Management/Strategy Exam 1 (I-Core)
Forecasting Labor Needs: step 1 - What is my current workforce? 1. FTE = 2. Current workforce = 3. Full time employees count as = 4. Part time employees count as = 5. How much work does 1 FTE do annually?
-Forecasting is by department/division 1. FTE = Full-time Equivalent, or the number of 40 hour/week work units available in your department/division 2. Current workforce = number of FTEs 3. Full time employees count as = 1 FTE 4. Part time employees count as = a percentage of an FTE based on the percentage of 40 hour work week they supply -a 20 hour/week employee = 20/40 = .5 FTE -a 30 hour/week employee = 30/40 = .75 FTE 5. How much work does 1 FTE do annually? -Work can be measured in number of units, number of customers, volume of sales -assume current workload is appropriate and remains consistent -Amount of work done by 1 FTE = Amount of work / Number of FTEs
Forecasting Labor Needs: 1. "Extra" Benefits are Recruiting Tools
1. "Extra" Benefits are Recruiting Tools -On campus child or elder care -Company specific tuition reimbursement -wellness programs -concierge services -others?
Selection 1: Measurement 1. 3 types of Validation (validity)
1. 3 types of Validation (validity) 1. Content related -This measure assesses job-related behaviors -Is this something you do on the job? -Am I actually measuring the content of the job? Ex: NFL combine: are these test actually measuring what they do in a game? Ex: if you take a typing test during the selection process, the content related validity would be high if the job actually required you to type 2. Construct related -Measure assesses what it claims to measure -is it really measuring what it says it is measuring -is the test constructed correctly? -does this 'test' measure what I think it does? Ex: NFL combine: does the broad jump actually measuring how far you can jump? Ex: if you take a typing test with uncommon words, you are more so testing vocabulary than you are typing speed, so a typing test with only common words is said to have high construct related validity because it would actually measure typing speed 3. criterion related -Measure's scores predict job success -is there a correlation between this test and how they will actually do on the job -how good? -predicts who will do well on the job -when criterion related validity is high we see a correlation between an applicant's score and their actual performance on the job Ex: NFL combine: does bench press really tell me who will be a better football player? -2 ways of measuring criterion related validity 1. predictive = track scores of applicants and then wait and compare those scores to see how they do on the job (takes awhile though) 2. concurrent = have current employees take the test and then look for a correlation between their scores and their job performance -Concurrent Method is a way to measure the Selection Method itself
Organizational Culture 1. 4 steps on how Culture Develops? 2. 4 ways that culture is transmitted?
1. 4 steps on how Culture Develops? 1. Philosophy of Organizations Founders 2. Selection and promotion Criteria for Employees 3. Top Management's Continued Reinforcement of Values 4. Company Structure 2. 4 ways that culture is transmitted? (all are artifacts, what we see) 1. Stories -How we tell 2. Rituals -what we do -Ex: touching Notre Dame, "play like a champion today" sign before a game 3. Symbols -what we see -Ex: Notre Dame, "play like a champion today" sign 4. Language -how we talk/treat customers -Language is the kinds of words we use to describe things in the organization (i.e., customers = guests)
Kroger trying to go commence case 1. According to the article, the rise in e-commerce has resulted in ALL of the following in the grocery industry EXCEPT: A. Companies overhauling their operations B. Kroger making a smooth transition into operating online C. Companies investing in technology D. Companies investing in talent 2. All of the following are true about Kroger EXCEPT: A. Kroger's investments in e-commerce have dented its profits B. Kroger vendors believe the company is getting digital orders to customers as fast as its competitors are C. Kroger was slow to invest in online operations D. Kroger has a record of dabbling in digital projects without committing to more significant changes in its business
1. According to the article, the rise in e-commerce has resulted in ALL of the following in the grocery industry EXCEPT: -B. Kroger making a smooth transition into operating online 2. All of the following are true about Kroger EXCEPT: -B. Kroger vendors believe the company is getting digital orders to customers as fast as its competitors are -The higher the approach orientation the more likely to speak up -those that felt expected to speak up, spoke up more than those who felt they didn't have to speak up -situational perspective is better supported than the personality perspective ----meaning if you want the team to speak up, social norms matter and so does the work environment -good environment can do 2 things 1. Identifying areas for improvement at work 2. Diagnosing potential threats
Strategic Analysis Initial strategic choice: Porter's Competitive Strategies 1. Cost Leadership/Low Cost vs. 2. Differentiation 3. Where do most companies lie on the spectrum?
1. Cost Leadership/Low Cost -Profit = having lower costs (NOTE: this does not necessarily mean that their consumer prices are lower than their competitors) -More EFFICIENT by reducing internal costs -"follow the rules" -Employees need multiple skills/ know how to use different equipment, be able to work quickly, and be conscious of costs -Salaries are considered an "expense" -Ex: gas, milk, water vs. 2. Differentiation -Profit = having a special product -Brand is very important -You make a profit because you make something UNIQUE that you can't get anywhere else -make products based off wha the market sees as valuable -Employees should contribute expertise, "champion" communication skills, be creative/innovative -Salaries are an "investment" 3. Where do most companies lie on the spectrum? -Most companies lie in the middle between low cost and differentiation
Organizational Culture 1. Culture = ? 2. What are the 3 parts to the Cultural Iceberg Model?
1. Culture = ? -Culture = values that shape behavior 2. What are the 3 parts to the Cultural Iceberg Model? 1. Artifacts -day-to-day behaviors of people in firm -behaviors, systems, processes, policies, nicknames -WHAT WE SEE! 2. Espoused(support) Values -these are the things that people say they believe, but they may not represent "true" values of what people in the firm actually believe is good or correct -Ideals, goals, values, aspirations -WHAT WE SAY! -NOTE: this is where we get the disconnect 3.. Basic Assumptions -underlying/deepest assumptions about how the world works in an organization -include beliefs about workers, the company, competitors and customers -do workers need constant supervision or punishment to do well, or are they naturally motivated to do good work -WHAT WE BELIEVE NOTE: -Basic assumptions are something like, "People can be trusted" or "the environment needs protection." You can think of basic assumptions as answering the "why" behind what a company says they believe. -Espoused values would be "We believe in giving our employees freedom to do what they want to do" or "We are committed to providing services in a sustainable way."
