human resource str and planning chapter 4

chapter 4

In this chapter we want to examine the growing importance of technology in human resources and how this technology can be used by human resource managers to more effectively perform human resource planning. Once the corporate strategies have been established, then the human resource strategy can begin to be developed. The HR strategy involves taking the organization's strategic goals and objectives and translating them into a consistent, integrated set of programs and policies for managing employees. STRATEGIC CHOICES The basis for good human resource decisions is good human resource information. Thus, human resource information systems (HRIS) can play a significant role in all aspects of the human resource function. Whether or not to use a HRIS and to what extent are just two of the strategic choices a firm must make. There are many choices to consider with respect to strategic human resource planning and the choices can be categorized along several key dimensions. (Exhibit 4.2 in the textbook) O reactive versus proactive. The firm can choose to be proactive or reactive in human resource planning. That is, it can be proactive --- anticipate the nature and types of individuals it will need to employ and the necessary skills and training they will require far in advance (proactive approach) or it can wait until something happens and react to needs as they arise (reactive approach). O The second strategic choice is determining the BREADTH of focus in human resource planning. The organization can choose a NARROW focus by planning in only one or two human resource areas, such as recruitment or selection, a MEDIUM focus by planning in several areas of human resources that include recruitment, selection, and training and development or it can choose a BROAD focus by planning in all human resource areas including recruitment, selection, training and development, reward systems, human resource information systems, safety and health, and appraisals. O The third strategic choice involves the FORMALITY of the plan. An INFORMAL plan resides mostly in the heads of its managers and human resource staff, while a FORMAL plan is written down and backed up by supporting documentation and data. Including a computerized HRIS in the organization is one way to formalize the plan. O The next strategic choice involves the DEGREE OF TIE the human resource plan has with the strategic plan. The plan can be LOOSELY TIED, if at all, to the firm's strategic plan, or it can be FULLY INTEGRATED with the strategic plan. O The last strategic choice in the human resource plan involves FLEXIBILITY. This refers to whether the plan has stated contingencies or alternatives (different scenarios) to be able to deal with change. This helps to reduce levels of uncertainty. Organizations tend to be left or right on all continua rather then to the left on some and to the right on others, although there are exceptions. THE NATURE OF HUMAN RESOURCE PLANNING Human resource planning is the key link between the firm's strategic plan and its overall human resource management function as shown in Exhibit 4.3 in the textbook. It is a projection of how the firm plans to acquire and utilize its human resources. It is a plan for the company's human resources into the future that is directly tied in with the overall strategy of the firm. For example, if the firm is following a growth strategy, the human resource plan would need to include methods of fulfilling personnel needs in the new jobs or in the redesigned jobs. The human resource plan is important in that it can help make or break the firm's overall strategic plans and goals. Not in the textbook, but there are five major objectives of HR planning that need to be mentioned: 1. Want to prevent overstaffing and understaffing. — If an organization has too many employees, it experiences a loss of efficiency due to excessive payroll costs and/or surplus production that can't be marketed and must be inventoried. On the other hand, having too few employees results in lost sales revenues as the organization is unable to satisfy existing demand of customers. 2. Want to ensure that the organization has the right employees with the right skills in the right places at the right times. Organizations need to anticipate their staffing needs so that the best employees have been hired, fully trained, and prepared to deliver peak performance exactly when the organization needs them. 3. Want to ensure that the organization is responsive to changes in its environment. Human resource planning forces the organization to speculate and assess the state of its external environment, and anticipate and plan for possible changes, rather than passively reacting to environmental conditions like changes in economy, industry (growing or shrinking), more government regulations, changes in technology. 4. Want to provide direction and coherence to all human resource activities and systems — to focus their activities, understand their relatedness and how changes in one area may impact another area. 5. Want to unite the perspectives of line and staff managers. HR planning requires the input and cooperation of all managers within an organization. Now let's look at some things that can influence human resource planning --- the process of making decisions regarding the acquisition and utilization of human resources: A. Economic forces — human resource planning is strongly affected by federal employment and economic policy planning. Congress and various federal agencies such as the Department of Labor, particularly the Employment and Training Administration and certain agencies within the Department of Health and Human Services and the Department of Education play a major role. Federal programs such as the Jobs Training Partnership Act which encourages private sector hiring of disadvantaged groups can affect how a firm's own plan unfolds. B. Labor Market — defined as the pool of qualified applicants from which a company can hire can influence human resource planning. The labor pool is a pool of skills and abilities that can be tapped as a need arises. As jobs change, firms are sometimes faced with shortages of the type of worker they need. From time to time, organizations experience shortages of people with certain skills or find that the wage level is so high that they cannot "afford" to hire the type of people needed to fill available jobs. Effective planning must include changes in the composition of the workforce. C. Skill Changes and Personnel Shortages -- These can influence human resource planning. Employers may have jobs open but cannot find people with the skills needed to fill the jobs. The mismatch between job skill requirements and the skills the available labor force possess has plagued the U.S. for some time. High-tech skills are currently some of the most demanded. Firm must decide whether to pay for skilled or unskilled workers. Now let's look at a MODEL FOR HUMAN RESOURCE PLANNING Exhibit 4.4 in the textbook shows an overall model or procedure for constructing a human resource plan. Let's look at each step: O Starts with considering the impact of the outside factors in the social, economic, legal, and political environment, as well as perceived market opportunities and the personal values and norms of strategic managers have in formulating an organization's growth objectives. O Determine objectives in order to meet the goals of the firm's overall strategy. Specifically, determine growth/ retrenchment objectives --they drive the human resource plan. Growth objectives and their strategies need to be accompanied by human resource plans that stress the acquisition of needed employees to support growth in sales, customers, or new products. Retrenchment objectives and their strategies need to be accompanied by plans that deal with layoffs, retirement, and terminations. Divestitures and mergers present new problems because of staff reconfigurations, reassignments, and layoffs that might be needed. In essence, a short-term and long-term objective list needs to be determined and developed. The planning horizon, or time frame for accomplishing these objectives needs also to be considered. It can range from short-range i.e. 1 year or less, intermediate-range -- 2 to 4 years and long-range -- 5 to 15 years. O Determine the Human Resource Objectives. Once the organization's objectives are specified, the human resource department should specify its objectives with regard to human resource utilization in the organization. Some examples of human resource objectives are shown in Exhibit 4.5 in the textbook: O Examine the Job Structure and Design — Examine job design and structure to determine how and if the jobs affected will be changed. No job remains unchanged for long. New technologies can completely change the design or structure of a job. For example, robotics have changed assembly lines and changed the skill mix needed from employees. CAD/CAM have changed engineering and design jobs. Quality circles, quality improvement programs, and participative management programs have resulted from the belief that employees want more involvement in their jobs. O Examine the Future Skill Requirements by Occupation or Job Category --- Examine future skill requirements based on the job and any technological changes that may occur. Occupational skills change over time. Therefore, it is important at this stage that an organization have a compete, current listing of all occupational categories in the organization with explanatory job descriptions that specify the duties, skills, and qualifications required for each job. This is a SKILLS BANK. It is defined as a complete and current listing of job descriptions that specify the skills, duties, and qualifications needed for a particular job. A computerized skills bank that itemizes the skills possessed by every employee and easily accessed can be used for promotion or training purposes. O Estimate Human Resource Shortages or Surpluses For Each Occupational Category--- Use some sort of formal analysis to