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Robbins: Organizational Behavior Chapter Seventeen

HUMAN RESOURCE POLICIES AND PRACTICES

LEARNING OBJECTIVES

After studying this chapter, students should be able to:

1. Contrast job descriptions with job specifications.


2. List the advantages of performance simulation tests over written tests.
3. Define four general skill categories.
4. Describe how career planning has changed in the last 20 years.
5. Explain the purposes of performance evaluation.
6. Describe actions that can improve the performance-evaluation process.
7. Clarify how the existence of a union affects employee behavior.
8. Identify the content in a typical diversity-training program.

CHAPTER OVERVIEW

An organization’s human resource policies and practices represent important forces for shaping employee
behavior and attitudes. In this chapter, we specifically discussed the influence of selection practices, training and
development programs, performance evaluation systems, and the existence of a union.

Selection Practices
An organization’s selection practices will determine who gets hired. If properly designed, they will identify
competent candidates and accurately match them to the job and the organization. The use of the proper selection
devices will increase the probability that the right person will be chosen to fill a slot.
While employee selection is far from a science, some organizations fail to design their selection systems so as to
maximize the likelihood that the right person-job fit will be achieved. When errors are made, the chosen
candidate’s performance may be less than satisfactory. Training may be necessary to improve the candidate’s
skills. At the worst, the candidate will prove unacceptable and a replacement will need to be found. Similarly,
where the selection process results in the hiring of less qualified candidates or individuals who do not fit into the
organization, those chosen are likely to feel anxious, tense, and uncomfortable. This, in turn, is likely to increase
dissatisfaction with the job.

Training and Development Programs


Training programs can affect work behavior in two ways. The most obvious is by directly improving the skills
necessary for the employee to successfully complete his/her job. An increase in ability improves the employee’s
potential to perform at a higher level. Of course, whether that potential becomes realized is largely an issue of
motivation.

A second benefit from training is that it increases an employee’s self-efficacy. As you will remember from Chapter
6, self-efficacy is a person’s expectation that he/she can successfully execute the behaviors required to produce
an outcome. For employees, those behaviors are work tasks and the outcome is effective job performance.
Employees with high self-efficacy have strong expectations about their abilities to perform successfully in new
situations. They are confident and expect to be successful. Training, then, is a means to positively affect self-
efficacy because employees may be more willing to undertake job tasks and exert a high level of effort. In
expectancy terms (see chapter 6), individuals are more likely to perceive their effort as leading to performance.

We also discuss career development in this chapter. Note the significant decline in formal programs intended to
guide an employee’s career within a single organization, but employees still value career planning and
development. Organizations can increase employee commitment, loyalty, and satisfaction by encouraging and
guiding employees in developing a self-managed career plan, and by clearly communicating the organization’s
goals and future strategies, giving employees growth experiences, offering financial assistance to help employees
keep their knowledge and skills current, and providing paid time off from work for off-the-job training.

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Performance Evaluation
A major goal of performance evaluation is to assess accurately an individual’s performance contribution as a
basis for making reward allocation decisions. If the performance evaluation process emphasizes the wrong criteria
or inaccurately appraises actual job performance, employees will be over- or under-rewarded. As demonstrated in
Chapter 5, in our discussion of equity theory, this can lead to negative consequences such as reduced effort,
increases in absenteeism, or search for alternative job opportunities. In addition, the content of the performance
evaluation has been found to influence employee performance and satisfaction. Specifically, performance and
satisfaction are increased when the evaluation is based on behavioral results-oriented criteria, when career
issues as well as performance issues are discussed, and when the employee has an opportunity to participate in
the evaluation.

Union-Management Interface
The existence of a union in an organization adds another variable in our search to explain and predict employee
behavior. The union has been found to be an important contributor to employees’ perceptions, attitudes, and
behavior.

The power of the union surfaces in the collective bargaining agreement that it negotiates with management. Much
of what an employee can and cannot do on the job is formally stipulated in this agreement. In addition, the
informal norms that union cohesiveness fosters can encourage or discourage high productivity, organizational
commitment, and morale.

WEB EXERCISES

At the end of each chapter of this instructor’s manual, you will find suggested exercises and ideas for researching
the WWW on OB topics. The exercises “Exploring OB Topics on the Web” are set up so that you can simply
photocopy the pages, distribute them to your class, and make assignments accordingly. You may want to assign
the exercises as an out-of-class activity, or as lab activities with your class. Within the lecture notes the graphic
will note that there is a WWW activity to support this material.

The chapter opens introducing the French appliance maker Moulinex. The company needed to reduce capacity
and close up several of its unprofitable factories, however, it was unable to due to the restrictions of the French
government who was under pressure from the country’s strong labor unions. Because Moulinex was unable to get
costs in line, it eventually declared bankruptcy. Nearly two-thirds of the employees lost their jobs permanently.
The message of this chapter is that HR practices not only differ across cultures, but influence the organization’s
effectiveness.

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CHAPTER NOTES

Introduction Notes:

1. Human resource policies and practice influence organizational


effectiveness.

2. Human resource management includes: employee selection, training


performance management, and union-management relations and how they
influence an organizations effectiveness.