Organizational Culture 1. Culture is an asset when it.... 2. Culture is a liability when it...
1. Culture is an asset when it.... 1. Supports Strategy -Ex: if you are Walmart (aka low-cost) you shouldn't have people questioning what you are doing, people should just follow rules because it costs less. 2. Rewards appropriate behaviors 2. Culture is a liability when it... 1. Institutionalism = focuses on relationships above the company -people are too focused on having a good relationship rather than doing well -Ex: church greeter would rather hug and have convo with friends and family and not greet new people they don't know 2. Discourages change and diversity -telling people that they have to be exactly like the people at the company or they won't fit in is bad 3. Obstructs mergers and acquisitions -Only 1/3 of companies achieve what they thought was actually going to happen financially when merging (MAINLY BECAUSE OF CULTURE DIFFERENCE) -Ex: GE acquired NBC & David Letterman show, GE employees weren't allowing him in their office 4. Supports bad behaviors -when a culture encourages people to do things that aren't healthy (to lie, for example) then it is dysfunctional
Sourcing and Recruiting 1. Desirable recruiter characteristics -positive signaling = -relate to recruits value system = 2. Recruiters 4 Metrics for success 3. One big key to success is ________ ? -Self-selection -Commitment to choice -Vaccination
1. Desirable recruiter characteristics -positive signaling = a recruiter is sending a positive message about what the firm is like, positive in tone and accuracy -relate to recruits value system = Send people that are similar to them (send people from IU to IU career fair) 2. Recruiters 4 Metrics for success 1. New hire performance 2 New hire satisfaction 3. Manger satisfaction = how satisfied the mangers are 4. New hire time to productivity = how fast can we get the new recruits to start making money for the firm 3. One big key to success is realistic Job previews (RJP) -NOTE: the most effective recruitment practice is to present both the positive and negative information about the job to job candidates. There is no "bad job" there is just "bad fit" -self-selection = when applicants have a balanced picture of the job, they can opt out of the application process if the job is not a good fit for them! -commitment to choice = they will be more committed to staying with the organization because they feel more inclined to stay in their positions because they willingly accepted the job with knowing the negative realities -vaccination = telling people about really bad part of the job is good, because they will be more prepared for it when it comes and act less negatively
why companies are failing at re-skilling case 1. Employers often choose to lay off employees instead of teaching them new skills because of ALL of the following EXCEPT: A. Moving employees into new positions requires time and money B. The required skills aren't easily taught to employees C. Companies have a hazy sense of what their employees are capable of D. They don't think their employees want to learn new skills 2. T/F Employers are often reluctant(unwilling) to invest the dollars needed to successfully retrain large numbers of employees even when the economy is strong. 3. T/F Letting go of people whose skills are obsolete remains a typical response to companies' shifts in business strategy, at least in part, because shareholders see layoffs as a cost savings. 4. T/F A White House report showed that nearly all U.S. spending, public and private, on education and training occurs before a person turns 25.
1. Employers often choose to lay off employees instead of teaching them new skills because of ALL of the following EXCEPT: -D. They don't think their employees want to learn new skills 2. T/F Employers are often reluctant to invest the dollars needed to successfully retrain large numbers of employees even when the economy is strong. -TRUE 3. T/F Letting go of people whose skills are obsolete remains a typical response to companies' shifts in business strategy, at least in part, because shareholders see layoffs as a cost savings. -TRUE 4. T/F A White House report showed that nearly all U.S. spending, public and private, on education and training occurs before a person turns 25. -TRUE -Instead of teaching new skill to current employee, they are hiring new employees which is very costly
Forecasting Labor Needs: step 4 - How many workers do I need to hire or release? 1. How many workers do I need to hire or release? 2. Reconciling forecast gaps: options to reduce employee surplus -Speed of results? -Amount of suffering caused? 1. layoff/downsizing = 2. pay reductions = 3. hiring freeze/attrition = 4. early retirement = 3. Reconciling forecast gaps: Options to handle employees shortage -Speed of results? -Ability to change? 1. overtime = 2. temporary employees = 3. outsourcing = 4. new hires = 4. Necessary to consider cost of each employee: Full-time are expensive! -compensation direct vs compensation indirect 5. Sunshine Lollipops just got a rush order for 10,000 Lollipops. Good news. But, they know this order won't be repeated - the new client is not going to be a source of future business. What should they do? A. Hire new temporary employees - who will have to be trained B. Have their current employees work overtime until the order is complete C. Hire new full-time employees so they ultimately have more trained people
1. How many workers do I need to hire or release? -Ultimately, do the amount you are going to need next year minus - the amount you will have next year = amount you need to hire 2. Reconciling forecast gaps: options to reduce employee surplus 1. layoff/downsizing = fast results, high suffering caused 2. pay reductions = fast results, high suffering caused 3. hiring freeze/attrition = slow results, low suffering caused 4. early retirement = slow results, low suffering caused 3. Reconciling forecast gaps: Options to handle employees shortage 1. overtime = fast results, high ability to change later (more efficient than temporary employees) 2. temporary employees = fast results, high ability to change later 3. outsourcing = fast results, high ability to change later 4. new hires = moderate results, low ability to change later (last resort, must be sure! takes over a month and a half) 4. Necessary to consider cost of each employee: Full-time are expensive! 1. compensation direct (directly tied to your work and performance) -base pay -Incentive pay = bonus, commission, stock options, tips 2. Compensation indirect (gets really expensive) -legally required = social security, medical leave, health insurance, workers compensation & unemployment, Medicare -optional/voluntary = PTO, liability insurance, life insurance, insurance etc., pension (helps with retirement) --NOTE: these extra benefits help with recruiting purposes 5. Sunshine Lollipops just got a rush order for 10,000 Lollipops. Good news. But, they know this order won't be repeated - the new client is not going to be a source of future business. What should they do? -B. Have their current employees work overtime until the order is complete
Forecasting Labor Needs: step 3 - How much labor will I have next year? 1. How much labor will I have next year?