determine the surplus or shortage of employees in job categories. Surpluses can result in terminations, layoffs, transfers, or early retirements. Shortages can result in decisions to hire new employees, use overtime, contract out work etc. Exhibit 4.7 in the textbook presents a procedure that is useful in estimating a given surplus or shortage for a particular occupation or job category. Estimates of shortages or surpluses can be done using the following techniques: 00 Transition Matrix (Markov Analysis) -- The transition matrix is an quantitative approach that tracks changes or movements in Human Resources in an organization. The changes or movements are called flows of employees. It is a mathematical technique which describes the probability of employees staying with job in any job category, moving to another job, or leaving the organization over a given time period, usually one year. It tracks the flow of human resources by job category. It examines such factors as turnover, promotions and transfers to arrive at estimates of how many persons will remain in a job category at a specified period of time in the future. It uses a transition probability matrix that is established based on historical trends of changes or movements or flows of employees. Computer Simulations -- This is a type of estimation method for determining contingency plans and performing what-if analysis. It involves using software to aid in predicting the movement patterns of employees at employment levels by job categories, performing what-if analysis or if-then scenarios, and helping to work out contingency or seasonal plans. It is used primarily as an aid in tracking human resource needs and developing contingency plans. Disney World uses a computer model to predict its employment levels by job categories. 00 Linear Programming —This is a mathematical method that determines the optimal way of allocating scarce resources among competing demands. It is the use of mathematical equations to reach an optimal decision based on known constraints. It is a type of estimation method that most often involves resource allocation decisions as well as human resource decisions. 00 Delphi Method — Relying on the knowledge of experts, this is a qualitative approach to decision making that involves asking a panel of experts to develop estimates of future human resource needs. Then the decisions are passed around for revision until a consensus is reached. Specifically, the experts complete a detailed questionnaire in an anonymous capacity in order to reach a consensus. This is always a repetitive process where they are asked to reconsider their stance several times based on a summary of responses until a consensus prediction is reached. Any or all of these techniques can be used. Some suggested strategies for managing shortages (this is when the internal supply of labor is less than the predicted demand for labor) might include: o recruit new permanent employees (external recruitment) o offer incentives to postpone retirement o rehire retirees part-time o attempt to reduce turnover o work current staff overtime o subcontract work out o hire temporary employees o redesign job processes so that fewer employees are needed Some suggested strategies for managing surpluses ( if the predicted internal supply of labor exceeds the predicted demand of labor) might be: o hiring freezes o do not replace those who leave o offer early retirement incentives o reduce work hours o voluntary severance, leaves of absence o across-the-board paycuts o layoffs o reduce outsourced work o employee training o switch to a variable pay plan o expand operations The last step is to O Establish Specific Objectives for Human Resource Functions ---- Specific objectives should now be determined for each human resource function such as recruitment, training, selection, promotion, placement, compensation, layoffs, terminations, etc. HUMAN RESOURCE COSTING Increasingly, organizations are questioning human resource decisions because it cannot be clearly demonstrated that they improve productivity. Human resource costing involves trying to place a "bottom line" financial figure on the policies and programs developed by the HR department. They want to find out how the policies of the HR unit affect the bottom line. For example, if the HR department wanted to implement a new training program, top management would most likely want to see that any money spent on the program would be at least regained (and hopefully surpassed) by improvements in productivity, efficiency, etc. or a reduction in other costs, such as from accidents. Because of the impact on the firm's financial picture as well as the firm's ability to be effective, HR costing becomes a strategic activity. There are various ways to cost human resources: 1. Human Resource Accounting — this method uses historical costs to arrive at an asset value. Specifically, this model uses historical costs that is, actual expenses for recruiting, training, development, etc, to determine the firm's investment in its employees and thus the asset value for the employee. The asset value can be computed by calculating the human resource expenditure per employee, similar to the traditional accounting function. Employees are then given an asset value. Some companies today are trying to measure intellectual capital or employee knowledge. 2. Costing Employee Behaviors ---This model calculates such things as turnover costs, replacement costs, training costs, and so on. Each behavior is identified and separate and independent dollar values are computed for each. 3. Utility Theory — This model requires decision makers to state goals clearly, specify outcomes of decisions, and attach differing values or utilities to each outcome. The information can then be used to calculate a payoff matrix. This is an area of decision making that provides a framework for selecting decision alternatives that provides maximum payment or utility. HUMAN RESOURCE INFORMATION SYSTEMS We said in this chapter that the basis for good human resource decisions is good HR information. So let's look at and talk a little more about a HRIS. An HRIS is a computerized system containing human resource data that is used to facilitate decision making in an organization. An HRIS uses information technology (computers) to facilitate decision making in a manner similar to that of a decision support system (DSS). Both of these systems place information for decision making literally at the fingertips of the decision makers. Using personal computer or terminals, human resource and line managers can call up information as needed. As with any system, there are four elements that make up an HRIS system: 1. Inputs — these can be employee information, applications for employment, company policies and procedures and other personnel related information that must be entered into the system in order to be used. 2. Transformations --- This portion is the actual computer and the instructions that tell the computer what to do, when to do it, and how to do it (that is, the software). It has the advantage of speed and efficiency over a manual system. During this stage, the input information is changed into something that is more useful to the firm. Computers and software can range from simple and inexpensive to complex and expensive. One of the most sophisticated software packages on the market today is SAP's R/3. 3. Outputs — These are the actual reports or newly processed materials from the computer. For output (information) to be high quality, it must meet the following criteria: o accurate that is, it must correctly reflect what it reports, o significant and relevant, that is, it must be usable and available in a timely manner o comprehensive --should provide a complete picture o readable-- must be easily understandable and have visual impact o consistent in format — same information should be in the same form. 4. Feedback/ Control Mechanism — This represents the control element of the system. It helps to ensure that the outputs are the ones that the system seeks to achieve. Example: An application for employment in the Finance Department inputted into the system gets 'transformed" into a hiring approval from the HR department who then "outputs" or sends the approval to the finance department. Most systems also have some form of control mechanism i.e. the finance department sends back a completed new employee report that enables the supervisor to manage the operation of the HRIS system. TYPES OF HRIS's There are four types of HRIS's. Let's look at each type: 1. Concentrated — This HRIS places all control and accountability in one centralized location. Gives management the greatest control over the system and reduces costs. On the downside, it limits the flexibility of persons who need to use or access the system's information. 2. Distributed — features both a control facility and multiple other sites connected to the facility and/or each other. Still allows for a great deal of management control and provides some flexibility for its users. 3. Independent — features multiple systems that may or may not be connected to each other. Management control is minimal. There is higher user access and flexibility. This system provides the greatest amount of flexibility to individual users who can design systems to fit their specific needs. However, this can result in increased costs due to different users reinventing the wheel or creating a new system function that may exist somewhere else in the organization. 4. A hybrid design is really a combination of the above three. MAKING A HRIS WORK Two things are critical to the HRIS's success: 1. Training users — the human resource department must make sure that its employees and other users are properly trained to use the HRIS. 2. Tying strategies to decisions — make sure that the system provides information that will aid decision makers in achieving organization goals and strategies. PRIVACY AND THE HRIS Also organizations should make every attempt to safeguard the private and sensitive information contained in the HRIS.

