Chapter 10 (Prep for Exam 3)
Individual Incentives
A bonus may be awarded to employees upon their reaching a sales quota or performance goal. Merit salary systems link rises to performance levels in non-sales jobs. Pay-for-performance (or variable pay) goes to middle managers on the basis of companywide performance, business-unit performance, personal record, or all three factors.
Trend in Contingent and Temporary Employment
A contingent worker is a person who works for an organization on something other than a permanent or full-time basis.
Dealing with Organized Labor
A labor union is a group of individuals working together to achieve shared job-related goals, such as higher pay, shorter working hours, more job security, greater benefits, or better working conditions. Labor relations refers to the process of dealing with employees who are represented by a union. Collective bargaining is the process by which union leaders and managers negotiate common terms and conditions of employment for the workers re represented by unions.
Compensation System
A major factor in retaining skilled workers is a company's compensation system—the total package of rewards that it offers employees in return for their labor.
Common Training Methods
After a company hires new employees, it must acquaint them with the firm and their new jobs. On-the-job training occurs while employees are at work. Off-the-job training takes place at locations away from work, such as in simulated work environments or in classrooms. Vestibule training takes place in simulated work environments that make the off-the-job training more realistic.
Matching HR Supply and Demand
After comparing future demand and internal supply, managers can make plans to manage predicted shortfalls or overstaffing. During the downturn of 2008-2009 many firms found it necessary to reduce the size of their workforce. Others did not reduce their workforce but reduced the number of hours each employee spent at work.
Application Forms (Selecting Human Resources)
An application form is a method of gathering information about the applicant's work history, educational background, and other job-related data; the application form should not contain questions about areas unrelated to the job, such as gender, religion, or national origin.
When Bargaining Fails
An impasse occurs when, after a series of bargaining sessions, management and labor have failed to agree on a new contract or a contract to replace an agreement that is about to expire.
Training
As its name suggests, on-the-job training occurs while an employee is at work. Off-the-job training takes place at locations away from a work site. This approach offers a controlled environment and allows focused study without interruptions. Training is a necessary practice if the organization wants to maintain a qualified and effective workforce.
Reaching Agreement on Contract Terms
By law, union leaders and management representatives must negotiate "in good faith."
Collective Bargaining
Collective bargaining is an ongoing process involving the drafting and administering of the terms of a labor contract.
Skill Inventories (Forecasting HR Demand and Supply)
Employee information systems (skills inventories) contain information on each employee's education, skills, work experience, and career aspirations.
AIDS in the Workplace
Employers cannot legally require an AIDS test or any other medical examination as a condition for making an offer of employment. Organizations must treat AIDS like any other disease covered by law; employers cannot discriminate against a person with AIDS, and they should try to educate coworkers about AIDS.
Errors in Performance Appraisal
Errors or biases can occur in any kind of rating or ranking system. One common problem is recency error, the tendency to base judgments on the subordinate's most recent performance because it is most easily recalled. Halo error is allowing the assessment of an employee on one dimension to "spread" to ratings of that employee on other dimensions. One interesting innovation in performance appraisal used in some organizations today is called 360-degree feedback, in which managers are evaluated by everyone around them—their boss, their peers, and their subordinates.
Compensation and Benefits
Fair Labor Standards Act sets a minimum wage and requires the payment of overtime rates for work in excess of 40 hours per week Equal Pay Act of 1963 requires that men and women be paid the same amount for doing the same job Employee Retirement Income Security Act (ERISA) of 1974 ensures the financial security of pension funds by regulating how they can be invested Family and Medical Leave Act (FMLA) of 1993 requires employers to provide up to 12 weeks of unpaid leave for family and medical emergencies.
Forecasting HR Demand and Supply
Forecasting the supply of labor involves forecasting the internal supply—the number and type of employees who will be in the firm at some future date—and the external supply—the number and type of people who will be available for hiring from the labor market at large.
Human Resource Management (HRM)
Human resource management (HRM) is the set of organizational activities directed at attracting, developing, and maintaining an effective workforce.
Human Resource Planning
Human resource planning is the starting point for attracting qualified human resources.
Interviews (Selecting Human Resources)
In a structured interview, questions are written in advance, and all inter- viewees follow the same question list with each candidate; in an unstructured interview, questions are asked at random.
Mediation and Arbitration
In mediation, a neutral third-party offers advice and suggestions in settling a labor-management dispute; in voluntary arbitration, the neutral third party dictates a settlement between the two sides, which have agreed to submit to outside judgment. Compulsory arbitration is used to settle disputes between the government and public employees.