1. How much labor will I have next year? -use historic annual turnover percentage rates --Part time employee turnover rate will be higher -Account for trends that may increase or decrease historical rates (estimated guess based on....) --employee retention programs --Unemployment rate/economic conditions --External demand for certain workers/skills --Competitors
Forecasting Labor Needs: step 2 - How much labor will I need next year? 1. How much labor will I need next year? 2. Anticipate 12% increase in work next year? 3. Anticipate 18% decrease in work next year?
1. How much labor will I need next year? -Multiple % change in work anticipated to (from) current number of FTEs 2. Anticipate 12% increase in work next year? -Equation: Current FTEs x 1.12 = FTEs needed to do work next year 3. Anticipate 18% decrease in work next year? -Equation: Current FTEs x .82 = FTEs needed to do work next year
Job Analysis and Job Description: Define the work - job analysis 1. Identifying needed work 2. combining works into jobs (TDRs) 3. Specifying Qualifications for the job (KSAOs)
1. Identifying needed work -what do organizations do? 2. combining works into jobs (TDRs) -how will work be divided among employees? (TDRs) -TDR = essentially what the job requires you to do and the things you are responsible for --Task --Duties --Responsibilities 3. Specifying Qualifications for the job (KSAOs) -What kind of employees can perform this work? (KSAOs) -KSAO = need this to complete/do the job --Knowledge = need someone to "know" --Skill/Ability = what you actually can perform --Other Characteristics = personality stuff
Sourcing and Recruiting 1. Internal and external recruiting in a Big 4 Accounting firm? Talent philosophy?
1. Internal and external recruiting in a Big 4 Accounting firm? 1. Staff Accountant = external labor market 2. Seniors = Internal labor market 3. managers = Internal labor market 4. partners = Internal labor market -Note: talent philosophy is either move up in the ranks or get out
Forecasting Labor Needs: How do I decide what to pay someone? 1. Job Structure vs. 2. Individual/person Structure 3. Should I pay more than my competitors? 3 choices 1. lead = -Attracting new employees = -Retaining current employees = -controlling labor costs = -Enhancing employee satisfaction = 2. meet = -Attracting new employees = -Retaining current employees = -controlling labor costs = -Enhancing employee satisfaction = 3. lag = -Attracting new employees = -Retaining current employees = -controlling labor costs = -Enhancing employee satisfaction =
1. Job Structure -pay based on job's value to company -focus on "compensable factors" in the job -NOTE: can't come into a job structure and expect to get paid anything other than the set salary vs. 2. Individual/person Structure -pay based on the employee's individual value to the company 3. Should I pay more than my competitors? 3 choices 1. lead = pay above industry average -Attracting new employees = advantage -Retaining current employees = advantage -controlling labor costs = mixed (adv = paying more than your competitors also has a cost savings, since your higher wage costs are offset by lower costs in other areas of the labor cost category (training, turnover, etc.). disadv = pay people more money so it is more costly) -Enhancing employee satisfaction = advantage 2. meet = at industry average -Attracting new employees = neutral -Retaining current employees = neutral -controlling labor costs = neutral -Enhancing employee satisfaction = neutral NOTE: neutral = no affect 3. lag = below industry average -Attracting new employees = disadvantage -Retaining current employees = mixed (adv = people stay because they like the work even though they get paid less, disadv = people care more about money so leave) -controlling labor costs = advantage (When you're paying people less than your competitors, you've got lower labor costs.) -Enhancing employee satisfaction = disadvantage NOTE: mixed means there is both pros and cons
ob Analysis and Job Description: Using the job characteristics model to design work 1. Job rotation / cross training = ? 2. Relational Job Design = ? 3. Alternative Work Arrangements = ? 4. Employee Involvement = ? -participative management vs. representative participation 5. O*Net OnLine = ?