chapter 7

Recruiting and selecting the right employees has always been a challenge for organizations. Retention issues have also come into play as more employees are wooed away by competitors. We have more workplace diversity. All of these issues call for new strategies and approaches to recruitment, selection, and retention. STRATEGIC CHOICES: A. An organization can make a strategic choice to focus recruiting efforts on minorities and women. Due to the increase of the numbers of women and minorities entrants into the work force over the coming decade, organizations can choose to actively recruit and promote women and minorities which may lead to several unique advantages for the organization B. Organizations can choose to make or buy their employees. They can hire unskilled or less skilled labor and invest in training (make) or they can hire skilled labor and professionals (buy) at a higher salary. Organizations that recruit only "skilled" labor have higher salary expenses and lower training costs. Organizations that recruit only "unskilled" labor have lower salary expenses and higher training costs. C. Organizations make strategic decisions regarding the budget allocated for recruiting and selecting employees. Some organizations do not even measure the cost of hiring an employee. In order to strategically control recruiting and selection process, organizations must know the cost-effectiveness of their devices. D. An organization can make a strategic choice to explore untapped labor sources such as handicapped, homeless, elderly or welfare recipients depending on the type of job that is needed to be done. These labor sources are receiving more attention from recruiters. E. Organizations make strategic decisions regarding the technological sophistication of their recruiting and selection devices. The use of computers, videotapes, telerecruiting (which allows the screening process to be done by telephone), computerized resumes, and online application systems are all new advances in recruiting and selection devices. F. An organization can choose the extent to which internal versus external methods are used. G. An organization must decide whether or not to develop a plan to retain qualified workers. RECRUITING METHODS What is recruitment?? A simple definition is that it is a process of locating and encouraging potential applicants to apply for existing or anticipated job openings. During this process, efforts are made to inform the applicants fully about the qualifications required to perform the job and the career opportunities the organization can offer its employees. Whether or not a particular job vacancy will be filled by someone from within the organization or from outside will, of course, depend upon the availability of personnel, the organization's HR policies, and the requirements of the job to be staffed. Let's talk about internal recruitment first. Most job openings are filled with people from within the organization. By filling vacancies this way, an organization can capitalize on the investment it has made in recruiting, selecting, training, and developing its current employees. Let's look at some methods of INTERNAL RECRUITING: 1. Job posting --- this involves posting job openings in company's newsletters, on computers, or on bulletin boards. Postings should include all relevant information about the job such as salary information, job description, qualifications of the job, whether it is full-time or part-time status, etc. 2. Skills Inventory — are lists of employee names and their relevant qualifications such as education levels, training, present position, work experiences, relevant job skills and abilities. Organizations can look through the inventories to find qualified candidates. 3. Job Bidding — is usually done when unions are present. Those interested in a position bid (apply for open position) and the selection is based on the individual with the highest seniority from among the qualified applicants. 4. Referrals --- this is when current employees provide the names of potential employees in exchange for a referral fee. Referrals from existing employees can be a good source of information unless the percentage of minorities and women is low. Remember we learned that taking referrals from only white males have been found to be a violation of Title VII of the Civil Rights Act. Some advantages of internal recruiting are: 1. employees familiar with organization 2. lower recruiting and training costs 3. increase morale and motivation for employees 4. probability of success due to better assessment of abilities and skills Some disadvantages of internal recruiting are: 1. political infighting for promotion 2. inbreeding 3. morale problems for those not promoted EXTERNAL RECRUITING Now let's switch and talk about external recruiting — recruiting outside the organization. Some methods of external recruiting used by organizations are: 1. School or college recruiting — recruiting at high schools, vocational schools or colleges. This is a strategy to fill entry-level positions that need specific educational requirements. Recruiting at colleges is best for filling positions requiring managerial skills, professional skills, and technical skills. 2. Advertising --- in newspapers, magazines, or other media sources like radio or television is relatively inexpensive, but can result in a large number of unqualified or marginally qualified candidates. Clearly written and specifically defined ads help make the process more effective. 3. Public employment agencies --- state agencies designed to fill job openings. They are most associated with filling blue-collar jobs, but this is changing in many states. 4. Private employment agencies — used to fill positions other than entry level and operate on a fee basis. They can vary in size and effectiveness. Usually specialize in serving a specific occupational or professional field like Kelly, Mac temps (computer people) to help meet the specific needs of their clients. 5. Executive search firms ---usually specialize in finding executive positions. They are often call "head hunters". 6. The Internet and the WWW--- According to a recent market research firm, 96 percent of all companies will use the Internet for recruitment needs within a few years. According to another report, more than 1.2 million jobs are currently listed on the Internet and over 1 million resumes have been posted online. Even though the number indicate heavy usage, another survey found that only one in five companies said they used the Internet to recruit. Of those who used it, only 1 percent of the hires came from this source as compared to 48 percent who used regular ads. The advantages of recruiting from the outside include: 1. new ideas and new approaches 2. "clean slate" regarding company specific experiences from which to build 3. level of knowledge and skill not available in current organizations The disadvantages of recruiting from the outside include: 1. lack of "fit" between employee and organization 2. lowered morale and commitment of employees 3. increased adjustment period Companies frequently use a variety of internal and external recruiting strategies to locate and hire their workers. By utilizing both, a company can develop an overall recruiting plan that is tailored to support the company's overall corporate strategy and result in the selection of highly qualified applicants. RETAINING EMPLOYEES One of the primary roles of a recruiting effort is to attract a number of qualified applicants, however, retaining those employees selected is also an important issue. To attract and retain qualified applicants, organizations need to conduct realistic job previews and share career development paths. 1. Realistic Job Previews --- this involves telling applicants about the positive as well as the negative aspects of the job he or she is considering. They provide a sort of vaccination of sorts against unrealistic expectations and may increase commitment to the job. RJP's have been found to result in fewer acceptances of job offers but lower turnover among those who accept. They are most effective when turnover is high, applicants do not have a realistic expectation of the job, and there is an abundance of applicants for the position. 