Selection Practices

A. Job Analysis Notes:

1. A job analysis is a “detailed description of the tasks of a job.”


2. It involves determining the relationship of a given job to other jobs, and
ascertaining the knowledge, skills, and abilities necessary for an employee to
successfully perform the job.
• Exhibit 17-1 describes the more popular job analysis methods.
3. The job description is a written statement of what a jobholder does, how the job
is done, and why it is done.
• It should accurately portray job content, environment, and conditions of
employment.
• It identifies characteristics of the job.
4. Job specification—“the minimum acceptable qualifications necessary to
perform a job successfully.”
• It identifies the knowledge, skills, and abilities needed to do the job
effectively.
• It identifies characteristics of the successful job incumbent.
5. The job description and specification are important documents in the selection
process.
• The job description can be used to describe the job to potential candidates.
• The job specification focuses on the qualifications necessary to perform a
job and assists in determining a candidate’s qualification.
• However, these documents may be declining in importance.
6. Job analysis is a static view of the job; job descriptions and specifications are
also static.
7. To facilitate flexibility, organizations are hiring for organizational needs rather
than for specific jobs.
8. Organizations want their permanent employees to be able to do a variety of
tasks and to move smoothly from project to project and from one team to
another.
9. Organizations tend to seek new employees who, in addition to job skills, have
personalities and attitudes that fit with the organization’s culture.

Instructor Note: At this point in the lecture you may want to introduce the ETHICAL DILEMMA: Is It Unethical to
“Shape” Your Resume? found in the text and at the end of these chapter notes. A suggestion for a class exercise
follows the introduction of the material.
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B. Selection Devices Notes:

1. Devices for obtaining information about a job applicant include: interviews,


employment tests, background checks, and personal letters of
recommendation.
2. Interviews
• In Korea, Japan, and many other Asian countries, employee interviews
traditionally have not been part of the selection process. Decisions were
made almost entirely on the basis of exam scores, scholastic
accomplishments, and letters of recommendation.
• Throughout most of the world this is not the case. The interview continues
to be the device most frequently used. It also seems to carry a great deal
of weight.
• The results tend to have a disproportionate amount of influence on the
selection decision.
• The candidate who performs poorly in the employment interview is likely to
be cut, regardless of his/her experience, test scores, or letters of
recommendation, and vice versa.
• This is important because of the unstructured form of most selection
interviews.
a. The unstructured interview—short in duration, casual, and made up of
random questions—is an ineffective selection device.
b. The data are typically biased and often unrelated to future job
performance.
• Biases can distort results:
a. Tending to favor applicants who share their attitudes
b. Giving unduly high weight to negative information
c. Allowing the order in which applicants are interviewed to influence
evaluations
• The Structured Interview reduces biases:
a. Uses a standardized set of questions
b. Provides interviewers with a uniform method of recording information
c. Standardizes the rating of the applicant’s qualifications reducing the
variability in results across applicants and increasing the validity of the
interview.
• The evidence indicates that interviews are most valuable for assessing:
a. An applicant’s intelligence
b. Level of motivation
B. Interpersonal skills
• When these qualities are related to job performance, the validity of the
interview as a selection device is increased.
• In practice, most organizations use interviews for more than a “prediction-
of-performance” device.

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B. Selection Devices (cont.) Notes:

3. Written tests
• Typical written tests are tests of intelligence, aptitude, ability, interest, and
integrity.
• Long popular as selection devices, they are in decline because such tests
have frequently been characterized as discriminating, and they were not
validated.
• Tests in intellectual ability, spatial and mechanical ability, perceptual
accuracy, and motor ability have shown to be moderately valid predictors
for many semiskilled and unskilled operative jobs.
a. Intelligence tests are particularly good predictors for jobs that require
cognitive complexity.
b. Japanese automakers in the United States rely heavily on written tests
focusing on skills such as reading, mathematics, mechanical dexterity,
and ability to work with others.
• As ethical problems have increased in organizations, integrity tests have
gained popularity.
a. Paper-and-pencil tests that measure dependability, carefulness,
responsibility, and honesty
b. The evidence is impressive that these tests are good
predictors.
4. Performance simulation tests
• Performance simulation tests have increased in popularity during the past
two decades. Based on job analysis data, they more easily meet the
requirement of job relatedness.
• The two best-known performance simulation tests are work sampling and
assessment centers.
a. The former is suited to routine jobs.
b. The latter is relevant for the selection of managerial personnel.
• Work sampling tests
a. Hands-on simulations of part or all of the job that must be performed by
applicants
b. Work samples are based on job analysis data.
c. Each work sample element is matched with a corresponding job
performance element.
• Work samples yield valid data superior to written aptitude and personality
tests.
• Assessment centers use a more elaborate set of performance simulation
tests, specifically designed to evaluate a candidate’s managerial potential.
a. Line executives, supervisors, and/or trained psychologists evaluate
candidates as they go through one to several days of exercises that
simulate real problems.
b. Assessment centers have consistently demonstrated results that
predict later job performance in managerial positions.

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Instructor Note: At this point in the lecture you may want to introduce the MYTH OR SCIENCE – “It’s First
Impressions That Count!” found in the text and below. A suggestion for a class exercise follows.

MYTH OR SCIENCE – “It’s First Impressions That Count”

When we meet someone for the first time, we notice a number of things about that person and then use these
impressions to fit the person into ready-made categories. This early categorization, formed quickly and on the
basis of minimal information, tends to hold greater weight than impressions and information received later—as is
evidenced by research on employment interviews. The primacy effect is potent—the first information presented
affects later judgments more than information presented later.

Research on applicant appearance confirms the power of first impressions. The evidence indicates that the way
applicants walk, talk, dress, and look can have a great impact on the interviewer’s evaluation of applicant
qualifications. Facial attractiveness seems to be particularly influential. Confirmative research finds that
interviewers’ post-interview evaluations of applicants conform, to a substantial degree, to their pre-interview
impressions, assuming that the interview elicits no highly negative information.

Class Exercise:
1. Direct students to http://www.collegegrad.com/.
2. Have students research job interviewing, interview attire, and negotiating.
3. Ask students to describe what they discovered about these elements.
4. What role do they think first impressions play in the interviewing process?