1. Job rotation / cross training = moving employees around to various different tasks -Advantages: reduce boredom, increase motivation, help employees see work contributions, learn from industry rivals and norms -Disadvantages: Work Disruptions, supervisor time, reduced efficiency 2. Relational Job Design = ? -can we develop a relationship with people who do the work and the customer? -Use this design to increase task significance -Employees & Work beneficiaries -Relational Job Design occurs when you help employees see their tasks as more significant when you allow them to see/focus on the people who are impacted by their work 3. Alternative Work Arrangements = ? -Flextime = show up when you want, choose when you work -Job Sharing = 2 people share 1 full time job -Telecommuting = work from wherever you are 4. Employee Involvement = ? -Participative Management (direct) = people have absolute control over what they do. Self managed team. Employees are encouraged to run their own departments and make decisions regarding policies and processes. It has often been promoted as the quick cure for poor morale and low productivity. -everyone has a say in how their department is run Ex = whole foods produce section -Representative Participation (Indirect) = allows employees to have a say and participate in described work-related decisions through elected or appointed employee representatives. Employees' interests become as important as those interests of management and stockholders. 5. O*Net OnLine = ? -this analysis results in a job description -career advice
Selection 1: Measurement 1. Legal Guidelines: Title VII (7) of the Civil Rights Act of 1964, prohibits employers from what? 2. Other relevant legal guidelines: age discrimination in employment act prohibits discrimination against people who are _____ years old? 3. Americans with disabilities act prohibits discrimination against individuals with ______ who can do what without what? 4. 2 defenses against claims of illegal discriminations
1. Legal Guidelines: Title VII (7) of the Civil Rights Act of 1964, prohibits employers from what? -basing employment decisions on an applicant's race, color, religion, or national origin -Disparate treatment = illegally treating someone differently because of protected class status (happens when men and women have to go through different kinds of test for the same job) -Adverse Impact = standard applied to all, but that standard affects a protected class more negatively (same test, but fewer people get through it). height requirements for flight attendants have an adverse impact of disqualifying a lot of women and non-whites from the job --WE LOOK AT EFFECT NOT INTENT 2. Other relevant legal guidelines: age discrimination in employment act prohibits discrimination against people who are _____ years old? -40 years or older -old people are more vulnerable -the AARP activist group is strong 3. Americans with disabilities act prohibits discrimination against individuals with ______ who can do what without what? -with disabilities that can preform essential functions of a job with or without reasonable accommodations -However, accommodations must be requested by the person injured or impaired, the company will not just give them to you 4. 2 defenses against claims of illegal discriminations 1. Job Relatedness or Bona Fide Occupational Qualification (BFOQ) or Business Necessity = must prove decisions made were necessary for someone to perform the job correctly -Ex: Disney hires people with specific characteristics to those of the actual Disney characters to protect their brand and so they actually look like the character and this is completely okay 2. Seniority -says i can lay people off if necessary, but I have to be fair about it -Ex: if you layoff or rehire people solely on the basis of how long they've worked there, their decisions about who to lay off are not seen as discriminating
Sourcing and Recruiting: Ways to recruit from the External Labor Market 1. Open = -advantages = -best when = 2. Targeted = -advantages = -best when =
1. Open = let anyone apply -advantages = diverse set of applications, lower cost per application -best when = large number of applicants required, or pre-entry KSAOs are not important 2. Targeted = certain requirements needed -advantages = narrow pool of applicants, more personal -best when = you need specific skills that are not common, or hiring for high-level positions
Selection 1: Measurement 1. Selection seeks correlation between what? 2. Correlation, what is r? ultimately we want to use the _______ system to be able to predict who the best employees will be for the company 3. What does a positive r mean? negative? 4. do we want r to be close to 1 or 0? 5. 2 ways to Interpret Correlations 6. what is curvilinear?
1. Selection seeks correlation between what? 1. predictive data = results from selection test -before the job, trying to predict how well you'll do on the job 2. criterion data = employee performance data -what happens while your on the job or after you get the job -Ex: your score you get from your managers performance evaluation of you 2. Correlation, what is r? ultimately we want to use the _______ system to be able to predict who the best employees will be for the company -most selection decisions are made off the basis of correlations -ultimately we want to use the selection system to be able to predict who the best employees will be for the company -r = correlation coefficient, measure of the relationship between 2 variables - when one changes, the other does too 3. What does a positive r mean? negative? 1. Positive r = both variables go in the same direction, both go up or both go down (go same direction) 2. Negative r = as one variable goes up, the other goes down. Or as one goes down, the other goes up (they go in opposite directions) 4. do we want r to be close to 1 or 0? -the closer the r is to -1 or 1 the stronger the relationship is between the variables -the closer r is to 0 the weaker the relationship 5. 2 ways to Interpret Correlations 1. Statistical Significance = what tells you a test isn't or is do to an error (tells you the test isn't or is due to random chance) -correlation is likely not due to measurement error -helps us say "ya i could believe that" -but also have to look a practical significance as well -Statistically significant = the probability of the correlation being due to chance is very low 2. Practical significance = most important -answers, "can i use that correlation in my work?" -this shows if correlation can make a real difference in our work NOTE!!! a test needs to be both to use and make legal projections about how someone will perform! 6. what is curvilinear? -a curvilinear relationship occurs when higher scores are related to performance only to a certain point, after which higher scores relate to lower performance -Ex: conscientiousness and job performance - a certain amount of conscientiousness contributed to positive job performance, however too much conscientiousness leads to a hard time making decisions so it can result in a lower job performance . so when this curvilinear relationship happens it is better to pick the candidate who score in the middle range on this measure.
Selection 2: Methods - Typical Evaluative tools 1. Skill/ability test 2. integrity test 3. job simulation / work sample 4. knowledge test 5. aptitude/cognitive ability test 6. personality test 7. structured interviews
1. Skill/ability test -make me a pivot table 2. integrity test -a lot more robust/powerful than you think -.5 and up correlation to people doing well 3. job simulation / work sample -internship 4. knowledge test -show me what you know 5. aptitude/ cognitive ability test -WONDERLIC test --50 questions in 12 minutes --average score is 20/50 --widely used in NFL --Known averages for many professionals 6. personality test -Most common personality test is Big 5 (five factor model, FFM) are able to predict behaviors because of effect on attitudes and motivation --1. Emotional stability = you can control the ups and downs of your emotions (people in hospitals must have high emotional stability to keep patients calm) --2. Extroversion = i get energy from being with people --3. openness to experience = studying abroad, consulting likes this, try new things --4. Agreeableness = positivity, I approach the world in a positive way --5. conscientiousness = being careful at what you do, reliable NOTE: Big five traits explain up to 75% of personality (conscientiousness and emotional stability predict performance across most occupations) 7. structured interviews -behavioral = STAR format, what have you done -Situational = if this happened what would you do -Case = work sample, given a problem and you show them the steps it took you to solve it
Sourcing and Recruiting: Ways to recruit from the Internal Labor Market 1. Succession Management and Talent Inventories = -Strength = -Weakness = 2. General employee Development = -Strength = -Weakness = 3. Internal job postings = -Strength = -Weakness =
1. Succession Management and Talent Inventories = all about individual -Strength = specialty training, preserves competitive advantage -Weakness = could lose employee loyalty because you train multiple people and only 1 gets the job and the others leave 2. General employee Development = same training for everyone -Strength = everybody gets better, the company's efforts can raise the skill level of the entire internal labor market -Weakness = training people to have skills they don't need, lose efficiency of specializing 3. Internal job postings = no training at all -Strength = people can move around more freely -Weakness = that particular person doesn't really know how to do the job
If your Employees aren't speaking up, blame company culture case 1. T/F Both personality and work environment have an effect on an employee's tendency to speak up with ideas or concerns. 2. T/F Strong environmental norms can override the influence of personality on employee's willingness to speak up at work.