2. Career development --- is usually done with first-time careerists and recent college graduates. Because organizations have limited paths up the organization for most employees, discussing realistic career paths with new employees can lead to more realistic expectations about their promotion rates. New careerists want to be immediately involved with the essential work and generally want rapid career and salary advancement. Career development is recommended to avoid ineffective career plateauing. ALTERNATIVES TO RECRUITMENT Another strategic decision companies can make is Not to recruit. Instead, they can rely on alternative staffing options to lower their recruitment costs. They may want to use TEMPORARY WORKERS--- employees hired on an as needed basis. Could be for a special project or for a specific time. Generally contracted through a temporary employment agency. Can use PART-TIME WORKERS ---- those who are employed on a continuing basis but who work less than full-time, normally work less than 35 hours a week. Previously, this was considered a less-than optimal working arrangement for employees, however this view is rapidly changing. Some companies have even started to offer benefits for part-time workers. Organizations can LEASE EMPLOYEES in the same way that they can lease cars. These are employees who are hired through a leasing company for a fee. The firm dismisses employees who are then hired by a leasing company which pays for and handles all HR related activities like training costs, benefits, health insurance and contracts with that company to lease back the employees. Usually used by small businesses. INDEPENDENT CONTRACTORS are individuals who contract with multiple companies to provide a specific skill or ability. These individuals offer to apply their talent to a specific problem for a variety of companies. Examples would be consultants and writers. Companies may elect to OUTSOURCE one or more of their business functions. They turn over complete responsibility of a specific business function to another firm. RECRUITING AND THE LEGAL ENVIRONMENT Recruiting and hiring employees must be done within the legal environment of the organization. Specific questions about gender, religion, or race are not permitted in interviews. EVALUATING RECRUITING METHODS Naturally, any recruiting method would be evaluated frequently to warrant its continued use. A cost benefit analysis could be used. THE SELECTION PROCESS In conjunction with the recruiting process, which is designed to increase the number of applicants whose qualifications meet job requirements and the needs of the organization, SELECTION is the process of choosing individuals who have the necessary qualifications to perform a particular job well. In broad terms, the overall goal of selection is to maximize "hits" and avoid "misses". Most organizations have more than one selection process. Exhibit 7.4 in the textbook presents an overview of the selection process. Let's look at each one individually. APPLICATION BLANKS AND RESUMES The application blank is what applicants fill out upon applying for a job in order to provide relevant information about themselves. The application blank is provided by the organization. To avoid negligent hiring claims, the information on applications must be verified. NEGLIGENT HIRING occurs when an employer fails to adequately verify an employee's background and is held liable when that employee injures a customer or third party and it is proven the employer failed to check the employee's background. Example: A carpet cleaning company was found to be guilty of negligent hiring and was ordered to pay $1,000,000 to the parents of two University of Florida students who were strangled by an employee who was in their apartment to clean the carpets. A thorough background check would have revealed that the employee was a bad risk because he had been arrested on drug charges, had violently resisted arrest, and had been fired from two previous jobs. Thus, it is necessary to verify all references and information provided by an applicant. Once the information on the application has been verified, it can be numerically scored to make it more comparable to others. The use of a WEIGHTED APPLICATION BLANK involves placing a value or score for the items on the application that have been found to predict successful job performance. Weighted application blanks refers to weighing some information (such as education, past job experiences) as more critical or predictive of success than other information. RESUMES are often used in place of, or in addition to, application blanks. Job applicants develop their own resumes, which should include essentially standard information. A resume usually contain only that information that the applicant is willing to voluntarily share. Because the resume represents the individual, it is important that it contain no errors. Exhibit 7.5 in the textbook provide some examples of resume bloopers. TESTING Selection testing is a means of obtaining standardized information from potential employees. Standardization means that the test contains the same content for each applicant and is administered and scored in the same way. Using tests as a selection devices is useful only when the tests are reliable and valid. Let's talk about reliability and validity. RELIABILITY means that the test is consistent in its measurement. That the test measures something consistently. That it yields comparable data over a period of time. Every measurement is composed of two parts, a true score and error. The error can be systematic which means the measure is incorrect by the same amount each time it is used or it can be random which means that is not consistent -- it differs each time. A CORRELATION COEFFICIENT is a numerical index that represents the degree of relationship between two variables and is used to measure reliability. It is a number ranging from -1.0 to + 1.0 and is used as an indicator of reliability of measurement. There are some different methods for estimating reliability. A quick look at the different methods: 1. Test -retest --involves giving a test twice to measure the co-efficient of stability. 2. Split-half — involves splitting test into two "equal" halves and seeing if the two halves correlate highly. 3. Parallel tests --involves developing two equivalent tests and measuring the coefficient of equivalence. 4. Interrater --measures the degree of agreement between two raters. 5. Internal consistency — refers to whether each item measures the same construct. Cronbach's coefficient alpha is the most common measure. VALIDITY If a test is valid, it measures what it says it is supposed to measure. A test can be reliable but not valid. But if a test is valid, it must be reliable. There are many different ways to assess validity. We are going to look at four different ways: 1. Content validity — do items on a test measure items from the same underlying concept or content domain — all questions possible on a specific topic. i.e. typing knowledge 2. Face validity — specific type of content validity . Has face validity if the people require to take it view the items on the test as job related. 3. Construct validity — does the test measure one construct that it claims to measure for example, motivation. 4. Criterion-related validity — how well does a test predict an outcome; that is, a predictor like resume, test results, and criterion are predictive of job performance. Both reliability and validity must be present for a test to be useful and legal. If not, the test is worthless to the organization. TYPES OF SELECTION TESTS A number of selection tests have been developed to aid the human resource manager in hiring employees. Let's look briefly at some of them: o Mental Ability Tests --- these are paper and pencil tests used by organizations to try to measure mental abilities or aptitudes such as intelligence, reasoning, numerical skills, understanding of spatial relationships, etc. Aptitudes tests measure a person's ability to learn or acquire new skills. Achievement tests measure what a person knows or can do right now. O Work Samples ---- also called performance tests, work sample tests measure the ability to "do" something rather than the ability to "know" something. They have been found to be good indicators of job performance. Generally they measure motor skills or verbal skills. They should test important aspects of the job and are difficult to fake. Usually require the applicant to perform tasks that are actually a part of the work required on the job. Want to see potential employees "in action". Examples would include a map-reading test for traffic control officers, a lathe test for machine operators, an in-basket test for managers, just to name a few. O Trainability Tests ---- help to determine the trainability of the applicant. The trainer demonstrates how to perform a particular task and then the job applicant is asked to perform the task . O Personality and General