The PATRIOT Act
In response to the terrorist attacks of September 11, 2001, the U.S. Government passed legislation to increase its powers to investigate and prosecute suspected terrorists. The HRM implications are that certain individuals (including ex-convicts and aliens from other countries deemed by the U.S. Government to have repeatedly provided support for acts of international terrorism) are ineligible to work with potentially dangerous biological agents.
Contract Issues
In the past, most union-management bargaining situations were characterized by union themselves fighting against wage cuts rather than striving for wage increases. Now, the contract can address any number of issues, including: Compensation- A cost-of-living adjustment (COLA) is one of the most common tools for securing wage increases. Wage reopener clauses provide for renegotiated wage rates at preset times during the duration of the contract. Benefits- Typical employee benefit issues include the cost of insurance, retirement, paid holidays, and working conditions. Job Security- In many cases, demands for job security include the promise that a company will not move to another location and that, if the workforce is reduced, seniority will be used to determine which workers lose their jobs.
Incentive Programs
Incentive programs are special pay programs designed to motivate high performance.
Job Analysis
Job analysis is a systematic analysis of jobs within an organization. The job analysis results in: (a) the job description, which lists the duties and responsibilities of a job, its working conditions; and the tools, materials, equipment, and information used to perform it; and (b) the job specification, which lists the skills, abilities, and other credentials and qualifications needed to perform the job effectively.
The Nature of Knowledge Work
Knowledge workers tend to work in high-tech firms and are usually experts in some abstract knowledge bas; they require highly specialized training, and not every organization is willing to make the human capital investments necessary to take advantage of these jobs.
Management Tactics
Lockouts occur when employers deny employees access to the workplace. A firm can also hire temporary or permanent replacements called strikebreakers.
Knowledge Worker
Management and Labor Markets---organizations that need knowledge workers must introduce regular market adjustments in order to pay them enough to keep them.
Equal Employment Opportunity
Numerous federal and state laws, federal guidelines, presidential executive orders, and judicial decisions mandate equal employment opportunity, which is nondiscrimination in employment on the basis of race, color, creed, sex, or national origin. Title VII of the Civil Rights Act of 1964 forbids discrimination in all areas of the employment relationship
Other Techniques (Selecting Human Resources)
Organizations often require applicants to take physical exams and drug tests. Some organizations also run credit checks on prospective employees.
Performance Appraisals
Performance appraisals are designed to show workers precisely how well they are doing their jobs. Typically, the appraisal process involves a written assessment issued on a regular basis. As a rule, however, the written evaluation is only one part of a multistep process. This process begins when a manager defines performance standards for an employee. Performance appraisals measure an employee's performance on job requirements and job- related goals. Most companies have a step-by-step process for dismissing or demoting employees. In addition, firms usually have a plan to decide which employees will remain employees when downsizing or making cutbacks.
Recruiting Human Resources
Recruiting is the process of attracting qualified persons to apply for the jobs that are open. Internal Recruiting- Internal recruiting means considering present employees as candidates for openings. External Recruiting- External Recruiting involves attracting people outside of the organization to apply for jobs.
Replacement Charts (Forecasting HR Demand and Supply)
Replacement charts list each important managerial position, who occupies it, how long that person will probably stay in it before moving on, and who is now qualified or soon will be qualified to move into it.
Sexual Harassment
Sexual harassment is defined by the EEOC as unwelcome2. sexual advances in the work environment. With quid pro quo harassment, the harasser offers to exchange something of value for sexual favors. Lewd jokes, unwelcome comments, and so on constitute a hostile work environment.
Unionism Today
Since the mid-1950s, U.S. labor unions have experienced increasing difficulties in attracting new members. In 2007 only 12.1 percent of the U.S. labor force is represented by a labor union.
Staffing the Organization
Staffing the organization is one of the most complex and important tasks of good HR management.
Tests (Selecting Human Resources)
Tests of ability, skill, aptitude, or knowledge relevant to a particular job are usually the best predictors of job success, although tests of general intelligence or personality are occasionally useful as well.
Equal Employment Opportunity Commission (EEOC)
The Equal Employment Opportunity Commission (EEOC) has responsibility for 11 enforcing Title VII, the Equal Pay Act, and the Americans with Disabilities Act. A business with government contracts must have on file a written affirmative action plan—a written statement of how the organization intends to actively recruit, hire, and develop members of relevant protected classes.
Health and Safety
The Occupational Safety and Health Act of 1970 holds that every employer has an obligation to furnish each employee with a place of employment that is free from hazards that cause or are likely to cause death or physical harm.
