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Chapter 1 Strategic Importance of Human Resource Management

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STRATEGIC IMPORTANCE OF
HUMAN RESOURCE
MANAGEMENT
CHAPTER OBJECTIVES
After studying this chapter, you should be able to:
Discuss the objectives of human resource management.
Identify steps in strategic management of human resources.
Explain how human resource departments are organized and function.
Discuss the role of human resource professionals in todays organization.
POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
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LECTURE OUTLINE (with PowerPoint

slides)

Strategic
Importance of
Human
Resource
Management
Slide 1

What is HRM?
Slide 2





Strategic HRM
Slide 3









Proactive HRM
Slide 4










Steps in
Strategic HRM
Step 1:
Environmental
Scan
Slide 5

STRATEGIC IMPORTANCE OF HUMAN RESOUCE MANAGEMENT
INTRODUCTIONWHAT IS HRM?
HRM is the leadership and management of people within an organization using
systems, methods, processes, and procedures that enable employees to optimize
their contribution to the organization and its goals.

HRM aims to support and enable organizations to meet their short- and long-
term economic, social, and environmental goals.

STRATEGIC HUMAN RESOUCE MANAGEMENT
A strategy is similar to a game plan and is linked to the strategic needs of
an organizationformulated at three levels: corporate, business, and
functional
Human Resource strategies and tactics must be mutually consistent
strategies may fail if they are not supported by effective tactics, i.e.
methods and procedures
Human Resource strategies need to reflect the organizations mission and
strategies, i.e., be consistent with organizational priorities

PROACTIVE HRM STRATEGIES
Strategic HRM should be proactive rather than reactive.
Proactive
-- Strategic HRM often enables an organization to anticipate a problem and
respond to it before causing damage to the organization
-- Occurs when HR problems are anticipated and corrective action begins
before the problem exists
Reactive
-- Occurs when decision-makers respond to HR problems

UNDERSTANDING THE STRATEGIC HRM PROCESS
STEP 1. ENVIRONMENTAL SCAN
Continuous monitoring of economic, technological, demographic, and
cultural forces and noting changes in governmental policies, legislation,
and statements
The environmental scan includes the following economic forces: economic
cycles, global trade, productivity improvement, global competitiveness
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Economic Forces
Slide 6









Economic Forces
Slide 7








Economic Forces
Slide 8

















Economic Forces
Slide 9







Economic Force: Economic cycles
The Canadian economy goes through boom and bust cycles, which are
often linked to boom and bust cycles in other economies
During recessionary periods, HR managers face challenges associated with
layoffs, wage concessions, and the lower morale that accompanies
recessions.
During boom cycles, HR managers must consider how to recruit and
develop the organizations talent base.

Economic Force: Global trade
For Canada, international trade has always been a crucial issue
-- Canada ranks high among exporting nations, exporting more than U.S.
and Japan on a per capita basis
-- Canadian jobs and economic prosperity depend upon international trade
-- Exports of goods and services account for 31% of Canadas Gross
Domestic Product (GDP)

Economic Force: Productivity Improvement
Productivity refers to the ratio of an organizations outputs (goods and
services) to its inputs (people, capital, material, and energy)
-- Productivity improvement is essential for long-term success i.e., to
reduce costs, save scare resources, and enhance profits
HR professionals contribute to improved productivity directly by finding
better, more efficient ways to meet their objectives and indirectly by
improving the quality of work life for employees
To meet productivity ratios, HR professionals may use outsourcing,
outplacement, part-time workers, and contingent workers
-- Nearly a quarter of all employment is part-time
-- Contingent workers comprise nearly 25% of the workforce as well. The
use of contractors is becoming popular in not only lower level, clerical
or secretarial jobs but also for professional jobs like lawyers and
accountants.

Economic Force: Global Competitiveness
Productivity levels in the U.S., consistently outpace those in Canada
In recent years, Canadas ability to innovate and create wealth has not kept
pace with other countriesCanada ranked ninth as compared to sixth a
decade ago.
Canada only holds 2% of the worlds patents, while the U.S. and Japan
hold 60%
The environmental scan includes technological forces: flexible work design,
information sharing and knowledge management, and automation
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Technological
Forces
Slide 10









Technological
Forces
Slide 11








Technological
Forces
Slide 12





Demographic
Forces
Slide 13










Demographic
Forces
Slide 14



Technological Force: Flexible Work Design
An unprecedented degree of technology has changed the way we work,
play, study, and entertain ourselves, while access to information has
affected the way several organizations conduct their business.
Technology has brought flexibility into when and where work is carried
out. For instance, employees can work without leaving their homes through
telecommuting

Technological Force: Information Sharing and Knowledge Management
More effective knowledge management the process of capturing
organizational knowledge and making it available for sharing and building
new knowledge has been another outcome of digital information systems
Information management systems store integrated information that can be
accessed quickly and accurately
The internet has had a profound impact on human resource activities
through social networking sites, video-sharing sites, wikis, blogs, and other
interactive opportunities to own and control data, and add value to the
applications used.

Technological Force: Automation
Organizations automate to increase speed, provide better service to
customers, increase predictability in operations, achieve higher standards of
quality in production, and increase flexibility
May use robots to replace boring or hazardous jobs

The environmental scan also includes demographic forces: gender balance in
the workplace, shift towards knowledge workers, educational attainment of
workers, aging population, generational shift
Demographics of the labour force describe the composition of the workforce e.g.
education levels, age. Demographic changes occur slowly and can usually be
predicted with considerable accuracy.
Demographic Force: Gender Balance in the Workplace
Nearly 48% of the workforce in 2012 are women
Women accounted for 70% of employment growth in Canada in last twenty
years
-- Raises importance of child care, work-family balance, dual career
families, and employment equity
Demographic Force: Shift toward knowledge workers
Shift from employment in primary and extractive industries to service,
technical, and professional jobs; nearly 78% of the total labour force is
employed in service producing industries.
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Demographic
Forces
Slide 15


Demographic
Forces
Slide 16




Demographic
Forces
Slide 17







Cultural Forces
Slide 18








Step 2:
Organizational
Mission and
Goals Analysis
Slide 19



Step 3: Analysis
of organizational
character and
culture
Slide 20
-- Information workers (data and knowledge workers) and non-information
workers
-- Knowledge workers have been the fastest growing type of workers in
Canadaorganizations need to attract, retain, and retrain these
knowledge workers
Demographic Force: Educational attainment of workers
Increases are expected to continue, however, 9% of women and 15% of
men drop out of school; currently more than 8 million Canadians lack basic
school certificate or diploma.
Demographic Force: Aging Population
Average age of the workforce is increasing (impending old age crisis),
along with the general aging population in Canada
-- Pressure for expanded retirement benefits, variable work schedules,
coordination of government benefits with company benefits, and
retraining programs, etc.
Demographic Force: Generational Shift
The Baby Boomers, Generation X, and Generation Y are qualitatively
different workers
Although the differences within groups may be wider than the differences
between groups, understanding that people have different expectations
from their workplaces is a useful starting point

The environmental scan also includes cultural forces: diversity, ethics
Cultural Force: Diversity
Canadian society is a cultural mosaicCanada encourages maintaining
unique culture and heritage vs. U.S. melting pot
-- Brings opportunities and challenges for an HR department
Cultural Force: Ethics
Ethical conduct of business is becoming an increasingly important issue.
Managers should understand different ethical perspectives and take into
account the ethical implications of their decisions.
STEP 2. ORGANIZATIONAL MISSION AND GOALS ANALYSIS
The organizations overall mission and goals guide the human resources
that are needed to fulfil the mission and goals
For instance, goals such as productivity (or revenue surplus), organizational
growth, employee satisfaction, efficiency, ability to adapt to environmental
changes, etc., will help to identify human resources strategies
STEP 3. ANALYSIS OF ORGANIZATIONAL CHARACTER AND
CULTURE
Human resource strategies should be formulated only after a careful look at
the organizations character: its employees, objectives, technology, size,
age, unions, policies, successes, and its failures. Character reflects the
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Step 4: Analysis
of organizational
strategies
Slide 21








Step 5: Choice
and
implementation
of HR strategies
Slide 22



















Step 6: Review
and evaluation of
human resource
strategies
Slide 23




organizations past and shapes the future.
Each organization has a unique culturecore beliefs and assumptions that
are widely shared by all organizational members. Need to be familiar with
and adjust to the culture of the organization.
STEP 4. ANALYSIS OF ORGANIZATIONAL STRATEGIES
There are three generic organizational strategies:
Cost Leadership strategy: Aims to gain competitive advantage through
lower costs, e.g., seek efficiency and use tight controls
Differentiation strategy: Focuses on creating a creating a distinctive or
unique product that is unsurpassed in quality, innovative design or other
feature, i.e., achieved through product design, unique technology, or even
advertising and promotion
Focus strategy: Concentrates on segment of the market and attempts to
satisfy that segments with a low-priced or highly distinctive product
STEP 5. CHOICE AND IMPLEMENTATION OF HUMAN RESOURCE
STRATEGIES
Strategic choice and implementation involved identifying, securing, organizing,
and directing the use of resources both within and outside the organization.
Ultimately, there should be a clear line of sight between the human
resource strategy and the corporate goals.
The HR strategy must reflect every change in the organizational strategy
and support it.
In formulating strategies, the HR department must continuously focus on
the following 5 groups of activities:
Planning Human ResourcesJob Analysis, HR Planning
Attracting Human ResourcesMeeting Legal Requirements,
Recruitment
Placing, Developing and Evaluating Human ResourcesTraining,
Development, Career Planning, Performance appraisals
Motivating EmployeesCompensation, Benefits, Employee
Motivation
Maintaining High PerformanceEmployee Relations, Meeting the
Needs of a Diverse Workforce, Safety, Union Relations
Note: Defined action plans with target achievement dates are required
to ensure effective implementation of HR strategies
STEP 6. REVIEW AND EVALUATION OF HUMAN RESOURCE
STRATEGIES
Strategies should be examined periodically for their continued
appropriateness and with consideration for changing factors, e.g.,
technology, environments, internal factors, etc.
A human resource audit involves a holistic examination of the human
resource policies, practices, and systems of a firm (or division) to eliminate
deficiencies and improve ways to achieve goals
HR departments must also focus on looking to the future to be proactive in
their orientation
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The Organization
of HRM
Slide 24













The Service Role
of the HR
Department
Slide 25









Todays HR
Professional
Slide 26


THE ORGANIZATION OF HRM
The Human Resource Department in a Small Organization
A separate HR department emerges in an organization when the human
resource activities become a burden to other departmentsoften emerges
as a small department or an individual reporting directly to a middle-level
manager
-- Typical duties include maintaining employee records, helping managers
find new recruits
A Large Human Resource Department
As the organization grows, the HR department usually grows in
impact/complexity and specialists are added, often in the areas of
employment, compensation, training, safety, employee and labour relations
Greater importance of the head of human resources may be signified by a
change in title to Vice President
THE SERVICE ROLE OF THE HR DEPARTMENT
Staff Authority
-- Human resource departments are service departments. They exist to
assist employees, managers, and the organization
-- Authority to advise, not direct managers in other departments
Line Authority
-- Possessed by managers of operating departments, allows these managers
to make decisions about production, performance and people
Functional Authority
-- In highly technical or extremely routine situations, the human resource
department may be provided the authority to make decisions usually
made by line managers or senior managers, e.g., deciding the type of
benefits provided to employees
TODAYS HUMAN RESOURCE MANAGEMENT PROFESSIONAL
In the last thirty years, there has been an enormous growth in the number of
HR managers (1971: 4,055; 1999: more than 43,000)
-- HRM has been slow to evolve into a full-fledged profession
Human Resource managers expected to possess competencies including:
Mastery of HRM Tools, Change Mastery, Personal Credibility
CCHRA (Canadian Council of Human Resources Associations), a
collaborative effort of HR Associations from across Canada, coordinates
the nationally recognized designation in HR called the CHRP (Certified
Human Resources Professional)




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ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS

1. What are the goals of a human resource
department? Choose an organization that you are
familiar with and indicate which of these goals will
be more important in this organization and why.
Strategic HRM is systematically linked to the strategic
needs of an organization and aims to provide it with an
effective work force while meeting the needs of its
members and other constituents in society. HRM aims
to improve the productive contribution of individuals
while simultaneously attempting to achieve other
societal and individual objectives. In practice, this
means that the department is attempting to achieve the
organizational, functional, societal, and individual (or
personal) goals of employees wherever feasible.
Todays organizations must be able to survive and
compete in a vastly changed world, where high
productivity and effectiveness are cornerstones to
success. The HR department aims to achieve these
goals while at the same time attempting to satisfy
societal and employee individual needs.
2. Draw a diagram of a HR department in a firm
that employs over 5,000 persons, and name the likely
components of such a department. Which of these
functions are likely to be eliminated in a small firm
employing 50 persons?
See Figure 1-15, p. 28 in the text. In a small firm, the
middle-level managers are likely to be eliminated.
3. Identify and briefly describe three major external
challenges (choosing one each from economic,
technological, and demographic categories) facing
human resource managers in Canada and their
implications.
Examples can be taken from Figure 1-2, p. 7; the
discussion is on pp. 6 to 18.
4. Outline the three major strategies pursued by
Canadian businesses. What implications do they
have for human resource function within the firms?
Illustrate your answers with suitable examples.
The three major strategies are cost leadership, focus,
and differentiation (See p. 20).



5. What are four trends (or attributes) in the
Canadian labour market that have implications for
a human resource manager? Explain your answer
citing which of the HR functions will be affected and
how.
Trend 1: The increasing number of women in the work
force. HR Dimensions: Benefits (child care,
counselling for two-career families), recruitment,
selection (employment equity, promotion).
Trend 2: Shift toward knowledge workers. HR
Dimensions: Recruitment and Selection (recruitment
strategies, selection criteria), training and development
(special programs), compensation (pay for knowledge,
not skills).
Trend 3: Educational attainment of workers. HR
Dimensions: Training and development (re-training
programs), compensation (incentives).
Trend 4: Aging population. HR Dimensions: Training
(re-training programs), benefits (coordination of
government and company benefits), work options
(variable work schedules).
Trend 5: Generational Shift. HR Dimensions:
Recruitment, training, benefits (what is desirable),
work options (flexibility).
See the discussion on pp. 12-16 of the text.










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ANSWERS TO CRITICAL THINKING QUESTIONS

1. Suppose your company is planning a chain of
high-quality restaurants to sell food products that
the company already produces. Outline which areas
of human resource management will be affected.
Virtually every area of human resource management
will be affected. Initially, consideration will have to be
given to human resource planning, recruitment,
selection, training, compensation, and overall employee
communications and relations. Once the business is
established, plans nor the further development of
present employees, career planning, and performance
evaluation will have to be undertaken.
2. If a bank is going to open a new branch in a
distant city, with what inputs will the human
resource department be concerned? What activities
will the department need to undertake in the
transition to a fully staffed and operating branch?
What type of feedback do you think the department
should seek after the branch has been operating for
six months?
The primary inputs of concern to the human resource
department are the availability of the needed workers in
the branch banks locale, staffing requirements, and
anticipated salary levels.
Creating a fully operating branch requires a plan for the
human resources needs and then to recruit, select, hire,
and train the personnel.
Perhaps the most important feedback the human
resource department should seek after the branch has
operated for six months is an evaluation of employee
performance. This information enables the human
resource department to assess how successful it was in
conducting the necessary human resource activities
needed to start the branch bank.
3. Find two recent news items and explain how
these developments might affect the demands made
on the HR department of an organization.
Answers will vary.





4. Suppose the birthrate during the early 2000s was
to double from the low rates of the 1990s. What
implications would this growth have in the years
2020 and 2030 for (a) grocery stores, (b) fast food
restaurants, (c) Canadian Armed Forces, (d) large
metropolitan universities?
(a) Grocery store: it will probably be easier to hire staff
due to larger supply, more difficult for older workers to
find jobs.
(b) Fast food restaurants: can be selective in hiring;
large supply (higher selection ratio); lower turnover due
to lack of alternatives.
(c) Canadian Armed Forces: more applicants; higher
selection ratio; higher quality recruits.
(d) Large metropolitan university: higher enrolment;
higher staffing needs; higher revenues.
5. Assume you were hired as the human resource
manager in a firm that historically gave low
importance to the function. Most of the human
resource management systems and procedures in the
firm are outdated. Historically, this function was
given a low-status, record-keeping role within the
firm. Armed with sophisticated HR training, you
recently entered the firm and want to upgrade the
HR systems and status of the department. In other
words, you want to make management recognize the
true importance of sound HR practices for strategic
success. What actions will you take in the short and
long term to achieve your goals? Be specific in our
action plans and illustrate your steps where
relevant.
Answers will vary. Short-term suggestion: Make HRM
relevant to line managers. Show some tangible benefits
(e.g., improved communication, faster processing of
departmental requests). Medium and Long term:
Encourage their input in formulating the overall HR
strategy and policies; encourage human resource audit
to bring about continuous improvements; show tangible
contributions (e.g., reduced employee turnover, better
morale, reduced absenteeism; better legal compliance).



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ETHICS QUESTION


Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary

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Chapter 1 Strategic Importance of Human Resource Management
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INCIDENT 1.1: HUMAN RESOURCE DECISION
MAKING AT CALGARY IMPORTERS LTD.

Incident Comments

A constantly recurring issue between human resource departments and operating managers is who should make critical
human resource-related decisions. Operating managers claim they are responsible for results, therefore, they should have
the authority to hire, fire, compensate, and perform other human resource activities. However, when operating managers
are given complete control, inequities and inconsistencies arise.

If you were president of Calgary Importers Ltd. And were asked to resolve this dispute, which argument would
you agree with? Why?
Because managers are responsible for their performance, the president risks depriving these managers of the authority
they need to do their jobs if they are not allowed to make human resource decisions about their staff. Thus, supporting
the line managers need for decision-making authority seems reasonable arrangement. However, when different managers
make decisions looking at only departmental needs, consistency in overall HR practices may be lost. The result could be
confusion, sense of inequity on the part of employees and potential legal violations

Can you suggest a compromise that would allow line managers to make these decisions consistently?
Most organizations strive to achieve consistency in their human resource decision making without depriving the manager
of the authority to make decisions. This compromise approach results in operating managers being able to make
decisions within the departments guidelines. Usually these decisions, particularly with respect to major changes, are
subject to review by the departments specialists. If the review by the human resource department uncovers
inconsistencies, the manager is advised of the problem and given an advisory recommendation to remove the
inconsistency. If the manager persists in ignoring the policy or advice, managers at higher levels are consulted.

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INCIDENT 1.2: CANADIAN BIO-MEDICAL
INSTRUMENTS LTD.

Incident Comments

When enterprises expand internationally, many new considerations have to be taken into account. Besides cross-cultural
issues, local constraints will have to be considered. International HRM requires creativity, tolerance, and adaptability at
all levels of management.

Assume you are the vice-president in charge of human resources. What additional information would you want
these three employees to find out?

Apart from legal details, the firm would want to find out, among other things:
the availability of locally qualified personnel
the local salary levels and benefits
the cost of living
immigration and work permit requirements for foreign nationals
the structure and work climate in a typical German firm of this size (including the degree of worker participation
present)
major unions in the industry and their policies
safety and health requirements for employees

What human resource issues or policies are you likely to confront in the foreseeable future?
hiring of employees (either locally or in Germany)
training of employees who have to work in Germany in that countrys customs, laws, living conditions, and work
ethic (in the case of Canadians who are hired to work in Germany)
safety, health, and employment laws
compensation issues
performance appraisal criteria for expatriate managers and staff
planning the career path of expatriate managers on their return after assignments. Research shows that a
substantial number of expatriates leave their employer because of the employer not meeting their expectations
on their return.
communication with expatriate employees and managers
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CHAPTER CASE STUDY: MAPLE LEAF SHOES
LTD., A STRATEGIC MANAGEMENT EXERCISE
Answers to Discussion Questions

1. What are some changes within Maple Leaf Shoes
and in its environment that have caused a shift in its
strategy? List the challenges facing the company
using the classification provided in your text.
Students may point out any of the number of changes
that have occurred in the firm and its environments.
Samples include:
The firms cost of production is on the rise.
There seems to be more competition, especially
based on price. Maple Leaf Shoes prices are no
longer very low priced compared to those of other
manufacturers.
Remaining non-managerial staff are about to be
unionized.
There is increasing competition from abroad.
Several of the new competitors are from countries
such as Mexico and Thailand, which have lower
labour costs.
The planned facilities in Indonesia (and plans to
enter India and Mexico) raise new HR challenges
in the areas of managerial training (especially those
who have Asian assignments), diversity training,
and developing new HRM policies and systems to
be suitable for an international organization.
There is a lack of well-trained managerial and
supervisory staff. The growth plans will make this
even more apparent in future.
Several of the challenges listed in Figure 1-1, pg. 4 can
be added to the above list.
2. Assume that you are hired as a consultant to help
the firm hire a new human resource manager. What
immediate and long-term job responsibilities will
you identify for the new job incumbent?
The immediate priorities will be:
Meeting human rights legislation requirements and
the requirements imposed by various federal and
provincial laws.
Preparing for contract negotiations with unions.
Job analysis of key functions and task holders to set
the stage for cost-reduction proposals.
Employee relations, especially fostering
communication with employees and improving the
overall morale by establishing necessary
administrative systems.
The long-term priorities will be:
Training and developing managers and other
staff to prepare them for future expansion.
Employment planning, which will also involve
the preparation of skills inventories and
replacement charts, and employee career
counseling. This will also have to be tied to a
performance appraisal system.
Facilitating organizational changes to
accommodate new priorities imposed by
growth and expansion.

3. Identify three sample objectives of the human
resource department at Maple Leaf Shoes and
list associated strategies and action plans to be
implemented by the department.

There may be a number of acceptable answers
here. It is recommended that the instructor
evaluate the objective for its clarity and rationale.
Financial information is given in Table 1, pg. 40.
For example: The objective may be:
To train 20 percent of the current managerial staff
in topics X, K, and Z by 15-7-2012 at a cost not
exceeding $_. The trained managers should be
able to do (a) ____ , (b) ____ , and (c) ________
satisfactorily.

This could translate into actions such as:
1. Identifying the sample of managers who need
training. Thus, the training needs analysis must
be completed by a set date (with monetary and
resource constraints attached to it).
2. The training methodology must be identified
next, choosing from lecture, role playing,
computer simulation, on-the job training, etc.
Once again, the person responsible for each
action and the date by which the action must be
completed is to be identified.
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CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK
Answers to Discussion Questions

1. What are some major challenges facing CPIB?
The major challenge to CPIB is to improve its
competitive position by becoming ore innovative.
Specifically, technological developments have allowed
for electronic banking and virtual banks with lower
overhead costs. Further, shareholders have been
demanding more voice in bank decisions. More
broadly, CPIB operates in a highly regulated industry.
Due to such regulations, Canadian banks feel they are at
a disadvantage relative to U.S. banks.
2. What are the specific implications for the human
resource function?
HRM must take a proactive approach to meet the
technological and competitive challenges. This
includes a thorough environmental analysis to identify
environmental threats and opportunities. Such an
analysis may suggest adopting cutting-edge technology,
for example. As discussed on page 20, the type of
organization strategy that CPIB adopts will greatly
affect HR priorities and practices. If a focus strategy is
used, this would indicate a high emphasis on training,
with moderate emphasis on both skill application and
flexibility to change.

3. What suggestions do you have for the current
challenges faced by the HR function?
The bank should adopt a differentiation strategy
because this is consistent with their history of
capitalizing on opportunities, especially in opening up
in foreign markets. It should continue to innovate
technologically as it did before as a key player in the
development of e-commerce. To address the concerns
of shareholders, CPIB should emphasize it s lean
operations yet still maintain its practice as a good
corporate citizen. Adopting such a strategy means that
employees should be selected on the basis of broad
skills and their creativity and innovation, while training
and development are given high emphasis. HRM
should foster an environment that encourages employee
flexibility to deal with change.

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Chapter 2 Job Analysis and Design
2-1
JOB ANALYSIS AND DESIGN
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Describe the uses of job analysis information for human resource managers.
Discuss the various steps in conducting job analysis and methods of job data collection.
Describe the contents of a job description and a job specification.
Discuss the various approaches to setting performance standards.
Outline the key considerations in job design.
POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
2
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Part 2 Planning Human Resources
2-2

LECTURE OUTLINE (with PowerPoint

slides)

Job Analysis and Design
Slide 1

Job Analysis
Slide 2


Job Analysis Terminology
Slide 3



HR Activities Relying on
Job Analysis
Slide 4












INTRODUCTION
Human resource specialists need to understand the actual
characteristics that presently exist in each job
Job analysis is the systematic study of a job to discover its
specifications and skill requirements for use in wage-setting,
recruitment, training or job-simplification purposes
Job is a group of related activities and duties; one or more people
may do the same job at an organization
Position is a collection of tasks and responsibilities performed by
an individual
MAJOR HUMAN RESOURCE MANAGEMENT ACTIVITIES
THAT RELY ON JOB ANALYSIS INFORMATION
1. Improve productivity
Efforts to improve employee productivity levels necessitate careful
study of jobs
2. Eliminate discrimination
Elimination of unnecessary job requirements that can cause
discrimination in employment
3. Creation of recruitment materials
Creation of job advertisements used to generate a pool of qualified
applicants
4. Person-job matching
Matching of job applicants to job requirements
5. Planning
Planning of future human resource requirements
6. Training
Determination of employee orientation and training needs
7. Compensation
Fair and equitable compensation of employees
8. Performance standards
Identification of realistic and challenging performance standards
9. Re-design jobs
Re-design of jobs to improve performance, employee morale, or
quality of work life
10. Performance appraisal
Fair and accurate appraisal of employee performance


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Chapter 2 Job Analysis and Design
2-3


Steps in Job Analysis
Slide 5

Phase 1: Preparation
Slide 6
















Phase 2: Collection of
Information
Slide 7
























STEPS IN JOB ANALYSIS
PHASE 1: PREPARATION FOR JOB ANALYSIS
1. Familiarization with the Organization and Its Jobs
Before studying jobs it is important to have an awareness of an
organizations objectives, strategies, structure, inputs, and desired
outcomes
-- Unionized organizations require that job analysis steps meet the
provisions of the collective agreement
-- May also study industry and government reports about the jobs to
be analyzed
2. Determine uses of Job Analysis Information
Job analysis plays a critical role for many HR functions
-- Important to determine specific objectives, e.g., selection, training,
designing performance appraisal and compensation systems
3. Identify Jobs to be Analyzed
Due to resource and time constraints need to determine jobs that are
targets for job analysis, e.g., jobs that are critical to the success of an
organization, jobs that are difficult to learn
PHASE 2: COLLECTION OF JOB ANALYSIS INFORMATION
4. Determine Sources of Job data
Human sources
-- Job incumbents, supervisors, job experts, work colleagues,
subordinates, customers
Non-human sources
-- Existing job descriptions and specifications, equipment design
blueprints, equipment maintenance manuals and records, training
and safety manuals, organization charts and other company
records, National Occupational Classification, videos,
professional journals, Internet
5. Data Collection Instrument Design
Job analysis schedules
-- Checklists that seek to collect information about jobs uniformly
-- Questionnaires are used to uncover the duties, responsibilities,
human characteristics and working conditions, and performance
standards of the investigated jobs
-- Various standardized forms are available for job analysis including
Functional Job Analysis, O*NET, Fleishman Job Analysis
System, Position Analysis Questionnaire, and Critical Incident
Method, with FJA and the PAQ as particularly popular.
6. Choice of Data Collection Method
There is no best way to collect job analysis information. Trade-offs
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Part 2 Planning Human Resources
2-4



























Phase 3: Use of
Information
Slide 8







Job Description
Slide 9











between time, cost and accuracy are associated with each method
Interviews
-- Slow and expensive, however, it allows the interviewer to explain
unclear questions and probe into uncertain answers
Focus Groups
-- Allow the ideas of 5 to 7 people knowledge about the job to build
off of each other during a 1 to 2 hour session
Mailed questionnaires
-- Allows many jobs to be studied at once, at little cost, however
there is less accuracy due to incomplete responses, misunderstood
questions and unreturned questionnaires
-- Electronic surveys are increasingly used
Employee log
-- Can be quite accurate, however they are not a popular technique as
they are time-consuming, and may be viewed as a nuisance
resulting in resistance and declining accuracy over time
Observation
-- Slow, costly and potentially less accurate, however, may be
necessary when language barriers exist or to confirm results of
other methods
Combinations
-- Often two or more techniques are used concurrently to ensure high
accuracy at minimum cost
PHASE 3: USE OF JOB ANALYSIS INFORMATION
The information collected about various jobs is put into usable forms
including:
-- job descriptions
-- job specifications
-- job performance standards
-- competency models

JOB DESCRIPTION
A recognized list of functions, tasks, accountabilities, working
conditions, and competencies for a particular occupation or job
Job identity
-- Includes job title, job location, job code, job grade, and status
Job summary and duties
-- Summary is a narrative that concisely summarizes the job
-- Duties and job responsibilities are clearly stated
Working conditions
-- Description of the physical environment, hours of work, safety and
health hazards, travel requirements etc.
Approvals
-- Reviewed for accuracy by selected jobholders and supervisors
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Chapter 2 Job Analysis and Design
2-5









Job Specifications
Slide 10






Job Performance
Standards
Slide 11













Competency Models
Slide 12















JOB DESCRIPTIONS VS. SPECIFICATIONS
The difference between a job description and a job specification is
one of perspective.
-- Job description defines what the jobs does--profile of the job
-- Job specification describes what the job demands of employees
who do it and the human factors required. It is a profile of the
human characteristics needed by the job. These requirements
include experience, training, education, physical demands, and
mental demands

JOB SPECIFICATIONS
A written statement that explains what a job demands of jobholders
and the human skills and factors required
Should include specific tools, actions, experiences, education and
training
-- Includes clear behaviour statements, e.g., lifts 40-kg bags

JOB PERFORMANCE STANDARDS
The work performance expected from an employee on a particular job
Standards become objectives or targets for employee efforts
Criteria against which job success is measured
Sources of standards include:
-- Job analysis information
Alternative sources:
-- Work measurement--methods for evaluating what a jobs
performance standards should be, i.e., the normal performance of
average workers. May involve use of historical data, time studies
and/or work sampling
-- Participative goal-setting--process of goal setting where
managers develop performance standards through discussion with
subordinates

COMPETENCY MODELS
Competency-based job descriptions and specifications have become
increasingly popular
-- Competency is a knowledge, skill, ability, or behaviour required
to be successful on the job
-- competencies are broader in scope than KSAOs e.g., problem
solving, communication, leadership
-- a competency framework describes a group of competencies
required in a particular job, most jobs have between 10 and 15
-- key differences include: competencies may be job spanning, they
may vary in importance across job roles (as seen in competency
matrices), and they contribute to the success of the organization
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Part 2 Planning Human Resources
2-6
Job Design: Key
Considerations
Slide 13

Organizational
Considerations
Slide 14






Ergonomic Considerations
Slide 15



in addition to success on the job

JOB DESIGN
Key Considerations in Job Design:
Organizational Considerations
-- Efficiency: Stress efficiency in effort, time, labour costs, training,
and employee learning time. Includes principles of scientific
management and industrial engineering
-- Work Flow: Sequence of and balance between jobs in an
organization
Ergonomic Considerations
-- Focuses on how human beings physically interface with their
work.
-- Multi-disciplinary using principles from biology (anatomy and
physiology), the behavioural sciences (psychology and sociology),
and physics and engineering
-- Focuses on fitting the task to the worker in many instances rather
than simply forcing employees to adapt to the task
-- Can lead to significant improvements in efficiency and
productivity (Saturn) and are also important to maintain safety at
the workplace (aging workforce issues)

Employee Considerations
Slide 16










Optimal Job Specialization
Slide 17











Employee Considerations
-- Autonomy: Independence, having control over ones work and
ones response to the work environment
Variety: The worker has the opportunity to use different skills and
abilities, or perform different activities
-- Task Identity: The feeling of responsibility and pride that results
from doing an entire piece of work, not just a small part of it
-- Feedback: Information that helps employees evaluate the success
or failure or an action or system
-- Task Significance: Knowing that the work one does is important to
others in the organization or to others
HOW MUCH JOB SPECIALIZATION IS OPTIMAL?
As jobs become more specialized, productivity climbs until behavioural
elements such as boredom offset the advantages of further specialization
Specialization Advantages
Specialization increases productivity to a certain point
Specialized jobs take less time to learn, frustration is decreased and
feedback is increased
Provides jobs for workers with limited skills
Specialization Disadvantages
Employee satisfaction drops and boredom causes errors or resignations
to occur
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Chapter 2 Job Analysis and Design
2-7
Increasing Quality of Work
Life
Slide 18












Environmental
Considerations
Slide 19









Meeting Job Analysis
Challenges
Slide 20










Routine jobs hold less appealing to educated or affluent workers
INCREASING QUALITY OF WORK LIFE
Job Rotation
-- Moving employees from one job to another to provide more variety
and to learn new skills
Job Enlargement
-- Expanding the number of related tasks in a job to increase the job
cycle and draw on a wider range of employee skills
Job Enrichment
-- Adding more responsibilities and autonomy to a job, giving the
worker greater power to plan, do, and evaluate job performance
Employee Involvement and Work Teams
-- Work is increasingly being organized around teams and processes
-- Self-managed and autonomous work teams are increasingly used
ENVIRONMENTAL CONSIDERATIONS
Workforce Availability
-- Efficiency considerations must be balanced against the abilities and
availability of the people who perform the work
Social Expectations
-- The acceptability of a jobs design is influenced by the expectations
of society and workers
Work Practices
-- Set ways of performing work arrived at from tradition or from the
collective wishes of employees
JOB ANALYSIS IN TOMORROWS JOBLESS WORLD
Global competition, changing technology and worker profiles and rapid
increases in knowledge requirements for many jobs have made accurate
and timely job descriptions difficult.
To meet these challenges one possibility is a future-oriented style
-- When describing job activities and specifications i.e. focus on both
present and future requirements
Job analysis will continue to be relevant for legal compliance purposes
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Part 2 Planning Human Resources
2-8

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS

1. Suppose you work for an organization that does
not collect job analysis. What arguments will you
make to introduce it? What methods of collecting
job analysis information will you recommend and
why?

Job analysis information is needed to help design jobs
necessary for an organization to be productive. The job
analysis information is used to write a job description
and job specification, and is the basis for HR strategy
and functioning. An improvement in the task definition
will result in greater productivity and profits. Figure 2-
1, p. 52, gives the major HR activities that rely on job
analysis information. The choice of job analysis
methods depends on the specific HR goals (see Figure
2-5, p.60). For example, interviews and questionnaires
are best suited for designing a compensation system,
while interviews and employee logs are best suited for
employee counselling.

2. Define job descriptions and job specifications,
illustrating how the two are related, yet different.

Job descriptions indicate what the duties, activities, and
responsibilities of jobs are. Job specifications outline
the human characteristics needed to perform the job
successfully. Both rely on the Job Analysis for their
information.

3. Why are clear job specifications important? What
are the costs of imprecise specifications?

Well-developed job specifications inform HR planners,
recruiters, and interviewers what to look for. Lacking
clear job specifications, planners, recruiters, and
interviewers have to rely on guess work, resulting in
poor employeejob match.

4. How can performance standards be set for
production jobs when job analysis information is
insufficient? How would you set standards for a
research scientist if you were chief scientist?

Performance standards on production jobs can be set in
a variety of ways. Historical data can be used to
determine what actual performance has been and that
figure can serve as a standard, particularly in stable
work environments with little technological change.
Time study can be used by studying the time it takes to
do individual tasks. These tasks are timed repeatedly
using the standard method to arrive at the rated job
time. To this figure allowances are added for production
delays, breaks, and other nonproductive time to
determine the standard time for the job. With this time
figure known, analysts can compute the standard output.

In setting the standards for a research scientist, the chief
scientist probably would want to use some form of
participative goal setting. Under this approach the
scientists discuss the job and the subordinate suggests
likely standards. After review and discussion with the
chief scientist, these standards are modified to the point
that the standards are realistic and accepted.

5. What factors need to be considered when
redesigning jobs? Of these, which is (are) most
important?

The factors to consider are efficiency, workflow,
ergonomic considerations, employee considerations,
autonomy, variety, task identity, feedback, and task
significance. While efficiency is important, the needs of
employees as well as environmental realities also affect
job redesign efforts.



.











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Chapter 2 Job Analysis and Design
2-9

ANSWERS TO CRITICAL THINKING QUESTIONS

1. Suppose you were assigned to write the job description in a shirt factory in British Columbia employing mostly
Chinese immigrants who spoke little English. What methods would you use to collect job analysis data?

Perhaps the best approach is by direct observation. From observations, the analyst can complete the job analysis schedule
and write up a job description. The job description then can be checked with the supervisor to ensure that no important
aspects of the jobs are overlooked.

2. You work in the human resource department of a large brewery in Atlantic Canada. You are in the process of
writing job descriptions for all managerial and supervisory staff. One manager who is in the production division
of the brewery refuses to complete a job analysis questionnaire.

(a) What reasons would you use to persuade that individual to complete it?

The best approach is to explain how the data is to be used. Most managers want the human resource department to do the
best job it can during recruiting, compensating, training, and other human resource activities. The analysts might be able
to convince the manager that a lack of completed job descriptions will reduce the level of service the department can
provide this and other managers.

(b) If, after your best efforts at persuasion failed, you still wanted job analysis information on the manager's job,
how would you get it?

Direct observation might be a good start. It can identify many of the activities and the proportion of the manager's time
each took. Discussions or completed questionnaires by other managers who did similar work can provide further insight.
Finally, the manager's superior can be asked to complete a questionnaire about the subordinate manager's job.


3. Suppose you have been assigned to design the job of ticket clerk for a regional airline in Ontario. How would
you handle the following trade-offs?

(a) Would you recommend highly specialized job designs to minimize training or very broad jobs with all clerks
cross-trained to handle multiple tasks? Why?

(b) Would you change your answer if you knew that employees tended to quit the job of ticket clerk within the
first six months? Why or why not?

Since airline ticket clerks often face bursts of activity just before a plane arrives followed by periods of relative calm, it
would seem advisable that each clerk be fully cross-trained to handle the peak workload.

However, if employees who were fully cross-trained tended to quit in a short time, the airline might be better off training
people in only narrow specialties. The more specialized jobs would require less training and take less time to master at a
satisfactory level of performance. Although this may create some congestion at the time of check-in, the airline's loss of
people would not be as costly and replacements could be trained quickly to fill in highly specialized jobs that become
vacant.

4. Assume you are told to evaluate a group of jobs in a boat-building business. After studying each job for a
considerable amount of time, you identify the following activities associated with each job. What job-redesign
techniques would you recommend for these jobs, if any?

(a) Sailmaker. Cuts and sews material with very little variety in the type of work from day to day. Job is highly skilled
and takes years to learn.

(b) Sander. Sands rough wood and fibreglass edges almost continuously. Little skill is required in this job.
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Part 2 Planning Human Resources
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(c) Sales representative. Talks to customers, answers phone inquiries, suggests customized additions to special-order
boats.

(d) Boat preparer. Cleans up completed boats, waxes fittings, and generally makes the boat ready for customer delivery.
Few skills are required for this job.

The sailmaker's job is probably viewed as a craft. To make the job more specialized might deprive the sailmaker of
variety in types of sails or reduce the amount of task identity.

The sander has a boring job that is physically demanding. Since it is easy to learn, rotation with the boat preparer's job
may add variety, and reduce boredom and fatigue. Job rotation and possibly some job enrichment (e.g., checking for
quality) may improve it.

Sales representatives normally have a job with a high degree of variety, task identity, autonomy, and feedback. The job
probably could not be specialized, and there is probably little need to expand the job through the addition of other
behavioural principles.

The boat preparer's job probably could be expanded through job rotation (perhaps with the sander). Also, this employee
could be made a "troubleshooter" and do the final quality control check.


5. What are the key performance dimensions of the instructor who is teaching this course? How will you go about
setting performance standards for the individual? Establish performance standards and associated time-bound,
specific objectives in any of two areas of your choice.

The Figure "Competency Model for a University Instructor" below provides guidelines for establishing suitable
performance dimensions. Students can download this Figure from the book's Online Learning Centre
http://www.mcgrawhillconnect.ca
For developing performance standards, the dean of faculty may want to use some form of participative goal setting.

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Chapter 2 Job Analysis and Design
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2-12



ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary
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Chapter 2 Job Analysis and Design
2-13


INCIDENT 2.1: HILLARY HOME APPLIANCES
CORPORATION

Incident Comments

This incident illustrates the necessity of performing a job analysis to help redesign the jobs to improve productivity. HR
plays a key role in job analysis and job design to improve productivity.

1. What prompted the HR manager to make the statement?

The HR manager realized that productivity was suffering. To improve productivity, there needs to be a job analysis to
redesign jobs. By redesigning the jobs, both performance and morale can be improved.


2. If you were the HR manager, what arguments will you provide to convince the two supervisors of the
desirability of job analysis and employee involvement teams?