Interest Inventories --- are used to measure an individual's work and career orientations. They measure disposition and temperament and focus on identifying traits or typical behaviors of individuals such as aggressiveness and self-esteem. There are no correct answers. O Honesty Tests --- this is an attempt to identify employees who do not have a propensity to steal. These are paper and pencil tests and integrity tests that asked direct questions about their honesty. (E.g. beliefs about frequency and extent of theft in our society, punishment for theft, perceived ease of theft, etc.). Questions would be : I would turn in a fellow worker I saw stealing money. (Tendency to protect) or Most people I've worked with have stolen something at one time or another (tendency to consider common) , or Over the last 3 years, what's the total amount of money you've taken without permission from your employer? ( admit behavior). Have commonly been used in settings like retail stores where employees have access to cash or merchandise. Usually hard for thieves to fake honesty. Now let's talk about the third component of the selection process the interview. THE INTERVIEW Most organizations, regardless of size, use interviewing as a selection method. It is rare to find an instance where an employee is hired without some sort of interview. Depending upon the type of job, applicants may be interviewed by one person, by members of a work team, or other individuals in the organization. It remains a mainstay of selection because 1. It is especially practical when there are only a small number of applicants 2. It serves other purposes, such as public relations 3. Interviewers maintain great faith and confidence in their judgments. To improve the quality of its interviews, it is important that the company mention the negative as well as the positive aspects of the job. Nevertheless, the interview can be plagued by problems of subjectivity and bias. Examples: o halo effect — rating someone high or low on a number of characteristics simply because he or she possesses one characteristic. For example, if an applicant comes dressed very professionally, the interviewer might evaluate other characteristics such as knowledge of the business field also high. o contrast effects --- when the interviewer evaluates a applicant by comparing this person to previous job applicants. For example, an average applicant might be judged as excellent because prior applicants were of very poor quality. This is just a sampling ---there are other perceptual errors. Interviews can be classified into three general categories: 1. Structured 2. Semi-structured and 3. Unstructured. Let's talk briefly about each. 1. Structured --- Here the interviewer asks very specific questions from a prepared list. The interviewer usually does not deviate from the list except for some follow-up questions. The interviewer records the applicants answers as well as his thoughts and reactions on a standard organizational form. Two common types of structured interviews are the A. behavioral description interview — where the applicant is asked questions about what he or she actually did in a given situation. It allows you to gather and evaluate information about what candidates have done in the past to predict how they will act in the future. Another way of saying this is asking applicants questions about how they have performed in the past in order to predict how they will perform in the future. ---that the best predictor of future performance is past performance. B. Situational interview--- where the applicant is given an hypothetical incident and asked to describe how they might react to a situation that might arise on the job. Example: It is the night before your scheduled vacation. You are packed and ready to go. Just before you get into bed, you receive a phone call from the plant. A problem has arisen that only you can handle. You are asked to come in to take care of things. What would you do in this situation? Record Answer: Scoring Guide: Good "I would go in to work and make certain that everything is OK. Then I would go on vacation." Good "There are no problems that only I can handle. I would make certain that someone qualified was there to handle things." Fair "I would try to find someone else to deal with the problem." Fair "I would go on vacation." SEMISTRUCTURED INTERVIEW --- In this type of interview, only major questions are prepared in advance and the interviewer has some flexibility regarding exactly what and how questions are asked. The interviewer also has the flexibility to ask other pertinent questions. UNSTRUCTURED INTERVIEW --- this interview has little or no planning on the part of the interviewer. Due to this lack of planning, the interviews tend to vary greatly between interviewers and candidates. Seldom yield valid or useful information and generally are not recommended. When the interviewer is satisfied that the applicant is potentially qualified, information about previous employment as well as other information provided by the applicant is investigated through checking references. REFERENCE CHECKING The next step in the selection process is reference checking. Most organizations ask an applicant for a list of references. Letters of recommendation are also considered a reference. It is important to accurately verify references and information provided by the applicant to avoid NEGLIGENT HIRING. As we mentioned before, this is being held liable if an employee causes injury to a third party and it is proven the employer failed to check the employee's background. That is, if they fail to screen out applicants with histories of instability who become dangerous in the workplace. Charges of NEGLIGENT REFERRALS can also be lodged by a third party or an employer against another employer for giving a reference that either misstated or omitted facts about the individual. Recent court cases have held former employers liable when they knew an individual was dangerous but failed to disclose this fact to the new employer. Also several firms have been sued by former employees who discovered that they had been given poor recommendations. Therefore, many organizations are reluctant to put into writing an evaluation of former employee. Based on the Privacy Act of 1974, individuals have a legal right to examine letters of reference about them unless they waive the right to do so. PHYSICAL EXAMINATION --- Many organizations require a complete physical examination prior to hiring to ensure that the candidate is physically able to perform the job. This exam is one of the later steps in the selection process because it can be costly. However, it can provide a baseline against which subsequent medical exams can be compared and interpreted. Also it is particularly important in determinations of work caused disabilities under workers' compensation law. Physical exams can also include drug and alcohol testing. Many large companies choose to employ an in-house physician to perform physical exams. JOB OFFER AND HIRING — The final step in the selection process are making the job offer and hiring the candidate. Keeping a strategic perspective, let's talk about STRATEGIES FOR EFFECTIVE RECRUITING AND SELECTION. The organization's strategy can affect the recruiting and selecting process. Organizations with different strategies recruit different types of individual for employment. Firms choosing a retrenchment strategy devote most of their time to improving efficiency. Thus they would emphasize "making" employees rather than "buying" highly trained or educated employees. Therefore, little recruiting is done above the entry level, and selection is based on weeding out undesirable or unqualified applicants. To summarize, training is important, and organizations might choose to use trainability tests or mental ability or aptitude tests in their selection process. This is similar to our defender strategy we talked about previously. Organizations in a growth mode similar to our prospector organizations emphasize "buying" employees. Recruitment methods tend to be sophisticated at all levels of the organization and efforts are focused on acquiring highly skilled employees. So there is little emphasis on training, thus these organizations might prefer a work sample test in their selection process. Analyzer organizations might use of mix of selection devices since they emphasize both make and buy employees Managers must not only be sure that the recruiting and selection criteria are job-related but also need to consider whether the criteria are consistent with the strategies of the organization.