Training and Development Programs Notes:

1. Skills deteriorate and can become obsolete.


2. US corporations with 100 or more employees spent $60.7 billion in one recent
year on formal training for 50 million workers.

A. Types of Training

1. There are four general skill categories for training—basic literacy, technical,
interpersonal, and problem solving. In addition, we briefly discuss ethics
training.
2. Basic literacy skills
• Ninety million American adults have limited literacy skills, and about 40
million can read little or not at all! Most workplace demands require a
tenth- or eleventh-grade reading level.
• About 20 percent of Americans between the ages of 21 and 25 cannot
read at an eighth-grade level.
• Organizations find they must provide basic reading and math skills for their
employees.
a. Math skills are needed for understanding numerical control equipment.
b. Better reading and writing skills are needed to interpret process
sheets and work in teams.
3. Technical skills
• Most training is directed at upgrading and improving an employee’s
technical skills.

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A. Types of Training (cont.) Notes:

• Technical training is important for two reasons—new technology and new


structural designs.
a. Jobs change as a result of new technologies and improved methods.
b. In addition, technical training has become increasingly important
because of changes in organization design.
4. Interpersonal skills
• Almost all employees belong to a work unit. To some degree, their work
performance depends on their ability to effectively interact.
• These skills include how to be a better listener, how to communicate ideas
more clearly, and how to be a more effective team player.
5. Problem-solving skills
• Managers and employees who perform non-routine tasks have to solve
problems.
• Problem-solving training might include activities to sharpen logic,
reasoning, and problem-defining skills, as well as abilities to assess
causation, develop alternatives, analyze alternatives, and select solutions.
6. Ethics training
• Seventy-five percent of employees working in the 1000 largest US
corporations receive ethics training.
• Critics argue that ethics are based on values, and value systems are fixed
at an early age.
• Ethics cannot be formally “taught” but must be learned by example.
• Supporters of ethics training argue that values can be learned and
changed after early childhood.
• Even if it could not, it helps employees to recognize ethical dilemmas,
become more aware of the ethical issues underlying their actions, and
reaffirms an organization’s expectations.

B. Training Methods

1. Training methods are most readily classified as formal or informal and on-the-
job or off-the-job.
2. Historically, training meant formal training. It is planned in advance and has a
structured format.
3. Organizations are increasingly relying on informal training.
• Unstructured, unplanned, and easily adapted to situations and individuals
• Most informal training is nothing other than employees helping each other
out. They share information and solve work-related problems with one
another.
4. On-the-job training includes job rotation, apprenticeships, understudy
assignments, and formal mentoring programs.
• The primary drawback of these methods is that they often disrupt the
workplace.

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B. Training Methods (cont.) Notes:

5. Organizations are investing increasingly in off-the-job training—nearly $60


billion annually.
6. What types of training might this include?
• The most popular is live classroom lectures.
• It also encompasses videotapes, public seminars, self-study programs,
internet courses, satellite-beamed television classes, and group activities
that use role-plays and case studies.

C. Individualize Formal Training to Fit the Employee’s Learning Style

1. Individuals process, internalize, and remember new and difficult material


differently. Therefore, effective formal training should be individualized to the
learning style of the employee.
2. Some examples of different learning styles include reading, watching, listening,
and participating.
3. You can translate these styles into different learning methods.
• Readers should be given books or other reading material to review.
• Watchers should get the opportunity to observe modeling of the new skills.
• Listeners will benefit from hearing.
• Participants will benefit most from experiential opportunities.
4. These different learning styles are not mutually exclusive.
5. If you know the preferred style of an employee, you can design his/her formal
training program to optimize this preference.

D. Career Development

1. Few human resource issues have changed as much as the role of the
organization in its employees’ careers.
• It has gone from paternalism to supporting individuals as they take
personal responsibility for their future.
• Careers have gone from a series of upward moves to people adapting
quickly, learning continuously, and changing their work identities over time.
2. For much of this century, companies recruited with the intent that workers
would spend their entire career inside that single organization.
• They created promotion paths dotted with ever-increasing responsibility.
• Employers would provide the training and opportunities; employees would
respond by demonstrating loyalty and hard work.
• This arrangement has undergone serious decay.
3. Today, career planning is something increasingly being done by individual
employees.

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D. Career Development (cont). Notes:

4. The organization’s responsibilities:


• The essence of a progressive career development program is built on
providing support for employees to continually add to their skills, abilities,
and knowledge. This support includes:
a. Clearly communicating the organization’s goals and future strategies.
b. Creating growth opportunities.
c. Offering financial assistance.
d. Providing the time for employees to learn.

5. The employee’s responsibilities:


• Employees should manage their own careers like entrepreneurs managing
a small business. They should think of themselves as self-employed.
• The successful career will be built on maintaining flexibility and keeping
skills and knowledge up to date.
• Some suggestions:
a. Know yourself. Know your strengths and weaknesses.
b. Manage your reputation. Make you and your accomplishments visible.
c. Build and maintain network contacts.
d. Keep current. Develop those specific skills and abilities that are in high
demand.
e. Balance your specialist and generalist competencies.
f. Document your achievements. Employers are increasingly looking to
what you have accomplished rather than the titles you have held.
g. Keep your options open. Always have contingency plans.

Performance Evaluation

A. Purposes of Performance Evaluation Notes:

1. Management uses evaluations for general human resource decisions.


• Decisions such as promotions, transfers, and terminations. Evaluations
identify training and development needs.
• They pinpoint employee skills and competencies needing development.
• Criterion against which selection and development programs are validated
• The effectiveness of training and development programs can be assessed
by examining the subsequent performance evaluations of participants.
• Providing feedback to employees on how the organization views their
performance
• Basis for reward allocations (salary increases, bonuses, etc.)
2. Each of these functions of performance evaluation is important. We will
emphasize performance evaluation in its role as a mechanism for providing
feedback and as a determinant of reward allocations.