Job analysis provides the necessary information to the managers to plan for future HR requirements and help determine
training needs. Greater employee involvement will help motivate employees to work on their own. It can reduce
monotony while create a greater sense of task significance to the team members.



EXERCISE 2-1: A GOOD WORK ENVIRONMENT

Comments to Instructor
Most students will have had some work experience and will be able to list some work-related enjoyable
situations. Answers will vary.
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Part 2 Planning Human Resources
2-14


CASE STUDY: MAPLE LEAF SHOES LTD. - AN
EXERCISE IN JOB ANALYSIS

Answers to Discussion Questions

1. What is your evaluation of Lance's approach to
the project?

The major positive point is that Lance made an attempt
to interview all the senior managers of the organization
(although he did not succeed in this). Some of the
questions used by Lance also are proactive in tone (e.g.,
What are the major challenges facing Maple Leaf
Shoes in the next five years?). He also seems to be
working under the assumption that for a human resource
department to be effective, it should meet the
expectations of its clients (in this instance, other
managers, decision makers, and staff). The use of
personal interviews should help to gather rich
information (as opposed to merely large chunks of
information). This is because other nonverbal cues and
symbolic gestures can give additional insights into the
respondent's frame of mind.

However, Lance's approach has more weaknesses than
strengths. The student may point out a number of
theoretical and methodological flaws in Lance's
approach. The following are given as sample items:

The question checklist used by Lance is too short
and does not give much insight into the human
resource function.
The free-response format used by Lance for all
questions makes the responses incomparable with
each other. Thus, forming any overall conclusion
on any of the questions may be hard.
Several job analysis steps listed in Figure 2-2, p.
50, have not been followed.
Only three out of five managers responded; the
interview with Clark seems useless given the
number of interruptions and his nonfamiliarity with
the day-to-day challenges facing the human
resource manager and the staff.
Lance didn't meet with subordinates (a major
customer of human resource management),
unions, and the large number of people who work
outside head office.
Apparently Lance has no plan to look at the records
of the company to gain insights into the past
practices.

At the end of the three interviews, Lance still
does not have any clear idea of job duties,
performance standards, criteria for evaluating
the effectiveness of the human resource
department function in this organization, and
physical and other special attributes needed
for the human resource manager.

At this point, the instructor may want to ask
students what conclusions they can form based on
the three interviews. While there may not be
complete agreement among the members of the
class, the following may emerge as some tentative
conclusions:

The human resource department (HRD) at
Maple Leaf shoes has not contributed much to
job design, organizational planning and
change, or employee planning.
Controlling the cost of production is a high
priority in this firm if it is to prosper (and even
to survive in the long run).
Unions in the organization are getting
increasingly militant, and dealing with them is
an urgent priority for the new human resource
manager.
Several members of the company have a poor,
negative, or low opinion of the human
resource department; until now the human
resource department in the firm has played a
low-key, record-keeping role (poor cousin
image?).
There is a need to establish more systems and
procedures covering various aspects of staff
management.
Human resource department staff strength at
Maple Leaf, in comparison to other similar-
sized organizations, seems low.
Those pieces of information are important;
however, these by themselves are inadequate
for the purpose of designing job descriptions
and specifications and identifying performance
standards.







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Chapter 2 Job Analysis and Design
2-15
2. What would you do if you were in Lance's
position right now?

Interviews are useful; however, a greater number of
them need to be done, especially with all categories of
employees, union officials, customers, colleagues, and
subordinates of the human resource manager.
Staff in other regions should also be contacted either
through mail questionnaires or telephone interviews.
The latter might be more expensive although it will
increase the response rate. A combination of the two
(that is, a mail questionnaire followed by a telephone
reminder or follow-up) may be a good approach as it
can protect the anonymity of the respondent and lead to
more frank responses.

A longer and more exhaustive interview schedule
should be designed focusing on, among other things:

What is the purpose of the job?
What is being done currently?
How work is being done currently?
What are the primary duties?
What are the other duties?
What constitutes successful performance of duties?
What constitutes acceptable performance of duties?
How much training is needed for these duties?
What are the human resource manager's
responsibilities?
What physical and human attributes are critical and
desirable for the position (e.g., initiative, attention,
judgment)?
Is experience important for the job?
Can training be substituted for experience?
What are some unusual psychological and other
demands on the human resource manager?

Past human resource department records should be
looked at to gauge the effectiveness and gaps in
performance of the human resource department;
these could give some insights into the
responsibilities of the position. For example, the
union may be able to provide information on the
number, type, and seriousness of employee
grievances in the past; details of safety violations
may also be available from the company itself or
by contacting the local government agencies.
Employee turnover, absenteeism, and productivity
data should give some indications to the researcher
about the magnitude of the challenge awaiting the
new human resource manager.

Publications such as NOC, human resource
magazines and reports, the job descriptions of
human resource management in other similar
organizations, etc., may also give additional
insights into what is being done elsewhere and
what should be added to the responsibilities of the
human resource manager at Maple Leaf Shoes
(subject to organizational goals and resource
constraints, of course).

While interviewing managers and staff, ask for past
critical incidents reflecting effective or ineffective
human resource management. This could help in
attempting to identify job specification and
performance standards.

It may be useful to introduce the notion of job
competencies to Maple Leaf Shoes, which would
require the analysis of characteristics of high
performers.




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Part 2 Planning Human Resources
2-16

CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK - REDEFINING JOBS
FOR FUTURE
Answers to Discussion Questions

1. Assume that you are invited as a consultant by
CPIB. What procedures would you introduce that
would ensure that the restudied job information was
correct?

A variety of job analyses can be used to verify that the
changed job descriptions are accurate. Through use of
electronic questionnaires, the job incumbents can be
surveyed periodically to determine what aspects of the
existing job description is inaccurate and why there are
different views of their jobs. Differences may be due to
differing expectations between CPIB and former CCTC
employees. To check whether the job information is
correct, the jobs could be studied by job experts through
observations and interviews. Work colleagues and
customers could also be interviewed individually or in
groups to determine if the information is accurate.

2. Given the ability of most managers to
communicate directly with the computer, can
CPIB use this to its advantage in collecting job
analysis information?

CPIB can computerize the collection of the job analysis
data. Both existing job descriptions and specifications
can be posted on the Intranet within CPIB. As well, a




job analysis questionnaire, like Figure 2-4, p. 56-58, can
be completed through the computer by the job
incumbents. This would also make it easier to analyze
and compare the survey results, and can be more readily
adopted to usable forms such as job descriptions and
job specifications.

3. What additional skills and competencies would
you focus on while planning a training program for
CCTC staff? How should CPIB establish
performance and skill standards for CCTC staff?

Traditional job specifications focus on competencies
associated with high job performance. Competencies
relevant to the CCTC staff also would include problem
solving, analytical thinking, and leadership. Broader
conceptualizations of competencies include beliefs and
values. For the CCTC staff, an important competency is
the degree to which their values are compatible with
that of CPIB. For the CCTC staff, the performance
standards can be established through work measurement
and participative goal setting. Based on their job
description, work measurement can be based on
historical data, time study, and/or work sampling.
Where the tasks do not have obvious standards,
participative goal setting can be used. Employees at
CCTC can gain insight on CPIBs expectations and
rewards can be tied to the meeting of these performance
goals.

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Chapter 3 Human Resource Planning
3-1
HUMAN RESOURCE
PLANNING
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Explain the importance of human resource plans for strategic success.
Describe the Human Resource Planning Process
Discuss methods for estimating an organizations demand for human resources.
Explain the various methods of estimating a firms supply of human resources.
Identify solutions to shortages or surpluses of human resources.
Discuss the major contents of a Human Resources Information System (HRIS).
Explain how HRIS has contributed to enhancing HR service delivery
POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
3
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Part 2 Planning Human Resources
3-2

LECTURE OUTLINE (with PowerPoint

slides)



Human Resource
Planning
Slide 1


Human Resource
Planning
Slide 2




















Human resource planning
Slide 3












RELATIONSHIP OF HUMAN RESOURCE PLANNING TO
STRATEGIC PLANNING
Human Resource planning systematically forecasts an organizations
future demand for and supply of employees, and then matches supply
with demand.

The human resource department will then contribute to the success of
the organizations strategic plan in several ways:
Proper staffing is critical for strategic success
-- An organization needs to be staffed with the right numbers and
types of people to provide for long-term success
Different Strategies Require Varying Human Resource Plans
-- e.g., growth or expansion strategy usually requires aggressive
hiring, training, and /or promotions; a reduction strategy often
requires layoffs, early retirements, etc.
Human Resource Planning Facilitates Proactive Responses
-- Human resource planning (employment planning) facilitates
better recruitment, selection and training strategies to meet equal
employment commitments
Successful Tactical Plans Require Appropriate Human
Resource Plans
-- Firms strategic plan is executed through many short-range,
tactical (operational) plans
-- The overall organizational strategy defines the human resource
objectives which are accomplished through appropriate human
resource plans
-- Employment planning is more common in large organizations
Human resource planning can vary from capturing basic
information to a more sophisticated approach
-- Level 1no formal planning
-- Level 2minimal HRP planning, focus on headcount
-- Level 3long term forecasts, needs are projected 3-6 years
doesnt integrate people planning with long term planning
-- Levels 4 &5HRP is a core strategic process, long range
planning of 3-6 years, sophisticated HRIS systems
-- See Figure 3.2five levels of planning activity on page 88



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Chapter 3 Human Resource Planning
3-3
Human resource planning
process
Slide 4















Causes of Demand for
Human Resources
Slide 5



THE HUMAN RESOURCE PLANNING PROCESS
See Figure 3.3 on page 88
As seen in Figure 3.3, human resource planning is a process with a
specific order of activities helping managers to focus on the issues that
are most important so they can plan effectively to ensure
organizational objectives are met.
There are 5 steps:
-- Forecast demand for resources
-- Assess supply of resources
-- Develop HR objectives
-- Design and implement programs to balance demand and supply
-- Establish program evaluation
THE DEMAND FOR HUMAN RESOURCES
1. External Challenges
Economic developmentsdevelopments in the environment
Social-Political-Legal Challengesimplications may be unclear
Technological challengescan impact supply and demand
Competitorsactions of competitors influence employment levels
2. Organizational Decisions
Strategic Plancommits the organization to objectives such as
growth rates, markets, new products which determine the numbers
and types of employees needed



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Part 2 Planning Human Resources
3-4














Forecasting Human
Resource Needs
Slide 6












Trend Projection
Forecasts
Slide 7





Other Forecasting
Methods
Slide 8










Budgetsincreases or cuts are the most significant influence on
human resource needs in the short-run
Sales and Production Forecastsprovide rapid notice of short-run
changes in human resource demand
New Venturesresult in new human resource demands
Organizational and Job Designchanges in structure, automation,
computerization and job redesign impact human resource needs

3. Workforce Factors
The demand for human resources is modified by employee action
such as retirements, resignations, terminations, deaths, and leaves of
absence
FORECASTING HUMAN RESOURCE NEEDS
1. Expert Forecasts rely on those who are knowledgeable to estimate
future human resource needs
Informal and instant forecast
-- Manager believes workload justifies another employee
Formal expert surveys
-- Planners survey managers who are the experts, about their
departments future employment needs
-- May use questionnaires or focused discussions e.g. nominal group
techniques (the groups ideas are discussed and ranked through a
voting process)
Delphi technique
-- Solicits estimates from a group of experts, usually managers using
repeated surveys until convergence in opinions occurs
2. Trend Projection Forecasts
Extrapolation
-- Extending past rates of change into the future
Indexation
-- A method of estimating future employment needs by matching
employment growth with an index, e.g., ration of production
employees to sales
3. Other Forecasting Methods
Budget and Planning Analysis
-- Organizations that need human resource planning generally have
detailed budgets and long-range plans
New-Venture Analysis
-- Requires planners to estimate human resource needs by making
comparisons with firms that already perform similar operations
Computer-based Simulation Models
-- More sophisticated forecasting approaches involving computers
and computer models that simultaneously use extrapolation,
indexation, survey results and estimates of workforce changes
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Chapter 3 Human Resource Planning
3-5





The Supply of Human
Resources
Slide 9





















The supply of HR
Slide 10



















LISTING HUMAN RESOURCE REQUIREMENTS
Staffing table is a list of anticipated employment openings for each
type of job

THE SUPPLY OF HUMAN RESOURCES
There are two sources of supply: internal and external
1. Internal Supply Estimates
Skills Inventories
-- Summaries of each non-managerial workers skills and abilities
Management Inventories
-- Comprehensive reports of available management capabilities
Replacement Charts
-- Visual representation of who will replace whom
Replacement Summaries
-- Lists of likely replacements for each job and their relative
strengths and weaknesses
Transition Matrices and Markov Analysis
-- Transition matrix describes the probabilities of how quickly a
job position turns over and what an incumbent may do, over a
forecast period of time, from that job situation (i.e., stay, move to
another position within the organization or accept a job in another
organization
-- Markov analysis is a forecast of a firms future human resource
supplies, using transitional probability matrices reflecting
historical or expected movements of employees across jobs
2. External Supply Estimates
Not every future opening can be met with present employees. When
estimating external supplies the following factors must be examined:
Labour Market Analysis
-- The study of the firms labour market to evaluate the present or
future availability of different types of workers e.g.
unemployment rate
Community Attitudes
-- Affects nature of the labour market e.g. anti-business or non-
growth attitudes may cause employees to re-locate
Demographic Trends
-- A long-term development that affects the availability of external
supply
-- Human Resources and Social Development Canada (HRSDC)
publishes short- and long-term labour force projections; The
Canadian Occupational Projection System (COPS) provides
detailed projections of the Canadian economy; Job Futures
identifies work trends and job prospects
-- Statistics Canada also publishes reports of labour force conditions

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Part 2 Planning Human Resources
3-6

Matching Supply and
Demand
Slide 11









Managing Oversupply
Slide 12








Managing oversupply
Slide 13







Managing oversupply
Slide 14
















STRATEGIES TO MATCH SUPPLY AND DEMAND FOR HUMAN
RESOURCES
Human resource planners face three outcomes:
1. Surplus (Oversupply)
Available supply of human resources exceeds the firms demands
2. Equal
Rare situation where supply and demand for is equal
3. Shortage
Available supply of human resources cannot meet the firms needs

MANAGING OVERSUPPLY
When the internal supply of workers exceeds the firms demand, a
surplus exists. There are various strategies that HR can consider. These
strategies can be grouped as follows:
Headcount reduction
Attrition
Work arrangements

Attrition strategies
Hiring Freeze
-- Most employers respond to a surplus with a hiring freeze
-- Attrition (voluntary departures) slowly reduce the surplus
Early and Phased Retirement Offers
-- Early retirement is a form of attrition and is used to encourage
long-service workers to retire before their normal retirement age
-- Phased retirement is a gradual phase into retirement

Alternate work arrangement strategies
Job Sharing
-- Available work is spread among all workers in a group to reduce
the extent of layoffs
Use of Part-time Workers
-- Eliminating full-time positions and replacing them with part-time
positions, thus reducing the total work hours
-- Increases flexibility for employers by matching the workforce with
peak demands; also benefits employers as part-time employees are
often not provided benefits
Internal Transfers
Organizations may attempt to find new internal jobs for surplus
employees
Loaning or Flexforce
-- May be used by seasonal companies instead of laying off
employees, they are loaned to other organizations for special
projects, etc.
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Chapter 3 Human Resource Planning
3-7

Managing oversupply
Slide 15

Headcount reduction strategies
Layoffs
-- Temporary withdrawal of employment to workers for economic or
business reasons
-- Unpleasant for both workers and management, however may be
required when attrition is not enough to reduce employment levels
Leave without Pay
-- Used to temporarily reduce the number of employees on payroll
e.g. to attend college or university, or pursue other interests
Termination
-- Permanent separation from the organization for any reason
-- Severance pay to employees who are being permanently separated
-- Outplacement to help employees find jobs with other employers

Overcoming Employee
Shortages
Slide 16













Alternative Arrangements
in Staffing
Slide 17






Alterative arrangements in
staffing
Slide 18







STRATEGIES TO OVERCOME SHORTAGE OF EMPLOYEES
See Figure 3-16 on page 106
There are several options to choose from depending the sense of urgency,
economic conditions and productivity gains. The staffing options to
consider are:
Hire employees
Source alternative service providers
Develop employees internally
Consider existing work arrangements

Work Arrangements
Overtime
-- Asking employees to work beyond the normal hours
-- Unwanted consequences include fatigue, increased stress and
accidents
-- Flexible schedules
-- Flexible time and location telecommuting, virtual organization
-- Flexible policies e.g. flexible retirements

Hire employees
Part-time Workers
-- Increasingly popular strategy for meeting human resource needs
Full-time Employees
-- Where internal transfer or promotion is not feasible, hiring full-time
employees may be required--results in additional fixed costs


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Part 2 Planning Human Resources
3-8


Alternative arrangements
in staffing
Slide 19








Alternative arrangements
Slide 20







Human Resource
Information Systems
Slide 21








HRIS Factors for
Consideration
Slide 22









Components of an HRIS
systems
Slide 23

Source service providers
3rd party e.g.Temporary Employment Agencies
-- Temps work for a temporary employment agency and are assigned to
employers that contact the agency for help
-- Independent contractor-a freelancer (self employed)
-- Outsource- contracting tasks to outside agencies or persons
-- Crowdsource- it is an action taken by a company that takes a
function once performed by employees and outsources it to an
undefined network for people in the form of an open call ( via the
internet)

Develop employees internally
Float and Transfer
-- Movement of an employee from one job to another that is relatively
equal in pay, responsibility and organizational level
Promotions
-- Movement of an employee from one job to another that is higher in
pay, responsibility, and/or organizational level

HUMAN RESOURCE INFORMATION SYSTEMS
A Human Resource Information System (HRIS) is a system used to
collect, record, store, analyze, and retrieve data concerning an
organizations human resources
The larger the organization and the more dynamic an organizations
environment, the greater the need for a sophisticated HRIS
Information varies from one organization to the next, however key
elements include wage and salary data; benefits; training and development
records and costs; employee information; organizational data; grievances,
demographics of the workforce, productivity data, etc.
Not all HRIS systems are the same. There are many different systems to
choose depending on organizational requirements. Key considerations are:
-- Size
-- What information needs to be captured
-- The volume of information transmitted
-- The firms objectives
-- Managerial decision needs
-- The importance of reporting capabilities
-- Technical capabilities of the firms hardware
-- Available resources

Components of an HRIS systems
-- Benefits
-- Payroll
-- Union related information
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Chapter 3 Human Resource Planning
3-9








Security considerations of
an HRIS system
Slide 24





HRIS an important tool
for strategic HRM
Slide 25









-- Performance appraisal
-- Training
-- Recruitment
-- Health and Safety
-- See Figure 3-15 & 3-16 on page 114.


Security is an important aspect of an HRIS system
-- Access to HRIS Information i.e., determining who should have access
and who should have the right to change input data
-- Security i.e., concerns about unauthorized disclosure of information,
viruses, etc.

HRIS AN IMPORTANT TOOL FOR STRATEGIC HRM
Increased efficiencyenhanced service delivery
Increased effectivenesshelping stakeholders make better decisions
Increased contribution to organizational sustainability- talent management
Increased visibilityenhanced HR competencies



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Part 2 Planning Human Resources
3-10

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS

1. What are the key steps in human resource
planning in organizations? Which of your actions, if
any will be different if you were planning human
resources for a smaller firm (that employees fewer
than 50 persons) than for a larger firm (which as
500 employees)?

Figure 3-2, p. 95, summarizes the key concepts
discussed in this chapter.

2. What are staffing tables and replacement charts?
Of what use is it to a human resource manager?

Staffing tables indicate short-range staffing needs by
types of jobs. It helps recruiters and others in the
organization approach staffing in a more logical,
proactive manner by detailing specific employment
needs. (See Figure 3-7, p. 102.) Replacement charts are
a visual representation of who will replace whom in the
event of a job opening. (See Figure 3-9, p. 105.)

3. Discuss any three techniques for estimating the
demand for human resources. Provide examples
where relevant.

The forecasting techniques for estimating future HR
needs are expert systems, trend analysis and other
methods, which include budget & planning analysis,
new venture analysis and computer models. (See Figure
3-4, p. 98.)

4. What are some popular approaches to match
supply and demand of human resources? Briefly
discuss two approaches (each) for situations when
demand exceeds and is less than supply of human
resources highlighting their advantages and
limitations.

When demand exceeds the supply of human resources a
shortage of employees exists. Options to deal with a
surplus include:
Overtime
Part-time Workers
Temporary Employment Agencies
Internal Temporary Pools
Employee Leasing
Transfers

Contract Workers
Promotions
Full-time Employees

See pp. 114-119 for a discussion of advantages and
disadvantages.

When the demand is less than the supply of human
resources a surplus exists. Options to deal with a
surplus include:
Hiring Freeze
Early and Phased Retirement Offers
Job Sharing
Use of Part-time Workers
Internal Transfers
Layoffs
Leave without Pay
Loaning or Flexforce
Termination
See pp. 110-114 for a detailed discussion of pros and
cons.

5. Alternate work arrangements are useful
approaches for both the employer and the
employee. Discuss.

Alternate work arrangements can provide employers
with greater flexibility as well as to reduce costs. They
can also meet the employees needs for flexibility and
help them better balance work-family demands. For a
detailed discussion of the pros and cons of specific
alternate work arrangements see pp. 120-23.

6. What are some of the security considerations
organization must understand when implementing
an HRIS? Provide an example of one way that
security profiles are set up?

Who can access the files
Who can view the files
Who can change the information
Who can merely view the information
Profiles can be set up using roles e.g. HR
manager can view certain types of information but
cannot edit the information

See discussion on pp. 1115-116 the text.
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Chapter 3 Human Resource Planning
3-11

ANSWERS TO CRITICAL THINKING QUESTIONS


1. Suppose human resource planners estimate that
several technological innovations indicate that your
firm will need 25 percent fewer employees in three
years. What actions would you take today?

First, you want to estimate the annual attrition rate. If
the departure rate is high enough, an employment freeze
might reduce employment levels sufficiently to avoid
any other drastic actions. (Imbalance in staffing levels
during the three years might be handled through
overtime payments, retraining, or occasional hiring.) If
attrition is not sufficient to lower employment levels,
outplacement efforts and requests for voluntary
resignations or early retirements might avoid layoffs
and terminations.

2. Suppose you managed a restaurant in a winter
resort area. During the summer it is profitable to
keep the business open, but you needed only one-half
the cooks, table servers, and bartenders. What
actions would you take in April when the peak
tourist season ended?

Voluntary resignations could be solicited. Otherwise, a
reduction in the work force will have to take place
through layoffs and terminations. Since overstaffing is
an annually recurring problem, the firm might want to
recruit workers who seek the summers off. Perhaps
parents who want to be home during the summer while
their children are out of school or farmers who may
have less work to do during winter months might be
recruited in the future.

3. If your company locates its research and
development offices in downtown Windsor, Ontario,
the city is willing to forego city property taxes on the
building for 10 years. The city is willing to make this
concession to reduce its high unemployment rate.
Calgary, Alberta, your company's other choice, has
a low unemployment rate and is not offering any tax
breaks. Based on these considerations, which city
would you recommend and why?

There is no right answer to this question. It requires a
consideration of the trade-off between taxes saved and
the ease of recruiting and retaining capable workers.
However, Windsor's high unemployment rate is
probably among unskilled or semiskilled workers, few
of whom would be employed in research and
development work.

4. Assume you are the human resource manager in a
Canadian university employing approximately 300
faculty members. Since these faculty members
constitute a valuable resource for your
organization, you decide to install an accounting
procedure for changes in the value of this asset. How
will you go about it? What problems do you
anticipate in the process?

Changes in the value of the human assets can be
calculated using cost or value models. Some of the
cost based calculations are:

cost of special training programs for the faculty
members
travel and other costs for workshops, training
programs, conferences, etc., which faculty attended
recruiting and hiring costs for new faculty
research stipends and grants given to faculty, etc.
changes in salaries, etc.
costs of reduced quality in teaching, research,
and/or university services on account of a
temporary transfer/change in job of a faculty
member (i.e., opportunity costs of faculty members
doing same activity rather than their normal duties)

Some of the value-based calculations can be:

the surplus salaries that faculty members can earn
by moving into other schools (i.e., sum of the
market value of all faculty less their current
salaries)
income generated by each faculty to the university
(An example of income from student fees alone is:
Assume a professor teaches five courses each year.
The total number of students in the five classes is,
say, 300; if the fee per course is, say, $500, then the
total income generated is: 500 x 300, or $150,000.)
research and other grants secured by faculty
members

Clearly both cost and value models involve some
degree of subjectivity in calculation. Also, it is hard to
defend that tuition income is reflective of the value' of
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Part 2 Planning Human Resources
3-12
faculty, as the quality of the instructor has often very
little to do with student enrollment.

5. For a high-tech organization, where the job
specifications and customer needs continually
change, which of the forecasting techniques
discussed in the text are likely to be relevant? Why?

Complex statistical methods are probably not useful for
this purpose. More likely some type of expert approach
may be more appropriate, like the expert forecast, the
nominal group technique, or the Delphi technique (see
discussion on p. 110).

6. Some fire departments and hospital staff are using
the 3-day, 36-hour schedule. Do you see any
negative aspects with this schedule?

A potential drawback could include scheduling
problems. In addition, the long hours could become
boring or monotonous. The longer work days may also
result in increased stress and fatigue which could
increase the risk of errors and/or safety concerns such as
accidents.

7. Assume you work for a firm that employs 30
managerial and 70 clerical/sales employees. As a
cost-cutting strategy, your firm is forced to
terminate the service of ten percent of your
managers and five percent of your clerical staff.
What specific actions will you take to help the
departing employees?

A popular service offered to departing employees is
outplacement (also called career management), usually
provided by consultants specializing in this field. It
assists the terminated employees in finding new jobs by
providing training in resume writing and interviewing
skills. The company may also provide office space,
secretarial services, copying machines, fax machines,
long-distance phone calls, counselling, and general job
hunting skills. (See the discussion on p. 114 of the
text.)


















































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Chapter 3 Human Resource Planning
3-13


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary.
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Part 2 Planning Human Resources
3-14


INCIDENT 3.1: ZEBRA LTD

Incident Comments

This is a typical example of a mid size IT company who is highly innovative and has suddenly experienced a significant
market demand for its new product/service. The human resource requirements become increasingly more important to
address. This case highlights the importance of proactive planning.

1. What staffing options does he have available? Determine what the advantages may be for each option

Refer to figure 3-13 for the various options available. The obvious answer might be to hire however a discussion as to
developing internally is an important consideration and discussing the budgetary differences between hiring and
contracting out work.

2. What specific skills would he need? How would he go about finding out the information?

Refer to chapter 2 on job analysis. Students should consider meeting with managers to discuss the skills needed and
conducting a job analysis. Also consider the internal supply and the importance of having a skills inventory and whether
the organization utilizes these tools.

3. Where should he go to find these skills? Can some skills sets be sourced locally or will the organization need to
go nationally?

Depending on the skill set and level (senior /executive/ or technical/professional) students will need to consider the
availability both internally and externally. Can link this answer to the chapter on recruitment and discuss the market
regarding hot skills and availability.

4. Assuming the organization is going to hire contract employees, what advice would you give the managers with
respect to managing this group?

Review figure 3-14 five key tests to determine contractor/employee status


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Chapter 3 Human Resource Planning
3-15


INCIDENT 3.2: WHAT DOES THE WEATHER
HAVE TO DO WITH HRP? EL NINO IMPACTS?


Incident Comments

Global warming is top of mind in the media and of significant concern for environmental scientists. This mini case
heightens the awareness of the HR student as to the resource issues of such a major environmental shift and addresses the
need to utilize effective forecasting tools.

1. What industries do you think would be most affected by this?

Encourage the students to think about the industries that provide products and services such as clothing for inclement
weather in both the retail and manufacturing sectors for example. Travel destinations and vacation packages would be
another area that would be affected. Also as the polar ice cap melts the water levels can rise and that would impact the
scientific community and those firms that offer environmental services. Students can be encouraged to do some research
on this topic and bring this information to class.

2. Identify some specific jobs that would be in demand.

Review Figure 3-5 Techniques for estimating Future human resource needs. Students can compare the expert to trend
forecasts to decide which might be more applicable in this case.

3. Identify some specific jobs that might be compromised and where there may be an oversupply if these trends
continue.

If the students do not know of these jobs they can reference the NOC for information as to the industry and jobs/job titles.
In addition some internet research can elicit relevant information.
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Part 2 Planning Human Resources
3-16


CASE STUDY: MAPLE LEAF SHOES LTD. A
HUMAN RESOURCE PLANNING EXERCISE

Answers to Discussion Questions

1. Prepare a human resource plan for the Juvenile
Division for the year 2008.

The last five years' productivity ratios are (production
divided by number of employees):

2007 0.786
2008 0.779
2009 0.779
2010 0.789
2011 0.744


A 25% improvement in productivity is expected to lead
to:
0.744 multiplied by 1.25 = 0.93

Overall number of workers needed in the division = 98
divided by .93 or = 105 persons.

To find out the distribution across the four operations,
one has to look at 2009-2010 figures (Table 1).

The proportion of employees in each operation in 2010
were:

Cutting 26 out of 136= 19.2%
Shaping 40 out of 136= 29.4%
Assembling 33 out of 136= 24.2%
Finishing 37 out of 136= 27.2%

In the normal course of events, this will mean the
following distribution of workers (out of 105 total in
2012):
Cutting = 20; Shaping = 31; Assembling = 25 and
Finishing = 29.

The 25% increase in productivity is achieved largely by
automation. In 2012, automated processes will produce
33% of total production. This means that approximately
9 fewer persons (33% of 26= 8.58 rounded off to the
next higher number) will be needed. Hence, 17 cutters
will be required in the next year.

The remaining 88 (105 minus 17) will have to be
distributed among shaping, assembling, and
finishing in the ratio of 29.4: 24.2: 27.2 (or
approximately equal proportion since their
productivity is supposed to be improving equally).
So, the workforce in 2012 in the four operations
will be: (total will still be 105).

Cutting (A) = 17; Shaping (B) = 32;
Assembling (C) = 26; Finishing (D) = 30.

Based on Table 1, the following movement
patterns among operations can be calculated:

Proportion of workers who move from/to divisions
or exit

A = cutting B = shaping C = assembling D =
finishing


From To To

A B C D Exit


A .81 .12 .04 0 .04

B .00 .80 .10 .05 .05

C .00 .06 .79 .15 .00

D .00 .00 .00 1.00 .00



If the same patterns continue, the 125 persons in
the division in 2011 will be re-distributed in the
following fashion by 2012 (assuming the same
pattern as 2009-2010 holds true):


Total employees of 125 were distributed as below:

A= 19.2% of 125 = 24
B= 29.4% of 125 = 37
C= 24.2% of 125 = 30
D= 27.2% of 125 = 34
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Chapter 3 Human Resource Planning
3-17


Their movements will be as follows

From To 34

A B C D Exit
Total

A 19 3 1 0 1
24
B 0 30 3 2 2
37
C 0 2 24 4 0
30
D 0 0 0 34 0
24

In summary:

Division
Needed Available Shortage
Col 1 Col 2 Existing or excess
Transfers (Col 1
Minus
Total of
Col 2)

A 17 19 0 -2


B 32 30 3+2 -3


C 26 24 1+3 -2


D 30 34 0 -4


Note that 6 persons (or 5% of 125) are going to retire.
We don't know which operation they work for. Based
on that, 5 persons (namely 11 above minus 6 who retire)
will have to laid off.

A number of women workers might like to job share.
Hence, the actual number of workers who may have to
be laid off will be smaller.



Other Activities:

(a) 50% of clerical staff (total = 15) have to be laid
off as well.

(b) 6 new sales staff (1 supervisor + 2 assistants
each for two locations) must be newly hired or
transferred from elsewhere.

(c) 4 managerial positions must be eliminated.

In summary, 5 operators, 7 clerks, and 2
supervisors have to be laid off; 6 new sales
positions have to be filled.

Rather than laying off the staff, it will be desirable
to retrain and transfer them to other positions.

2. What other suggestions and comments would
you make to the management if you were in
Reynolds position?

The report should reflect an understanding of the
human element in HR planning. Before deleting
positions and laying off employees, the HR
manager should consider the people and the group
implications of such decisions.

For example, is it possible to transfer the workers
and managers to other locations and operations?
The firm seems to have a concentration of women
in low-paying, boring jobs such as cutting and
shaping. Why aren't more women in complex
and/or supervisory positions?

Is there a long-term plan to help these lower-level
employees to move into supervisory or managerial
positions? Has the firm prepared its staff for future
growth?

How is the firm preparing itself for future
automation? Is there consultation with the union
and employee groups on this matter?

How does the firm prepare for increasing diversity
that is bound to emerge in the future? What are the
implications of locating plants abroad.
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Part 2 Planning Human Resources
3-18

CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK PLANNING SUPPLY
AND DEMAND FOR A CALL CENTRE AT CPIB
Answers to Discussion Questions

1. Comparing the forecasted HR supply and demand, conduct a needs assessment. What levels have a labour
surplus and what levels have a labour shortage? How many employees would the company need to meet the
demands for the next year? Ask the students to review page 100-101.

1. Markov Matrix -- outline of employee movements




" # $ %


&'()*
+,-
%./*
&0/.-
1.23
4.25.-
$06* 6.-7
-./ 89(* 1:*2;6


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CD E F < < < @ E


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CD A<? ? AA >E ? H A<?


% $06* 6.-7(I. -./ <=<< <=<< <=@@ <=?F <=@F A<<B
CD ?J< < < AG< GAH AF@ ?J<

1:*2; .3/;:K..6
CD >AJ AA @E @<> G@G A?@ >AJ



2. Potentially problematic predicted workforce trends:

A. the number of CS reps will decline from 590 to 323- a significant shortfall

B. the number of employees in all senior positions will increase- the increase will have to be compared to projected
needs.

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Chapter 3 Human Resource Planning
3-19


3. Markov Matrix outline of employee movements after including a 3% retirement factor in the exit projections.




" # $ % 89(* (CI;


&'()*
+,-
60/.-7(6:
- 14 $&L
GB
-.*(-.3* 1:*2;6 $'2C,.

" &'()* +,- <=E> <=<? <=<< <=<< <=@H A<<B
CD E F < < < @ E <

# %./* &0/.-7(6:- <=AG <=>H <=<E <=<< <=<E A<<B
CD AH @ AF A < A AH A

$ 1.23 4.25.- <=<? <=A< <=EJ <=<? <=AA A<<B
CD A<? ? AA >@ ? A@ A<? F

% $06* 6.-7(I. -./ <=<< <=<< <=@@ <=?A <=@> A<<B
CD ?J< < < AG< G<A A?J ?J< A>

1:*2; .3/;:K..6
CD >AJ AA @? @<G G<E A>F >AJ @@


Potentially problematic workforce trends after including a 3% retirement rate.
A. The number of CSR will decline from 590 to 306- an even larger shortfall than projected before.
B. Shift managers will increase from 6 to 11
C. Team leaders will increase from 105 to 203
D. Dept supervisors will increase from 18 to 25
E. CSR will decrease from 590 to 306


To determine if the increase in senior staff is a problem, projected senior staff increases will have to be compared to
projected requirements (see Q5 below)

1. Assuming a direct relationship between employees needed and call centre activity, the projected increase in activity
would lead to the following employee requirements



current projected increase %
increase
Markov
Matrix
projections
Position
Over/under
customers 5,200,000 6.700,000 1.500,000 29%
manager 6 8 2 29 11 3
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Part 2 Planning Human Resources
3-20
supervisor 18 23 5 29 25 2
TL 105 135 30 29 203 68
CSR 590 760 170 29 306 [454]
Total 719 926 207 29 545 [381]


Conclusions:
1. There will be a very large shortfall of CSR. The projections after accounting for a 3% retirement rate shows a
shortfall of 454 CSRs.
2. There will be excesses in all senior positions. The excess employees by position are projected to be:


Needed Projected excess
Shift manager 8 11 3
Dept Supervisor 23 25 2
Team leader 135 203 68
166 239 73


3. Part of the shortfall of CSR could be reduced by not promoting as many CSRs as planned to higher positions.
Reducing promotions at all levels would also reduce the excess levels of senior employees.
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Chapter 4 Legal Requirements and Managing Diversity
4-1
LEGAL REQUIREMENTS AND
MANAGING DIVERSITY
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Explain the impact of government on human resource management.
List the major provisions of the Canadian Human Rights Act.
Explain the effect of human rights legislation on the role of human resource specialists.
Define harassment and explain what is meant by the term sexual harassment.
Outline an Employment Equity Program.
Define diversity management and discuss the strategic importance of managing diversity.
Discuss the various steps in managing diversity.
POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
4

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Part 3 Attracting Human Resources
4-2

LECTURE OUTLINE (with PowerPoint

slides)


Meeting Legal
Requirements
Slide 1

Government Impact
Slide 2









The Charter of Rights and
Freedoms
Slide 3






Human Rights Legislation
Slide 4









GOVERNMENT IMPACT
Governments present many challenges to human resource
departments. Federal and provincial laws regulate the employee-
employer relationship and challenge the methods human resource
departments use. Governments create special regulatory bodies such
as commissions and boards, to enforce compliance with the law and
aid in its interpretation.
Responsibilities of human resource specialists:
-- Stay abreast of laws, interpretations and rulings
-- Develop and administer programs to ensure compliance
-- Pursue their traditional roles of obtaining, maintaining, and
retaining an optimal workforce

THE CHARTER OF RIGHTS AND FREEDOMS
The Canadian Charter of Rights and Freedoms is contained in the
Constitution Act of 1982 and is probably the most far-reaching legal
challenge for human resource managers. The Charter provides
fundamental rights to every Canadian.

HUMAN RIGHTS LEGISLATION
Human rights legislation is a family of federal and provincial acts that
have a common objective to provide equal employment opportunities
for members of protected groups. The two layers of employment laws:
Federal law
-- Passed by Parliament and enforced by the federal Human Rights
Commission / Tribunal (applies to employers under federal
jurisdiction)
Provincial law
-- Passed by provincial governments and enforced by provincial
human rights commissions / tribunals (applies to employers
under provincial jurisdiction)
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Chapter 4 Legal Requirements and Managing Diversity
4-3


Direct vs. Indirect
Discrimination
Slide 5
















Human Rights Legislation
Slide 6








Prohibited Grounds of
Discrimination
Slide 7
















DISCRIMINATION
Discrimination is defined as a showing of partiality or prejudice
in treatment; specific action or policies directed against the
welfare of minority groups (Source: Websters New World
Dictionary of the American Language)
Discrimination is not defined in the Charter of Rights and
Freedoms
Direct discrimination on grounds specified in the human rights
legislation is illegal
Systemic (indirect or unintentional) discrimination
-- Any company policy, practice, or action that is not openly or
intentionally discriminatory, but that has an indirectly
discriminatory impact or effect
-- Examples include minimum height and weight requirements;
internal hiring policies, limited accessibility of buildings or
facilities

HUMAN RIGHTS LEGISLATION
Bona fide occupation qualification (BFOQ)
-- Legal form of discrimination
-- Justified business reason for discriminating against a member
of a protected class
Duty to accommodate
-- Requirement that an employer must accommodate the
employee to the point of undue hardship

PROHIBITED GROUNDS OF DISCRIMINATION
1. Race and Colour
-- Discrimination that is intentional or unintentional, subtle or very open
2. National or Ethnic Origins
-- It is illegal for human resource decisions to be influenced by the
national or ethnic origins of applicants
3. Religion
-- A persons religious beliefs and practices should not affect
employment decisions
-- An employer must accommodate an employees religious practices
unless those practices present undue hardship
4. Age
-- For the most part, mandatory retirement has been abolished in
Canadian jurisdictions


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Part 3 Attracting Human Resources
4-4


























Harassment
Slide 8


















Enforcement
Slide 9


5. Sex/Sexual Orientation
-- It is illegal to discriminate against job applicants and current
employees because of their sex
-- It is unlawful to have separate policies for men and women
-- In 2000, Parliament passed legislation treating same-sex partners the
same as legally married and common-law couples for all purposes of
federal law
6. Marital/Family Status
-- Discrimination based on marital status is illegal, e.g., denying a
woman a job because her husband is already employed by the same
company
-- Nepotism is a form of discrimination based on family status, i.e.,
having a policy of hiring employees children for summer jobs
7. Disability
-- With practical exceptions (e.g. a blind person cannot be a truck driver)
a person should not be denied employment solely for the reason of
being disabled and employers have an obligation to reasonably
accommodate a disabled employee to the point of undue hardship
-- Drug-dependency or alcoholism may be interpreted as disabilities
8. Pardoned convicts
-- The Canadian Human Rights Act prohibits discrimination against a
convicted person if a pardon has been issued for the offence

HARASSMENT
Harassment occurs when a member of an organization treats an
employee is a disparate manner because of that persons sex, race,
religion, age, or other protective classification.
Examples of harassment
-- Verbal abuse or threats
-- Unwelcome remarks, jokes, taunting
-- Practical jokes that cause awkwardness
-- Leering or other gestures
-- Condescension or paternalism that undermines self-respect
Sexual harassment
-- Unsolicited or unwelcome sex-or gender-based conduct that has
adverse employment consequences for the complainant
-- Men may also be subjected to sexual harassment
Reasonable personit will be assumed that harassing behaviour
has taken place if a reasonable person ought to have known that
such behaviour was unwelcome

ENFORCEMENT
Responsibility for enforcement of the Canadian Human Rights Act lies
with the Canadian Human Rights Commission (CHRC)
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Chapter 4 Legal Requirements and Managing Diversity
4-5












Employment Equity
Slide 10







Employment Equity Act
(1987)
Slide 11





Employment Equity
Amendment (1996)
Slide 12




Functional Impact of
Employment Equity
Slide 13











Deals with complaints
-- May also act on its own if an infraction is perceived
Provincial Human Rights Laws and Human Rights
Commissions
-- Canadian provinces and territories generally have their own
human rights laws and human rights commissions with similar
discrimination criteria, regulations, and procedures. BC abolished
its commission, but retained its Human Rights Tribunal. Nunavut
has a human rights tribunal and Ontario has both a commission
and a tribunal.