chapter 5

This chapter examines the role of equal employment opportunities and managing a diverse workplace. All managers need to be aware that equal employment opportunity (EEO) affect the choice and implementation of HRM practices and strategic management. In this chapter, I want to provide you with a brief overview of the major types of EEO laws that managers must consider in managing human resources. EMPLOYMENT DISCRIMINATION Discrimination can be defined as the process of responding to a person differently based on that person's individual differences. This is often the goal for human resources managers. In its broadest sense, these managers make selection decisions by discriminating among the applicants. Example: when six applicants apply for one job, one has to be selected. As long as decisions of this type are based on the abilities of the applicants, discrimination is legal. Discrimination becomes illegal when the differences used to separate individuals are non-job-related characteristics such as gender, race, national origin or handicap. We are going to discuss illegal discrimination. There are a large number of laws, executive orders, and guidelines that require organizations to develop and implement human resources plans to ensure equity in employment decisions. Let's take a brief look at them: TITLE VII OF THE CIVIL RIGHTS ACT OF 1964 Arguably the most important EEO law for U.S. managers is Title VII of the Civil Rights Act of 1964. This was passed by the U.S. Congress as part of President Lyndon Johnson's wide ranging program designed to promote social justice. Title VII, the section that deals with employment discrimination applies to most firms employing at least 15 people. It forbids treating employees differently on the basis of race, color, religion, sex, or national origin in any employment condition. Employers must not discriminate in ANY aspect of employment, including such activities as hiring, promotion, pay, termination, benefits, and training. This law was amended in 1972, 1991, and 1994 to include pregnancy and conditions of childbirth, as well as to specify the scope of coverage to government employees, educational institutions, and private employers of more than 15 people. This law has transformed the workplace by opening employment opportunities previously unavailable to many people, including women and African-Americans. WHAT IS DISCRIMINATION? Discrimination in employment decisions can occur in one of three ways: 1. Disparate Treatment --- this occurs when a manager intentionally or overtly treats an applicant or employee differently or restricts employment opportunities because of race, color, religion, national origin, etc. For example, a firm placing a newspaper recruitment ad that sought "aggressive, outgoing, self-starting men" for sales work would be engaging in disparate treatment against women. Also, disparate treatment can occur if a set of rules or standards is applied to a protected group. Example: an organizational rule that allows men to marry but prohibits women from marrying treats women different than men and violates Title VII. Disparate treatment can occur as a result of sexual, racial, religious, or national origin harassment. Example, managers violate the law if they make sexual advances or demands as a condition for employment or promotion. 2. ADVERSE IMPACT — This occurs when seemingly neutral qualifications for employment or promotions are found to have an adverse impact on a protected group. It refers to the rejection for employment, placement, or promotion of a significantly higher percentage of a protected class when compared with a non-protected class. Example: requirements of minimum heights or weights can have an adverse impact on women as well as some ethnic groups. Example: If a firm screens out applicants for jobs based on the basis of a test "cutoff" scores and that cutoff score screen out significantly more blacks than whites, this screening process might have a adverse impact on blacks' employment opportunities. The four-fifths rule is the standard by which adverse impact is judged. It is not a legal definition of discrimination, but rather, a method by which the EEOC or any enforcement agency monitors serious discrepancies in hiring, promotion, or other employment decisions. Adverse impact is when the ratio of minority hires to applicants is less than 80 percent of the ratio of majority hires to applicants. Another way of saying this, the rule states that the selection rate of any minority group should be 80 percent (i.e. four-fifths) of the group with the highest selection ratio. A selection ratio is simply the number of applicants selected divided by the number of applicants who applied. SEE EXHIBIT 5.4 IN THE TEXTBOOK FOR AN EXAMPLE OF THE FOUR-FIFTHS RULE 3. Past Discrimination — This is perpetuating the effects of past discriminatory policies. Example: hiring persons referred by existing workers who are mostly white males because those they refer are likely to be white males. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Along with prohibiting employment discrimination, Title VII of the Civil Rights Act created the Equal Employment Opportunity Commission. The EEOC consists of five commissioners and a general counsel, all appointed by the President of the U.S. and confirmed by the Senate. The president appoints commissioners for staggered five-year terms and no more than three members of the commission can be of the same political party. One commissioner is appointed to be the EEOC chairperson, who is responsible for the overall administration of the agency. The commission's work consists of formulating EEO policy and approving all litigation involved in maintaining equal employment opportunity. The general counsel is appointed for a four-year term and is responsible for investigating discrimination charges, conducting agency litigation, and providing legal opinions. They also review EEOC regulations, guidelines, and contracts. To summarize, the EEOC is the federal government's leading civil rights agency. They are responsible for ensuring that covered employers comply with this act. The commission accomplishes this goal primarily by (1) issuing various employment guidelines and monitoring the practices of organizations and (2) protecting employee rights through the investigation and prosecution of discrimination charges. It is important to remember that the EEOC's guidelines are not federal law but administrative rules and regulations published in the FEDERAL REGISTER. The EEOC also has the authority to enforce compliance with the following acts: O Equal Pay Act of 1963 requires all employers covered by the Fair Labor Standards Act and others to provide equal pay for equal work, regardless of sex. Exceptions include seniority or merit-based differences. O Pregnancy Discrimination Act of 1978 broadens the definition of sex discrimination to include pregnancy, childbirth, or related medical conditions; prohibits employers from discriminating against pregnant women in employment benefits if they are capable of performing their job duties. It requires policies and benefits for pregnancy and related conditions to be the same as for disabilities. O Age Discrimination Act of 1967 amended in 1986 and 1990 prohibits private and public employers from discriminating against persons 40 years of age or older in any area of employment because of age: exceptions are permitted where age is a bona fide occupational qualification. (Permits discrimination where employee hiring preferences are a reasonable necessity for the normal operation of a business - an actual qualification