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B. Performance Evaluation and Motivation Notes:

1. A vital component of expectancy model of motivation is performance,


specifically the effort-performance and performance-reward linkages.
2. To maximize motivation, people need to perceive that the effort they exert
leads to a favorable performance evaluation and that the favorable evaluation
will lead to the rewards that they value.
3. Individuals will work considerably below their potential if objectives are unclear,
if criteria for measuring those objectives are vague, and if the employees lack
confidence in their efforts.

C. What Do We Evaluate?

1. The criteria or criterion used to evaluate performance has a major influence on


performance. The three most popular sets of criteria are individual task
outcomes, behaviors, and traits.
2. Individual task outcomes
• If ends count, rather than means, then management should evaluate an
employee’s task outcomes.
3. Behaviors
• When it is difficult to identify specific outcomes that can be directly
attributable to an employee’s actions, then management evaluates the
employee’s behavior.
• The behaviors need not be limited to those directly related to individual
productivity.
• Including subjective or contextual factors in a performance evaluation, as
long as they contribute to organizational effectiveness, may not only make
sense—it may also improve coordination, teamwork, cooperation, and
overall organizational performance.
4. Traits
• The weakest set of criteria is individual traits because they are farthest
removed from the actual performance of the job itself.
• Traits may or may not be highly correlated with positive task outcomes, but
only the naive would ignore the reality that such traits are frequently used
in organizations for assessing performance.

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D. Who Should Do the Evaluating? Notes:

1. The obvious answer is the immediate boss, however, others may actually be
able to do the job better.
2. Immediate superior
• The majority of all performance evaluations at the lower and middle levels
are conducted by the employee’s immediate boss.
• Drawbacks:
a. Many bosses feel unqualified to evaluate the unique contributions of
each employee.
b. Others resent being asked to “play God” with their employees’ careers.
c. Additionally, self-managed teams, telecommuting, and other
organizing devices that distance bosses from their employees may
diminish the reliability of the evaluation.
3. Peers
• Peer evaluations are one of the most reliable sources of appraisal data.
Why?
a. Peers are close to the action.
b. Peers as raters result in a number of independent judgments.
• On the downside: peer evaluations can suffer from coworkers’
unwillingness to evaluate one another and from biases based on friendship
or animosity.
4. Self-evaluation
• This is consistent with values such as self-management and empowerment
and self-evaluations get high marks from employees.
• They suffer from over-inflated assessment and self-serving bias and are
often low in agreement with superiors’ ratings.
5. Immediate subordinates
• Immediate subordinates’ evaluations can provide accurate and detailed
information about a manager’s behavior.
• The obvious problem is fear of reprisal from bosses given unfavorable
evaluations. Respondent anonymity is crucial if these evaluations are to be
accurate.

6. 360-Degree evaluations (See Exhibit 17-3)


• It provides for performance feedback from the full circle of daily contacts
that an employee might have.
• The number of appraisals can be as few as three or four evaluations or as
many as 25, with most organizations collecting five to ten per employee.

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1. Methods of Performance Evaluation Notes:

1. Written essays
• The simplest method of evaluation is to write a narrative describing an
employee’s strengths, weaknesses, past performance, potential, and
suggestions for improvement.
• No complex forms or extensive training is required, but the results often
reflect the ability of the writer.
2. Critical incidents
• Focuses on those behaviors that are key in making the difference between
executing a job effectively and executing it ineffectively.
• The appraiser writes down anecdotes that describe what the employee did
that was especially effective or ineffective. A list of critical incidents
provides a rich set of examples to discuss with the employee.
3. Graphic ratings scales
• A set of performance factors, such as quantity and quality of work, depth of
knowledge, cooperation, loyalty, attendance, honesty, and initiative, is
listed.
• The evaluator then goes down the list and rates each on incremental
scales. The scales typically specify five points.
• Popular because they are less time-consuming to develop and administer
and allow for quantitative analysis and comparison.
• The major drawback is that they do not provide the depth of information
that essays or critical incidents do.

4. Behaviorally anchored rating scales


• BARS combine major elements from the critical incident and graphic rating
scale approaches. The appraiser rates the employees based on items
along a continuum, but the points are examples of actual behavior.
• BARS specify definite, observable, and measurable job behavior.
• Examples of job-related behavior and performance dimensions are found
by asking participants to give specific illustrations of effective and
ineffective behavior regarding each performance dimension.
• The results of this process are behavioral descriptions, such as:
anticipates, plans, executes, solves immediate problems, carries out
orders, and handles emergency situations.

5. Forced comparisons
• This method evaluates one individual’s performance against the
performance of one or more. It is a relative rather than an absolute
measuring device.
• The three most popular are group order ranking, individual ranking, and
paired comparisons.
a. The group order ranking requires the evaluator to place employees into
a particular classification, such as top one-fifth or second one-fifth.

b. This method is often used in recommending students to graduate


schools.
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E. Methods of Performance Evaluation (cont.) Notes:

• The individual ranking approach rank-orders employees from best to worst.


a. This approach assumes that the difference between the first and
second employee is the same as that between the twenty-first and
twenty-second.
b. This approach allows for no ties.
• The paired comparison approach compares each employee with every
other employee and rates each as either the superior or the weaker
member of the pair.
a. After all paired comparisons are made, each employee is assigned a
summary ranking based on the number of superior scores he/she
achieved.
b. This ensures that each employee is compared against every other.

