Ch 11 learnsmart
Human resource management (HRM) is the process of determining human resource needs and
then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling
employees to achieve organizational goals (see Figure 11.1). For many years, human resource
management was called “personnel” and involved clerical functions such as screening
applications, keeping records, processing the payroll, and finding new employees when
necessary. The roles and responsibilities of HRM have evolved primarily because of two key
factors: (1) organizations’ recognition of employees as their ultimate resource and (2) changes in
the law that rewrote many traditional practices
One reason human resource management is receiving increased attention now is that the U.S.
economy has experienced a major shift—from traditional manufacturing industries to service
and high-tech manufacturing industries that require highly technical job skills. This shift means
that many workers must be retrained for new, more challenging jobs. They truly are the ultimate
resource. People develop the ideas that eventually become products to satisfy consumers’ wants
and needs. Take away their creative minds, and leading firms such as Disney, Apple, Procter &
Gamble, Google, Facebook, and General Electric would be nothing.
Until the 1930s, the U.S. government had little to do with human resource decisions. Since then,
legislation and legal decisions have greatly affected all areas of human resource management,
from hiring to training to monitoring working conditions (see Figure 11.2). These laws were
passed because many businesses did not exercise fair labor practices voluntarily.
Perhaps the most controversial policy enforced by the EEOC involved affirmative action,
designed to “right past wrongs” by increasing opportunities for minorities and women.
Interpretation of the affirmative action law led employers to actively recruit, and in some cases
give preference to, women and minority group members. Questions persist about the legality of
affirmative action and the effect it may have in creating a sort of reverse discrimination in the
workplace. Reverse discrimination has been defined as discriminating against members of a
dominant or majority group (e.g., whites or males) usually as a result of policies designed to
correct previous discrimination. The issue has generated heated debate as well as many lawsuits.
The Americans with Disabilities Act of 1990 (ADA) requires employers to give applicants with
physical or mental disabilities the same consideration for employment as people without
disabilities. The ADA also protects individuals with disabilities from discrimination in public
accommodations, transportation, and telecommunications.
The ADA requires making “reasonable accommodations” for employees with disabilities, such
as modifying equipment or widening doorways. Most companies have no trouble making
structural changes to be accommodating. However, at times such changes can be difficult for
some small businesses. 7Employers used to think that being fair meant treating everyone the
same, but accommodation in fact means treating people according to their specific needs. That
can include putting up barriers to isolate people readily distracted by noise, reassigning workers
to new tasks, and making changes in supervisors’ management styles. Accommodations are not
always expensive; an inexpensive headset can allow someone with cerebral palsy to talk on the
phone. All management, including human resource management, begins with planning. The
five steps in the human resource planning process are:
1. Preparing a human resource inventory of the organization’s employees. This inventory
should include ages, names, education, capabilities, training, specialized skills, and other
relevant information (such as languages Page 306 spoken). It reveals whether the labor
force is technically up-to-date and thoroughly trained.
2. Preparing a job analysis. A job analysis is a study of what employees do who hold
various job titles. It’s necessary in order to recruit and train employees with the necessary
skills to do the job. The results of job analysis are two written statements: job descriptions
and job specifications. Ajob description specifies the objectives of the job, the type of
work, the responsibilities and duties, working conditions, and the job’s relationship to
other functions. Job specifications are a written summary of the minimal education and
skills to do a particular job. In short, job descriptions are about the job, and job
specifications are about the person who does the job. Visit the Occupational Information
Network (O*NET) atwww.onetcenter.org for detailed information about job analyses
and job descriptions. See Figure 11.3 for a hypothetical job description and job
3. Assessing future human resource demand. Because technology changes rapidly, effective
human resource managers are proactive; that is, they forecast the organization’s
requirements and train people ahead of time or ensure trained people are available when
4. Assessing future labor supply. The labor force is constantly shifting: getting older,
becoming more technically oriented, becoming more diverse. Some workers will be
scarcer in the future, like biomedical engineers and robotic repair workers, and others
will be oversupplied, like assembly-line workers.
5. Establishing a strategic plan. The human resource strategic plan must address recruiting,
selecting, training, developing, appraising, compensating, and scheduling the labor
force. Because the first four steps lead up to this one, we’ll focus on them in the
rest of the chapter.
