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Chapter 9

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Chapter 9: Managing Human Resources The Foundations of Human Resource Management Human Resource Management (HRM): set of organizational activities directed at attracting, developing, and maintaining an effective workforce  human resource management takes place within a complex and ever-changing environment context and is increasingly being recognized for its strategic importance The Strategic Importance of HRM Human resources are critical for effective organizational functioning  The new importance of HRM stems from increased legal complexities, the recognition that human resources are a valuable means for improving productivity, and the awareness today of the costs associated with poor HRM Managers now realize that the effectiveness of their HR function has a substantial impact on a firms bottom line  Poor HR planning can result in spurts of hiring followed by layoffs o This is costly in terms of unemployment compensation payments, training expenses, and morale o Haphazard compensation systems do not attract, keep, and motivate good employees o Outmoded recruitment practices can expose the firm to expensive and embarrassing legal action  The chief CR executive of most large businesses is a VP directly accountable to the CEO Human Resource Planning Job Analysis Job Analysis: a detailed study of the specific duties in a particular job and the human qualities required for that job Job analysis is made up of two parts: 1. Job Description: the objectives, responsibilities, and key tasks of a job; the conditions under which it will be done; its relationship to other positions; and the skills needed to perform it 2. Job Specification: the specific skills, education, and experience needed to perform a job Job analysis information is used in many HR activities  For example, knowing about job content and job requirements is necessary to develop appropriate selection methods and job-relevant performance appraisal systems and to set equitable compensation rates Forecasting HR Demand and Supply After managers understand the jobs to be performed within an organization, they can start planning for the organization’s future HR needs  They start by assessing trends in past HR usage, future organizational plans, and general economic trends  Historical ratios can then be used to predict demand for types of employees 1 o Such as operating employees and sales representatives Forecasting the supply of labour involves two tasks: 1. Forecasting Internal Supply – the number and type of employees who will be in the firm at some future date 2. Forecasting External Supply - the number and type of people who will be available for hiring from the labour market at large The simplest approach merely adjusts present staffing levels for anticipated turnover and promotions  They make sure to spot areas where there will eventually be too many qualified professionals competing for too few promotions or, too few good people available to fill important positions Replacement Charts At higher levels of the organization, managers make plans for specific people and positions Replacement Chart: an HR technique that lists each important managerial position, who occupies it, how long he or she will probably stay in it before moving on, and who is now qualified or soon will be qualified to move into it  This allows ample time to plan developmental experiences for people identified as potential successors to critical managerial jobs Skills Inventories To facilitate both planning and identifying people for transfer or promotion, some organizations also have employee information systems, or skills inventories Employee Information Systems (skills inventories): computerized systems that contain information on each employees education, skills, work experience, and career aspirations  Such as system can quickly locate every employee who is qualified to fill a position requiring o For example, requiring, a degree in chemical engineering, three years of experience in an oil refinery, and fluency in French Forecasting the external supply of labour is a different problem altogether  To get an idea of the future availability of labour, planners must rely on information from outside sources, such as government reports and figures supplies by colleges and universities on the number in major fields Matching HR Supply and Demand After comparing future demand and internal supply, managers can make plans to manage predicted shortfalls or overstaffing  If a shortfall is predicted many things can be done o new employees can be hired o present employees can be retrained and transferred into understaffed areas o individuals approaching retirement can be convinced to stay on o labour-saving or productivity-enhancing systems can be installed 2 If the organization needs to hire, the external labour-supply forecast helps managers plan how to recruit according to whether the type of person needed is readily available or scarce in the labour market  use of temporary workers also helps managers in staffing by giving them flexibility  If overstaffing is expected to be a problem, the main options are: o Transferring the extra employees o Not replacing individuals who quit o Encouraging early retirement o Laying people off Staffing the Organization Once managers have decided what position they need to fill, they must find and hire individuals who meet the job requirements The top three characteristics employers look for when hiring people is  Good work ethic  Reliability  Willingness to stay on the job Recruiting Human Resources Once an organization has an idea of its future HR needs, the next phase is usually recruiting new employees Recruiting: the phase in the staffing of a company in which the firm seeks to develop a pool of interested, qualified applicants for a position  Some recruits are found internally, while most come from outside the organization Internal Recruiting Internal Recruiting: considering present employees as candidates for job openings  Promotion from within can help build morale and keep high-quality employees from leaving  In unionized firms, the procedures for notifying employees of internal job-change opportunities are usually spelled out in the union contract  For higher-level positions, a skills inventory system may be used to identify internal candidates or managers may be asked to recommend individuals who should be considered External Recruiting External Recruiting: attracting people outside the organization to apply for jobs  External recruiting methods include advertising, campus interviews, employment agencies, union hiring halls, and referrals by present employees o The manager must select the most appropriate method for each job o Private employment agencies can be a good source of clerical and technical employees, and executive search firms specialize in locating top-management talent o Newspaper ads are often used because they reach a wide audience The older-fashioned job fair has survived in spite of internet career postings 3 Internships One method of external recruiting involves offering college and university students internships Internships: a short-term paid position where students focus on a specific project  If the individuals work out well, the company often hires the student full-time after they graduate o AT IBM Canada’s internship program, for example, students are responsible for turning an idea into a marketable product o They also get to network with industry leaders and develop their professional skills Selecting Human Resources Once the recruiting process has attracted a pool of applicant, the next step is to select someone to hire  The intent of the selection process is to gather information from applicants that will predict their job success and then to hire the candidates that will be most successful Validation: the process of determining the predictive value of information  To reduce the element of uncertainty, managers use a variety of selection techniques o Applications or Resumes, Screening Interview, Reference Checks, Interview with Managers, Medical/Drug test, Ability/Aptitude test Application Forms The first step in selection is usually asking candidates to fill out an application form  This is an efficient