Instructor Note: At this point in the lecture you may want to introduce the OB IN THE NEWS: Forced Rankings
Gain in Popularity box found in the text and below. A suggestion for a class exercise follows.

OB IN THE NEWS—Forced Rankings Gain in Popularity

It has become one of the fastest-growing trends in performance evaluation. Companies like Ford, GE,
Microsoft, Sun Microsystems, and Conoco are among the 20 percent of US companies that now rank their
employees from best to worst and then use those rankings to determine pay and make other human resource
decisions.
Many top executives became frustrated by managers who rated all their employees as “above average.”
In addition, executives wanted to create a system that would increase the organization’s competitiveness—one
that would reward the very best performers and encourage poor performers to leave. They are turning to forced
rankings or what has been called “rank and yank” by its critics.
For instance, all 18,000 of Ford Motor’s managers undergo this process. These managers are divided into
groups of 30 to 50, then rated. For each group, 10 percent have to get an A, 80 percent a B, and 10 percent a C.
Anyone receiving a C is restricted from a pay raise and two consecutive years of a C rating results in either a
demotion or termination.
The most well-known “rank and yank” program is GE’s “20-70-10 plan.” The company forces the heads of
each of its divisions to review all managers and professional employees, and to identify their top 20 percent,
middle 70 percent, and bottom 10 percent. GE then does everything possible to keep and reward its top
performers and fires all bottom group performers. The company’s former CEO stated, “A company that bets its
future on its people must remove the lower 10 percent, and keep removing it every year—always raising the bar
of performance and increasing the quality of its leadership.”
Proponents see these forced rankings and elimination of weak performers as a way to continually
improve an organization’s workforce and to reward those who are most deserving. Critics, on the other hand,
argue that these programs are harsh, arbitrary, and create a “zero-sum game” that discourages cooperation.
Critics also say that these programs run counter to the belief, held by many, that almost any worker is
salvageable.

Source: Based on R. Abelson, “Companies Turn to Grades, and Employees Go to Court,” New York Times, March 19, 2001, p. A1; D. Jones,
“More Firms Cut Workers Ranked at Bottom to Make Way for Talent,” USA Today, May 30, 2001, p. 1B; and J. Greenwald, “Rank and Fire,”
Time, June 18, 2001, pp. 38–40.

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Class Exercise:

1. Lead a class discussion (or have the student’s break into small groups ) as to the positive and negative
aspects of this type of performance evaluation process.
2. Ask students to consider the issue in terms of what has been studied thus far in the text/class. For example:
3. How would a forced ranking (and it’s consequences) affect their motivation, trust, attitude, job satisfaction,
etc.
4. Is the best way to evaluate? Why or why not? What are alternatives?
5. Does this type of evaluation reflect a certain culture or value system for the organization? Is it a system they
would want to work under?
6. Could or should this type of system work in the classroom? Are they, or have they been, in classes that
graded solely on a “curve?” Was that “fair?” Why or why not?
7. Note: Refer them to the web exercise at the end of the chapter where they can read comments others have
written in regards to this approach.

F. Suggestions for Improving Performance Evaluations Notes:

1. Evaluators can make leniency, halo, and similarity errors, or use the process
for political purposes.
2. Emphasize behaviors rather than traits
• Traits such as loyalty, initiative, courage, reliability, and self-expression are
intuitively appealing as desirable characteristics in employees, but are
individuals who are evaluated as high on those traits higher performers
than those who rate low?
• There is no evidence to support that certain traits will be adequate
synonyms for performance in a large cross section of jobs.
• Another weakness is the judgment itself. Traits suffer from weak inter-rater
agreement. For example, “loyalty” may have different meanings to
different raters.

3. Document performance behaviors in a diary


• Diaries help evaluators to better organize information in their memory.
• Diaries reduce leniency and halo errors. Evaluations tend to be more
accurate and less prone to all rating errors.
4. Use multiple evaluators
• As the number of evaluators increases, the probability of attaining more
accurate information increases.
• If a set of evaluators judges a performance, the highest and lowest scores
are dropped, and the final performance evaluation is made up from the
cumulative scores of those remaining.
• If an employee has had ten supervisors, nine having rated her excellent
and one poor, we can discount the value of the one poor evaluation.
5. Evaluate selectively
• Evaluate only those areas in which you have some expertise.
• If raters make evaluations on only those dimensions which they are in a
good position to rate, we increase the inter-rater agreement and make the
evaluation a more valid process.

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F. Suggestions for Improving Performance Evaluations (cont.) Notes:

• Appraisers should be as close as possible, in terms of organizational level,


to the individual being evaluated.
6. Train evaluators
• There is substantial evidence that training evaluators can make them more
accurate raters.
• Common errors have been minimized or eliminated in workshops where
managers practice. However, the effects of training appear to diminish
over time.
7. Provide employees with due process
• The concept of due process increases the perception that employees are
treated fairly.
• Three features characterize due process systems:
a. Individuals are provided with adequate notice of what is expected of
them.
b. All relevant evidence is aired in a fair hearing so individuals affected
can respond.
c. The final decision is based on the evidence and is free from bias.
• There is considerable evidence that evaluation systems often violate
employees’ due process by:
a. Providing them with infrequent and relatively general performance
feedback.
b. Allowing them little input into the appraisal process.
c. Knowingly introducing bias into performance ratings.