1. T/F Both personality and work environment have an effect on an employee's tendency to speak up with ideas or concerns. -TRUE 2. T/F Strong environmental norms can override the influence of personality on employee's willingness to speak up at work. -TRUE
case 3 1. T/F Companies will not save money when its employees find their work meaningful. 2. All of these will help employees find meaning in their jobs EXCEPT: A. Articulate the connection between current projects and the company's overall purpose B. Discourage people from being knowledge workers C. Have someone verbally share their experiences of meaningful work with others D. Solicit feedback from employees
1. T/F Companies will not save money when its employees find their work meaningful. -False, they will save money 2. All of these will help employees find meaning in their jobs EXCEPT: B. Discourage people from being knowledge workers
Athletes in the workplace case 1. T/F Traits that make athletes successful can point to promising career paths 2. T/F Every great athlete is a great teammate
1. T/F Traits that make athletes successful can point to promising career paths -TRUE 2. T/F Every great athlete is a great teammate -FALSE
Selection 1: Measurement 1. Useful measure are _______ and _______ ? 2. Types of reliable errors? 3. 4 ways to measure Reliability? 4. Evaluating Reliability. If reliability coefficient is _____ or higher it is adequate for selection needs 5. Validity and Reliability on a illustration bulls-eye -reliable not valid = -neither reliable nor valid = -both reliable & valid =
1. Useful measure are _______ and _______ ? -Reliable = results can be trusted, measured right, consistency! (are the answers the same?) -Valid = results translate to reality, "measuring the right thing", how useful is it to us? (are the answers good?) -NOTE: we must have both!!!! 2. Types of reliable errors? -NOTE: we want to avoid error, lol obviously (; 1. Systematic error -Deficiency = didn't collect enough data, data incomplete, data lost, test/ internet malfunction -Contamination = may be a bias, or some other external factor making the scores inconsistent 2. Random error -stuff happens -If you can't pinpoint or tell exactly what's happening it is probably random error 3. 4 ways to measure Reliability? 1. test-retest = take same test more than once (on different occasion to see if they are the same) 2. Alternate or parallel form = measure something 2 different ways (similar assessment first on paper, then on an app) 3. internal consistency = surveys that ask you the same questions over and over to see if you are consistent 4. Inter-Rater Agreement = look at all people in the population and came to an agreement with everyone (panel interview, each interviewer will provide a score of you, then examined for consistency among those scores) 4. Evaluating Reliability. If reliability coefficient is _____ or higher it is adequate for selection needs -If reliability coefficient is... .90 and up = superior .80-.89 = good .70-.79 = adequate for selection needs .50-.69 = limited applicability .49 and below = not a useful measure 5. Validity and Reliability on a illustration bulls-eye -reliable not valid = all darts in one same place, but they are not accurately on the bulls-eye -neither reliable nor valid = all darts are scattered throughout the board -both reliable & valid = all darts in one same place, and they are all bulls-eyes!
Walmart Case 1. Walmart hopes its use of VR will do all of the following EXCEPT: A. Limit bias inherent in traditional hiring decisions B. Let problem employees know that Big Brother is watching C. Increase diversity D. Help the company find new middle managers
1. Walmart hopes its use of VR will do all of the following EXCEPT: -B. Let problem employees know that Big Brother is watching
Organizational Culture 1. What are the 4 elements of an Organizational Structure?
1. What are the 4 elements of an Organizational Structure? 1. Specialization 2. Formalization 3. Professionalism 4. Centralization
Strategy Part 1 1. What are the 6 steps in the strategic management process?
1. What are the 6 steps in the strategic management process? 1. Mission/Vision 2. External Analysis 3. Internal Analysis 4. Strategic Choice 5. Strategy Implementation 6. competitive Advantage
Strategy Part 1 Step 1: Mission/Vision Statement 1. What are the main focuses here? Example 1: "Build the best product, cause no harm, use business to inspire and implement solutions to the environmental crisis" Example 2: "To give customers the most compelling shopping experience possible." 2. A good statement.... 3. A bad statement....
1. What are the main focuses here? -the firms purpose, "reason for being" -what the firm wants to be -determine key stakeholders and how will they be served Example 1: "Build the best product, cause no harm, use business to inspire and implement solutions to the environmental crisis" -Patagonia Example 2: "To give customers the most compelling shopping experience possible." -Nordstrom 2. A good statement.... -Defines the company's value proposition -Identifies key stakeholders -Guides employee decision making -Helps determine strategic choices -Video example on mission statements (www.missionstatments.com) • 1. Concrete language • 2. Focus on the "why" 3. A bad statement.... -could apply to any company -Does not identify how the company competes -Does not address mission (why the business exists) -Has the word solution in it
Forecasting Labor Needs 1. What external factors should I consider? 2. What internal factors should I consider? 3. The Forecasting Process 4 steps
1. What external factors should I consider? -Economic Indicators = Seasonal fluctuations, interest rates/economic conditions, legal change -Availability of your desired talent -Trends affecting your industry -Anticipated actions of competitors 2. What internal factors should I consider? -Projected growth of the business = new/expanded product/service offerings -Planned promotions/succession planning 3. The Forecasting Process 4 steps 1. What is my current workforce? 2. How much labor will I need next year? 3. How much labor will I have next year? 4. How many workers do I need to hire or release?