Employment-at-Will
The concept of employment-at-will holds that both employer and employee have the mutual right to terminate an employment relationship anytime for any reason and with or without advance notice to the other.
Assessing Training Needs
The first step in developing a training plan is to determine what needs exist. As training programs are being developed, the manager should set specific and measurable goals specifying what participants are to learn. Managers should also plan to evaluate the training program after employees complete it.
The Future of Unions
The future of unions depends on the future composition of the workforce. Unions will most likely evolve to assume new roles and responsibilities, such as having a voice in management. Even large and influential unions such as the United Auto Workers (UAW) were forced to make significant concessions during the large-scale restructuring of the U.S. auto industry in 2008-2009.
Strategic Importance of HRM
The importance of HRM has grown dramatically in the last several years; this stems from increased legal complexities, the recognition that human resources are a valuable means for improving productivity, and today's awareness of the costs associated with poor human resource management.
Selecting Human Resources
The intent of the selection process is to gather from applicants information that will predict their job success and then to hire the candidates likely to be most successful. The organization can only gather information about factors that can be used to predict future performance; validation is the process of determining the predictive value of that information.
Managing Contingent and Temporary Workers
The keys to understanding how to use such workers involve careful planning and understanding their advantages and disadvantages within the organization. In addition, managers must assess the real cost of using contingent workers.
Performance Feedback
The last step in most performance appraisal systems is giving feedback to subordinates about their performance. This is usually done in a private meeting between the person being evaluated and his or her boss.
Company-wide Incentives
These programs apply to all employees in a firm. In profit-sharing plans, a firm's profits earned above a certain level are distributed to employees. Gain-sharing plans distribute bonuses to employees when a firm's costs are reduced through greater work efficiency. Pay-for-knowledge plans distribute pay to workers who learn new skills and become proficient at different jobs.
Benefits Programs
These programs apply to all employees in a firm. In profit-sharing plans, a firm's profits earned above a certain level are distributed to employees. Gain-sharing plans distribute bonuses to employees when a firm's costs are reduced through greater work efficiency. Pay-for-knowledge plans distribute pay to workers who learn new skills and become proficient at different jobs. Retirement Plans- Retirement plans are set up to pay pensions to workers when they retire. Contributions are made either totally by the company or by both the company and the employee. In recent years more companies have run into problems because they have not set aside enough money to cover the retirement funds for their workers. Some major companies have stopped contributing toward retirement accounts while others have transitioned employees to riskier 401(k) plans. Containing the Costs of Benefits- To contain the costs of benefits, employees can select from a variety of benefit alternatives in what is known as a cafeteria benefits plan.
Managing Knowledge Workers
Traditionally, employees added value to organizations because of what they did or because of their experience; today, however, many employees add value because of what they know.
Common Appraisal Methods
Two basic categories of appraisal methods commonly used in organizations are objective methods and judgmental methods. Objective measures of performance include actual output (number of units produced), scrap rate, dollar volume of sales, and number of claims processed. Judgmental methods, including ranking and rating techniques, are the most common way to measure performance.
Labor Relations
Union activities and management's behavior toward unions constitute another heavily regulated area. The National Labor Relations Act (also known as the) Wagner Act, passed in 1935, sets up a procedure for employees to vote on whether to have a union. The National Labor Relations Board (NLRB) was established by the Wagner Act to enforce its provisions. Following a series of severe strikes in 1946, the Labor-Management Relations Act (also known as the Taft-Hartley Act) was passed in 1947 to limit union power.
Wages and Salaries
Wages are paid hourly for time worked. A salary is an amount paid per year for discharging the responsibilities of a job. Companies may set wages and salaries by looking at competitors' rates. In addition, firms must decide how their wage and salary levels will compare for different jobs.
Union Tactics
When their demands are not met, unions may bring a variety of tactics to the bargaining table. Strikes. A strike occurs when employees walk off the job and refuse to work. Other union tactics include picketing, in which workers march at the entrance to the firm with signs explaining their reasons for striking; boycotts, in which union members agree not to buy products of a targeted employer; and a work slowdown, in which workers perform their jobs at a much slower pace than normal.
Managing Workforce Diversity
Workforce diversity is the range of workers' attitudes, values, beliefs, and behaviors that differ by gender, race, age, ethnicity, physical ability, and other relevant characteristics; many U.S. organizations are now creating more diverse workforces, embracing more women, ethnic minorities, and foreign-born employees than ever before.
