtheglobaleconomyistoeverythingthatwedohereatHSBC,”saysanother.Thisalsoallowsforendlessinternationaltravelopportunities,withHSBCemployeeswayfaringtoalmostanywhereintheglobe;theyshouldexpecttorelocateatleasttwiceintheircareeriftheywishtoclimbthecorporateladder.47

JobmobilityisanintegralpartofHSBC’soperations,andtrackingemployeesalariesisakeyfactorintheirHRMsuccessformula.HSBCtypicallypaysitsemployees5%abovemarketvalue,withcompetitivefirmssuchasJPMorganChaseandCitibankpayingonly3%abovemarket.48Benefitsincludehealthinsurance(medical,dental,vision),lifeinsurance,retirementandsavingsprogramsincludinga401(k)match,andotheremployeeservicesincludingadoptionassistance,time-offprograms,andconciergeservices.49ThechallengeforHSBCthenwashowtoensurethattheywouldcontinuetopaytheiremployeesapremiumsalaryandbenefitspackageworldwide,especiallywhenemployeesareconstantlybeingswitchedfromonelocationtoanotherwheresalariesandbenefitsmayvarydrastically.

HSBCquicklyrealizedthatsuchalargeoperationrequiredexpertadviceandcounsel.HSBCcontractedwithECAInternationaltodesignandimplementanewassignmentsalaryandbenefitsmanagementsystemtohelpthemwiththeir1,400long-termassigneesin50

locations.50ECAisoneoftheworld’sleadersinthedevelopmentandprovisionofsolutionsforthemanagementandassignmentofemployeesaroundtheworld.Theirhighlyskilledteamshelptoensurethatbusinesses’internationalassignmentsoperateefficientlyandcost-effectively.Deliveringdata,expertise,systems,andsupportinformatsthatsuititsclients,ECA’sofferincludesacomplete“outsource”packageofcalculations,advice,andservicesforcompanieswithlittleinternationalassignmentmanagementexperienceorresource;subscriptionstocomprehensiveonlineinformationandsoftwaresystemsforcompanieswithlargerrequirements;andcustompolicyandsystemdevelopmentprojectsforcompaniesthatmanagethousandsofinternationalassigneesaroundtheworld.51

Thekeyobjectivesoftheprojectwastoimproveefficiency,accuracy,consistency,andtransparencyofcalculationanddatastorageofsalaryandbenefitsinformationwhilereducingoperationalcostsandallowingHSBCtoreactquicklytointernationalopportunities.ThenewsystemneededtobeabletoincorporateallelementsofHSBC’sHRpoliciesforconsistencyofapplicationwhileaccommodatingtheinevitablepolicydeviationsexperiencedcountrybycountry,andithadtobeaccessiblefromHSBC’sthreeregionalhubsandbecompletelysecure.

ECA’ssoftwareteamprototypedanewsolutionforHSBCbasedonECAEnterprise,acomprehensive,data-populated,web-enabledsalaryandbenefitscalculatoranddatabase,andthendevelopedtheprototypeinclosecollaborationwithHSBCthroughasharedwebsite.

HSBCworkedwithbothECA’sclientservicesandsoftwareexperts,whoadvisedonbothpolicyandtechnicalmatters,ensuringthesystemfulfilledHSBC’spolicyobjectivesanduserneeds.

Ontimeandonbudget,thecustomized,hostedversionallowedforaseamlesstransitionbetweentheoldandthenewoperatingsystems.Atthetimethenewweb-enabledtoolbecameoperational,usersinallthreeofHSBC’shubshadbeentrainedon-sitebyECAstaff.

HarryLister,seniormanagerofbenefitsandinternationalmobility,ispleasedwiththenewsystem.“HSBCEnterprisefulfillsallofthebusinessgoalswesetouttoachieve,”Listersays.“WecannowcalculateandstoresalaryandbenefitspackagesforalloftheGroup’sinternationalassigneesefficientlyandwithatransparencythatourpreviouslegacysystemsdidnotallow.”52

Questions1. Describesomeoftheethicalandlegalissues

HSBCshouldbecognizantofgiventhebreadthoftheirinternationaloperation.WhatmightbesomekeyHRissuesforthisfirm?

2. HSBChasnumerousofficelocationsandsubsidiaries.Whatseemstobethefirm’sgenericbusinessstrategy?

3. Givenyouranswertoquestion2,howdoesthefirm’spolicyregardingemployeetravel,jobmobility,andrelocationsupportHSBC’sgenericstrategy?Why?

4. HSBCisaglobalfirmwithnearly9,500officesin85countries.Insuchalargeinternationaloperation,whywouldtrackingemployeesalariesandbenefitsbesuchakeyfactorintheHRMsuccessformula?Howdoesthisformulasupportthefirm’sgenericstrategy?

5. ECAdevelopsandimplementssolutionsforthemanagementandassignmentofemployeesaroundtheworldforglobalfirms.WhatotherHRMfunctionsmightbeincludedinthoseservices?Why?

6. HSBChasofficesintheMiddleEast.WhatHRconcernsmightHSBChaveregardingemployeesworkinginthatparticularregion,especiallyexpatriates?

CasecreatedbyHerbertSherman,PhD,andTheodore

Vallas,DepartmentofManagementSciences,SchoolofBusinessBrooklynCampus,LongIslandUniversity

SKILLBUILDER14-1TheGlobalHRMEnvironment

ObjectiveTodevelopyourglobalHRMawareness

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Conceptualanddesign,andbusinessskills

2. SHRM2013CurriculumGuidebook—PartsofmultipleguidesincludingQuestion3—B:EmploymentLaw,Question4—F:ManagingaDiverseWorkforce,Question5—I.Staffing:RecruitmentandSelection,Question6—L:TrainingandDevelopment,Questions7and8—K:TotalReward,Question9—C:Ethics

AssignmentForthisexercise,selectacompanythatconductsbusinessasanMNCoratransnationalglobalcorporation,preferablyoneyouworkorwouldliketoworkfor.Youwillmostlikelyneedtoconductsomeresearchtogettheanswerstothequestionsbelow,suchasvisitingthecompany’swebsiteandtalkingtoHRprofessionals.

1. Explainthestageofcorporateglobalization.2. Listatleastfivecountriesitconductsbusinessin

andthetradeagreementsthesecountriesparticipatein.

3. Identifysomeofthekeydifferencesinlawsamongthefivecountries.

4 . Comparethecompany’sfiveHofstede’sModelofNationalCulturedimensionsforthefivecountriesitdoesbusinessin.

5. Explainhowitrecruitsandselectsexpatriateemployees.

6. Describehowittrainsitsexpatriatesandfamilies.7. Discussthemethod(s)ofcompensationforits

expatriates.8. Comparethecompensation(pay,incentives,and

benefits)amongthefivecountries.9. Doesthecompanyhaveanyspecificcodeof

ethicsforconductingbusinessinothercountries,andifso,describethecode.

Yourprofessormayormaynotrequireyoutoanswerallninequestions.Youmaybeaskedtopassinthisassignment,presentyouranswerstotheclass,and/ordiscussyouranswersinsmallgroupsoronline.

SKILLBUILDER14-2CulturalDiversityAwareness

ObjectiveTodevelopyourglobalculturalawareness

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Humanrelationsskills2. SHRM2013CurriculumGuidebook—F:

ManagingaDiverseWorkforce

Assignment

Procedure1(4–6minutes)Youandyourclassmateswillshareyourinternationalexperienceandnationalities.Startwithpeoplewhohavelivedinanothercountry,thenmovetothosewhohavevisitedanothercountry,andfollowwithdiscussionofnationality(e.g.,“IamhalfFrenchandhalfIrishbuthaveneverbeentoeithercountry”).Theinstructororarecorderwillwritethecountriesontheboarduntilseveralcountries/nationalitiesarelistedorthetimeisup.

Procedure2(10–30minutes)Youandyourclassmateswillshareyourknowledgeofculturaldifferencesbetweenthecountryinwhichthecourseisbeingtaughtandthoselistedontheboard.Thisisagoodopportunityforinternationalstudentsandthosewhohavevisitedothercountriestosharetheirexperiences.Youmayalsodiscussculturaldifferenceswithinthecountry.

SKILLBUILDER14-3TheMostImportantThingsIGotFromThisCourse

ObjectiveToreviewyourcourselearning,criticalthinking,andskilldevelopment

SkillsTheprimaryskillsdevelopedthroughthisexerciseareasfollows:

1. HRmanagementskills—Conceptualanddesign2. SHRM2013CurriculumGuidebook—Theguide

willvarywithstudentanswers

AssignmentThinkaboutandwrite/typethethreeorfourmostimportantthingsyoulearnedorskillsyoudevelopedthroughthiscourseandhowtheyarehelpingorwillhelpyouinyourpersonaland/orprofessionallife.

Youmaybeaskedtopassinthisassignment,presentyouranswerstotheclass,and/ordiscussyouranswersinsmallgroupsoronline.

AppendixFrayerModelPlus

SHRM2013CurriculumGuidebookRequiredandSecondaryHRContentAreas

(Reorderedandnumberedforreference)

TheSocietyforHumanResourcesManagement(SHRM),theworld’slargestHumanResourceManagementassociation,periodicallyputsoutguidanceoncollegeanduniversitycurriculaforhumanresourcemanagement(HRM)programs(whattheythinkweneedtoteachyou).Thelatestversionoftheirguidebookisprovidedbelowforyourinformationanduse.ThisguidanceprovidesinformationonwhatSHRMconsiderstobecriticalinthestudyofHRM.Ifyouchoosetopursuehumanresourcemanagementasacareerchoice,thisinformationwillhelpyouwiththeprocessofcertificationthroughtheHumanResourceCertificationInstitute(HRCI)orthroughSHRM’snewinternal

accreditationprogram.Evenifyoudon’tdecidetopursueHRMasacareer,thisistheinformationthatwillbemostpertinenttoyoursuccessasamanagerinanyfieldofbusiness.

Itmakessensethatanintroductorytextbookwouldintroduceyoutoeachoftheareasthatarecriticalinthatfieldofstudy.Asaresult,inthistextbookwe’vechosentodiscussall“RequiredContent”forundergraduateHRprogramsfromthemostrecentversion(2013)oftheCurriculumGuide.Asfarasweknow,nootherintroductoryHRMtextbookdoesthis.ThishasbeendonetointroduceyoutoeachofthetopicsthatSHRMconsiderstobecritical.WehavereorderedtheinformationfromtheSHRMcurriculumguidetoemphasizetherequiredcontentfirst,andthenthesecondaryandgraduatecontentareas,butthecontentitselfisidenticaltotheguidelinesfromSHRM.Youcancalluptheguideitselfathttp://www.shrm.org/Education/hreducation/Documents/2013_SHRM%20HR%20Curriculum%20Guidelines%20and%20Templates_View%20Only_FINAL.pdf

Thisappendixisdesignedtolinkbacktoeachofthechaptersandidentifywhereeachofthe

requiredcontentareasisdiscussedwithinthetextbook.WhenyouseeaboxinthechaptertitledSHRMGuide,itwillhaveanalphanumericreference.ThatalphanumericreferencetiestothisappendixbySection(thecapitalletter)andSubtopic(thenumeral).Forexample,ifyouseetheboxinthemarginhere,itwouldleadyoutoSectionA(EmployeeandLaborRelations),Subtopic5(EmployeeInvolvement).Nexttoeachofthesubtopicsisthepagenumberonwhichthetopicisdiscussed.Thisshouldhelpifyouarelookingforinformationonaparticulartopicwithinthechapters.

SHRMA:5

EmployeeInvolvement

RequiredContent:UndergraduateCurriculum

A.EmployeeandLaborRelations

1.Disciplinaryactions:Demotion,disciplinarytermination[Chapter9,p.230]3.Managing/creatingapositiveorganizationalculture[Chapter2,p.40]4.Employeeengagement[Chapter1,p.6]5.Employeeinvolvement[Chapter1,p.5]6.Employeeretention[Chapter1,p.8]8.Unionmembership[Chapter9,p.234]9.Union-relatedlaborlaws[Chapter9,p.231]10.Union/managementrelations[Chapter9,p.232]11.Uniondecertificationanddeauthorization[Chapter9,p.236]12.Collectivebargainingissues[Chapter9,p.235]13.Collectivebargainingprocess

[Chapter9,p.235]16.Grievancemanagement[Chapter9,p.236]17.Strikes,boycotts,andworkstoppages[Chapter9,p.232]18.Unfairlaborpractices[Chapter9,p.232]19.Managingunionorganizingpoliciesandhandbooks[Chapter9,p.235]20.Attendance[Chapter1,p.8]21.Attitudesurveys[Chapter9,p.220]22.Investigations[Chapter9,p.228]27.Employeerecords[Chapter9,p.224]

B.EmploymentLaw1.AgeDiscriminationinEmploymentActof1967[Chapter3,p.62]2.AmericanswithDisabilitiesActof1990andasamendedin2008[Chapter3,p.62]3.EqualPayActof1963[Chapter3,p.59]4.PregnancyDiscriminationActof1978[Chapter3,p.62]5.TitleVIIoftheCivilRightsActof1964and1991[Chapter3,p.60,63]6.ExecutiveOrder11246(1965)[Chapter3,p.68]7.EmployerRetirementIncomeSecurityActof1974(ERISA)[Chapter11,p.286]8.FairLaborStandardsActof1938(FLSA)[Chapter10,p.253]9.FamilyandMedicalLeaveActof1993(FMLA)[Chapter11,p.284]12.NationalLaborRelationsActof1935(NLRA)[Chapter9,p.232]

13.LaborManagementRelationsActof1947(LMRA)[Chapter9,p.233]14.RailwayLaborActof1926(RLA)[Chapter9,p.232]15.UniformedServicesEmploymentandReemploymentRightsActof1994(USERRA)[Chapter3,p.64]16.WorkerAdjustmentandRetrainingNotificationActof1988(WARNAct)[Chapter9,p.234]17.Enforcementagencies(EEOC,OFCCP)[Chapter3,p.66]19.Employeeprivacy[Chapter9,p.224]20.Employerunfairlaborpractices[Chapter14,p.232]21.Professionalliability[Chapter1,p.19]24.Disparateimpact[Chapter3,p.60]25.Disparatetreatment[Chapter3,p.60]26.TheOccupationalSafetyandHealthActof1970(OSHA)[Chapter12,p.304]

Citationsandpenalties27.Unlawfulharassment[Chapter3,p.66]

Sexual

ReligiousDisabilityRaceColorNationoforigin

28.Whistle-blowing/retaliation[Chapter3,p.66]29.Reasonableaccommodation[Chapter3,p.62,74]

ADAReligious

30.Employment-at-willdoctrine[Chapter9,p.225]31.LillyLedbetterFairPayAct[Chapter3,p.65]32.GeneticInformationNondiscriminationAct(GINA)[Chapter3,p.65,Chapter6,p.143]33.COBRA:ConsolidatedOmnibusBudgetReconciliationActof1985[Chapter11,p.286]34.AmericanRecoveryandReinvestmentActof2009(ARRA)[Chapter11,p.286]36.FairCreditReportingAct(FCRA)

[Chapter6,p.150]37.HealthInsurancePortabilityandAccountabilityAct(HIPAA)of1996[Chapter11,p.286]39.Negligenthiring[Chapter6,p.137]

C.Ethics1.Rulesofconduct[Chapter13,p.334]2.Moralprinciples[Chapter13,p.333]3.Individualversusgroupbehavior[Chapter2,p.40;Chapter14,p.357]4.Organizationalvalues[Chapter13,p.333]5.Guidelinesandcodes[Chapter9,p.225]6.Behaviorwithinethicalboundaries[Chapter9,p.225;Chapter12,p.320]7.Facingandsolvingethicaldilemmas[Chapter13,p.332]8.Codesofethics[Chapter1,p.11]

GeneralvaluesystemEthicalprinciplesEthicalrules

9.Complianceandlaws[Chapter13,p.338]11.Conflictsofinterest[Chapter13,p.334]12.Useofcompanyassets[Chapter13,p.

335]13.Acceptanceorprovidingofgifts,gratuities,andentertainment[Chapter13,p.335]14.Abusivebehavior[Chapter12,p.321]

Workplacebullying17.ForeignCorruptPracticesAct[Chapter14,p.356]

D.HR’sRoleinOrganizations1. Itisgenerallyexpectedthatfacultywill

discussHR’srolewithregardtoeachoftheindividualHRdisciplineswheneveranindividualdisciplineistaught.ThismaytaketheformofdescribingHR’sroleindevelopinghumancapital,itseffectontheorganization’ssuccess,ortheinterplayamongthevariousdisciplines—meaninghowdecisionsinoneHRdisciplineaffectotherHRdisciplines.[Chapter1,p.15]

E.JobAnalysis/JobDesign1. Job/roledesign(roles,duties,and

responsibilities)[Chapter4,p.92]2. Jobevaluationandcompensation

(grades,paysurveys,andpaysetting)[Chapter10,p.258]

3. Employmentpractices(recruitment,selection,andplacement)[Chapter6,p.137]

4. Performancemanagement(performancecriteriaandappraisal)[Chapter8,p.191]

5. Traininganddevelopment[Chapter7,p.164,167]

Vocationalandcareercounseling

Needsassessment

Careerpathing

6. Compliancewithlegalrequirements[Chapter3,p.66.Chapter10,p.255,258,

Chapter12,p.311]

Equalemployment(job-relatedness,bonafideoccupationalqualifications,andthereasonableaccommodationprocess)

Equalpay(skill,effort,responsibility,andworkingconditions)andcomparableworth

Overtimeeligibility(exemptvs.nonexemptwork)

Ergonomicsandworkplacesafety(workhazardsandmitigation)

7. HRplanning(skillinventoriesandsupply/demandforecasting)[Chapter4,p.99]

8. Workmanagement(workprocessesandoutsourcing)[Chapter4,p.86,104]

9. Organizationdesign(missions,functions,andotheraspectsofworkunitsforhorizontalandverticaldifferentiation)[Chapter2,p.39]

F.ManagingaDiverseWorkforce

1.Equalemploymentopportunity(EEO)[Chapter3,p.66]2.Affirmativeaction(AA)[Chapter3,p.68]3.Agingworkforce[Chapter13,p.339]4.Individualswithdisabilities[Chapter3,p.62]5.Languageissues[Chapter14,p.360]6.Racial/ethnicdiversity[Chapter3,p.69]7.Religion[Chapter3,p.74]8.Reversediscrimination[Chapter1,p.21]9.Sex/genderissues[Chapter3,p.70]10.Gay,lesbian,bisexual,transgender(GLBT)/sexualorientationissues[Chapter13,p.339]12.Businesscasefordiversity[Chapter3,p.69]13.Culturalcompetence[Chapter14,p.

357]

G.Outcomes:MetricsandMeasurementofHR

1.Economicvalueadded[Chapter2,p.45]5.Trendandratioanalysisprojections[Chapter4,p.100]6.Calculatingandinterpretingyieldratios[Chapter5,p.124]7.Returnoninvestment(ROI)[Chapter2,p.45]10.Quantitativeanalysis[Chapter4,p.100]11.Benchmarking[Chapter10,p.263]12.Analyzingandinterpretingmetrics[Chapter4,p.100]13.Forecasting[Chapter4,p.99]

H.PerformanceManagement1.Identifyingandmeasuringemployeeperformance[Chapter8,p.197]2.Sourcesofinformation(e.g.,managers,peers,clients)[Chapter8,p.200]3.Ratererrorsinperformancemeasurement[Chapter8,p.203]5.Performanceappraisals[Chapter8,p.196]6.Appraisalfeedback[Chapter8,p.206]7.Managingperformance[Chapter8,p.194]8.Diagnosingproblems[Chapter9,p.227]9.Performanceimprovementprograms[Chapter9,p.226]

I.Staffing:RecruitmentandSelection

1.Employmentrelationship:Employees,contractors,temporaryworkers[Chapter4,p.104]2.Externalinfluencesonstaffing:Labormarkets,unions,economicconditions,technology[Chapter5,p.114]3.Externalrecruitment:Recruiters,openvs.targetedrecruitment,recruitmentsources,applicantreactions,medium(electronic,advertisement),fraud/misrepresentation[Chapter5,p.118]6.Initialassessmentmethods:Résumés,coverletters,applicationblanks,biographicalinformation,reference/backgroundchecks,geneticscreening,initialinterviews,minimumqualifications[Chapter6,p.141]7.Discretionaryassessmentmethods[Chapter6,p.137]

8.Ability/jobknowledgetests,assessmentcenters[Chapter6,p.145]9.Noncognitiveassessments(e.g.,personalityassessments,integritytests,situationaljudgmenttests,interestinventories)[Chapter6,p.144]10.Structuredinterviews[Chapter6,p.147]11.Contingentassessmentmethods:Drugtesting,medicalexams[Chapter6,p.146]12.Measurementconcepts:Predictors/criteria,reliability,validity[Chapter6,p.140]13.Selectiondecisions:Ranking,grouping/banding,randomselection[Chapter6,p.153]14.Joboffers:Employment-at-will,contracts,authorizationtowork[Chapter9,p.225]15.Bonafideoccupationalqualifications(BFOQs)[Chapter3,p.61]16.Employmentbrand[Chapter10,p.252]

J.StrategicHR1.Strategicmanagement[Chapter2,p.34]2.Enhancingfirmcompetitiveness[Chapter2,p.39]3.Strategyformulation[Chapter2,p.39]5.Sustainability/corporatesocialresponsibility[Chapter1,p.11]6.Internalconsulting(requiredforgraduatestudentsonly)[Chapter1,p.15]7.Competitiveadvantage[Chapter2,p.35]8.Competitivestrategy[Chapter2,p.33]9.Ethics[Chapter1,p.11]10.LinkingHRstrategytoorganizationalstrategy[Chapter2,p.39]11.Organizationaleffectiveness[Chapter1,p.7]12.TrendsandforecastinginHR[Chapter4,p.100]13.Missionandvision[Chapter2,p.35]

K.TotalRewardsA.Compensation

1. Developmentofabasepaysystem[Chapter10,p.260]

2. Developingpaylevels[Chapter10,p.261]

3. Determiningpayincreases[Chapter10,p.264]

4. Roleofjobanalysis/jobdesign/jobdescriptionsindeterminingcompensation[Chapter10,p.258]

5. Payprograms:Meritpay,pay-for-performance,incentives/bonuses,profitsharing,groupincentives/gainsharing,balancedscorecard[Chapter11,p.276]

6. Compensationofspecialgroups(e.g.,executives,sales,contingentworkers,management)[Chapter10,p.255]

7. Internalalignmentstrategies[Chapter10,p.250]

8. Externalcompetitivenessstrategies

[Chapter10,p.250]9. Legalconstraintsonpayissues[Chapter

10,p.258]10. Monitoringcompensationcosts[Chapter

10,p.251]11. Unionroleinwageandsalary

administration[Chapter10,p.258]12. Minimumwage/overtime[Chapter10,p.