EMPLOYMENT EQUITY
Four Designated Groups:
Women
Aboriginal people
Persons with a disability
Visible minorities

The Abella Commission on Equality in Employment was appointed to
determine the most effective, efficient, and equitable methods of
promoting employment opportunities for four designated groups
Employment Equity Act was passed by the federal government in
August 1987
-- Employers with 100 employees or more under federal jurisdiction
are required to develop annual plans setting out goals and
timetables
-- As of 1996, employers are responsible for providing reasonable
accommodation, e.g., providing a sign-language interpreter for a
job interview with a deaf applicant, altering dress or grooming
codes to allow Aboriginal people to wear braids, etc.

Functional Impact of Employment Equity
Human resource plans
-- Must reflect the organizations employment equity goals
Job descriptions
-- Must not contain unneeded requirements
Recruiting
-- Must ensure that all types of applicants are sought
Selection
-- Screening devices must be job-relevant and non-discriminatory
Training and development
-- Must be made available for all workers, without discrimination
Performance appraisal
-- Must be free of biases that discriminate
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Part 3 Attracting Human Resources
4-6




Major Steps: Employee
Equity Programs
Slide 14

























Pay Equity
Slide 15

Compensation programs
-- Must be based on skills, performance, and/or seniority

EMPLOYMENT EQUITY PROGRAMS
Developed by employers to undo past employment discrimination or to
ensure equal employment opportunity in the future.
Major Steps in Employment Equity Programs
Exhibit commitment
-- Total support from top officials is required, e.g., raises, bonuses,
and promotions dependent upon each managers compliance
Appoint a director
-- Some member of the organization should be responsible e.g. vice
president of human resources with an HR specialist responsible
for day-to-day implementation
Publicize commitment
-- Publicized externally and internally
Survey the workforce
-- To compare the composition of the employers workforce with the
composition of the workforce in the labour market
Develop goals and timetables
-- Goals and timetables to eliminate underutilization and
concentration should be established
Design specific programs
-- Human resource specialists design remedial, active, and
preventive programs
Establish controls
-- Benchmarks are required to evaluate and reward success
PAY EQUITY
Women aged 25-54 earn about 85% as much per hour compared to
male employees
Equal pay for work of equal value
-- A number of provinces have laws that make it illegal to pay
women less than men if their jobs are of equal value
-- At the federal level, the Canadian Human Rights Act prohibits
discrimination based on sex, making it illegal to pay women less
than men if their jobs are of equal value
Recent cases
-- Federal government settled in 1999 at a cost of $3.5 billion
-- A 2011 Supreme Court of Canada decision involving Canada Post
employees is expected to cost the employer $250 million.

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Chapter 4 Legal Requirements and Managing Diversity
4-7


Reverse Discrimination
Slide 16







Principle of Natural
Justice
Slide 17









Other Legal Challenges
Slide 18

























REVERSE DISCRIMINATION
This charge usually arises when an employer seeks to hire or promote a
member of a protected group over an equally (or better) qualified
candidate who is not a member of a protected group
Places Human Resource departments in a difficult position
Canadian Human Rights Act declares Employment Equity Programs
non-discriminatory if they fulfil the spirit of the law

PRINCIPLE OF NATURAL JUSTICE
Minimum standards of fairness and implied obligations for decision-
making:
-- The right to a fair hearing
-- The right to a bias-free proceeding
-- The right to present the opposing argument
-- The right of legal representation
-- The right to timely notice of a hearing
-- The right to a timely process

OTHER LEGAL CHALLENGES
Other relevant issues include:
Canadian Labour Code (1971)
-- Regulates union certification and other aspects (Chapter 14)
-- Provincial equivalents are the Employment (or Labour) Standards Acts
Dismissal
-- An employee or employee can terminate an employment relationship as
long as reasonable notice is given. Immediate dismissal can occur if
the employee is provided severance pay
Hours of work and overtime regulations
-- Canada Labour Code sets the standards
Minimum wages
-- Set by provincial and federal boards (Chapter 9)
Occupational health and safety
-- Regulation of occupational health and safety issues (Chapter 12)
Weekly rest day
-- Canada Labour Code specifies at least one full day of rest during the
week is to be provided (preferably Sunday)
Workplace Hazardous Material Information System (WHMIS)
-- Regulates the handling and labelling of dangerous material (Chapter 12)



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Part 3 Attracting Human Resources
4-8


Strategic Implications
Slide 19














Diversity Management
Slide 20






Organizational Barriers
Slide 21









Workplace Diversity
Slide 22



Dimensions of Diversity
Slide 23


STRATEGIC IMPLICATIONS OF LEGAL CHALLENGES
Ensure all rules and policies consider legal aspects
-- Human Resources is responsible to ensure that all policies and rules
take legal aspects into account
Employment equity requirements
-- Ensure that all long-range strategic plans follow employment equity
requirements
-- Required to do business with the federal government
Good corporate citizen
-- Project external equity to be attractive to job applicants
Training
-- To ensure managers and supervisors are familiar with the laws
Sexual harassment and unjust dismissal
-- Prominent issues
DIVERSITY MANAGEMENT
A diverse workforce requires managers with new leadership styles who
understand employees varying needs and creatively respond by offering
flexible management policies and practices
A combination of factors including government policies, demographic
and labour forces changes, increasing global operations, technological
revolution have fundamentally changed the way Canadian
organizations work and who they employ
A variety of organizational barriers exist:
-- Old boys network is the set of informal relationships that develop
among male mangers and executives that provide increased
opportunities for men
-- Glass ceiling is the invisible but real obstructions to career
advancement of women and visible minorities, resulting in
frustration, career dissatisfaction, and increased turnover
-- Stereotyping is the process of using a few observable
characteristics to assign someone to a pre-conceived social category

MEANING OF DIVERSITY MANAGEMENT
Workplace diversity includes important human characteristics that
influence an employees values, perceptions of self and others,
behaviours, and interpretations of events
Dimensions of Diversity Include:
Core dimensions of diversity
-- Exert considerable impact on our early socialization and have a
sustained life-long impact


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Chapter 4 Legal Requirements and Managing Diversity
4-9














Strategic Importance
Slide 24

























-- Includes age, ethnicity and culture, sex/gender, race, religion,
sexual orientation, and capabilities
-- Example: An individuals age impacts how (s)he is perceived by
others, the individuals ability to learn, perform tasks; also
impacts the individuals perceptions and behaviours
Secondary dimensions of diversity
-- Are less visible and more variable in their impact on individual
behaviour
-- Includes education, status, language, income levels, etc.

STRATEGIC IMPORTANCE OF DIVERSITY MANAGEMENT
Several factors make diversity management strategically important
Changing Workforce
-- Canadian labour market is undergoing a transformation
-- Todays workforce is considerably more diverse than in the past
Importance of Human Capital
-- Knowledge workers may be the key to success or failure
-- Most valuable parts of the organizations operation may be
reflected by the human tasks performed, e.g., sensing, decision-
making
Diversity as a Competitive Advantage
-- Proactive organizations recognize that competitive strength often
depends on focusing on employees and their clients
-- A firms customers are no longer a homogeneous group due to
globalization and changing domestic markets
-- Effective managers recognize the value of tapping peoples
differences and pooling their insights and experience
Paradigm Shift
-- Paradigm is a shared mindset that reflects a fundamental way of
thinking and understanding the world around us
-- Paradigm shifts require organizations to make fundamental
changes in thinking, operating and managing people
-- See next slide Traditional versus New Paradigms
Increasing Role of Work Teams
-- Teams play a dominant role in modern organizations
-- Effective handling of diversity can lead to added creativity,
problem-solving, and intra-organizational communication


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Part 3 Attracting Human Resources
4-10


Traditional versus New
Paradigms
Slide 25

















Steps in Managing
Diversity
Slide 26

Traditional versus New Paradigms
Traditional
-- Organizational success is linked to standardization
-- Diversity is a cost
-- Rules and policies are to be shaped by senior executives
-- Emphasis on masculine values of competitiveness,
aggressiveness, and individuality
-- Change employee behaviours and attitudes to suit the
organizations culture
New
-- Success is linked to individuals contribution
-- Diversity is a competitive advantage
-- Rules and policies are to best shaped to satisfy the customer and
the employee
-- Recognition that feminine values of openness, flexibility, and
relationship orientation are important to organizational success
-- Modify organizational culture to suit the needs of employees

STEPS IN DIVERSITY MANAGEMENT
Diversity management efforts require four key steps:
1. Identify Ideal Future State
Begins with identification of current workforce composition i.e. age,
gender, ethnicity, education, and disability (may also include
language, race, parental status, marital status, etc.)
Surveys, focus groups, and employee interviews are then conducted
to identify present and ideal future states at work e.g. may reveal
employees are experiencing difficulties in balancing work and family
responsibilities
2. Analyze Present Systems and Procedures
Examine current policies, systems, practices, rules and procedures to
determine their validity and fairness for a diverse workforce e.g.
work assignments, recruitment and hiring, orientation, etc.
3. Change Systems, Procedures, and Practices
Senior Management Commitment
-- One of the most important elements of ensuring the success of
diversity efforts
-- Must be viewed as integral part of the firms business philosophy
-- Link diversity initiatives to business goals and performance
criteria to create manager accountability

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Chapter 4 Legal Requirements and Managing Diversity
4-11























Current Industry Practices
Slide 27

























Establishment of a Diversity Committee
-- To oversee diversity efforts, implement process, and serve as a
communication link
-- Should represent all employee groups, i.e., occupational groups,
geographic locations, age, etc.
Education and Retraining
-- Training in the importance of diversity needs to be provided to all
employees at all levels in the organization
-- Variety of training and employee development techniques may
need to be used to sensitize workers to varying cultural values
and norms
Wide Communication of Changes
-- Information, changes in internal systems and procedures must be
communicated to all employees
4. Evaluate Results and Follow-up
Monitor progress on a systematic basis and communicate
quantitative (e.g. number of hires, promotions, absenteeism,
turnover, grievances, etc.) and qualitative (e.g. work climate
feedback) indices

CURRENT INDUSTRY PRACTICES
The choice of specific mechanisms should be made after consideration
of the organizations unique challenges and constraints
Diversity Training Programs
-- Managers and supervisors need new skills to manage and
motivate a diverse workforce
-- Awareness training focuses on creating an understanding of the
need for managing and valuing diversity and to increase self-
awareness of diversity related issues, e.g., stereotyping, cross-
cultural sensitivity
-- Skill building training educates employees on specific cultural
differences and how to respond to these differences in the
workplace
-- Content training relates to providing specific information about
a culture
-- Process training involves understanding how to utilize
behaviours for effectiveness in diverse workplaces, e.g.,
management style, interpersonal communications, etc.
Mentoring Programs
-- Programs encouraging members of disadvantaged groups (e.g.,
women) to work with a senior manger who acts like a friend and
guide in achieving career success
-- May be formal or informal
Alternate Work Arrangements
-- Non-traditional work arrangements, e.g., flex-time,
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Part 3 Attracting Human Resources
4-12




Current Industry Practices
(contd)
Slide 28











telecommuting
-- Provides more flexibility to employees while meeting
organizational goals, e.g., balancing work and family issues
Apprenticeships
-- A form of on-the-job training in which young people learn a trade
from an experienced person
Support Groups
-- Provide emotional support to a new employee who shares a
common attribute with the group
Communication Standards
-- Formal protocols for internal messages and communication to
avoid offending members of ethnic, age, or other groups, e.g.,
chairperson vs. chairman



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Chapter 4 Legal Requirements and Managing Diversity
4-13

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS


1. Suppose during your first job interview after
graduation you are asked, "Why should a company have
an Employment Equity Program?" How would you
respond?

Although each person has a different idea of why
employment equity programs are needed, a minimum
answer should mention the need for legal compliance in
a proactive manner and the need to meet the
organization's social responsibility. More
fundamentally, organizations should undertake
whatever steps they can to ensure equal employment
opportunity to all people. Other reasons may include the
need to be in compliance with conciliation agreements,
court orders, or rules for government contractors.

2. List the major prohibitions of the Canadian Human
Rights Act.

Figure 4-2, pp. 133-134, lists the prohibitions of the
Canadian Human Rights Act and the prohibitions of all
provincial human rights laws.

3. Since a human resource department is not a legal
department, what role does it play in the area of equal
employment law?

The human resource department is responsible for
keeping the organization in compliance with the various
human rights laws. To do this, it usually develops and
monitors a detailed employment equity program. When
charges do arise, it is the human resource department's
responsibility to provide the legal department with the
necessary employee relations records and other
information for the legal department to defend the case.

4. Suppose you are told that your first duty as a human
resource specialist is to construct an Employment
Equity Program. What would you do? What types of
information would you seek?

Figure 4-4, p. 147, outlines the major steps to follow to
develop and implement an employment equity program.
The information needed includes records about the
concentration and underutilization of each protected
class of workers employed by the firm. To make this
determination, information about the distribution of
protected classes in the firm's labour market is needed.

5. What conditions would have to be met before you
could bring suit against an employer who discriminated
against you because of your sex?

There have to be reasonable grounds to believe that an
act of discrimination has occurred. The wrongdoer can
be sued in court only after a conciliation effort by an
appropriate human rights commission (federal or
provincial) has failed and the verdict of a human rights
tribunal has not been accepted.

6. A job candidate answers "yes" to the question of
whether she a smoker. She is well-qualified, but you
decide not to hire her. Does she have a legal recourse?

No. The human rights legislation does not mention
personal habits like smoking among the prohibited
causes for discrimination. It means that an employee
cannot appeal to a human rights commission if he or she
challenges an employer on this ground.


7. Why is management of diversity important for an
organization today?

Changing demographics, labour force changes,
changing values, technological revolution, globalization
of business, immigration policies, all have
fundamentally changed the way Canadian organizations
work and whom they employ (see discussion on pp.
430-432).

8. What are the steps in implementing a diversity
management program?

Figure 4-7, p. 157, describes the four steps in managing
diversity (see also discussion on pp. 157-163).






.
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Part 3 Attracting Human Resources
4-14

ANSWERS TO CRITICAL THINKING QUESTIONS


1. If you are a supervisor in a bank and an employee
demands to be allowed to miss Fridays for religious
reasons, what would you do? Under what circumstances
would you have to let the employee have time off?
Under what circumstances could you prohibit it?

Since most firms have policies on such issues, the
supervisor would be well-advised to check first with the
human resource department. Although the supervisor's
assessment of the situation would be a valuable input to
the human resource department's considerations, policy
considerations might override what the supervisor
thinks is best. If the supervisor and the human resource
department believe the employee's absence would not
materially affect services or if they believe they could
maintain services and accommodate this employee's
religious preferences, the employee's request should be
granted. However, if services would be affected
significantly and no other reasonable accommodation
can be made, the employee could be denied the demand.

2. You have a job opening for a warehouse helper, a
position that requires sometimes heavy lifting, up to 50
kg. A woman applies for the job and claims that she is
able to do the work. She looks rather petite and you are
afraid that she may hurt herself. When you deny her the
job she threatens to complain to the Human Rights
Commission. What do you do?

Of course, we know that looks are deceiving. The first
step would be to ask for a demonstration of her
capabilities, a kind of performance test. If she performs
well, there is no legal reason to deny her the job. To be
on the safe side, the HR manager can ask for a doctor's
certificate that the applicant it capable of lifting 50 kg
with no negative consequences to her health.










3. Choose an organization that you are familiar
with. Are any of its rules, practices, or policies likely
to be found undesirable by its female, minority, or
older employees? Why?

Answers will vary. Students will reflect on their
personal experiences.


4. If 40 percent of your employees are women, but if
women account for only 2 percent of the executive
cadre and 6 percent of the managerial cadre, what
steps would you take to improve the status of women
in your organization?

It would require a diversity management approach as
discussed on pp. 157-163. In addition, the employment
equity opportunity discussion on pp. 147-148 is also
relevant.





























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Chapter 4 Legal Requirements and Managing Diversity
4-15


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary.
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Part 3 Attracting Human Resources
4-16


INCIDENT 4.1: METROPOLITAN HOSPITALS
EMPLOYMENT EQUITY NEEDS

Incident Comments

This incident points out the conflicts that can arise between line managers and human resource staff specialists. The issue
is particularly sensitive after an employment equity plan is developed because the human resource department often
strongly believes the first promotion or two can alert others in the organization as to how serious the Employment Equity
Program will be taken.

1. What weight would you give to
(a) Kate's seniority and experience?
(b) Roy's superior training?
(c) the recommendation of the records manager?
(d) the new Employment Equity Program?

Kate's seniority and experience imply that she has the necessary skills to perform the job if promoted. Although Roy's
education is superior, Kate's experience may be as valuable, if not more so. The recommendation of the records manager
should be considered carefully, since whoever is promoted will work for her. Moreover, since the records manager is
responsible for the new supervisor's performance, her wishes should receive a significant weight in the final decision.
However, at some point, the needs of the Employment Equity Program for the hospital should be considered. (In practice,
more Employment Equity Programs are established so that management has the flexibility in any one promotion decision
to select the best-qualified employee and focus on achieving the programs goals with subsequent promotions.)

2. What are the implications for the Employment Equity Program if Roy gets the job? What are the implications for
employees presently taking job-related courses if Kate gets the promotion?

The most significant implication for the Employment Equity Program is how the employees in the hospital view Roy's
promotion. Some may see his promotion as meaning the best-qualified still get promoted. Others may view his promotion
as confirmation that management of the hospital is going to remain largely a male "club."

If Roy gets the promotion, those who are trying to better themselves through job-related training may feel that training is
a good stepping stone to promotion, and that people in the hospital are not promoted simply on the basis of seniority.

3. What decision would you make if you were the human resource manager?

More important than the decision reached by students is the justification for their decision. One solution some
organizations make is to postpone any decision until several promotions can be announced simultaneously. In this
manner, women and men are promoted, which shows that the firm is serious about promoting women. However, by
promoting some qualified men, it shows the work force that men are not being excluded from consideration because of
the Employment Equity Program.







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Chapter 4 Legal Requirements and Managing Diversity
4-17

EXERCISE 4-1: CARVER JEWELLERY
COMPANY

1. Identify which job classes at Carver exhibit underutilization.

There is an underutilization of females, blacks, and Native peoples in the executive, management, and
salaried/commission jobs.

2. Identify which job classes at Carver exhibit concentration.

In the hourly paid jobs there is a considerable concentration of females. A slight concentration of blacks and Native
peoples exists in this hourly classification.


CASE STUDY: MAPLE LEAF SHOES LTD.
LEGAL CHALLENGES

Answers to Discussion Questions


1. Is there a case of sexual harassment in this situation
or is it only fun?

Rosetta can make a good case for sexual harassment,
since she obviously feels uncomfortable and cannot get
any help from the supervisor. The Supreme Court
decision in Robicheau vs the Department of Defense
makes it clear that it is the responsibility of the
employer to make sure that the job environment is free
of harassment. If Rosetta would complain to the Human
Rights Commission, there would certainly be an
investigation and, given the circumstances, the
investigator would probably find in favour of her,
compelling management to take action. Since she quit,
she could even sue the company for "constructive
dismissal" for making her work environment
unbearable.

2. If you were Eva, what would and could you
do? What are the options? What is the probability of
success of each option?

Since she is a third party and not directly involved in
the case, she would have to rely on Rosetta's testimony.
However, Eva could initiate an investigation by the
Human Rights Commission, with a high probability of
success. She could also complain to the union, who
could file a grievance on behalf of Rosetta, again with a
good chance of succeeding. Another option, less
confrontational, would be to see the HR manager
and explain the situation to her, pointing out the
potential consequences for the company if a
complaint with the Human Rights Commission
were launched. This too should be a successful
approach, assuming that the HR manager perceives
the seriousness of the situation.

3. What are Al's responsibilities in this instance?
Did he carry them out well? Why or why not?

Al is clearly responsible for the situation in the
finishing section, but he does not seem to be aware
of his negligence. There is little doubt that an
arbitrator or a judge would find him (actually, the
company) liable for letting things get out of hand
and for not stepping in after Rosetta complained to
him.

If he had taken his responsibility seriously, he
would have admonished or reprimanded the
culprits. He also could have called the work group
together and told them about the legal situation. He
also could have initiated sexual harassment
information sessions, perhaps with a representative
from the Human Rights Commission as the trainer
or speaker (all HRCs have information officers,
who are available free of charge for such requests).




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Part 3 Attracting Human Resources
4-18

CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK: PLANNING FOR
DIVERSITY AT HBI

Answers to Discussion Questions



1. From the data provided, what conclusions can you
form about the status of male and female employees
(managerial and other) at HBI?

Table 1 shows that the higher the position level, the
smaller the percentages of female workers. There is no
female at the top management level at HBI. For both
females and males, the percentages with university
education increases with level. Within each level, the
female workers have a higher percentage with 5 or more
years of experience than their male counterparts.

Table 2 shows that females have more experience than
males in the administration and marketing division;
however, females have significantly less experience
than their male counterparts in the operations division.
Across all 3 divisions, females have higher leadership

ratings and higher percentages with university education
than their male counterparts. This suggests that the
female middle managers are able to do the jobs at least
as well, if not better than the male managers, even in the
operations division where females have fewer years of
experience.

2. What suggestions do you have for Dickoff to
diversify the workforce (managerial and other) at
HBI?

HBI should adopt the 4 step process in diversity
management (p. 433), especially in increasing the
percentages of females in middle and top managerial
positions. Resistance to the diversity program should be
managed through diversity training that would
emphasize the benefits to HBI of having more female
managers.



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RECRUITMENT
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Explain the strategic importance of the recruitment function.
Discuss the constraints facing a typical recruiter.
Identify the appropriate recruiting methods for different types of jobs.
Explain how to generate effective recruitment advertisements.
List key measures for evaluating the effectiveness of the recruitment function.


POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
5

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Part 1 The Strategic Human Resource Management Model

LECTURE OUTLINE (with PowerPoint

slides)


Recruitment
Slide 1

Recruitment Defined
Slide 2

















The Recruitment
Process
Slide 3
















RECRUITMENT
Finding new employees for the organization is a continuing challenge.
Recruitment is the process of finding and attracting capable individuals to apply for
employment and to accept a job offer if/when one is made to them.
It is distinct from selection, which involves identifying candidates from this pool of
applicants who best meet job requirements using selection tools such as interviews.
It begins with generating a pool of applicants, continues during selection while decisions
are made among applicants to choose the best one, and then extends after selection
decisions have been made to convince candidates who have been made offer, to accept
the job.

It includes both intentional (e.g., placing job ads) and unintentional
(e.g., media coverage) actions
It is a two-way street where applicants are learning about the
organization, and the organization is learning about the applicant
Responsibility for recruitment usually belongs to the human resource
department
-- Recruiters: Specialists within the human resource department of
large organizations who are responsible for recruitment

THE RECRUITMENT PROCESS
Identify job openings
-- Human resource planning
-- Requests by managers
Identify job requirements
-- Reviewing job analysis information, i.e., job descriptions and
specifications
-- Reviewing manager comments on what is needed for the job
Determine recruitment methods
-- Usually more than one method is used to find suitable candidates,
e.g., school, college and university visits, advertisements, contacts
with professional and labour associations, use of government
agencies such as HRDC
Obtain applications
-- The right type of applicant is more important than the number of
applications received
-- Maintain applicant interest in the organization during the selection
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Strategic Importance of
Recruitment
Slide 4


process and then try to convince selected applicants to accept the
job
Constraints
-- Variety of constraints may be faced (discussed later in the chapter)

STRATEGIC IMPORTANCE OF THE RECRUITMENT FUNCTION
Recruitment decisions may have profound implications for the organization and its
strategic success
Gaining Competitive Advantage from Human Capital
-- Highly skilled and motivated employees are a source of
competitive advantage










Internal Recruiting
Slide 5





















External Recruiting
Slide 6
Reaping the Benefits of Diversity Management
-- Diversity provides vitality and competitive advantage
Focusing on Employee Development
-- Organization has a choice to develop and promote internal
candidates or hire from outside
Investing Resources into Recruitment
-- Decision on the total recruitment budget affects the quality
of recruits and the overall effectiveness of recruitment

INTERNAL RECRUITING
Advantages
-- Employee is familiar with the organization and its culture
-- Employee is known to the firm; this improves the
organizations ability to predict the persons success in the
job
-- Improves workforce morale and motivation
-- Information about employee performance is known in
addition to scores on selection tests; improves ability to
predict success in the new job
Weaknesses
-- Internal rivalry and competition for higher positions can
reduce interpersonal and interdepartmental cooperation
-- No new blood is brought into the system, which can prevent
creative solutions from emerging
-- Poor morale (leading to possible turnover) of employees
who were not promoted
--Performance evaluation records are only relevant to the
extent that the promotion job is similar to the employees
current job

EXTERNAL RECRUITING
Advantages
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Part 1 The Strategic Human Resource Management Model















Constraints: Organizational
Policies
Slide 7














Constraints on Recruitment
Slide 8














-- Organization is able to acquire skills or knowledge
(competencies) that may not be currently available within
-- Newer ideas and novel ways of solving problems my
emerge
Weaknesses
-- Newcomers may not fit in with the organization and into
its present culture
-- Newcomers take a longer time to learn about the
organizations culture, policies, and practices
-- Usually, hiring from the outside is more expensive
-- Lowered morale and motivation levels of current
employees who dont see any career growth possibilities
within the firm

CONSTRAINTS ON RECRUITMENT
1. Organizational Policies
Promote-from-Within Policies
-- Gives present employees the first opportunity for job
openings and facilitates their career growth
Compensation Policies
-- Recruiters seldom have the authority to exceed stated pay
ranges
Employment Status Policies
-- Some unionized settings have limitations against hiring part-
time, temporary, and contract workers
-- Policies may be in place against hiring employees who have
second jobs
International Hiring Policies
-- May require foreign job openings to be staffed with local
citizens

2. Human Resource Plans
Recruiters need to consider the firms overall plan to fill existing and future
vacancies, including decisions on whether to fill internally or by recruiting
from outside

3. Diversity Management Programs
Where diversity management and Employment Equity Programs exist,
recruitment must also take these programs into account

4. Recruiter Habits
The propensity of a recruiter to rely on methods, systems, or behaviours
that led to past recruitment success
Habits may perpetuate past mistakes or obscure effective
alternatives
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5. Environmental Conditions
Leading Economic Indicators
-- Statistics Canada publishes the direction of the leading
indicators (upturns versus downturns in the national
economy)
Predicted versus Actual Sales
--Variations between predicted and actual sales may require
recruiting efforts to be adapted accordingly
Employment Statistics
--Monitor availability and competition for workers to see
workforce supply by industry sector and job group
6. Job Requirements
Highly specialized workers are more difficult to find than unskilled
People with more experience generally cost more, so organizations are not
always able to afford the most experienced workers
7. Costs
Recruiters must operate within budgets and minimize expenses wherever
possible
8. Inducements
May be needed to stimulate a potential recruits interest
Examples include: monetary, flextime, non-traditional benefits

Applying for a Job
Slide 9










Job Application Forms
Slide 10








Applicants typically use one of two methods to apply for a job: submit a rsum
or complete a job application form.
The rsum is a one- to two-page summary of the applicants
education, work experience, personal contact information, work
goals, and related skills
An application form designates the information the recruiters
would like to have for each applicant, and may make indicators
such as education credentials and gaps in employment history more
readily apparent.

JOB APPLICATION FORMS
Name and Address
-- Are nearly universal requestsneed to ensure that information
sought is job-related, i.e., non-discriminatory
Employment Status
-- Employment objectives and availability
Education and Skills
-- Uncovers the job seekers abilities, e.g., specific skills and
education
Work History
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Recruitment Methods
Slide 11
































-- Listing of past jobs
Memberships, Awards, and Hobbies
-- Off-the-job activities may make one candidate preferable over
another, e.g., managerial and professional positions
References
-- In additional to traditional references questions may explore
criminal recordmust ensure job-relatedness
Signature Line
-- Candidates are usually required to sign and date their
applications
-- Allows the employer to check references, verify records, etc.
-- Affirms the information is true and accuratefalsification of an
application form is grounds for discharge in most organizations

RECRUITMENT METHODS
To let job seekers know about job opportunities, there are many
options for recruiters:
Walk-ins and Write-ins
-- Job seekers who arrive at or write to the human resource
department in search of a job without prior referrals and not in
response to a specific ad (includes rsums via email)
Employee Referrals
-- Recommendations by present employees to the recruiter about
possible job applicants for a position
-- Excellent recruitment technique however, caution must be taken
to ensure this method does not intentionally or unintentionally
discriminate
Advertising
-- Ads are the most familiar form of employment advertising
-- Blind ads are ads that do not identify the employer
-- Other advertisements include media-billboards, television, radio,
and transit advertising
-- Regardless of the ad media, applicants prefer to learn basics
about the job including hours of work, location, wages, and
benefits right on the ad
-- Ads may include attractive (only positive) or realistic (positive
and negative) messages
The Internet
The internet has become one of the most important recruiting tools:
-- Cost-effective and research millions of users day and night
-- Exact qualifications and job skills can be provided to weed out
unsuitable candidates
-- It is relatively inexpensive

Job Board sites allow job seekers to post their rsums and
recruiters to post their job opportunities
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Recruitment Methods (contd)
Slide 12








































Most organizations also have Careers pages on their websites
containing detailed information about their job opportunities,
wages and benefits, the organization, and employee testimonials

Human Resources and Social Development Canada (HRSD)
-- Federal agency that provides programs and services for
employers and present and potential employees
-- Programs and activities include the Job Bank (database of jobs
and work opportunities); and the Working in Canada website
(containing information on the current and future demand for
various occupations within specific geographical regions).
Private Employment Agencies
-- Take an employers request for recruits and then solicits job
seekers
-- May screen applicants or provide a stream of applicants for the
clients human resource department to screen
Professional Search Firms
-- More specialized than placement agencies
-- For a fee, recruit specialized personnel by telephone, and at
times, recruit from a competitor
Educational Institutions
-- A common source of recruits for entry-level openings
-- In recent years, co-op education programs have become
popular as have summer placement programs
-- Alumni associations can be an excellent source for hiring
experienced technical and managerial staff
Professional Associations
-- Professional associations can be a source of job seekers specific
to a particular occupation
Labour Organizations
-- Local labour organizations maintain list of people with trade
skills who are looking for employment
Armed Forces
-- Trained personnel leave the armed forces regularly. Many of
these people have hard-to-find skills
Temporary-Help Agencies
-- Provide on-loan employees for temporary jobs during
vacations, peak seasons, illnesses, etc.
Departing Employees
-- Buy-back is a method of convincing an employee who is about
to resign to stay with the organization by offering increased
wages, schedule changes, etc.
Open House and Job Fairs
-- May be useful methods to attract employees

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Part 1 The Strategic Human Resource Management Model


Non-Traditional Recruitment
Methods
Slide 13














Choosing Recruitment Sources
Slide 14













Evaluating Recruitment
Slide 15
NON-TRADITIONAL RECRUITMENT SOURCES
Applicant Tracking Systems
-- Databases of potential candidates to facilitate matching of job
requirements and applicants
Contingent/Contract/Leased Workers
-- Includes self-employed, temporary or leased employees
Partnerships with Social Agencies
-- Partnerships between employers and social agencies and
community associations to help with recruiting
Direct Mail Solicitations
-- To target a specific population segment or geographic area
Recruitment Abroad
-- Canada recruits skilled workers from other countries, e.g.,
computer programmers

CHOOSING RECRUITMENT SOURCES
How does a recruiter choose which methods to use?
1. How many recruits are needed?
2. What is the skill level required?
3. What sources are available in the industry and geographic region?
4. What has worked in the past?
5. How much is the budget?
6. Are there labour agreements in place that specify recruitment options?

Producing a system to track each recruitment method to see the
number of applicants, quality of applicants, acceptances, performance
on the job, and even retention saves recruitment time, effort, and
money.

EVALUATING THE RECRUITMENT FUNCTION
The effectiveness of the recruiting function should be evaluated on an
ongoing basis. Popular measures include:
Cost per Hire
-- The dollar cost per person recruitedshould include the direct
and apportioned costs and overhead
Quality of Hires and Cost
-- Addresses the quality of people hired from various sources e.g. performance,
absenteeism
Offers-to-Applicants Ratio
-- Ratio between the number of job offers extended and the total
number of applicants calculated for each recruitment method
Time Lapsed per Hire
-- Time taken to fill a position
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ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS
1. What background information should a recruiter have before beginning to recruit job seekers?

Recruiters need information in two general areas: knowledge of the constraints under which they are expected to perform
and knowledge of the particular job to be filled. Familiarity with company policies, labour markets, human resource
plans, and affirmative action guidelines are important constraints imposed on the recruiter. In addition, the recruiter must
have knowledge of the particular job, either through job analysis information or discussions with the manager who has
the job opening.

2. Give three examples of how organizational policies affect the recruitment process. Explain how these influence
a recruiter's actions.

Policies in compensation limit the money available to attract qualified applicants. The affirmative action plan and
policies may suggest specific types and sources of workers. Promotion-from-within policies may require the recruiter to
undertake a thorough review of present employees before seeking applicants externally.

3. Under what circumstances would a blind ad be a useful recruiting technique?

Whenever an employer seeks to avoid large numbers of applicants or whenever the recruiter thinks people will be less
willing to apply if they know the employer or nature of the job, a blind ad may be appropriate. Blind ads also are used in
order not to inform competitors of hiring needs or to keep job incumbents from knowing an opening exists, especially
where an employee is to be terminated.

4. "If a job application omits important questions, needed information about recruits will not be available. But if
a needless question is asked, the information can be ignored by the recruiter without any other complications."
Do you agree or disagree? Why?

Disagree. Needless questions that are not job-related may be relied upon to make the final hiring decision. If such is the
case, the irrelevant information may discriminate against a protected class.
5. Suppose your employer asks you, the human resource manager, to justify the relatively large recruiting budget
that you have been historically assigned. What arguments would you provide? What indices or measures will you
provide to show that your recruitment is cost-effective?

To have quality recruits, a pool of candidates must be generated to allow for good selection decisions, and the chosen
candidates must be convinced to accept the offered position. Less qualified employees may cause organizational
problems and customer irritation or dissatisfaction. There is also the higher turnover problem with unsuitable employees,
causing additional hiring and training costs.

Some indices that can be used: cost per hire; quality of hires and cost offers; applicant ratios; time lapsed per hire. Figure
5-9, p. 200, shows additional measures to evaluate the effectiveness of a companys recruitment function.










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Part 1 The Strategic Human Resource Management Model

ANSWERS TO CRITICAL THINKING QUESTIONS


1. After months of insufficient recognition (and two
years without a raise), you accept an offer from
another firm for a $2,000-a-year raise. When you
tell your boss you are resigning, you are told how
crucial you are to the business and are offered a
raise of $2,500 per year. What do you do? Why?
What problems might exist if you accept the buy-
back?

Although there is no right answer to the first two parts
of this question, students might be brought around to
discussing the question of their obligation to the other
employer with whom they have accepted an offer.

The problems that might exist are several. The
employee might not receive another raise for some
time, having just received one. Secondly, the person's
future loyalty to the organization may be questioned,
and it may affect future promotions. Finally, nothing
prevents the first employer from firing someone it kept
through a buy-back once a replacement is found
through a blind ad.

2. Suppose you are a manager who just accepted the
resignation of a crucial employee. After you send
your request for a replacement to the human
resource department, how could you help the
recruiter do a more effective job?

By reviewing the job description and position
description information to see if it is accurate and
complete, the manager understands the type of recruit
likely to be sought. If that information is outdated or
incomplete, a call or visit from the manager would help
the recruiter understand the needs of the job more
precisely.

3. If at your company the regular university
recruiter became ill and you were assigned to recruit
at six universities in two weeks, what information
would you need before leaving on the trip?

The knowledge needed by a new university recruiter is
extensive. An understanding of present and future
hiring needs, specific job openings and their
descriptions, affirmative action goals, and general
compensation policies is necessary. It would also be

helpful if the recruiter had knowledge to "sell" the
company. This sales information requires an
understanding of wages, benefits, company-provided
services, the local community, opportunities for
advancement, and other information sought by
applicants.

4. In small businesses, managers usually handle
their own recruiting. What methods would you use
for the following situations? Why?
(a) The regular janitor is going on vacation for three
weeks.
(b) Your office assistant who manages all
appointments and handles all filing in your office
has the flu and wont be in the office for two days.
(c) Two more salespersons are needed: one for local
customers and one to open a sales office in Victoria,
British Columbia.
(d) Your only chemist is retiring and must be
replaced with a highly skilled individual.
(e) Next week, your only computer
programmer/analyst plans to begin on a three-week
leave to visit his sick mother in India. If his
mothers health turns for the worse, he may be
delayed by another week or two.

Janitor. Since janitorial services cannot be left undone
for three weeks, a replacement is needed either by
temporarily assigning those duties to someone or hiring
a temporary worker or private contractor to do the
work.

Office assistant. Since urgent administrative
information may have to be completed, many firms
consider hiring a temporary office worker. Sharing an
assistant or relying on an administrative support pool
within the company also may be feasible answers.

Salespersons. The local sales position may be filled
through ads, employee referrals, or private or public
employment agencies. Filling the Victoria position
probably requires hiring a person from the area. Private
placement agencies or search firms are the most logical
source of such talent unless someone from the company
is to be transferred.

Chemist. To fill a highly skilled position, the manager
probably would rely on the skills of a search firm,
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although present employees may be able to recommend
someone.

Computer programmer/analyst: To fill a highly skilled
position, on a temporary basis, the manager would
either assign the job duties to someone else in the
organization or rely on a temporary or private
contractor. The manager may wish to contact a related
professional association as a source of a qualified
person who may be seeking a temporary position.

5. You are the human resource manager in a large
auto-assembly unit employing 2000 semi-skilled and
skilled employees. Each year you recruit dozens of
full time and part time workers. Recently, the vice-
president, Finance, pointed that out that
recruitment costs in your firm are increasing
steadily. She is proposing a freeze in the recruitment
budget. What kind of information will you provide
in an effort to change her mind on the matter?

The HR manager can show her the productivity of those
who were recruited, such as error and scrap rates in
their assembly work. The turnover rate of those who
were hired would also show the benefit of maintaining
the recruitment plan






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Part 3 Attracting Human Resources


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.





WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the
required information. Answers will vary.
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5-13


INCIDENT 5.1: ONTARIO ELECTRONICS
EXPANSION

Incident Comments
Rapid expansion of an organization puts a considerable burden on the organization and the human resource department.
To meet the demands of rapid expansion, firms often rely on the good judgment of recruiters to know where and how to
find capable applicants. Under the circumstances described in the incident, most human resource specialists would take
the following actions.

1. Assuming you are given the responsibility of recruiting these needed employees, what channels would you use
to find and attract each type of recruit sought?

A patent lawyer with considerable experience would be found by employing a professional search firm that specializes in
legal talent. Another possibility would be to locate a professional association of patent lawyers. A third option might be
to retain a law firm with the needed staff lawyers.

A patent lawyer who is familiar with the ins and outs of the patent process and the patent office in Hull, Quebec, also is
needed. Although hiring a lawyer might be feasible through search firms or professional associations, this level of
expertise might be best obtained by retaining an appropriate law firm in Ottawa or Hull.

Twelve engineers are needed, but they represent two different groups, the experienced and the less experienced.
Experienced engineers almost certainly would be hired through a search firm, or perhaps through contacting an alumni
association. The less experienced ones might be found at colleges and universities that the firm normally uses to recruit
engineers through annual on campus job fairs.

An office manager and clerical staff might be found by pursuing several channels simultaneously. Ads, private
placement agencies, Human Resource Development Canada Centres, walk-ins, and employee referrals are feasible
channels of recruitment for these skills.

