Chapter 11

The importance of human resource management (HRM)

Necessary part of the organising function of management
Selecting, training, and evaluating the work force

Human Resource Management

As an important strategic tool

HRM helps establish an organisations sustainable competitive advantage.

Adds value to the firm

High performance work practices lead to both high individual and high organisational performance.

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High-performance work practices

Self-directed work teams Job rotation High levels of skills training Problem-solving groups Total quality management procedures and processes Encouragement of innovative and creative behavior Extensive employee involvement and training
Sources: Based on M. Huselid, The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance, Academy of Management Journal, June 1995, p. 635; and B. Becker and B. Gerhart, The Impact of Human Resource Management on organisational Performance: Progress and Prospects, Academy of Management Journal, August 1996, p. 785.

The human resource management process

Implementation of employee suggestions Contingent pay based on performance Coaching and mentoring Significant amounts of information sharing Use of employee attitude surveys Cross-functional integration Comprehensive employee recruitment and selection procedures
Figure 11.2

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Environmental factors affecting HRM Labour union

An organisation that represents workers and seeks to protect their interests through collective bargaining.

Environmental factors affecting HRM (contd) Affirmative action

The requirement that organisations take proactive steps to ensure the full participation of protected groups in its workforce.

Collective bargaining agreement

A contractual agreement between a firm and a union elected to represent a bargaining unit of employees of the firm in bargaining for:
Wage, hours, and working conditions.

Laws and regulations

Limit managerial discretion in hiring, promoting, and discharging employees.

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Managing human resources Human resource (HR) planning

The process by which managers ensure that they have the right number and kinds of people in the right places, and at the right times, who are capable of effectively and efficiently performing their tasks. Helps avoid sudden talent shortages and surpluses. Steps in HR planning:
Assessing current human resources Assessing future needs for human resources Developing a program to meet those future needs

Current assessment Human resource inventory

A review of the current make-up of the organisations current resource status Job Analysis
An assessment that defines a job and the behaviors necessary to perform the job
Knowledge, skills, and abilities (KSAs)

Requires conducting interviews, engaging in direct observation, and collecting the self-reports of employees and their managers.

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Current assessment (contd) Job description

A written statement of what the job holder does, how it is done, and why it is done.

Meeting future human resource needs

Supply of Employees Demand for Employees

Job specification
A written statement of the minimum qualifications that a person must possess to perform a given job successfully.

Factors Affecting Staffing

Strategic Goals Forecast demand for products and services Availability of knowledge, skills, and abilities

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

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Recruitment and decruitment Recruitment

The process of locating, identifying, and attracting capable applicants to an organisation

Major sources of potential job candidates

Decruitment
The process of reducing a surplus of employees in the workforce of an organisation

E-recruiting
Recruitment of employees through the Internet
organisational web sites Online recruiters

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Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Table 11.1

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Selection Selection process

The process of screening job applicants to ensure that the most appropriate candidates are hired.

Selection decision outcomes

Selection
An exercise in predicting which applicants, if hired, will be (or will not be) successful in performing well on the criteria the organisation uses to evaluate performance. Selection errors:
Reject errors for potentially successful applicants Accept errors for ultimately poor performers

Figure 11.4 Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

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Validity and reliability Validity (of prediction)

A proven relationship between the selection device used and some relevant criterion for successful performance in an organisation.
High tests scores equate to high job performance; low scores to poor performance.

Types of selection devices Application forms Written tests Performance simulations Interviews Background investigations Physical examinations

Reliability (of prediction)

The degree of consistency with which a selection device measures the same thing.
Individual test scores obtained with a selection device are consistent over multiple testing instances.

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Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

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Written tests Types of tests

Intelligence: how smart are you? Aptitude: can you learn to do it? Attitude: how do you feel about it? Ability: can you do it? Interest: do you want to do it?

Performance simulation tests

Testing an applicants ability to perform actual job behaviors, use required skills, and demonstrate specific knowledge of the job.
Work sampling
Requiring applicants to actually perform a task or set of tasks that are central to successful job performance.

Legal challenges to tests

Lack of job-relatedness of test to job requirements Discrimination in equal employment opportunity against members of protected classes

Assessment centers
Dedicated facilities in which job candidates undergo a series of performance simulation tests to evaluate their managerial potential.

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Other selection approaches Situational interviews

Interviews in which candidates are evaluated on how well they handle role play in mock scenarios.

Suggestions for interviewing

1. 2.

Structure a fixed set of questions for all applicants. Have detailed information about the job for which applicants are interviewing. Minimise any prior knowledge of applicants background, experience, interests, test scores, or other characteristics. Ask behavioural questions that require applicants to give detailed accounts of actual job behaviors. Use a standardised evaluation form. Take notes during the interview. Avoid short interviews that encourage premature decision making.
Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia Figure 11.6

Background investigations
Verification of application data Reference checks:
Lack validity because self-selection of references ensures only positive outcomes.

3.

4.

Physical examinations
Useful for physical requirements and for insurance purposes related to pre-existing conditions.

5. 6. 7.