254]13. Paydiscriminationanddissimilarjobs

[Chapter10,p.257]14. Prevailingwage[Chapter10,p.263]15. Motivationtheories:Equitytheory,

reinforcementtheory,agencytheory[Chapter10,p.249;Chapter11,p.282]

B.EmployeeBenefits

1.Statutoryvs.voluntarybenefits[Chapter11,p.283]2.Typesofretirementplans(definedbenefit,definedcontribution,hybridplans)[Chapter11,p.290]3.Regulationofretirementplans(FLSA,ERISA,PensionProtectionActof2006)

[Chapter11,p.286]4.Typesofhealthcareplans(multiple-payer/single-payer,universalhealthcaresystems,HMOs,PPOs,fee-for-service,consumer-directed)[Chapter11,p.288]5.Regulationofhealthinsuranceprograms(COBRA,HIPAA,HealthMaintenanceOrganizationActof1973)[Chapter11,p.285]6.Federalinsuranceprograms(Old-Age,Survivor,andDisabilityInsurance[OASDI],Medicare)[Chapter11,p.283]7.Disabilityinsurance[Chapter11,p.291]8.Educationalbenefits[Chapter11,p.291]9.Employeeassistance/wellnessprogramsChapter12,p.310]10.Family-orientedbenefits[Chapter11,p.283]11.Globalemployeebenefits[Chapter14,p.366]12.Lifeinsurance[Chapter11,p.291]14.Outsourcing(secondary)[Chapter14,p.361]

15.Timeoffandotherbenefits[Chapter11,p.287]16.UnemploymentInsurance[Chapter11,p.284]17.Wellnessprograms[Chapter12,p.310]18.Financialbenefits(gainsharing,groupincentives,teamawards,meritpay/bonuses)[Chapter11,p.279]19.Managingemployeebenefits(costcontrol,monitoringfutureobligations,actionplanning,strategicplanning)[Chapter11,p.283]21.Paidleaveplans[Chapter11,p.287]22.Workers’compensation[Chapter11,p.283]

L.TrainingandDevelopment1.Needsassessment[Chapter7,p.167]3.Learningtheories:Behaviorism,constructivism,cognitivemodels,adultlearning,knowledgemanagement[Chapter7,p.168]4.Trainingevaluation:Kirkpatrick’smodel[Chapter7,p.175]5.E-learninganduseoftechnologyintraining[Chapter7,p.175]6.On-the-jobtraining(OJT)[Chapter7,p.173]7.Outsourcing(secondary)[Chapter7,p.181]8.Transferoftraining:Designissues,facilitatingtransfer[Chapter7,p.176]9.Employeedevelopment:Formaleducation,experience,assessment[Chapter7,p.177]11.Theroleoftraininginsuccessionplanning[Chapter7,p.166]

M.WorkforcePlanningandTalentManagement

1.Downsizing/rightsizing(secondary)[Chapter4,p.102]2.Planning:Forecastingrequirementsandavailabilities,gapanalysis,actionplanning,core/flexibleworkforce[Chapter4,p.99]3.Retention:Involuntaryturnover,outplacementcounseling,alternativedisputeresolution[Chapter9,p.230]4.Retention:Voluntaryturnover,jobsatisfaction,withdrawal,alternatives[Chapter9,p.220]6.Laborsupplyanddemand[Chapter4,p.102]

RequiredContent:GraduateCurriculum

N.ChangeManagement1. Stagesofchangemanagement

IndifferenceRejectionDoubtNeutralityExperimentationCommitment

2. DimensionsofchangeCultureCoachingDirectionCommunicationAccountabilityResilienceSkillsandknowledgeRecognitionManagingprojectsInvolvement

3. Communication4. Buildingtrust5. Creatingafoundationforproblem

solving6. Leadingchange7. Planningchangestrategy8. Implementingchange9. Copingstrategiesforemployees10. Adjustingtochangewithinthe

organization

O.Globalization1. Globalbusinessenvironment2. Managingexpatriatesinglobalmarkets3. Cross-borderHRmanagement4. Repatriatingemployeespostinternational

assignment5. Globalsecurityandterrorism6. Inshoring7. Offshoring/outsourcing8. Globallabormarkets9. Cross-culturaleffectiveness

P.InternalConsulting1. Assesscustomers’needs2. Influencecross-departmentally3. IdentifyareasforHRinterventionand

designintervention4. Advisemanagementandcolleagues

cross-divisionally5. Analyzeandrecommendsolutionsto

businessproblems6. Analyzedataandpreparereportsto

informbusinessdecisions7. Recommendchangesforprocess

improvement8. Conductperiodicaudits9. Leadspecialandcross-functionalproject

teams

Q.OrganizationalDevelopment1. Coaching2. Developinghumanresources3. Emotionalintelligence4. Equippingtheorganizationforpresent

andfuturetalentneeds5. Improvingorganizationaleffectiveness6. Knowledgemanagement7. Leadershipdevelopment8. Measurementsystems9. Ongoingperformanceandproductivity

initiatives10. Organizationaleffectiveness11. Organizationallearning12. Organizationalstructureandjobdesign13. Outsourcingemployeedevelopment14. Socialnetworking15. Successionplanning16. Trainingemployeestomeetcurrentand

futurejobdemands

SecondaryContent

R.Corporate/SocialResponsibilityandSustainability1. Corporatephilanthropy2. Ethics3. Diversity4. Financialtransparency

5. Employeerelationsandemploymentpractices

Participativedecisionmaking6. Supplychainmanagement7. Governance8. Community/employeeengagement9. Greenmanagement10. ThebusinesscaseforCSR11. Reputationandbrandenhancement12. Accountabilityandtransparency13. Riskmanagement14. Linkingorganizationalcultureand

corporatevalues

S.Downsizing/Rightsizing1. Employmentdownsizing2. Alternativestoemploymentdownsizing3. Strategiesforlong-termsuccess4. Whydownsizinghappens5. Whendownsizingistheanswer6. Effectivelymanagingadownsizing

effort7. Alternativestodownsizing8. Consequencesofemployment

downsizing9. Approachestoreducingstaffsize10. Identifyingandeliminatingunnecessary

work11. Prioritizingjobsforcombining,

streamlining,oreliminating12. Identifyingselectioncriteriaformaking

downsizing/rightsizingdecisions13. Importanceoffocusingonindividual

jobsvs.individualstaffmembers14. Layoffs15. Reductionsinforce

T.HRCareerPlanning1. Definitionofacareer2. Balancingworkandlife3. Careermanagementsystems4. Companypoliciestoaccommodatework

andnonworkactivities5. Copingwithjobloss

6. Developingleaderskills

Authenticleadership

Contingencytheory

Ethicaldecisionmaking

Leader-memberexchangetheory

Path-goaltheory

Situationalapproach

Skillsapproach

Styleapproach

Teamleadership

Traitapproach

Transformationalleadership7. Plateauing8. Skillsobsolescence9. Careerdevelopment

U.HRInformationSystems1. Conductingsystemsneedsassessments2. Determiningsystemspecifications3. SelectinganHRinformationsystem4. UsingHRdataforenterprise

management5. IssuestoconsiderwhenselectingHRIS

software

V.MergersandAcquisitions1. ConductingHRduediligence2. IntegratingHRsystems3. Assimilatingworkcultures4. Integratingcompensationandbenefits

structures5. Mergingworkplacecultures6. Integratingperformancemanagement

systems

7. Culturalcompatibility

Addressculturaldifferences

Degreeofinternalintegration

Autonomy

Adaptability

Employeetrust

Diversity

8. Integration

Communication

Employeeanxiety

Rumors

Redundancy

Downsizing

Morale

W.Outsourcing1. Creatinganoutsourcingstrategy2. Preparingarequestforinformation

(RFI)orrequestforproposal(RFP)3. Identifyingthird-partyproviders

(contractors)4. Evaluatingproposalsfromcontractors5. Conductingcost-benefitanalyses6. Negotiatingcontractterms7. Retainingmanagementrights8. Importanceoflegalreviewofcontracts9. Managingvendor/staffrelationships10. Managingavendor ’sperformanceunder

thecontractterms11. Managingcommunicationsand

deliverables12. Evaluatingeffectivenessofoutsourcing

efforts

X.WorkplaceHealth,Safety,andSecurity1. OSHAcitationsandpenalties(required)2. Disasterpreparation,continuity,and

recoveryplanning3. Employeehealth4. Inspection5. Protectionfromretaliation6. Safetymanagement7. Securityconcernsatwork8. Communicablediseases9. Datasecurity10. Testingforsubstanceabuse11. Ergonomics12. Monitoring,surveillance,privacy

Glossary

absenteeismThefailureofanemployeetoreporttotheworkplaceasscheduled.

accountabilityThepersonaldutytosomeoneelse(ahigher-levelmanagerortheorganizationitself)fortheeffectiveuseofresourcestocompleteanassignment.

activelisteningTheintentionandabilitytolistentoothers,usethecontentandcontextofthecommunication,andrespondappropriately.

adverseemploymentactionAnyactionsuchasfirings,demotions,schedulereductions,orchangesthatwouldharmtheindividualemployee.

affirmativeactionAseriesofpolicies,programs,andinitiativesthathavebeeninstitutedby

variousentitieswithinbothgovernmentandtheprivatesectorthataredesignedtopreferhiringofindividualsfromprotectedgroupsincertaincircumstances,inanattempttomitigatepastdiscrimination.

assessmentcenterAplacewherejobapplicantsundergoaseriesoftests,interviews,andsimulatedexperiencestodeterminetheirpotentialforaparticularjob.

authorityTherighttogiveorders,enforceobedience,makedecisions,andcommitresourcestowardcompletingorganizationalgoals.

behaviorallyanchoredratingscale(BARS)form

Aperformanceappraisalthatprovidesadescriptionofeachassessmentalongacontinuum.

behaviorsTheactionstakenbyanindividual.

biasApersonality-basedtendency,either

towardoragainstsomething.biologicaljobdesign

Designingjobsbyfocusingonminimizingthephysicalstrainontheworkerbystructuringthephysicalworkenvironmentaroundthewaythebodyworks.

bonafideoccupationalqualification(BFOQ)

Aqualificationthatisabsolutelyrequiredinorderforanindividualtobeabletosuccessfullydoaparticularjob.

broadbandingCombiningmultiplepaylevelsintoone.

burnoutConstantlackofinterestandmotivationtoperformone’sjob.

businessnecessityWhenaparticularpracticeisnecessaryforthesafeandefficientoperationofthebusinessandwhenthereisaspecificbusinesspurposeforapplyingaparticularstandardthatmay,infact,bediscriminatory.

businessskills

Theanalyticalandquantitativeskills—includingin-depthknowledgeofhowthebusinessworksanditsbudgetingandstrategicplanningprocesses—thatarenecessaryforamanagertounderstandandcontributetotheprofitabilityoftheorganization.

careerAsdefinedbyDouglasHall,theindividuallyperceivedsequenceofattitudesandbehaviorsassociatedwithwork-relatedexperiencesandactivitiesoverthespanoftheperson’slife.

centralizationDegreetowhichdecisionmakingisconcentratedwithintheorganization.

coachingTheprocessofgivingmotivationalfeedbacktomaintainandimproveperformance.

COBRAAlawthatrequiresemployerstooffertomaintainhealthinsuranceonindividualswholeavetheiremployment(foraperiodoftime).

cognitiveabilitytestAnassessmentofgeneralintelligenceorofsometypeofaptitudeforaparticularjob.

cohesivenessAnintentanddesireforgroupmemberstosticktogetherintheiractions.

collectivebargainingThenegotiationprocessresultinginacontractbetweenunionemployeesandmanagementthatcoversemploymentconditions.

communicationTheprocessoftransmittinginformationandmeaning.

compensationThetotalofanemployee’spayandbenefits

compensationsystemAnythingthatanemployeemayvalueanddesireandthattheemployeriswillingandabletoofferinexchange.

compensatorydamagesMonetarydamagesawardedbythecourtthatcompensatetheinjuredpersonfor

losses.compensatoryselectionmodel

Modelallowinganindividualtodopoorlyononetestbutmakeupforthatpoorgradebydoingexceptionallywellonothertests.

complexityDegreetowhichdifferentpartsoftheorganizationaresegregatedfromoneanother.

conceptualanddesignskillsTheabilitytoevaluateasituation,identifyalternatives,selectareasonablealternative,andmakeadecisiontoimplementasolutiontoaproblem.

conflictTheactofbeingopposedtoanother.

constructvalidityAnassessmentthatmeasuresatheoreticalconceptortraitthatisnotdirectlyobservable.

constructivedischargeWhenanemployeeisputundersuchextremepressurebymanagementthatcontinuedemploymentbecomes

intolerableand,asaresult,theemployeequits,orresignsfromtheorganization.

contentvalidityAnassessmentofwhetheratestmeasuresknowledgeorunderstandingoftheitemsitissupposedtomeasure.

corporatesocialresponsibilityTheconceptthatorganizationshaveadutytoallsocietalstakeholderstooperateinamannerthattakeseachoftheirneedsintoaccount.

costcenterAdivisionordepartmentthatbringsinnorevenueorprofitfortheorganization—runningthisfunctiononlycoststheorganizationmoney.

creativityAbasicabilitytothinkinuniqueanddifferentwaysandapplythosethoughtprocessestoexistingproblems.

criterion-relatedvalidityAnassessmentoftheabilityofatesttomeasuresomeotherfactorrelatedtothetest.

criticalincidentsmethod

Aperformanceappraisalmethodinwhichamanagerkeepsawrittenrecordofthepositiveandnegativeperformanceofemployeesthroughouttheperformanceperiod.

cybersecurityTheuseoftoolsandprocessestoprotectorganizationalcomputersystemsandnetworks.

dataanalyticsProcessofaccessinglargeamountsofdatainordertoanalyzethosedataandgaininsightintosignificanttrendsorpatternswithinorganizationsorindustries.

definedbenefitplanAplanprovidingtheretireewithaspecificamountandtypeofbenefitsthatwillbeavailablewhentheindividualretires.

definedcontributionplanAplanprovidingonlytheamountoffundsthatwillgointoaretirementaccount,notwhattheemployeewillreceiveuponretirement.

delayeringTheprocessofchangingthecompanystructuretogetridofsomeoftheverticalhierarchy(reportinglevels)inanorganization.

disabilityAphysicalormentalimpairmentthatsubstantiallylimitsoneormoremajorlifeactivities,arecordofhavingsuchanimpairment,orbeingregardedashavingsuchanimpairment.

disciplineCorrectiveactiondesignedtogetemployeestomeetstandardsandthecodeofconduct.

discriminationTheactofmakingdistinctionsorchoosingonethingoveranother;inHR,itismakingdistinctionsamongpeople.

disparateimpactWhenanofficiallyneutralemploymentpracticedisproportionatelyexcludesthemembersofaprotectedgroup;itisgenerallyconsideredtobeunintentional,butintentisirrelevant.

disparatetreatmentWhenindividualsinsimilarsituationsareintentionallytreateddifferentlyandthedifferenttreatmentisbasedonanindividual’smembershipinaprotectedclass.

divergentthinkingTheabilitytofindmanypossiblesolutionstoaparticularproblem,includingunique,untestedsolutions.

diversityTheexistenceofdifferences—inHRM,itdealswithdifferenttypesofpeopleinanorganization.

EAPAsetofcounselingandotherservicesprovidedtoemployeesthathelpthemtoresolvepersonalissuesthatmayaffecttheirwork.

economicvalueadded(EVA)Measureofprofitsthatremainafterthecostofcapitalhasbeendeductedfromoperatingprofits.

effectivenessAfunctionofgettingthejobdone

wheneverandhoweveritmustbedone.efficiency

Afunctionofhowmanyorganizationalresourcesweusedingettingthejobdone.

empathyBeingabletoputyourselfinanotherperson’splace—tounderstandnotonlywhatthatpersonissayingbutwhytheindividualiscommunicatingthatinformationtoyou.

employeedevelopmentOngoingeducationtoimproveknowledgeandskillsforpresentandfuturejobs.

employeeengagementAcombinationofjobsatisfaction,ability,andawillingnesstoperformfortheorganizationatahighlevelandoveranextendedperiodoftime.

employeehealthThestateofphysicalandpsychologicalwellnessintheworkforce.

employment-at-willConceptallowingthecompanyorthe

workertobreaktheworkrelationshipatanypointintime,withorwithoutanyparticularreason,aslongasindoingso,nolawisviolated.

equitytheoryTheorythatemployeesaremotivatedwhentheratiooftheirperceivedoutcomestoinputsisatleastroughlyequaltothatofotherreferentindividuals.

ergonomicsAccordingtoOSHA,“thescienceoffittingworkplaceconditionsandjobdemandstothecapabilitiesoftheworkingpopulation.”

essentialfunctionsThefundamentaldutiesoftheposition.

ethicsTheapplicationofasetofvaluesandprinciplesinordertomaketheright,orgood,choice.

EWPPlansdesignedtocatertotheemployee’sphysical,insteadofpsychological,welfarethrougheducationandtrainingprograms.

expatriateAnemployeewholeavestheirhomecountrytogoworkinanothercountry.

expectancytheoryAtheoryproposingthatemployeesaremotivatedwhentheybelievetheycanaccomplishataskandthattherewardsfordoingsoareworththeeffort.

experienceratingAmeasureofhowoftenclaimsaremadeagainstaninsurancepolicy.

externalrecruitingTheprocessofengagingindividualsfromthelabormarketoutsidethefirmtoapplyforajob.

extinctionThelackofresponse,eitherpositiveornegative,inordertoavoidreinforcinganundesirablebehavior.

fitness-for-dutytestAtestidentifyingwhetherornotanemployeeisphysicallycapableataparticularpointintimeofperformingaspecifictypeofwork.

ForeignCorruptPracticesAct

LawbarringUS-basedorUS-listedcompaniesfrombribingforeignofficialsinexchangeforbusiness.

formalizationDegreetowhichjobsarestandardizedwithinanorganization,meaningthedegreetowhichwehavecreatedpolicies,procedures,andrulesthat“program”thejobsoftheemployees.

Four-FifthsRuleAtestusedbyvariousfederalcourts,theDepartmentofLabor,andtheEEOCtodeterminewhetherdisparateimpactexistsinanemploymenttest.

goldenparachutesProvisionforexecutiveswhoaredismissedfromamergedoracquiredfirmoftypicallylargelumpsumpaymentsondismissal.

graphicratingscaleformAperformanceappraisalchecklistformonwhichamanagersimplyratesperformanceonacontinuumsuchasexcellent,good,average,fair,andpoor.

grievance

Aformalcomplaintconcerningpay,workingconditions,orviolationofsomeotherfactorinacollectivebargainingagreement.

grossnegligenceAseriousfailuretoexercisecareintheworkenvironment.

high-deductiblehealthplan(HDHP)A“majormedical”insuranceplanthatprotectsagainstcatastrophichealthcarecostsandinmostcasesispaidforbytheemployer.

HMOAhealthcareplanthatprovidesbothhealthmaintenanceservicesandmedicalcareaspartoftheplan.

hostileworkenvironmentHarassmentthatoccurswhensomeone’sbehavioratworkcreatesanenvironmentthatissexualinnatureandthatmakesitdifficultforsomeoneofaparticularsextoworkinthatenvironment.

hotelingWhenanorganizationusesasoftwareprogramthatallowsemployeesto

“reserve”officespaceforparticularpartsoftheworkweekwhentheywillneedit.

HRforecastingIdentifyingtheestimatedsupplyanddemandforthedifferenttypesofhumanresourcesintheorganizationoversomefutureperiod,basedonanalysisofpastandpresentdemand.

HSAorMSAAplanallowingtheemployerandemployeetofundamedicalsavingsaccountfromwhichtheemployeecanpaymedicalexpenseseachyearwithpretaxdollars.

humanrelationsskillsTheabilitytounderstand,communicate,andworkwellwithindividualsandgroupsthroughdevelopingeffectiverelationships.

humanresourceinformationsystems(HRIS)

InteractingdatabasesystemsthataimatgeneratinganddeliveringHRinformationandallowustoautomate

somehumanresourcemanagementfunctions.

humanresources(HR)Thepeoplewithinanorganization.

illegaldiscriminationTheactofmakingdistinctionsthatharmpeopleandthatarebasedonthosepeople’smembershipinaprotectedclass.

InformationAgeAnerathatbeganaround1980,inwhichinformationbecameoneofthemainproductsusedinorganizations;itischaracterizedbyexponentialincreasesinavailableinformationinallindustries.

innovationTheactofcreatingusefulprocessesorproductsbasedoncreativethoughtprocesses.

interesttestAtestmeasuringaperson’sintellectualcuriosityandmotivationinaparticularfield.

internalrecruitingFillingjobopeningswithcurrentemployeesorpeopletheemployees

know.jobanalysis

Theprocessusedtoidentifytheworkperformedandtheworkingconditionsforeachofthejobswithinourorganizations.

jobcharacteristicsmodelAconceptualframeworkfordesigningorenrichingjobsbasedoncorejobcharacteristics.

jobdescriptionIdentificationofthemajortasks,duties,andresponsibilitiesthatarecomponentsofajob.

jobdesignTheprocessofidentifyingtasksthateachemployeeisresponsibleforcompleting,aswellasidentifyinghowthosetaskswillbeaccomplished.

jobevaluationTheprocessofdeterminingtheworthofeachpositionrelativetotheotherpositionswithintheorganization.

jobexpansionTheprocessofmakingjobsbroader,

withlessrepetition.Jobscanbeexpandedthroughrotation,enlargement,andenrichment.

jobrelatednessWhenatestforemploymentisalegitimatemeasureofanindividual’sabilitytodotheessentialfunctionsofajob.

jobsatisfactionThefeelingofwell-beingthatweexperienceinourjobs—basicallywhetherornotwelikewhatwedoandtheimmediateenvironmentsurroundingusandourjobs.

jobsimplificationTheprocessofeliminatingorcombiningtasksand/orchangingtheworksequencetoimproveperformance.

jobspecificationIdentificationofthequalificationsofapersonwhoshouldbecapableofdoingthejobtasksnotedinthejobdescription.

JustCauseAsetofstandardtestsforfairnessindisciplinaryactions—teststhatwere

originallyutilizedinuniongrievancearbitrations.

knowledgeworkersWorkerswho“usetheirheadmorethantheirhands”andwhogatherandinterpretinformationtoimproveaproductorprocessfortheirorganizations.

labormarketTheexternalpoolofcandidatesfromwhichwedrawourrecruits.

laborrelationsTheinteractionsbetweenmanagementandunionizedemployees.

layoffAprocessofterminatingagroupofemployees,usuallyduetosomebusinessdownturnorperhapsatechnologicalchange,withintenttoimproveorganizationalefficiencyandeffectiveness.

learningAnyrelativelypermanentchangeinbehaviorthatoccursasaresultofexperienceorpractice.

linemanagers

Theindividualswhocreate,manage,andmaintainthepeopleandorganizationalprocessesthatcreatewhateveritisthatthebusinesssells.

managementbyobjectives(MBO)methodAprocessinwhichmanagersandemployeesjointlysetobjectivesfortheemployees,periodicallyevaluateperformance,andrewardemployeesaccordingtotheresults.

managementcounselingTheprocessofgivingemployeesfeedback(sotheyrealizethataproblemisaffectingtheirjobperformance)andreferringemployeeswithproblemsthatcannotbemanagedwithintheworkstructuretotheorganization’semployeeassistanceprogram.

marginaljobfunctionsThosefunctionsthatmaybeperformedonthejobbutneednotbeperformedbyallholdersofthejob.

mechanisticjobdesignDesigningjobsaroundtheconceptsoftaskspecialization,skillsimplification,

andrepetition.meritpay

Aprogramtorewardtopperformerswithincreasesintheirannualwagethatcarryoverfromyeartoyear.

minimumwageThelowesthourlyrateofpaygenerallypermissiblebyfederallaw.

missionstatementAstatementlayingoutourexpectationofwhatwe’regoingtodoinordertobecometheorganizationthatwehaveenvisioned.

motivationThewillingnesstoachieveorganizationalobjectives.

motivationaljobdesignDesigningjobsbyfocusingonthejobcharacteristicsthataffectthepsychologicalmeaningandmotivationalpotentialofthejob;thisapproachviewsattitudinalvariablesasthemostimportantoutcomesofjobdesign.

multiple-hurdleselectionmodelModelrequiringthateachapplicantmust

passaparticularselectiontestinordertogoontothenexttest.

narrativemethodorformMethodinwhichthemanagerisrequiredtowriteastatementabouttheemployee’sperformance.

needsassessmentTheprocessofanalyzingthedifferencebetweenwhatiscurrentlyoccurringwithinajoborjobsandwhatisrequired—eithernoworinthefuture—basedontheorganization’soperationsandstrategicgoals.

negativereinforcementWithdrawalofaharmfulthingfromtheenvironmentinresponsetoapositiveactiononthepartofthesubject.

negligenthireAlegalconceptthatsaysiftheorganizationhiressomeonewhomayposeadangertocoworkers,customers,suppliers,orotherthirdparties,andifthatpersonthenharmssomeoneelseinthecourseofworkingforthecompany,thenthecompanycanbeheldliablefor

theindividual’sactions.objectives

Statementsofwhatistobeaccomplishedinsingular,specific,andmeasurableterms,withatargetdate.

onshoringTheprocessofshutteringoperationsinothercountriesandbringingworkbacktothehomecountry.

organizationalcultureThevalues,beliefs,andassumptionsaboutappropriatebehaviorthatmembersofanorganizationshare.

organizationalstructureThewayinwhichanorganizationgroupsitsresourcestoaccomplishitsmission.

orientationTheprocessofintroducingnewemployeestotheorganizationandtheirjobs.

OUCHtestAruleofthumbruleusedwheneveryouarecontemplatinganyemploymentaction,tomaintainfairnessandequityforallofyouremployeesorapplicants.

outsourcingTheprocessofhiringanotherorganizationtodoworkthatwaspreviouslydonewithinthehostorganization.

overtimeAhigherthanminimum,federallymandatedwage,requiredfornonexemptemployeesiftheyworkmorethanacertainnumberofhoursinaweek.

parochialismAnarrow-mindedviewoftheworldwithaninabilitytorecognizeindividualdifferences.

patternorpracticediscriminationWhenapersonorgroupengagesinasequenceofactionsoverasignificantperiodoftimethatisintendedtodenytherightsprovidedbyTitleVIIofthe1964CRAtoamemberofaprotectedclass.

paystructureAhierarchyofjobsandtheirratesofpaywithintheorganization.