G. Providing Performance Feedback

1. For many, providing performance feedback to employees is unpleasant and


likely to be ignored.
2. First, managers are often uncomfortable discussing performance weaknesses
directly with employees. Managers fear a confrontation when presenting
negative feedback.
3. Second, many employees tend to become defensive when their weaknesses
are pointed out. Instead of accepting the feedback as constructive and a basis
for improving performance, some employees challenge the evaluation by
criticizing the manager or redirecting blame.
4. Finally, employees tend to have an inflated assessment of their own
performance.
• Statistically, half of all employees must be below-average performers.
• The average employee’s estimate of his/her own performance level
generally falls around the 75th percentile.
5. The solution—train managers how to conduct constructive feedback sessions.
6. An effective review can result in the employee leaving the interview in an
upbeat mood, informed about the performance areas in which he or she needs
to improve, and determined to correct the deficiencies.
7. The performance review should be designed more as a counseling activity than
a judgment process.

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Instructor Note: At this point in the lecture you may want to introduce the POINT- COUNTER POINT: It’s Time
to Abolish Performance Evaluations found in the text and at the end of these chapter notes. A suggestion for a
class exercise follows.

AND/OR

Instructor Note: At this point in the lecture you may want to introduce the TEAM EXERCISE: Evaluating
Performance and Providing Feedback found in the text and at the end of these chapter notes. A suggestion for a
class exercise follows.

H. What about Team Performance Evaluations? Notes:

1. Performance evaluation concepts have been almost exclusively developed with


only individual employees in mind.
2. Four suggestions for designing a system that supports and improves the
performance of teams:
• Tie the team’s results to the organization’s goals.
• Begin with the team’s customers and the work process the team follows to
satisfy customers’ needs.
a. The final product the customer receives can be evaluated in terms of
the customer’s requirements.
• Measure both team and individual performance. Define the roles of each
team member in terms of accomplishments that support the team’s work
process. Then assess each member’s contribution and the team’s overall
performance.
• Train the team to create its own measures.

The Union-Management Interface

A. Labor Unions Notes:

1. A vehicle by which employees act collectively to protect and promote their


interests.
2. In the United States, less than 13 percent of the workforce belongs to and is
represented by a union. This number is considerably higher in other countries.
Canada and Australia are 37 percent and 26 percent, respectively.
3. For employees who are members of a labor union, wage levels and conditions
of employment are explicitly articulated in a contract that is negotiated, through
collective bargaining, between representatives of the union and the
organization’s management.
4. Where a labor union exists, it can influence a number of organizational
activities including a variety of HR activities (selection, job design, safety rules,
etc.).
5. American labor unions have focused their attention on improving stagnant
wages, discouraging corporate downsizings, minimizing the outsourcing of
jobs, and coping with job obsolescence.
6. The most obvious and pervasive area of labor’s influence is wage rates and
working conditions. Where unions exist, performance evaluation systems tend
to be less complex.

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A. Labor Unions (cont.) Notes:

7. The union contract affects motivation through determination of wage rates,


seniority rules, layoff procedures, promotion criteria, and security provisions.
8. Unions can influence the competence with which employees perform their jobs
by offering special training programs to their members, by requiring
apprenticeships, and by allowing members to gain leadership experience
through union organizational activities.
9. The actual level of employee performance will be further influenced by
collective bargaining restrictions placed on the amount of work produced, the
speed with which work can be done, overtime allowances per worker, and the
kind of tasks a given employee is allowed to perform.
10. The research evaluating the specific effect of unions on productivity is mixed.
Some studies found that unions had a positive effect on productivity. Other
studies have shown that unions negatively impact productivity by reducing
effectiveness. The evidence is too inconsistent to draw any meaningful
conclusions.
11. The evidence consistently demonstrates that unions have only indirect effects
on job satisfaction. They increase pay satisfaction but negatively affect
satisfaction with the work itself, coworkers and supervision, and promotions.

International Human Resource Practices: Selected Issues

A. Selection Notes:

1. The global corporation increasingly needs managers who have experience in


diverse cultures, but selection practices differ per nations.
2. Educational qualifications in screening candidates seem to be a universal
practice. However research tells us there are no widely accepted universal
selection practices.

B. Performance Evaluation

1. Many cultures are not particularly concerned with performance appraisal or, if
they are, they do not look at it the same way as do managers in the United
States or Canada.
2. Four key cultural dimensions:
• Individualism/collectivism
a. Individualistic cultures emphasize formal performance evaluation
systems and advocate written evaluations performed at regular
intervals.
b. Collectivist cultures are characterized by more informal systems—
downplaying formal feedback and disconnecting reward allocations
from performance ratings.
• Relationship to the environment
a. US and Canadian organizations hold people responsible for their
actions.
b. In Middle Eastern countries, performance evaluations are not likely to
be widely used since managers in these countries tend to see people
as subjugated to their environment.

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B. Performance Evaluation (cont.) Notes:

• Time orientation
a. Some countries have a short-term time orientation, making
performance evaluations frequent.
b. In Japan, however, where people hold a long-term time frame,
performance appraisals may occur only every five or ten years.
• Focus of responsibility
a. North American managers emphasize the individual in performance
evaluations.
b. Their counterparts in Israel are much more likely to emphasize group
contributions and performance.

Managing Diversity in Organizations

A. Work/Life Conflicts Notes:

1. Currently 46 percent of the U.S. workforce is female and more fathers want to
actively participate in the care and raising of their children.
2. Heavy workloads and travel demands make it increasing hard for all employees
with or without children or other family responsibilities.
3. Today’s workplace is being modified to accommodate the varied needs of a
diverse workforce. This includes flexibility at work to better balance home and
work lives.
4. Time pressures are not the biggest concern, however. Employees are thinking
about work issues at home and thinking about home issues at work.
Employers should focus more on helping employees to clearly segment their
lives.

B. Diversity Training

1. The centerpiece of most diversity programs is training. Ninety-three percent of


companies used training as part of their programs.
2. Diversity training programs are generally intended to provide a vehicle for
increasing awareness and examining stereotypes.