Source: Based on D.A. DeCenzo and S.P. Robbins, Human Resource Management, 7th ed. (New York Wiley: 2002, p. 200)
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Examples of cant ask and can ask interview questions for managers*

Other selection approaches (contd) Realistic job preview (RJP)

The process of relating to an applicant both the positive and the negative aspects of the job.
Encourages mismatched applicants to withdraw. Aligns successful applicants expectations with actual job conditions; reducing turnover.

Cant Ask
Whats your birth date? or How old are you? Whats your marital status? or Do you plan to have a family? Whats your native language? Have you ever been arrested?

Can Ask
Are you over 18? Would you relocate? Are you authorised to work in Australia Have you ever been convicted of [fill in the blank]?The crime must be reasonably related to the performance of the job.

* Managers should be aware that there are numerous other can and cant ask questions. Be sure to always check with your HR department for specific guidance.

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Figure 11.7

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Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

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Selection decision outcomes

Quality of selection devices as predictors

Selection Decision
Accept Reject

Later Job Performance

Successful

Correct Decision

Reject Error

Unsuccessful

Accept Error

Correct Decision
Table 11.3

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Figure 11.4

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Decruitment options

Orientation

The introduction of a new employee into his or her job and the organisation.

Orientation objectives Orientation objectives

Reduce Reduce anxiety anxiety Learn job Learn job Introduce Get to know Introduce Get to know Transition Transition work unit company work unit company

Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Table 11.2

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Orientation Transitioning a new employee into the organisation.

Work-unit orientation
Familiarises new employee with work-unit goals Clarifies how his or her job contributes to unit goals Introduces he or she to his or her coworkers

Types of training Interpersonal skills Technical Business Mandatory Performance management Problem solving/Decision making Personal

Organisation orientation
Informs new employee about the organisations objectives, history, philosophy, procedures, and rules. Includes a tour of the entire facility

Table 11.4 Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

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Employee training methods

Traditional Training Methods
On-the-job Job rotation Mentoring and coaching Experiential exercises Workbooks/manuals Classroom lectures

Training

Technology-Based Training Methods

CDROM/DVD/Videotapes/ Audiotapes Videoconferencing/ teleconferencing/ Satellite TV E-learning or other interactive modules.

skill categories skill categories

Technical Technical Interpersonal Interpersonal Problem Problem solving solving

training methods training methods

On-the-job On-the-job Off-the-job Off-the-job
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Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Employee performance management Performance management system

A process establishing performance standards and appraising employee performance in order to arrive at objective HR decisions and to provide documentation in support of those decisions.

Performance appraisal methods Written essays Critical incidents Graphic rating scales Behaviorally anchored rating scales (BARS) Multiperson comparisons Management By Objectives (MBO) 360 Degree feedback

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Compensation and benefits Benefits of a fair, effective, and appropriate compensation system
Helps attract and retain high-performance employees Impacts on the strategic performance of the firm

Factors that influence compensation and benefits

Types of compensation
Base wage or salary Wage and salary add-ons Incentive payments Skill-based pay

Figure 11.8 Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

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Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

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Career development Career defined

The sequence of positions held by a person during his or her lifetime.

Top 10 job factors for university graduates

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Career development
Provides for information, assessment, and training Helps attract and retain highly talented people

Boundaryless career
A career in which individuals, not organisations, define career progression and organisational loyalty

Enjoying what they do Opportunity to use skills and abilities Opportunity for personal development Feeling what they do matters Benefits Recognition for good performance Friendly co-workers Job location Lots of money Working on teams (ranked in order of importance)
Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Source: Based on V. Frazee. Whats Important to College Grads in Their First Jobs? Personnel Journal, July 1996, p. 21.

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Contemporary HRM issues Downsizing

The planned elimination of jobs in an organisation
Provide open and honest communication. Reassure survivors.

Contemporary HRM issues (contd) Sexual harassment

An unwanted activity of a sexual nature that affects an individuals employment.
Unwanted sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when submission or rejection of this conduct explicitly or implicitly affects an individuals employment.

Managing work force diversity

Recruitment for diversity Selection without discrimination Orientation and training that is effective

An offensive or hostile environment

An environment in which a person is affected by elements of a sexual nature.

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Contemporary HRM issues (contd) Work-life balance

Employees have personal lives that they dont leave behind when they come to work. organisations have become more attuned to their employees by offering family-friendly benefits:
On-site child care Summer day camps Flextime Job sharing Leave for personal matters Flexible job hours

Compensation and benefits packages

Factors that Influence Compensation and Benefits Packages

Size of Company Kind of Business Management Philosophy
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Tenure and Performance

Type of Job Labor or Capital Intensive Company Profitability

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Unionisation

Geographic Location

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Career development

Industrial relations

Career Development

Why employees join unions Why employees join unions

Wage and outcomes

In the Past In the Past

Organisations Organisations Developed Developed Careers Careers
Robbins, Bergman, Stagg, Coulter: Management 4e 2006 Pearson Education Australia

Today Today
Individuals Individuals Develop Develop Careers Careers
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Influence rules Influence rules

Security Security

Political power Political power

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Current issues in HRM

Some suggestions for a successful management career

Managing work Managing work force diversity force diversity

Recruitment Recruitment Selection Selection Orientation and Orientation and training training

Work-Life balance Work-Life balance Sexual harassment Sexual harassment Occupational health and safety Occupational health and safety
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