2. What other actions should the human resource department take now that there is a possibility of very rapid
expansion?

The human resource plan should be revised to reflect the firm's new opportunities. Based on the outcome of that effort,
additional training and recruitment might have to be started immediately in order to supply the human resources needed
to meet expansion plans.

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Part 3 Attracting Human Resources




CASE STUDY: MAPLE LEAF SHOES LTD. A
CASE STUDY IN RECRUITMENT

Answers to Discussion Questions


1. What is your evaluation of the recruitment
strategy used by Maple Leaf Shoes?

Poor.

The recruitment methods used (e.g., ads in the local
newspapers and contacting a temporary help agency)
are not appropriate given the responsibilities and
competencies associated with the HR manager's
position.

Assuming the position is to be advertised, it should
have been done in national (or even international
newspapers/magazines). Advertisements in the
publications of trade organizations and chambers of
commerce would also be more appropriate than in local
dailies.

Hiring a search firm would have been a better approach
given the time constraints faced by the firm. The
position is also very critical for the survival and
prosperity of Maple Leaf Shoes. Clark's actions do not
show recognition of this fact.

It should also be pointed out that the job description and
competencies expected of the new job incumbent are
not based on any systematic job analysis. Thus, the job
description used for recruitment purposes is erroneous.

2. Evaluate the recruitment advertisement. What
parts of the copy would seem undesirable? What
items are missing in the advertisement?

Once again, Poor!

The student will note that several of the criteria listed in
the text chapter for a good recruitment ad (e.g., clear
job definitions, non-sexist language) are violated in this
ad. The ad does not tell the reader very much about the
job, responsibilities, or the job challenge except in
generalities.

The language is sexist and very masculine in tone.
Adjectives such as aggressive, take charge, etc. show
the firm's bias for a "macho" person to head this
function. The statement, "qualified women and
minority candidates are also encouraged to apply" is
likely to be perceived as insulting by many. (Suggestion
to the instructor: you may want to ask your female and
visible minority students about their reactions to the
statements in this ad.)

The student should evaluate the ad against the chapter
material and list the items that are missing in the ad.

3. Design a new recruitment advertisement for the
position of the human resource manager.

There is no single correct answer for this question.
Emphasize the content when evaluating the final ad
(especially the avoidance of illegal, discriminatory, or
unnecessary statements). You may give bonus points to
students who also give emphasis to copy layout
(emphasizing visual balance and tension and attracting
the reader's attention instantaneously).

4. Design an application form to be used for hiring a
human resource manager in the firm.

The application form should basically be along the lines
suggested in this chapter. The application form given in
the text chapter should however be modified to meet
the needs of a senior managerial position such as this.
The student should be asked to show a one-to-one
correspondence between the job specifications s/he has
identified for the position and the questions in the
application form.

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5-15

CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK: EVALUATING
RECRUITMENT FUNCTION
Answer to Discussion Questions

1. Make your recommendation on the best
recruitment methods for each type of workforce.

For investment managers, their specialized skills and
experience suggests that the best recruitment method is
through professional associations and advertisement in
trade publications. Professional search firms may be
expensive but may be able to locate qualified applicants
for technical and managerial positions that are hard to
fill. For sales staff, their skills suggest that recruitment
can be done through newspaper ads and educational
institutions. Internet recruitment can be used for both
types of employees both on the organizations Career
webpages as well as on job boards such as Monster or
Workopolis.

2. Looking at the figures provided in the case, what
other conclusions can you arrive at?

The statistics reveal the following patterns:

Women are underrepresented among investment
managers and analysts.

Most of the investment managers and analysts are less
than 30 years old, while the sales staff has a more
balanced age distribution.

Ninety percent of the investment managers and analysts
have at least a university degree, whereas only 40
percent of the sales staff has a university degree.

Both advertisements and Internet recruitment attract the
most number of applicants for both investment
managers and analysts, and for sales staff. Internet
recruitment led to the most number of investment
managers who accepted job offers, but also the highest
number that left the firm within two years.
Advertisements led to the most number of sales staff
who accepted job offers with only two leaving within
two years. In balancing between costs and the number
of successful hires, internet recruitment appears to be
the best-suited method for the managers, whereas
advertisement appears to be best suited for the sales
staff. Campus recruiting especially using referrals from
current employees may be effective due to the savings
associated with reduced training requirements.
Consideration for this method will need to be balanced
against the likelihood that allegations of discrimination
may arise.

Students should be encouraged to prepare an Excel type
spread sheet to identify the total cost of a position under
each method (recruitment cost + training cost+
replacement cost). They will find that some of their
obvious answers are not necessarily the best
recruitment methods.



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Chapter 6 Selection
6-1
SELECTION
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Explain the strategic significance of the selection function.
Describe the various steps in the selection process.
Discuss the types and usefulness of application screening tools in selecting employees.
Explain the role of employment tests in the selection process.
Discuss the major approaches to test validation.
Outline the various steps in conducting an employment interview.

POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
6

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Part 3 Attracting Human Resources
6-2

LECTURE OUTLINE (with PowerPoint

slides)


Selection
Slide 1

Selection Process Defined
Slide 2






Strategic Significance of
Selection
Slide 3














Strategic Significance of
Selection (contd)
Slide 4











SELECTION PROCESS DEFINED
The selection process is a series of specific steps used to decide which
recruits should be hired.
Begins when recruits apply for employment and ends with the
hiring decision
-- Steps in between involve matching the employment needs of the
organization and the applicant

STRATEGIC SIGNIFICANCE OF THE SELECTION FUNCTION
The selection process is integral to the strategic success of firms.
Critical dimensions include:
1. Successful Execution of an Organizations Strategy Depends on the
Calibre of its Employees
-- Overall effectiveness and success depends on the quality and calibre
of the employees it hires
2. An Organizations Selection Decisions Must Reflect Job
Requirements
-- Mismatch could result in poor hires or possible lawsuits from
applicants who believe they were discriminated against
3. Selection Strategy Must Be Well Integrated with Organizational
Priorities
-- Selection system should be consistent with the strategic posture of
the organization and organizational characteristics discussed in
chapter 1.
4. Selection Strategy Must Recognize Organizational Constraints
-- Selection systems need to be cost-effective and consistent with
organizations budgetary and other (e.g., policies) constraints
5. Selection Strategy Should Recognize Labour Market Realities
-- Ideally, an organization has a large, qualified pool of recruits from
which to select applicants
-- Selection ratio is the relationship between the number of applicants
hired and the total number of applicants e e.g. 1:25 is a large
selection ratio; 1:2 is a small selection ratio
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Chapter 6 Selection
6-3
6. Selection Practices Must be Ethical
-- Hiring decisions are shaped by the ethics of employment specialists

Steps in the Selection Process
Preliminary Reception
Slide 5












Steps in the Selection Process
Screening
Slide 6














Steps in the Selection Process
Employment Tests
Slide 7











STEPS IN THE SELECTION OF HUMAN RESOURCES
Selection system needs to be related to the job descriptions and
specifications i.e. job specifications should form the basis of all
selection decisions
The type of selection procedure will depend on factors including
the size of the organization, the stage of its growth, and the jobs
involved

Step 1: Preliminary Reception of Applicants
Initial contact may be in person, in writing (e.g., through e-mail)
-- Walk-ins may receive a preliminary or courtesy interview
-- Write-ins are often sent a letter of acknowledgment
-- For many organizations, this step has disappeared due to the
increasing use of Internet recruitment

Step 2: Applicant Screening
At the screening stage, most organizations will have received a
large number of resumes or job application forms.
The purpose of screening is to remove from consideration those
applicants who do not need the broad qualifications of the job
(such as education or experience requirements)
Weighted application blank
-- Job application form in which various items are given
differential weights to reflect their predictive power
Care needs to be taken to ensure application is useful and meets
legal requirements
Biographical information blanks (biodata)
-- Questionnaire about applicants personal history and life
experiences (e.g., hobbies, family relations, accomplishments,
values, reactions to stressful situations)
-- Cautions: items may unintentionally discriminate, may be
viewed by applicants as invasive, not easily verifiable, rarely
commercially available so must be developed in house.

Step 3: Administration of Employment Tests
Employment tests are used to obtain relatively objective
information that can be compared with other candidates and
current workers
Reliability means that the test yields consistent results
Validity asks the question, Is the test accurately measuring what
it is purported to measure?
-- Empirical approaches involves determining the correlation of
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Part 3 Attracting Human Resources
6-4














Steps in the Selection Process
Employment Tests (Types of
Tests)
Slide 8
































the test scores and the job-related criterion, i.e., the higher the
correlation, the better the match
Predictive validity is determined by giving a test to a group of
applicants and later correlating their performance and test
scores.
Concurrent validity involves testing present employees and
correlating their test results with measures of their performance
-- Rational approaches are used when there is not a large enough
sample to use an empirical approach
Content validity is assumed when the test includes a sample of
the skills needed to perform the job, e.g., staffing test
Construct validity seeks a relationship between performance
and characteristics assumed to be required, e.g., cognitive
ability

TYPES OF TESTS
Personality Tests
-- Measure personality or temperament
-- Low cost, among the most reliable, moderate validity
Ability Tests
-- Aim to predict which job applicants have the skills, knowledge,
and ability to do the job.
-- Low cost, high reliability and validity
Knowledge Tests
-- Measure a persons information or knowledge about job
requirements.
-- Moderate cost, high reliability and validity
-- Validity is assumed when the test includes a representative
sample of the work the application is to do when hired
Performance Tests (or work samples)
-- Measure the ability of applicants to do some parts of the work
for which they are to be hired.
-- Although the cost is high for performance tests, they also have
high reliability and validity
Situational Judgment Tests
-- Applicants are placed into hypothetical job scenarios, and asked
to select a behavioural response from among a list of alternative
courses of action.
Assessment Centres
-- Used for identifying managerial potential
-- Several methods of assessment are used e.g. job simulations, in-
basket exercises, interviews, etc.
Computer-interactive Tests
-- Uses computer simulations to measure perceptual-motor skills
(e.g., reaction time, control precision)
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Chapter 6 Selection
6-5







Steps in the Selection Process
Employment Interviews(s)
Slide 9
Steps in the Selection Process
Realistic Job Previews
Slide 10




Steps in the Selection Process
Verification of References
Slide 11



Integrity Tests
-- Measure an applicants honesty and integrity through overt and
non-overt questions about dishonesty and counter-productive
behaviors
--Low cost, high reliability, moderate validity

Step 4: Employment Interview(s)
Supervisors should have input into the final hiring decision
Step 5: Realistic Job Previews
Involve showing the candidate the type of work, equipment, and
working conditions before the hiring decision is made
Highlights both the positive and negative aspects of the job
Tends to reduce employee turnover by attempting to reduce
initial job dissatisfaction
Step 6: Verification of References
Employment references discuss the applicants work history
Concern exists that former supervisors may not be completely
candid, particularly with negative information
Many employment references become only a confirmation of prior
employment
-- Reference Letters are collected by an applicant from previous
employers and contacts
-- Rarely would an applicant pass along an unfavourable reference
letter; virtually all reference letters are positive limiting their
utility
-- Background checks may be used to verify the applicants
skills, education, and experience
-- Employers need to be aware of their legal obligations including
privacy and personal information protection in their collection,
use, retention, and disclosure of personal information about
applicants

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Part 3 Attracting Human Resources
6-6


Steps in the Selection
Process Medical
Evaluation
Slide 12











Steps in the Selection
Process Hiring
Decision
Slide 13













Employment Interviews
Slide 14










Types of Interviews
Slide 15



Step 7: Contingent Assessments
Medical evaluation - A health checklist indicating health and accident
information or medical evaluation
Many employers do not include this step because of costs involved and
potential for charges of discrimination from rejected applicants, e.g.,
rejected applicant may believe they were not hired due to a pre-existing
medical condition
May be scheduled after the hiring decision
Drug tests are increasingly used, however, drug and alcohol testing
without a demonstrable relationship to job performance has been found to
be a violation of employee rights
Drug-dependent users are a protected class of individuals under the
Canadian Human Rights Act
Step 8: Hiring Decision
Whether made by the supervisor or the human resource department, the
hiring decision marks the end of the selection process
-- Job applications of those hired should be retained to update HRIS and
for future analyses (e.g., to uncover invalid tests)
-- For public relations purposes, applicants who were not selected should
be contacted; retain applications for future openings where promising.
--Trade-offs among predictors are made using different approaches
(subjective, multiple cut off, compensatory)
-- Selection for self-managed teams require careful planning to ensure
inputs from everyone at the same time maintain objectivity, validity and
professionalism.
-- Applicants who are hired should be contacted immediately. The
employment contract should be carefully prepared specifying
conditions of employment and restrictive covenants where relevant.

EMPLOYMENT INTERVIEWS
Formal, in-depth conversation conducted to evaluate the applicants
acceptability
Most widely used selection technique
-- Allows a personal impression
-- Offers the firm an opportunity to sell a job to a candidate
-- Provides opportunity to answer the candidates questions
-- Effective public relations tool
-- Popular due to flexibility and ability to offer a two-way exchange
-- Flaw relates to their varying reliability and validity
TYPES OF INTERVIEWS
Interviews may be conducted on a one-to-one basis, panel or group
interview basis
Unstructured Interviews
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Chapter 6 Selection
6-7















Types of Structured
Interviews
Slide 16


















Other Types of
Interviews
Slide 17






Employment Interview
Stages
Slide 18


-- Uses few if any planned questions to enable the interviewer to
pursue, in depth, the applicants responses
-- Lacks the reliability of a structured interview because questions are
different for each applicant
Structured Interviews
-- Rely on a pre-determined set of questions developed before the
interview; the same questions are asked of each applicant
-- A scoring guide is used to grade each applicants response on each
question
-- Interview may seem quite mechanical and rigid
-- Claimed to be highly job-related and some past research studies
improved reliability and validity over traditional, unstructured
interviews

There are three common types of structured interviews:
Behavioural Description Interviews
-- Based on the principle that the best predictor of a persons future
behaviour is their past behaviour in a similar circumstance
-- Attempts to determine how job applicants responded to situations in
the past, e.g., Tell me about the most serious disagreement that
you have had with a co-worker.
Situational interviews
-- Questions focus on situations that are likely to arise on the job
-- Applicants are asked to indicate what they would do in such
situations
-- Responses are scored according to a rating rubric wherein more
points are given to better responses
Stress-Producing Interviews
-- Used for jobs that involve high levels of stress and may involve a
series of harsh, rapid-fire questions to learn how the applicant
handles stress
-- Should be used with other interview formats

Computer-Assisted Interviewing
Interviews that use computers to electronically profile job candidates
and screen new hires
May increase reliability by making the interviews uniform, however,
some human resource managers are uncomfortable with the resulting
in-depth electronic profiling

THE INTERVIEW PROCESS
1. Interviewer Preparation
Develop specific questions/desired answers
Anticipate applicants questions
Be prepared to explain job duties, performance standards, pay, benefits
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Part 3 Attracting Human Resources
6-8









Employment interview
Stages (contd)
Slide 19










Interviewer Errors
Slide 20







Interviewee Errors
Slide 21




Evaluating the Selection
Slide 22








Review the application form
Average cost of hiring new employees often exceeds 30% of the
annual salary for managerial and professional employees so there is a
need to ensure interview process is efficient and comfortable for the
applicant
2. Creation of Rapport
Interviewer is responsible for establishing a relaxed rapport
Use non-threatening questions and appropriate body language
3. Information Exchange
The heart of the interview process is the exchange of information
Use open-ended questions
Validity is enhanced by using structured interview questions
4. Termination
The interviewer must draw the session to a close e.g. Do you have any
additional questions?
5. Evaluation
Use of a checklist improves reliability and should be completed
immediately after the interview

INTERVIEWER ERRORS
Halo effect use of limited information about candidate to bias
interviewers evaluation
Leading questions communicating the desired answer
Stereotypes harbouring prejudice or exhibiting personal bias
Interviewer domination using the interview to oversell, brag, etc.
Contrast Errors comparing the candidate to those who came before
instead of to an objective standard
INTERVIEWEE ERRORS
May be trying to cover job-related weaknesses or may be due to
nervousness
Examples include: playing games (e.g., acting nonchalant), talking too
much, boasting, not listening, and being unprepared
EVALUATING THE SELECTION
To evaluate new employees and the selection process feedback is needed
Quality and productivity of the workforce
-- are superiors and peers satisfied with the hires?
-- are training costs increasing?
-- are managers spending too much time managing new hires?
-- are grievances, absences, and turnover inordinately high?
Costs incurred in the process should be at a level appropriate to the
organization
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Chapter 6 Selection
6-9

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS

1. What is the strategic importance of the selection function for an organization?

The selection function is strategically important because the successful execution of an organizations strategy depends
on the calibre of its employees. Poor selection practices may result in the organization not being able to fulfill its mission
and objectives.

2. List and briefly discuss the various steps in the selection process.

Figure 6-2, p. 212, provides a listing of the steps which are described under the major headings of the chapter.

3. What are the five stages of the employment interview? What specific actions should you, as an interviewer, take
to conduct a proper interview?

Figure 6-18, p. 241, lists the five stages of the employment interview; the discussion is on pp. 240-245.

4. What are the different types of validity? If you want to validate a new dexterity test (which measures physical
co-ordination) for workers in an assembly plant, how will you go about it?

There are 2 approaches to test validation: the empirical approach and the rational approach (see Figure 6-8, pg. 220). The
empirical approach is test scores are related to either future job performance (predictive validity) or to current job
performance (concurrent validity). The rational approach seeks to determine if the test items include reasonable samples
of the skills needed to successfully perform the job (content validity) or to establish a relationship between performance
and other characteristics that are assumed to be necessary to successful job performance.

To validate the dexterity test using the rational approach, a content analysis of the test items would help to ensure that the
necessary skills to perform the assembly work are measured in the test itself. Using the empirical approach, test scores of
job applicants would be correlated with their job performance after they are hired. A high correlation would indicate that
the test is able to predict who is able to perform the job.

5. What attributes of behavioural description and situational interviews make them appear more promising than
traditional interview formats?

Behavioural or situational interviews are claimed to be highly job-related; they ask the same questions in the same way to
all candidates, and responses are compared to a list of potential responses and scored against a scoring rubric. Research
studies have indicated improved reliability and validity over traditional, unstructured interviews. See pp. 237-240 for a
summary of validity data and study results.

6. What is a weighted application blank? How is it different from a traditional application form?

A weighted application blank is a job application form in which various items are given differential weights to reflect
their relationship to various criteria important to job success.

A weighted application form is different from a traditional application form in that it captures not only job relevant
information but also serves as a screening tool to distinguish between satisfactory and unsatisfactory job incumbents.



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Part 1 The Strategic Human Resource Management Model
6-10


ANSWERS TO CRITICAL THINKING QUESTIONS

1. Suppose you are an employment specialist. Would
you expect to have a large or small selection ratio
for each of the following job openings?

a. Janitors. Probably a large ratio, since many
applicants qualify for this type of work.

b. Nuclear engineers with five years of experience
designing nuclear reactors. Since there are few people
with this background, there would be a small ratio of
hirees to applicants.

c. Pharmacists. A small selection ratio is likely to exist
because few people are qualified for this type of work.

d. Software programmers. A small selection ratio will
exist because candidates for this job seem to be scarce.

e. Elementary school teachers in the Yukon. A small
selection ratio is likely to exist because qualified
applicants may be in short supply.

f. Elementary school teachers in Ontario. A large ratio
is likely to exist, due to the provinces relatively large
population including many qualified teachers who may
be willing to re-locate within the province.

2. If a human resource manager asked you to
streamline the firm's selection process for hourly
paid workers, which steps described in this chapter
would you eliminate? Why?

Perhaps the two most likely candidates for deletion
would be the verification of references and the medical
evaluation. Although both provide useful inputs, they
do not appear as important as the other steps.

3. A Canadian university has been experiencing high
student dropout rates in recent years. One
calculation showed that although the first-year
enrollment in commerce courses increased from 650
to 980 students in the last four years, the dropout
rate for first-year students has worsened from 9
percent to 15 percent. The university has been using
uniform admission standards during the years and
has not made any significant changes in the grading
or instructional procedures. Based on what you
learned in this course on recruitment and selection,
what recommendations would you make to the
university to improve its retention rates? Why?

Giving a realistic preview of life at the university may
provide students with clearer expectations. Knowledge
of potential "stressors" on campus may better prepare
the new entrants to cope with them; those who are not
confident of their ability to overcome the stress may
simply not join the university. This should in turn
reduce the drop-out rates of registered students. Other
relevant information to be given to students may
include:

the course load of a typical student
information on how many hours of study are
usually needed to succeed in the various
courses and programs
details about counselling services to let
students know where help is available)
information on various systems that exist in the
university (e.g., registration procedures,
withdrawal from a course, faculty-advisor
system, etc.)

4. If you are hired as a consultant to evaluate the
selection process for salespersons in a large car
dealership in the Toronto area, what kind of
information will you collect?

The performance assessment of current employees will
provide the best measure of a successful hiring system.
Other relevant information would include employee
turnover, absenteeism, low employee satisfaction, union
activity, grievances, and legal suits.

Another measure is a utility analysis of the selection
system.











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Chapter 6 Selection
6-11
5. Assume you are hired to improve the interview
process employed by a large real estate organization
when it hires sales and customer service
representatives. When suggesting improvements,
what factors will you focus on? What steps will you
recommend to check whether your suggestion
indeed resulted in better hires in the future?
Factors to focus on:
interviewer preparation
creation of rapport
information exchange
termination
evaluation
interviewer errors

Steps to be taken to improve the selection system:

The performance assessment of current employees will
provide the best measure of a successful hiring system.
Other relevant information would include employee
turnover, absenteeism, low employee satisfaction, union
activity, grievances, legal suits.

6. Suppose you are approached by the human
resource department in a large insurance firm that
routinely hires dozens of clerical workers. Of the
various types of tests discussed in the text, which
would you recommend? What are the steps that you
will suggest to validate the test(s) you
recommended?

For the clerical workers, performance tests, such as the
Minnesota Clerical Test and the Revised Minnesota
Paper Form Board Test, would be appropriate. The tests
should first be checked for its content validity (i.e., do
the test items adequately sample the skills necessary to
perform the job). Next, assuming the test is content
valid, the test scores of the job applicants can be related
to job performance after they are hired (predictive
validity). Alternatively, the test could be given to job
incumbents and their scores related to job performance
(concurrent validity).



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Part 3 Attracting Human Resources
6-12


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary.
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Chapter 6 Selection
6-13


INCIDENT 6.1: A SELECTION DECISION AT
EMPIRE INC.

Incident Comments

Perhaps the underlying problem at Empire is that the supervisors do not take enough time with new employees to ensure
that they feel part of the team. Further, since the human resource department makes the final hiring decision, supervisors
may feel little, if any, commitment to new employees.

1. What information would you consider irrelevant in the preceding selection profiles?

Since the job is relatively easy to learn, the experience and educational levels probably do not play an important role in
job success. (Having a university education may imply applicant A is more likely to become bored.) Age is not likely to
be relevant either. To discriminate against applicant B because of age also would be illegal. Since the interviewer's
evaluations vary, their opinions seem of little use, too. Work history, apparent eagerness, and availability may be the
crucial variables.

2. Are there any changes you would recommend in the selection process?

Supervisors should be more involved in the selection process. They may be able to offer valuable inputs. If they
interviewed candidates, the supervisors could give potential employees a realistic job preview.

3. Which of the three candidates would you select, given the limited knowledge you possess? Why?

Applicant B appears to be slightly preferable because of strong eagerness, reasonably early availability, a stable work
history, and excellent job knowledge.
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Part 3 Attracting Human Resources
6-14



INCIDENT 6-2: NATIONAL FOOD BROKERS'
SELECTION PROCESS
Incident Comments

Perhaps the key to this incident is the comment employees make when they are given an exit interview. That is, they had
no idea how much time they had to spend on the phone. Once employees have done this work for a couple of years,
apparently they accept the constraints of the job and perform well.

1. Suppose you are asked by the human resource manager to suggest some strategies for improving the selection
process in order to hire more stable workers. What suggestions would you make?

Pre-employment testing might be aimed at measuring the characteristics commonly associated with long-service
employees. Perhaps, some testable feature of certain applicants can help predict long or short service.

Reference checks may help identify employees who are not easily satisfied by jobs and help pinpoint which applicants
have an unstable work history which is likely to be repeated at National Food Brokers.

2. What role should the supervisory interview play in the selection process? What information conveyed to the
applicants can help reduce the future worker turnover rates?

The role of supervisors interviews is a crucial one because supervisors make the final hiring decision, not the HR
manager. Supervisors can explain the demands of the nature of the job and the demands placed on the employee. This
might cause some people to decline an employment offer before they are hired and trained.


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Chapter 6 Selection
6-15


EXERCISE 6-1: HOW DO YOU SELECT YOUR
FRIENDS?

This exercise is meant to show that we generally like people who are like us, i.e., share similar values. This exercise is a
demonstration of the similarity effect an interviewer error.

The exercise shows how selection criteria are often driven by personal and cultural values that we may not be consciously
aware of. Moreover, the criteria used in selection will have varying degrees of importance or weight. Those criteria which
help to differentiate among liked and disliked individuals, should be given more weight in the selection of friends.
Similarly, those criteria, even if value driven, which help to differentiate successful from unsuccessful applicants should
be given more weight in the selection of employees. However, unlike the selection of personal friends, selection of
employees on such things as gender, race and other personal attributes not related to the job, is illegal and of course,
should be discouraged! The exercise should be done individually and the application to employment selection should be
discussed in activity groups or in class as a whole.

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Part 3 Attracting Human Resources
6-16


CASE STUDY: MAPLE LEAF SHOES LTD.
SELECTION OF A HUMAN RESOURCE
MANAGER

Answers to Discussion Questions

1. Based on the information given in this case, what
education, experience, job skills, and other
competencies would seem to be required for the
future human resource manager of Maple Leaf
Shoes?

The person selected as human resource manager in
Maple Leaf Shoes should be able to immediately attend
to some of the pressing problems and prepare the
organization for the turbulent years ahead (mainly
because of increased competition, potential for
expansion and growth, dealing with a work force that is
becoming increasingly unionized, etc.).

This means that the new incumbent should possess:

a sound training in human resource
management techniques
considerable experience in a somewhat similar
setting
good people management skills
the ability to lead tough negotiations with
unions

The person should be a self-starter with considerable
vision and be able to introduce systems and procedures
in the organization.

2. How do the various candidates rate on these
factors you identified?

The profiles of the four major candidates indicate that
no one possesses all these qualities to a very great
extent. However, the firm has to make a decision
quickly as the new incumbent must begin contract
negotiations with one of the unions soon. This raises the
difficult question: whom to hire?

To complicate matters, there is not a whole lot of
agreement among the three interviewers regarding the
candidates. They seem to agree only on one thing,
namely, Robinson is not the best candidate! While
Robinson has a number of years of experience in
human resource management work, it is mainly in
service and the public sector where job demands
are somewhat different. Working for a township is
qualitatively different from working in a shoe
company. The major argument in his favour is that
he is black and that by hiring him the firm will be
sending out a message to its work force and the
larger community that it favours minority
employment. However, Robinson's lack of formal
training and inadequate experience should prevent
him from being a serious contender for the job.
Note that his people skills are also probably not
very great, as indicated by the impressions formed
by the interviewers. It should be noted that he has
been active in a number of social activities and was
a sportsman at college. It could very well be that
he is a great team player.

Dougherty is just the opposite to Robinson in the
matter of dealing with people. This, in fact, seems
to be the major strength of his candidacy. He has
also worked for over five years in the human
resource management area, though mostly in a
clerical capacity. Dougherty is primarily a
salesperson (16 years of sales experience) and this
probably shows during his interview. In total, he
has done four non-credit courses in the human
resource management area. It is debatable whether
this is adequate, considering the firm's present and
future challenges. The impression one gets is that
Dougherty is unlikely to start very many new
human resource systems and procedures.

Anderson and Reynolds are probably the two most
promising candidates for the job. Anderson has
several years of experience in a managerial
capacity including five years as assistant human
resource manager in a grocery store setting.
Reynolds has eight years of experience in the HR
area although not in managerial capacity (her title
is only that of a human resource assistant;
however, in the absence of a human resource
manager in the firm, she probably has equivalent
responsibilities of an assistant manager). Anderson
is a self-starter and seems to have many years of
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Chapter 6 Selection
6-17
administrative experience. He has also done extension
courses in human resource management. Reynolds is the
only one (if you do not seriously consider Robinson for
the job) who has a degree in an area which is relevant
for human resource management, has done extension
courses, seems quite bright (Dean's List), and by nature
is a mover (started several new systems since coming to
Maple Leaf Shoes). Above all, she also has relevant
experience, since she knows the company well. There is
also the matter of her leaving the company if Anderson
is hired over her.

The personal details of the candidate are probably
irrelevant for the purpose of selecting human resource
management. The student should realize that these can't,
in any case, be used for selection purposes, as this can
create new criticisms of discrimination. However, the
president's reservation about Reynolds has to be
respected since he will have to work with the new hire
closely.

3. What is your evaluation of the selection process
employed by the firm (especially Robert Clark) in
this instance? If you were in charge, would you have
done anything differently? How?

The case does not describe the interview process used
in selecting these candidates, but Robert Clark could
have made his decision easier had he conducted a
behaviourally based interview. Also, there was
apparently little agreement on the selection criteria
among the four other managers, who conducted their
own interviews. A job description and a job
specification should have been given to all the
interviewers.

One possible solution may be to defer a hiring decision
until the first contract negotiations with the union are
completed. Reynolds should be asked to lead the
negotiating team and informed that successful
completion of the bargaining could lead to her
being appointed as the new human resource
manager. This will reduce the likelihood of her
leaving the firm now. It could provide an
opportunity for Clark to test her out before making
the hiring decision. Hiring Anderson and in that
process losing Reynolds will not be desirable for
the firm right now, considering the number and
criticality of the challenges facing the firm.

4. Among the candidates, who (if any) would
seem to be suitable for the position? What are
the issues you should consider and trade-offs
you should make when selecting one of these
candidates for the position?

Students will give different answers to this
question. Some will suggest Steven Robinson, who
has experience in HRM, is black, and thus may
present a great opportunity for the company to
demonstrate being an equal opportunity
employer.

Jane Reynolds is probably the most suitable
candidate, given that she has practically done the
HRM job at Maple Leaf Shoes for two years in the
absence of a human resource manager. She knows
everyone in the company, including the union
representatives, and may be able to conduct the
bargaining process, perhaps with the assistance of
a negotiation professional. Time is a major concern
in this case. One would expect that a new human
resource manager would need perhaps a year to
learn the ropes, which means that an outsider
may not be effective. Appointing a woman
manager would indicate equal opportunities for
women, signaling a change in the companys
policies.
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Part 2 Planning Human Resources
6-18

CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK EVALUATING A NEW
SELECTION TEST
Answer to Discussion Questions

1. Calculate the cut-off test score that will minimize the overall cost of testing plus training.

The overall cost of training will be lowest when the success rate is the highest. However, the number of persons who
receive these high test scores are not very high (for example, only 15 out of 100 receive the score of 90 or above where
success rate is the highest (100%).

The students should be encouraged to prepare a spread sheet which calculate the total number that need to be hired for
each score. For example, the success rate for people who get a score of 40 is only 2/12 or (1/6). This means that to get
one successful person, the firm has to hire six persons. However, only 82 out of 100 applicants get a score of 40 or
above. Hence a lot more applicants have to be tested before getting 6 successful persons who have a score of 40.

Adding the total testing and training costs would show that a score of 70 minimizes the total costs.

2. To get 40 successful employees, how many persons will have to be hired who have:

a) A score of 70 or higher in the test?

At a score of 70, 43 out of 100 applicants will meet this cutoff, but only 37/43 will be successful. Thus, to get 40
successful applicants, 47 will have to hired.

b) A score of 60 or higher in the test?

At a score of 60, 56 out of 100 applicants will meet this cutoff, but only 43/56 will be successful. Thus, to get 40
successful applicants, 52 have to be hired.

3. What suggestions will you make to the bank in validating and using the above test?

The test should first be checked for content validity to ensure that the test items sample the skills necessary to perform the
job. Since the test is administered to employees from other countries, checking for cultural bias is especially important.
Items that are culturally biased should be replaced with less biased items. The test scores should then be correlated with
job performance separately for the Canadian and Asian employees to ensure that there is no differential validity for the
two groups. If the test predicts equally well for both, then one standard cutoff score should be determined.

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Chapter 6 Selection
6-19



APPENDIX A

Comment to the Instructor
In Appendix A the concept of Utility Analysis is discussed. Since it is a complex procedure it would typically be dealt
with in advanced undergraduate or graduate HRM classes. Utility Analysis is a powerful method to assess the bottom-line
implications of using valid selection measures.
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Chapter 7 Orientation, Training and Development, and Career Planning
7-1
ORIENTATION, TRAINING
AND DEVELOPMENT, AND
CAREER PLANNING
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Explain the process of onboarding and why it is important
List the key components of an employee orientation program
Describe the importance of training as part of the long-range strategy of an organization.
Explain the key steps in the training process
Define strategic human resource development. (HRD)
Explain the principles of learning and how this knowledge impacts the choice of training programs
List the developmental strategies that impact employee development
Describe how human resource departments encourage and assist career planning as well as support the learning
management framework


POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
7

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Part 4 Placing, Developing, and Evaluating Human Resources
7-2

LECTURE OUTLINE (with PowerPoint

slides)

Orientation, Training and
Development, and Career
Planning
Slide 1

Onboarding
Slide 2








Orientation
Slide 3



















Orientation
Slide 4






ONBOARDING
Onboarding is the process of integrating and acculturating new
employees into the organization and providing them with the tools,
resources and knowledge to become successful and productive. It
includes orientation, socialization, training and development activities.
It encompasses year -long activities that serve to integrate the new hire
into the organization.
The outcomes of a successful program are greater retention, faster time to
productivity, increased motivation and employee engagement.
See figure 7-1 Onboarding Model

ORIENTATION
Orientation introduces to the new employee to the organization.
These programs familiarize new employees with their roles, the
organization, its policies, other employees and HR related information
The components of an orientation program are:
Organizational Issues
-- Examples include history of employer, names and titles of key
executives, overview of products/production process, policies, safety
procedures
-- Employee handbookexplaining key benefits, policies, and general
information about the employer may be provided
Employee Benefits
-- Examples include pay scales and paydays, vacations and holidays, rest
breaks, training and education benefits, employer-provided services,
counselling, etc.
Introductions
-- To supervisor, co-workers, trainers, employee counsellor
Job Duties
-- Examples include job location, overview of the job, job safety
requirements, job tasks, job objectives, and relationship to other jobs

ORIENTATION
Orientation can serve several purposes:
Reduce employee turnover
-- New employees may quit if they experience a difference between
what they expect to find and what they actually find, i.e.,
cognitive dissonance
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Chapter 7 Orientation, Training and Development, and Career Planning
7-3





















Socialization
Slide 5










Reduce errors and save time
-- Well-oriented employees knows what is expected and is likely to
make fewer mistakes
Develop clear job and organizational expectations
Improve job performance
-- Employees who establish good relationships tend to be more
productive
Attain acceptable job performance levels faster
-- Defining job performance standards eliminates uncertainty
Increase organizational stability
-- By communicating policies and regulations to new employees
Reduce employee anxiety
Reduce grievances
-- Grievances often result from ambiguous job expectations and
unclear responsibilities
Result in fewer instances of corrective discipline
-- Clarifies the rights and duties of employees, outlines disciplinary
requirements and consequences

SOCIALIZATION
Socialization is the continuing process by which an employee begins
to understand and accept the values, norms, and beliefs held by
others in the organization for recruitment usually belongs to the
human resource department
-- Involves turning outsiders into insiders
-- May have taken place even before employees join organizations,
e.g., summer job, formal education etc.

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Part 4 Placing, Developing, and Evaluating Human Resources
7-4

Training and Development
Slide 6



















Purpose of training
Slide 7













The Training System
Slide 8








Employee Training
Needs assessment
Slide 9
TRAINING AND DEVELOPMENT

HRD refers to a part of HRM that integrates the use of training and
employee and career development efforts to improve individual, group
and organizational effectiveness.

The goal is to establish applicable learning interventions that will
enable individuals to optimally perform current and future jobs.
Training is a planned effort by an organization to make possible the
learning of job-related behaviour, i.e., to do their present jobs
Development involves preparing employees for future job
responsibilities, i.e., prepare for future jobs
Training has a greater focus on short term skill enhancement and on
the current job. Development is more long term and the focus is on
the competencies and skills needed for future roles.
See figure 7-3 differentiating training and development on page
267

EMPLOYEE TRAINING
Canadian companies have to compete in a global economy in a fast-
changing business environment
Global competition has forced many Canadian companies to flatten
structures and reduce employees. As a result, multi-skilled (or cross-
trained employees are required to perform diverse tasks
The organizational environment needs to foster life-long learning in
order to attract and retain multi-skilled employees
Due to high immigration levels training is required to ensure
supervisors and employees work effectively with diverse employees
with varying cultural values
Developments in information technologies, computer applications,
multi-media training methods, etc., require new skills and training
strategies

The Training System
Sequence of events include needs assessment, objectives, content,
learning principles, implementation of actual program, and
evaluation
Employee benefits include skill improvement, self-development,
strong self-confidence, sense of growth etc.
Organizational benefits include improved profitability through
higher productivity, improved morale, lower costs, better corporate
image

NEEDS ASSESSMENT
Diagnoses present problems and future challenges that can be met
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Chapter 7 Orientation, Training and Development, and Career Planning
7-5










Employee training
Training Objectives
Slide 10



through training or development
-- Needs to consider each person
-- Need may be determined by the human resource department,
supervisors, or self-nomination
-- Sources of information may include production records,
grievances, safety reports, absenteeism and turnover statistics,
performance appraisal, etc.