Strategy Part 1 1. What is Strategy? 2. What is a Competitive Parity? 3. What is Competitive Advantage? 4. What is Sustained Competitive Advantage? 5. Are most competitive Advantages Temporary?
1. What is Strategy? 1. Firms develop theory + Firms test theory = success then Competitive Advantage 2. What is a Competitive Parity? -getting normal returns -meeting the expectations -Partners satisfied but not one firm is dominating the market -Examples: Big 4, uber/lyft 3. What is Competitive Advantage? -above normal returns -exceed expectations 4. What is Sustained Competitive Advantage? -Making more profit than your competitors for a sustained period of 4 or more years 5. Are most competitive Advantages Temporary? -Yes 1. A firm tries something new to make profit 2. that profit than attracts competition 3. that competition that erodes into your profits
1. Which of the following, if true, would require a company to make adjustments to its historical employee-productivity ratios when completing a labor forecast? A. The company is able to recruit more easily because of higher unemployment. B. The company's cost of borrowing is going down. C. The company is expecting higher volumes of work in the next two years. D. The company is adopting a more efficient manufacturing system.
1. Which of the following, if true, would require a company to make adjustments to its historical employee-productivity ratios when completing a labor forecast? -D. The company is adopting a more efficient manufacturing system. (since they are more efficient each employee can be more productive and accomplish more) -NOTE: Because the ratio of work to 1 FTE doesn't change as a result of volume. Only making someone more efficient would change the amount of work they can do
Selection 2: Methods Selection Goal: Maximizing Fit - How would you assess this? 1. a survey of 3,000 HR professionals: the majority of HR managers would fire a productive employee if they don't work well with others 2. person-job 3. person-group 4. person-organization 5. person-vocation
1. a survey of 3,000 HR professionals: the majority of HR managers would fire a productive employee if they don't work well with others -the value connection between all members within a team is proven effective whether they all have positive values or all have negative values, funny but people who all have negative values work really well together (people work better with people who have the same values) 2. person-job -will the job motivate the applicant? 3. person-group -will the applicant work well with the group? 4. person-organization -will the applicant fit into the company work culture? 5. person-vocation -are the applicant's attributes consistent with this occupation (regardless of the employer)
Organizational Culture: 4 types of organizational culture 1. clan = -internal or external? -flexible or stable? 2. Adhocracy = -internal or external? -flexible or stable? 3. Hierarchal = -internal or external? -flexible or stable? 4. Market = -internal or external? -flexible or stable?
1. clan = -internal (focus is on inside company) -flexible (value being able to change/do whatever it takes, employees have freedom) -strong employee commitment and loyalty (tend to stay with organization for long periods of time) -share values among employees -Unfortunately, clans don't respond to external changes in the world well -Ex: Southwest will do whatever it takes to get a plane off the ground, because pilots get stock options 2. Adhocracy = -external (focus on competitors) -flexible (value being able to change/do whatever it takes, employees have freedom) -The most entrepreneurial and innovative culture that fights to succeed -very low formalization -Ex: Apple does anything to get a buck. They first see what competitors are doing and then they jump in for a second mover advantage. 3. Hierarchal = -internal (focus is on inside company) -Stability (want to do it same way every time, value being consistent) -many rules and regulations -Popular in oil and gas production or government or banking -Ex: Walmart employees do as they are told and follow rules 4. Market = -external (focus on competitors) -Stability (want to do it same way every time, value being consistent) -high focus on efficiency and productivity to be competitive -high formalization (go through a standardized process) -use control methods to develop new products that will help them compete -Ex: 3M
Selection 2: Methods - Contingent Assessment Methods 1. medical and drug test 2. background check
1. medical and drug test -Disclose all medicine you are taking 2. background check = criminal record? certifications / degree NOTE: you have the job if you just pass these things
Selection 2: Methods - Typical Screening tools 1. resumes/cover letters = 2. job applications/weighted application blanks = 3. Unstructured Interviews =
1. resumes/cover letters = any typos? 2. job applications/weighted application blanks = take an applications and score it based on boxes you checked 3. Unstructured Interviews = tell me about yourself (they want to know if they should keep talking to you)
Strategic Analysis Step 2: Internal Analysis: Choosing Key Resources 1. what are our most important resources?
1. what are our most important resources? 1. Valuable -if yes, proceed -if no, stop you'll be at a competitive disadvantage --valuable asks, does it help us make money or cut costs? --Also asks, can it help the firm exploit an environmental opportunity or neutralize an environmental threat 2. Rare -if yes, proceed -if no, invest only a little (competitive parity) --does the market place perceive it is hard to find? --can a customer not find lower prices anywhere else? 3. Inimitable -If yes (hard to imitate), proceed -If no (easy to imitate), invest for a temporary competitive advantage --Will it cost firms a little or a lot to try and develop this? --If it involves setting up contracts/social relationships it is probably hard to imitate 4. Exploitable/Organized -if yes, then you have sustained competitive advantage -if no, you have a unused competitive advantage --Are the firms policies, procedures, branding, operations, culture, etc. organized to exploit this resource to its fullest extent?
Sourcing and Recruiting 1. what are the 2 factors that make up the "pool of possible candidates?"
1. what are the 2 factors that make up the "pool of possible candidates?" 1. Internal labor market = "make" -people who currently work for the firm OR 2. external labor market = "buy" -people outside the company
Selection 2: Methods 1. what are the 2 types of fit? 2. categories fo selection tools -screening tools = -evaluative tools = -contingent tools =
1. what are the 2 types of fit? 1. Complementary Fit = need new skills brought in 2. supplementary fit = we want the same skills brought in (aka sup... same) 2. categories fo selection tools -screening tools = narrow down applicant pool (GPA requirement) -evaluative tools = examine remaining applicants to determine who to hire (take test, next interview) -contingent tools = final check before employment (drug test)
Job Analysis and Job Description 1. what are the 7 steps of the employment life cycle?