Instructor Note: At this point in the lecture you may want to introduce the CASE INCIDENT: Is This Any Way to
Run a Business? box found in the text and at the end of these chapter notes. A suggestion for a class exercise
follows.

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QUESTIONS FOR REVIEW

1. What is job analysis? How is it related to those the organization hires?


Answer – Job analysis involves developing a detailed description of the tasks involved in a job, determining
the relationship of a given job to other jobs, and ascertaining the knowledge, skills, and abilities necessary for
an employee to successfully perform the job. Exhibit 17-1 describes the more popular job analysis methods.

2. What are assessment centers? Why do you think they might be more effective for selecting managers than
traditional written tests?
Answer – Assessment centers are a more elaborate set of performance simulation tests, specifically
designed to evaluate a candidate’s managerial potential. Line executives, supervisors, and/or trained
psychologists evaluate candidates as they go through one to several days of exercises that simulate real
problems that they would confront on the job. Based on a list of descriptive dimensions that the actual job
incumbent has to meet, activities might include interviews, in-basket problem-solving exercises, leaderless
group discussions, and business decision games. For instance, a candidate might be required to play the role
of a manager who must decide how to respond to ten memos in his/her in-basket within a two-hour period.
Assessment centers have consistently demonstrated results that predict later job performance in managerial
positions.

3. Contrast formal and informal training.


Answer – Historically, training meant formal training. It is planned in advance and has a structured format.
Organizations are increasingly relying on informal training—unstructured, unplanned, and easily adapted to
situations and individuals. Most informal training is nothing other than employees helping each other out.
They share information and solve work-related problems with one another.

4. What can organizations do to help employees develop their careers?


Answer – Amoco Corporation’s career development program is a model for modern companies. It is
designed around employee self-reliance and to help employees reflect on their marketability both inside and
outside the firm. The essence of a progressive career development program is built on providing support for
employees to continually add to their skills, abilities, and knowledge. This support includes:
• Clearly communicating the organization’s goals and future strategies
• Creating growth opportunities
• Offering financial assistance
• Providing the time for employees to learn

5. What can individuals do to foster their own career development?


Answer – Employees should manage their own careers like entrepreneurs managing a small business. The
following suggestions are consistent with the view that you, and only you, hold primary responsibility for your
career:
• Know yourself.
• Manage your reputation.
• Build and maintain network contacts.
• Keep current.
• Balance your specialist and generalist competencies.
• Document your achievements.
• Keep your options open.

6. Why do organizations evaluate employees?


Answer – See Exhibit 17-3 for survey results on primary uses of evaluations. Management uses evaluations
for general human resource decisions.
• Decisions such as promotions, transfers, and terminations; Evaluations identify training and
development needs.
• They pinpoint employee skills and competencies needing development.
• Criterion against which selection and development programs are validated
• The effectiveness of training and development programs can be assessed by examining the
subsequent performance evaluations of participants.
• Providing feedback to employees on how the organization views their performance
• Basis for reward allocations
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7. What are the advantages and disadvantages of the following performance evaluation methods: (a) written
essays, (b) graphic rating scales, and (c) behaviorally anchored rating scales?
Answer –
• Written essays
The simplest method of evaluation is to write a narrative describing an employee’s strengths, weaknesses,
past performance, potential, and suggestions for improvement. No complex forms or extensive training is
required, but the results often reflect the ability of the writer.
• Graphic ratings scales
These are one of the oldest and most popular methods of evaluation. A set of performance factors, such as
quantity and quality of work, depth of knowledge, cooperation, loyalty, attendance, honesty, and initiative, is
listed. The evaluator then goes down the list and rates each on incremental scales. The scales typically
specify five points. These scales are popular because they are less time-consuming to develop and
administer and allow for quantitative analysis and comparison, but they do not provide the depth of
information that essays or critical incidents do.
• Behaviorally anchored rating scales
BARS combine major elements from the critical incident and graphic rating scale approaches. The appraiser
rates the employees based on items along a continuum, but the points are examples of actual behavior.
BARS specify definite, observable, and measurable job behavior. Examples of job-related behavior and
performance dimensions are found by asking participants to give specific illustrations of effective and
ineffective behavior regarding each performance dimension. The results of this process are behavioral
descriptions, such as anticipates, plans, executes, solves immediate problems, carries out orders, and
handles emergency situations.

8. How can management effectively evaluate individuals when they work as part of a team?
Answer – Performance evaluation concepts have been almost exclusively developed with only individual
employees in mind. Four suggestions for designing a system that supports and improves the performance of
teams are:
• Tie the team’s results to the organization’s goals.
• Begin with the team’s customers and the work process the team follows to satisfy customers’
needs.
• Measure both team and individual performance.
• Train the team to create its own measures.

9. How can an organization’s performance evaluation system affect employee behavior?


Answer – A vital component of expectancy model of motivation is performance, specifically the effort-
performance and performance-reward linkages. Performance is defined by the individual’s performance
evaluation. To maximize motivation, people need to perceive that the effort they exert leads to a favorable
performance evaluation and that the favorable evaluation will lead to the rewards that they value. Individuals
will work considerably below their potential:
• If objectives are unclear.
• if criteria for measuring those objectives are vague.
• if they lack confidence in their efforts.

10. What impact do unions have on an organization’s reward system?


Answer – For employees who are members of a labor union, wage levels and conditions of employment are
explicitly articulated in a contract that is negotiated, through collective bargaining, between representatives of
the union and the organization’s management. The most obvious and pervasive area of labor’s influence is
wage rates and working conditions. Where unions exist, performance evaluation systems tend to be less
complex. The union contract affects motivation through determination of wage rates, seniority rules, layoff
procedures, promotion criteria, and security provisions.