PBGCAgovernmentalcorporationestablished

withintheDepartmentofLaborwhosepurposeistoinsureretirementfundsfromfailure.

perceptual-motorjobdesignDesigningjobswithtasksthatremainwithintheworker ’snormalmentalcapabilitiesandlimitations.

performanceappraisalTheongoingprocessofevaluatingemployeeperformance.

performancemanagementTheprocessofidentifying,measuring,managing,anddevelopingtheperformanceofthehumanresourcesinanorganization.

perquisitesExtrafinancialbenefitsusuallyprovidedtotopemployeesinmanybusinesses.

personalitytestAtestmeasuringthepsychologicaltraitsorcharacteristicsofapplicantstodeterminesuitabilityforperformanceinaspecifictypeofjob.

physicaltestAtestdesignedtoensurethatapplicants

arecapableofperformingonthejobinwaysdefinedbythejobspecificationanddescription.

positivereinforcementProvidingarewardinreturnforaconstructiveactiononthepartofthesubject.

preferredproviderorganizations(PPOs)Akindofhybridbetweentraditionalfee-for-serviceplansandHMOs.

principlesBasicapplicationofourvalues.

productivityTheamountofoutputthatanorganizationgetsperunitofinput,withhumaninputusuallyexpressedintermsofunitsoftime.

productivitycenterArevenuecenterthatenhancestheprofitabilityoftheorganizationthroughenhancingtheproductivityofthepeoplewithintheorganization.

profitsharingprogramsProgramsthatprovideaportionofcompanyproceedsoveraspecificperiod

oftime(usuallyeitherquarterlyorannually)totheemployeesofthefirmthroughabonuspayment.

progressivedisciplineAprocessinwhichtheemployerprovidestheemployeewithopportunitiestocorrectpoorbehaviorbeforeterminatingthem.

punishmentTheapplicationofanadverseconsequence,ortheremovalofareward,inordertodecreaseanunwantedbehavior.

punitivedamagesMonetarydamagesawardedbythecourtthataredesignedtopunishaninjuringpartythathasintentionallyinflictedharmonothers.

qualitativeforecastingTheuseofnonquantitativemethodstoforecastthefuture,usuallybasedontheknowledgeofapoolofexpertsinasubjectoranindustry.

quantitativeforecastUtilizingmathematicstoforecastfuture

eventsbasedonhistoricaldata.quidproquoharassment

Harassmentthatoccurswhensometypeofbenefitorpunishmentismadecontingentupontheemployeesubmittingtosexualadvances.

racenormingWhendifferentgroupsofpeoplehavedifferentscoresdesignatedas“passing”gradesonatestforemployment.

rankingAperformanceappraisalmethodthatisusedtoevaluateemployeeperformancefrombesttoworst.

raterangeThemaximum,minimum,andmidpointofpayforacertaingroupofjobs.

ratioanalysisTheprocessofreviewinghistoricaldataandcalculatingspecificproportionsbetweenabusinessfactor(suchasproduction)andthenumberofemployeesneeded.

realisticjobpreview(RJP)Areviewofallofthetasksand

requirementsofthejob,bothgoodandbad.

reasonableaccommodationAnaccommodationmadebyanemployertoallowsomeonewhoisdisabledbutotherwisequalifiedtodotheessentialfunctionsofajobtobeabletoperformthatjob.

reasonablepersonThe“average”personwhowouldlookatthesituationanditsintensitytodeterminewhethertheaccusedpersonwaswrongintheiractions.

recruitingTheprocessofcreatingareasonablepoolofqualifiedcandidatesforajobopening.

regressionanalysisAstatisticaltechniquethatidentifiestherelationshipbetweenaseriesofvariabledatapointsforuseinforecastingfuturevariables.

reliabilityTheconsistencyofatestmeasurement.

remediation

Thecorrectionofadeficiencyorfailureinaprocessorprocedure.

responsibilityTheobligationtoanswerforsomething/someone—thedutytocarryoutanassignmenttoasatisfactoryconclusion.

resultsAmeasureofthegoalsachievedthroughaworkprocess.

retaliationAsituationwheretheorganizationtakesan“adverseemploymentaction”againstanemployeebecausetheemployeebroughtdiscriminationchargesagainsttheorganizationorsupportedsomeonewhobroughtdiscriminationchargesagainstthecompany.

returnoninvestment(ROI)Measureofthefinancialreturnwereceivebecauseofsomethingthatwedotoinvestinourorganizationoritspeople.

revenuecentersDivisionsordepartmentsthatgenerate

monetaryreturnsfortheorganization.reversediscrimination

Discriminationagainstmembersofthemajoritygroupbyanorganization,generallyresultingfromaffirmativeactionpolicieswithinanorganization.

right-to-sueAnoticefromtheEEOC,issuedifitelectsnottoprosecuteanindividualdiscriminationcomplaintwithintheagency,thatgivestherecipienttherighttogodirectlytothecourtswiththecomplaint.

SafetyDataSheetsDocumentsthatprovideinformationonahazardouschemicalanditscharacteristics.

selectionTheprocessofchoosingthebest-qualifiedapplicantwhowasrecruitedforagivenjob.

self-efficacyWhetherornotapersonbelievesthattheyhavethecapabilitytodosomethingorattainaparticulargoal.

seriousmisconductIntentionalbehaviorthathasthepotentialtocausegreatharmtoanotherortothecompany.

sexualharassment“Unwelcomesexualadvances,requestsforsexualfavors,andotherverbalorphysicalconductofasexualnatureconstitutessexualharassmentwhensubmissiontoorrejectionofthisconductexplicitlyorimplicitlyaffectsanindividual’semployment,unreasonablyinterfereswithanindividual’sworkperformanceorcreatesanintimidating,hostileoroffensiveworkenvironment.”

simulationAtestwhereacandidateisputintoahigh-pressuresituationinacontrolledenvironmentsothatthedangerandcostarelimited.

skillstestAnassessmentinstrumentdesignedtodetermineifyouhavetheabilitytoapplyaparticularknowledgeset.

socialloafers

Individualswhoavoidprovidingtheirmaximumeffortingroupsettingsbecauseitisdifficulttopickoutindividualperformance.

SocietyforHumanResourceManagement(SHRM)

ThelargestandmostrecognizedoftheHRMadvocacyorganizationsintheUnitedStates.

staffmanagersIndividualswhoadviselinemanagersinsomefieldofexpertise.

stereotypingMentallyclassifyingapersonintoanaffinitygroupandthenidentifyingthepersonashavingthesameassumedcharacteristicsasthegroup.

strategyAplanofactiondesignedtoachieveaparticularsetofobjectives.

stressThebody’sreactiontoenvironmentaldemands.

stressorsFactorsthatmay,ifextreme,cause

peopletofeeloverwhelmedbyanxiety,tension,and/orpressure.

strikeAcollectiveworkstoppagebymembersofaunionthatisintendedtoputpressureonanemployer.

sustainabilityMeetingtheneedsofthecurrentgenerationwithoutcompromisingtheabilityoffuturegenerationstomeettheirneeds.

technicalskillsTheabilitytousemethodsandtechniquestoperformatask.

360-degreeevaluationAnevaluationthatanalyzesindividuals’performancefromallsides—fromtheirsupervisor ’sviewpoint,fromtheirsubordinates’viewpoint,fromtheircustomers(ifapplicable),fromtheirpeers,andfromtheirownself-evaluation.

tradeblocsGroupsofcountrieswhoformanassociationforthepurposeoffacilitating

movementofgoodsacrossnationalborders.

traditionalhealthcareplansPlansthatcoverasetpercentageoffeesformedicalservices—foreitherdoctorsorin-patientcare.

trainingTheprocessofteachingemployeestheskillsnecessarytoperformajob.

traitsThephysicalorpsychologicalcharacteristicsofaperson.

trendanalysisAprocessofreviewinghistoricalitemssuchasrevenuesandrelatingchangesinthoseitemstosomebusinessfactortoformapredictivechart.

trustFaithinthecharacterandactionsofanother.

turnoverThepermanentlossofworkersfromtheorganization.

unduehardshipWhenthelevelofdifficultyforan

organizationtoprovideaccommodations,determinedbylookingatthenatureandcostoftheaccommodationandtheoverallfinancialresourcesofthefacility,becomesasignificantburdenontheorganization.

UniformGuidelinesonEmployeeSelectionProcedures(UGESP)

Guidelinesthatprovideinformationthatcanbeusedtoavoiddiscriminatoryhiringpracticesaswellasdiscriminationinotheremploymentdecisions.

validityTheextenttowhichatestmeasureswhatitclaimstomeasure.

valuesOurbasicconceptsofgoodandbad,orrightandwrong.

variablepayCompensationthatdependsonsomemeasureofindividualorgroupperformanceorresultsinordertobeawarded.

vestingAmaximumamountoftimebeyond

whichtheemployeewillhaveunfetteredaccesstotheirretirementfunds,bothemployeecontributionsandemployercontributions.

visionWhatweexpecttobecomeasanorganizationataparticularpointintimeinthefuture.

wagecompressionWhennewemployeesrequirehigherstartingpaythanthehistoricalnorm,causingnarrowingofthepaygapbetweenexperiencedandnewemployees.

worksampleAtestconductedbyprovidingasampleoftheworkthatthecandidatewouldperformonthejobandaskingthecandidatetoperformthetasksundersometypeofcontrolledconditions.

workflowanalysisThetoolthatweusetoidentifywhathastobedonewithintheorganizationtoproduceaproductorservice.

workplacesafetyThephysicalprotectionofpeoplefrom

injuryorillnesswhileonthejob.workplacesecurity

Themanagementofpersonnel,equipment,andfacilitiesinordertoprotectthem.

yieldratioAcalculationofhowmanypeoplemakeitthroughtherecruitingsteptothenextstepinthehiringprocess.

Notes

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5.B.A.Campbell,R.Coff,D.Kryscynski,“RethinkingSustainedCompetitiveAdvantageFromHumanCapital,”AcademyofManagementReview(2012),37(3),pp.376–

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8.A.Fox,“RaisingEngagement,”HRMagazine(May2010),p.36.

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13.K.W.Mossholder,H.A.Richardson,R.P.Settoon,“HumanResourceSystemsandHelpinginOrganizations:ARelationalPerspective,”AcademyofManagementReview(2011),36(1),pp.33–52.

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49.Ibid.

50.Ibid.

51.Ibid.

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23.W.Bennis,“ActingthePartofaLeader,”Businessweek(September14,2009),p.80.

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41.Ibid.

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46.M.K.Fiegener,“MatchingBusiness-LevelStrategicControlstoStrategy:Impacton

ControlSystemEffectiveness,”JournalofAppliedBusinessResearch(JABR)(2011),10(1),pp.25–34.

47.Ibid.

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27,2014),http://tech.fortune.cnn.com/2014/02/27/microsoft-culture-must-change-chairman-says/.

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54.D.West,lectureatSpringfieldCollege(November23,2009).

55.P.Bolton,M.K.Brennermeier,L.Veldkamp,“Leadership,Coordination,andCorporateCulture,”ReviewofEconomicStudies(2013),80(2),pp.512–537.

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57.M.W.DiStaso,T.McCorkindale,D.K.

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59.M.Lim,“Clicks,Cabs,andCoffeeHouses:SocialMediaandOppositionalMovementsinEgypt,2004–2011,”JournalofCommunication(2012),62(2),pp.231–248.

60.S.Cleland,“Google’s‘Infringenovation’Secrets,”Forbes(October3,2011),http://www.forbes.com/sites/scottcleland/2011/10/03/googles-infringenovation-secrets/.

61.S.Lohr,“BigData,TryingtoBuildBetterWorkers,”TheNewYorkTimes(April21,2013),p.BU4.

62.“BigData:TheNextFrontierforInnovation,Competition,andProductivity,”McKinseyGlobalInstitute(June2011),p.23.

63.S.Lohr,“BigData,TryingtoBuildBetterWorkers,”TheNewYorkTimes(April21,2013),p.BU4.

64.McAfee,E.Brynjolfsson,“BigData:TheManagementRevolution,”HarvardBusinessReview(October2012),p.4.

65.Ibid.

66.J.Schramm,“FutureFocus:TheTroubleWithAlgorithms,”HRMagazine(November2013),58(11),p.80.

67.M.L.Brosnan,C.S.Farley,D.Gartside,H.Tambe,“HowWellDoYouKnowYourWorkforce?”Accenture(October2013),http://www.accenture.com/us-en/outlook/Pages/outlook-journal-2013-how-well-do-you-know-your-workforce-analytics.aspx.

68.CharteredInstituteofPersonnelandDevelopment,TalentAnalyticsandBigData—TheChallengeforHR(London,UK:CIPD,2013),p.2,http://www.oracle.com/us/products/applications/human-capital-management/talent-analytics-and-big-data-2063584.pdf.

69.S.Lohr,“BigData,TryingtoBuildBetterWorkers,”TheNewYorkTimes(April21,2013),p.BU4.

70.Ibid.

71.http://www.shrm.org/hrdisciplines/staffingmanagement/articles/pages/tapping-talent-analytics-potential.aspx(retrievedMarch15,2014).

72.BostonConsultingGroup,“PeopleManagementTranslatesIntoSuperiorEconomicPerformance,”[pressrelease](August2,2012),http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-110525/.

73.K.W.Mossholder,H.A.Richardson,R.P.Settoon,“HumanResourceSystemsandHelpinginOrganizations:ARelationalPerspective,”AcademyofManagementReview(2011),36(1),pp.33–52.

74.D.Mueller,S.Strohmeier,C.Gasper,“HRISDesignCharacteristics:TowardsaGeneralResearchFramework,”3rdEuropeanAcademicWorkshoponElectronicHumanResourceManagement(May2010).

75.S.Pande,P.Khanna,“LeveragingHumanResourceInformationSystems:AlignmentofBusinessWithTechnology,”InternationalJournalofComputerApplications(2012),p.56.

76.SocietyforHumanResourceManagement,http://www.shrm.org/Publications/hrmagazine/EditorialContent/Pages/0808hrsolutions.aspx(retrieved,July7,2010).

77.J.Walker,“CompaniesTradeinHunch-BasedHiringforComputerModeling,”TheNewYorkTimes(September20,2012),p.B1.

78.Wikipedia.(2014).Netflix.RetrievedJune15,2014fromhttp://en.wikipedia.org/wiki/Netflix.

79.P.McCord,“HowNetflixReinventedHR,”HarvardBusinessReview92(1/2),pp.70–76.

80.P.Sikka,NetflixWillRaiseItsPricesAfterBetter-Than-ExpectedEarnings,MarketRealist.com.Retrievedfromhttp://marketrealist.com/2014/04/netflix-will-raise-prices-better-expected-earnings/.

81.P.McCord,“HowNetflixReinventedHR,”HarvardBusinessReview,92(1/2),pp.70–76.

82.Ibid.

83.Ibid.

84.Ibid.

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4.http://uniformguidelines.com/uniformguidelines.html#18/(retrievedMay24,2014).

5.http://www.eeoc.gov/policy/docs/factemployment_procedures.html(retrievedMay24,2014).

6.http://www.eeoc.gov/laws/statutes/epa.cfm(retrievedJuly20,2010).

7.Ibid.

8.http://www.eeoc.gov/laws/statutes/titlevii.cfm(retrievedMay24,2014).

9.http://www.eeoc.gov/policy/docs/factemployment_procedures.html(retrievedMay24,2014).

10.http://www.eeoc.gov/policy/docs/factemployment_procedures.html(retrievedMay24,2014).

11.http://www.eeoc.gov/laws/statutes/titlevii.cfm(retrievedJuly21,2010).

12.http://www3.ce9.uscourts.gov/jury-instructions/node/182/(retrievedMay24,2014).

13.http://www.eeoc.gov/laws/statutes/titlevii.cfm(retrievedMay24,2014).

14.http://www.eeoc.gov/laws/statutes/titlevii.cfm(retrievedMay24,2014).

15.http://www.dol.gov/compliance/laws/comp-vevraa.htm(retrievedMay24,2014).

16.http://www.eeoc.gov/facts/fs-preg.html(retrievedMay24,2014).

17.http://www.ada.gov/pubs/adastatute08.htm(retrievedMay24,2014).

18.Ibid.

19.http://www.ada.gov/employmt.htm(retrievedMay24,2014).

20.http://www.ada.gov/pubs/adastatute08.htm(retrievedMay24,2014).

21.http://www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm(retrievedMay24,2014).

22.CivilRightsActof1991—PublicLaw102-166.

23.http://www.eeoc.gov/employers/remedies.cfm(retrievedMay24,2014).

24.http://www.eeoc.gov/eeoc/history/35th/thelaw/cra_1991.html(retrievedMay24,2014).

25.http://www.dol.gov/vets/usc/vpl/usc38.htm#4301/(retrievedMay24,2014).

26.http://www.dol.gov/elaws/vets/userra/userra.asp(retrievedMay24,2014).

27.http://www.dol.gov/vets/usc/vpl/usc38.htm#4301/

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28.http://www.dol.gov/vets/regs/fedreg/final/2005023960.htm#regs/(retrievedMay24,2014).

29.http://www.eeoc.gov/laws/statutes/gina.cfm(retrievedMay24,2014).

30.http://www.eeoc.gov/laws/statutes/gina.cfm(retrievedMay24,2014).

31.http://eeoc.gov/eeoc/(retrievedMay24,2014).

32.http://eeoc.gov/eeoc/(retrievedMay24,2014).

33.http://www.eeoc.gov/employers/eeo1survey/faq.cfm(retrievedMay21,2014).

34.http://www.eeoc.gov/laws/statutes/titlevii.cfm

(retrievedMay24,2014).

35.http://eeoc.gov/eeoc/statistics/enforcement/charges.cfm(retrievedMay21,2014).

36.PennsylvaniaStatePolicev.Suders(03-95),542U.S.129(2004),325F.3d432.

37.http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title29/29cfr1608_main_02.tpl(retrievedJuly21,2010).

38.http://www.shrm.org/templatestools/hrqa/pages/whenisanaapneeded.aspx(retrievedMay24,2014).

39.41CFRPart60-1.

40.Ibid.

41.http://www.supremecourt.gov/opinions/12pdf/11-345_l5gm.pdf(retrievedMay25,2014).

42.http://www.nytimes.com/2014/04/23/us/supreme-court-michigan-affirmative-action-ban.html?_r=0(retrievedMay25,2014).

43.Z.T.Kalinoski,D.Steele-Johnson,E.J.Peyton,K.A.Leas,J.Steinke,N.A.Bowling,“AMeta-AnalyticEvaluationofDiversityTrainingOutcomes,”JournalofOrganizationalBehavior(2013),34(8),pp.1076–1104.

44.A.Joshi,H.Roh,“TheRoleofContextinWorkTeamDiversityResearch:AMeta-AnalyticReview,”AcademyofManagementJournal(2009),52(3),pp.599–627.

45.E.Kearney,D.Gebert,S.C.Voelpel,“WhenandHowDiversityBenefitsTeams:TheImportanceofTeamMembers’NeedforCognition,”AcademyofManagementJournal(2009),52(3),pp.581–598.

46.C.L.Holladay,M.A.Quiñones,“TheInfluenceofTrainingFocusandTrainer

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51.M.A.Runco,S.Acar,“DivergentThinkingasanIndicatorofCreativePotential,”CreativityResearchJournal(2012),24(1),pp.66–75.

52.F.Stevens,V.Plaut,J.Sanchez-Burks,“UnlockingtheBenefitsofDiversity,”JournalofAppliedBehavioralScience(2008),44(1),pp.116–133.

53.S.Benard,L.Doan,“TheConflict-CohesionHypothesis:Past,Present,andPossibleFutures,”AdvancesinGroupProcesses(2011),28,pp.189–225.

54.E.A.Okoro,M.C.Washington,“WorkforceDiversityandOrganizationalCommunication:AnalysisofHumanCapitalPerformanceandProductivity,”JournalofDiversityManagement(2012),7(1),pp.57–62.

55.S.D.Sidle,“BuildingaCommittedGlobalWorkforce:DoesWhatEmployeesWantDependonCulture?”AcademyofManagementPerspectives(2009),23(1),pp.79–80.

56.http://www.eeoc.gov/facts/fs-sex.html(retrievedMay24,2014).

57.http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=477&invol=57(retrievedMay24,2014).

58.http://www.eeoc.gov/policy/docs/currentissues.html(retrievedMay24,2014).

59.http://www.law.cornell.edu/supct/html/96-568.ZO.html(retrievedMay24,2014).

60.Ibid.

61.Ibid.

62.Ibid.

63.http://www.shrm.org/legalissues/federalresources/pages/headscarf-accommodation-muslim-applicant.aspx(retrievedMay23,2014).

64.Ibid.

65.http://www.eeoc.gov/eeoc/newsroom/release/4-4-06.cfm(retrievedMay24,2014).

66.http://www.eeoc.gov/eeoc/plan/2013parhigh_discussion.cfm(retrievedMay24,2014).

67.http://www.eeoc.gov/eeoc/systemic/(retrievedMay24,2014).

68.Ibid.

69.http://www.insidecounsel.com/2012/02/06/labor-increased-litigation-under-the-adaaa/(retrievedMay23,2014).

70.Ibid.

71.http://www1.eeoc.gov/eeoc/newsroom/release/5-15-13.cfm(retrievedMay23,2014).

72.http://www.eeoc.gov/eeoc/newsroom/release/7-30-13a.cfm(retrievedMay23,2014).

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29.K.Swisher,“AQuestionofManagement,”TheWallStreetJournal(June2,2009),p.R4.

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40.J.I.Hancock,D.G.Allen,F.A.Bosco,K.R.McDaniel,C.A.Pierce,“Meta-AnalyticReviewofEmployeeTurnoverasaPredictorofFirmPerformance,”JournalofManagement(2013),39(3),pp.573–603.

41.M.Levinson,“NineThingsManagersandEmployeesNeedtoKnowAboutLayoffs,”CIO(March18,2008),http://www.cio.com/article/198702/Nine_Things_Managers_and_Employees_Need_to_Know_About_Layoffs/

42.F.Gandolfi,“HRStrategiesThatCanTaketheStingoutofDownsizing-RelatedLayoffs,”IveyBusinessJournal(July/August2008),http://iveybusinessjournal.com/topics/strategy/hr-strategies-that-can-take-the-sting-out-of-downsizing-related-layoffs#.U4oRwygkTv4/.

43.Ibid.

44.F.Gandolfi,“HRStrategiesThatCanTaketheStingoutofDownsizing-RelatedLayoffs,”IveyBusinessJournal(July/August2008),http://iveybusinessjournal.com/topics/strategy/hr-strategies-that-can-take-the-sting-out-of-

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46.E.Krell,“MakeItEasiertoSayGoodbye,”HRMagazine(2012),57(10),pp.40–44.

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53.B.Izzo,PNarancic,“Vizcainov.

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61.N.Landrum,S.Edwards,SustainableBusiness,AnExecutive’sPrimer(NewYork,NY:BusinessExpertPress,2009).

62.Ibid.

63.Cote,D.M.(2013,June).Honeywell’sCEOonhowheavoidedlayoffs.HarvardBusinessReview.Retrievedfromhttp://hbr.org/2013/06/honeywells-ceo-on-how-he-avoided-layoffs/.

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2.D.G.Allen,P.C.Bryant,J.M.Vardaman,“RetainingTalent:ReplacingMisconceptionsWithEvidence-BasedStrategies,”AcademyofManagementPerspectives(2010),24(2),2010,pp.48–64.

3.D.Autor,L.Katz,M.Kearney,“TrendsinU.S.WageInequality:RevisingtheRevisionists,”TheReviewofEconomicsandStatistics(2008),90(2),pp.300–323.

4.E.Glazer,“ProblemsandSolutions—WeAskedHRExecutives:What’sYourBiggestChallenge?”TheWallStreetJournal(October24,2011),p.R-2.

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6.J.M.Henderson,“JobStabilityvs.JobSatisfaction?MillennialsMayHavetoSettleforNeither,”Forbesblog(December22,2012),http://www.forbes.com/sites/jmaureenhenderson/2012/12/22/job-stability-vs-job-satisfaction-millennials-may-have-to-settle-for-neither/.

7.K.Lundby(Ed.),GoingGlobal:PracticalApplicationsandRecommendationsforHRandODProfessionalsintheGlobalWorkplace(SanFrancisco,CA:Jossey-Bass,2010),pp.114–115.

8.S.Raice,“Friend—andPossibleEmployee,”TheWallStreetJournal(October24,2011),p.A-2.

9.J.Barrett-Poindexter,“HowtoFindOutWhataCompany’sCultureIsReallyLike,”

Glassdoorblog(July22,2013),http://www.glassdoor.com/blog/find-companys-culture/.

10.G.Segal,“TheRealWaytoBuildaNetwork,”Fortune(February6,2013),pp.23–32.

11.J.Valentino-Devries,“SocialMediaandBiasinHiring,”TheWallStreetJournal,(November21,2013),p.B-4.

12.V.Elmer,“HiringWithoutaNet:Groupon’sRecruiterSpeaks,”Fortune(July25,2011),p.34.

13.J.I.Hancock,D.G.Allen,F.A.Bosco,K.R.McDaniel,C.A.Pierce,“Meta-AnalyticReviewofEmployeeTurnoverasaPredictorofFirmPerformance,”JournalofManagement(2013),39(3),pp.573–603.

14.R.Bonet,P.Cappelli,M.Hamori,“LaborMarketIntermediariesandtheNewParadigmforHumanResources,”TheAcademyof

ManagementAnnals(2013),7(1),pp.341–392.

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18.Ibid.

19.C.C.Chen,C.S.Hsu,P.S.Tsai,“TheProcessMechanismsLinkingRecruiterPositiveMoodsandOrganizationalAttraction,”InternationalJournalofSelectionandAssessment(2013),21(4),pp.376–387.

20.S.Overman,“HelpRecruitersVaultAhead,”StaffingManagementMagazine(2006),2(2),pp.32–35.

21.C.B.Felsen,E.K.Shaw,J.M.Ferrante,L.J.Lacroix,B.F.Crabtree,“StrategiesforIn-PersonRecruitment:LessonsLearnedFromaNewJerseyPrimaryCareResearchNetwork(NJPCRN)Study,”TheJournaloftheAmericanBoardofFamilyMedicine(2010),23(4),pp.523–533.

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23.C.C.Chen,C.S.Hsu,P.S.Tsai,“The

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24.SocietyforHumanResourceManagement,“CostperHire”[spreadsheettemplate],http://www.shrm.org/templatestools/samples/metrics/documents/cost%20per%20hire.xls(retrievedJune10,2014).

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26.D.DeLeon,K.LaVelle,S.Cantrell,“TrendsReshapingtheFutureofHR:TappingSkillsAnywhere,Anytime,”Accenture(January22,2013),p.3.