1. what are the 7 steps of the employment life cycle? 1. Define the work 2. Source and Recruit 3. Select 4. Orient and train 5. Manage performance 6. engage and retain 7. separate
Strategic Analysis Step 2: Internal Analysis: Resource-Based view of the firm (RBV) 2 KEY ASSUMPTIONS 1. Resource Heterogeneity 2. Resource Immobility
2 KEY ASSUMPTIONS 1. Resource Heterogeneity = implies that even though they have the same resources, firms will use them differently. -Resources in every company are used different -context of where resources are allocated in each firm are different -Resource heterogeneity says that all firms will have different resources because the context each firm provides changes the nature of a resource 2. Resource Immobility -everyone is unique (can't just copy someone else) -you can't just move resources from one firm to another and expect they will provide the same value -Value from a resource comes from both its intrinsic worth and the firm context in which it is embedded -Resource immobility says that because of resource heterogeneity, resources cannot be copied or transferred from one firm to another and expected to perform the same way
Netflix Case: Transparency
Artifacts o "When life gives you lemons, make lemonade" -- CEO admits CCO made unacceptable racist comment and should have been fired sooner o "Sun shining" - you say it as it is and be transparent about what you are doing o Everyone can see salaries Pros (Asset) o Employees understand what is expected of them - leads to high performing talent o "North Star" - everyone is open about their aspirations o Can decrease discrimination Cons (Liability) o Self-Criticism - always worried about being a top performer because any small mistake could lead to firing (could be afraid to speak up, make decisions, etc.) o International Work Environment - may not work in other countries (due to labor laws, cultural norms, etc.)
Netflix Case: Keeper Test
Artifacts o Based on 50% culture & 50% performance Pros (Asset) o Decreases complacency, so productivity goes up o Culture is very strong - you have to be loyal to culture or you'll get fired Cons (Liability) o Disconnect with teams - people are competitors more than teammates o Decreased creativity - bad ideas could get them fired o Atmosphere of fear o International expansion - may not work with other cultures, labor laws, etc.
Netflix Case: Radical Candor
Artifacts o Open about uncomfortable topics o 360 reviews - openly tell people what they don't like about them Pros (Asset) o Builds trust - people are comfortable being open and honest with each other o Continuous improvement - very easy to identify areas of improvement Cons (Liability) o Disgruntled employees speaking out badly about Netflix to the public o Increased gossip (when people don't know all factors that go into firing decisions) o Invasion of privacy
Netflix Case: Freedom and Responsibility
Artifacts o Open conversation - discussions about firing decisions o "Glass walls" - everyone can see employee information Pros (Asset) o Opportunities for growth o Real time 360 gives opportunities for feedback Cons (Liability) o As comfort goes down, competition goes up -- uncomfortableness could cause a loss in talent o Compromised ethics o Not sustainable - if Netflix wants the best talent, those people have lots of other options that could have better culture
Organizational Culture: 4 elements of an Organizational Structure Centralization 1. pros 2. cons
Centralization -who makes decisions within the company? -how much authority do workers have to commit company resources? 1. pros -more consistent 2. cons -little things that go wrong are a big deal -customers have to wait for you to ask your manager for "approval" before you do something -Ex: bugs life leaf drops in front of the ants trail, and they had to wait till the king ant came and told them they are okay and can just go around the leaf -basic employee can't customize something for someone, they can only give them what is offered
What culture could Netflix be?
Clan • Internal Focus - "Netflix Way" • Inflexible - employees have authority / freedom Hierarchical • Internal focus - keeper test, etc. all based on people in the company liking you • Inflexible - must buy into keeper test, etc. to be successful Adhocracy • External focus - high compensation, benefits, etc. • Flexibility - freedom & responsibility, "highly aligned, loosely coupled" Market • External focus - high compensation, benefits, etc. • Inflexible - if you don't do specific things, you get fired
Selection 1: Measurement Curvilinear Relationships Thwart Correlation Analysis 1. Performance vs anxiety graph
Curvilinear Relationships Thwart Correlation Analysis Performance vs anxiety graph -low anxiety = low performance -moderate anxiety = high performance -high anxiety = low performance
Sourcing and Recruiting: Plan for recruiting with Ratio analysis Ex: Hoosier Burgers advertises on campus to hire 10 and 20 hour/week servers. 200 applicants, 65 interviews, 30 offers, 20 hires. 4 managers handled the recruiting for these 20 hires. It costs a total of $40,000 1. what is the (Staffing) yield ratio? 2. Cost per Hire? low cost = ? 3. how many recruiters are required next year if they need 40 hires next year? 4. how many applications do we need if we want to hire 40 people next year
Ex: Hoosier Burgers advertises on campus to hire 10 and 20 hour/week servers. 200 applicants, 65 interviews, 30 offers, 20 hires. 4 managers handled the recruiting for these 20 hires. It costs a total of $40,000 1. what is the (Staffing) yield ratio? -Total applications to people hired -how many apps did i need vs. how many people did i hire -the percent of applicants hired -A high % = effective source (the higher the better) -Equation: yield ratio = Hires / Apps -Yield Ratio = 20 / 200 = 0.1 or 10% 2. Cost per Hire? low cost = ? -A low cost = efficient source (the lower the better) -Equation: total cost of recruitment / hires -Cost Per Hire = 40,000 / 20 = $2000 -Need to consider indirect administrative costs, time, and energy required of recruitment staff 3. how many recruiters are required next year if they need 40 hires? -Equation: 4 / 20 = x / 40 --Now solve for x and take: (4*40) / 20 = 8 recruiters 4. how many applications do we need if we want to hire 40 people next year -Equation: 20 / 200 = 40 / x --Now solve for x: (40*200) / 20 = 400 applications
Organizational Culture: 4 elements of an Organizational Structure Formalization 1. pros 2. cons
Formalization -KEY = Consistency! -Formalization is the amount of rules and documentation -how consistent does our product need to be? -how consistent does our process need to be? -how much written documentation do we have to ensure standardization? -Ex: McDonald's Big Mac example follows a formal process every time it is made so it is consistent 1. pros -it is a good thing if you just use the same process over and over again 2. cons -minute there is one problem everything shuts down -not flexible to change -When there are too many written rules, people often cannot react when they reach a situation where the rules don't apply.