TRAINING OBJECTIVES
Desired behaviour
Conditions under which it is to occur
Acceptable performance criteria
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Part 4 Placing, Developing, and Evaluating Human Resources
7-6

Learning Principles
Slide 11




















Training techniques
Slide 12












Web based training
Slide 13











LEARNING PRINCIPLES
Learning cannot be observed; only its results can be measured. Learning
principles are guidelines in the ways in which people learn most
effectively
Participation
-- Learning is usually quicker and more long-laster when the learner
can participate actively, e.g., driving a car
Repetition
-- Etches a pattern into our memory, e.g., learning the alphabet
Relevance
-- Learning is helped when the material to be learned is meaningful,
e.g., trainers explain the overall purpose of a job before explaining
explicit tasks
Transference
-- Application of training to actual job situations, e.g., pilots being
trained using flight simulators
Feedback
-- Gives learners information on their progress in order to adjust
behaviour

TRAINING TECHNIQUES
In selecting a training technique, tradeoffs occurs between cost-
effectiveness, desired program content, appropriateness of the facilities,
trainee and trainer preferences and capabilities, and learning principles
On-the-Job Trainingreceived directly on the job and is used
primarily to teach workers how to do their present job e.g. Job
rotation, apprenticeships, coaching
Off-the-Job Traininge.g., lecture and video presentations, role
playing, case study, simulation exercises laboratory training,
computer-based training (CBT), virtual Reality (VR), Internet or Web-
based Training is also known as virtual education, or eLearning,

Web based delivery systems
Web /computer the program is loaded on the hard drive and the user
interact with only one specific program
Web/electronic performance support through a web connection,
workers have access to databases, on line tools and discussion forums
Web/virtual synchronous- employers and trainers meet at a
predetermined time.
Web/virtual asynchronous- this is a classroom on the internet. It is
accessible anytime



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Chapter 7 Orientation, Training and Development, and Career Planning
7-7
Web based tools
Slide 14












Strategic HRD
Slide 15










Developmental Strategies
Slide 16























Popular Web based tools

A variety of methods have been developed:
-- Blogs (Web Log) are web sites with a text and graphics
-- RSS (Rich Site Summary) delivers regularly changing news
-- Podcasts consist of audio or video clips
-- Wikis are Web pages accessible to everyone, allowing changes
-- Social networking websites
-- Intranet training uses an intra-organizational computer network to
deliver training, e.g., Royal Banks Personal Learning Network
-- Video-conferencing is widely used for long-distance education,
e.g., Queens Executive MBA program

STRATEGIC HUMAN RESOURCE DEVELOPMENT
The identification of essential job skills and the management of
employees learning for the long-range future in relation to explicit
corporate and business strategies
Benchmarking
-- Comparing ones own quality and production standards with those
of industry leaders or competitor
Employee Development
Process of enhancing an employees future value to the organization
through careful career planning

DEVELOPMENTAL STRATEGIES
Cognitive
-- Concerned with altering thoughts and ideas i.e. knowledge, new
processes
-- Tends to increase the knowledge and expertise of individuals
-- Probably the least effective strategy in employee development
-- Includes relatively passive methods, e.g., lectures, seminars,
academic education
Behavioural
-- Attempts to change behaviour, e.g., management style
-- Aims to make individuals more competent in interacting with their
environment, i.e., colleagues, subordinates, customers
-- Includes role-playing, behaviour modelling, team building,
coaching, mentoring, etc.
Environmental
-- Concerned with providing the organizational setting in which
employees can thrive and develop
-- Although the most promising developmental strategy it is the most
difficult to implement
-- Includes job rotation, organizational development, the learning
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Part 4 Placing, Developing, and Evaluating Human Resources
7-8

Evaluation of T&D
Slide 17





















Career Planning and
development
Slide 18















Factors affecting individual
career choice
Slide 19





organization concept, temporary assignments, project teams, etc.
EVALUATION OF TRAINING AND DEVELOPMENT
The lack of evaluation is the most serious flaw in most training efforts.
There are several ways in which to evaluate the effectiveness of a
program:
Reaction
-- Also known as the happiness or smile sheet
-- Most widely used criterion in training evaluation
-- Usual question is How satisfied are you with the program?
Knowledge
-- Very popular in learning institutions, i.e., use of exams
-- Can be reliably assessed only if before and after tests are used
Behaviour
-- Self-reports and observations by others are used to measure
behaviour change, e.g., neutral observers, supervisors, customers
etc.
Organizational results
-- Would be ideal measurement except for the difficulty in determining
the cause-effect relationship of training to organizational results
-- Cost benefit analysis see Figure 7-9: training costs and benefits


CAREER PLANNING AND DEVELOPMENT
Career planning is closely linked to employee development. In order to
achieve a career plan, action must be taken to achieve goal goals.
Career planning is the process through which someone becomes more
aware of their interests and needs and motivations
Career management is a series of formal and less formal activities
designed and managed by the org to influence the development f one
or more employees
Career development is a long term process; a series of activities
undertaken by individuals in pursuit of their careers
Employees want career equity, supervisory support, awareness of
opportunities
Employees measure career success in several ways:
-- Advancement, learning e.g., the acquisition of new skills, depth and
breath
-- Employability and psychological factors recognition, engagement

Factors affecting Individual career choices
Generational differences
Individual values and abilities and attitudes
Personality job fit
See Figure 7-11 the RIASEC model

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Chapter 7 Orientation, Training and Development, and Career Planning
7-9


HR department and career
planning
Slide 20



















HR department and career
planning
Slide 21

HUMAN RESOURCE DEPARTMENTS AND CAREER
PLANNING
Encourages Management commitment and support
Devise communication plans through HR tool to raise awareness of
career options
-- Workshops, seminars, career paths, job posting, career counseling
Aligns HR processes to facilitate career planning
-- There are several HR processes that contribute to employee
development
-- Succession planning, human resource planning, training and
development and performance management
Use technology to support career planning efforts
-- Many organizations use the intranet for career counseling purposes
-- Organizations use robust enterprise wide applications that have a
career planning module. This application can display career paths
and help design individual plans for employees
-- Podcasts

HR Contribution to Career Planning
Develops promotable employees, i.e., helps to develop internal talent
Lowers turnover, i.e., increased attention and concern for employees
increases organizational loyalty
Taps employee potential, i.e., encourages employees to tap their
potential abilities to realize specific career goals
Furthers growth, i.e., motivates employees to develop
Reduces hoarding, i.e., managers, and others in the organization
become aware of employee qualifications
Satisfies employee needs, i.e., improved opportunities satisfies
individual needs for recognition and accomplishment
Assists organizations meet legal requirement such as employment
equity plans
Taps and optimizes employee potential





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Part 4 Placing, Developing, and Evaluating Human Resources
7-10

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS

1. "If employees are properly selected, there should be
no need for an orientation program or training." Do you
agree or disagree? Why?

Disagree. Regardless of how experienced or
knowledgeable an employee may be, that worker and
the organization can benefit from an orientation that
introduces the people, place, policies, and procedures of
the organization. Even then, the employee may lack
specific skills needed to perform satisfactorily.

2. What are the organizational and employee benefits
that result form a comprehensive onboarding process?

The employee benefits from having a comprehensive
onboarding process are increased engagement,
motivation and organizational commitment. Employees
experience a lower level of anxiety about the new job,,
they are able to feel an enhanced sense of confidence to
perform their job effectively. In addition the company
creates a more favorable image among new hires and
turnover is reduced significantly.

3. For each of the following occupations, which training
techniques do you recommend? Why?

(a) cashier in a grocery store
(b) welder
(c) assembly line worker
(d) inexperienced supervisor

Cashier. Training probably would begin with vestibule
training on a cash register until the employee became
proficient. Then training would continue on an on-the-
job basis.

Welder. A welder probably would go through an
apprenticeship program to learn the basics of the trade.
(At the same time, of course, the welder would receive
job instruction training in how to perform specific
welds.)

Assembly worker. Most assembly line workers are given
job instruction training.


Inexperienced supervisor. Once a person has made
supervisor, a superior should provide coaching.

4. Assume you were hired to manage a research and
development department. After a few weeks, you
noticed some researchers were more effective than
others, and the less effective ones received little
recognition from their more productive counterparts.
What forms of training would you consider for both
groups?

Role-playing exercises may allow each side to learn
how each group sees the other. Following this training,
the better researchers might be enlisted to coach the less
effective members to upgrade their performance.

5. What is the purpose of a cost-benefit analysis?

A cost-benefit analysis is supposed to demonstrate that
a planned capital investment, in this case in training, is
justified by the benefits expected, e.g., higher profits,
reduced waste, lower repair costs, etc.

6. Discuss why it is so important that there be a linkage
between an organization's human resource development
needs and its mission and strategy.

An organization's strategy involves large-scale, future-
oriented, integrated plans to achieve organizational
objectives (Chapter 1). To make such plans work, future
human resource needs have to be taken into account.
Whatever a strategic plan wants to accomplish, it has to
make sure future managers and employees have the
necessary skills and competencies to achieve the
company's objectives.

7. Explain the differences between the cognitive,
behavioural, and environmental approaches to strategic
management development.

Cognitive management development is concerned with
changing a manager's way of thinking. It implies
constant learning and upgrading one's expertise.

Behavioural management development attempts to
change a manager's behaviour, i.e., management style. It
aims to make individuals more competent in interacting
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Chapter 7 Orientation, Training and Development, and Career Planning
7-11
with their environment, e.g., with colleagues,
subordinates, or customers.

Environmental management development tries to
change a manager's attitudes and values. Creating a job
environment that continuously reinforces desirable
behaviour will eventually change the frame of reference
of managers and ensure that changes (new approaches)
become permanent.

8. In what way does a "learning" organization differ
from a "traditional" organization?

In a learning organization employees "continually
expand their capacity to create the results they truly
desire, where new and expansive patterns of thinking
are nurtured, where collective aspiration is set free, and
where people are continually learning how to learn
together" (Senge).

9. Why should a human resource department be
concerned about career planning, especially since
employee plans may conflict with the organization's
objectives? What advantages does a human resource
department expect to receive from assisting in career
planning?

Through career planning employees may feel they have
a career, not just a job, with the employer. The HR
department can benefit from having a higher quality
pool of internal applicants from which to draw in order
to meet staffing needs. Moreover, problems of
employee/organizational adjustment to socio-
technological change, obsolescence, and employee
turnover may be reduced.

10. Suppose you are in a management training position
after completing university. Your career goal is not very
clear, but you would like to become a top manager in
your firm. What types of information would you seek
from the human resource department to help you
develop your career plan?

Information about short- and long-run human resources
needs would give some insight into preparations needed
to attain future promotions. Having knowledge of career
paths taken by present executives might indicate which
functional or product areas are most likely to lead to top
management positions.



11. Why is employee feedback an important element of
any organization's attempt to encourage career
development?

Without feedback, employees have no way of
evaluating how successful their career planning efforts
have been. In time, the lack of feedback may cause
employees to believe career planning is a useless
expenditure of their time.

12. Suppose a hard-working and loyal employee is
passed over for promotion. What would you tell this
person?

Assurance of the value of the employee should be
communicated as well as consideration for future
promotions. The reasons why this person was passed
over should be explained. Finally, specific career
development actions should be discussed that will
increase the employee's likelihood of being promoted in
the future. Of course, the employee should be told these
actions do not guarantee promotion, but they will
increase the likelihood of future career success.












.









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Part 4 Placing, Developing, and Evaluating Human Resources
7-12

ANSWERS TO CRITICAL THINKING QUESTIONS


1. Before you entered your college or university you
had certain ideas about what your values and
expectations would be as a student. How did the
institution's socialization process change these values
and expectations?

Clearly, the answer will vary from one student to the
next. Students should be encouraged to focus on their
values and expectations relating to a number of items
including:

work load
expectations of having a fun time in the
institution
attitude toward students belonging to opposite sex,
older students, students of other backgrounds, etc.
work-play relationship
role of instructions
care shown by others (students, professors,
administrators, support staff)
career goals
ethical standards/values

2. Your company is desperately looking for a system
analyst. You know that your competitor invested
heavily in training and has a highly competent
system analyst, who indicated to you privately that
she would switch if you pay her $10,000 more. Your
boss thinks that this is a bargain and tells you: Get
her! It surely would hurt the competitor. What
issues does this raise?

Organizations are increasingly dependent on highly
skilled and knowledgeable employees. Ultimately, an
employee retains ownership of their intellectual capital
and is able to utilize their specialized knowledge, skills,
and experience to negotiate favourable employment
terms.

If your company is willing to pay this system analyst
$10,000 more than she is currently earning she appears
to be willing to resign her current position. Your
competitor has invested in the development of this
employee and the loss may be incalculable because of
the knowledge and skills the employee will take with
her. However, ultimately the human resource
department of your competitor has responsibility to

retain employees by meeting their needs. In addition,
your competitor is responsible for utilizing succession
planning to ensure sufficient candidates exist for key
positions.

3. You are the Training and Development manager.
Your president calls you in and tells you that the
management development budget has to be cut because
of the company's financial situation. What arguments
can you use to persuade your boss that development
money is well spent?

The best argument is that without well-trained and up-
to-date skilled employees the company will always be a
runner-up to companies who train continuously. Well-
trained staff is also more flexible in terms of possible
assignments (especially if they are cross-trained), tend
to be better motivated and have better morale, have less
turnover, and have less absenteeism. Also, the quality of
their output tends to be higher.






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Chapter 7 Orientation, Training and Development, and Career Planning
7-13


ETHICS QUESTIONS

Comments to Instructors
There are no right or wrong answers to these questions. They are for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary
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Part 4 Placing, Developing, and Evaluating Human Resources
7-14


CASE STUDY: MAPLE LEAF SHOES LTD.
DEVELOPING A TRAINING PROGRAM

Answers to Discussion Questions



1. You are Russ. Describe the steps you would
recommend to Reynolds to go through before
actually designing the contents of the training.

Ideally, before a training program begins, it is useful to
assess the qualifications of the present employees.
Performance appraisals are excellent sources of
information on whether the employee performs at the
expected level or, if not, whether it is the lack of job-
related skills that is causing the low performance.
Supervisors then would indicate what type of training
would benefit the employee. As the text suggests, the
human resource department has to verify these
suggestions to determine whether requested training is
really needed. A look at the job description and job
specification may also be helpful since these documents
outline the job responsibilities and skill requirements
for fulfilling these responsibilities.

Trainers may also look at production costs, quality
control reports, grievances, safety reports, absenteeism
and turnover statistics, and exit interviews. A well done
needs assessment would also determine the training
objectives in behavioural terms, the conditions under
which the behaviour is to occur, and the criteria for the
evaluation of the training program.

To summarize the steps:
(a) conduct a performance appraisal
(b) allow supervisors to suggest the training needed
(c) look at the other potential data listed above
(d) determine training objectives based on the above
data

2. What training methods would you suggest to be
used to train production workers? (First you may
ask: What determines the methods?)

Methods are determined by developing behaviour based
training objectives, which describe in detail what the
trainee should be able to accomplish, under what
conditions, and any limitations (e.g. time). If the
objective describes production type behaviours, a
logical training method may be on-the-job training.
Other methods could be apprenticeship (a longer term
affair), coaching, simulation, or virtual training.

3. How would you evaluate the training program to
determine how effective it was? (What criteria
would you use?)

Figure 7-8, p. 291, describes the steps in the evaluation
process. Ideally, a pre-test/post-test approach is used to
determine the effectiveness of a training program. Since
the evaluation criteria have been chosen through the
training needs analysis and setting of training
objectives, all that is needed is the application of the
criteria. A reaction measure would indicate the degree
of general satisfaction with the set-up and organization
of the program. A written exam may be used to test
improved knowledge. Changes in attitudes can be
measured through attitude surveys. Improved job-
related behaviour (skills) can be observed by superiors
and colleagues (although this would have to be done on
the job and some time after the completion of the
training program). Finally, organizational results could
be monitored to assess the long-range impact of the
training program. Care would have to be taken to make
sure that it was the training program that caused
observed changes.

4. Do you think the first-line supervisors are the
appropriate people to design the training program?
Who else would you add, if anyone, to this group?

It probably would be a good idea to include one or more
job incumbents, since they would know best what is
required to do the job effectively. Even if the
supervisors came through the ranks and did the job
themselves, chances are that a number of changes have
taken place since they did the work themselves, and
they may no longer know the details.
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Chapter 7 Orientation, Training and Development, and Career Planning
7-15

CASE STUDY: MAPLE LEAF SHOES LTD.:
CAREER PLAN
Answer to Discussion Questions

1. Develop a career plan for Bernadine. What would she
have to do to move up the ladder to the comptroller
position, the chief financial officer of the company?

It is advisable for Bernadine to enroll as soon as
possible at the local university for a Bachelor of
Commerce degree with a major in Accounting. Since
she does not have the money to be a full-time student it
will have to be on a part-time basis, which means that
she can get her degree in three (if she uses summer
sessions) or four years.




If she works out her career plan with her supervisor and
the human resource manager, she may be able to get
some support from the company, especially if she
consults with her supervisor about special courses she
could take, which may be of special interest to the
company, e.g., taxation, international accounting, or
auditing.

After obtaining her Bachelor's degree she has the
choice of going for an MBA degree, which would be
useful if she had interest in a broader management
position. If she still feels comfortable staying in the
accounting field, she may want to consider choosing an
accounting designation, CA, CMA, or CGA. After five
or six years she would be ready to be considered for an
Assistant Comptroller position, preparing herself to take
over when the current comptroller retires.

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Part 4 Placing, Developing, and Evaluating Human Resources
7-16

CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK

Answers to Discussion Questions



1. You are Mary Keddy. Develop a proposal that Mr.
Bennett could present to the board. Consider also the
practicality of the plan.

A proposal to evaluate the training should include
assessing employee reactions, knowledge, attitudes,
behaviour and impact on the organization. A number of
subjective and objective methods can be used in
combination. Evaluation should also include a cost-
benefit analysis using the basic formula: revenue cost
= profit.

2. As a rule of thumb, five to ten percent of the cost
of a training program should be used for the
programs evaluation, depending on the complexity
of the assessment. Please develop a cheap and an
expensive proposal. A brief description of your
approach and reasons will suffice (why would one
method be cheaper or more expensive than the
other?).

An inexpensive approach includes assessing employee
reactions and attitudes immediately following their
training. An expensive program would involve
correlating training scores with job performance several
months after the training. For the less expensive
approach, the primary aim is to gauge how employees
feel about the program but without drawing any
conclusions about the impact on performance. For the
more expensive approach, performance indicators can
be quantified into productivity gain, which would allow
CPIB to estimate the dollar return of the training
(utility).

3. If you wanted to recommend a foolproof
evaluation, e.g., rule out other causes of success than
the training program itself, what approach would
you suggest?

To construct a foolproof evaluation method, an
experiment with appropriate control group(s) should be
put in place. If the trainees are randomly assigned to
condition, then the post-test only design should be:

T O (training group)
O (control group)

If the trainees are not randomly assigned to condition, a
pre test, post-test should be used.

O T O (training group)
O O (control group)

Because trainees may learn from the pre test
independently of training, the design should be
modified to include the groups where no pre test is
given.

O T O (pre-test, post-test training)
O O (pre-test, post-test)
T O (training, post-test)
O (post-test only)

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Chapter 8 Performance Appraisal
8-1
PERFORMANCE APPRAISAL
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Explain the purpose of performance management.
Describe the characteristics of an effective performance measurement.
Identify the issues that influence the selection of a performance appraisal system.
Discuss rater biases in performance appraisals.
Describe commonly used appraisal methods.
Explain how the results of performance appraisal affect human resource management.
Rate the performance appraisal mechanism in your organization.
Describe the guidelines for effective performance evaluation interviews.


POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
8

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Part 4 Placing, Developing, and Evaluating Human Resources
8-2

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Chapter 8 Performance Appraisal
8-3
LECTURE OUTLINE (with PowerPoint

slides)
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Part 4 Placing, Developing, and Evaluating Human Resources
8-4
Performance
Management
Slide 1


Performance
Management
Slide 2


Uses of Performance
Data
Slide 3











Characteristics of
Effective Performance
Management
Slide 2






















PERFORMANCE MANAGEMENT
Performance management involves much more than just performance
appraisal. To meet the organizations strategic objectives, individual
employees need to meet their individual performance goals; collectively
employees meeting their goals help the organization to meet its goals.
Performance management involves using performance data to mutually
inform:
corporate culture
organizational benchmarks
human capital potential
systems and processes
resources
current policies
program directions
sharing results with shareholders
asking for shareholder's input

EFFECTIVE PERFORMANCE MANAGEMENT HAS
SEVERAL CHARACTERISTICS
Performance Objectives. This is a critical aspect of the
organizations overall strategy; if not fulfilled may result in
undesirable organizational results
Performance Goals. Achievable and realistic targets to which
actual outcomes can be compared
Performance Measurement. Assessing the efficiency of
transforming resources into goods and services, their quality,
client satisfaction, quality of decision making, and efficiency and
effectiveness of management contributions
Output Measures. Quantity and quality assessment
Outcome Measures. Results of programs compared to preset
targets








PERFORMANCE MANAGEMENT SYSTEM GOALS
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Chapter 8 Performance Appraisal
8-5
Performance
Management System
Goals
Slide 5


















Performance
Management as part of
managerial strategy
Slide 6

















Uses of Performance
Appraisal
Slide 7





Organizations concerned with running an efficient and effective
performance management system will try to achieve the following
objectives:
Transform organizational objectives into clearly understood,
measurable outcomes that define success and are shared with
stakeholders in and outside the organization
Provide instruments for measuring, managing, and improving the
overall health and success of the organization
Include measures of quality, cost, speed, customer service, and
employee satisfaction, motivation, and skills to provide an in-
depth, predictive performance management system
Shift from prescriptive, audit- and compliance-based
management to an ongoing, forward -looking strategic
partnership between top and middle management and employees

PERFORMANCE MANAGEMENT AS PART OF MANAGERIAL
STRATEGY
An important part of the performance management process is the
assessment of strengths and weaknesses of the human resources in the
organization
Performance appraisal is the process by which organizations
evaluate employee job performance
-- Provides data to assess the current skill, experience and
performance level of every employee
-- Impacts human resource planning, training & developing, career
development, and compensation expense forecasts
-- An effective performance appraisal system (valid performance
appraisals) is critical in the performance management process
Balanced Scorecard
-- Has become a very popular performance management approach
-- Combines the performance measures of the total organization,
integrating financial measures with other key performance
indicators such as customer satisfaction, internal processes,
learning, and innovation

USES OF PERFORMANCE APPRAISAL
Feedback and performance improvement
-- Performance feedback allows the employee, the manager, and
human resource specialists to take appropriate action to improve
performance
Administrative decisions
-- Helps decision-makers determine who should receive pay raises,
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Part 4 Placing, Developing, and Evaluating Human Resources
8-6




















Key Elements
Slide 8








Appraisal Systems
Slide 9

promotions, transfers, demotions, dismissals, etc.
Employee development and career planning
-- Poor performance may indicate the need for training; good
performance may indicate untapped potential
-- Helps to guide a conversation around the employees desired
career path and goals
Criteria for test validation
-- We assess the success of training, recruitment, and selection
efforts based on whether employees perform well
Training program objectives
-- Set training objectives based on employee performance in specific
domains
Job re-design
-- Poor performance may indicate errors in job analysis information
or other information that has resulted in inappropriate hiring,
training, or counselling decisions, or may be a symptom of ill-
conceived job designs

ELEMENTS OF THE PERFORMANCE APPRAISAL SYSTEM
The human resource department usually develops performance
appraisals for employees in all departments
-- This centralization is meant to ensure uniformity in order to
provide for useful results
-- The employees immediate supervisor performs the actual
evaluation 95% of the time
The appraisal system should create an accurate picture of an
individuals job performance. To achieve this goal appraisal systems
should be:
Job-related
-- The system evaluates critical behaviours that constitute job
success
-- If the system is not job-related it is invalid and probably unreliable
Practical
-- Is understood by evaluators and employees
Have performance standards
-- Performance evaluation requires performance standards which are
the benchmarks against which performance is measured
-- Collected through job analysis
Have performance measures
-- Performance evaluation also requires performance measures
which are the ratings used to evaluate performance

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Chapter 8 Performance Appraisal
8-7



Performance Measures
Slide 10












Characteristics for
Effectiveness
Slide 11
















Characteristics for
Effectiveness (contd)
Slide 12












PERFORMANCE MEASURES
Direct versus Indirect Observation
Direct observation occurs when the rater actually sees the
performance
Indirect observation occurs when the rater can evaluate only
substitutes for actual performance (constructs)
Objective versus Subjective
Objective performance measures are those indications of job
performance that are verifiable by others and are usually quantitative
Subjective performance measures are those ratings that are not
verifiable by others and usually are based on the raters opinions


CHARACTERISTICS OF AN EFFECTIVE PERFORMANCE
APPRAISAL SYSTEM
Validity is of utmost importance. The most valid criteria are results.
Valid, or job-related, performance criteria must be based on a
thorough job analysis
Reliability (consistency) is difficult to achieve because of different
raters and changing work environments. However, valid criteria
tend to reliable, but reliable criteria are not necessarily valid
Input into system development increases the probability of
acceptance of the system by both supervisors and employees. It
gives employees a sense of ownership
Acceptable performance standards mean the standards should be
set based on the job analysis
Acceptable goals are derived from the strategic business plans of the
organization, but must be operationalized by managers and made to
be achievable by the employee
Control of standards, i.e., recognizes that jobs are highly
interdependent. An employee must have control over meeting a
standard of performance for it to be valid
Frequency of feedbackmost appraisals take place once a year.
Ideally, performance feedback would be given by the supervisor
monthly, or quarterly, and immediately after effective or ineffective
job behaviour was observed
Rater training in observation techniques and categorization skills as
well as to be familiarized with potential rating errors
Ratee training to ensure the performance appraisal system is well-
understood and accepted by employees
Input into interview process increases employee satisfaction and
morale
Appraisal consequences are required to maintain effectiveness and
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Part 4 Placing, Developing, and Evaluating Human Resources
8-8









Past Performance:
Noncomparative
Slide 13





























Past Performance:
Comparative
Slide 14






ensure employees and supervisors see that appraisal results are taken
seriously and followed up on. There is also a crucial link to a merit
pay system
Different sources (raters) will have different but valid views of a
job and the performance of the employee and reduces the risk of
biases (rating errors)

METHODS OF EVALUATING PAST PERFORMANCE
Noncomparative evaluation methods do not compare one employee
against another, but use scales or reports with performance criteria
Rating Scale is perhaps the oldest and most widely used form of
performance appraisal
-- Rater provides a subjective evaluation of an individuals
performance along a scale from low to high
-- Responses may given numerical values to enable calculation of an
average score
-- Although inexpensive to develop and administer there are many
disadvantages including rater biases and omissions of specific
performance criteria in order to be useful to a variety of jobs
Behaviourally Anchored Rating Scales (BARS) attempt to reduce
the subjectivity and biases of subjective performance measures by
using descriptions of effective and ineffective performance provided
by a variety of sources
-- Specific examples of behaviours are placed along a scale
-- BARS are job-related, practical, and standardized for similar jobs
-- Serious limitation is that only a limited number of performance
categories are included
-- Similar to BARS, Behavioural Observation Scales (BOS) involve
making judgements on the frequency at which observed
behaviours occurred
Performance Tests and Observations may include paper-and
pencil tests or an actual demonstration of skills
-- Must be valid (i.e., job-related) and reliable to be useful
360-Degree Performance Appraisals involve using multiple
sources of performance appraisal ratings including self, peer,
supervisor, subordinate, and even client or customer ratings.

Comparative evaluation methods compare one persons performance
with that of co-workers
Ranking method has the rater place each employee in order from
best to worst
-- Although easy to administer and explain, this method is subject to
the halo and recency effects
Forced distributions require raters to sort employees into different
categories or classifications
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Chapter 8 Performance Appraisal
8-9







Future Performance
Methods
Slide 15












Other Developments
Slide 16

-- Usually a certain proportion must be put into each category
-- Although this method overcomes the biases of central tendency,
leniency, and strictness, some employees and supervisors dislike
this method because they feel some employees are rated lower
than they think to be correct

METHODS TO TARGET FUTURE PERFORMANCE
Future-oriented appraisals focus on future performance by evaluating
employee potential or setting future performance goals. Techniques
include:
Management-by-Objectives Approach
-- Employee and supervisor jointly establish performance goals for
the future
-- Ideally, these goals are mutually agreed upon and objectively
measurable
Assessment Centre Technique
-- Evaluation of future potential that relies on multiple types of
evaluation and multiple raters
-- Usually used for groups of middle-level managers with potential
OTHER DEVELOPMENTS
Web-based performance appraisal
-- Now the mainstream standard for all sizes of firms
-- These systems are: developed by experts, adaptable to an
organizations needs, easy to use, and they allow for data to be
easily analyzed, stored, and retrieved.
-- Ideally performance appraisal software is part of an enterprise-
wide software system including other HR software (e.g.,
application data, interview guides for selection, computer-based
training, and payroll) and software for other organizational
functions such as finance, purchasing, distribution,
manufacturing, and more.
Competencies
-- Historically, it was the performance standards set in job
descriptions that guided supervisors in their assessment; now
there is a tendency to focus more on skill levels than job
performance.
-- One problem within performance appraisal still to be addressed is
evaluating the performance on contingency workers

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Part 4 Placing, Developing, and Evaluating Human Resources
8-10
















Implications of Appraisal:
Training
Slide 17










Implications of Appraisal:
Evaluation Interviews
Slide 18






Effective Evaluation Interviews
Slide 19



Effective Evaluation Interviews
(contd)
Slide 20




Talent Management is emerging within the HR field. It involves
identifying and developing specific individuals who are seen as having
high potential
-- It comes from recognizing that employees who are top performers
are not necessarily the people with the highest potential for working
at key organizational positions or areas, or for moving up in the
organization.
-- Tools such as the 9 box grid provide for assessments of employee
potential along with performance, and guide conversations
around which employees to target for remedial training,
employee development, and future promotion.

IMPLICATIONS OF APPRAISAL
Training Raters
-- Raters need knowledge of the system and its purpose
-- Require training not only focused on rating errors, but also on the
cognitive aspect of the rating process i.e., ability to make
judgments based on relatively complex information
The Recency Effectoccurs when ratings are strongly affected by
the employees most recent actions (either good or bad)
Contrast Errors occur when raters compare employees to each
other rather than to a performance standard

EVALUATION INTERVIEWS
Evaluation interviews are performance review sessions that give
employees feedback about their past performance or future
potential
Can use tell-and-sell, tell-and-listen, or problem-solving
approaches
-- The interview should be a positive, performance-improving
dialogue

GUIDELINES FOR EFFECTIVE PERFORMANCE EVALUATION
INTERVIEWS
1. Emphasize positive aspects of employee performance
2. Tell each employee that the evaluation session is to improve
performance, not to discipline
3. Provide immediate positive and developmental feedback in a
private location, and explicitly state that you are providing
performance feedback
4. Review performance formally at least annually and more frequently
for new employees or those who are performing poorly
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Chapter 8 Performance Appraisal
8-11













Human Resource Management
Feedback
Slide 21












Legal Aspects of Performance
Appraisal
Slide 22

5. Make criticisms specific, not general and vague
6. Focus criticisms on performance, not on personality characteristics
7. Stay calm and do not argue with the person being evaluated
8. Identify specific actions the employee can take to improve
performance
9. Emphasize the evaluators willingness to assist the employees
efforts and to improve performance
10. End the evaluation session by stressing the positive aspects of the
employees performance and reviewing plans to improve
performance

HUMAN RESOURCE MANAGEMENT FEEDBACK

The performance appraisal process also provides insight into the
effectiveness of the human resource management function.
-- If poor performance is widespread, many employees are excluded
from internal promotions and transfers, or they may be
terminated.
-- Unacceptably high numbers of poor performers may indicate
errors elsewhere in the human resource management function
(e.g., the selection process may be screening candidates poorly,
job analysis information may be incorrect, or the HR department
may be failing to respond to the challenges of the external
environment)
LEGAL ASPECTS OF PERFORMANCE APPRAISAL
A performance appraisal form is a legal document.
-- Raters must use only performance criteria that are relevant to the
job, and performance criteria must be valid and used consistently.
-- Nonrelevant criteria can be avoided if performance standards are
established through a thorough job analysis and recorded in a job
description.
-- A reasonable time frame must be set for performance
improvement with the length of time depending on the job.
-- Well-documented performance shortcomings can avoid serious
embarrassments, and feedback interviews have been viewed
favourably in court or with arbitrators.


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Part 4 Placing, Developing, and Evaluating Human Resources
8-12

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS

1. Discuss the differences between performance
management and performance appraisal.

Performance management looks at a number of
variables of which performance appraisal is just one.
Performance management looks at how organization
strategy can be met through the performance of every
member within the organization.

2. Explain why Wal-Mart is a good example of
effective performance management. What did
management do to make it one of the most efficient
and profitable companies in the world?

One of the reasons of Wal-Mart's success was the
introduction of bar codes, which allowed tracking of
items for instant feedback on sales.

3. What are the uses of performance appraisals?

Figure 8-2, p. 304, summarizes the uses of performance
appraisals. It may be worth indicating to students that
the performance appraisal also provides feedback on
how well the human resource department is performing.

4. Suppose a company for which you work uses a
rating scale. The items on the scale are general
personality characteristics. What criticism do you
have of this method?

A rating scale is very subject to rater biases. When the
scale uses general personality characteristics, biases are
more likely to appear. Furthermore, it is very unlikely
that personality characteristics bear much of a
relationship to actual job performance.

5. If you were asked to recommend a replacement
for the rating scale, what actions would you take
before selecting another appraisal technique?

Students should seek a performance appraisal technique
that is job-related, practical, and standardized.
Additionally, the method selected should consider the
nature and availability of performance standards and
measures that are available for evaluating performance.

6. Why are direct and objective measures of
performance usually considered superior to indirect
and subjective measures?

Direct measures are based on actual observation of job
behaviour, i.e., the supervisor has opportunities to see
an employee in action. Indirect measures are substitutes
for direct observation, e.g., a test substituted for direct
observation.

Objective measures are verifiable, e.g., counting
mistakes. Subjective measures are not verifiable, e.g.,
the opinion of a supervisor regarding the performance
of an employee. Opinions may be biased.

7. If your organization were to use subjective
measures to evaluate employee performance, what
instructions would you give evaluators about the
biases they might encounter?

The various biases should be reviewed and their causes
discussed. Evaluators should be instructed to justify
their evaluations based on the employee's actual
performance.

8. Describe how you would conduct a typical
performance evaluation interview.

The three major approaches to conducting a
performance evaluation interview outlined in the
chapter include tell-and-sell, tell-and-listen, and
problem solving. Figure 8-11, p. 320, provides specific
guidelines for conducting the interview itself, regardless
of the approach selected.

9. How do the results of performance appraisals
affect other human resource management activities?

Performance appraisals can be viewed as providing
feedback on the entire range of human resource
activities discussed in this book. Poor performance may
be indicative of just that -- poor employee performance.
However, it may reveal problems in the way the human
resource department defines its objectives; meets
external challenges; deals with employment equity;
helps with job design; collects job analysis information;
conducts human resource plans; handles recruitment;
proceeds through the selection process; provides
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Chapter 8 Performance Appraisal
8-13
orientation, training, and development; assists with
career planning; deals with change in the organization;
or designs and implements performance appraisal
techniques.

10. Describe the characteristics of a 360-degree
performance appraisal.

A 360-degree performance appraisal is a combination
of self, peer, supervisor, and subordinate feedback,
sometimes even from customers. Advantage: different
perspectives. It proves very useful in flat organizations,
with fewer managers who have to supervise more
employees, making it more difficult to assess individual
performance.

11. In what ways is the Balanced Scorecard
approach a useful performance appraisal
instrument?

The balanced scorecard concept combines the
performance measures of the total organization instead
of relying on independent measures of its parts. It
provides a view or an organizations overall
performance by integrating financial measures with
other key performance indicators around customer
satisfaction, internal organizational processes and
growth, learning, and innovation.

12. What is the relationship between a performance
appraisal system and a selection system?

No selection system can be validated without a valid
performance appraisal. Validation would be done by
correlating selection scores (interview, tests) with
performance scores.

13. Explain the legal aspect of a performance
appraisal system. Under what circumstances could it
become a crucial document?

Dismissals are often based on grounds of low
performance. Many low performance assessments are
poorly documented and based often on the opinion of a
supervisor, which have no validity in a court of law or
with an arbitrator. However, if low performance is well
documented, management usually has no problems
ridding itself of a poor performer.

It could also be a crucial document if an organization
has to prove that its selection system is valid. This can
be done only with a valid performance appraisal system.



14. What are the minimum requirements of a due
process appraisal system?

1. Valid criteria
2. Consistent use
3. Reasonable time frame
4. Well-documented

See p.321 for details.





.









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Part 4 Placing, Developing, and Evaluating Human Resources
8-14

ANSWERS TO CRITICAL THINKING QUESTIONS



1. If the dean of your faculty asked you to serve on a
committee to develop a performance appraisal
system for evaluating the faculty, what performance
criteria would you identify? Of these criteria, which
ones do you think are most likely to determine the
faculty members' success at your school? What
standards would you recommend to the dean
regardless of the specific evaluation instrument
selected?

To students, the primary performance criterion is
teaching ability. If students are encouraged, they may
identify many individual criteria that comprise effective
teaching. Examples might include fair grading,
reasonable tests, interesting classroom presentations,
freedom from annoying mannerisms, and others.

The criteria most likely to determine success at your
college or university are probably unique to your
institution, and depend on whether the school is
considered to have a teaching, research, or community
service orientation. In turn, this orientation affects the
specific standards a student is likely to recommend.

2. Your organization has dismissed an employee for
not performing up to par. She sues the company for
unjust dismissal, claiming that the company's
performance appraisal instrument is not a valid
assessment tool, since no woman had served on the
committee responsible for developing it. Are you
able to persuade a judge that despite the fact that no
woman served on the committee, your appraisal
instrument is valid?

The employee would have to demonstrate that the
instrument is gender sensitive, i.e., discriminates against
women (or men), which would be unusual. It is much
more common that biases originate from raters.
However, the issue here is whether the performance
appraisal instrument is valid, because no woman was
involved in its development. If proper development
rules have been followed (see Figure 8-4, p. 307), and if
job-relevant performance criteria were developed, then
it really does not matter whether women were involved
in the instrument's development or not.




3. Can one performance appraisal instrument be
used for all levels in an organization, i.e., executives,
middle managers, and employees? Why or why not?

It is unlikely that one instrument could be used
effectively for different job groups. The text emphasizes
the importance of job-relevant performance criteria
which, by definition, would be different for each job. It
is true that often one performance appraisal systems is
used for different groups, but this is at the expense of its
validity.

It is possible to use one part of a performance appraisal
instrument for different jobs, if the latter contain similar
job elements, e.g., managers may have common
decision making skill requirements. The other part of
the appraisal instrument would then use job specific
criteria. Such elements the above jobs do not have in
common. As an example, a manufacturing manager
probably requires some manufacturing-related specific
skills, which would be different from the skill
requirements of a marketing manager, but both jobs
may have some common management/supervisory
skills.





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Chapter 8 Performance Appraisal
8-15


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.



WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary.

































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Part 4 Placing, Developing, and Evaluating Human Resources
8-16

INCIDENT 8.1: THE MALFUNCTIONING
REGIONAL HUMAN RESOURCE DEPARTMENT

Incident Comments

The main value in this incident is that it identifies some of the potential problems that can emerge if careful attention is
not paid to the organization's performance appraisal process. The incident also underscores the interdependency of
various human resource activities.

1. What do you think is the major problem with the performance appraisal process in the regional office?

In a word, feedback. The survey indicates that many employees felt feedback was insufficient. Still others apparently
never saw their evaluations, another sign of limited feedback. Even those who did see their evaluations felt the standards
were irrelevant and unfair, an indication that these employees do not understand the standards.

2. What major problems do you think exist with the regional office's
(a) job analysis information?
(b) human resource planning?
(c) training and development?
(d) career planning?

Job analysis information may not have identified accurate performance standards; if those standards were accurate, they
may be outdated.

Human resource planning may not be addressing the organization's future human resource needs, as indicated by the
perceived high proportion of outsiders used to fill job openings.

Training and development may be insufficient, since few employees showed any improvement on their performance
ratings from one year to another.

Career planning also may be insufficient, since employees complain about a lack of career opportunities within the
organization.

















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Chapter 8 Performance Appraisal
8-17

EXERCISE 8-1: DEVELOPING A PERFORMANCE
APPRAISAL SYSTEM

1. Define at least three performance criteria for the instructor.

To students, the primary performance criterion is teaching ability. Individual criteria that comprise effective teaching
may include fair grading, reasonable tests, and providing effective classroom presentations. Additional criteria may
include research and publication results, and community involvement.

The criteria most likely to determine success at your college or university are probably unique to your institution, and
depend on whether the school is considered to have a teaching, research, or community service orientation.


2. How would you measure them so that the results would be useful for a tenure and promotion decision?

Objective, job-related performance measures should be used to ensure that tenure and promotion decisions are made in a
non-discriminatory manner.


3. Which type of instrument or method do you suggest? Why?

Recommended methods or instruments include use of BARS to assess teaching ability. BARS is job-related and could be
standardized for the instructor job. 360-degree performance appraisal could also be used to gather diverse perspectives
including student assessments of performance. Other criteria such as fair grading and reasonable tests could be assessed
through the use of performance tests or the use of an assessment center to provide objective assessments. Criteria such as
research and publication could be measured using specific, quantifiable results e.g. number of publications, research
funds generated, etc. using a MBO approach. Consideration should also be given to the balanced scorecard approach as
a means to integrate and balance the institutions overall performance measures.


4. Who should be the appraisers?

Appraisers may include members of the Faculty Evaluation Committee, supervisors (i.e., Dean or Associate Dean),
students, other instructors and/or teaching experts from a university or college teaching/education discipline.


5. Time permitting, compare the results in your group with those of another group.

Students should compare performance criteria, instruments, and who was chosen to be raters.
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Part 4 Placing, Developing, and Evaluating Human Resources
8-18


CASE STUDY: MAPLE LEAF SHOES LTD.,
PERFORMANCE APPRAISAL ISSUES

Answers to Discussion Questions



1. You are Tim Lance. Please write an assessment of
Maple Leaf Shoes' performance evaluation system.

The strength of the present evaluation system is that it is
easy to use and that 10 percent of the supervisors are
trying, seriously trying, to make it work as intended.
The weaknesses, however, are numerous. For the
majority of supervisors, the system is not worth the
paper it is written on. First, the criteria are vague and
the standards are unspecified. Second, the supervisors
do not seem to have received any training in using it or
had its importance impressed upon them. Third, the
employees generally receive no feedback and have
indifferent or mixed feelings about the system. Fourth,
the senior management do not consult the evaluation
results for promotions or raises. So it has become a
useless system carried on by untrained people.


2. What changes would you recommend to the
company? Why?

The only recommendation here is for the company to
formally dissolve the system and start training the
supervisors in the art and science of performance
appraisal. Supervisors should hold periodic conferences
with their subordinates to give them feedback as to how
they are doing. At the next stage, perhaps a formal
evaluation form with specific criteria may be devised,
and a format such as BARS or MBO can be established
in consultation with the supervisors and employees. In
the third stage, an attempt might be made to link salary
decisions to performance appraisal. The linkage should
perhaps be a qualitative one rather than a quantitative
one.

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Chapter 8 Performance Appraisal
8-19

CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK

Answers to Discussion Question


1. How can the bank develop a system that will be
legally foolproof?

The appraisal system should accurately reflect the
performance criteria and standards of the job, and the
ratings should indicate the level of performance in the
appraisal itself. One way to make it foolproof is to
document the specific behaviours that are deemed as
unacceptable, and why they are considered mistakes
relative to the specified standards. This can be done
through BARS, which is based on writing in specific
critical incidents that indicate whether the employee
meets the performance standards on each performance
criteria. This means that the relevant performance
dimensions and standards should be determined a priori
(i.e., what behaviours would indicate mistakes and
why), and that they be incorporated in the BARS
measure. This system allows for documenting concrete,
overt behaviours, which reflect the relevant
performance requirements of the job, and thus is legally
defensible.