27.HRexecutivesarealsoprojectingsignificantworkershortagesinmanyprofessionsintenmajorindustriesby2020

and2030.

28.P.Cappelli,J.R.Keller,“ClassifyingWorkintheNewEconomy,”AcademyofManagementReview(2013),38(4),pp.575–596.

29.D.Gartsideetal.,“TrendsReshapingtheFutureofHR:TheRiseoftheExtendedWorkforce,”Accenture(January22,2013),p.3.

30.D.DeLeon,K.LaVelle,S.Cantrell,“TrendsReshapingtheFutureofHR:TappingSkillsAnywhere,Anytime,”Accenture(January22,2013),p.5.

31.P.Cappelli,J.R.Keller,“ClassifyingWorkintheNewEconomy,”AcademyofManagementReview(2013),38(4),pp.575–596.

32.D.Gartsideetal.,“TrendsReshapingtheFutureofHR:TheRiseoftheExtendedWorkforce,”Accenture(January22,2013),p.

4.

33.Hoover ’sInc.(2014).LinkedIn[Hoover ’sCompanyRecords:In-DepthRecords].RetrievedJuly17,2014,fromLongIslandUniversityAcademicDatabase.

34.G.Anders,“Insidertradingfortalent,”Forbes(November18,2013),192(7),p.1-1.

35.LinkedInCorporation.(2014).AboutLinkedIn.RetrievedJune3,2014,fromhttp://press.linkedin.com/about/.

36.Ibid.

Chapter61.CareerBuilder,“BadHiresCanBeCostly,”HRMagazine(February2013),p.18.

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14.Ibid.

15.“Title29:Labor,”http://www.gpo.gov/fdsys/pkg/CFR-2011-title29-vol4/xml/CFR-2011-title29-vol4-part1607.xml(retrievedJune9,2014).

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18.USEqualEmploymentOpportunityCommission,http://www.eeoc.gov(retrievedJuly9,2013).

19.D.G.Allen,P.C.Bryant,J.M.Vardaman,“RetainingTalent:ReplacingMisconceptions

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22.M.Henricks,“InterviewforIntegrity,”Entrepreneur(April2009),p.22.

23.UniformGuidelinesonEmployeeSelectionProcedures,“IV.A.Criterion-RelatedValidity”(2013),http://www.uniformguidelines.com/questionandanswers.html#5(retrievedJune10,2014).

24.USDepartmentofLabor,“EmployeePolygraphProtectionActof1988.”(Pub.L.

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32.USDepartmentofLabor,“Drug-FreeWorkplacePolicyBuilder:Section7—Drug

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36.A.Lashinsky,“LarryPageInterview,”Fortune(February6,2012),pp.98–99.

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38.J.Alsever,“HowtoGetaJob:Show,Don’tTell,”Fortune(March19,2012),pp.29–31.

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42.http://www.shrm.org/templatestools/samples/interviewquestions/pages/competenciesksa%E2%80%99s.aspx(retrievedJune7,2014).

43.M.Henricks,“InterviewforIntegrity,”Entrepreneur(April2009),p.22.

44.USEqualEmploymentOpportunityCommissionandFederalTradeCommission,“BackgroundChecks:WhatEmployersNeedtoKnow,”http://www.eeoc.gov/eeoc/publications/background_checks_employers.cfm(June8,2014).

45.D.B.Weisenfeld,“ColoradoBecomes9thStatetoLimitEmployerCreditChecks”(April30,2013),http://www.xperthr.com/news/colorado-becomes-9th-state-to-limit-employer-credit-checks/9819/.

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49.B.Yuille,“FourNewJob-SearchTrends,”Forbes(February23,2010),http://www.forbes.com/2010/02/23/job-search-trends-personal-finance-resume.html.

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52.G.M.Saylin,T.C.Horrocks,“TheRisksof

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56.Wikipedia.(2014).WhatsApp.RetrievedJuly17,2014,fromhttp://en.wikipedia.org/wiki/WhatsApp.

57.G.Anders.(2014,February19).He

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58.C.Gordon(2012,October5).GettingajobatFacebook:Insidethe“Meritocratic”hiringprocess.RetrievedfromtheAOLwebsiteathttp://jobs.aol.com/articles/2012/10/05/want-to-get-a-job-at-facebook-weve-demystified-the-hiring-proc/.

59.C.Bueno(2012,July20).GetthatjobatFacebook.RetrievedfromtheFacebookEngineeringpageathttps://www.facebook.com/notes/facebook-engineering/get-that-job-at-facebook/10150964382448920/.

60.Ibid.

61.Ibid.

62.Forbes.(n.d.).TheWorld’sBillionaires:#46BrianActon.RetrievedJuly17,2014,fromhttp://www.forbes.com/profile/brian-acton/.

63.Wikipedia.(2014).WhatsApp.RetrievedJuly17,2014,fromhttp://en.wikipedia.org/wiki/WhatsApp.

Chapter71.R.C.Rose,N.Kumar,O.B.Pak,“TheEffectofOrganizationalLearningonOrganizationalCommitment,JobSatisfactionandWorkPerformance,JournalofAppliedBusinessResearch(2011),25(6).

2.D.G.Allen,P.C.Bryant,J.M.Vardaman,“RetainingTalent:ReplacingMisconceptionsWithEvidence-BasedStrategies,”AcademyofManagementPerspectives(2010),24(2),pp.48–64.

3.K.Pajo,A.Coetzer,N.Guenole,“FormalDevelopmentOpportunitiesandWithdrawalBehaviorbyEmployeesinSmallandMedium-SizedEnterprises,”JournalofSmallBusinessManagement(2010),48(3),pp.281–301.

4.S.K.Johnson,L.O.Garrison,G.H.Broome,J.W.Fleenor,J.L.Steed,“GofortheGoals:

RelationshipsBetweenGoalSettingandTransferofTrainingFollowingLeadershipDevelopment,”AcademyofManagementLearning&Education(2012),11(4),pp.555–569.

5.M.Festing,“StrategicHumanResourceManagementinGermany,”AcademyofManagementPerspectives(2012),26(2),pp.37–54.

6.A.Fox,“HelpManagersShine,”HRMagazine(February2013),pp.43–46.

7.B.Schyns,T.Kiefer,R.Kerschreiter,A.Tymon,“TeachingImplicitLeadershipTheoriestoDevelopLeadersandLeadership:HowandWhyItCanMakeaDifference,”AcademyofManagementLearning&Education(2011),10(3),pp.397–408.

8.S.K.Johnson,L.O.Garrison,G.H.Broome,J.W.Fleenor,J.L.Steed,“GofortheGoals:RelationshipsBetweenGoalSettingandTransferofTrainingFollowingLeadership

Development,AcademyofManagementLearning&Education(2012),11(4),pp.555–569.

9.http://www.entrepreneur.com/article/224440/(retrievedJune14,2014).

10.T.Sitzmann,K.Ely,K.G.Brown,K.N.Bauer,“Self-AssessmentofKnowledge:ACognitiveLearningorAffectiveMeasure?”AcademyofManagementLearning&Education(2010),(9)2,pp.169–191.

11.D.G.Allen,P.C.Bryant,J.M.Vardaman,“RetainingTalent:ReplacingMisconceptionsWithEvidence-BasedStrategies,”AcademyofManagementPerspectives(2010),24(2),pp.48–64.

12.D.M.Sluss,R.E.Ployhart,M.G.Cobb,B.E.Ashforth,“GeneralizingNewcomers’RelationalandOrganizationalIdentifications:ProcessandPrototypicality,”AcademyofManagementJournal(2012),55(4),pp.949–

975.

13.R.E.Silverman,“FirstDayonJob:NotJustPaperwork,”TheWallStreetJournal(May28,2013),p.D1.

14.D.G.Allen,L.R.Shanock,“PerceivedOrganizationalSupportandEmbeddednessasKeyMechanismsConnectingSocializationTacticstoCommitmentandTurnoverAmongNewEmployees,”JournalofOrganizationalBehavior(2013),34(3),pp.350–369.

15.C.Tschopp,G.Grote,M.Gerber,“HowCareerOrientationShapestheJobSatisfaction–TurnoverIntentionLink,”JournalofOrganizationalBehavior(2014),35(2),pp.151–171.

16.D.G.Allen,P.C.Bryant,J.M.Vardaman,“RetainingTalent:ReplacingMisconceptionsWithEvidence-BasedStrategies,”AcademyofManagementPerspectives(2010),24(2),pp.48–64.

17.Ibid.

18.C.B.Cox,M.F.Beier,“TooOldtoTrainorReprimand:TheRoleofIntergroupAttributionBiasinEvaluatingOlderWorkers,”JournalofBusinessandPsychology(2013),pp.1–10.

19.S.Robbins,M.Coulter,Management(SaddleRiver,NJ:PearsonEducation,2014),p.466.

20.P.E.Kennedy,S.Y.Chyung,D.J.Winiecki,R.O.Brinkerhoff,“TrainingProfessionals’UsageandUnderstandingofKirkpatrick’sLevel3andLevel4Evaluations,”InternationalJournalofTrainingandDevelopment(2014),18(1),pp.1–21.

21.D.S.Chiaburu,J.L.Huang,H.M.Hutchins,R.G.Gardner,“Trainees’PerceivedKnowledgeGainUnrelatedtotheTrainingDomain:TheJointActionofImpressionManagementandMotives,”InternationalJournalofTrainingandDevelopment(2014),

18(1),pp.37–52.

22.Ibid.

23.D.T.Hall,CareersinandoutofOrganizations(ThousandOaks,CA:SAGE,2002).

24.C.Hu,S.Wang,C.C.Yang,T.Y.Wu,“WhenMentorsFeelSupported:RelationshipsWithMentoringFunctionsandProtégés’PerceivedOrganizationalSupport,”JournalofOrganizationalBehavior(2014),35(1),pp.22–37.

25.S.Humphrey,F.Morgeson,M.Mannor,“DevelopingaTheoryoftheStrategicCoreofTeams:ARoleCompositionModelofTeamPerformance,”JournalofAppliedPsychology(2009),(94)1,pp.48–61.

26.D.Super,D.Hall,“CareerDevelopment:ExplorationandPlanning,”AnnualReviewofPsychology(1978),29,pp.333–372.

27.http://business.financialpost.com/2014/01/09/gamification-newest-tool-in-corporate-training-arsenal/(retrievedJune11,2014).

28.ADP(Ed.),“OutsourcingandtheFutureofHR,”ADP(2012),p.3.

29.JonHay(Ed.),“HROutsourcingTrendsandInsights2009,”HewittAssociates(2009),p.10.

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32.S.Warnes(2014,July1).70%male,50%white:WhySiliconValleyneedstodiversify.Mirror.Retrievedfrom

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33.P.Mejia(2014,July11).Codes,notbros:Googlepledges$50milliontoladiesintech.Newsweek.Retrievedfromhttp://www.newsweek.com/codes-not-bros-google-pledges-50-million-ladies-tech-258298/.

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35.P.Mejia(2014,July11).Codes,notbros:Googlepledges$50milliontoladiesintech.Newsweek.Retrievedfromhttp://www.newsweek.com/codes-not-bros-google-pledges-50-million-ladies-tech-258298/.

36.Ibid.

37.V.Jones(2014,July8).Howtohookuptechsectorwithtalent.CNN.com.Retrievedfromhttp://www.cnn.com/2014/07/08/opinion/jones-tech-minorities/.

38.P.Mejia(2014,July11).Codes,notbros:Googlepledges$50milliontoladiesintech.Newsweek.Retrievedfromhttp://www.newsweek.com/codes-not-bros-google-pledges-50-million-ladies-tech-258298/.

Chapter81.J.Welch,S.Welch,“DealingWiththeMorning-AfterSyndromeatFacebook,”Fortune(March19,2012),p.92.

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3.S.K.Johnson,L.O.Garrison,G.H.Broome,J.W.Fleenor,J.L.Steed,“GofortheGoals:RelationshipsBetweenGoalSettingandTransferofTrainingFollowingLeadershipDevelopment,”AcademyofManagementLearning&Education(2012),11(4),pp.555–569.

4.“MasterClass,”Businessweek(May6–12,2013),p.83.

5.K.Gurchiek,“NewHRStandardon

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6.C.O.Longenecker,“HowtheBestMotivateWorkers,”IndustrialManagement(2011),53(1),pp.8–13.

7.S.A.Culbert,“GetRidofthePerformanceReview,”TheWallStreetJournal(October20,2008),p.R4.

8.D.G.Allen,P.C.Bryant,J.M.Vardaman,“RetainingTalent:ReplacingMisconceptionsWithEvidence-BasedStrategies,”AcademyofManagementPerspectives(2010),24(2),pp.48–64.

9.A.S.DeNisi,“ManagingPerformancetoChangeBehavior,”JournalofOrganizationalBehaviorManagement(2011),31(4),pp.262–276.

10.I.A.Scott,G.Phelps,C.Brand,“AssessingIndividualClinicalPerformance:APrimerforPhysicians,”InternalMedicineJournal

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11.Ibid.

12.http://www.shrm.org/templatestools/toolkits/pages/managingemployeeperformance.aspx(retrievedJune20,2014).

13.SocietyforHumanResourceManagement,PerformanceManagementSurvey(2000),http://www.shrm.org/Research/SurveyFindings/Documents/Performance%20Management%20Survey.pdfp.7.

14.http://www.shrm.org/hrdisciplines/employeerelations/articles/Pages/UsedtoMotivateWeedOut.aspx(retrievedJune20,2014).

15.P.F.Buller,G.M.McEvoy,“Strategy,HumanResourceManagementandPerformance:SharpeningLineofSight,”HumanResourceManagementReview(2012),22(1),pp.43–56.

16.K.Blanchard,D.Hudson,E.Wills,The

OneMinuteEntrepreneur(NewYork,NY:Currency,2008).

17.G.Blickle,J.A.Meurs,A.Wihler,C.Ewen,A.Plies,S.Günther,“TheInteractiveEffectsofConscientiousness,OpennesstoExperience,andPoliticalSkillonJobPerformanceinComplexJobs:TheImportanceofContext,”JournalofOrganizationalBehavior(2013),34(8),pp.1145–1164.

18.P.Mussel,“IntroducingtheConstructCuriosityforPredictingJobPerformance,”JournalofOrganizationalBehavior(2013),34(4),pp.453–472.

19.K.Blanchard,D.Hudson,E.Wills,TheOneMinuteEntrepreneur(NewYork,NY:Currency,2008).

20.J.Goodale,“Behaviorally-BasedRatingScales:TowardanIntegratedApproachtoPerformanceAppraisal,”ContemporaryProblemsinPersonnel(Chicago,IL:St.Clair

Press,1977),p.247.

21.K.Blanchard,D.Hutson,E.Wills,TheOneMinuteEntrepreneur(NewYork,NY:Currency,2008).

22.Ibid.

23.D.G.Allen,P.C.Bryant,J.M.Vardaman,“RetainingTalent:ReplacingMisconceptionsWithEvidence-BasedStrategies,”AcademyofManagementPerspectives(2010),24(2),pp.48–64.

24.A.Cohen,“WhenDoYouDoYourBestThinking?”M.Buckleyresponse,BusinessWeek(May14,2015),p.78.

25.H.K.Fulk,R.L.Bell,N.Bodie,“TeamManagementbyObjectives:EnhancingDevelopingTeams’Performance,”JournalofManagementPolicyandPractice(2011),12(3),pp.17–26.

26.Wikipedia.com(retrievedJanuary17,

2011).ThefirstknownusesofthetermSMARTgoalsoccurintheNovember1981issueofManagementReviewbyGeorgeT.Doran.

27.E.Gibson,“TheStop-ManagingGuidetoManagement,”Businessweek(June15,2009),p.73.

28.H.K.Fulk,R.L.Bell,N.Bodie,“TeamManagementbyObjectives:EnhancingDevelopingTeams’Performance,”JournalofManagementPolicyandPractice(2011),12(3),pp.17–26.

29.S.McCartney,“HowUSAirwaysVaultedtoFirstPlace,”TheWallStreetJournal(July22,2009),p.D3.

30.http://www.shrm.org/publications/hrnews/pages/announcements-on-stack-rankings-touch-off-debate.aspx(retrievedJune22,2014).

31.S.Ovide,“MicrosoftAbandonsDreaded

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32.R.Karlgaad,“DoJerksAlwaysWin?”Forbes(December29,2014),p.44.

33.K.Blanchard,D.Hutson,E.Wills,TheOneMinuteEntrepreneur(NewYork,NY:Currency,2008).

34.M.Ohland,M.Loughry,D.Woehr,C.Finelli,L.Bullard,R.Felder,...D.Schmucker,“TheComprehensiveAssessmentofTeamMemberEffectiveness:DevelopmentofaBehaviorallyAnchoredRatingScaleforSelfandPeerEvaluation,”AcademyofManagementLearning&Education(2012).

35.A.Sudarsan,“ConcurrentValidityofPeerAppraisalofGroupWorkforAdministrativePurposes,”TheIUPJournalofOrganizationalBehavior(2010),9(1&2),pp.73–86.

36.S.Brutus,M.Donia,S.Ronen,“CanBusinessStudentsLearntoEvaluateBetter?

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37.http://www.shrm.org/hrdisciplines/employeerelations/articles/Pages/ManagerEmployeePerceptions.aspx(retrievedJune20,2014).

38.N.Castle,H.Garton,G.Kenward,“Confidencevs.Competence:BasicLifeSupportSkillsofHealthProfessionals,”BritishJournalofNursing(2007),16,pp.664–666.

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40.K.Sullivan,C.Hall,“IntroducingStudentstoSelf-Assessment,”Assessment&EvaluationinHigherEducation(1997),22,pp.289–305.

41.B.McKinstry,H.Peacock,D.Blaney,“Can

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44.E.M.Mone,M.London,EmployeeEngagementThroughEffectivePerformanceManagement:APracticalGuideforManagers(NewYork,NY:Routledge/Taylor&Francis,2011).

45.H.Aguinas,PerformanceManagement(UpperSaddleRiver,NJ:PearsonEducation,2007),p.184.

46.A.Thomas,J.Palmer,J.Feldman,“ExaminationandMeasurementofHaloviaCurvilinearRegression:ANewApproachtoHalo,”JournalofAppliedSocialPsychology(February2009),39(2),pp.350–358.

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48.K.Blanchard,D.Hutson,E.Wills,TheOneMinuteEntrepreneur(NewYork,NY:Currency,2008).

49.R.Albergotti,“AtFacebook,BossisaDirtyWord,”TheWallStreetJournal(December26,2014),pp.B1,B2.

50.C.Dusterhoff,J.B.Cunningham,J.N.MacGregor,“TheEffectsofPerformanceRating,Leader-MemberExchange,PerceivedUtility,andOrganizationalJusticeonPerformanceAppraisalSatisfaction:ApplyingaMoralJudgmentPerspective,”JournalofBusinessEthics(2014),119(2),pp.265–273.

51.J.McGregor,“JobReviewin140Keystrokes,”Businessweek(March23&30,2009),p.58.

52.D.G.Allen,P.C.Bryant,J.M.Vardaman,“RetainingTalent:ReplacingMisconceptionsWithEvidence-BasedStrategies,”AcademyofManagementPerspectives(2010),24(2),pp.48–64.

53.E.Gibson,“TheStop-ManagingGuidetoManagement,”Businessweek(June15,2009),p.73.

54.Ibid.

55.D.G.Allen,P.C.Bryant,J.M.Vardaman,

“RetainingTalent:ReplacingMisconceptionsWithEvidence-BasedStrategies,”AcademyofManagementPerspectives(2010),24(2),pp.48–64.

56.T.Gutner,“WaystoMaketheMostofaNegativeJobReview,”TheWallStreetJournal(January13,2009),p.D4.

57.Ibid.

58.Hoover ’sInc.(2014).Amazon.com,Inc.[Hoover ’sCompanyRecords—CompetitiveLandscape/In-DepthRecords].RetrievedJuly13,2014fromLongIslandUniversityAcademicDatabase.

59.Ibid.

60.B.Stone,“WhyIt’sSoDifficulttoClimbAmazon’sCorporateLadder,”BloombergBusinessWeek(October15,2013).Retrievedfromhttp://www.businessweek.com/articles/2013-10-15/careers-at-amazon-why-its-so-hard-to-

climb-jeff-bezoss-corporate-ladder/.

61.Ibid.

62.Ibid.

63.Ibid.

64.T.Soper,“Here’sWhatEmployeesLoveandHateAboutWorkingatAmazon,Microsoft,”GeekWire(December13,2012).Retrievedfromhttp://www.geekwire.com/2012/employees-love-hate-working-amazon-microsoft/.

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2.M.W.Kramer,R.J.Meisenbach,G.J.Hansen,“Communication,Uncertainty,andVolunteerMembership,”JournalofAppliedCommunicationResearch(2013),41(1),pp.18–39.

3.D.B.Arnett,C.M.Wittmann,“ImprovingMarketingSuccess:TheRoleofTacitKnowledgeExchangeBetweenSalesandMarketing,”JournalofBusinessResearch(2014),67(3),pp.324–331.

4.R.Hurley,“TrustMe,”TheWallStreetJournal(October24,2011),p.R4.

5.“JackWelch’sLessonsforSuccess,”Fortune(1993),127(2),pp.86–93.

6.R.Hurley,“TrustMe,”TheWallStreetJournal(October24,2011),p.R4.

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8.P.H.Kim,K.Dirks,C.D.Cooper,“TheRepairofTrust:ADynamicBilateralPerspectiveandMultilevelConceptualization,”AcademyofManagementReview(2009),34(3),pp.401–422.

9.J.Paskin,“Findingthe‘I’inTeam,”Businessweek(February18–24,2013),p.78.

10.Dreamworks,http://www.dreamworksstudios.com(retrievedMay16,2011).

11.J.Birkinshaw,“WhyGoodManagementIsSoDifficult,”StrategicHRReview(2014),13(2).

12.E.Bernstein,“TheHiddenBenefitsofChitchat,”TheWallStreetJournal(August13,2013),pp.D1–D2.

13.PublicRadioNewsBroadcast,WFCR88.5(May28,2010).

14.J.Robinson,“E-mailIsMakingYouStupid?”Entrepreneur(March2010),pp.61–63.

15.L.E.Sears,Y.Shi,C.R.Coberley,J.E.Pope,“OverallWell-BeingasaPredictorofHealthCare,Productivity,andRetentionOutcomesinaLargeEmployer,”PopulationHealthManagement(2013),16(6),pp.397–405.

16.B.A.Scott,C.M.Barnes,D.T.Wagner,“ChameleonicorConsistent?AMultilevelInvestigationofEmotionalLaborVariabilityandSelf-Monitoring,”Academyof

ManagementJournal(2012),55(4),pp.905–926.

17.K.Hannon,“It’sNeverTooLatetoLoveYourJob,”AARPMagazine(May2013),pp.44–45.

18.R.Dunham,J.Herman,“DevelopmentofaFemaleFacesScaleforMeasuringJobSatisfaction,”JournalofAppliedPsychology(1975),60(5),pp.629–631.

19.P.Spector,“MeasurementofHumanServiceStaffSatisfaction:DevelopmentoftheJobSatisfactionSurvey,”AmericanJournalofCommunityPsychology(1985),13(6),pp.693–713.

20.C.Ai-Hong,J.S.Nafisah,M.N.A.Rahim,“ComparisonofJobSatisfactionAmongEightHealthCareProfessionsinPrivate(Non-government)Settings,”TheMalaysianJournalofMedicalSciences(2012),19(2),p.19.

21.P.Spector,“MeasurementofHumanServiceStaffSatisfaction:DevelopmentoftheJobSatisfactionSurvey,”AmericanJournalofCommunityPsychology(1985),13(6),pp.693–713.

22.D.C.Wyld,“DoesMoreMoneyBuyMoreHappinessontheJob?”AcademyofManagementPerspective(2011),25(1),pp.101–102.

23.http://www.shrm.org/hrdisciplines/employeerelations/articles/pages/miserable-workers.aspx(retrievedJune25,2014).

24.T.Lytle,“EmployeeRelations:GiveEmployeesaSay;HowtoEncourageIdeasFromEmployees—andPicktheBestOnestoActon,”HRMagazine–Alexandria(2011),56(10),p.68.

25.R.Reuteman,“GenerationGaps,”Entrepreneur(March2015),pp.42–48.

26.G.F.Cavanagh,D.J.Moberg,M.Velasquez,

“TheEthicsofOrganizationalPolitics,”AcademyofManagementReview(1981),6(3),pp.363–374.

27.J.Hughes,C.Babcock,F.Bass,“You’reFired,NowGetBacktoWork,”Businessweek(August1–7,2011),pp.31–32.

28.UnitedNations,UniversalDeclarationofHumanRights(adoptedbytheGeneralAssemblyDecember10,1948),UNDoc.GA/RES/217A(III).

29.S.S.Wiltermuth,F.J.Flynn,“Power,MoralClarity,andPunishmentintheWorkplace,”AcademyofManagementJournal(2013),56(4),pp.1002–1023.

30.D.Ariely,“WhyWeLie,”TheWallStreetJournal(May26–27,2012),pp.C1–C2.

31.http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/how-fire-employee-and-stay-within-lawretrieved(June

23,2014).

32.C.J.Muhl,“Employment-at-WillDoctrine:ThreeMajorExceptions,”TheMonthlyLaborReview,124(3),pp.3–11.