method of gathering information about the applicant’s previous work history, educational background and other job-related demographic data  Should not contain questions about areas unrelated to the job o Such as gender, religion, or national origin  Application-form usually decide whether a candidate merits further evaluation Tests Tests of ability, skill, aptitude, and knowledge relevant to a particular job are usually the best predictors of job success  Tests of general intelligence or personality are occasionally useful as well  Test should be administered and scored consistently  All candidates should be given the same direction, allowed the same amount of time, and offered the same testing environment Regardless of the type of test used, it must be job-related  It must not serve as a basis for discrimination against anyone for reasons unrelated to the job  It must be a valid predicator of performance o IT must provide evidence that people who score well on it are more likely to perform well in the job than are people who score poorly Interviews 4 The interview us a popular selection device, but it is sometimes a poor predictor f job success because biases that are inherent in the way people perceive and judge others on first meeting affect subsequent evaluations  Many companies are now placing more emphasis on testing and less emphasis on interviewing o Most candidates become very clever at interviewing and give all the “right” answers Interview validity can be improved by training interviewers to be aware of potential biases and by increasing the structure of the interview  In a structured interview, questions are written in advance and all interviewers follow the same question list with each candidate o This creates consistency into the interview procedure and allows the organization to validate the content of the questions Interviews can also increase interview validity by asking “curveball” questions – that is, questions that job applicant would never expect to be asked – to see how well they think on their feet  For example, How would you move Mount Fuji? Or How would you sell me a glass of water?  These types of questions give insights into a candidate’s strengths and weaknesses Other Techniques Organizations also use other selection techniques that vary with the circumstances  A manufacturer afraid of injuries to workers on the job might require new employees to have a physical exam o This gives information about whether the employees are physically fit to do the work Polygraph (lie detector) tests are largely illegal now, and drug tests are also coming under fire  In 1988, for example, Imperial Oil Ltd.’s drug policy was unlawful because Imperial Oil failed to prove that a positive drug test would indicate failure to perform essential duties  Its policy also required random drug and alcohol testing, but that was also judged discriminatory because the company could not prove such testing was necessary to deter alcohol or drug impairment on the job Developing Human Resources Regardless of how effective a selection system is, most employees need additional training if they are to grow and develop in their jobs This process begins with orientation and then proceeds to the assessment of training and development needs (including the performance of a needs analysis) and the selection of the best training techniques and methods New Employee Orientation An important part of an organization’s training and development program is a new employee orientation Orientation: the initial acquainting of new employees with the company’s policies and programs, personnel with whom they will interact, and the nature of the job  Poor orientation can result in disenchantment, dissatisfaction, anxiety, turnover, and other employee problems 5  Effective orientation can play a key role in job satisfaction, performance, and retention o It will also help newcomers feel like part of a team, introduce them quickly to co-workers, supervisors, and other new employees o It will also easy the transition from outsider to insider Some organizations also find it appropriate to include as a part their orientation a general overview of and introduction to the business itself  This may include such things as information about the firm’s history, its evolution, its successes, and perhaps even some of its failures  Organizations with strong corporate cultures are especially likely to provide such information because it quickly and easily provides information about the firms culture o This makes it easier to know how to function within it Training and Development Beyond orientation for new employees, most organizations also find it effective to continue training and development on a regular basis  Employees must be continually trained and developed to enhance and otherwise improve the quality of the contributions they make to the organization The starting point in assessing training and development needs is conducting a needs analysis – determining the organization’s true needs and the training programs necessary to meet them This analysis generally focusses on two things: the organization’s job-related needs and the capabilities of the current workforce  The organizations needs are determined by the nature of the work that the organization need to be done o What knowledge, skills, and abilities does the organizations need to compete Work-Based Programs Work-Based Programs: a technique that ties training and development activities directly to task performance On-the-Job-Training: those development programs in which employees gain new skills while performing them at work  Much on the job training is informal, as when one employee shows another how to operate the photocopy machine Systematic Job Rotations and Transfers: a technique in which an employee is systematically rotated or transferred from one job to another  This most likely to be used for lower level managers or for operating employees being groomed for promotions  The employee learns a wider array of tasks, acquires more abilities, and develops a more comprehensive view of the work of an organization or a particular sub-unit Instructional-Based Programs 6 Instructional-Based Programs: training workers through the use of classroom-based programs such as the lecture approach Lecture or Discussion Approach: an instructional-based program in which a trainer presents material in a descriptive fashion to those attending a trainee program.  Just as professors lecture students on a particular subject matter, an organizational trainer “lectures” trainees o This may be done through a pure lecture method and may include, audio, video, and discussions, depending on the size of the class Off-the-Job-Training: those development programs in which employees learn new skills at a location away from the normal work site  For example, refresher course are offered to managers of McDonald’s 1375 Canadian restaurants at the Canadian Institute of Hamburgerology Another instructional-based program is computer-assisted instruction  A trainee sits at a personal computer and operates software that has been specifically developed to teach certain material Team Building and Group-Based Training As more and more organizations are using teams as a basis for doing their jobs  it should not be surprising that many of the same companies are developing training programs specifically designed to facilitate intragroup co-operation among team members One popular method involves various outdoor training exercises  For example, a group going through a physical obstacle course that requires climbing, crawling and other physical activities Evaluating Employee Performance Performance Appraisal: a formal program for evaluating how well an employee is performing the job. It helps managers to determine how effective they are in recruiting and selecting employees  Appraisals are important because they provide a benchmark to assess the extent to which recruiting and selection processes are adequate o Are they selecting the best employees  Appraisals also contribute to effective training, development, and compensation The Performance Appraisal Process Several questions must be answered as part of the performance appraisal process. These questions generally relate to who condu
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