for performing the job) O Rehabilitation Act of 1973 amended in 1974 which prohibits federal contractors from discriminating against disabled individuals in any program or activity receiving federal financial assistance; requires federal contractors to develop affirmative action plans to hire and promote disabled persons. O American With Disabilities Act of 1990 which prohibits discrimination in employment against persons with physical or mental disabilities or the chronically ill; enjoins employers to make reasonable accommodation to the employment needs of the disabled; covers employers with fifteen or more employees. This Act made it illegal for public accommodations to discriminate against individuals with disabilities. The EEOC enforces compliance with these acts. The plaintiff of a discrimination suit must prove that a discriminating act took place (a prima facie case i.e before further examination) , then it is up to the employer to rebut the charge. We only wanted to briefly look at some of these employment laws and acts. More detail is given in another course offered called Human Resource Management. Now let's look at some TYPES OF DISCRIMINATION SEX OR SEXUAL DISCRIMINATION -- This is when an individual's sex is a deciding factor upon which an employment decision is based. Remember we said previously that Title VII of the Civil Rights Act of 1964 prohibits discrimination because of the sex of the person. Some unlawful examples are: OO Including the use of height or weight requirements if the requirements eliminate a larger number of women than men. OO Refusing employment to a woman based on an assumption that parenthood might cause her to be more absent than a male employee. More harmful are the subtle stereotypes that hinder women in their search for managerial positions. Examples include the following: OO believing women have lower career commitment than men do OO if she is in her childbearing years, whether they should invest in her knowing she might leave OO women are too emotional to handle management positions OO women are either too aggressive or not aggressive enough. Sexual discrimination lawsuits are still prevalent today. SEXUAL HARASSMENT — Sexual discrimination is not the same thing as sexual harassment. Sexual harassment is also a violation of Title VII of the Civil Rights Act. The EEOC guidelines state that " unwelcome advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature" constitute sexual harassment when submission to the conduct is tied to continuing employment or advancement. The EEOC recognizes two forms of sexual harassment as being illegal until Title VII. Another way of saying it is that there are basically two types of sexual harassment, both of which are illegal. First type of sexual harassment is commonly referred to as quid pro quo harassment ( i.e. something for something). This involves demanding sex as a condition for promotion. Specifically, it involves unwelcome sexual advances or requests for sexual favors as a condition of employment. This type of sexual harassment occurs when "submission to or rejection of sexual conduct is used as a basis for employment decisions". This type of harassment involves a tangible or economic consequence, such as a demotion or loss of pay. If a supervisor promotes a female employee only after she agrees to an after-work date, the conduct is clearly illegal. The second type of harassment HOSTILE ENVIRONMENT, can occur when unwelcome sexual conduct "has the purpose or effect of unreasonably interfering with job performance or creating an intimidating, hostile, or offensive working environment". Thus dirty jokes told by male employees around female employees, vulgar slang, nude pictures, swearing, and personal ridicule and insult constitute sexual harassment when an employee finds them offensive. This harassment can also be called environmental sexual harassment. An employer should take all necessary steps to prevent harassment in the workplace. EXHIBIT 5.5 in the textbook give some guidelines to prevent sexual harassment: O Establish a written policy forbidding sexual harassment O Communicate the policy to managers and employees O Establish an effective complaint procedure that addresses the appropriate action to take if they are harassed O Investigate all claims in a prompt and timely manner O Take appropriate action against the offender and remedial action to correct past harassment. PREGNANCY DISCRIMINATION — Prior to the passage of the Pregnancy Discrimination Act, pregnant women could be forced to resign or take a leave of absence because of their condition. Under the Pregnancy Discrimination Act of 1978, female employees or job applicants may not be treated differently from male employees because of pregnancy or capacity to become pregnant. Pregnancy is a disability and pregnant employees must be treated on a equal basis with employees having other medical conditions. Under the law, it is illegal for employers to deny sick leave for morning sickness or related pregnancy illness if sick leave is permitted for other medical conditions such as flu or surgical operations. RACE DISCRIMINATION---- Occurs when employment decisions are based on the employee's race or color. Charges of race discrimination remain the most common type of EEO complaint. Under Title VII, employers have a responsibility to maintain a bias-free work environment and correct any discriminating situations. The restaurant industry has been hard hit with race-bias allegations even though race discrimination is not confined to just this industry. Examples, Shoney's, Wendy's, and Denny's have been some targets. NATIONAL ORIGIN DISCRIMINATION — affects members of all national groups and groups of persons of common ancestry or heritage against employment discrimination. It differs from race discrimination in that factors other than skin color or obvious race identification may be the basis for discrimination. Example, an accent that is unique. AGE DISCRIMINATION AND HARASSMENT --- With the aging of the baby boomers, (a group of about 76 million people) the chances of age discrimination by employers increases dramatically. Recent figures from the EEOC show that age discrimination complaints compose about 20 percent of all discrimination charges. The Age Discrimination in Employment Act of 1967 protects employees 40 years of age or older from discrimination based on their age. In general, an employer cannot force an employee to retire after turning 70. They cannot refuse to hire or promote an individual because he or she is 70 or older. They cannot o exclude older workers from important work activities o make negative changes in the performance evaluations of older employees o deny older employees job-related education, career development, or promotional opportunities o select younger job applicants over older, better qualified candidates o pressure older employees into taking early retirement o reduce the job duties and responsibilities of older employees RELIGIOUS DISCRIMINATION Title VII of the Civil Rights Act prohibits employment discrimination on the basis of religion, including all aspects of religious practices and beliefs. Freedom to exercise religious choice is guaranteed under the U.S. Constitution. Title VII also prohibits discrimination based on religion in employment decisions. The act defines religion to " include all aspects of religious observance and practice, as well as belief". Conduct that "denigrates' or shows "hostility or aversion" toward someone because of his or her religion is considered religious harassment. Also discrimination occurs when an employee is forced to choose