33.J.Segers,D.Vloeberghs,E.Henderickx,I.Inceoglu,“StructuringandUnderstandingtheCoachingIndustry:TheCoachingCube,”AcademyofManagementLearning&Education(2011),2(2),pp.204–221.

34.“NeedCoaching?”HRMagazine(February2013),p.66.

35.S.K.Johnson,L.O.Garrison,G.H.Broome,J.W.Fleenor,J.L.Steed,“GofortheGoals:RelationshipsBetweenGoalSettingandTransferofTrainingFollowingLeadershipDevelopment,”AcademyofManagementLearning&Education(2012),11(4),pp.555–569.

36.B.Menguc,S.Auh,M.Fisher,A.Haddad,“ToBeEngagedorNottoBeEngaged:The

AntecedentsandConsequencesofServiceEmployeeEngagement,”JournalofBusinessResearch(2013),66(11),pp.2163–2170.

37.G.Colvin,“WhyTalentIsOverRated,”Fortune(October27,2008),pp.138–147.

38.J.Segers,D.Vloeberghs,E.Henderickx,I.Inceoglu,“StructuringandUnderstandingtheCoachingIndustry:TheCoachingCube,”AcademyofManagementLearning&Education(2011),2(2),pp.204–221.

39.E.DeHaan,C.Bertie,A.Day,C.Sills,“Clients’CriticalMomentsofCoaching:Towarda‘ClientModel’ofExecutiveCoaching,”AcademyofManagementLearning&Education(2010),9(4),pp.607–621.

40.N.Tocher,M.W.Rutherford,“PerceivedAcuteHumanResourceManagementProblemsinSmallandMediumFirms:AnEmpiricalExamination,”EntrepreneurshipTheoryandPractice(2009),33(2),pp.455–479.

41.S.Shellenbarger,“MeettheMeetingKillers,”TheWallStreetJournal(May16,2012),pp.D1,D3.

42.CareerBuilder,“BadHiresCanBeCostly,”HRMagazine(February2013),p.18.

43.J.R.Detert,A.C.Edmondson,“ImplicitVoiceTheories:Taken-for-GrantedRulesofSelf-CensorshipatWork,”AcademyofManagementJournal(2011),54(3),pp.461–488.

44.CareerBuilder,“BadHiresCanBeCostly,”HRMagazine(February2013),p.18.

45.M.Voronov,R.Vince,“IntegratingEmotionsIntotheAnalysisofInstitutionalWork,”AcademyofManagementReview(2012),37(1),pp.58–81.

46.CareerBuilder,“BadHiresCanBeCostly,”HRMagazine(February2013),p.18.

47.R.E.Kidwell,“AStrategicDeviance

PerspectiveontheFranchiseFormofOrganizing,”EntrepreneurshipTheoryandPractice(2011),35(3),pp.467–482.

48.M.Goldsmith,“WhatGotYouHereWon’tGetYouThere:HowSuccessfulPeopleBecameEvenMoreSuccessful,”AcademyofManagementPerspective(2009),23(3),pp.103–105.

49.A.R.Gardner,“NoFindingofRaceDiscriminationinFailure-to-PromoteCase,”HRMagazine(April2013),p.74.

50.http://www.nmb.gov/resources/docs/the-railway-labor-act/(retrievedJune28,2014).

51.http://www.nlrb.gov/national-labor-relations-act/(retrievedJune28,2014).

52.http://www.nlrb.gov/what-we-do/(retrievedJune28,2014).

53.http://www.nlrb.gov/resources/national-labor-relations-act/(retrievedJune28,2014).

54.http://law.justia.com/cases/california/cal2d/49/625.html(retrievedJune28,2014).

55.http://www.perb.ca.gov/csmcs/glossary.pdf(retrievedJune28,2014).

56.http://www.dol.gov/oasam/programs/history/glossary.htm(retrievedApril9,2011).

57.Ibid.

58.Ibid.

59.Collins,B.RighttoWorkLaws:LegislativeBackgroundandEmpiricalResearch(Washington,DC:CongressionalResearchService,2012),http://fas.org/sgp/crs/misc/R42575.pdf.

60.http://doleta.gov/programs/factsht/warn.htm(retrievedJune26,2014).

61.http://doleta.gov/programs/factsht/warn.htm(retrievedJune26,2014).

62.http://www.bls.gov/news.release/union2.nr0.htm(retrievedJune24,2015).

63.Ibid.

64.http://www.nlrb.gov/resources/national-labor-relations-act/(retrievedJune25,2014).

65.http://www.velaw.com/uploadedFiles/VEsite/Resources/UnionOrganizationProcess(5-501-0280).pdf(retrievedJune25,2014).

66.http://www.velaw.com/uploadedFiles/VEsite/Resources/UnionOrganizationProcess(5-501-0280).pdf(retrievedJune25,2014).

67.M.Valdez,“BoeingMachinistsOKContractTiedto777x,”AssociatedPress(January4,2014).

68.http://www.shrm.org/TemplatesTools/hrqa/Pages/decertifyaunion.aspx(retrievedJune25,2014).

69.S.Sobell,“SocialNetworking@Work,”TheCostcoConnection(June2011),p.21.

70.J.Deschenaux,“EmployeeUseofSocialMedia:LawsFailtoKeepPaceWithTechnology,”http://www.shrm.org/LegalIssues/FederalResources/Pages/EmployeeUseofSocialMedia.aspx(retrievedMarch20,2011).

71.M.Trottman,“U.S.AdmonishesWal-Mart,”TheWallStreetJournal(November19,2013),p.B2.

72.http://thehill.com/blogs/congress-blog/labor/208512-courts-agree-unions-latest-tactics-are-illegal/(retrievedJune28,2014).

Chapter101.M.Philips,“WageGrowthMaySignalInflationAhead,”BloombergBusinessweek(January21–27,2013),pp.13–15.

2.http://www.bls.gov/news.release/pdf/ecec.pdf(retrievedJuly5,2014).

3.J.DeVaro,“ATheoreticalAnalysisofRelationalJobDesignandCompensation,”JournalofOrganizationalBehavior(2010),31(2–3),pp.279–301.

4.R.E.Johnson,C.D.Chang,L.O.Yang,“CommitmentandMotivationatWork:TheRelevanceofEmployeeIdentityandRegulatoryFocus,”AcademyofManagementReview(2010),35(2),pp.226–245.

5.G.O.Trevor,G.Reilly,B.Gerhart,“ReconsideringPayDispersion’sEffectonthePerformanceofInterdependentWork:

ReconcilingSortingandPayInequality,”AcademyofManagementJournal(2012),55(3),pp.585–610.

6.http://www.shrm.org/research/surveyfindings/documents/14-0028%20JobSatEngage_Report_FULL_FNL.pdf(retrievedJuly5,2014).

7.J.DeVaro,“ATheoreticalAnalysisofRelationalJobDesignandCompensation,”JournalofOrganizationalBehavior(2010),31(2–3),pp.279–301.

8.V.Vroom,WorkandMotivation(NewYork:JohnWiley&Sons,1964).

9.M.Renko,K.G.Kroeck,A.Bullough,“ExpectancyTheoryandNascentEntrepreneurship,”SmallBusinessEconomics(2012),39(3),pp.667–684.

10.R.L.Purvis,T.J.Zagenczyk,G.E.McCray,“What’sinItforMe?UsingExpectancyTheoryandClimatetoExplainStakeholder

Participation,ItsDirectionandIntensity,”InternationalJournalofProjectManagement(2014).

11.http://knowledge.wharton.upenn.edu/article/balancing-the-pay-scale-fair-vs-unfair/(retrievedJuly5,2014).

12.J.S.Adams,“TowardanUnderstandingofInequity,”JournalofAbnormalandSocialPsychology(1963),67,pp.422–436.

13.C.P.Long,C.Bendersky,C.Morrill,“FairnessMonitoring:LinkingManagerialControlsandFairnessJudgmentsinOrganizations,”AcademyofManagementJournal(2011),54(5),pp.1045–1068.

14.A.Edmans,“TheLinkBetweenJobSatisfactionandFirmValue,WithImplicationsforCorporateSocialResponsibility,AcademyofManagementPerspectives(2012),26(4),pp.1–19.

15.http://www.mindtools.com/pages/article/newLDR_96.htm(retrievedJuly9,2014).

16.M.K.Duffy,K.L.Scott,J.D.Shaw,B.J.Tepper,K.Aquino,“ASocialContextModelofEnvyandSocialUndermining,”AcademyofManagementJournal(2012),55(3),pp.643–666.

17.S.A.Samaha,R.W.Palmatier,R.P.Dant,“PoisoningRelationships:PerceivedUnfairnessinChannelsofDistribution,”JournalofMarketing(2011),75(3),pp.99–117.

18.C.P.Long,C.Bendersky,C.Morrill,“FairnessMonitoring:LinkingManagerialControlsandFairnessJudgmentsinOrganizations,”AcademyofManagementJournal(2011),54(5),pp.1045–1068.

19.G.O.Trevor,G.Reilly,B.Gerhart,“ReconsideringPayDispersion’sEffectonthePerformanceofInterdependentWork:

ReconcilingSortingandPayInequality,”AcademyofManagementJournal(2012),55(3),pp.585–610.

20.K.Leavitt,S.J.Reynolds,C.M.Barnes,P.Schilpzan,S.T.Hannah,“DifferentHats,DifferentObligations:PluralOccupationalIdentitiesandSituatedMoralJudgments,”AcademyofManagementJournal(2012),55(6),pp.1316–1333.

21.R.L.Bell,J.S.Martin,“TheRelevanceofScientificManagementandEquityTheoryinEverydayManagerialCommunicationSituations,”JournalofManagementPolicyandPractice(2012),13(3),pp.106–115.

22.http://www.mindtools.com/pages/article/newLDR_96.htm(retrievedJuly9,2014).

23.C.O.Trevor,G.Reilly,B.Gerhart,“ReconsideringPayDispersion’sEffectonthePerformanceofInterdependentWork:ReconcilingSortingandPayInequality,”

AcademyofManagementJournal(2012),55(3),pp.585–610.

24.H.Yang,“EfficiencyWagesandSubjectivePerformancePay,”EconomicInquiry(2008),46(2),pp.179–196.

25.http://blog.roberthalf.com/are-you-staying-competitive-with-employment-benefits(retrievedJuly9,2014).

26.P.M.Madhani,“RebalancingFixedandVariablePayinaSalesOrganization:ABusinessCyclePerspective,”CompensationBenefitsReview(2010),42(3),pp.179–189.

27.J.Helyar,D.MacMillan,“InTech,PoachingIstheSincerestFormofFlattery,”Businessweek(March7–13,2011),pp.17–18.

28.G.N.Stock,C.McDermott,M.McDermott,“TheEffectsofCapitalandHumanResourceInvestmentsonHospitalPerformance,”HospitalTopics(2014),92(1),pp.14–19.

29.C.N.Halaby,“Supervision,Pay,andEffort,”SocialForces(2014),92(3),pp.1135–1158.

30.D.H.Bradley,TheFederalMinimumWage:InBrief(Washington,DC:CongressionalResearchService,2013),http://fas.org/sgp/crs/misc/R43089.pdf.

31.B.Bartling,F.A.vonSiemens,“TheIntensityofIncentivesinFirmsandMarkets:MoralHazardWithEnviousAgents,”LabourEconomics(2010),17(3),pp.598–607.

32.http://www.shrm.org/hrdisciplines/compensation/articles/pages/salary-compression-lid.aspx(retrievedJuly6,2014).

33.http://www.dol.gov/whd/regs/statutes/0002.fair.pdf(retrievedJuly9,2014).

34.http://www.dol.gov/compliance/guide/minwage.htm(retrievedJuly9,2014).

35.http://www.dol.gov/opa/media/press/whd/WHD20141131.htm(retrievedJuly7,2014).

36.http://www.dol.gov/compliance/guide/minwage.htm(retrievedJuly9,2014).

37.Ibid.

38.http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.htm(retrievedJuly6,2014).

39.http://www.dol.gov/whd/regs/compliance/fairpay/fs17h_highly_comp.pdf(retrievedJuly6,2014).

40.http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.htm(retrievedJuly6,2014).

41.http://www.dol.gov/elaws/faq/esa/flsa/016.htm(retrievedJuly9,2014).

42.http://www.dol.gov/compliance/guide/childlbr.htm(retrievedJuly9,2014).

43.http://www.eeoc.gov/eeoc/newsroom/equal_pay_day_2014.cfm(retrievedJuly7,2014).

44.http://www.dol.gov/oasam/programs/history/flsa1938.htm(retrievedJuly9,2014).

45.http://www.worldatwork.org/adimLink?id=74254(retrievedJuly8,2014).

46.http://www.shrm.org/Research/Articles/Articles/Pages/Compensation_20Series_20Part_20II__20Job_20Evaluation.aspx(retrievedJuly9,2014).

47.http://www.shrm.org/Education/hreducation/Pages/DesigningaPayStructureACaseStudyandIntegratedExercises.aspx(retrievedJuly9,2014).

48.http://www.shrm.org/Education/hreducation/Pages/DesigningaPayStructureACaseStudyandIntegratedExercises.aspx

(retrievedJuly9,2014).

49.M.Guadalupe,J.Wulf,“TheFlatteningFirmandProductMarketCompetition:TheEffectofTradeLiberalizationonCorporateHierarchies,”AmericanEconomicJournal:AppliedEconomics(2010),2(4),pp.105–127.

50.G.O.Trevor,G.Reilly,B.Gerhart,“ReconsideringPayDispersion’sEffectonthePerformanceofInterdependentWork:ReconcilingSortingandPayInequality,”AcademyofManagementJournal(2012),55(3),pp.585–610.

51.http://www.shrm.org/TemplatesTools/HowtoGuides/Pages/HowtoEstablishSalaryRanges.aspx(retrievedJuly9,2014).

52.http://www.shrm.org/hrdisciplines/compensation/Articles/Pages/CMS_000067.aspx(retrievedJuly9,2014).

53.http://aon.mediaroom.com/2013-08-29-Aon-Hewitt-Survey-Shows-2014-Salary-

Increases-to-Reach-Highest-Levels-Since-2008(retrievedJuly9,2014).

54.Hoover ’sInc.(2014).CVSCaremarkCorporation[Hoover ’sCompanyRecords:In-DepthRecords].RetrievedJuly12,2014,fromLongIslandUniversityAcademicDatabase.

55.D.Lazarus,“AtCVS,OnlytheVeryRichGetMuchRicher,”LosAngelesTimes,http://www.latimes.com/business/la-fi-lazarus-20140627-column.html(June26,2014).

56.Ibid.

57.Ibid.

58.J.Kell,“CVSCaremarkCEO’sPayJumps44%,”WallStreetJournal,http://online.wsj.com/news/articles/SB10001424127887323501004578390383929384430(March29,2013).

Chapter111.R.E.Johnson,C.D.Chang,L.O.Yang,“CommitmentandMotivationatWork:TheRelevanceofEmployeeIdentityandRegulatoryFocus,”AcademyofManagementReview(2010),35(2),pp.226–245.

2.J.J.Martocchio,StrategicCompensation:AHumanResourceManagementApproach(UpperSaddleRiver,NJ:PrenticeHall,2015),p.86.

3.C.S.Jung,“ExtendingtheTheoryofGoalAmbiguitytoPrograms:ExaminingtheRelationshipBetweenGoalAmbiguityandPerformance,”PublicAdministrationReview(2014),74(2),pp.205–219.

4.L.A.MyersJr.,“OneHundredYearsLater:WhatWouldFrederickW.TaylorSay?”InternationalJournalofBusinessandSocialScience(2011),2(20),pp.8–11.

5.H.YoungShin,W.Lee,“HowCanWeIntroducetheMostEffectiveIncentivePlanforNon-exemptEmployees?”(2013),http://digitalcommons.ilr.cornell.edu/student/18/

6.S.Anand,P.R.Vidyarthi,R.C.Linden,D.M.Rousseau,“GoodCitizensinPoor-QualityRelationships:IdiosyncraticDealsasaSubstituteforRelationshipQuality,”AcademyofManagementJournal(2010),53(5),pp.970–988.

7.J.J.Martocchio,StrategicCompensation:AHumanResourceManagementApproach(UpperSaddleRiver,NJ:PrenticeHall,2015),p.92.

8.Ibid.

9.D.Kruse,R.B.Freeman,J.R.Blasi,SharedCapitalismatWork:EmployeeOwnership,ProfitandGainSharing,andBroad-BasedStockOptions(Chicago,IL:UniversityofChicagoPress,2010).

10.J.Blasi,D.Kruse,D.Weltmann,“FirmSurvivalandPerformanceinPrivatelyHeldESOPCompanies,”AdvancesintheEconomicAnalysisofParticipatory&Labor-ManagedFirms(2013),14,pp.109–124.

11.D.C.Wyld,“DoEmployeesViewStockOptionstheSameWayasTheirBossesDo?”AcademyofManagementPerspectives(2011),25(4),pp.91–92.

12.S.Gustin,“TwoYearsAfterSteveJobs’Death,IsAppleaDifferentCompany?”TIMEMagazine(October4,2013).

13.http://ycharts.com/companies/AAPL/market_cap/(retrievedJuly13,2014).

14.M.Krantz,B.Hansen,“CEOPaySoarsWhileWorker ’sPayStalls,”USAToday(April1,2011),pp.B1–B2.

15.“ExecutiveCompensationGroupAdvisory,”VedderPriceP.C.(July2010).

16.http://www.bloomberg.com/news/2013-09-17/ceo-to-worker-pay-ratio-disclosure-proposal-to-be-issued-by-sec.html(retrievedJuly13,2014).

17.“ExecutiveCompensationGroupAdvisory,”VedderPriceP.C.(July2010).

18.http://www.shrm.org/hrdisciplines/compensation/Articles/Pages/CMS_014050.aspx(retrievedJuly15,2014).

19.Ibid.

20.https://www.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/tables.pdf(retrievedJuly12,2015).

21.Ibid.

22.http://www.dol.gov/whd/fmla/index.htm(retrievedJuly2,2011).

23.http://www.dol.gov/whd/fmla/fmlaAmended.htm#SEC_101_DEFINITIONS

(retrievedJuly22,2014).

24.http://www.littler.com/publication-press/publication/employer-mandate-delay-beware-ignoring-aca/(retrievedJuly22,2014).

25.http://www.hhs.gov/ocr/privacy/(retrievedJuly23,2014).

26.http://www.pbgc.gov/wr/benefits/guaranteed-benefits.html(retrievedJuly23,2014).

27.SocietyforHumanResourcesManagement,ExaminingPaidLeaveintheWorkplace(Alexandria,VA:SHRM,2008),http://www.shrm.org/research/surveyfindings/articles/documents/09-0228_paid_leave_sr_fnl.pdf.

28.SocietyforHumanResourcesManagement,“2013EmployeeBenefits,”(Alexandria,VA:SHRM,2013),p.30,http://www.shrm.org/research/surveyfindings/articles/documents/13-0245%202013_empbenefits_fnl.pdf.

29.http://www.bls.gov/opub/ted/2013/ted_20130730.htm(retrievedJuly23,2014).

30.SocietyforHumanResourcesManagement,“2013EmployeeBenefits”(Alexandria,VA:SHRM,2013),p.31,http://www.shrm.org/research/surveyfindings/articles/documents/13-0245%202013_empbenefits_fnl.pdf.

31.http://www.bls.gov/ncs/ebs/benefits/2013/ownership/civilian/table06a.htm(retrievedJuly23,2014).

32.http://www.irs.gov/pub/irs-pdf/p969.pdf(retrievedJuly23,2014).

33.http://www.bls.gov/ncs/ebs/benefits/2013/ownership/private/table02a.htm(retrievedJuly23,2014).

34.http://www.irs.gov/Retirement-Plans/Plan-Participant-Employee/Retirement-Topics-401k-and-Profit-Sharing-Plan-Contribution-Limits(retrievedJuly23,2014).

35.http://www.irs.gov/Retirement-Plans/Plan-Participant-Employee/Retirement-Topics-IRA-Contribution-Limits(retrievedJuly23,2014).

36.http://www.irs.gov/Government-Entities/Federal-State-&-Local-Governments/Group-Term-Life-Insurance(retrievedJuly24,2014).

37.http://pueblo.gsa.gov/cic_text/employ/lt-disability/insurance.htm(retrievedJuly24,2014).

38.SocietyforHumanResourcesManagement,“2013EmployeeBenefits”(Alexandria,VA:SHRM,2013),p.25,http://www.shrm.org/research/surveyfindings/articles/documents/13-0245%202013_empbenefits_fnl.pdf.

39.Ibid.

40.http://graphics8.nytimes.com/packages/pdf/business/20110428-docs/allstate.pdf(retrievedJuly15,2014).

41.http://www.shrm.org/hrdisciplines/benefits/articles/pages/transform-health-care.aspx(retrievedJuly26,2014).

42.Ibid.

43.R.Leung,“WorkingtheGoodLife,”CBSNews.Retrievedfromhttp://www.cbsnews.com/news/working-the-good-life/(April18,2013).

44.M.Crowley,”HowSASBecametheWorld’sBestPlacetoWork,”FastCompany&Inc.Retrievedfromhttp://www.fastcompany.com/3004953/how-sas-became-worlds-best-place-work/(January22,2013).

45.M.Weitzner.“TheRoyalTreatment,”60Minutes.RetrievedfromYouTubeathttps://www.youtube.com/watch?v=N-ebIGpZIWI.

46.Ibid.

47.R.Leung,“WorkingtheGoodLife,”CBSNews.Retrievedfromhttp://www.cbsnews.com/news/working-the-good-life/.

48.Ibid.

49.M.Weitzner,“TheRoyalTreatment,”60Minutes,”RetrievedfromYouTubeathttps://www.youtube.com/watch?v=N-ebIGpZIWI(September15,2007).

Chapter121.K.Jiang,D.P.Lepak,J.Hu,J.C.Baer,“HowDoesHumanResourceManagementInfluenceOrganizationalOutcomes?AMeta-AnalyticInvestigationofMediatingMechanisms,”AcademyofManagementJournal(2012),55(6),pp.1264–1294.

2.R.Maurer,“CorporationsUrgedtoPushSuppliersonWorkerSafety,”HRMagazine(February2013),p.15.

3.http://www.osha.gov(retrievedJuly10,2013).

4.http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_id=2743&p_table=OSHACT(retrievedJuly20,2011).

5.http://www.osha.gov/doc/outreachtraining/htmlfiles/introsha.html(retrievedJuly20,2011).

6.http://www.bls.gov/iif/oshwc/cfoi/cfoi_revised12.pdf(retrievedJuly26,2014).

7.http://www.bls.gov/news.release/osh.nr0.htm(retrievedJuly26,2014).

8.http://www.osha.gov/about.html(retrievedJuly26,2014).

9.http://www.osha.gov/Publications/3439at-a-glance.pdf(retrievedJuly26,2014).

10.http://www.shrm.org/legalissues/federalresources/pages/osha-inspectors.aspx(retrievedJuly26,2014).

11.http://www.shrm.org/legalissues/federalresources/pages/osha-inspectors.aspx(retrievedJuly27,2014).

12.https://www.osha.gov/Publications/3439at-a-glance.pdf(retrievedJuly27,2014).

13.https://www.osha.gov/FedReg_osha_pdf/FED20120326.pdf(retrievedJuly27,2014).

14.https://www.osha.gov/dsg/hazcom/hazcom-appendix-d.html(retrievedJuly27,2014).

15.http://www.osha.gov/Publications/osha3000.pdf(retrievedJuly27,2014).

16.http://cdc.gov/niosh/about.html(retrievedJuly27,2014).

17.http://www.cdc.gov/niosh/docs/strategic/(retrievedJuly27,2014).

18.D.A.Sharar,J.Pompe,R.Lennox,“EvaluatingtheWorkplaceEffectsofEAPCounseling,”JournalofHealth&Productivity(2012),6(12),pp.5–14.

19.http://www.bls.gov/ncs/ebs/benefits/2010/ebbl0046.pdf

(retrievedJuly27,2014).

20.G.Hargraveetal.,“EAPTreatmentImpactonPresenteeismandAbsenteeism:ImplicationsforReturnonInvestment,”JournalofWorkplaceBehavioralHealth(2008),23(3),pp.283–293.

21.M.Attridge,P.Herlihy,P.Sharar,T.Amaral,T.McPherson,etal.,“EAPEffectivenessandROI,”EASNAResearchNotes(2009),1(3).

22.M.E.Porter,M.R.Kramer,“CreatingSharedValue,”HarvardBusinessReview,89(1/2),pp.62–77.

23.L.Berry,A.Mirabito,W.Baun,“What’stheHardReturnonEmployeeWellnessPrograms?”HarvardBusinessReview(2010),88(12),pp.104–112.

24.Ibid.

25.

http://www.cdc.gov/workplacehealthpromotion/evaluation/topics/disorders.html(retrievedJuly27,2014).

26.Ibid.

27.http://www.osha.gov/ergonomics/FAQs-external.html(retrievedJuly29,2014).

28.https://www.osha.gov/SLTC/ergonomics/index.html(retrievedJuly29,2014).

29.Ibid.

30.http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3736412/(retrievedOctober2,2015).

31.http://ehs.okstate.edu/kopykit/Office%20Ergonomics1.PDF(retrievedJuly29,2014).