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Chapter 9 Compensation Management
9-1
COMPENSATION
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Explain the objective of effective compensation management.
Describe how wages and salaries are determined.
Identify the major issues that influence compensation management.
Explain the differences between equal pay for equal work and equal pay for work of equal value.
Evaluate the advantages and disadvantages of incentive systems.
Explain the major approaches to group incentive plans.
Define total compensation
Describe pay and organizational strategy

POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
9

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Part 5 Motivating and Rewarding Human Resources
9-2

LECTURE OUTLINE (with PowerPoint

slides)

Compensation
Management
Slide 1

Compensation
Slide 2











Objectives of
Compensation
Slide 3






















COMPENSATION
Cash and non-cash rewards employees receive in exchange for
their work
Effective compensation management
-- Employees are more likely to be satisfied and motivated to
contribute to the achievement of organizational objectives
Compensation perceived to be inappropriate
-- Performance, motivation, and satisfaction may decline dramatically
-- Employee turnover may occur resulting in loss of investment for
recruitment, selection, training, and development
-- Dissatisfaction may be experienced with:
-- Absolute pay (physiological and security needs)
-- Relative pay (social and esteem needs)

OBJECTIVES OF COMPENSATION ADMINISTRATION
Sometimes, objectives may conflict with one another, and trade-offs
must be made
Acquire qualified personnel
-- Compensation needs to be high enough to attract applicants
Retain present employees
-- To prevent turnover, pay must be kept competitive with other
employers
Ensure equity
-- Internal equity requires that jobs of similar value get similar pay,
i.e., internal consistency
-- External equity involves paying workers fairly relative to market
rates
Reward desired behaviour
-- Pay should reinforce desired behaviours, i.e., good performance,
loyalty, new responsibilities, etc.
Control costs
-- Obtain and retain workforce at a reasonable cost, i.e., organization
does not overpay or underpay
Comply with legal regulations
-- Ensures compliance with all government regulations
Further administrative efficiency
-- Designing the program so that it can be efficiently administered
(secondary consideration only)
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Chapter 9 Compensation Management
9-3


Compensation
Management (Phase I)
Slide 4






Compensation
Management (Phase II)
Slide 5




















Compensation
Management (Phase III)
Slide 6












MAJOR PHASES OF COMPENSATION MANAGEMENT
Phase I: Job Analysis
Initial job analysis (Chapter 2)
Identify and study jobs to learn about the duties, responsibilities, and
working conditions
-- Position descriptions
-- Job descriptions
-- Job standards
Phase II: Job Evaluation
Job evaluation
-- Systematic procedures to determine the relative worth or value of
jobs
-- Purpose is to identify which jobs should be paid more than others
-- Provides for internal equityperceived equity of a pay system in an
organization
Job evaluation methods
-- Job ranking is the simplest and least precise method of job
evaluation. Jobs are ranked subjectively according to their
overall worth to the organization e.g. janitor is ranked as 1,
secretary as 2, and office manager is ranked as 3
-- Job grading (job classification), is a slightly more sophisticated method than
job ranking, but is also not very precise. Jobs are assigned to pre-determined
job classifications according to their relative worth to the organization
-- Point systems are used more than any other evaluation method. It
evaluates the critical (compensable) factors of each job,
determines different levels or degrees for each factor, and
allocates points to each level. Critical factors generally include:
responsibility, skill, effort, and working conditions
Phase III: Wage and Salary Surveys
Discover what other employers in the same labour market are paying
for specific key jobs
Provides for external equityperceived fairness in pay relative to what other
employers are paying for the same type of work
Sources of Compensation Data:
-- Human Resources and Social Development Canada (HRSDC)
periodically conducts surveys in major metropolitan labour
markets
-- Consultants provide this service for their clients
-- Canada Human Resource Centres also compile information for
distribution to employers
-- Employer and professional associations may survey member firms
-- Some human resource departments conduct their own wage and
salary surveys due to the problem of varying comparability
encountered with using published surveys
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Part 5 Motivating and Rewarding Human Resources
9-4


Compensation
Management (Phase IV)
Slide 7












Compensation Challenges
Slide 8





















Pay Equity
Slide 9



Pay Equity
Slide 10

Phase IV: Pricing Jobs
Pricing jobs includes two activities:
Establishing the pay level for each job involves combining the job
evaluation rankings and the survey wage rates as well as other
considerations, e.g., organizations pay policy
-- Create scattergram and draw a wage-trend line through the dots
that represent key jobs
Creating the compensation structure involves grouping the
different pay levels into a structure that can be managed (i.e., job
classes and rate ranges)
-- Rate range is a pay range for each job class
-- Merit raise is a pay increase given to individual workers
according to an evaluation of their performance

CHALLENGES AFFECTING COMPENSATION
Prevailing Wage Rates
-- Some jobs must be paid more than their relative worth because of
market forces, e.g., scarcity of skilled workers for the oil patch in
Alberta in 2012
-- Some jobs may be paid less than the established minimum, e.g. new hires with
no experience may be paid less than the pay minimum until they gain
experience
Union Power
-- Unions may be successful in using their power to obtain wage rates higher
than their relative worth
Productivity
-- Ultimately, a company cannot pay workers more than they
contribute back to the firm through their productivity
Wage and Salary Policies
-- Policies that cause wages and salaries to be adjusted, e.g., to give
non-union workers the same raise as unionized workers
Government Constraints
-- Canada Labour Code is a federal law that regulates labour relations under
federal jurisdiction, i.e., minimum wage, overtime pay, maintaining staff
records, etc.
-- All the provinces have minimum wage legislation

PAY EQUITY
Canadian Human Rights Act prohibits discrimination because of sex, it is
illegal for companies to pay women less than men if their jobs involve equal
skills, effort, responsibilities, and conditions.
-- Government enforces these provisions
Equal Pay for Equal Work (equal pay) requires an employer to pay men and
women the same wage or salary when they do the same work
-- Part of the Canada Labour Code since 1971
-- Some exceptions, e.g., seniority, sales commissions
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Chapter 9 Compensation Management
9-5








Pay Equity
Slide 11







Pay-for-Performance
Slide 12



Incentive Systems
Slide 13


















Individual vs. Team-based
Incentives
Slide 14



Equal Pay for Work of Equal Value (pay equity) requires that jobs of
comparable worth to the organization should be equally paid
-- 1978 amendment to the Canadian Human Right Act makes it illegal to
discriminate on the basis of job value (or content)
The wage gap is the historical gap between the income of men and
women, i.e., in Canada women earn about 80 per cent as much as
men
-- Wage gap exists in part because women have traditionally found work in
lower-paying occupations such as teaching, retail, nursing, secretarial work.
Part of the wage gap is also due to career gaps, i.e., when women leave the
labour force to care for children
-- Ultimately, 5-10% of the wage gap cannot be explained by any
factor other than gender-based pay discrimination
-- Most provinces have also enacted pay equity legislation
THE PAY-FOR-PERFORMANCE MODEL
Incentive systems provide the clearest link between pay and performance or
productivity
Incentive pay is directly linked to an employees performance or productivity
Benefits of financial incentives:
-- Better performance is reinforced on a regular basis
-- Reinforcement is generally quick and frequentusually with each
paycheque
-- The worker sees the results of the desired behaviour quickly,
therefore, the behaviour is more likely to continue
-- The employee benefits because wages are given in proportion to
performance rather than indirect measures such as time worked
Problems with financial incentives
-- Administration of an incentive system can be complexstandards
must be established and results measured
-- If standards are imprecise, the incentive system may result in
inequities
-- Employees may not achieve standards due to uncontrollable
factors, such as work delays or machine breakdowns
-- Unions often resist incentive systems because they are concerned
management may change the standards and require employees to
work harder for the same pay
-- Incentive systems may focus efforts on only one aspect, e.g., sales
Individual Incentive Plans
Piecework compensates the worker for each unit of output
Production Bonuses are used in conjunction with a base wage rate
or salary and are incentives for exceeding a specified level of output
Commissions involve paying a salesperson a percentage of the
selling price or a flat amount for each unit sold (may or may not be
combined with a base salary)
Maturity Curves are a form of incentive for technical and
professional employees that rewards employees for productivity and
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Part 5 Motivating and Rewarding Human Resources
9-6






























Pay Secrecy
Slide 15








New Approaches to Pay
Slide 16






experience
Executive Incentives vary widely, e.g., cash bonuses, stock options,
etc. that usually relate to the performance of the organization
Team-based Incentive Plans
Team Results determine employee bonuses and salary increases
Production Incentive Plans allow groups of workers to receive bonuses for
exceeding predetermined levels of output
Profit-Sharing Plans share company profits with the workers. Can create a
sense of trust and common fate among workers and management, however, it is
often difficult for employees to perceive how their efforts make a difference.
Most effective in organizations with open, two-way communication and
participative management that fosters a satisfying work environment
Employee Stock Ownership Plans (ESOPs) give employees genuine
ownership. Recent studies show very positive impacts on employee motivation,
productivity, turnover, sales, long-term growth
Cost Reduction Plans reward employees for ways to reduce costs. These
savings are shared with employees in the form of a bonus (e.g., Scanlon Plan)
Non-Monetary Rewards can also be highly motivational, e.g., recognition
Pay Secrecy
Advantages
-- Most employees prefer to have their pay kept secret
-- Gives managers greater freedom
-- Covers up inequities in the internal pay structure
Disadvantages
-- May generate distrust in the pay system
-- Employees may perceive that there is no relationship between pay and
performance
NEW APPROACHES TO PAY
Skill- or knowledge-based pay is a pay system based on the skills or
knowledge that an employee has (in contrast to the more common job-based
pay)
-- Incentives for horizontal learning of skills, i.e., job enlargement, e.g.,
manufacturing jobs
-- Incentives for vertical skills, e.g., Volvo rewards employees if the
group is able to function without a supervisor
Variable pay is a performance-linked approach that involves the use of a
variety of methods, e.g., business and special incentives, individual performance
incentives, profit-sharing, gainsharing, etc.


Broadbanding is a strategy for salary structures that consolidates a large
number of pay grades into a few broad bands in order to assist in flattening
large, hierarchical organizations, encouraging employees to broaden their skills,
de-emphasizing promotion, etc.
Tailor-Made Perks allows employees to choose their rewards, e.g., using a
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Chapter 9 Compensation Management
9-7
















Changing Compensation
Systems
Slide 17








Pay & Organizational
Strategy
Slide 18


















point-based system to choose merchandise
International Pay is a challenge for HR managers to develop policies which
consider global trends, national cultures, and individual differences
CHANGING COMPENSATION SYSTEMS
Traditional
-- Pay = 100% base
-- Entitlement-base increases
-- Few incentive/bonus plans, restricted to executives
Modern
-- Variable component added
-- Performance-driven gains
-- Many kinds of plans, extended throughout the organization
PAY AND ORGANIZATIONAL STRATEGY
Because of increased national and international competition
organizations are concerned about maintaining competitive advantage.
Seven areas of focus that affect pay systems are suggested by Lawler:
Motivating performancemoney is still a strong motivator and
effective incentive systems can improve individual motivation
Identifying valued rewardsmanagement has to understand what
is important to different people
Relating rewards to performanceemployees need to perceive a
connection between their pay and their performance
Setting performance goalseffective goals should be acceptable, attainable,
and developed with employee input
Motivation and punishmentan individuals motivation to
perform is strongly influenced by the consequences
Motivating skill and knowledge developmentan organization
needs to develop the right mix of skills for its business objectives
Fostering attraction and retentionpay and reward systems have a major
impact on the organizations ability to attract and retain


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Part 5 Motivating and Rewarding Human Resources
9-8



ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS


1. What is the difference between absolute and
relative pay with regard to motivation?

Absolute pay satisfies physiological and security needs,
while relative pay satisfies social and esteem needs, the
latter having a greater impact on pay satisfaction and
motivation.

2. Why is job analysis information, discussed in
Chapter 2, necessary before job evaluations can be
performed?

Job analysis information gives compensation specialists
an understanding of the jobs and their compensable
factors, and of what the key jobs in the organization are.
Without job analysis information, even the simpler
approaches to job evaluation -- job ranking and job
grading -- would be difficult or impossible to do
correctly.

3. Suppose when you interview new employees, you
ask them what they think is a fair wage or salary. If
you hire them, you pay them that amount as long as
it is reasonable and not below minimum wage laws.
What problems would you expect?

Again, pay dissatisfaction is highly likely. Although the
recruits may have been glad to receive the pay asked
for, when they learn that others with similar jobs are
getting paid more, dissatisfaction may result. In turn,
performance may suffer, unionization or strikes may
occur, and the attractiveness of the job is likely to
decline. Absenteeism, turnover, psychological
withdrawal, and other negative effects may occur.

4. Assume your company has a properly conducted
compensation program. If a group of employees asks
you why they receive different hourly pay rates even
though they perform the same job, how would you
respond?

All employees should be within the same rate range.
Within the rate range, seniority, performance,
productivity, and experience may justify paying
different workers different wage rates.



5. Why is the point system superior to all other
systems? Discuss the advantages and disadvantages
of this system.

The point system is more precise than other methods
because it can handle critical factors in more detail.
This increased accuracy gives the organization greater
assurance that workers are fairly compensated. The
disadvantage of the point system is that it is more time-
consuming, therefore, more difficult and costly to
develop initially.

6. If you are told to find out what competitors in
your area are paying their employees, how would
you get this information without conducting a wage
and salary survey?

Published wage and salary surveys can be obtained
from HRSDC, Canada Human Resource Centres,
consultants, associations, or possibly from other firms
that have already gathered this information.

7. Even after jobs are first priced using a wage-trend
line, what other challenges might cause you to adjust
some rates upward?

The prevailing wage rate, union pressure, scarcity of
recruits, wage and salary policies, minimum wage laws,
and exceptional employee performance may lead to
wages above the wage trend line.

8. Since financial incentives give employees feedback
for good performance and they relate pay to
performance, why do most companies pay wages
and salaries rather than financial incentives?

Several powerful reasons exist to explain the limited
use of incentives. The lack of clear-cut standards or
measures to evaluate performance is a common reason.
Beyond that, there are complexities in the
administration of incentive systems, concerns about the
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Chapter 9 Compensation Management
9-9
impact of uncontrollable forces impacting results, union
resistance, and concern that only one aspect of
performance will be addressed.



9. Explain the difference between "equal pay for
equal work" and "equal pay for work of equal
value" and the implications of the difference for a
human resources manager.

"Equal pay for equal work" has been part of the
Canadian Labour Code for some time. It means that
employers have to pay male and female workers the
same wages if they perform substantially similar work.
Exceptions: where valid seniority and merit pay
systems have been adopted.

"Equal pay for work of equal value" is a newer concept
included into the Canadian Human Rights Act. It makes
it illegal to discriminate on the basis of job value (or
content). Four criteria are to be used for job evaluation -
- skill, effort, responsibility, and working conditions --
and they are used as a composite measure.

Since the Canadian Human Rights Act is relevant only
to organizations under federal jurisdiction, only human
resources managers of these organizations have to pay
attention to it. However, in several provinces, all human
resources managers have to follow the requirements of
their specific pay equity laws.

10. Under what circumstances are pay differentials
justified?

The Equal Wage Guidelines of the federal legislation
define seven "reasonable factors" that can justify
differences in wages:

(1) performance differences (as measured by a
formal appraisal system)
(2) seniority (based on length of service)
(3) red-circling (because of job re-evaluation)
(4) rehabilitation assignments
(5) demotion pay
(6) phased-in wage reductions
(7) temporary training positions

These factors justify a difference in wages only if
they are applied consistently and equitably. It must be
clearly demonstrable that existing wage differences are
not based on sex.









11. Why is it so important to explain to employees
the performance-reward relationship?

If performance is fairly and equitably rewarded,
employees tend to experience job satisfaction (not as it
had been believed: that happy (satisfied) workers
perform well).


12. In what ways does the total reward model differ
from the regular compensation approach?

It is defined as the use as rewards of everything an
employee values in an employment relationship. It
requires a reward system tailor-made for the
organization. A regular compensation approach tends
use a one-fits-all model, with pay scales and same
benefits for all.


.









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Part 5 Motivating and Rewarding Human Resources
9-10

ANSWERS TO CRITICAL THINKING QUESTIONS


1. Suppose you manage a small business with thirty
employees. You discover that some people are much
more motivated by money and others are motivated
by security. To those who want more money, you
offer an incentive plan in which their income is
determined by their results. The other employees
have a fair salary. What problems might arise?

The other employees, who do not desire money as
strongly, may feel discriminated against because they
do not have an opportunity to earn more money. The
result is likely to be pay dissatisfaction.

2. "Money is a strong motivator" and "in surveys on
what employees want from their job, money ranks 5
or lower." How can you reconcile these two
statements?

Employees tend to see money from different points of
views. On the one hand, it fulfills basic needs, on the
other hand it is seen as a status symbol (see discussion
on absolute and relative levels of pay on p. 331).

3. Obviously, profit-sharing plans are not an option
as an incentive plan in non-profit and government
organizations. Can you think of incentive plans that
will fulfill a similar function?

Cost reduction plans, like the Scanlon plan, would fit
both types of organizations (see discussion on p. 350).

4. "Minimum wages increase unemployment."
Please comment on this statement often made by
economists. Do you agree?

There is no conclusive evidence one way or the other.
Some economists used data to show that an increase in
minimum wages resulted in higher unemployment in
certain geographic areas, but critiques point out that
other causes could account for this rise. A recent study
by another group of economists could not find any
evidence of a negative impact of minimum wages, i.e.,
increased unemployment. So: it's a draw.




5. How should a HR manager find out what
employees value as rewards? Is it acceptable to ask
employees directly? Discuss. Are other methods
preferable? Which? Why?

The best and most valid method is to ask employees
directly what they prefer. There is nothing wrong with
the direct approach. It provides the employee with the
feeling of being involved in the reward process and
gives the supervisor individual feedback. Other
methods used could be focus groups or, on a larger
scale, a survey. These two approaches have the
disadvantage of providing only general information.
This may be useful for an overview of what types of
rewards are valued. However, to be effective, individual
preferences are needed.
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Chapter 9 Compensation Management
9-11


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the
required information. Answers will vary.
































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Part 4 Placing, Developing, and Evaluating Human Resources
9-12


INCIDENT 9.1: COMPENSATION
ADMINISTRATION AT REYNOLDS PLASTIC
PRODUCTS

Incident Comments

This incident illustrates some of the errors that can occur in compensation administration when this human resources
activity is not administered properly. These types of problems are found more often in organizations that lack a formal
compensation program.

Develop a step-by-step plan of the actions you would take and the order in which you would take them if you were
made human resource director of the Reynolds subsidiary.

Immediately, all workers who are being paid less than minimum wage should be given a raise to the prevailing minimum
wage. Overtime should be paid for all hours more than forty during any work week. The policy of paying nontechnical
jobs 15 percent below the prevailing rate should be studied and probably those jobs should be raised to the prevailing
wage rate or to a much smaller differential. Pay differentials for heads of households should be abolished immediately.
Once these "quick fixes" were implemented, it would be advisable to undertake a thorough job evaluation, wage and
salary study and determine what back pay liabilities the firm owes. Beginning with job analysis information, job
evaluation, pay surveys, and pricing jobs in a rational manner, the organization would create an appropriate pay scale for
workers and avoid charges of pay discrimination.




























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Chapter 9 Compensation Management
9-13







EXERCISE 9-1: A REALISTIC JOB EVALUATION
SIMULATION

Form groups of 3 to 5 students (3 students may need approximately 20 minutes, 5 students about 45 minutes for
the exercise).
Use the following rules:

1. Each student chooses a job s/he is familiar with (ideally, a job description would be available, but is not
essential). The jobs should be different, but from one organization, e.g., hospital, school, manufacturing plant.

2. Use table shown on p. 360.

3. Using Figure 9-4, p. 336, find consensus in your group in choosing the most appropriate point level for each job.

4. Example: For the job of a janitor, what level of responsibility for the safety of others, Critical Factor 1a, is
appropriate? Probably not a high one, so a good choice may be Level I, 20 points. For a bus driver or an emergency room
nurse the appropriate choice may be Level IV, or 200 points.

5. Choose one of the above jobs, called a key job. A key job is a well-known job, ideally common in many
organizations, e.g., secretary, accountant, tool and die maker in the manufacturing industry, etc. Do a simulated
wage survey. In this exercise it is sufficient to take an educated guess on what the key job is paid in the job
market.

It does not matter whether you choose an hourly wage or a monthly or annual salary, but it has to be the same for each
job.

6. Calculate the pay coefficient by dividing the estimated wage by the point total of the key job, according to the
formula

wage of key job $
Pay coefficient pc = ------------------------------- = --------
point total for key job point

7. Multiply all job point totals by the pay coefficient. The results are the wages/salaries for all the above jobs. In
reality, this procedure would have to be done by the job evaluation committee for all jobs in the organization,
often in the hundreds.

Comment: This exercise is quite a realistic simulation of what goes on in a job evaluation committee. In all probability,
the opinions in each group will be diverse when it comes to determining the level for each job. The results, of course, are
not realistic since the point table has been created artificially and not by a job evaluation committee, and the pay level of
the key job has been estimated by students. Nevertheless, this exercise should give a good feel for the job evaluation
process, using the point method. It also demonstrates the need to choose members of the committee who are
knowledgeable about the jobs in the organization and are trained in the application of the point method. One more point:
Up until the wage survey, money was not part of the discussion, only points.


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Part 4 Placing, Developing, and Evaluating Human Resources
9-14



CASE STUDY: MAPLE LEAF SHOES LTD.,
COMPENSATION POLICY

Answers to Discussion Questions


1. You are the consultant. Clark has asked you to
submit a proposal for a PS plan for Maple Leaf
Shoes. You wonder about the appropriateness of
such an incentive system for Maple Leaf Shoes, but
promised to look into it. What will you tell Robert
Clark?

Clark seems to have the mistaken belief that profit
sharing plan motivates employees and increases
productivity. There is no evidence of that (see pp.348-
349). Companies with PS plans tend to have higher
productivity and higher morale, but these companies
have many other characteristics that may cause stronger
employee commitment. "Tend" implies that there are
companies with PS plans which do worse than
companies without one. The consultant should tell
Clark about the limitations of the incentive effect of a
PS plan and point out that many other organizational
changes would be necessary until a truly motivating job
environment would develop, e.g., more participative
management, two-way communication, direct incentive
systems, etc.

2. Do you see a possibility of convincing Maple Leaf
Shoes unions to buy in on a PS plan?

It will be a tough selling job. Unions tend to look
negatively at PS plans. But if union representatives
could be shown evidence of some real benefits of a PS
plan to their members it may work. Arranging a
meeting between Maple Leaf union reps and union reps
from a company with an effective PS plan may result in
a change of mind for the Maple Leaf union reps. This
should work even better if the unions would be given a
chance to participate in the development of the plan.

3. What are other incentive plans suitable for Maple
Leaf Shoes?

Piece-rate plans certainly would be very effective, but it
would also be worthwhile to look into a production
incentive plan or a cost-reduction plan (see pp. 346,
348, and 350).
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Chapter 9 Compensation Management
8-15

CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK (PAMELA JONES)


The Pamela Jones case is a real case, describing the
experiences of the wife of the author of this case.

Suggestions For Discussion

Did management make the "right" hiring
decision?

It seems that a proper hiring decision was made.
Pamela had an appropriate education and a
personality test indicated that she had the proper
aptitude for banking. She worked hard and was
dedicated to her employer.

How did management fare with regard to
providing a motivating environment?

Management seems to have done a very inadequate
job in providing a motivating environment for
Pamela Jones.

To what degree did management fulfill the
expectations of Pamela?

Initially, Pamela's expectations were met, but very
soon her work environment deteriorated, causing
her motivation to drop and eventually causing her
to quit.

Was the performance-reward connection clear
to her?

The performance reward link was not clear.

What should management have done to create a
truly motivating environment?

An excellent way to find out what employees want
is to ask them about their preferences. Not all
preferences can be fulfilled, but such surveys
provide useful feedback for a performance pay
model.





Appendix A

Comments for the Instructor

Appendix A contains a replication of Figure 9-4 to
assist in the job evaluation exercise. The steps in the
application of the Point Method are illustrated in
examples.
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Chapter 10 Employee Benefits and Services
10-1
EMPLOYEE BENEFITS AND
SERVICES
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Describe the objectives of indirect compensation.
Explain how government furthers employee security and which major Canadian laws relate to it.
Describe the costs of employee benefits and ways to control them.
Describe the advantages and disadvantages of flexible benefit plans
Explain the key issues in designing pension plans.
Identify the administrative problems of employee benefits and services and suggest improvements.
Discuss benefits and services that are likely to become more common in the future.


POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
10

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Part 5 Motivating and Rewarding Human Resources
10-2

LECTURE OUTLINE (with PowerPoint

slides)


Employee Benefits &
Services
Slide 1

Total Compensation
Slide 2











Indirect Compensation:
Societal Objectives
Slide 3





Indirect Compensation:
Organizational Objectives
Slide 4







Indirect Compensation:
Employee Objectives
Slide 5




EMPLOYEE BENEFITS
Direct compensation is the employees pay
-- Based on critical job factors or performance

Indirect compensation consists of benefits and services
-- Usually extended as a condition of employment
-- Not directly related to performance
-- Includes insurance, income security, time off, educational,
financial, and social services
-- Represents a very significant part of a companys compensation
systemapproaching 50% of annual payroll expenses, as
compared to about 15% in the early 1950s
-- Significant impact on attracting and retaining employees

THE ROLE OF INDIRECT COMPENSATION
Societal Objectives
-- To solve social problems and provide security for interdependent
wage earners governments rely on the support of employees
-- Employers can deduct the cost of benefits as a business expense
-- Employees can receive most benefits tax-free
-- Benefits and services give many employees financial security
against illness, disability, and retirement
Organizational Objectives
-- Must offer some benefits to be able to recruit and retain
-- Vacations, holidays, and rest breaks help reduce fatigue and many
enhance productivity during hours worked
-- Discourage labour unrest
-- Satisfy employee objectives
-- Aid recruitment
-- Reduce turnover
-- Minimize overtime costs
Employee Objectives
-- Seek employer-provided benefits and services because of lower
costs and availability
-- Lower income taxes
-- Partial protection from inflation e.g. the value of a two-week
vacation is not reduced in value by inflation
-- Primary objective may be to obtain benefits and services e.g.
supplementary health and life insurance
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Chapter 10 Employee Benefits and Services
10-3


Benefits & Services
Slide 6































Insurance & Employee
Security
Slide 7










LEGALLY REQUIRED BENEFITS
Imposed upon organizations by the government. Employers must comply with
the law and its procedures. Legally required benefits and services are designed to
help employees by ensuring minimum levels of financial security for the nations
workforce.
Canada Pension Plan (CPP)/Quebec Pension Plan (QPP)
-- Mandatory plan for all employees and the self-employed
-- Contributory plan, i.e., both the employer and the employee pay
part of the costs
-- Portability within Canada
Employment Insurance (EI)
-- Intended to help monetary problems during a job transition
-- Self-employed are not eligible for benefits
Workers Compensation Acts
-- Workers are entitled to compensation in the event of personal injury by
accident during their regular work
-- Compensation is payable by workers collectively
Health Insurance Plans
-- Medical care is funded by the federal and provincial governments
-- Supplementary health plans are discussed under voluntary benefits
Holidays and Vacations
-- Usually based on the employees length of service but minimum
requirements exist

VOLUNTARY BENEFITS
Life and Health Insurance
Salary Continuation Plans
Employee Security
Paid Time-off Benefits
Employee Services

Insurance Benefits spread the financial risks encountered by employees and
their families
-- Life Insurance was the first form of insurance offered employees
-- Group life insurance is an almost universal employee benefit
-- Health-related Insurance that supplements provincial health-care programs
may include disability insurance, out-of-province/country medical insurance,
dental insurance, etc.
-- Salary Continuation Plans, i.e., short-term and long-term
disability
Employee Security Benefits are non-insurance benefits that enhance employee
-- Employment Income Security, e.g., severance pay, guaranteed annual wage
(GAW) if faced with layoffs or lack of work
-- Retirement Security e.g. Registered Pension Plans include defined benefits
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Part 5 Motivating and Rewarding Human Resources
10-4



Paid Time-off & Services
Slide 8











Emerging Services &
Trends
Slide 9













Current Trends
Slide 10





plans and defined contribution plans (secured by legislation i.e. Pension
Benefits Standards Act)
Paid Time-off Benefits include legal requirements e.g. statutory holidays and
vacations and voluntary benefits such as wash-up time
-- On-the-Job Breaks, i.e., rest breaks, meal breaks, wash-up time
-- Paid Sick Leave includes paid time when employees are absent
for medical reasons (one of the most abused benefits)
-- Holidays and Vacations are provided by many employers beyond
the minimum legislated requirements
Employee Services go beyond pay and traditional benefits
-- Educational Assistance, e.g., tuition refund programs
-- Financial Services, e.g., employee discount plans, credit unions,
and stock purchase programs
-- Social Services, e.g., Employee Assistance programs (EAP) to
assist employees with personal problems and relocation programs
EMERGING SERVICES & TRENDS
Increased medical coverage, e.g., dental plans and optometrist services; also
greater assumption of costs provided by employers
More and longer vacations including reduced length-of-service requirements
and more holidays
Increased pension coverage with greater contributions by employers as well as
cost-of-living adjustments
Pension portability improvements as well as earlier vesting
Paid leaves, e.g., sabbatical leaves for managers, paid educational leave for
employees
Child and elder care with the employer providing subsidized
childcare and time-off and access to assistance and counselling to
deal with care for aging relatives
Same-sex benefits, i.e., granting all benefits to same-sex couples
Benefits for part-time employees (and retirees)
Current trends
-- Indirect compensation will form a greater proportion of total
compensation offered
-- Employees may be able to make choices among benefits and may encounter
ore liberalized eligibility requirements
-- Need to adopt a total compensation approach
-- Changes in the labour force will impact workforce demands, e.g.,
aging workforce will result in greater emphasis on pensions; more
working women will impact demand for paid maternity leave, etc.
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Chapter 10 Employee Benefits and Services
10-5

Management of Voluntary
Programs
Slide 11

















Flexible Benefits
Slide 12










Implications for HRM
Slide 13











Implications for HRM (contd)
Slide 14
MANAGEMENT OF VOLUNTARY BENEFIT AND SERVICE
PROGRAMS
A serious shortcoming of human resource management has been poor
management of indirect compensation i.e. benefits and services have
grown in a haphazard manner in many organizations
Problems in Administration
-- Lack of employee involvement, i.e., employees have little discretion once the
benefit program is designed
-- Failing to recognize individual differences and needs, i.e.,
employees receive benefits they neither need or want
-- Workers may be unaware of all the benefits to which they are
entitled
-- Results in pressure from employees for more benefits to meet their needs,
complaints, and dissatisfaction
Traditional Remedies
-- Traditional solution has been to increase employee awareness,
usually by publicizing benefits, e.g., orientation sessions,
employee handbooks, mailings, announcements, etc.
A Proactive Solution: Flexible Benefits
-- Also known as cafeteria benefit programs
-- Allows employees to select benefits and services that match their individual
needs
-- Workers are provided a benefit and services account which they
use to shop for specific benefits offered by the employer
-- Increases administrative costs and obligations to advise employees, however,
offers several advantages including employee participation
-- Technology is increasingly being used to handle administration,
e.g., interactive voice response systems (IVRs) and web-based
technologies

IMPLICATIONS FOR HUMAN RESOURCE MANAGEMENT
Comply
-- Comply with all legal requirements and maintain accurate employee records,
e.g., pension deductions, accurate records of overtime, etc.
Avoid duplication
Human resource managers need to consider CPP and other
benefits, e.g., health benefits available to employees when
designing benefit plans
Reducing accidents
-- To lower the costs of workers compensation
Challenge Unjustified Claims
-- For employment compensation made against employers
Control health costs
-- May be able to save 15% of costs by using generic drugs, out-of-
country medical coverage for personal travel, etc.
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Part 5 Motivating and Rewarding Human Resources
10-6





Benefit Audit
Slide 15

















Benefits & Strategy Implications
Slide 16
















Retention of key employees
-- Several studies have shown that innovative and flexible benefit plans are very
effective tools in attracting and retaining highly skilled staff

BENEFIT AUDIT
System to control the efficiency of a benefit program. Usually consists of two
components:
Claims audit which examines claims and claim trends
Organization audit which examines the efficiency and
effectiveness of handling employee benefits including dealing with
an insurer or a third-party administrator
A benefits audit enables employers to:
Identify opportunities for financial and human resource savings
Ensure that insurers or third-party administrators are doing a good
job
Exert effective control over benefits area
Identify who is in control of the benefits budget
Check how their employee claiming habits compare against other
Canadian employers

BENEFITS AND STRATEGY IMPLICATIONS
The following steps are required:
Define the objectives of the organization
Link objectives of the human resource department with the
objectives of the organization
Assess the needs of employees
Assess the legal requirements to ensure that laws are followed
Compare the companys benefits with those of the competition
Make sure the benefits are valued by the employees
Conduct an annual benefit audit


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Chapter 10 Employee Benefits and Services
10-7

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS

1. Why has government been interested in providing
financial security to workers through laws? What
areas do you think are likely to receive
governmental attention in the future to ensure
employee financial security?

Since we are a nation of workers who are dependent
upon the income from employment, anything that
affects the security of that income affects workers.
When enough workers are affected, society suffers.

In the future, the government may direct more attention
to providing workers with greater financial security.
Possible directions this effort may take include larger
penalties or unemployment compensation taxes on
employers who experience large variations in their
employment levels.

2. Some people believe that employment insurance
has over a period of time worked against the
workers rather than for them. What is your opinion
of employment insurance? Why?

Although student answers may vary widely, it should
be pointed out that this law was never intended to
provide complete financial security. Rather, it takes
care of the pressing needs of the worker (and family)
during the transition from one job to another. It may be
pointed out by some students that EI has led to higher
taxes and costs of operation in Canada. At least a few
students will point out the loose way the system was
administered in the past. Against this, the freedom and
security that the system provides to the workers
(especially in a recessionary period) has to be
compared.

3. Suppose a friend of yours contracted lead
poisoning on the job. What sources of income could
this person rely on while recovering during the next
two months? What if it took two years for your
friend to recover? Are there other sources of income
available?

The employee is eligible for any unused sick leave,
vacation, short- and long-term disability payments,
workers' compensation payments, and in some
instances Canada Pension Plan benefits. During the first
two months, unused sick leave and vacations, short-
term disability, and workers' compensation are the
income sources which might be available. After six
months, long-term disability and the Canada Pension
Plan apply in most cases.

4. Besides retirement income, what other benefits
are provided through the Canada Pension Plan?

The Canada Pension Plan provides disability benefits
and death benefits when a covered worker dies.
Benefits to surviving children and the spouse are
available under certain conditions.

5. What changes should be made to the employment
insurance system to avoid its present weaknesses?

Some of the suggestions may be: increasing the waiting
time, reducing the overall benefits, changing the
provisions to make faster job search attractive, and/or
changing the eligibility criteria. The student should be
encouraged to first identify the present weaknesses. He
or she should then be asked to identify solutions to
these, keeping in mind the undesirable consequences of
changing some of the present provisions.

6. What factors have contributed to the rapid
growth of benefits since the Second World War?

The tax advantages of fringe benefits have been a major
force. Employers subtract the cost of benefits from
income as a business expense while employees do not
have to count the value of benefits as taxable income.
Union pressures, competition among employers for
workers, the administrative and actuarial advantages,
trends toward more leisure time, and greater affluence
of workers have contributed to the growth of benefits.









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Part 5 Motivating and Rewarding Human Resources
10-8
7. Briefly describe the benefits an organization
might give employees to provide them with greater
financial security.

Severance pay, retirement plans, short- and long-term
disability, life insurance, supplemental employment
insurance, major medical coverage, and other forms of
insurance or services protect the worker from large,
unforeseen expenses. Although not truly a benefit, a
financially healthy and growing employer may provide
the best security of all.

8. Why was the Pension Benefits Standards Act
needed? What are its major provisions?

The Pension Benefits Standards Act was needed to
ensure that deserving workers receive the pension rights
to which they are entitled. It precludes employers from
denying long-service employees retirement
compensation even if these workers quit or are fired. It
also protects workers from being denied a private
pension because the employer has become insolvent.

The major provisions of the Pension Benefits Standards
Act include requirements about eligibility, vesting,
funding, fiduciary standards, reporting and disclosure,
plan termination insurance, portability, and
survivorship options for private pension plans.

9. What are the common problems you would expect
to find with the benefits and services programs of a
large company?

The common problems centre around lack of employee
involvement in the design of benefits and services.
Most employees are given a package of benefits by the
organization with little say in the nature of those
benefits. As a result, apathy and ignorance about
benefits are likely. Of course, in a large company there
are problems of cost, administration, renegotiation of
benefits with vendors, and other problems associated
with any large undertaking.

10. If you were asked to increase employee
awareness of benefits, what actions would you take
without changing the way the company provides
benefits? If you could change the entire benefit
program, what other methods might you use to
increase employee awareness?

Within the constraints of a traditional benefit program,
increased publicity about benefits through company
newspaper articles, letters to employees, bulletin board
announcements, meetings, and other communications
efforts is about all that can be done.

If the company changed its benefit program to some
form of flexible benefits structure, employees would
become aware of the benefit program because they
would have to make selections among various options
presented to them.



.









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Chapter 10 Employee Benefits and Services
10-9

ANSWERS TO CRITICAL THINKING QUESTIONS

1. Suppose you are requested to explain why
employees are better off receiving pay and benefits
rather than getting larger pay cheques that include
the monetary value of benefits. What arguments will
you use?

The tax advantages result in the employee getting the
benefits without having to pay income taxes on the
value of these benefits.

Further, economies of scale lead to lower administrative
costs and actuarial advantages. The result is the cost of
fringe benefits is probably lower than the employee
could obtain elsewhere. Another argument for benefits
and wages is that some benefits -- retirement plans, for
example -- may help to lower employee turnover.
Finally, many employees may spend the money and not
provide themselves or their families with minimum
protection.

2. For each of the following groups of employees,
what types of problems are likely to occur if a
company goes from a five-day, forty-hour week to a
four-day, forty-hour week?
(a) working mothers
(b) labourers
(c) assembly line workers

(a) Working mothers may find it difficult to make
suitable child care arrangements. Additionally, many
working mothers face an extremely long day when the
time needed to prepare children for babysitters in the
morning and to prepare evening meals is added.
(b) Labourers are likely to suffer considerable fatigue.
(c) Assembly line workers would likely suffer fatigue
and boredom, which could increase error rates and
decrease productivity.

3. Should companies pay educational assistance?
Assume that it was for a degree in information
technology. What if a competitor offers a higher
salary to the successful graduate? How could you
make sure the company's investment remains in the
organization?

First, most companies will pay educational assistance
only if the courses taken are beneficial to its objectives.
Second, an agreement could be reached with the
employee to the effect that s/he would remain in the
employment of the company for a specified period of
time, usually 5 years. If s/he would leave earlier, a pro-
rated amount of the benefits would have to be pre-paid.
Of course, if an employee becomes more valuable for
the organization, s/he has to be compensated
accordingly, otherwise competitors will bid for the
employee's services.










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Part 5 Motivating and Rewarding Human Resources
10-10


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the
required information. Answers will vary.




INCIDENT 10.1: SOAP PRODUCERS AND
DISTRIBUTORS LTD.

Incident Comments

Although this incident is structured to focus on the benefit area, there may be other causes contributing to the turnover
rate. Management treatment of workers may be inappropriate, working conditions may be substandard, or jobs may be
designed poorly. However, considering the benefits issue, the benefit program may be insufficient.

1. What additions do you think should be made to the company's benefit program?

No mention in the case is made of rest breaks, paid sick leave, short- or long-term disability, retirement programs, and
other benefits mentioned in the chapter.

2. What problem in the incident might be solved by a cafeteria approach?

The complaints about the employer's benefits do not seem to be aimed at any one specific benefit. Presumably, different
groups of workers have different needs and seek benefits related to those needs. For example, younger workers may seek
maternity insurance or more life insurance. Older workers may be concerned about having a retirement plan or other
benefits. A cafeteria approach allows different groups to customize their benefits to fit their needs.

3. To overcome the company's recruitment problems, what other changes do you suggest?
The implementation of shorter work weeks or flextime may serve as a very attractive recruitment inducement.
Scheduling benefits may increase the attractiveness of employment with the firm for new recruits, and the present
employees may be more willing to stay.
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Chapter 10 Employee Benefits and Services
10-11


CASE STUDY: MAPLE LEAF SHOES LTD.,
FLEXIBLE BENEFIT PROGRAM

Answers to Discussion Question
Sam Polyani, a union rep, wants to sell the company's CEO on the benefits of a flexible benefit plan since his members
want it.

1. Can you assist Sam Polyani in his attempt to sell Robert Clark on a flexible benefit plan? What are the
advantages and disadvantages of such plans?