between giving up an employment opportunity or a fundamental religious belief or practice. The most common problem occurs when an employee asks the manager to accommodate a religious need and there is a scheduling conflict. Example, if management asks a Seventh-Day Adventist to work on Saturdays. In addition to 1. Holidays and observances (scheduling), other areas that a manager may have to accommodate may be 2. Personal appearance that is wearing beards, veils, or turbans, and 3. Religious conduct on the job that is, the saying of prayers or doing missionary work among other employees. When religious conflicts arise, the employer must make every effort to reasonably accommodate the employee. Reasonable accommodations include the use of voluntary substitutes, flexible work scheduling, transfers to other departments, or changes in job assignments. Employers who can demonstrate that they are unable to reasonably accommodate an employee's or job applicant's religious practice or beliefs without undue hardship on the company are not engaging in religious discrimination. HANDICAP DISCRIMINATION — The Rehabilitation Act of 1973 requires al federal contractors not to discriminate against and to take affirmative action to employ applicants with physical or mental disabilities. AIDS is now considered a handicap and thus this disease is covered under the Rehabilitation Act. Employers are required to make reasonable accommodations for employees with disabilities. A reasonable accommodation is an attempt by employers to adjust, without undue hardship, the working conditions or schedules of employees with disabilities. This may include making facilities accessible and usable to disabled persons, restructuring jobs, permitting part-time or modified schedules, changing equipment i.e. telephone devices for the hearing impaired, etc. AMERICAN WITH DISABILITIES ACT — This act makes it illegal for public accommodations to discriminate against individuals with disabilities. Discrimination against the disabled was first prohibited in federally funded activities by the Vocational Rehabilitation Act of 1973. However, the disabled were not among the protected classes covered by the Civil Rights Act of 1964. To remedy this shortcoming, Congress in 1990 passed the American with Disabilities Act (ADA) , prohibiting employers from discriminating against individuals with physical and mental handicaps and the chronically ill. AFFIRMATIVE ACTION Similarities exist between the legal concepts of "discrimination" and "affirmative action". However, there are important differences. EEO laws are designed to rid the workplace of current and future discrimination. Affirmative action is designed to remedy past discrimination. Many employers face penalties for violations of both EEO and Affirmative Action regulations. Affirmative Action is a policy that goes beyond equal employment opportunity by requiring organizations to comply with the law and correct past discriminatory practices by increasing the numbers of qualified minorities and women in specific positions by hiring and promotions. It requires employers to analyze their workforce and develop a plan of action to correct areas of past discrimination. Affirmative action is achieved by having organizations follow specific guidelines and goals to ensure that they have a balanced and representative workforce. To achieve these goals, employers must make a concerted effort to recruit, select, train and promote members of protected classes. WHO IS REQUIRED TO DEVELOP AFFIRMATIVE ACTION PROGRAMS? Federal contractors and subcontractors who have at least 50 employees and a $50,000 contract or subcontract with the federal government are usually compelled to develop, implement, and maintain a written AAP on an annual basis. Also many employers have an AAP on a voluntary basis because they realize that having a diverse workforce would be beneficial. HOW AFFIRMATIVE ACTION WORKS Affirmative Action operates on four levels: 1. The first level is pure nondiscrimination and embodies a willingness to treat all races and both sexes the same in employment decisions. 2. The second level of affirmative action hires and/or promotes employees entirely based on merit. Will actively recruit minority and female applicants. 3. The third level uses preferential hiring which means that the company systematically favors minorities and females in hiring and promotion decisions. 4. The fourth level uses a quota system which includes preferential hiring and advocates a specific number of women and minorities to he hired or promoted. REVERSE DISCRIMINATION In pursuing affirmative action, employers may be accused of REVERSE DISCRIMINATION. It is the act of giving preference to members of protected classes to the extent that unprotected individuals believe they are suffering discrimination. Reverse discrimination have been recognized by the courts. When these charges occur, organizations are caught between attempting to correct past discriminatory practices and handling present complaints for unprotected members alleging that HR policies are unfair. For example, an equally qualified or more qualified white male is not hired or promoted in favor of a minority. Recently, it has been extended to include white females, also, when not hired in lieu of other minorities. It is exactly this "catch-22" that has made affirmative action one of the most controversial issues of the past fifty years. LEGAL ISSUES IN COMPENSATION — A. The Equal Pay Act was designed to close the salary gap between men and women. The Equal Pay Act of 1963 requires that men and women who work for the same organization be paid the same for work that is equal in skill, effort, responsibility, and working conditions. Despite this, women still earn on average $.71 for a man's dollar. Remember pay differentials can be justified based on a seniority system, a merit system, a system for measuring earnings by quantity or quality of a product, or any other factor other then gender. B. Comparable Worth means that jobs requiring comparable knowledge, skills and abilities should be paid similar amounts. Comparable worth would mean employers are required to provide equal pay for work of equal value even if they are not in the same organization. This was developed primarily as an answer to the persistent wage gap between men and women employees to help reduce pay discrepancies for women. OTHER STRATEGIC ISSUES A. Glass Ceilings --Refers to the invisible promotion barriers that keep women and minorities out of top management positions. We are now seeing glass ceiling reviews also know as corporate reviews conducted by the Department of Labor to identify practices in organizations that appear to hinder the upward mobility of qualified women and minorities. Organizations are increasingly conducting their own glass-ceiling audits prior to government review to avoid fines and externally imposed corrective action. Thus, opportunities for women and minorities to move into higher level management positions are definitely improving. MANAGING WORKPLACE DIVERSITY Today's workplace is becoming more diverse than ever before. The future of affirmative action may rest not in voluntary programs or mandated quota systems, but in managerial attitudes that value diversity in the workforce. Organizations that embrace a diverse workforce acknowledge individual employee differences and the contributions made by persons of varied abilities. Organizations that approach diversity from a business-oriented perspective will employ and promote their protected-class employees as a means of developing and gaining a competitive advantage.