32.http://www.forbes.com/sites/kathryndill/2014/04/18/survey-42-of-employees-have-changed-jobs-due-to-

stress/(retrievedJuly27,2014).

33.M.L.Marzec,A.F.Scibelli,D.W.Edington,“ExaminingIndividualFactorsAccordingtoHealthRiskAppraisalDataasDeterminantsofAbsenteeismAmongUSUtilityEmployees,”JournalofOccupationalandEnvironmentalMedicine(2013),55(7),pp.732–740.

34.B.C.Deb,S.K.Biswas,“StressManagement:ACriticalView,”EuropeanJournalofBusinessandManagement(2011),3(4),pp.205–212.

35.M.F.Marin,C.Lord,J.Andrews,R.P.Juster,S.Sindi,G.Arsenault-Lapierre,...S.J.Lupien,“ChronicStress,CognitiveFunctioningandMentalHealth,”NeurobiologyofLearningandMemory(2011),96(4),pp.583–595.

36.C.R.Wanberg,J.Zhu,R.Kanfer,Z.Zhang,“AfterthePinkSlip:ApplyingDynamicMotivationFrameworkstotheJobSearchExperience,”AcademyofManagement

Journal(2012),55(2),pp.261–284.

37.S.Shellenbarger,“AreYouHard-WiredtoBoilOverFromStress?”TheWallStreetJournal(February13,2013),p.D3.

38.C.R.Wanberg,J.Zhu,R.Kanfer,Z.Zhang,“AfterthePinkSlip:ApplyingDynamicMotivationFrameworkstotheJobSearchExperience,”AcademyofManagementJournal(2012),55(2),pp.261–284.

39.http://www.corporatewellnessmagazine.com/issue-24/worksite-wellness-issue-24/workplace-stress-strains-organizations-bottom-lines/(retrievedJuly27,2014).

40.A.E.Nixon,J.J.Mazzola,J.Bauer,J.R.Krueger,P.E.Spector,“CanWorkMakeYouSick?AMeta-AnalysisoftheRelationshipsBetweenJobStressorsandPhysicalSymptoms,”Work&Stress(2011),25(1),pp.1–22.

41.“PreserveYourHealthLikeYourWealth,”TheWallStreetJournal(April15,2009),pp.D5–D6.

42.E.Monsen,R.W.Boss,“TheImpactofStrategicEntrepreneurshipInsidetheOrganization:ExaminingJobStressandEmployeeRetention,”EntrepreneurshipTheoryandPractice(2009),33(1),pp.71–104.

43.K.E.Spaeder,“TimetoDe-stress,”Entrepreneur(October2008),p.24.

44.“PreserveYourHealthLikeYourWealth,”TheWallStreetJournal(April15,2009),pp.D5–D6.

45.Ibid.

46.Ibid.

47.Staff,“Over34%ofAmericans,”TheWallStreetJournal(January10–11,2009),p.A1.

48.R.Tomsho,“BulgingWaistCarriesRisk,”TheWallStreetJournal(November13,2008),p.D4.

49.C.Arnst,“TaxingtheRich—Food,ThatIs,”Businessweek(February23,2009),p.62.

50.“PreserveYourHealthLikeYourWealth,”TheWallStreetJournal(April15,2009),pp.D5–D6.

51.S.D.Sidle,“WorkplaceStressManagementInterventions:WhatWorksBest?”AcademyofManagementPerspective(2008),22(3),pp.111–112.

52.J.Welch,S.Welch,“FindingYourInnerCourage,”Businessweek(February23,2009),p.84.

53.“PreserveYourHealthLikeYourWealth,”TheWallStreetJournal(April15,2009),pp.D5–D6.

54.S.Covey,“TimeManagement,”Fortune

(September19,2009),pp.28–29.

55.S.Shellenbarger,“WhenStressIsGoodforYou,”TheWallStreetJournal(January24,2012),pp.D1,D5.

56.“TopSecurityThreatsandManagementIssuesFacingCorporateAmerica:2012SurveyofFortune1000Companies,”SecuritasSecurityServicesUSA(2013),p.6.

57.http://www.cnn.com/2014/05/19/justice/china-hacking-charges/(retrievedJuly27,2014).

58.https://www.osha.gov/SLTC/workplaceviolence/(retrievedOctober1,2015).

59.R.Lussier,“DealingWithAngerandPreventingWorkplaceViolence,”ClinicalLeadership&ManagementReview(2004),18(2),pp.117–119.

60.Ibid.

61.Ibid.

62.http://www.dol.gov/elaws/asp/drugfree/drugs/screen92.asp

63.http://www.shrm.org/hrdisciplines/safetysecurity/articles/pages/drugs-workplace-crisis.aspx(retrievedJuly27,2014).

64.http://www.shrm.org/templatestools/toolkits/pages/introsafetyandsecurity.aspx(retrievedJuly27,2014).

65.http://www.ojp.usdoj.gov/newsroom/pdfs/ojp_resource_guide_08.pdf(retrievedJuly27,2014).

66.http://www.cdc.gov/nchs/fastats/obesity-overweight.htm(retrievedJuly28,2014).

67.http://blogs.hbr.org/2013/01/sitting-is-the-smoking-of-our-generation/(retrievedJuly28,2014).

68.N.Owen,G.N.Healy,C.E.Matthews,D.W.Dunstan,“TooMuchSitting:ThePopulation-HealthScienceofSedentaryBehavior,”ExerciseandSportSciencesReviews(2010),38(3),p.105.

69.http://www.shrm.org/hrdisciplines/global/articles/pages/workplace-bullying-protections-differ-globally.aspx(retrievedJuly29,2014).

70.http://www.stopbullying.gov/laws/federal/index.html(retrievedJuly29,2014).

71.S.Banjo,“InsideNike’sStruggletoBalanceCostandWorkerSafetyinBangladesh,”TheWallStreetJournal(April21,2014).Retrievedfromhttp://online.wsj.com/news/articles/SB10001424052702303873604579493502231397942/

72.Hoover ’sInc.,Nike,Inc.[Hoover ’scompanyrecords:In-depthrecords](June23,2014).RetrievedJune24,2014,fromLongIslandUniversityAcademicDatabase.

73.S.Banjo,“InsideNike’sStruggletoBalanceCostandWorkerSafetyinBangladesh,”TheWallStreetJournal(April21,2014).Retrievedfromhttp://online.wsj.com/news/articles/SB10001424052702303873604579493502231397942/

74.Ibid.

75.S.Cendrowski,“CanOutsourcingBeImproved?”Fortune,167(8).Retrievedfromhttp://scottcendrowski.com/can-outsourcing-be-improved/(June10,2013).

76.S.Greenhouse,“MajorRetailersJoinBangladeshSafetyPlan,”TheNewYorkTimes(May13,2013).Retrievedfromhttp://www.nytimes.com/2013/05/14/business/global/hm-agrees-to-bangladesh-safety-plan.html?_r=0.

77.S.Banjo,NikeCEOonBangladesh:‘IsitaPerfectSituation?No.’[InterviewwithMikeParker].TheWallStreetJournal.(April22,2014).Retrievedfromhttp://blogs.wsj.com/corporate-intelligence/2014/04/22/nike-ceo-on-

bangladesh-is-it-a-perfect-situation-no/.

78.S.Banjo,“InsideNike’sStruggletoBalanceCostandWorkerSafetyinBangladesh,”TheWallStreetJournal(April21,2014).Retrievedfromhttp://online.wsj.com/news/articles/SB10001424052702303873604579493502231397942/

Chapter131.R.L.Hughes,R.C.Ginnett,G.J.Curphy,Leadership:EnhancingtheLessonsofExperience,7thed.(BurrRidge,IL:McGraw-Hill,2011).

2.R.Murphree,“VisionaryLeader:GospelIsKeytoUnlimitedSuccess,”AFAJournal(March2013),p.11.

3.C.Bonanos,“TheLiesWeTellatWork,”Businessweek(February4–10,2013),pp.71–73.

4.P.Zak,TheMoralMolecule(NewYork,NY:Penguin,2012).

5.C.Downs,“Liar,Liar—Back’sonFire,”AARPMagazine(October/November2012),p.22.

6.K.Leavitt,S.J.Reynolds,C.M.Barnes,P.Schilpzan,S.T.Hannah,“DifferentHats,

DifferentObligations:PluralOccupationalIdentitiesandSituatedMoralJudgments,”AcademyofManagementJournal(2012),55(6),pp.1316–1333.

7.B.C.Gunia,L.Wang,L.Huang,J.Wang,J.K.Murnighan,“ContemplationandConversation:SubtleInfluencesonMoralDecisionMaking,”AcademyofManagementJournal(2012),55(1),pp.13–33.

8.D.Lange,N.T.Washburn,“UnderstandingAttributionsofCorporateSocialIrresponsibility,”AcademyofManagementJournal(2012),37(2),pp.300–326.

9.A.Rasche,K.U.Gilbert,I.Schedel,“Cross-DisciplinaryEthicsEducationinMBAPrograms:RhetoricorReality?”AcademyofManagementLearning&Education(2013),12(1),pp.71–85.

10.C.Besio,A.Pronzini,“Morality,Ethics,andValuesOutsideandInsideOrganizations:AnExampleoftheDiscourseonClimate

Change,”JournalofBusinessEthics(2014),119(3),pp.287–300.

11.S.Robbins,M.Coulter,Management(UpperSaddleRiver,NJ:Pearson,2014),p.136.

12.R.Chandra,BusinessEthics(Self-published,2013).

13.C.A.Rusnak,“AreYouConfusingPeopleWithYourLeadershipStyle?”CostcoConnection(March2012),p.11.

14.J.Geisler,“Forgive?Forget?NotLikely,”CostcoConnection(December2012),p.10.

15.C.Bonanos,“TheLiesWeTellatWork,”Businessweek(February4–10,2013),pp.71–73.

16.D.Ariely,“WhyWeLie,”TheWallStreetJournal(May26–27,2012),pp.C1–C2.

17.M.K.Duffy,K.L.Scott,J.D.Shaw,B.J.

Tepper,K.Aquino,“ASocialContextModelofEnvyandSocialUndermining,”AcademyofManagementJournal(2012),55(3),pp.643–666.

18.D.M.Mayer,K.Aquino,R.L.Greenbaum,M.Kuenzi,“WhoDisplaysEthicalLeadership,andWhyDoesItMatter?AnExaminationofAntecedentsandConsequencesofEthicalLeadership,”AcademyofManagementJournal(2011),55(1),pp.151–171.

19.M.K.Duffy,K.L.Scott,J.D.Shaw,B.J.Tepper,K.Aquino,“ASocialContextModelofEnvyandSocialUndermining,”AcademyofManagementJournal(2012),55(3),pp.643–666.

20.B.C.Gunia,L.Wang,L.Huang,J.Wang,J.K.Murnighan,“ContemplationandConversation:SubtleInfluencesonMoralDecisionMaking,”AcademyofManagementJournal(2012),55(1),pp.13–33.

21.C.Bonanos,“TheLiesWeTellatWork,”

Businessweek(February4–10,2013),pp.71–73.

22.D.Ariely,“WhyWeLie,”TheWallStreetJournal(May26–27,2012),pp.C1–C2.

23.Ibid.

24.S.D.Levitt,S.J.Dubner,“SuperFreakonomics:GlobalCooling,PatrioticProstitutes,andWhySuicideBombersShouldBuyLifeInsurance,”AcademyofManagementPerspectives(2011),25(2),pp.86–87.

25.D.Ariely,“WhyWeLie,”TheWallStreetJournal(May26–27,2012),pp.C1–C2.

26.K.Leavitt,S.J.Reynolds,C.M.Barnes,P.Schilpzan,S.T.Hannah,“DifferentHats,DifferentObligations:PluralOccupationalIdentitiesandSituatedMoralJudgments,”AcademyofManagementJournal(2012),55(6),pp.1316–1333.

27.D.Ariely,“WhyWeLie,”TheWallStreetJournal(May26–27,2012),pp.C1–C2.

28.Ibid.

29.https://www.rotary.org/myrotary/en/learning-reference/about-rotary/history-rotary-international/(retrievedAugust5,2014).

30.http://www.berkshirehathaway.com/govern/corpgov.pdf(retrievedAugust5,2014).

31.B.C.Gunia,L.Wang,L.Huang,J.Wang,J.K.Murnighan,“ContemplationandConversation:SubtleInfluencesonMoralDecisionMaking,”AcademyofManagementJournal(2012),55(1),pp.13–33.

32.D.Ariely,“WhyWeLie,”TheWallStreetJournal(May26–27,2012),pp.C1–C2.

33.P.Zak,TheMoralMolecule(NewYork,NY:Penguin,2012).

34.http://smallbusiness.chron.com/key-components-code-ethics-business-244.html(retrievedAugust1,2014).

35.D.Meinert,“CreatinganEthicalCulture,”HRMagazine(April2014),pp.22–27.

36.J.R.Detert,M.C.Edmondson,“ImplicitVoiceTheories:Taken-for-GrantedRulesofSelf-CensorshipatWork,”AcademyofManagementJournal(2011),54(3),pp.461–488.

37.D.Ariely,“WhyWeLie,”TheWallStreetJournal(May26–27,2012),pp.C1–C2.

38.P.Drucker,Management(NewYork,NY:Routledge,2012).

39.http://dealbook.nytimes.com/2013/04/22/ralph-lauren-pays-1-6-million-to-resolve-bribery-case/(retrievedAugust2,2014).

40.

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41.D.Lange,N.T.Washburn,“UnderstandingAttributionsofCorporateSocialIrresponsibility,”AcademyofManagementJournal(2012),37(2),pp.300–326.

42.http://www.reuters.com/article/2013/06/10/us-bofa-mbs-idUSBRE95916M20130610/(retrievedAugust2,2014).

43.http://www.forbes.com/sites/nathanielparishflannery/2011/09/03/monsantos-pesticide-problems-raise-awareness-for-corporate-environmental-responsibility/(retrievedAugust2,2014).

44.http://online.wsj.com/articles/furor-erupts-over-facebook-experiment-on-users-1404085840/(retrievedAugust5,2014).

45.D.Lange,N.T.Washburn,“Understanding

AttributionsofCorporateSocialIrresponsibility,”AcademyofManagementJournal(2012),37(2),pp.300–326.

46.http://www.bloomberg.com/news/2014-03-26/wal-mart-says-bribery-probe-cost-439-million-in-past-two-years.html(retrievedAugust5,2014).

47.http://abcnews.go.com/US/lululemon-founder-chip-wilson-blames-womens-bodies-yoga/story?id=20815278(retrievedAugust5,2014).

48.A.B.Carroll,K.M.Shabana,“TheBusinessCaseforCorporateSocialResponsibility:AReviewofConcepts,ResearchandPractice,”InternationalJournalofManagementReviews(2010),12(1),pp.85–105.

49.A.M.Grant,“GivingTime,TimeAfterTime:WorkDesignandSustainedEmployeeParticipationinCorporateVolunteering,”AcademyofManagementReview(2012),37(4),pp.589–615.

50.Edmans,“TheLinkBetweenJobSatisfactionandFirmValue,WithImplicationsforCorporateSocialResponsibility,”AcademyofManagementPerspectives(2012),26(4),pp.1–19.

51.“MasterClass,”Businessweek(May6–12,2013),p.83.

52.D.Lange,N.T.Washburn,“UnderstandingAttributionsofCorporateSocialIrresponsibility,”AcademyofManagementJournal(2012),37(2),pp.300–326.

53.R.Cohen,“FiveLessonsFromtheBananaMan,TheWallStreetJournal(June2–3,2012),p.C2.

54.http://www.huffingtonpost.com/sally-steenland/americans-see-opportunity_b_4177762.html(retrievedAugust2,2014).

55.C.Dougherty,“NewFacesofChildhood,”TheWallStreetJournal(April6,2011),p.A3.

56.M.Jordan,“IllegalsEstimatedtoAccountfor1in12U.S.Births,”TheWallStreetJournal(August12,2010),pp.A1–A2.

57.“MoreWhiteAmericansDied,”TheWallStreetJournal(June13,2013),pp.A1,A8.

58.C.Dougherty,“U.S.NearsRacialMilestone,”TheWallStreetJournal(June11,2010),p.A3.

59.S.Reddy,“LatinosFuelGrowthinDecade,”TheWallStreetJournal(March25,2011),p.A2.

60.U.S.CensusBureau,reportedinTheWallStreetJournal(December13,2012),p.A3.

61.“CorporateSocialResponsibility:GoodCitizenshiporInvestorRip-off?”TheWallStreetJournal(January9,2006),p.R6.

62.J.Morelli,“EnvironmentalSustainability:ADefinitionforEnvironmentalProfessionals,”JournalofEnvironmental

Sustainability(2013),1(1),p.2.

63.A.Nadim,R.N.Lussier,“SustainabilityasaSmallBusinessCompetitiveStrategy,”JournalofSmallStrategy(2012),21(2),pp.79–95.

64.S.B.Banerjee,“EmbeddingSustainabilityAcrosstheOrganization:ACriticalPerspective,”AcademyofManagementLearning&Education(2011),10(4),pp.719–731.

65.H.Paulson,“FortuneGlobalForum,”Fortune(April29,2013),p.20.

66.A.A.Marcus,A.R.Fremeth,“GreenManagementMattersRegardless,”AcademyofManagementPerspectives(2009),23(3),pp.17–26.

67.K.K.Dhanda,P.J.Murphy,“TheNewWildWestIsGreen:CarbonOffsetMarkets,Transactions,andProviders,”AcademyofManagementPerspectives(2011),25(4),pp.

37–49.

68.A.Nadim,R.N.Lussier,“SustainabilityasaSmallBusinessCompetitiveStrategy,”JournalofSmallStrategy(2012),21(2),pp.79–95.

69.http://en.wikipedia.org/wiki/Chief_sustainability_officer/(retrievedMay22,2013).

70.http://www.walmart.com(retrievedMay22,2013).

71.Briefs:Wal-Mart,Businessweek(February13–19,2012),p.28.

72.K.Weise,“Sustainability:I’mWithWal-Mart,”Businessweek(November28–December2,2011),p.60.

73.http://www.theguardian.com/sustainable-business/blog/best-practices-sustainability-us-corporations-ceres(retrievedAugust3,2014).

74.M.Porter,M.Kramer,“Strategy&Society:TheLinkBetweenCompetitiveAdvantageandCorporateSocialResponsibility,”HarvardBusinessReview(December2006),84(12),pp.78–92.

75.O.Branzei,A.Nadkarni,“TheTataWay:EvolvingandExecutingSustainableBusinessStrategies,”IveyBusinessJournal(March/April2008),72(2),pp.1–8.

76.MITSloanManagementReview,FindingsFromthe2013Sustainability&InnovationGlobalExecutiveStudyandResearchProject(Boston,MA:MITSloanManagementReview/BostonConsultingGroup,2013),p.15.

77.http://www.environmentalleader.com/2014/04/23/spotlight-on-the-hows-and-whys-of-sustainable-products/(retrievedAugust5,2014).

78.https://www.linkedin.com/today/post/article/20140220123325-

60894986-how-should-a-business-leader-understand-sustainability(retrievedAugust5,2014).

79.http://www.patagonia.com/us/footprint/(retrievedAugust5,2014).

80.www3.weforum.org/.../WEF_GAC_GovernanceSustainability_GreenLight_January_Report_2014.pdf(retrievedAugust4,2014).

81.http://www.iso.org/iso/home/standards/management-standards/iso14000.htm(retrievedAugust5,2014).

82.http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html(retrievedAugust5,2014).

83.http://www.weforum.org(retrievedAugust5,2014).

84.http://www.csrwire.com/pages/about_us(retrievedAugust5,2014).

85.N.Landrum,S.Edwards,SustainableBusiness:AnExecutive’sPrimer(NewYork,NY:BusinessExpertPress,2009),p.32.

86.http://arkansasenergy.org/industry/incentives-and-programs/home-energy-assistance-loan-%28heal%29-program.aspx(retrievedJuly28,2011).

87.A.Brief(Ed.),DiversityatWork(Cambridge,UK:CambridgeUniversityPress,2008),pp.265–267.

88.R.Anand,M.Winters,“ARetrospectiveViewofCorporateDiversityTrainingFrom1964tothePresent,”AcademyofManagementLearning&Education(2008),7(3),pp.356–372.

89.Ibid.

90.C.Holladay,M.Quinones,“TheInfluenceofTrainingFocusandTrainerCharacteristicsonDiversityTrainingEffectiveness,”

AcademyofManagementLearning&Education(2008),7(3),pp.343–354.

91.H.Blodget,“InCaseYouDon’tAppreciateHowFastthe‘WindowsMonopoly’IsGettingDestroyed...,”BusinessInsider.RetrievedAugust13,2014,fromhttp://www.businessinsider.com/windows-monopoly-is-getting-destroyed-2013-7

92.T.Worstall,“Microsoft’sMarketShareDropsFrom97%to20%inJustOveraDecadeForbes.RetrievedAugust13,2014fromhttp://www.forbes.com/sites/timworstall/2012/12/13/microsofts-market-share-drops-from-97-to-20-in-just-over-a-decade/.

93.J.Yarow,“ChartoftheDay:TheCollapseofMicrosoft’sMonopoly,”BusinessInsider.RetrievedAugust13,2014,fromhttp://www.businessinsider.com/chart-of-the-day-consumer-compute-shift-2012-12?nr_email_referer=1&utm_source=Triggermail&utm_medium=email&utm_term=SAI%20Chart%20Of%20The%20Day&utm_campaign=SAI_COTD_120712

94.H.Leonard,“ThereWillSoonBeOneSmartphoneforEveryFivePeopleintheWorld,”BusinessInsider.RetrievedAugust13,2014,fromhttp://www.businessinsider.com/15-billion-smartphones-in-the-world-22013-2.

95.J.Callaham,“TheTop10MicrosoftNewsStoriesof2013,”Neowin.RetrievedAugust13,2014,fromhttp://www.neowin.net/news/the-top-10-microsoft-news-stories-of-2013.

96.“Nokia,”inWikipedia.RetrievedAugust14,2014,fromhttp://en.wikipedia.org/wiki/Nokia.

97.J.Rossi,“MicrosoftLayoffsHitFinlandStaffHard,”WallStreetJournal.RetrievedAugust14,2014,fromhttp://online.wsj.com/articles/microsoft-layoffs-hit-nokias-finland-1405624498.

98.Ibid.

Chapter141.M.Li,W.H.Mobley,A.Kelly,“WhenDoGlobalLeadersLearnBesttoDevelopCulturalIntelligence?AnInvestigationoftheModeratingRoleofExperientialLearningStyles,”AcademyofManagementEducation&Learning(2013),12(1),pp.32–50.

2.S.T.Hannah,B.J.Avolio,D.R.May,“MoralMaturationandMoralConations:ACapacityApproachtoExplainingMoralThoughtandAction,”AcademyofManagementReview(2011),36(4),pp.663–685.

3.http://www.fedex.com(retrievedMay16,2013).

4.M.Li,W.H.Mobley,A.Kelly,“WhenDoGlobalLeadersLearnBesttoDevelopCulturalIntelligence?AnInvestigationoftheModeratingRoleofExperientialLearningStyles,”AcademyofManagementEducation&

Learning(2013),12(1),pp.32–50.

5.J.H.Marler,“StrategicHumanResourceManagementinContext,”AcademyofManagementPerspectives(2012),26(2),pp.6–11.

6.http://www.census.gov/popclock(retrievedAugust25,2014).

7.Amazon.comwebsite,www.amazon.com,accessedApril7,2015.

8.http://www.wto.org/english/thewto_e/whatis_e/wto_dg_stat_e.htm(retrievedAugust12,2014).

9.InformationtakenfromtheWorldTradeOrganization’swebsite,http://www.wto.org,accessedApril7,2015.

10.A.Molinsky,“ThePsychologicalProcessesofCulturalRetooling,”AcademyofManagementJournal(2010).

11.M.Mendenhall,A.Arnardottir,G.Oddou,L.Burke,“DevelopingCross-CulturalCompetenciesinManagementEducationViaCognitive-BehaviorTherapy,”AcademyofManagementLearning&Education(2013).

12.http://www.eeoc.gov/facts/multi-employees.html(retrievedJuly22,2010).

13.Ibid.

14.J.Palazzolo,“IsItaBribe...orNot?”TheWallStreetJournal(July22,2013),p.R3.

15.http://geert-hofstede.com/dimensions.html(retrievedAugust13,2014).

16.home.sandiego.edu/~dimon/CulturalFrameworks.pdf

17.T.J.Huang,S.C.Chi,J.J.Lawler,“TheRelationshipBetweenExpatriates’PersonalityTraitsandTheirAdjustmenttoInternationalAssignments,”TheInternationalJournalofHumanResourceManagement(2005),16(9),

pp.1656–1670.

18.S.Mor,M.Morris,J.Joh,“IdentifyingandTrainingAdaptiveCross-CulturalManagementSkills:TheCrucialRoleofCulturalMetacognition,”AcademyofManagementLearning&Education(2013).

19.C.Dörrenbächer,J.Gammelgaard,F.McDonald,A.Stephan,H.Tüselmann,“StaffingForeignSubsidiariesWithParentCountryNationalsorHostCountryNationals?InsightsFromEuropeanSubsidiaries(No.74),”WorkingPapersoftheInstituteofManagementBerlinattheBerlinSchoolofEconomicsandLaw(HWRBerlin,2013).