Selection 1: Measurement Is this a good selection method? must meet 6 tests 1. validity 2. usability 3. reliability 4. selection ratio 5. applicant reactions 6. legally defensible
Is this a good selection method? must meet 6 tests 1. validity 2. usability -is it feasible (practical)? -how expensive is it? 3. reliability 4. selection ratio -is this actually doing a good job of differentiating people from us? -We want to choose selection methods that differentiate appropriately between candidates. We don't want one that everyone passes, but we also don't want selection methods so difficult that no one passes. So we look to see if an appropriate percentage are passing to show that it is not too easy nor too difficult -Selection ratios relate to the percentage of applicants that make it from one stage of a selection process to the next 5. applicant reactions -is the applicant okay with this? -will people keep coming back? 6. legally defensible
What has Netflix's leadership team done to support culture? What should they keep and what should they change about the culture?
Leadership Team • Implementing systems like 360 review • Leadership team is not above the law - CEO fires his best friend for racist incident Keep • Competitive environment - develops skills & increases performance • 50% culture 50% skills - there are talented people everywhere, but culture is key • Keeper Test - keeps culture strong & allows for real time action Change • Real time 360 review - eliminates trust between individuals, could be put on blast in from of a group at any time o How to improve it: set a plan for how someone can improve in the future instead of what they messed up in the past ("feed forward rather than "feedback") • Improve constructive language - not just "you're not a star player anymore," but rather "this is what you could do better" • Sensitive Line: the point at which you don't want to listen to anymore feedback (no matter if it's useful, you've heard enough) o Some people's is very close to the surface - don't take negative feedback well o Some people can handle a lot of negative feedback - would do well at Netflix
Job Analysis and Job Description: Designing Motivating work - the Job Characteristics Model 1. What are core job characteristics? -skill variety = -task identity = -task significance = -autonomy = -feedback = 2. Critical Psychological States? 3. Personal and Work Outcomes?
NOTE: research shows that the way a job is created and organized can increase or decrease the motivation of the person filling it through work design NOTE: The job characteristics model presumes that the majority of people are high in a personal characteristic known as growth need. People in growth need want to do go work and are motivated by being engaged with meaningful projects. If someone falls into the category of low in growth need, they like the same thing everyday and not to be challenged, so this model won't do them good. 1. What are core job characteristics? 1. Skill variety = diverse job tasks, need to have multiple skills 2. Task Identity = Know exactly what you did to contribute (high task identity = completion of an entire project, low task identity = you feel you cannot complete a full project) -Task identity is when someone does a complete, discrete job. You can point to it (like building a chair, you made the whole chair) 3. Task significance = don't know exactly what you did to contribute but you know the big picture outcome of what you contributed to (high task significance = worker perceives his work is important to the welfare of others) -Ex: A medical team saves a life, you don't know exactly what you did to save the life, but you helped in someway save a life! 4. Autonomy = do I have control over my work and the way I do it (high autonomy = a lot of freedom) 5. Feedback = clear information is given about the outcomes and quality of work you do 2. Critical Psychological States? 1. meaningfulness of work 2. personality responsibility 3. knowledge of outcomes 3. Personal and Work Outcomes? 1. internal motivation 2. high quality work 3. high work satisfaction 4. *low absenteeism and turnover -BIG ONE!!! if people are doing work they like they'll show up!! NOTE: the more you have of core job characteristics the better people are off in critical psychological states and personal and work outcomes!
Organizational Culture: 4 elements of an Organizational Structure Professionalism 1. pros 2. cons
Professionalism -how conservative do your customers expect your company to be? -How do you communicate legitimacy and competence to the world? 1. pros -Inspires trust with customers 2. cons -unwilling to share weaknesses or things they need due to pressure of being professional 24/7
Organizational Culture: 4 elements of an Organizational Structure Specialization Economies and Diseconomies of work specialization 1. pros? 2. cons?
Specialization -to what degree are activities subdivided into separate jobs? -how broad or deep is each job? -how narrow is each workers focus? -high specialization = deep knowledge -Low specialization = broad knowledge -the right point of specialization can make a company more PRODUCTIVE -Video example = formula 1 race team pit crew changes tires ridiculously fast Economies and Diseconomies of work specialization -short-term, impact from economies of specialization drive productivity up as specialization increases -long-term, impact from human diseconomies drive production down as specialization gets higher and higher 1. pros? -efficiency -big, cool projects accomplished -short-term increases productivity 2. cons? -too much specialization can result in routine and decline productivity in the long-run
Strategic Analysis What are 3 resources hard to imitate? 1. Patent protection? 2. Brand Identity 3. Social systems and company culture
What are 3 resources hard to imitate? 1. Patent protection? -some protection, but doesn't make it impossible to imitate -have to show 100% evidence on how you made it -Patents provide some legal protection but don't necessarily make something costly to imitate. -Disadvantage: now everyone can see how you made it, and it's up to you to see if someone else is violating your patent 2. Brand Identity -BEST WAY TO MAKE SOMETHING HARD TO IMITATE -Having loyal customers and a good brand identify is the best thing you can do to protect yourself -loyal customers will come to you no matter what 3. Social systems and company culture -Ex: company culture with Southwest (very important) -Ex: Nike was born on innovation and relationships -NOTE: Social relationships are very hard to imitate