There is only one advantage for the company: Flexible benefit plans seem to improve morale and job satisfaction of
employees, and it may be a useful strategy for Clark to buy into this plan if he intends to create a more motivating job
environment. On the other hand, a flexible benefit plan is more expensive, mainly because of extra administration costs.
It looks as if Sam may have to offer some additional incentives as bargaining chips if he wants the flexible benefit plan.





CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK

Answers to Discussion Questions



1. Use Web research to find arguments for and
against using the Internet and the banks intranet
for the administration and delivery of its benefit
services.

Internet administration would allow for easy access to
off-the-shelf benefits plans. Such plans would be less
expensive than a custom designed one. The Internet
would make it easier to compare among the benefits
plans that are available, and to receive updated
information on any legal changes that could affect
benefits administration. The disadvantage of using the
Internet is that employees may not be involved in an
Internet-administered benefits package. The benefits
package may not be equally well-suited to all
employees.

Intranet administration allows the employees ready
access to information about CPIBs benefits program.
Any questions can also be dealt with through the
intranet. However, not all workers will make use of the
intranet. Older and less skilled workers are less likely to
access the intranet to get information about the benefits
available.

2. Is outsourcing benefit administration advisable?
Why? What criteria should be used in making the
decision?

Outsourcing of benefits is advisable only if the internal
cost of administration is greater than the external cost
of administration at CPIB. Given the large workforce at
CPIB, a cost analysis should be conducted to determine
if outsourcing is more economical. The criteria for
whether the benefits should be outsourced should be
based on a needs analysis, and deal with the following
questions: What tasks need to be performed? Who
performs these tasks and how much does it cost? What
would the outsourcing benefits program cost in
comparison? How long will it take to implement such a
program?

3. If Mary asks for a benefit audit, what would the
auditor look at?

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Part 4 Placing, Developing, and Evaluating Human Resources
10-12
A benefit audit will enable Mary to determine the
following:

a. Identify opportunities for financial and HR
savings.
b. Determine whether insurers or 3
rd
party
administrators are doing a good job.
c. Determine if there is effective control over
their benefits area.
d. Identify who is in control of the benefits
budget.
e. Check on employee claiming patterns
compared to claiming patterns at other banks.
.






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Chapter 11 Managing Employee Relations
11-1
MANAGING EMPLOYEE
RELATIONS
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Discuss the importance of downward and upward communication in organizational settings.
Define employee counselling and the major types of counselling.
Describe how progressive discipline and wrongful dismissal work.
Explain the different techniques available to improve quality of work life.
Outline the major issues relating to downsizing the workforce and their implications for strategic human resource
management.


POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
11

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Part 6 Maintaining High Performance
11-2

LECTURE OUTLINE (with PowerPoint

slides)


Managing Employee
Relations
Slide 1

Employee Relations
Slide 2




Importance of Employee
Relations
Slide 3
























EMPLOYEE RELATIONS
The state of employee relations in an organization is determined by
how human resource planning, placement, training and development,
evaluation and compensation is handled
Open-door policy encourages employees to come to higher
management with any concerns

STRATEGIC IMPORTANCE OF EMPLOYEE RELATIONS
PRACTICES
Employee relations is a complex blend of organizational culture, human
resource practices, and individual perceptions. Virtually everything
the human resource department does affects employee relations
Improve productivity
-- Employee productivity is significantly affected by ability and
attitude and effective employee relations practices improve both
Implementation of organizational strategies
-- Employees need to understand their roles and be rewarded for
exhibiting desired behaviours
-- Effective employee relations practices ensure that organizational
goals and strategies are properly communicated to employees and
receive their commitment
Reduce employment costs
-- When the organizations culture includes concern for and interest
in employees, the result is reduced turnover and absenteeism
which results in significant cost savings
Help employees grow and develop
-- An important goal of human resource departments is to help
employees achieve their personal goals
-- Interest in employees work and career goals results in benefits of
improved morale, loyalty, productivity, and availability of skilled
people


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Chapter 11 Managing Employee Relations
11-3


5 Key Dimensions of
Employee Relations
Slide 4


Employee Communication
Slide 5









































FIVE KEY DIMENSIONS OF EMPLOYEE RELATIONS
There are five major components of effective employee relations:
communications, counselling, discipline, rights and involvement
1. Effective Employee Communication
Downward communication systems
-- Begins at some point in the organization and feeds down the
organizational hierarchy to inform or influence others
-- Multiple channels are used to overcome barriers and reach the
intended receivers
-- In-House Publications to inform employees about current
developments and to foster understanding of objectives. May
contain articles about sports activities, employee profiles, etc.
-- Information Booklets are often distributed by human resource
departments, e.g., employee handbook, specialized subjects such
as employee assistance programs, etc.
-- Employee Bulletins concerning day-to-day operations are
published by human resource departments. Increasingly electronic
media are being used to communicate with employees
-- Pre-recorded Messages may take the form of television
programs, automated voicemail, etc.
-- Electronic Communication (e-mail) is taken for granted in many
organizations. Intranets (internal communications systems that
function like a smaller version of the World Wide Web) are being
used for a wide variety of purposes including communication with
employees. Extranets (intranets linked with vendors) are being
used for purposes such as benefit inquiries. To prevent the
misuse of electronic communications organizations require
policies on Internet usage
-- Social Media use by employees is providing a variety of
challenges to employers including issues relating to security of
networks and data, employee time spent on social media sites, and
improper or illegal communications. However, social media may
also be a powerful tool in attracting and retaining people.
-- Information Sharing and Open Book Management include
sharing financial and other information with employees.
Upward Communication Systems
-- Area of communication that requires improvement in most
organizations
-- Upward communication begins in the organization and proceeds
up the hierarchy to inform or influence others
-- Grapevine is an informal system that arises spontaneously from
the social interaction of people in the organization. Feedback
includes information about areas of job dissatisfaction, difficulties
with supervisors, etc.
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Part 6 Maintaining High Performance
11-4

























Employee Counselling
Slide 6











Employee Discipline
Slide 7




-- Electronic Communication such as e-mail, intranets, and
discussion groups can also be used effectively to facilitate upward
communication. More organizations are implementing Human
Resource Management Systems (HRMS).
-- In-House Complaint Procedures are formal methods through
which an employee can register a complaint. Alternate dispute
resolution (ADR) programs are used in many organizations to
resolve disputes in a timely, cost-effective manner. ADR
programs include open door policy, peer review panel,
ombudsperson, mediation and arbitration
-- Manager-Employee Meetings are meetings between managers
and groups of employees to discuss issues, suggestions, opinions,
etc.
-- Suggestion Systems are a formal method for generating,
evaluating, and implementing employee ideas. These systems
may fail because suggestions may take too long to implement or
supervisors/managers have failed to fully support or encourage the
processalso need to reflect group contributions
-- Employee Attitude/Opinion Surveys are systematic methods of
determining what employees think about their organizations
(usually conducted through anonymous questionnaires); requires
feedback of results and action; many organizations are using Web
technology to conduct on-line surveys
2. Employee Counselling
Discussion of a problem with an employee in order to resolve the
issue and / or help the employee cope with the situation.
-- Many employers have formal arrangements with outside
professional counselling agencies to help their employees
Employee Assistance Programs (EFAP)
-- Comprehensive company programs that seek to help employees to
overcome their personal and work-related problems
-- Online communications are increasingly being used to supplement
EAP structures, e.g., video counselling, chat rooms, bulletin
boards, and self-help applications
3. Employee Discipline is management action taken to encourage
compliance with the organizations standards
Preventive Discipline is an action taken prior to any infraction to
encourage employees to follow the rules
-- Management has responsibility for ensuring standards are known
and understood
-- The human resource department has a major responsibility, e.g.,
developing specific programs, communication
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Chapter 11 Managing Employee Relations
11-5







Employee Discipline
Slide 8










Positive Discipline
Slide 9












Dismissal
Slide 10















Restrictions on Discipline
-- Ability to discipline may be restricted by union contracts
(concerns about management authority) and government
legislation for workers who assert rights protected by law (e.g.,
failing to perform work that is unsafe)
-- Due process may be required to ensure established rules and
procedures for disciplinary action are followed, and employees
have an opportunity to respond to the charges
Progressive Discipline is a type of discipline whereby there are
stronger penalties for repeated offences including verbal reprimand,
written reprimand, suspension, discharge for cause
-- Verbal reprimand by supervisor
-- Written reprimand, with a record in file
-- One- to three-day suspension from work
-- Suspension for one week or longer
-- Discharge for cause
Positive Discipline
-- Takes a problem-solving approach instead of using punishment
-- Involves employee acceptance that a problem exists and
agreement that the employee takes responsibility
-- Focus on the specific problem rather than the employees attitude
or personality
-- Gain agreement with the employee that a performance problem
exists and that the employee is responsible for changing his/her
behaviour
-- Approach discipline as a problem-solving process
-- Document suggested changes and employee commitments
-- Follow up to ensure the employee is keeping commitments

DISMISSAL
The ultimate disciplinary action is dismissal (i.e. fired, terminated,
discharged, involuntarily separated)
Wrongful Dismissal
-- A non-union employer who does not have just cause for
dismissing an employee may be sued for wrongful dismissal
-- The law is very complicated and legal guidance is advised
-- Employment standards legislation provides minimum notice for
dismissal without cause, however, the courts frequently exceed
these provisions
Determining Just Cause
-- Cause for dismissal under common law includes an act by an
employee that could have serious negative effects on the
organization, e.g., incompetence; employee misconduct
-- Employer is responsible for proving the existence of just cause
-- Perceptions of employers and the courts often differ
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Part 6 Maintaining High Performance
11-6

Dismissing an Incompetent
Employee
Slide 11



















Constructive Dismissal
Slide 12



Reasonable Notice
Slide 13






The Wallace Effect
Slide 14












Incompetent Work Performance
-- The employment contract contains an implied warranty that the
employee is reasonably competent and able to perform the
work for which the employee was hired.
-- Requirements in dismissing an incompetent employee include:
1. Providing reasonable, objective standards of performance in a
clear and understandable manner.
2. Showing that the employee failed to meet those standards.
3. Establishing that the employee was given a clear and
unequivocal warning that s/he failed to meet the standards.
4. Clearing warning the employee that failing to meet the
requisite standards will result in dismissal.
Employee Misconduct
-- Theft, fraud, and dishonesty are among the most serious grounds
for dismissal
-- Other cases involve consideration of the nature of the misconduct
and the employers position within the organization, e.g., senior
mangers or those in position of trust (such as a teacher) may be
held to a higher standard of conduct both on and off the job
Business or Economic Reasons
-- Terminating an employee for business or economic reasons is not
just cause for dismissal i.e. reasonable notice or compensation is
required
Constructive Dismissal
-- A major change in the employment terms that results in an
employee resigning may be considered constructive dismissal
Examples: significant change in job function, a demotion, a
demand for an employees resignation, or a forced transfer
Reasonable Notice
When just cause for dismissal does not exist, a dismissed employee
must be provided reasonable notice or compensation in lieu of
notice
-- Major considerations include former employees age, length of
service, salary, occupational status, labour market conditions.
Note: employees who are terminated are required to attempt to
mitigate losses, i.e., make efforts to find alternative employment
The Wallace Effect
The 1997 decision of the Supreme Court in Wallace v. United
Grain Growers resulted in the awarding of extended periods of
notice in a number of wrongful dismissal cases where the employer
has been acting in a callous manner.
-- In a recent decision (Honda Canada v. Keays), the Supreme
Court of Canada addressed the manner in which bad-faith
damages should be assessed and restricted the use of punitive
damages

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Chapter 11 Managing Employee Relations
11-7


Managing the Dismissal
Slide 15













Employee Rights
Slide 16

















Employee Involvement
Slide 17













Managing the Dismissal
There are several guidelines to follow in dismissing an employee:
-- Prepare for the interview and conduct a rehearsal
-- Consider the dismissal process from the employee's perspective
and ask "How would I like to be treated in such a situation?"
-- Get to the point
-- Select the time and place
-- Have any necessary information ready
-- Notify others in the organization and ensure that the individual's
duties are covered
-- In some instance, special security measures may be necessary
-- Discuss the process with other colleagues who have had to
terminate employees

4. Employee Rights
Right to Privacy
-- Personal privacy legislation requires organizations to hold
personal information about employees in a responsible manner
and severely limiting the disclosure of such information without
the employees consent
-- Employers must only collect job-related information
-- Many organizations monitor employee communications and
activities on the job
Right to Fair Treatment
-- An individuals age, race, gender, religion, physical disability,
etc. should not be considered when hiring (unless it is a bona fide
occupational requirement)
-- An employer has an obligation to make reasonable
accommodation to meet employee needs
-- These principles must also govern the day-to-day working
relationship
-- Right to work in a safe and harassment-free environment
5. Employee Involvement
Most of the approaches to employee involvement focus on the increased
participation of workers. Employee involvement is a popular method to
increase the quality of work life.
Self-Directed Work Teams
-- Teams of workers without a formal company-appointed
supervisor who make decisions traditionally handled by a
supervisor, e.g., daily work assignments, the use of job rotation,
orientation, training, and production schedules
High-Involvement Work Practices
-- Set / bundle of human resource practices aimed at increasing
employee and employer performance
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Part 6 Maintaining High Performance
11-8











Job Security, Downsizing &
Employee Retention
Slide 18








Retaining Top Performers
Slide 19



-- Benefits include lower turnover, higher productivity, and
improved financial performance
Employee Self-Service
Aimed at reducing the amount of administrative work. Can be
divided into two groups:
-- Productivity applications, i.e., management of personal data,
retirement plans, health and benefits management
-- Strategic applications, i.e., online recruitment and skills
management

JOB SECURITY, DOWNSIZING, AND EMPLOYEE RETENTION
No-Layoff Policies
-- Employees who have job security are more receptive to change,
more likely to be innovative
Organizational Downsizing
-- Major corporations around the world continue to downsize
-- Implemented to enhance organizational performance and in
response to the global financial crisis, however, studies show that
morale sinks, productivity drops, and survivors distrust
management
Retaining Top Performers
-- Develop a planned approach to employee retention including
addressing individual needs, investing in employees, etc.
-- Become an employer of choice with a goal of retaining employees
-- Communicate the organizations vision and values clearly,
frequently, and consistently
-- Reward supervisors and managers for keeping good people
-- Use exit interviews to obtain information as to why people are
leaving the organization


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Chapter 11 Managing Employee Relations
11-9

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS


1. Think of a situation in which you learned some
new information from the grapevine and took action
on the basis of that information. Discuss.

Answers will vary. However, students examples will
illustrate how grapevines can supplement more formal
organizational communications.

2. List and describe different types of programs that
can be used by the human resource department to
improve communication.

Company magazines, newspapers, and other in-house
publications provide employees with one-way
communication about developments within the
organization. This information may be supplemented by
printed booklets, bulletins and various electronic
communication media that inform employees about
specific programs or changes in those programs.
Television and other pre-recorded messages provide the
same one-way communication but do it in a different
format. Job-holder reports and meetings share
information with employees about the organization's
economic success. Employee meetings, employee
question-answer programs, electronic communication,
suggestion programs, and formal attitude and opinion
surveys allow employees to communicate upwardly
with others in the organization, which furthers the goals
of two-way communications. Likewise, an open-door
policy furthers two-way communication because it
allows employees to interact with others in the
organization.

3. Discuss differences between preventive and
corrective discipline. What examples of either one
were applied to you on the last job you had?

Preventive discipline attempts to inform employees of
expected standards, provide guidelines for expected
behaviour, and develop self-discipline. Corrective
discipline is reactive; it seeks to punish for violations of
standards in the hope the corrective action will prevent
the employee from violating standards in the future.




4. What is progressive discipline? How does it work?
Is its basic approach realistic in work situations?
Explain your answer.

Progressive disciplinary systems impose stronger
penalties for repeated offenses. The purpose of this is to
give an employee an opportunity to take corrective
action before more serious penalties are applied. A
typical progressive discipline system involves a verbal
reprimand for the first infraction. A second infraction is
accompanied by written reprimand with a record in file.
Further infractions build up to stronger discipline (e.g.,
one- to three-day suspension from work, suspension for
one week, etc.) leading finally to discharge. Many (if
not most) employers today employ such a progressive
discipline model.
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Part 6 Maintaining High Performance
11-10

ANSWERS TO CRITICAL THINKING QUESTIONS

1. Employee involvement (EI) has become a popular
concept. As a manager, what steps would you take
to increase EI in your division?

Employee involvement (EI) consists of a variety of
systematic methods that empower employees to
participate in the decisions that affect them and their
relationship with the organization.

To increase employee involvement a manager should
consider the implementation of self-directed work teams
that would typically decide daily work assignments,
orient new employees and perform other tasks that may
currently be handled by a supervisor. Other high-
involvement work practices could include the
introduction of problem-solving groups, job
enlargement/enrichment, etc.

2. Suppose you are plant or division manager and
you want to improve the quality of work life in your
division. What steps would you take?

To create a high quality of work life environment often
means changing attitudes, beliefs, and values within the
organization. It has to do with the dignity of human
beings and the management philosophy that is applied
to workers. Management that adopt negative views of
workers and let those negative views reflect through
their management philosophy into their day-to-day
management decision making detract from the
organization's quality of work life environment. Since
these attitudes and human resource assumptions tend to
be subtle, a mere "directive" from top management may
be grossly insufficient. What will be needed in almost
every case is a long-term effort that may require specific
organizational development interventions. Any of the
approaches discussed in the text (e.g., self-directed
work teams, high involvement work practices etc.) may
be mentioned by the student. The specific steps to
implement these are discussed in the text.

3. Think of an organization that you have worked in.
What employee relations practices could be
implemented to improve performance?

Answers will vary.

4. Assume you have been asked to terminate an
employee. How would you conduct the termination
interview?

The interview should be as positive and constructive as
possible, not an easy task (see p. 408).










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Chapter 11 Managing Employee Relations
11-11


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary.
































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Part 6 Maintaining High Performance
11-12


INCIDENT 11.1: THE MACHINISTS ABUSIVE
COMMENTS TO THE SUPERVISOR

Incident Comments

This incident gives students some insight into a specific discipline situation. It can be used to underscore the need for
maintaining industrial discipline and the problem of insubordination, which potential managers may encounter in their
careers.

1. As a human resource director, what comments would you make?

Although students may argue that the employee should be given a warning or the discipline may have been too harsh, the
supervisor had to take some action or his credibility among the other workers might have been undermined. When an
employee uses abusive language toward a supervisor and refuses to follow reasonable orders, no action by the supervisor
may be interpreted as weakness and may encourage other discipline problems among other employees.

The supervisor should be commended for remaining calm and conducting the discipline in private. The supervisor also
should be commended for immediately notifying the human resource department. Depending on normal company
procedure, the supervisor in some companies is required to notify the human resource department before major
disciplinary action is taken. That requirement does not appear to be the case in this company. Finally, the supervisor
seems to have applied the "hot-stove rule," although the supervisor may have been very upset at the time and maybe
should have waited until he and the employee had calmed down more before implementing the discipline.

2. What follow-up actions should the human resource director take or recommend that Horace take? For
example, do you recommend counseling for William? Would you reconsider existing disciplinary procedures or
policies?

When William returns from the one-day suspension, Horace should call him into the office for a brief counselling session
to learn if William has some stress-related problem that is contributing to his uncooperative behaviour. The supervisor
also should explore whether William is willing to follow orders in the future. If William remains adamant in his stance
about picking up trash or otherwise seems uncooperative, Horace may want to refer William to the human resource
department for additional counselling.

Perhaps Horace should have been more proactive and counseled William after his comment during the weekly
department meeting. If that counselling failed, William may have been referred to the human resource department for
additional counselling. Instead, Horace waited until there was an infraction, insubordination, and abusive language before
taking action.








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Chapter 11 Managing Employee Relations
11-13


CASE STUDY: MAPLE LEAF SHOES LTD.,
ADDRESSING EMPLOYEE RELATIONS

Answers to Discussion Questions



1. / 2. How should Britney deal with the Joan
Jorgenson incident? What suggestions would you
make to improve the policy on employee
communications?

Regarding the Joan Jorgenson incident, one of the key
points surrounds the issue of "whistle-blowing".
Students should also note that the approach to dealing
with sexual harassment at the Maple Leaf office
involved having Natalie go to Winnipeg. Is this an
effective way to deal with the issue?

In considering what action Britney might take with
regard to Joan, some of the factors to consider include:

the company policy on employee communications
the fact that the policy is communicated regularly
to employees
Joan's position (clerical) would a different
response be called for if Joan was in a different
position?
Joan's decision to notify both the Human Rights
Commission and the local media

In determining an appropriate approach, it is important
to consider the impact of any action on both Joan and
other employees. Particularly relevant to the decision
are the concepts relating to discipline
(preventive/corrective/progressive and positive
discipline) covered in the chapter.

3. What disciplinary action (if any) would you
recommend Britney take with regard to the case
involving Max MacSweeney?

With reference to the Max MacSweeney incident, a
potential ground for dismissal would be on the basis of
misconduct. However, as noted in the text, establishing
just cause for dismissal is not easy employers
frequently believe they have cause when in fact they
don't. It is important to consider:

Max's position in the organization accountant
(courts often place a higher duty on more senior
employees)
Max's previous record there is a greater
likelihood that the courts will give employees a
second chance if they have an unblemished work
record
the nature of the alleged misconduct -- this issue is
complicated by the fact that while Max used
company property to access the web sites, he did so
on his "own" time (outside of regular working
hours)
absence of a policy on Internet usage.

While some disciplinary action may be called for, it is
unlikely that a court would uphold a dismissal on the
basis of just cause. However, the organization has the
option to dismiss Max and provide "reasonable notice"
or compensation in lieu of notice.

4. Develop a company policy on Internet usage.

Concerning the development of a policy on Internet
usage, material covered in the text is of assistance. As
well, the policy needs to be adapted to the requirements
of the organization. Some considerations include:

who can use the Internet (all employees or selected
employees)
use of the Internet for business purposes
rules of conduct
right of the employer to monitor Internet usage
specific prohibitions copyright issues,
distribution of viruses, material that is threatening,
abusive, defamatory or obscene.

Maple Leaf Shoes should have a policy which restricts
the use of the Internet for business purposes only. If
employees are caught using the Internet for personal
reasons, a progressive discipline system should be
implemented. See Figure 11-2, p. 403, for the steps that
should be followed.

5. Do you recommend that Paul Bertuzzi be
dismissed? Is there just cause for dismissal?
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Part 6 Maintaining High Performance
11-14

In considering whether there is just cause for dismissal,
a number of issues are worthy of attention:
Paul's position is a supervisor fiduciary duty
the nature of the misconduct theft and divulging
of company secrets
Paul did not participate in the misconduct his
involvement was passive in that he had only
"heard" about the activities of the other supervisors
Does Paul have a duty to report the misconduct?
Paul might argue that a very short time had elapsed
from him becoming aware of the misconduct and
the audit. Perhaps Paul was seeking to verify the
information or planning to reveal the actions of the
other supervisors in the near future.

6. Regardless of your answer to Question 1, what
would be reasonable notice in the event that a
court ruled that your organization did not have just
cause to terminate Paul? Explain your answer.

In determining "reasonable notice", there are a wide
number of factors the court considers. Some of the most
important are:

employee's age
employee's length of service
employee's occupational status
employee's salary
labour market opportunities elsewhere
employee's duty to mitigate losses

Students frequently apply the guidelines provided in the
text. Assuming Paul is considered mid-management, he
would receive about three weeks notice for each year of
service (3 weeks x 11 years or about 33 weeks
approximately 8 months). It is important for students to
realize that the courts don't simply apply the guidelines;
rather they consider the various factors and come up
with a notice period. The guidelines are merely given to
give students some sense of the notice periods awarded.

7. If you were in Paul Bertuzzis position, would you
have reported the scheme to senior management?

The issue of whether a student in Paul's position would
report the scheme to senior management addresses both
practical and ethical issues. A strict interpretation of a
fiduciary duty would suggest that Paul had an obligation
to report what he had heard. On the other hand,
employees are often unwilling to "tell" on co-workers.
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Chapter 11 Managing Employee Relations
11-15

CASE STUDY: A MATTER OF SECURITY AT
CANADIAN PACIFIC AND INTERNATIONAL
BANK

Answers to Discussion Questions



1. Would you recommend disciplinary action in this
case? Why or why not?

Brenda exercised reasonable caution but did not follow
CPIBs typical procedure for securing sensitive
property. Students should recommend a progressive
discipline, where a letter of reprimand would be placed
in her personnel file. In the letter, there would be a
detailed summary of what she did and why that was
unacceptable, steps for what she should have done to
secure the property, and a warning that if she misplaced
or lost sensitive files again, she would be dismissed
from her current position. Depending on the severity of
future loss of property, she would either be demoted or
dismissed from the organization as well.

2. Are there long-term implications for the human
resource function as a result of this incident?

The long-term implications are to explicitly state in the
rules and procedures, how employees should be dealt
with if certain infractions are made. Disciplining
policies must follow the principles of fair treatment,
based on just cause. This suggests that CPIB must
anticipate future behaviours that are subject to
sanctions, and then develop a policy to deal with such
behaviours.



3. Assume head office has demanded a new policy
addressing the security of bank property. Discuss
the merits and drawbacks of having such a policy.

The primary merit is that there is a uniform code for
how infractions will be handled, ensuring more
consistent application of sanctions. The drawback is
that such a policy may be too rigid, where extenuating
circumstances are not duly considered when
implementing sanctions. This may lead the employees
to claim unfair treatment because the disciplinary
actions were too harsh given the situations.

4. Develop a policy for CPIB.

Implement a policy where the criteria for infractions are
clearly spelled out in the rules and policies. The policy
should specify any extenuating circumstances that
should be considered when imposing sanctions.
Otherwise the steps of progressive discipline (see
Figure 11-2, p. 403) should be followed. Monitor how
many infractions are reported a year after the policy is
in place. If a particular infraction is repeated by a
number of employees, employees may need remedial
orientation on handling sensitive property.



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Chapter 12 Ensuring Health and Safety at the Workplace
12-1
ENSURING HEALTH AND
SAFETY AT THE
WORKPLACE
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Describe the major Canadian laws relating to occupational health and safety.
Assess the traditional thinking with respect to occupational health and safety issues.
Explain the new thinking with respect to employee rights relating to occupational health and safety issues.
Outline the safety and health responsibilities of employers and employees.
Discuss the impact of stress on employees and the workplace.
Summarize the relationship between health and safety issues and human resource management.


POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
12

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Part 6 Maintaining High Performance
12-2

LECTURE OUTLINE (with PowerPoint

slides)

Ensuring Health and
Safety at the Workplace
Slide 1


Assumption of Risk
Slide 2


Safety in the Workplace
Models
Slide 3






Health & Safety in the
Workplace
Slide 4





Workplace Injuries and
Health Hazards
Slide 5















ENSURING HEALTH AND SAFETY AT THE WORKPLACE
At the turn of the 20
th
century, the thinking and attitudes of employers
and employees toward accident prevention were quite different from
today
Assumption of risk was a legal expression used by the courts
-- Obsolete attitude toward accident prevention shared by employers
and employees where the worker accepted all the customary risks
and unsafe practices of the occupation he or she worked in
Careless worker model was the early approach to safety in the
workplace
-- Assumed that most accidents were due to workers failure to be
careful or to protect themselves, i.e., assumed it was mainly the
workers fault if an accident happened
Shared responsibility model assumes the best method to reduce
accident rates relies on the cooperation of the two main partners: the
employer and the employee
Growing emphasis on health and safety in the workplace due to:
-- Strong union pressure
-- Increased public interest in greater corporate responsibility
-- Better and more comprehensive federal and provincial legislation
and health and safety measures

WORKPLACE INJURIES AND HEALTH HAZARDS
Workplace accidents and occupation-related illnesses cost about $8
billion annually in direct compensation (total cost exceeds $19 billion
when indirect expenses are considered)
Accidents at work are caused by a complex combination of unsafe
employee behaviour and unsafe working conditions
-- The number of workplace injuries have declined in recent years,
however, the direct cost of injuries (lost wages, first aid and
medical treatment, rehabilitation, disability compensation) has
not. Additional indirect costs include lost production, recruiting,
selecting, training of new employees, damage to facilities and
equipment
-- Men are about twice as likely as women to have a loss-time injury
-- Younger workers are most likely to be injured
-- Most dangerous industries are fishing, construction,
manufacturing and transportation
-- The back is the most common body part to be injured
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Chapter 12 Ensuring Health and Safety at the Workplace
12-3

Health Hazards
Slide 6










Younger Workers
Slide 7




Federal and Provincial
Safety Regulations
Slide 8





Joint OHS Committee
Slide 9






Federal Laws
Slide 10









Health Hazards
-- Physical agentsexposure to physical elements such as noise,
temperature, lighting, vibrations, and radiation
-- Biological agents/biohazards/chemicalsexposure to such
natural organisms as parasites, bacteria, insects, viruses (e.g.,
SARS, West Nile virus) and chemical compounds or other
harmful toxic substances
-- Ergonomically related injuriescaused by the work
environment, e.g., repetitive strain, stress, over-exertion/fatigue,
back injuries
Younger Workers and Workplace Safety
-- Growing emphasis on the health and safety of young workers
-- 1 in 7 young workers is injured on the job
-- Approximately one-fourth of all workplace injuries involve
employees in the 15-29 age group (electrocution and machine
injuries are the most common types of injuries for this age group)
FEDERAL AND PROVINCIAL SAFETY REGULATIONS
Each province and the federal jurisdiction have detailed legislation
addressing health and safety
Three fundamental employee rights
-- The right to know about hazards in the workplace
-- The right to participate in correcting those hazards
-- The right to refuse dangerous work
Joint Occupational Health and Safety Committee
-- Key element of health and safety laws
-- Broad range of responsibilities, e.g., ensure adequate records are
kept; investigate and resolve employee complaints; monitor health
and safety programs; develop, establish, and promote health and
safety programs and procedures
-- Usually required in every workplace with 20 or more employees
Additional Federal Laws
-- Hazardous Products Act (1985)primary objective was the
protection of consumers by regulating the sale of dangerous
products
-- Workplace Hazardous Materials Information System (1988)
WHMIS now includes Hazardous Products Act. Requires that
suppliers label all hazardous products and provide a Material
Safety Data Sheet (MSDS) on each. Also requires that employers
provide training to enable employees to recognize the WHMIS
hazard symbols and understand the information in the MSDS


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Part 6 Maintaining High Performance
12-4


Responsibility for Health &
Safety
Slide 11



















Implications for HRM
Slide 12
























RESPONSIBILITY FOR HEALTH AND SAFETY
A major purpose of occupational health and safety laws is to prevent
injuries from happening. The responsibility for safety needs to be a
concern for everyone:
1. Top Management
Set the policies and make concern for health and safety part of the
organizations culture and strategy
Public opinion favours holding corporate executives responsible for
avoidable accidents that occur in the workplace
2. Supervisors
Must become proficient in managing safety
-- Knowing about health and safety laws and regulations
-- Trained in observing safety violations
-- Communication skills to convey information to employees
3. Employees
Responsible for working safely
-- Trained in safety rules and how to operate equipment safely
-- Good safety performance should be recognized and rewarded
including the use of group awards
-- Unsatisfactory practices should be documented and corrected

IMPLICATIONS FOR HUMAN RESOURCE MANAGEMENT
Consistent enforcement
-- Human resource professionals should ensure consistent
enforcement of all safety and health rules
Due diligence
-- Organizations are responsible for ensuring that all reasonable
steps were taken to avoid a particular health and safety offence
Health and Safety Audit
-- Has become quite popular, especially with companies who pay
attention to health and safety
Safety Climate
-- Is an important factor affecting safety knowledge and motivation
-- Eight dimensions:
Management commitment to safety
HR management practices
Safety systems
Supervisory support for safety
Internal group processes
Boundary management
Risk
Work pressure
Downsizing and Safety
-- Some evidence that employees during a downsizing believe that
productivity is more important than safety and are less likely to
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Chapter 12 Ensuring Health and Safety at the Workplace
12-5




Workplace Stress
Slide 13









Symptoms of Stress
Slide 14














Major Causes of Workplace
Stress
Slide 15






Major Causes of Workplace
Stress (contd)
Slide 16



Burnout
Slide 17


carry out their jobs safely unless the organization has a positive
safety climate and safety is perceived as important

WORKPLACE STRESS
Workplace stress
-- Harmful physical and emotional responses
Stress management
-- Now part of the regular vocabulary of managers and employees
-- Ways of dealing with the problem of stress
National Health Survey
-- Estimates the financial cost associated with mental health issues
to the Canadian economy at about $30 billion per year
Symptoms of stress that can harm employee performance:
-- Nervousness; chronic worry; easily provoked to anger; unable to
relax; stress-related physical ailments e.g. stomach upsets;
cardiovascular disease, musculosketal disorders, e.g., back
injuries; psychological disorders e.g. depression, workplace
injuries, suicide, cancer, ulcers and impaired immune functions

CAUSES OF STRESS AT WORK
Stressors are conditions that tend to cause stress
-- Exposure to job stressors can directly influence the health and
safety of employees
-- Individual and situational factors can intervene to increase or
reduce the amount of stress experienced e.g. ones outlook or
attitude, having a support network, work and family life balance
Major Causes of Workplace Stress
Factors Unique to the Job
-- Includes workload, work pace/variety/meaningfulness of work,
autonomy, hours of work/shiftwork, physical environment (noise,
air quality, etc,), isolation (physical or emotional)
Role in the Organization
-- Includes role conflict/role ambiguity, level of responsibility
Career Development
-- Includes under- or over-promotion, job security, career
development opportunities, overall job satisfaction
Relationships at Work
-- Includes supervisors/co-workers/subordinates, threat of violence
or harassment
Organizational Climate
-- Participation (or non-participation) in decision-making,
management style, communication patterns
Burnout
-- Condition of mental, emotional, and sometimes physical
exhaustion that results in substantial and prolonged stress
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Part 6 Maintaining High Performance
12-6










Stress Management
Slide 18






HR Actions to Reduce Stress
Slide 19














Fitness & Employee Wellness
Slide 20









Other Contemporary Safety
Issues
Slide 21
-- Human resource departments role is a proactive one to help
employees prevent burnout, e.g., train supervisors to recognize
stress and take action to reduce employee stress, re-design jobs,
provide counselling, etc.
Stress and Job Performance
-- Stress can be either helpful or harmful to job performance,
depending upon the amount of stress experienced

STRESS MANAGEMENT
Curative measures try to correct the outcome of stress, e.g.,
availability of exercise, counselling services
Preventive measures attempt to change the cause of stress e.g.
stress management training sessions, improving working conditions
Stress audit identifies the causes of stress

HUMAN RESOURCE ACTIONS TO REDUCE STRESS
Compatible workloadensure that an employees workload is
compatible with the individuals capabilities and resources
Job designdesign jobs to provide meaningful opportunities for
employees to use their skills
Define rolesclearly define employee roles and responsibilities
Participate in decisionsprovide workers with the opportunity to
participate in decision making
Improve communication process
Work schedulesdevelop appropriate work schedules
Provide trainingtrain managers and employees to be sensitive to
the symptoms of stress
Establish policyestablish a stress management policy

FITNESS AND EMPLOYEE WELLNESS PROGRAMS
Fitness, wellness and lifestyle programs, have been shown to have a
positive impact on reducing stress and absenteeism and increasing
productivity. These programs:
Improve employee health
Decrease health-care costs
Improve employee satisfaction
Decrease absenteeism and turnover
Improve corporate image

OTHER COMPTEMPORARY SAFETY ISSUES
Workplace Security
-- Reassessment of security policies to make workplaces safe,
disaster preparations, increased screening of new hires
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Chapter 12 Ensuring Health and Safety at the Workplace
12-7
Sick Building Syndrome (SBS)
-- Growing number of employees report becoming sick while
working in a particular building e.g. headaches, allergic reactions
-- May be caused by pollutants, e.g., mould; solvents, cleaners, etc.
Workplace Violence
-- Violence is the third-highest cause of all workplace deaths and the
leading cause of workplace death for women (U.S.)
-- Some employers are developing extensive programs to address
safety concerns and workplace violence
Ergonomics
-- Also known as human factors engineeringfocuses on the
interaction between employees and their working environment
-- Most rapidly growing category of workplace illnesses involves
ergonomic disorders, e.g., repetitive-strain injuries
AIDS
-- HIV and AIDS have a potentially immense impact on HR
-- Requires policy, training, education, counselling and support
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Part 6 Maintaining High Performance
12-8

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS


1. Explain the legal term "assumption of risk."

At the turn of the century the courts used this term to
mean that a worker had to accept all the risks associated
with an occupation he or she accepted.

2. What factors affect occupational accidents?

By and large, work accidents are caused by a complex
combination of unsafe employee behaviour and unsafe
working conditions. Some of the key dimensions are
inadequate monitoring or disclosure of health hazards,
employers covering up accidents, ignorance by medical
professionals, personal habits like smoking, costs of
safety procedures, and carelessness by employees.

3. What responsibilities do Joint Occupational
Health and Safety Committees have?

To deal with health and safety complaints by
employees, to identify hazards and to regularly monitor
workplaces for hazards, to monitor records of injuries
and illnesses, to participate in investigations of health-
and safety-related injuries, to develop, establish, and
promote health and safety programs and procedures,
and to obtain information from the employer and
government agencies concerning existing or potential
hazards in the workplace.

4. Explain the requirements of the Workplace
Hazardous Material Information System (WHMIS):

It requires that suppliers label all hazardous products
and provide a Material Safety Data Sheet (MSDS) on
each one. It also requires that all employers provide
training to enable employees to recognize the WHMIS
hazard symbols and understand the information on the
MSDSs.



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Chapter 12 Ensuring Health and Safety at the Workplace
12-9

ANSWERS TO CRITICAL THINKING QUESTIONS


1. Develop a strategy and identify the
implementation steps you would follow to lower the
incident rate of workplace accidents in your
organization.

See the discussion on pp. 435-440.

2. Think about a time when you felt under
considerable stress. What were the causes of that
stress? What efforts (by you and/or others) were or
could have been taken to reduce the stress?

Students will discuss personal experiences with stress.
Causes of stress are listed in Figure 12-5, p. 443. The
focus of the discussion should be on the attempt to cope
with the stressful situation (see pp. 445-446).

3. What can be done to prepare an organization for
an AIDS case?

It is essential that an employer develop and adopt an
organizational policy on how to cope with such a case
and that educates supervisors and employees about the
nature of AIDS. See discussion on p. 452.

4. Consider an organization that you have worked
in. Critically review its safety procedures and
training. Evaluate the organization in terms of the
presence of physical, biological, and chemical
hazards. Also be sure to address issues relating to
ergonomics.

Students will discuss personal experiences. Ideally, they
will list the procedures and critique them, as well as list
the different types of hazards. They may need some
assistance in discussing the ergonomic aspect of a job,
e.g, height of chairs, tables, counters, desks,
accessibility of shelves, drawers, switches, faucets,
lighting, job design, etc. See discussion on p. 451
related to ergonomics.



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Part 6 Maintaining High Performance
12-10


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary.
































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Chapter 12 Ensuring Health and Safety at the Workplace
12-11


INCIDENT 12.1: SAFETY AT CANADA
CHEMICALS LTD.

Incident Comments

This incident is useful for illustrating the conflict that often arises between operating managers and safety managers. Line
managers often see safety as a barrier to higher production, and sometimes concern for safety is viewed as the concern
only of those who are easily scared. Often, this problem comes to some crisis and top management is forced to mediate.

1. If you were the general manager, what would you do to gain greater cooperation for safety from:
(a) Gar, and
(b) the workers under him?

Some companies make line managers responsible for safety by evaluating those managers for raises and promotions, in
part, on their support of safety rules and procedures. Some employers go even further and require complete weekly or
monthly safety slogan contests that pay the winning employee a nominal amount. Participation through safety meetings,
slogan contests, and rewards for good group safety can reduce problems.

2. Should Sam be given authority to discipline those who violate safety rules?

Many companies are reluctant to give safety managers the authority to discipline workers because executives think safety
managers may deprive operating managers of the authority to discipline. However, without a strong safety program at
Canada Chemicals Limited, employees may not take the company's commitment to safety very seriously. If the safety
director also has the authority to discipline workers, employees will feel there is a concern for safety. One or two
disciplinary situations (for example, a day off without pay for an employee who was not using proper safety equipment),
probably would cause other employees to realize the seriousness of the firm's approach to safety.













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Part 6 Maintaining High Performance
12-12


CASE STUDY: MAPLE LEAF SHOES LTD.,
SAFETY AT THE WORKPLACE
The First Issue

1. Does Maple Leaf Shoes have just cause to dismiss
Sam? Catherine?
2. What should Jon do in this case?
3. Develop a policy on AIDS and describe how you
would administer this new policy.

Additional information on issues relating to just cause
and termination are provided in other chapters (see, in
particular, Chapter 4 (Meeting Legal Requirements) and
Chapter 11 (Managing Employee Relations).