20.R.Maurer.“EmergingMarketsDriveGlobalTalentStrategyShift,”http://www.shrm.org/hrdisciplines/global/articles/pages/emerging-markets-global-talent-strategy.aspx(retrievedAugust21,2014).

21.G.K.Stahl,M.Y.Brannen,“BuildingCross-CulturalLeadershipCompetence:An

InterviewWithCarlosGhosn,”AcademyofManagementLearning&Education(2013),12(3),pp.494–502.

22.http://www.shrm.org/education/hreducation/documents/international_hrm_presentation.pptx(retrievedAugust23,2014).

23.R.L.Minter,“PreparationofExpatriatesforGlobalAssignments:Revisited,”JournalofDiversityManagement(2011),3(2),pp.37–42.

24.N.Cole,K.Nesbeth,“WhyDoInternationalAssignmentsFail?TheExpatriateFamiliesSpeak,”InternationalStudiesofManagementandOrganization(2014),44(3).

25.K.vanderZee,J.P.vanOudenhoven,“CultureShockorChallenge?TheRoleofPersonalityasaDeterminantofInterculturalCompetence,”JournalofCross-CulturalPsychology(2013),44(6),pp.928–940.

26.http://www.shrm.org/education/hreducation/documents/international_hrm_presentation.pptx(retrievedAugust23,2014).

27.SocietyforHumanResourceManagement,“Repatriation:HowCanMyCompanyBestRetainRepatriatedEmployees?”http://www.shrm.org/templatestools/hrqa/pages/howcanmycompanybestretainrepatriatedemployees.aspx(retrievedAugust23,2014).

28.C.Bailey,L.Dragoni,“RepatriationAfterGlobalAssignments:CurrentHRPracticesandSuggestionsforEnsuringSuccessfulRepatriation,”People&StrategyJournal(2013),36(1),pp.48–57.

29.T.Shelton,“GlobalCompensationStrategies:ManagingandAdministeringSplitPayforanExpatriateWorkforce,”CompensationandBenefitsReview(Jan/Feb2008),40,pp.56–60.

30.ORCWorldwide,2006WorldwideSurveyofInternationalAssignmentPoliciesandPractices,(NewYork,NY:ORC,2007).

31.SocietyforHumanResourceManagement,“‘Global:Expatriate’:HowShouldWeCompensateanEmployeeonaForeignAssignment?”(December11,2012),http://www.shrm.org/templatestools/hrqa/pages/howshouldwecompensateanemployeeonaforeignassignment.aspx

32.K.Y.Ng,L.V.Dyne,S.Ang,“FromExperiencetoExperientialLearning:CulturalIntelligenceasaLearningCapabilityforGlobalLeaderDevelopment,”AcademyofManagementLearning&Education(2009),8(1),pp.511–526.

33.C.Rose,“CharlieRoseTalkstoMikeDuke,”Businessweek(December2–6,2010),p.30.

34.“WorkonYourWinningStrategy,”GlobalManagementConsultancyHayGroup(2010).

35.M.Segalla,D.Rouzies,M.Besson,B.Weitz,“ACross-NationalInvestigationofIncentiveSalesCompensation,”InternationalJournalofResearchinMarketing(2006),23(4),pp.419–433.

36.Ibid.

37.http://www.forbes.com/sites/johnkotter/2013/04/03/how-to-lead-through-business-disruption/(retrievedAugust24,2014).

38.E.Kelly,BusinessTrends2014:NavigatingtheNextWaveofGlobalization(Westlake,TX:DeloitteUniversityPress,2014),p.6,http://dupress.com/periodical/trends/business-trends-2014/?id=us:el:dc:bt14:awa.

39.Ibid.p.3.

40.C.Bailey,L.Dragoni,“RepatriationAfterGlobalAssignments:CurrentHRPracticesandSuggestionsforEnsuringSuccessfulRepatriation,”People&StrategyJournal(2013),36(1),pp.48–57.

41.http://www.wikipedia.com(retrievedMay19,2011).

42.http://www.wharton.universia.net/index.cfm?fa=viewArticle&id=1349&language=english(retrievedMay11,2011).

43.“Brazil:LaborRelations,”TozziniFriereAdvogados(2007),p.1.

44.J.Almeida,BrazilinFocus(NewYork,NY:NovaScience,2008),pp.124–125.

45.“75%ofEmployersExpectWorseLaborRelationsin2011,”TheKoreaTimes(December19,2010),http://www.koreatimes.co.kr/www/news/nation/nation_view.asp?newsIdx=78249&categoryCode=113KoreaTimes(retrievedMay11,2011).

46.Hoover ’sInc.HSBCHoldingsPLC[Hoover ’scompanyrecords:In-depthrecords](2014).RetrievedJuly30,2014,fromLongIslandUniversityAcademicDatabase.

47.TheJobCrowd,HSBCBankPLCJob

Reviews.RetrievedAugust4,2014,fromhttp://www.thejobcrowd.com/employer/hsbc-bank-plc/overview/.

48.PayScale,AverageSalaryforHSBCEmployees.RetrievedAugust4,2014,fromhttp://www.payscale.com/research/US/Employer=HSBC/Salary

49.HSBC,BenefitsandRewards.RetrievedAugust4,2014,fromhttp://www.us.hsbc.com/1/2/home/about/careers/benefits-rewards/.

50.ECAInternational,CaseStudy:HSBC;DesignandImplementationofaCustomSalaryManagementProgramme.RetrievedJuly30,2014,fromhttp://www.eca-international.com/about_eca/our_clients/case_study__hsbc

51.ECAInternational,WhatWeDo.RetrievedJuly30,2014,fromhttp://www.eca-international.com/about_eca/what_we_do.

52.ECAInternational,CaseStudy:HSBC;DesignandImplementationofaCustom

SalaryManagementProgramme.RetrievedJuly30,2014,fromhttp://www.eca-international.com/about_eca/our_clients/case_study__hsbc

Index

Ability-jobfit,138Absenteeism,8,373Academicgradesandincentives,280Academicstandards,191Accenture,126,127Acceptability,ofperformancemeasures,192–193Accountability,334,335,373Activelistening,123,373Acton,Brian,158Acutestress,312ADA.SeeAmericanswithDisabilitiesActof1990ADAAmendmentsAct(ADAAA),74Adams,J.Stacy,250Adaptation,362–363,363(exhibit)AddisonShoeFactory,344ADEA.SeeAgeDiscriminationinEmploymentActof1967Administrativeemployeeexemption,256

(exhibit)ADP,181Adverseemploymentaction,67,373Advertising,forrecruiting,119,120(exhibit)Affirmativeaction,68–69,68(exhibit),373AgeDiscriminationinEmploymentActof1967(ADEA),59(exhibit),62,356Alcoa,317Amazon.com,211–212,352American,buying,355AmericanswithDisabilitiesActof1990(ADA),59(exhibit),62–63,74,356Annualleave,287AonHewitt,267Apple:

Acton,Brian,and,158competitivestatus,346,347differentiation,37jobdescription,sample,92(exhibit)leadership,281organizationalculture,41profitsversussocialresponsibility,14

technology,32Applications,employment,141Appraisal.SeePerformanceappraisalAssertiveness,358(exhibit)Assessmentcenters,145,373Assimilation,344AssociationforTalentDevelopment,18AssuranceofLearningExam,18Asynchronousdistancelearning,174–175Athenahealth,6–7AT&T,96Attrition,natural,103Audits,social,338Authority,334,335,373Autonomy,94,95

Backgroundchecks,150–153,320Balancesheetapproachtoexpatriatepay,365Bandwidth,97,98(exhibit)BankofAmerica,42,336Bargaining,collective,236,373BARSforms.SeeBehaviorallyanchoredratingscaleforms

Basepay,248,267Bauer,Jeff,294Behavioralappraisals,195Behavioraldescriptivequestions,149–150Behaviorallyanchoredratingscale(BARS)forms,198–199,373Behavior-basedquestions,148–150Behaviorevaluations,176Behaviors,40,41,195,373BenandJerry’sIceCream,341Benchmarkjobs,260Benefits:

about,11,249case,297–298flexible(cafeteria)plans,291–293globalissues,366–367legislation,258responsibilityfor,15retirement,289–291statutory,283–286,292(exhibit)sustainability-based,343–344voluntary,287–291,292(exhibit)SeealsoCompensation

Benevolentcorporatesocial

responsibility,339,339(exhibit)BerkshireHathaway,332,332(exhibit),333BethlehemSteel,96Bezos,Jeff,212BFOQ.SeeBonafideoccupationalqualificationBias,203,373Bigdata,42–44Biologicaljobdesign,93–94,373BlackBerry,32Blanchardtest,195,196,202,206Bock,Laszlo,148Bonafideoccupationalqualification(BFOQ),61,373Bonuses,276,282BostonConsultingGroup,The,342Boycotts,secondary,233Brazil,366,368Bribery,335–336Broadbanding,265,265(exhibit),373Buckly,Michael,197Budgetaryconstraints,onrecruiting,121Buffett,Warren,40,332,332(exhibit),333

Bullying,320–321BureauofLaborStatistics,247,287,289BurgerKingWorldwide,37Burnout,312,373Businesscontinuityandrecovery,317–318Businessnecessity,61,373Businessskills,16–17,373

Cafeteriaplans,291–293CampbellConstruction,304Careerdevelopmentconsequencesmodel,178–181,179(exhibit),180(exhibit)Careers,177,373Careerstages,178–179,179(exhibit)Carpaltunnelsyndrome,311Cases:

benefits,297–298compensationmanagement,270–271discipline,240–241employeeengagement,24ethics,346–347globalissues,370–371

legalenvironmentanddiversitymanagement,78–79organizationalculture,109–110performanceappraisal,211–212recruiting,129–130selection,158–159strategy-drivenHRmanagement,49–50training,184–185workplacesafety,323–324

Castel,Carolyn,271Caucasians,339CentersforDiseaseControlandPrevention(CDC),311Centralization,39–40,373Centraltendencyerror,204CenturyLink,6–7Challenges,humanresourcemanagement,7Chiefsustainabilityofficers(CSOs),340Childlabor,255China,367Chrysler,96Citibank,370CivilRightsActof1991,59(exhibit),

63–64,64(exhibit)Classroomtraining,174“Clawback”incentives,282Closed-endedquestions,148Closedshops,233Coaching,226,226(model),229,373COBRA.SeeConsolidatedOmnibusBudgetReconciliationActof1985Coca-Cola,37,352Codesofconduct,225Codesofethics,333–334Cognitiveabilitytests,145,373Cohesiveness,70,373Collectivebargaining,236,373Collectivism,357,358(exhibit)CollegeofBusinessoftheUniversityofArkansasatLittleRock,35–36Commissions,276–277Communication:

about,219–220defined,219,373asperformanceappraisalreason,193–194inrecruiting,122–123symbolic,364

trainingfor,363–364Comparableworth,257–258Compensablefactors,259Compensation:

about,11defined,247,373direct,249executive,259,271,281–282globalworkforce,364–367,370–371indirect,249jobanalysisand,88responsibilityfor,15technologyof,267–268typesof,248–249,251workers’,283–284SeealsoBenefits

Compensationmanagement:about,247–248case,270–271compensationsystem,248–249jobevaluation,258–260legalandfairnessissues,253–255,254(exhibit),256–257(exhibit),257–258

motivationand,249–251,250(exhibit)organizationalphilosophy,251–253paysystem,developing,260–266,261–265(exhibit)practitioner ’sperspective,247trendsandissues,267–268

Compensationsystem,248–249,373Compensatorydamages,63,64(exhibit),373Compensatoryselectionmodel,154,373Competencies,humanresourcemanagement,7Competency-basedpay,252Competency-basedperformancemanagement,208–209Competition:

asexternalforce,31,114labormarket,261,262(exhibit),263(exhibit)productmarket,262–263,262(exhibit),263(exhibit)

Complexity,39,373Compliance,334,344Compressedworkweek,98

Computeremployeeexemption,256–257(exhibit)Conceptualanddesignskills,16,173(exhibit),373Conduct,codesof,225Conflict,70,373ConsolidatedOmnibusBudgetReconciliationActof1985(COBRA),285–286,373Constructivedischarge,67,373Constructvalidity,140,373Contentvalidity,140,373Contingencyagencies,119Continuousperformanceappraisal,208Contracts,implied,226Contractworkers,104Contrasterror,205Conventionallevelofmoraldevelopment,330Corehours,97,98(exhibit)Core-plusplans,293CornellUniversity,311Corporatecitizenship,good,339,339(exhibit)Corporatesocialresponsibility(CSR):

about,337–339,339(exhibit)defined,337,373profitsversus,14trendsandissues,344–345SeealsoEthics;Sustainability

CorporateSocialResponsibilityNewswire,343(exhibit)Corruptpaymentstogovernmentofficials,336Costcenters,6,373Costco,252Costleadership,37,38Costperhire,124,125(exhibit)Cote,David,109Counseling,226–227,375CountrywideFinancial,336Creativity,69,373Creditchecks,150–151,320Criminalbackgroundchecks,151–152Criterion-relatedvalidity,139–140,373Criticaldependentvariables,8Criticalincidentsmethod,197,373CSOs.SeeChiefsustainabilityofficersCSR.SeeCorporatesocialresponsibilityCUErgo,311

Culturalissues,357,358(exhibit)Culturaltraining,362–363Culture.SeeNationalculture;OrganizationalcultureCultureshock,362–363,363(exhibit)Customerassessments,202Customerprivacy,336–337Customers,31CVSCaremark,270–271Cybersecurity,317,373

Damages:compensatory,63,64(exhibit),373punitive,63–64,64(exhibit),376

Dataanalytics,42–44,46,373Databases,jobanalysis,88–89,105–106Decertificationelections,236Decisionmaking,44,194Definedbenefitplans,289,290,373Definedcontributionplans,290,374Delayering,265,374Dell,36,199,361DeloitteConsulting,367Deminimusviolations,309Demographics,labor,9–10

Demotion,230DepartmentofJustice,320DepartmentofLabor,57–58,58(exhibit),64,88,105–106DepartmentoftheTreasury,37Depressionorhostility,incultureshock,362,363(exhibit)Developmentalperformanceappraisalinterviews,207–208,207(model)Diaries,90Differentialpiece-rateplans,278Differentiation,37,38Dillard’s,150Directcompensation,249Disability,62,374Disabilityinsurance,291Discharge,230,231Disciplinarysuspension,230Discipline:

case,240–241defined,227,374guidelines,229(exhibit)JustCauseand,227–228model,231,231(model)progressive,217,228–231,376

Disciplinesinhumanresourcemanagement,10–12Discrimination:

defined,56,374illegal,56,374patternorpractice,60,61(exhibit),375religious,73–74reverse,21,58,69,376systemic,74

Disengagementstageofcareerdevelopment,179,179(exhibit)Disney,150Disparateimpact,60,61(exhibit),374Disparatetreatment,60,61(exhibit),374Distancelearning,174–175Distributionalerrors,204Divergentthinking,69–70,374Diversity:

about,68,68(exhibit),69–70corporatesocialresponsibilityand,339defined,69,374language,67,78–79training,344–345

SeealsoLegalenvironmentanddiversitymanagement

Dodd-FrankWallStreetReformandConsumerProtectionActof2010,282Dogpile,184Dominic’sPizza,97Domino’sPizza,150Douglas,MaxE.,197DrPepperSnappleGroup,37Drucker,Peter,40,335Drugtesting,146Dueprocess,rightto,224Duke,Mike,365Dutiestests,255,256–257(exhibit)Dysfunctionalstress,312

EAPs.SeeEmployeeAssistanceProgramsEarlyretirement,103ECAInternational,370–371Economicvalueadded(EVA),45,374Economy,33Education,formal,177Educational(ortuition)assistance,291Educationalinstitutions,recruitingfrom,

118,120(exhibit)EEO.SeeEqualemploymentopportunityEEOC.SeeEqualEmploymentOpportunityCommissionEffectiveness,6,374Efficiency,6–7,374Efficiencywagetheory,252Elance,127E-learning,174–175Elop,Stephen,347Empathy,16,374Employeeassessment,178EmployeeAssistancePrograms(EAPs),310,318,374Employeedevelopment:

foradvancement,166defined,164,374methods,177–178trainingversus,164SeealsoTraining

Employeeengagement:case,24defined,5,374importanceof,5,6trendsandissues,20–21

Employeehealth,303,310–311,320,374Employeeinsuranceoptions,291EmployeePolygraphProtectionActof1988,143,144(exhibit)Employeeprivacy,337Employeereferrals,117,120(exhibit)Employeerelations,11,15EmployeeRetirementIncomeSecurityActof1974(ERISA),286Employeerights,66,223–224,223(exhibit),305(exhibit),307Employeeservices,291Employeestockownershipplans(ESOPs),279Employeestockplans,279–280EmployeeWellnessPrograms(EWPs),310–311,320,374Employerrights,66–67,305–307,305(exhibit)Employerunfairlaborpractices,232–233Employmentagencies,118–119,120(exhibit)Employment-at-will,225–226,374

Employmentdecisions,139Employmenttesting.SeeTestsandtestingEngagement,employee.SeeEmployeeengagementEnron,327,335Environment:

external,31–33,31(exhibit),43(exhibit)hostilework,72,374social,114–115SeealsoLegalenvironmentanddiversitymanagement;Organizationalculture;Organizationalstructure;Strategy

Equalemploymentopportunity(EEO),67–68,68(exhibit)EqualEmploymentOpportunityCommission(EEOC):

about,66–67employmenttesting,143Four-FifthsRule,57–58,58(exhibit)globalissues,356investigations,74payequityandcomparableworth,

257EqualPayActof1963,59,59(exhibit),257Equity,pay,257–258Equitytheory,250–251,374Ergonomics,311,374ERISA.SeeEmployeeRetirementIncomeSecurityActof1974Errors,204–205ESOPs.SeeEmployeestockownershipplansEssentialfunctions,63,374Establishmentstageofcareerdevelopment,178,179(exhibit)Ethicalcorporatesocialresponsibility,339,339(exhibit)Ethicaldilemmas:

academicstandards,191bribery,336buyingAmerican,355discipline,230homelesspeople,122interns,virtual,175inversions,37languagediversity,67

LGBTjobcandidates,153part-timeemployees,103profitsversussocialresponsibility,14SeealsoEthics

Ethics:about,11,327approaches,332–333,332(exhibit)case,346–347codesof,333–334defined,328,374factorscontributingtounethicalbehavior,328,330–331four-waytestof,332incentivesand,294issues,common,335–337practitioner ’sperspective,327responsibilityfor,15stakeholders’approachto,332,332(exhibit)SeealsoCorporatesocialresponsibility;Ethicaldilemmas

EVA.SeeEconomicvalueaddedEvaluativeperformanceappraisalinterviews,206–207,207(model)

EWPs.SeeEmployeeWellnessProgramsExecutivecompensation,259,271,281–282Executiveemployeeexemption,256(exhibit)ExecutiveOrder11246,68–69,153ExecutiveOrder11478,153ExecutiveOrder13665,253Executiverecruiters,119Exemptemployees,254–255,256–257(exhibit)Exercise,315Expatriates,362–364,363(exhibit),374Expectancy,249Expectancytheory,249–250,250(exhibit),374Experience,177–178Experienceratings,284,374Explorationstageofcareerdevelopment,178,179(exhibit)Externalapproachtojobevaluation,258Externalenvironment,31–33,31(exhibit),43(exhibit)Externalrecruiting,116,118–120,120(exhibit),374

Extinction,169(exhibit),170,374

Facebook:compensationmanagement,252employeedemographics,184employeesand,42ethics,336–337performanceappraisal,206recruitingand,116selection,158

Facesscaleofjobsatisfaction,220(exhibit),221Factorcomparisonmethod,259–260Failuretoabateviolations,309FairCreditReportingAct(FCRA),150Fairdealing,lackof,226FairLaborStandardsActof1938(FLSA),253–255,256–257(exhibit),257FamilyandMedicalLeaveActof1993(FMLA),284–285FCRA.SeeFairCreditReportingActFedEx,41,104,351Feedback,94,95,197Fee-for-serviceplans,288,377

Femininity,358(exhibit)Fiduciaryresponsibility,286Financialcrisis(2008-2009),294Finland,347FirstAmendmenttotheUSConstitution,224“Fit,”137–139,360Fitness-for-dutytests,146,374Flexhours,97,98(exhibit)Flexiblebenefit(cafeteria)plans,291–293Flexiblework,97–98,98(exhibit)Flextime,97FLSA.SeeFairLaborStandardsActof1938FMLA.SeeFamilyandMedicalLeaveActof1993Focusornichestrategies,37Forbes,312Ford,42,96Forecasting:

humanresources,98–100,101(exhibit),374qualitative,100,376

Forecasts:

qualitative,99,376quantitative,99–100,101(exhibit)

ForeignCorruptPracticesAct,356,374Formalization,39,374Four-FifthsRule,57–58,58(exhibit),60,374Four-LevelEvaluationMethod,175–1764Ms,87401(k)retirementplans,290Four-waytestofethics,332Freeconsent,rightof,223Freedomofconscience,rightto,224Freespeech,rightto,224Full-choiceplans,293Functionalstress,312

Gainsharingplans,279Gallup,20Gamificationoftraining,181GE,163Genderidentity,153Generaldutiesclause,304–305Generalemploymentagencies,118GeneticInformationNondiscriminationActof2008(GINA),59(exhibit),65,

148Genetictesting,144Ghosn,Carlos,362GINA.SeeGeneticInformationNondiscriminationActof2008Globalissues:

case,370–371compensation,364–367,370–371culturalissues,357,358(exhibit)developingandmanagingglobalhumanresources,361–364,363(exhibit)legalissues,356practitioner ’sperspective,351recruiting,127selection,154–155staffing,355,359–361training,355trendsandissues,46,367–368SeealsoGlobalization

Globalization,46,351–355,353(exhibit),367

SeealsoGlobalissuesGlobalvillage,352GM,96

Goldenparachutes,282,374GoldenRule,332Goodcorporatecitizenship,339,339(exhibit)Goodfaith,lackof,226Goodnight,James,297–298Google:

compensationmanagement,252dataanalytics,43,44employeedemographics,184employeeengagement,5organizationalculture,297recruiting,124,129selectioninterviews,147,148training,184–185

Government,33,41,336Graphicratingscaleforms,198,374Green-circlerates,264Greencompanies,340Grievances,236,236(model),374Grossnegligence,231,374Grouphealthinsurance,288–289Grouptermlifeinsurance,291Guru,127

Haloerror,204HarleyDavidson,37Hastings,Read,49,50Hayakawa,S.I.,355HazardCommunicationStandards(HCS),307–308,308–309(exhibit)HDHPs.SeeHigh-deductiblehealthplans“Headhunters,”119HEALArkansas,344Health,employee,303,310–311,320,374Healthcare,personalizationof,294HealthInsurancePortabilityandAccountabilityActof1996(HIPAA),286Healthmaintenanceorganizations(HMOs),288,374Healthsavingsaccounts(HSAs),288–289,374Heroes,41HierarchyofNeeds,Maslow’s,179,179(exhibit)High-deductiblehealthplans(HDHPs),289,374HIPAA.SeeHealthInsurancePortabilityandAccountabilityActof1996

Hiringfreeze,103HMOs.SeeHealthmaintenanceorganizationsHofstede’smodelofnationalculture,357,358(exhibit)Holidaypay,287Home-countrynationals,360,361(exhibit)Homelesspeople,122Honda,36,165Honestytests,145Honeymoonphase,363(exhibit)Honeywell,109–110Host-countrynationals,360,361(exhibit)Hostileworkenvironment,72,374Hostility,incultureshock,362,363(exhibit)Hoteling,106,374HoustonChronicle,333HP,129HR.SeeHumanresourcesHRCI.SeeHumanResourceCertificationInstituteHRIS.SeeHumanresourceinformation

systemsHRM.SeeHumanresourcemanagementHRMagazine,5HSAs.SeeHealthsavingsaccountsHSBC,370–371Humanrelationsskills,16,173(exhibit),374HumanResourceCertificationInstitute(HRCI),18Humanresourceinformationsystems(HRIS),44,45,155,374Humanresourcemanagement(HRM):

challenges,7competencies,7disciplineswithin,10–12organizations,17–18practitioner ’smodelfor,19–20,19(exhibit)reasonsforstudying,4–6responsibilities,13–15role,6–7skills,16–17,16(exhibit)strategyand,38–39Seealsospecifictopics

Humanresources(HR),5,374

SeealsospecifictopicsHumanresourcesforecasting,98–100,101(exhibit),374Hypotheticalquestions,148

IBM,43,96,163Illegaldiscrimination,56,374Immigration,154Impliedcontracts,226Incentives:

academic,280“clawback,”282incompensationmanagement,248ethicsand,294inglobalfirms,365–366group,278–280,278(exhibit)individual,275–278,277(exhibit)practitioner ’sperspective,275sustainabilityand,341trendsandissues,294

Inclusion,344Indeed(job-huntingsearchengine),129Indirectcompensation,249Individualism,358(exhibit)IndividualRetirementAccounts(IRAs),

290–291Indonesia,336Informalcoachingtalks,229InformationAge,8–9,374Innovation,69,374Inspectionwarrants,305Instrumentality,249Insurance:

disability,291grouphealth,288–289grouptermlife,291life,291Old-Age,Survivors,andDisabilityInsurance,283unemployment,284