Recruitment is the set of activities for obtaining the right number of qualified people at
the right time. Its purpose is to select those who best meet the needs of the
Human resource managers can turn to many sources for recruiting assistance (see Figure
11.4). Internal sources include current employees who can be transferred or promoted or who can
recommend others to hire. Using internal sources is less expensive than recruiting from outside
and helps maintain employee morale. However, it isn’t always possible to find qualified workers
within the company, so human resource managers also use external sources such as
advertisements, public and private employment agencies, college placement bureaus,
management consultants, Internet sites, professional organizations, referrals, and online and
Selection is the process of gathering information and deciding who should be hired, under legal
guidelines, to serve the best interests of the individual and the organization.
A typical selection process has six steps: 1. Obtaining complete application forms. Although equal employment laws limit the kinds
of questions that can appear, applications help reveal the applicant’s educational
background, work experience, career objectives, and other qualifications directly related
to the job.
2. Conducting initial and follow-up interviews. A staff member from the human resource
department often screens applicants in a first interview. If the interviewer considers the
applicant a potential hire, the manager who will supervise the new employee may
interview the applicant as well. It’s important that managers prepare adequately for the
interview to avoid selection decisions they may regret. 19 No matter how innocent the
intention, missteps such as asking about pregnancy or child care could later be evidence
if the applicant files discrimination charges.
3. Giving employment tests. Organizations often use tests to measure basic competency in
specific job skills like welding or firefighting, and to help evaluate applicants’
personalities and interests. The tests should always be directly related to the
job. Employment tests have been legally challenged as potential means of discrimination.
4. Conducting background investigations. Most organizations now investigate a candidate’s work
record, school record, credit history, and references more carefully than in the past to help
identify those most likely to succeed. It is simply too costly to hire, train, and motivate people
only to lose them and have to start the process over. Services such as LexisNexis allow
prospective employers not only to conduct speedy background checks of criminal records,
driving records, and credit histories but also to verify work experience and professional and
5. Obtaining results from physical exams. There are obvious benefits to hiring physically and
mentally healthy people. However, according to the Americans with Disabilities Act, medical
tests cannot be given just to screen out individuals. In some states, physical exams can be given
only after an offer of employment has been accepted. In states that allow pre-employment
physical exams, they must be given to everyone applying for the same position. Pre-employment
testing to detect drug or alcohol abuse has been controversial, as has screening to detect carriers
of HIV, the virus that causes AIDS.
6. Establishing trial (probationary) periods. Often an organization will hire an employee
conditionally to let the person prove his or her value on the job. After a specified probationary
period (perhaps six months or a year), the firm can either permanently hire or discharge that
employee on the basis of supervisors’ evaluations. Although such systems make it easier to fire
inefficient or problem employees, they do not eliminate the high cost of turnover.
Contingent workers include part-time workers (anyone who works 1 to 34 hours per week),
temporary workers (workers paid by temporary employment agencies), seasonal workers,
independent contractors, interns, and co-op students.
Companies may also hire contingent workers when full-timers are on some type of leave (such as
maternity leave), when there is a peak demand for labor or products (like the holiday shopping
season), or when quick service to customers is a priority.
Contingent workers receive few benefits; they are rarely offered health insurance,
vacation time, or company pensions. They also tend to earn less than permanent
workers do. On the positive side, many on temporary assignments are eventually offered
full-time positions. Managers see using temporary workers as a way of weeding out poor workers and finding good hires. Although exact numbers are difficult to gather, the
Bureau of Labor Statistics estimates there are approximately 5.7 million contingent
workers in the United States, with the majority under age 25. 22Experts say temps are
filling openings in an increasingly broad range of jobs, from unskilled manufacturing
and distribution positions to middle management. Increasing numbers of contingent
workers are educated professionals such as accountants, attorneys, and engineers.
As technology and other innovations change the workplace, companies must offer
training programs that often are quite sophisticated. The term training and
development includes all attempts to improve productivity by increasing an employee’s
ability to perform. A well-designed training program often leads to higher retention
rates, increased productivity, and greater job satisfaction. Employers in the United
States generally find that money for training is well spent. Training focuses on short-
term skills, whereas development focuses on long-term abilities. Both include three
steps: (1) assessing organization needs and employee skills to determine Page 313training
needs; (2) designing traini