With regard to the right to terminate Sam, the fact that
Sam had been infected with the AIDS virus is not
grounds for termination. In cases involving the
preparation of food, some organizations have sought to
transfer an employee with the AIDS virus to another job
in the organization. While the Chapter and Appendix
material provides considerable information on how the
AIDS virus is transmitted, students frequently bring up
the point that they would be unwilling to eat food
prepared by someone with AIDS.

Concerning the right to dismiss Catherine, the key
issues involve fear of contracting AIDS and
insubordination. Fundamental points for discussion
include the development of a policy on AIDS, the need
for and importance of education, and the importance of
confidentiality. A review of some of the concepts
relating to employee discipline (discussed in Chapter
11) is also very helpful.

The Second Issue

1. Does Maple Leaf Shoes have just cause to
terminate Alex?
2. In discharge cases, the grievance procedure at
Maple Leaf Shoes goes directly to step three (a
meeting between senior union and management
representatives). The management side is looking to
Jon for advice on how to proceed. Help Jon
formulate an appropriate strategy.

Although substance abuse is a very important issue,
many organizations do not have a clear policy on how
to deal with the issue.
In considering whether Maple Leaf Shoes has just cause
to terminate Alex, some of the key factors include:

* Alex's previous record (related and unrelated offences
-- students will often link the three-day suspension for
drinking with the current issue).

Alex's role as a single mother an interesting
topic for discussion frequently revolves around
whether the company should take into account
personal factors when disciplining an employee.
company concern with substance abuse problems
although limited to the warehouse, Alex and her
co-workers in the secretarial area were warned that
drug use would not be tolerated (but was this
warning clear enough and sufficiently reinforced?).
although Alex admitted smoking the marijuana
cigarette on company property, she was off-duty.
An interesting discussion often focuses on the
duties of an employee outside of work hours and
the right of organizations to restrict or control
employee behaviour outside of work hours.
the safety issue the organization was
legitimately concerned about safety in the
workplace, but Alex may argue that her actions did
not impair the safety of herself or her co-workers.
the need for a policy on substance abuse.
the desire to rehabilitate an employee depending
on the circumstances, substance abuse may be
considered an illness, and there is a tendency to
give employees a "second chance" (usually in
combination with enrollment in an Employee
Assistance Program).

In cases such as this one, an arbitrator is likely to
impose some type of penalty (suspension) and require
the employee enroll in an EAP program.

One useful technique is to have the students decide the
Alex Dixon case on their own and then compare
answers. As well, the case can also be used as a mini-
negotiation exercise in which students are divided into
teams (union and management) and required to try and
settle the grievance without going to arbitration.

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Chapter 12 Ensuring Health and Safety at the Workplace
12-13

CASE STUDY: STRESSFUL TIMES AT A CPIB
BRANCH

Answers to Discussion Questions


First Issue

1. The day of the meeting between Roselynn and
Marsha had arrived. Was arranging such a meeting
a good idea?

Having a meeting is a good idea provided that Marsha
has investigated the specific circumstances which led to
this incident. Marsha also should develop an action plan
to help Roselynn cope with the situation.

2. What should Marsha try to achieve during the
meeting? Were there any steps that could have been
taken to prevent this incident from occurring?

During the meeting, Marsha should help Roselynn
develop a plan to help her cope with the situation. She
could adopt the awareness attitude action (AAA)
method to stress reduction, which focuses on
developing awareness of stress related problems,
adjusting attitudes (accepting for your reactions and
developing a positive outlook), and taking actions.

A way to have prevented the incident was to approach
Mr. Romanowski after the first incident and request that
he not berate Roselynn. Another preventative step was
to have the teller manager talk to Mr. Romanowski after
he refused to go to Roselynns work station.

Second Issue

1. Develop a safety training program for bank
employees. What are the basic components of the
program? What requirements would you build into
such a program?

The safety program should focus on steps employees
can take to prevent or minimize the risks of future
robberies. Training should also focus on ways to cope
with future traumatic events through the AAA method.
The methods of training can include a combination of
lectures, cases, and role-playing exercises.

The training program should be given to all bank
employees. The employees should have access to
information about various curative and preventive
measures, such as EAPs available at CPIB. Moreover,
all employees who experienced future traumatic events
should be given follow-up debriefing and counselling to
help them cope.

2. As a result of the robbery, a number of employees
and customers may feel traumatized. What should
the bank do in such a situation? Be sure to consider
both short- and long-term suggestions.

The short-term plan is to have counselling services
available to customers and employees. The long-term
plan is to re-design the layout of the branch so as to
discourage future robberies. This should be done with
input from all employees. A stress audit should be
conducted to see if the robbery had any lingering long
term psychological and physiological effects on
employees. If it has, then CPIB may need to enhance
their EAP to help them cope. This may also include
training CPIB managers to be sensitive to the symptoms
of stress. A stress management policy should be in place
at CPIB if one does not exist.


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Chapter 13 The Union-Management Framework
13-1
THE UNION-MANAGEMENT
FRAMEWORK
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Describe the structure of Canadian unions.
Discuss the major reasons why workers join unions.
Explain how a union organizing campaign is carried out.
Summarize the core legal principles relating to collective bargaining.
Outline the key steps in negotiating a union contract.
List common techniques to resolve disputes.
Describe how unions affect the human resource management environment.
Suggest ways to build union-management cooperation.


POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
13

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Part 6 Maintaining High Performance
13-2

LECTURE OUTLINE (with PowerPoint

slides)

The Union-Management
Framework
Slide 1

Union Defined
Slide 2

Collective Agreement
Slide 3





Why do Employees Join
Unions?
Slide 4















Attitudes Toward Unions
Slide 5







THE UNION-MANAGEMENT FRAMEWORK
A union is an organization with the legal authority to represent
workers, negotiate the terms and conditions of employment with the
employer, and administer the collective agreement
Unions do not just happen. They are frequently caused by
management action or inaction that workers perceive as unfair
Collective agreement is a contract negotiated between the union
and employer, outlining terms and conditions of employment
-- Addresses a variety of issues such as wages and benefits, hours of
work, working conditions, grievance procedures, etc.
-- Places restrictions on managements rights in managing the
workplace
CAUSES OF UNIONS
Reasons for joining include:
-- Job dissatisfaction
-- Individual attitudes toward unions in general
-- Perceived union instrumentality (beliefs about what unions can do
for an employee)
Reasons for not joining include:
-- Employees who want to become managers may believe union
membership damages their chances for promotion
-- View unions as another boss that leads to extra costs, such as
union dues or lost wages from strikes
-- Negative opinions toward unions and collective action based on
past experiences or stories of union wrongdoing
-- Employer policies and supervisory treatment may be fair, and
employees lack the motivation to join a union

CANADIANS VIEWS TOWARD UNIONS
Nanos Research survey conducted with Canadian participants:
-- Approximately 77% of unionized employees perceived that the
presence of a union was important for receiving fair treatment
from their employer
-- Only 1/5 of non-union employees reported that they were
interested in being unionized




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Chapter 13 The Union-Management Framework
13-3
Union Goals and
Philosophy
Slide 6











Union Structure and
Function
Slide 7























Trends in Union
Membership
Slide 8





LABOUR UNIONS: GOALS AND STRUCTURE
Business Unionism
-- The practice of unions seeking to improve the wages, hours, and
working conditions in a businesslike manner
-- Recognizes that a union can survive only if it delivers a needed
service to its members
Social (Reform) Unionism
-- Characteristic of unions seeking to further members interests by
influencing the social, economic, and legal policies of
governments
-- Involves speaking out for and against government programs at all
levelsmunicipal, provincial, and federal
UNION STRUCTURE AND FUNCTION
Local Unions
-- The most important part of the union structure for most union
members and industrial relations practitioners
-- Provides the members, the revenue, and the power of the entire
union movement
Craft Unions
-- Composed of workers who possess the same skills or trade, e.g.,
carpenters who work in the same geographic area
Industrial Unions
-- Include the unskilled and semiskilled workers at a particular
location
National and International Unions
-- Many unions are also part of a larger unionwhich may be a
national union, e.g., Canadian Union of Public Employees; or an
international union, e.g., United Steelworkers of America
-- Exist to organize and help local unions; pursue social objectives;
assist local union with negotiations and grievance handling; and
provide expert advice
-- Approximately 26% of union members belong to an international
uniondown from approximately 66% in 1960 (secession)
Canadian Labour Congress (CLC)
-- Largest labour federation with a total membership of more than 3
million employees
TRENDS IN UNION MEMBERSHIP
Union Growth and Decline
-- In 2011, about 29.7% of the non-agricultural paid workforce (4.3
million workers) belong to unions
-- The number of women members in Canadian unions has been
increasingly rapidly (now more than 50% of union members are
female)
-- Unions are placing greater emphasis on organizing service
employees
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Part 6 Maintaining High Performance
13-4










Impact of Union Representation
Slide 9












Canadian Labour Legislation
Slide 10


















Labour Relations Boards
Slide 11




-- Newfoundland has the highest rate (37%) of unionization; Alberta
(23%) has the lowest union density
-- Part-time workers are less likely to be unionized (23%) than full-
time workers (31%)
-- Larger workplaces are more likely to be unionized54% in firms
with more than 500 employees; 13% in firms with less than 20
employees
-- International trendsa number of countries have experienced a
decline in union density
THE IMPACT OF UNION REPRESENTATION
Strikes
-- Although the public frequently associates unions with strikes,
most collective agreements are settled without a strike or lockout
Wages and Benefits
-- Wages tend to be higher for full-time unionized employees and
the difference in wages is even more pronounced for part-time
employees
-- Unionized employees usually have more comprehensive benefits
Unions and Productivity
-- The relationship between unionization and productivity is subject
to debate and has not been universally agreed upon
THE LEGAL ENVIRONMENT
Federal jurisdiction over labour relations is limited to Federal
government agencies and organizations involved in interprovincial
trade and commerce (e.g., banks, airlines, railways, federal
government agencies). All other organizations fall under provincial
jurisdiction. The common core of Canadian Labour Legislation
includes:
Right to join a union
-- Employees have the right to join a trade union of their choice and
participate in the unions activities
Good faith bargaining
-- In attempting to negotiate a collective agreement, both labour and
management have a duty to bargain in good faith
No strikes or lockouts during the life of the collective agreement
-- It is illegal for a union to strike or an employer to lock out
employees during the life of the contract
Prohibition of unfair labour practices
-- All jurisdictions have legislation prohibiting unfair labour
practices by employers and unions
Conciliation before strike or lockout (in most provinces)
Labour Relations Boards
-- Boards set up in the federal and provincial jurisdictions to
administer labour relations legislation
-- Investigate violation of the law and have the power to investigate
and make decisions, e.g., enforce unfair labour practice
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Chapter 13 The Union-Management Framework
13-5


Influences on Unionization
Slide 12











Unfair Labour Practices
Slide 13






















3 Phases of Collective
Bargaining
Slide 14








allegations

FACTORS THAT MAY LEAD TO UNIONIZATION
Prior to union organizing campaigns, there are often signs of
employee interest in unionization
-- Turnover and absenteeism rates are higher than
industry/community norms; employee satisfaction surveys show
that employees are dissatisfied; pay and benefits are below
average; procedures for resolving employee complaints are
ineffective
UNFAIR LABOUR PRACTICES
Unfair Labour Practices by Management
-- Interfering in the formation of a union or contributing to it
financially
-- Discriminating against an employee because the individual is or is
not a member of a trade union or because that individual chooses
to exercise rights granted by labour relations statutes
-- Intimidating or coercing an employee to become or not become a
member of a union
Unfair Labour Practices by Unions
-- Seeking to compel an employer to bargain collectively with the
union if the union is not the certified bargaining agent
-- Attempting, at the workplace and during working hours, to
persuade an employee to become or not become a union member
-- Engaging in, encouraging, or threatening illegal strikes
-- Failing to represent employees fairly
Obtaining Bargaining Rights
-- Legal recognition may be obtained in 3 ways:
Voluntary recognition
Regular certification
Prehearing votes

NEGOTIATING A COLLECTIVE AGREEMENT
Once a union is certified, the union and management are required to
bargain in good faith to negotiate a collective agreement. The
collective bargaining process has three overlapping phases:
Phase 1Preparation for Negotiations
-- Often the most critical stage
-- Detailed preparations are required to achieve objectives
Phase 2Negotiating with the Union
-- Face-to-face bargaining
-- Covers a variety of issues relating to terms and conditions of
employment
Phase 3Approving the Proposed Agreement
-- Bargaining stage of negotiations is completed when the agreement
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Part 6 Maintaining High Performance
13-6




Mutual Gains Bargaining
Slide 15








Conciliation & Mediation
Slide 16













Administering the Agreement
Slide 17









Contract Provisions
Slide 18








has been approvednegotiations are not complete until both
parties (union and management) approve the proposed agreement

MUTUAL GAINS BARGAINING
Moves away from traditional adversarial approach to negotiating a
collective agreement
Win-win approach in which both parties engage in joint problem-
solving activities
Process is usually preceded by training in conflict resolution for
both employer and union representatives
Requires both labour and management to have commitment, trust,
respect, and a long-term focus
CONCILIATION AND MEDIATION
In the event that negotiations between labour and management
breakdown all jurisdictions provide for conciliation and mediation
Conciliation
-- A government-appointed third party attempts to bring together the
parties to reconcile their differences
-- Appointed at the request of either one or both parties or at the
discretion of the minister of labour (federal or provincial)
-- Strike or lockout can typically commence after the conciliator has
filed his or her report and a cooling off period (often two weeks)
has passed
Mediation
-- Process whereby disputing parties choose voluntarily to reconcile
their differences through a third party
ADMINISTERING THE COLLECTIVE AGREEMENT
Grievance procedures
-- Grievance is a complaint by an employee or employer that
alleges that some aspect of a collective agreement has been
violated
-- Grievance procedures--most collective agreements include
formal multi-step procedures to resolve grievances, e.g.,
preliminary discussion, complaint is put in writing, etc.
-- Arbitration is used to resolve a grievance when an acceptable
solution cannot be reached. Process may be costly, highly
legalistic and is final i.e. usually cannot be changed or revised
Contract Provisions
-- Union shopa union security provision in which employers may
hire anyone they want, but all workers must join the union within
a specified period
-- Dues check-off / Rand Formula is a common provision in
collective agreements and requires an employer to deduct union
dues at source from the wages of an employee and remit the
funds to the union
-- Senioritylength of the workers employment, which may be
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Chapter 13 The Union-Management Framework
13-7






HRM & Bargaining Unit
Employees
Slide 19





Implications of Union Avoidance
Slide 20












Features of Union Substitution
Slide 21














Managing in a Union
Environment
Slide 22



used for determining order of promotion, layoffs, vacation, etc.
-- Disciplinethe requirement that the employer must have just
cause to discipline or discharge an employee is a common
provision in many collective agreements

HRM AND BARGAINING UNIT EMPLOYEES
More than 95% have a policy addressing sexual harassment
86% have an orientation program for new hires
86% have an employee assistance plan (EAP)
66% have a formal performance appraisal system
Unions have generally stayed away from contingency compensation
plans, i.e., profit-sharing, employee stock ownership plans, etc.
IMPLICATIONS OF UNION AVOIDANCE APPROACHES
In non-union facilities, an implicit objective of many employers is to
remain non-union:
Union Suppression
-- Involves fighting union representation
-- An employer may try to intimidate workers, threaten closing or
moving the plant or facility, or discriminate against union
supporters
Union Substitution
-- Examines what unions bring to the employment relationship and
tries to introduce these features into the non-union workplace
-- Advocated by many HR practitioners, consultants, and labour
lawyers
Features of Union Substitution
-- Design satisfying jobs i.e. personally satisfying to employees
-- Maximize opportunitiesdevelop plans that maximize
individual opportunities while minimizing possibility of layoffs
-- Select qualified workers
-- Establish fair standards of individual performance
-- Train workers and managers to enable them to achieve
expected levels of performance
-- Evaluate based on performance
-- Employee voice i.e. provide employees with a voice in the
workplace
-- Pay and benefits are parallel to those available in the union
sector

MANAGING IN A UNION ENVIRONMENT
When unions are present, the human resource function is changed
Human resource department may be expanded to add labour
relations specialists to deal with negotiations and contract
administration
Greater centralization of employee record-keeping and discipline to
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Part 6 Maintaining High Performance
13-8






Labour-Management
Cooperation
Slide 23
ensure uniformitymanagers authority diminishes and
responsibility increases
Management has less freedom to make unilateral changes, i.e., can
no longer simply decide what changes to implement

LABOUR-MANAGEMENT COOPERATION
There is increasing acceptance that labour and management must
cooperate and work together in order to survive and prosper in the
highly competitive global economy
There is growing evidence that organizational performance is
enhanced when labour and management cooperate
Cooperative Methods Include:
-- Prior consultation with union leaders to defuse problems before
they become formal grievances
-- Sincere concern for employee problems and welfare even when
management is not obligated to do so by the collective agreement
-- Training programs that objectively communicate the intent of
union and management and reduce biases and misunderstandings
-- Joint study committees that allow management and union
officials to find solutions to common problems
-- Third parties who can provide guidance and programs that bring
union leaders and managers closer together to pursue common
objectives
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Chapter 13 The Union-Management Framework
13-9

ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS


1. In your own words, summarize the primary
objectives of unions.

Unions seek to get more for their members more
money, benefits, rights, protection, and fair treatment.
They do this through negotiations with management
(business unionism goals) and through influencing
governments at various levels (social unionism goals).

2. What distinguishes craft and industrial unions
from each other?

Craft unions seek to organize all workers in a
geographical area who have common skills or trades.
Industrial unions seek to organize all the non-
management production workers that have the same
employer or work location.

3. What role does a federal or provincial Labour
Relations Board serve in labour-management
relations?

An LRB has two main functions: (1) It polices union
and management labour practices that are in violation of
the act; (2) It conducts employee representation
elections to determine employee wishes with regard to
their desire to join or remain in a union.

4. In preparing to negotiate a contract with a union,
what types of information would you gather before
arriving at the bargaining table?

Information is needed about the environment, the
economy, the inflation rate, rival union gains, and the
past demands and expectations of the union.
Information can be gathered from within the
organization about what rights management needs to
retain in order to operate the organization successfully.
Knowledge of the union's status with respect to a strike
also is useful.








5. If you were asked to explain why various types of
people are on the employers bargaining team, what
reasons would you give for each?
(a) the company lawyer
(b) the director of industrial relations
(c) a wage and salary specialist
(d) a benefit specialist
(e) the assistant plant manager

The lawyer is needed because the labour agreement is a
legal document, a contract that binds the company and
union to future actions. The lawyer helps assure that the
contract is proper and enforceable. The director of
industrial relations is usually present because that
person may be the chief spokesperson for the employer
and may be the only person at the table who has the
authority to make binding decisions. A wage and salary
specialist may be included to provide expertise on the
firm's wages and salaries to help evaluate union
proposals. Likewise, the benefit specialist helps
evaluate the impact of changes in benefits. The assistant
plant manager provides valuable information about how
changes may affect the ability to manage the operations
effectively.

6. Since grievance procedures are found in most
contracts, both managers and unions must want
them. Explain why both managers and unions want
grievance procedures.

Unions and management seek grievance procedures
because these methods are fast and economical ways to
settle disputes that arise during the life of the contract.
Otherwise, strikes, lockouts, court suits, work
slowdowns, and other more costly and disruptive
methods might be used to resolve disputes.

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Part 6 Maintaining High Performance
13-10

ANSWERS TO CRITICAL THINKING QUESTIONS


1. "Unions do not happen, they are caused by
management." Do you agree or disagree with this
statement? Why?

Agree. Management is responsible for the work
environment and with worker satisfaction within that
environment. If dissatisfaction exists, management may
have failed to perform correctly. Or, more
sympathetically, competitive and economic forces may
preclude management from providing the type of
treatment workers seek.

2. If you have to advise the manager of a small chain
of bakeries how to prepare for a possible strike,
what would you suggest?

First, the manager should assess how likely a strike is.
The manager must then decide if the bakeries are going
to close or operate during the strike. Based on that
decision, the manager must develop plans accordingly.
If the decision is made to close, vendors and customers,
especially wholesale customers, should be advised and
alternative sources of supply identified. If the plant is to
operate, baking, counter, and delivery schedules must
be developed for management and human resources to
fill in for the striking workers.

3. Suppose an employee in your department is an
active member of the union but is performing
improperly. After several sessions with the
employee, performance is still unacceptable. What
type of support would you want to gather before you
terminate that employee? What legal complications
might result from your action?

The necessary support includes detailed documentation
of poor performance, records of previous counselling
sessions where you attempted to guide the employee
toward the desired behaviour, and any advice you could
get from the labour relations department. You also want
to make sure your actions are in accordance with the
collective agreement.

The employee might claim to a federal or provincial
Labour Relations Board that your actions discriminate
and interfere with collective action.



4. If you work in the human resource department of
a small company that is suddenly unionized, what
changes would you expect to occur in the human
resource department?

A labour relations section may be added to the
department to coordinate relations between the
employer and the union. Record keeping may become
more detailed, and responsibility for discipline and
other employee-related actions may be centralized in
the human resource department to ensure uniformity.

5. What role do you think the federal and provincial
governments will play in future labour-management
relations? What actions can unions and management
take to reduce the probability of future government
involvement?

The future role of the government is likely to be more
of the same. The government-union-management
framework has remained very stable for nearly a half a
century. Radical changes are unlikely, although more
legislation and agency decisions may further define the
roles of labour and management. Agency decisions are
likely to continue. New legislation is likely if and when
severe abuses of power by either side are recognized.

6. Obtain copies of two different collective
agreements. Compare and contrast the contract
items and the grievance procedure.

Answers will vary.


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Chapter 13 The Union-Management Framework
13-11


ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the required
information. Answers will vary.
































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Part 6 Maintaining High Performance
13-12


INCIDENT 13.1: A ROUTINE DISCHARGE AT ITC

Incident Comments

This incident helps illustrate for students how an otherwise simple discharge for what appears to be reasonable cause can
create serious resentment among employees and even lead to a unionization attempt. It also underscores the problems that
can arise when employees sense that a supervisor discriminates against an employee (Pete Ross) in ways that are seen by
other employees as unfair. Finally, the case shows how even simple questions by a supervisor or manager can lead to
unfair labour practice charges.

1. What unfair labour practices may have occurred?

Although many employees may feel that Pete's discharge is illegal, employers can legally discharge workers who violate
company rules about drinking. The questioning of John Briggs about his union-related activities is considered an unfair
labour practice violation (interference). His discharge, if caused by his union activity, is also an unfair labour practice
violation (discrimination for union activity).

2. Should management offer reinstatement to Pete Ross or John Briggs? Why?

Reinstatement of Pete Ross may reduce some of the bitterness that led to the union drive. However, to do so would imply
management's permission to drink on the job and would tell employees that management made an error in firing Pete,
which probably was not the case. Reinstatement of John, however, is different. John was discharged illegally because of
his union activity. To reinstate him now might avoid future unfair labour practices.

3. Was John correct when he answered "That is none of your business" to the questions about the authorization
cards?

Yes. Workers have a right to discuss unionization and seek signatures on authorization cards as long as they are not doing
it when they are supposed to be working.











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Chapter 13 The Union-Management Framework
13-13


CASE STUDY: ABSENTEEISM AT MAPLE LEAF
SHOES

Feltham Grievance Case:


Instructors can use the Feltham grievance case as a case
for discussion or as a bargaining exercise (first
objective of the case).

If using as a bargaining exercise (negotiation of a
grievance), students should be placed on either a
management or union team. While the size of the teams
can vary, a team of about 3 or 4 (maximum of 6) tends
to work quite well.

As a short in-class exercise, it is necessary to give each
team some time to prepare their strategy for bargaining
and determine their roles in the exercise. At the end of
the negotiation process, each pairing (union and
management) report on the agreement they reached or
that they were unable to resolve the issue.

If a more formal approach to the case is desired, it is
possible to have a pre-negotiation and / or post-
negotiation report as part of the exercise.

Developing an Absenteeism Policy:

One approach to developing an absenteeism policy is to
have the students develop the policy from a
management perspective. However, if there is an
interest in exposing the students to labour-management
cooperation, it is possible to place students on teams
(management and union) and work together to develop
a policy.

If management introduces the policy without union
input, there is often little buy-in from the unionized
employees. In addition, issues that may be very
important to workers may be overlooked by the
management side.

In some instances, there is a focus on punitive measures
(win / lose or power approach). Other times, the parties
work together using a problem-solving approach to
address the issue of absenteeism (win / win approach).



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Part 6 Maintaining High Performance
13-14

CASE STUDY: LABOUR-MANAGEMENT
RELATIONS: CPIB AND THE MAPLE LEAF
TRUST ACQUISITION

Answers to Discussion Questions


1. Assume that you are one of the two senior HRM
employees assigned to examining labour relations at
the credit card center. Review the above material
for Mary Keddy and briefly summarize your major
findings.

The information shows that the majority of grievances
reach the second level supervisor stage. Most of the
grievances concern the issues of lateness or
absenteeism, overtime allocation, and job scheduling.

On average, the union response to performance is lower
than that of management, particularly in the areas of
employee morale and job satisfaction. Further, the
union is lower than management in perceived labour
climate, especially in whether grievances are settled
promptly, fair working conditions, union management
co-operation, and sharing of information.

2. What specific recommendations would you give
Mary? Are there any programs or initiatives that
you would suggest?

Given that absenteeism and scheduling are the major
areas of concern, a joint union-management committee
should be formed to help develop policies on how to
handle tardiness, absenteeism, and unfair work
scheduling. Such a committee would facilitate greater
sharing of information and co-operative problem
solving between the two parties. This in turn, may help
to improve morale among the union members. A
procedure should be in place to handle all grievances
that would be supervised by the joint committee. (Other
responses are possible).


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Chapter 14 Global Human Resource Management
14-1
14 GLOBAL HUMAN RESOURCE
MANAGEMENT
CHAPTER OBJECTIVES


After studying this chapter, you should be able to:
Differentiate between the terms International HRM and Global HRM
Describe the evolution of a firms operations and the impact on HRM
Identify the external and internal contextual factors which influence global HRM
Explain the differences between a firms domestic and global HRM policies and practices.
Describe the staffing challenges facing multinational organizations and the staffing options available.
Outline the elements which constitute a successful expatriate experience.
Discuss the changing role of corporate HR in a global organization and emerging HR competencies.
POWERPOINT SLIDES
Canadian Human Resource Management includes a complete set of Microsoft PowerPoint

files for each chapter.


(Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the
lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you dont want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.)
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Part 7 Human Resource Management in a Global Context
14-2

LECTURE OUTLINE (with PowerPoint

slides)

Global Human Resource
Management
Slide 1

Human Resources in a
Multinational Enterprise
Slide 2



Corporate Evolution
Slide 3





External Contextual
Factors
Slide 4













Internal Contextual
Factors
Slide 5

HR IN A MULTINATIONAL ENTERPRISE
Business Ecosystem
--Series of intercompany relationships
International HR Management (IHRM)
--Worldwide management of talent
Global HR Management (GHRM)
--Broader concept, focusing on organizational capabilities,
including staffing, efficiency, information exchange, and
knowledge transfer
Four Stages of Corporate Evolution
--Domestic firms: focuses on domestic markets, operates locally
--International firms: exports become part of the companys
objective; 3 staffing categories: parent country nationals (PCN),
host country nationals (HCN), and third country nationals (TCN)
--Global and Transnational Firms: have no borders and headquarters
can be anywhere

CONTEXTUAL FACTORS
There are four External Contextual Factors:
1. Country culture:
Dimensions: Assertiveness
Gender differentiation
Uncertainty avoidance
Power distance
In-group collectivism
Performance orientation
Humane orientation
Institutional collectivism
Future orientation
Communication and language
2. Labour economy
3. Labour legislation
4. Immigration Policies

Internal Contextual Factors
1. Commitment to Corporate Social Responsibility
2. Staffing Preferences
Ethnocentrism
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Chapter 14 Global Human Resource Management
14-3




HR Planning and Staffing
Slide 6










Key Elements
Slide 7







Orientation, Training &
Development
Slide 8

Polycentrism
Geocentrism
Regiocentrism

HR PLANNING & STAFFING IN A GLOBAL CONTEXT
Staffing Mix
Host Country National-Local Presence
Parent Country NationalsIntegrating Global Standards
Third Country Nationals

Current Trends in Staffing Global Organizations The Assignment
International commuter
Frequent flier
Flexpatriate
Expatriate
Inpatriate

KEY ELEMENTS OF A SUCCESSFUL EXPATRIATE EXPERIENCE
Travel and Relocation
-- IHRM Policies
-- Travel
-- Relocation Policies
Administrative Processing
Candidate Selection Criteria (see Figure 14-7, p.514)
Repatriation
-- Reverse culture shock

ORIENTATION, TRAINING, AND DEVELOPMENT
Cross-cultural Training
Methods
Slide 9





Performance Appraisal
Slide 10



Orientation: The Importance of Pre-departure Training
Cross-cultural Training Methods
-- Culture Assimilators
-- Critical Incidents
-- Cases
-- Role Play
-- Simulation

PERFORMANCE APPRAISAL (See Figure 14-9, p.518)
Home-country evaluation
Host-country evaluation

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Part 7 Human Resource Management in a Global Context
14-4
Global Compensation
Slide 11






Changing Role
Slide 12
GLOBAL COMPENSATION
Develop an overseas compensation and benefit plan
Taking into account cost of living differences
Considering any special needs
Giving tax advice and financial counselling
Supervise extensive paperwork

THE CHANGING ROLE OF HR IN GLOBAL ORGANIZATIONS
Foster a Global Mindset
Managing the Talent Pipeline
Think Globally, Act Locally
-- Develop and implement formal systems to improve worldwide
communication
-- Implement and effectively utilize an enterprise wide HRIS system
-- Implement recruitment and staffing strategies to attract the best
talent worldwide
-- Develop policies that effectively balance equity across the global
enterprise

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Chapter 14 Global Human Resource Management
14-5


ANSWERS TO REVIEW AND DISCUSSION
QUESTIONS


1. What are the four categories sued to describe the
evolution of an MNE firm?

1. Domestic firms: Focus is on the domestic market,
operates locally.
2.International firms: Operates internationally and often
form international divisions.
3. Multinational firms: Branches in many countries,
operating independently and the focus is on economics
of scale.
4. Global or Transnational firms: Has no border and
headquarter can be anywhere, is internationally staffed,
focuses on economics of scale, and its emphasis is on
flexibility and mass customization.

See Figure 14-1, p.502, for more details.

2. What are the four external contextual factors that
influence IHRM practices?

1. Country culture: It is important for HR staff to
understand culturally diverse work ethics, norms,
values, and business protocols. It is also useful to be
aware of cultural dimensions like assertiveness, gender
differentiation, uncertainty avoidance, power distance,
in-group collectivism, performance orientation, human
orientation, institutional collectivism, and future
orientation. Furthermore, communication styles and
body language differ significantly across cultures.
2. Labour economy: For MNE, operating in other
countries means to have to cope with skill shortages in
developing countries, labour costs, and labour
participation rate implications.
3. Labour legislation: Each country has its own rules
regarding employment standards like hours of work,
rest periods, vacation, and termination provisions.
4. Immigration policies: HR staff has to be aware of
immigration regulations when sending staff abroad.

See p.505 for more details.

3. What are the two internal contextual factors that
HR professionals must consider?

1. Commitment to corporate social responsibility:
Proactive programs, showing commitment to economic,
social, and environmental issues influencing its
operations.
2. Staffing preferences: Ethnocentrism, polycentrism,
geocentrism, and regiocentrism.

4. Mangers have a specific orientation with respect
to staffing its subsidiaries. What are the
preferences?

Ethnocentrism (home country staff), polycentrism (host
country staff under tight home country control),
geocentrism (best person can be found anywhere),
and regiocentrism (regional staff).

See p.509 for more details.

5. There are advantages and disadvantages to
consider when employing a HCN, PCN, and/or a
TCN,. What are the reasons why a manager would
choose one option vs. another?

1. Host Country National: Knows local culture and
policies.
2. Parent Country National: Is familiar with local
culture, but also with parent organization culture.
3. Third Country National: Is neither a citizen of the
country where the headquarter is located nor a citizen
of the foreign subsidiary country. They tend to have
better language and cross-cultural skills than
headquarter expatriates.

See p.510 and on for more details.

6. A successful expatriate experience requires that
the organization considers several elements. What
are these elements?

Travel and Relocation
1. Travel: Policies have to be in place to specify rules
for travel, e.g., business class or economy section,
travel allowances, and how often home visits are
allowed.
2.Relocation: Is a stressful and expensive affair. Policy
should focus on minimizing disruptions. Topics to be
addressed: Housing, cost of living adjustments,
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Part 3 Attracting Human Resources
14-6
temporary living expenses, spousal assistance,
predeparture training, and setting-up services.

Administrative Processing
Attention to detail, payroll processing and tax
arrangements, immigration assistance, spouse and
dependent issues.
Candidate Selection Criteria

See Figure17-7, p.514.

Repatriation
Reintegration of expatriate into home country firm.
Attention: Reverse culture shock.

See p.514 for more information on repatriation.

7. International compensations can be complex.
What are the various mechanisms used to
compensate expatriates?

1. Pay is expanded to include additional taxes, living
expenses, and personal costs
2. Supplements to cover cost of children education
3. Cost of return visits to home country
4. Special medical services
5. Benefits, e.g., company car, driver, club
memberships, housing
6. Relocation assistance (e.g., buying employees home
at market value, shipping of household goods

See Figure 14-10

8. What are the key elements to be considered when
designing a global performance appraisal system?

See Figure 14-9, p.518



.









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Chapter 14 Global Human Resource Management
14-7

ANSWERS TO CRITICAL THINKING QUESTIONS

1. Why would you hire a third culture kid (TCK)?

They are comfortable with many different cultures and
require little cross-cultural training.

See p.512 for more details.

2. How useful are expatriates in transferring
knowledge and skills to their home countries?

Expatriates tend to have a wealth of knowledge about
doing business abroad. Employed effectively in training
potential international staff they can make valuable
contributions to pre-departure training.

See p.512 for more details.

3. What are some of the ethical issues that would
arise when working in a country like China?

See Spotlight on Ethics, p.508

4. What are the competencies of an international
manager?
See Figure 14-7, p. 514, for details

5. Why is pre-departure training so crucial?

It provides cultural awareness, appreciation of foreign
cultures, and develops coping mechanisms. See
discussion on p.515


6. What does Think globally, act locally mean?

When developing IHR policies, domestic practices
ideally are suitable for global use. See discussion on
p.521.
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Part 4 Placing, Developing, and Evaluating Human Resources
14-8



ETHICS QUESTION

Comments to Instructors
There is no right or wrong answer to this question. It is for class discussion purposes.




WEB RESEARCH

Comments to Instructors
These exercises have been designed for students to demonstrate their computer and Internet skills to research the
required information. Answers will vary.































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or contact us at Ebooksmtb@hotmail.com Also you can contact us on Skype: Ebooksmtb
Chapter 14 Global Human Resource Management
9-9



INCIDENT 14.1: IS IMPORTING WORKERS
FROM CHINA THE ANSWER TO MININGS
LABOUR SHORTAGE?

Incident Comments

This incident illustrates some of the issues associated with using foreign nationals in a local business environment.


1. Discuss the cultural impacts on the northern communities if 400 workers were hired.

Bringing 400 single men into a small community would certainly be disruptive. To kill their free time, drinking would
very likely be a major problem. Women may be molested and prostitution might develop. There may be resentment by
locals against foreign workers taking jobs from them and there could be confrontations. On the other hand, local business
may experience increased revenues and the community may learn something about a foreign culture.

2. Discuss the ethical and corporate social responsibility issues that the company is facing. Discuss the health and
safety concerns as well.

Bringing foreign workers to Canada raises both ethical and social questions. Companies usually say that they are unable
to hire local workers for the wages offered and cite competition, which dictates wage levels. Unions will certainly resist
hiring foreign labour, because it tends to depress wages. There will be arguments to spend more money on the training of
local workers, especially First Nation members. Safety will be a major issue if the foreign workers do not speak the local
language. Experience with immigrant workers in agriculture has shown that often they live in substandard housing.

3. Is this the answer to Dehaus labour problems? What other staffing options might Dehau consider? Where
would they find suitable labour?

It is likely that importing foreign labour is a short-term solution, because of the ethical and social problems involved.
Long-term answers may lie in investing in training and development of local human resources, especially First Nation
members, whose unemployment rate is high. Other solutions may be recruiting mining workers from provinces with
higher unemployment, like Nova Scotia, New Brunswick, and Prince Edward Island.














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Part 4 Placing, Developing, and Evaluating Human Resources
14-10

CASE STUDY: MAPLE LEAF SHOES LTD.,
INTERNATIONAL EXPANSION

Answers to Discussion Questions


1. Identify some of the challenges Maple Leaf will
face if it were to open a plant in Mexico. What
specific issues should Jane discuss in her report?

Jane has to do an analysis of the host countrys labour
market to find out whether suitably skilled labour is
available. If not, training expenses could be substantial.
Even is skilled labour is available, some training will be
necessary.
Who will be the supervisors and managers? It may
be necessary to start with home country supervisors and
managers. Should they commute in the beginning or
relocate immediately? How long should they commute
until a permanent solution is found?
If home country nationals are send abroad, they have
to be properly screened and trained cross-culturally. A
cost analysis will be necessary to determine relocation
expenses, i.e., shipping of household goods, cost of
living, child education, tax issues. Immigration
regulations have to be considered.
Cross-cultural training has to be developed.
Ideally, a career development plan will be created,
with promotion and repatriation issues addressed.
Compensation has to be considered, to provide an
incentive for a job transfer.
No doubt, there will be home country union
resistance to exporting jobs.

2. Two positions have been identified for expatriate
assignments, a manager and a supervisor. What
should the selection criteria be? What specific
competencies should be considered?

Criteria: Technical competence, motivation, previous
performance, managerial talent, independence of mind,
language fluency, interpersonal skills, personality
characteristics, family issues, previous oversees
experience;
Competencies: See Figure 14-7, p.514

3. Jane Reynolds will need to set up a performance
appraisal program. She has asked you to summarize
what she needs to do to ensure that the expat
performance appraisal (EPA) experience is positive.

Jane has to balance two sources of information: Host
country and home country. While host country
managers may be in a good position to observe day-to-
day behaviours of the employee, the individual is likely
still formally tied to the parent organization for pay,
career development and other decisions. Figure 1-9 lists
four steps in developing a global performance
management system.

4. What actions can Jane take to demonstrate to Tim
McDonald that she is a strategic thinker and
understands the bottom line repercussions?

For whatever recommendations she develops, a cost-
benefit analysis would be essential. She has to
demonstrate that she is aware the implications of any
decision on the bottom line of the host country branch.
Actions to be taken: Selection criteria, competencies,
choice between what type of position: Commuter,
frequent flyer, expatriate; pay consideration, relocation,
immigration issues, training and development, career
implications, repatriation; union reaction;


Extension Question:
Discuss the labour relation issues ML will face in
Canada.
The union will strenuously resist any attempt to
export jobs to foreign countries. If this plan would
result in lay-offs or even closure of a home country
plant, strike actions would be very likely. Even is no
jobs are lost, the action puts management in a position
where it is able to put pressure on the union to lower its
pay demands. There will also be repercussions on the
morale, motivation, and organizational commitment of
the employees.
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Chapter 14 Global Human Resource Management
8-11

CASE STUDY: CANADIAN PACIFIC AND
INTERNATIONAL BANK
INTERNATIONAL EXPANSION

Answers to Discussion Questions

1. What are the various staffing categories that
Mary Keddy should consider?

Home Country National (HCN); Parent Company
National (PCN); Third Country National (TCN). See
Figure 14-5, p.510/511, for discussion.

2. What are the internal and external factors that
will influence how the company will proceed?

See Figure 14-2, p.505; external factors: Country
culture, labour economics, labour legislation, and
immigration policies; internal factors: Firms
commitment to CSR and preferences for staffing
alternatives.

3. What are the implications for the IHR function as
CPIB expands?

See p.520 for a discussion. Managers supervising
employees abroad have to have a broader perspective,
because international HR issues are more complex.
Even domestic HR practices, processes, and systems
have to be adjusted. There are three key responsibilities
for an IHRM: Think globally, act locally, foster a
global mindset, and manage the talent pipeline.

4. Mary Keddy plans to offer one of her staff a
promotion to lead the IHR group. She has asked you
to prepare an internal job posting and to discuss the
details with her prior to release. Discuss the roles
and competencies expected of this position and
prepare a job posting.

Criteria: Technical competence, motivation, previous
performance, managerial talent, independence of mind,
language fluency, interpersonal skills, personality
characteristics, family issues, previous oversees
experience;
Competencies: See Figure 14-7, p.514

An internal job posting should contain: Job title,
department, posting date, posting expiry date,
purpose, essential duties and responsibilities, primary
interactions, internal external competencies,
education and/or experience.

The role of an IHRM is discussed on p.520.



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