Integrity,327,328,333Integritytests,145Intel,95Interesttests,144–145,375Internalapproachtojobevaluation,258Internalenvironment.SeeOrganizationalculture;Organizationalstructure;StrategyInternalrecruiting,117–118,120(exhibit),375

InternationalInstituteforSustainableDevelopment,343(exhibit)InternationalOrganizationforStandardization,343(exhibit)InternationalOrganizationforSustainableDevelopment,343(exhibit)Internet,forrecruiting,119,120(exhibit)Interns,virtual,175Interviews:

developmentalperformanceappraisal,207–208,207(model)evaluativeperformanceappraisal,206–207,207(model)jobanalysis,89–90selection,147–150,149(exhibit),150(model)semistructured,148structured,148types,148,149(exhibit)unstructured,148

Inversions,37IRAs.SeeIndividualRetirementAccounts

Japan,31,357JCM.SeeJobcharacteristicsmodel

Jehan,Andre,122Jobanalysis:

about,87–88databases,88–89,105–106defined,87,375methods,89–91outcomes,91,92(exhibit)performanceappraisaland,191reasonsfor,88

Jobcandidaterecruiting.SeeRecruitingJobcharacteristicsmodel(JCM),94–96,95(exhibit),98(exhibit),375Jobdescriptions,88,91,92(exhibit),375Jobdesign/redesign,91–94,375Jobenlargement,96Jobenrichment,97Jobevaluation,258–260,375Jobexpansion,96–97,98(exhibit),375Joboffers,154Jobranking,259Jobredesign,91Jobrelatedness,61,375Jobrotation,96Jobs,Steve,41,281

Jobsatisfaction:defined,8,375determinantsof,221–222measuring,220–221,220(exhibit),221(exhibit)

Jobsharing,97,102Jobsimplification,96,98(exhibit),375Jobspecifications,88,91,92(exhibit),375Jobstructureandpaylevels,260–263,262(exhibit),263(exhibit)Johnson&Johnson,163,311JPMorganChase,370Jurisdictionalstrikes,233JustCause,227–228,375JusticeDepartment,320Justificationofunethicalbehavior,331

KawasakiHeavyIndustries,351Kelleher,Herb,41KellyServices,118Kmart,150Knight,PhillipH.,323Knowledgeworkers,9,127,375Kogan,Nataly,175

Labordemographics,9–10LaborDepartment,57–58,58(exhibit),64,88,105–106Laborforce,31LaborManagementRelationsActof1947,232(exhibit),233Labormarket,114,375Labormarketcompetition,261,262(exhibit),263(exhibit)Laborrelations:

about,11collectivebargaining,236decertificationelections,236defined,235,375grievances,236,236(model)legalissues,231–234,232(exhibit)responsibilityfor,15trendsandissues,237unionorganizing,234–235,235(exhibit)unionsandlaborrights,234–236,235(exhibit),236(model)

Laborshortage,104–105Laborsurplus,102–103Languageability,360

Languagediversity,67,78–79Laws.SeeLegalenvironmentanddiversitymanagement;specificlawsLayoffs,102,375Learnedprofessionalemployeeexemption,256(exhibit)Learning,168,172,375Learningevaluations,175–176Legalcorporatesocialresponsibility,339,339(exhibit)Legalenvironmentanddiversitymanagement:

about,10,55–56affirmativeaction,68–69,68(exhibit)case,78–79compensationmanagement,253–255,254(exhibit),256–257(exhibit),257–258diversity,68,68(exhibit),69–70employmentlaws,major,59–66,59(exhibit)equalemploymentopportunity,67–68,68(exhibit)EqualEmploymentOpportunity

Commission,66–67,74globalissues,356laborrelations,231–234,232(exhibit)OUCHtest,56–58,57(exhibit),58(exhibit)pensionandbenefitslegislation,258practitioner ’sperspective,55recruiting,115religiousdiscrimination,73–74responsibilityfor,15sexualharassment,70–73,73(exhibit)testsandtesting,143–147,144(exhibit)trendsandissues,74Seealsospecificlaws

Leniencyerror,204Lewis,C.S.,327Liability,professional,18Lifeandsafety,rightto,224Lifeinsurance,291“Likeme”error,204LillyLedbetterFairPayActof2009,59(exhibit),60,65–66

Linemanagers,14–15,375LinkedIn,115,116,129–130,184,338Listening,123,219–220,373Lister,Harry,371LivingSocial,31Localizationapproachtoexpatriatepay,365Localmassmedia,forrecruiting,119,120(exhibit)Longevityphilosophy,252Lululemon,337Lumpsumoptionforexpatriatepay,365

MadeWithCode(MWC),184–185Maintenancestageofcareerdevelopment,178,179(exhibit)Managementbyobjectives(MBO)method,197–198,198(model),375Managementcounseling,227,375Managementrights,225–226Managingandleadingworkforce,218–220Margaritaville,37Marginaljobfunctions,63,375Marketingpractices,336

Marketpayline,263,263(exhibit),264(exhibit)MaryKay,41Masculinity,358(exhibit)Maslow’sHierarchyofNeeds,179,179(exhibit)Mayer,Marissa,282Maytag,96,97MBOmethod.SeeManagementbyobjectivesmethodMcCord,Patty,50McDonald’s,38,40,41,252McKinsey&Company,43Mechanisticjobdesign,93,375Medicalsavingsaccounts(MSAs),288–289,374Medicare,283Meritpay,277,375Microsoft:

complexity,39efficiency,6–7ethics,346–347performanceappraisal,199temporaryworkers,104,118

MidwestRegionalMedicalCenter

(Oklahoma),74Minimumwage,254,375Misconduct,serious,231,376Mission,193Missionstatements,35–36,375MITSloanManagementReview,342Modularplans,293Monsanto,97Monster(job-huntingsearchengine),129Moraldevelopment,330–331Motivation,194,249–251,250(exhibit),375Motivationaljobdesign,94,96–98,98(exhibit),375Motorola,96,97MSAs.SeeMedicalsavingsaccountsMultiple-hurdleselectionmodel,154,375Musculoskeletaldisorders(MSDs),311MWC.SeeMadeWithCode

Narrativemethodorform,198,375NataviGuides,175NationalAssociationofEnvironmentalManagers,343(exhibit)

Nationalculture,357,358(exhibit)NationalInstituteofOccupationalSafetyandHealth(NIOSH),309–310NationalInstitutesofHealth,320NationalLaborRelationsActof1935(NLRA),232–233,232(exhibit),258NationalLaborRelationsBoard(NLRB),233,235,237,253NationalSteel,96Naturalattrition,103Needs,Maslow’sHierarchyof,179,179(exhibit)Needsassessment,167,375Negativereinforcement,169(exhibit),170,375Negligence,gross,231,374Negligenthires,137,319–320,375Negotiationapproachtoexpatriatepay,365Netflix,49–50,86,190Newhireperformance,125–126,125(exhibit)Newhireturnover,125,125(exhibit)Nichestrategies,37Nike,36,37,147,323–324

NIOSH.SeeNationalInstituteofOccupationalSafetyandHealthNLRA.SeeNationalLaborRelationsActof1935NLRB.SeeNationalLaborRelationsBoardNokia,347Nonexemptemployees,254–255Norvig,Peter,43NOTIPSrules,235Nurturing,358(exhibit)Nutrition,314

OASDI.SeeOld-Age,Survivors,andDisabilityInsuranceObama,Barack,41,253Objectives,36,193,197,375Observation,90OccupationalSafetyandHealthAct(OSHAct),304–305OccupationalSafetyandHealthAdministration(OSHA):

employeerightsandresponsibilities,305(exhibit),307employerresponsibilities,305

(exhibit),307–309,308–309(exhibit)employerrights,305–307,305(exhibit)ergonomics,311HazardCommunicationStandards,307–308,308–309(exhibit)responsibilities,304violations,citations,andpenalties,309

Offshoring,361OJT.SeeOn-the-jobtrainingOld-Age,Survivors,andDisabilityInsurance(OASDI),283OLR.SeeOrganizationandLeadershipReviewOnboarding,164–165O*NET,88,105–106Onshoring,361,375On-the-jobtraining(OJT),173,174(model)Open-endedquestions,148Operantconditioning,168Oracle,43,259Oralwarnings,229

Organizationalculture:about,29,40–41artifactsof,41case,109–110defined,40,375employeebehaviorand,41incentives/benefitsand,297–298practitioner ’sperspective,29socialmediaand,41–42

Organizationalstructure,39–40,91–92,375OrganizationandLeadershipReview(OLR),212Organizations,humanresourcemanagement,17–18Orientation,164–165,358(exhibit),375OSHA.SeeOccupationalSafetyandHealthAdministrationOSHAct.SeeOccupationalSafetyandHealthActOtherthanseriousviolations,309OUCHtest:

about,56–58,57(exhibit),58(exhibit)defined,57,375

performanceappraisaland,194–195,196,206selectionand,136,144

Outsidesalesemployeeexemption,256(exhibit)Outsourcing,105,181,360–361,375Overtime,104,255,375OxfamInternational,32

Paidpersonalleave,288Paidtimeoff(PTO),287–288Parent-countrynationals,360,361(exhibit)Parochialism,357,375Part-timeemployees,103Patagonia,342PatientProtectionandAffordableCareActof2010,285Patternorpracticediscrimination,60,61(exhibit),375Pay:

base,248,267competency-based,252globalworkforce,364–365holiday,287

merit,277,375sayon,282skill-based,252variable,267,275,377

Paycurve,263,263(exhibit),264(exhibit)Payequity,257–258Payreduction,102Paysecrecy,253Paystructure,260,263–266,264(exhibit),265(exhibit),375Paysystem,developing,260–266,261–265(exhibit)PBGC.SeePensionBenefitGuaranteeCorporationPeerreviews,201Pensionandbenefitslegislation,258PensionBenefitGuaranteeCorporation(PBGC),286,375Pepsi,32,37Perceptioncongruence,202Perceptual-motorjobdesign,94,375Performanceappraisal:

case,211–212continuous,208

debriefing,206–208,207(model)defined,191,375developmentalinterviews,207–208,207(model)evaluativeinterviews,206–207,207(model)measures,192–193methodsandforms,196–200,197(exhibit)performancemanagementversus,190–191practitioner ’sperspective,189problemswith,203–206,204(exhibit)process,191–192,192(exhibit)reasonsfor,193–194responsibilityfor,200–203sustainabilityand,341trainingfor,206trendsandissues,208types,194–196,205–206

Performanceevaluation.SeePerformanceappraisalPerformancemanagement:

competency-based,208–209

defined,190,375–376jobanalysisand,88performanceappraisalversus,190–191trendsandissues,208–209SeealsoPerformanceappraisal

Performancephilosophy,252Perquisites,282,283,376Personality-jobfit,137,360Personalitytests,144,376Personalresponsibility,334Person-organizationfit,139,360Physicalexams,146Physicalskillstests,145–146Physicaltests,145–146,376Pieceworkplans,278Pincus,Mark,24PizzaSchmizza,122Point-factormethod,259Polygraphtesting,143,144(exhibit),145Positivereinforcement,169–170,169(exhibit),376Positivethinking,315Postconventionallevelofmoral

development,330–331Power-distance,358(exhibit)PPOs.SeePreferredproviderorganizationsPractitioner ’smodelforhumanresourcemanagement,19–20,19(exhibit)Practitioner ’sperspective:

compensationmanagement,247employeehealth,303ethics,327globalissues,351incentives,275legalenvironmentanddiversitymanagement,55matchingemployeesandjobs,85organizationalculture,29performanceappraisal,189progressivediscipline,217recruiting,113selection,135training,163

Preconventionallevelofmoraldevelopment,330Pre-employmentinquiries,141,142(exhibit),143

Preferredproviderorganizations(PPOs),288,376PregnancyDiscriminationActof1978,59(exhibit),62PricewaterhouseCoopers,147Principles,333,376Privacy,224,336–337Privateemploymentagencies,118–119,120(exhibit)Probingquestions,148Problememployees,227Processtheory,249Productivity,6,136,376Productivitycenters,6,376Productmarketcompetition,262–263,262(exhibit),263(exhibit)Professionalliability,18Profits,14Profit-sharingprograms,279,376Progressivediscipline,217,228–231,376Promotionfromwithin,117,120(exhibit)Proof,228Proximityerror,204

PrudentialInsurance,96PTO.SeePaidtimeoffPublicemploymentagencies,118,120(exhibit)Publicpolicyexceptionstoemployment-at-will,225Punishment,169(exhibit),170,376Punitivedamages,63–64,64(exhibit),376

Qualitativeforecasting,100,376Qualitativeforecasts,99,376Quantitativeforecasts,99–100,101(exhibit)Questionnaires,89,221,221(exhibit)Questiontypes,148–150,149(exhibit)Quidproquoharassment,71,376Quotas,64

Racenorming,64,376RailwayLaborActof1926,231–232,232(exhibit)RalphLauren(company),336Ranking,199,376Raterange,263,376

Ratioanalysis,99,101(exhibit),376Reactionevaluations,175Realisticjobpreview(RJP),122,124,376Reasonableaccommodation,62–63,376Reasonableperson,72,376Recencyerror,204–205Recruiter-candidateinteraction,122–124Recruiting:

alternativesto,115–116case,129–130challengesandconstraints,121–124defined,113,376evaluationofprograms,124–126,125(exhibit)external,116,118–120,120(exhibit),374externalfactors,114–115globalissues,127,362internal,117–118,120(exhibit),375jobanalysisand,88organizationalconsiderations,115–116practitioner ’sperspective,113process,113–114

reachof,116socialmedia,115,116timingof,115trendsandissues,126–127

Red-circlerates,264Reentrytraining,364Referencechecks,152Referrals,employee,117,120(exhibit)Regressionanalysis,99–100,101(exhibit),376Reinforcement:

about,168negative,169(exhibit),170,375positive,169–170,169(exhibit),376

Relaxation,313–314,314(exhibit)Relevantothers,250Reliability,99,140,192,376Religiousdiscrimination,73–74Remediation,165,376Renault-NissanAlliance,362Repatriationafterforeignassignments,364Repeatedviolations,309Repetitivestressinjuries(RSIs),311

Responsibility,286,334,335,376SeealsoCorporatesocialresponsibility

Restaurantservers,255Results,195–196,376Resultsevaluations,176Results-only-work-environments(ROWE),208Résumés,131–132,141Retainedsearchfirms,119Retaliation,67,376Retirement,103,366Retirementbenefits,289–291Retraining,103,104–105Returnoninvestment(ROI),45,376Revenuecenters,6,376Reversediscrimination,21,58,69,376Rewards,198Ricciv.DeStefano(2009),21Rightoffreeconsent,223Rights:

employee,66,223–224,223(exhibit),305(exhibit),307employer,66–67,305–307,305(exhibit)

management,225–226Righttodueprocess,224Righttofreedomofconscience,224Righttofreespeech,224Righttolifeandsafety,224Righttoprivacy,224Right-to-sue,66,376Right-to-worklaws,233Rinni,Antti,347RJP.SeeRealisticjobpreviewRobertGraham(company),197ROI.SeeReturnoninvestmentRoleofhumanresourcemanagement,6–7RotaryInternational,332RothIndividualRetirementAccounts(IRAs),290ROWE.SeeResults-only-work-environmentsRSIs.SeeRepetitivestressinjuries

Safety,workplace,11,15,304,323–324,377SafetyDataSheets(SDS),308–309(exhibit),376

Samsung,32,86SAS.SeeStatisticalAnalysisSystemInstituteInc.“Sayonpay,”282Science&EntertainmentExchange,184Secondaryboycotts,233SecuritasSecurityServicesUSA,316SecuritiesandExchangeCommission(SEC),42Security,workplace,316–318,320–321,377Selection:

about,135–136applicationsandpreliminaryscreening,141,142(exhibit),143backgroundchecks,150–153case,158–159defined,136,376“fit,”lookingfor,137–139globalissues,362globalworkforceissues,154–155humanresourceinformationsystemsand,155importanceof,136–137interviews,147–150,149(exhibit),

150(model)jobanalysisand,88practitioner ’sperspective,135process,137,138(exhibit)selectingcandidateandofferingjob,153–154testingandlegalissues,143–147,144(exhibit)trendsandissues,154–156UniformGuidelinesonEmployeeSelectionProcedures,139–141workplacesecurityand,319–320

Self-assessments,202Self-efficacy,168,376Semistructuredinterviews,148Seriousmisconduct,231,376Seriousviolations,309Severityorstrictnesserror,204Sexualharassment,70–73,73(exhibit),376Sexualorientation,153Shapingbehavior,169–171,169(exhibit)Shareholders,32SHRM.SeeSocietyforHumanResourceManagement

Sickleave,287Similarityerror,204Simulations,145–146,376Situationalquestions,148–149Skill-basedpay,252Skills:

business,16–17,373conceptualanddesign,16,173(exhibit),373globalmanager,359–360humanrelations,16,173(exhibit),374humanresourcemanagement,16–17,16(exhibit)technical,16,173(exhibit),377

Skillstests,144,376Skillvariety,94Skinner,B.F.,168Slogans,41SMARTobjectives,197Smith,Frederick,41Socialaudits,338Socialenvironment,114–115Socialloafers,278,376Socialmedia:

organizationalcultureand,41–42recruiting,115,116searching,152–153inworkplace,237workplacesafety/securityand,319

SocialSecurity,283Society,32SocietyforHumanResourceManagement(SHRM),17–18,376SouthKorea,368SouthwestAirlines,41,165Specializedpublications,forrecruiting,119,120(exhibit)Specificity,ofperformancemeasures,193Spivak,Avi,175Split-payapproachtoexpatriatepay,365Staffing:

about,10globalissues,355,359–361jobanalysisand,88responsibilityfor,15

Staffmanagers,14–15,376Stakeholders’approachtoethics,332,332(exhibit)

Standardhourplans,278Standards,academic,191Starbucks,252,253Stateemploymentservices,118,120(exhibit)StatisticalAnalysisSystemInstituteInc.(SAS),297–298Statutorybenefits,283–286,292(exhibit)Stereotyping,203,376Stockincentives,282Stockoptions,279–280Stockpurchasingplans,280Stop&Shop,95Stories,41Straightpiece-rateplans,278Strategy:

about,34–35case,49–50defined,34,376historyof,33humanresourcemanagementand,38–39importanceof,29–30typesof,37vision,mission,andobjectives,

35–36Stress,312–316,314(exhibit),316(exhibit),376Stressmanagement,312–315,314(exhibit)Stressors,312,376Strictnesserror,204Strikes,232,233,237,376Structuredinterviews,148Stubb,Alexander,347Subordinatereviews,201Substanceabuse,320Substantialevidence,228Suharto,336SunTzu,33–34Supervisorevaluations,200Suppliers,31Supportnetworks,315SupremeCourt,69Suspension,disciplinary,230Sustainability:

about,11,340benefitsbasedon,343–344defined,11,340,376greencompanies,340

humanresourcesand,340–341managementcommitment,needfor,340–341resources,Internet,343(exhibit)responsibilityfor,15tips,342trendsandissues,343–344workflowsandjobdesignfor,106SeealsoCorporatesocialresponsibility

Sustainabilitytraining,341–342Symboliccommunication,364Symbols,41Synchronousdistancelearning,174Systemicdiscrimination,74

Taft-HartleyActof1947,232(exhibit),233Talentmanagement,50,177–181,179(exhibit),180(exhibit)Talentwars,126–127Target,95,96,211Taskidentity,94Tasksignificance,94TataMotors,37

Technicalskills,16,173(exhibit),377Technology,9,32,105Telecommuting,97–98Temporaryagencies,118,120(exhibit)Temporaryworkers,104,118TEPCO,40,317Termination,230,231Testsandtesting:

Blanchard,195,196,202,206cognitiveability,145,373drug,146duties,255,256–257(exhibit)EqualEmploymentOpportunityCommission,143fitness-for-duty,146,374four-waytestofethics,332genetic,144honesty,145integrity,145interest,144–145,375legalissues,143–147,144(exhibit)personality,144,376physical,145–146,376physicalskills,145–146polygraph,143,144(exhibit),145

skills,144,376UniformGuidelinesonEmployeeSelectionProcedures,139written,144–145

Thinking:divergent,69–70,374positive,315

Third-countrynationals,360,361(exhibit)360-degreeevaluations,50,202–203,373Timemanagement,313Timerequiredtohire,124–125,125(exhibit)TimHortons,37TitleVIIoftheCivilRightsActof1964,59(exhibit),60–61,61(exhibit),356T-Mobile,145Toyota,165Tradeblocs,353,353(exhibit),377TraderJoe’s,35Traditionalhealthcareplans,288,377Training:

about,10–11,163assessing,175–176

case,184–185classroom,174communication,363–364cultural,362–363defined,164,377designanddeliveryof,171,173–175,173(exhibit),174(model)diversity,344–345employeedevelopmentversus,164employeereadinessfor,167–168expatriate,362–364,363(exhibit)gamificationof,181globalissues,355jobanalysisand,88learningandshapingbehavior,168–171,169(exhibit),172needfor,163–166needsassessment,167outsourcing,181performanceappraisal,206practitioner ’sperspective,163processoverview,166–167,167(exhibit)reentry,364responsibilityfor,15

sustainability,341–342talentmanagement,50,177–181,179(exhibit),180(exhibit)trendsandissues,181

Traits:assessing,194–195,205–206defined,194,377ethicsand,328,330globalmanager,359–360

Transfer,103,230TravelersInsurance,97TreasuryDepartment,37Trendanalysis,99,101(exhibit),377Trendsandissues:

compensationmanagement,267–268corporatesocialresponsibility,344–345dataanalytics,46employeeengagement,20–21employeerightsandlaborrelations,236–237globalissues,46,367–368incentives,294legalenvironment,74

matchingemployeesandjobs,105–106performancemanagementandappraisal,208–209recruiting,126–127reversediscrimination,21selection,154–156sustainability,343–344training,181workplacesafety,health,andsecurity,320–321

Trust,218–219,332–333,377Tuitionassistance,291Turnover:

defined,8,377newhire,125,125(exhibit)reducing,105

Twitter,158,319,338

UGESP.SeeUniformGuidelinesonEmployeeSelectionProceduresUI.SeeUnemploymentInsuranceUncertaintyavoidance,358(exhibit)Unduehardship,63,377UnemploymentInsurance(UI),284

Unemploymentrate,114Unfairlaborpractices,232–233UniformedServicesEmploymentandReemploymentRightsActof1994,59(exhibit),64UniformGuidelinesonEmployeeSelectionProcedures(UGESP),139–141,377Unionorganizing,234–235,235(exhibit)Unionsandlaborrights,234–236,235(exhibit),236(model)Unionshops,233Unionunfairlaborpractices,233UnitedNations,224UnitedNationsGlobalCompact,343(exhibit)UnitedSteelWorkersUnion,317UniversityofArkansasatLittleRock,CollegeofBusiness,35–36Unstructuredinterviews,148USBureauofLaborStatistics,247,287,289USDepartmentofJustice,320USDepartmentofLabor,57–58,58

(exhibit),64,88,105–106USDepartmentoftheTreasury,37USSupremeCourt,69

Vacationorannualleave,287Valence,249Validity:

about,99construct,140,373content,140,373criterion-related,139–140,373defined,139,377inperformancemeasures,192reliabilityand,140

Values,333,377Variablepay,267,275,377Variables,criticaldependent,8Vesting,286,377VeteransBenefitsImprovementActof2004(VBIA),59(exhibit),65Victoria’sSecret,42VietnamEraVeteransReadjustmentAssistanceActof1974(VEVRAA),59(exhibit),62Violence,workplace,318–320

Virtualinterns,175Visas,work,154Vision,35–36,377Voluntarybenefits,287–291,292(exhibit)Vroom,Victor,249

Wageandsalaryadd-ons,248Wagecompression,252–253,377WagnerActof1935,232–233,232(exhibit),258Walk-ins,118,120(exhibit)Walmart:

compensationmanagement,252,259corporatesocialresponsibility,337costleadership,37ethics,336asglobalfirm,365organizationalculture,41part-timeemployees,103processsolutions,211size,270strike,237sustainability,340

WaltDisneyCo.,324Walton,Sam,41WARNAct.SeeWorkerAdjustmentandRetrainingNotificationActof1988Warnings,229–230WebCrawler,184Weber,Max,36Websearches,152–153Welch,Jack,218Westinghouse,317WhatsApp,158Whistle-blowing,11,331Whitehead,Donald,122Wildcatstrikes,233Willfulviolations,304,309Woods,Tiger,96WorkerAdjustmentandRetrainingNotificationActof1988(WARNAct),232(exhibit),234WorkerRightsConsortium,324Workers’compensation,283–284Workflowanalysis,86–87,87(exhibit),377Workforcescience,44Workplacesafety,11,15,304,323–324,

377Workplacesecurity,316–318,320–321,377Workplaceviolence,318–320WorkplaceWellnessPrograms,310–311,320Worksample,145,377Worksharing,97,102Workvisas,154Workweek,compressed,98WorldatWork,18WorldBusinessCouncilforSustainableDevelopment,342,343(exhibit)WorldEconomicForum,343(exhibit)WorldTradeOrganization(WTO),352Wright,Cindy,3–4

SeealsoPractitioner ’sperspectiveWrittentesting,144–145Writtenwarnings,229–230

Xerox,46

Yahoo,158,184,199,282Yieldratio,124,125(exhibit),377

Zappos,40Zynga,24