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QUESTIONS FOR CRITICAL THINKING

1. How could the phrase “the best predictor of future behavior is past behavior” guide you in managing human
resources?
Answer – Since the best predictor of future behavior is past behavior, the best interview questions tend to be
those that focus on previous experiences that are relevant to the current job. Examples might include: “What
have you done in previous jobs that demonstrates your creativity?” or “On your last job, what was it that you
most wanted to accomplish but didn’t? Why didn’t you?”

2. Describe a training program you might design to help employees develop their interpersonal skills. How would
that program differ from one you designed to improve employee ethical behavior?
Answer – You may need to help lead students through this answer as the text does not address training
design issues. Students’ responses should address the following facts and categories of interpersonal skills:
Almost all employees belong to a work unit. To some degree, their work performance depends on their ability
to effectively interact. These skills include how to be a better listener, how to communicate ideas more clearly,
and how to be a more effective team player. Their responses should also consider the fact that individuals
process, internalize, and remember new and difficult material differently, and therefore strategies should be
individualized to the learning style of the specific employee.

3. What relationship, if any, is there between job analysis and performance evaluation?
Answer – Job analysis provides the defensible basis for performance evaluation based on task outcomes or
behavior. Job analysis ensures that the performance evaluation evaluates job relevant performance.

4. What problems, if any, can you see developing as a result of using 360-degree evaluations?
Answer – 360-degree evaluations are the latest approach to performance evaluation. It provides for
performance feedback from the full circle of daily contacts that an employee might have. See Exhibit 17-4.

The administration could be cumbersome as more people know about the individual’s evaluation. Because
they contributed, individuals might be reluctant to make tough decisions that will anger peers or subordinates
for fear of reprisals later in their evaluations, etc.

5. GE prides itself on continually raising the performance bar by annually letting go employees who perform in
the lowest 10 percent. In contrast, Cleveland-based Lincoln Electric Co. prides itself on its no-layoff policy.
Lincoln Electric has provided its employees with guaranteed-employment since 1958. How can two
successful companies have such different approaches to employment security? How can they both work?
What implications can you derive from the success of these different practices?
Answer – Students will have a variety of responses to this question. Typically the responses would include a
reference to organizational goals and value systems or culture in terms of making this type of system work.
Also, selection practices will also be a consideration. Not everyone will want to work in a “rate and rank”
system, yet others will find it extremely challenging and motivating. The implications of each system include
how each organization spends its resources in terms of training, retaining, market conditions, etc.

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POINT COUNTER POINT–It’s Time to Abolish Performance Evaluations


POINT
Performance evaluations have failed us. They take up a lot of management’s time and effort. Instead of
providing valid and reliable information for human resource decisions, more often they do nothing other than
demotivate employees. As practiced today, performance evaluations provide management with essentially
worthless data and make employees angry, jealous, and cynical.
There is no shortage of good reasons why performance evaluations should be eliminated. The whole
process, for instance, is political. It is used by management for ulterior purposes—to cover themselves against
lawsuits, to justify different levels of pay, to reward allies, and to punish enemies. Employees see the process as a
sham that can be manipulated for political purposes. So most employees put little value in the process or in the
final results.
Performance evaluations are subjective. In spite of efforts to formalize and systematize the process, rater
errors continue to make any results highly suspicious. Evaluation results also tend to be inflated and non-
differentiating. It is typical for 80 percent or more of employees to be rated above average. This tends to
overvalue most people’s contribution and overlook those who are under-performing.
Employees are not immune to the influences of regular performance evaluations. Regardless of their
validity, most employees still want to receive favorable evaluations. This often encourages employees to misdirect
their efforts in order to look good on the criteria management has chosen to appraise. This, of course, helps to
explain many behaviors that actually undermine an organization’s overall performance— such as following rules
that don’t make any sense or engaging in practices that forgo a large payoff in the long-term in order to gain a
small payoff immediately.
Performance evaluations were a good fit in the management world of the 1950s and 1960s—a world of
bureaucratic organizations run by command-and control managers. In today’s climate of teamwork and
empowerment, performance evaluations are obsolete and should be abolished.

COUNTER POINT
No knowledgeable observer can fail to acknowledge that performance evaluation has its flaws. That is no
reason to abolish the practice.
If you eliminate performance evaluations, with what do you replace it? We still need some measure of an
employee’s contribution. We need to hold people accountable for previous commitments they have made to their
work group and organization; and employees would still need some form of feedback on how they can improve if
they come up short on meeting those commitments.
Many of the negatives associated with performance evaluations can be corrected by following what we
have learned that can make appraisals more valid and reliable, and by focusing on development rather than
evaluation.
Much of the criticism unleashed against performance evaluations is due to the way the process is
handled. For instance, having employees participate in setting their work goals and having them engage in self-
evaluation makes the process more democratic and less threatening. By using comparative rankings,
management can minimize the effect of inflationary ratings, and the use of multiple evaluators lessens the
likelihood of political influence and increases the validity of the results.
In addition, performance appraisals should be used for more than merely evaluation. That is, they should
do more than just try to identify what’s wrong. They should also be used for development purposes—helping
employees learn how they can improve. When the appraisal process focuses more on development than
evaluation, much of the criticism aimed at the process will subside. In a developmental role, managers no longer
have to play God. Rather, they become a supportive coach helping employees to improve their performance.
The arguments against performance evaluation are misdirected. The concept is solid. What needs to be
abolished is the mismanagement of the process. By emphasizing development rather than evaluation, and by
making sure that best practices are followed, the performance evaluation can be a valuable tool for improving
both employee and organizational performance.

Much of this argument is based on T. Coens and M. Jenkins, Abolishing Performance Appraisals (San Francisco: Berrett–Koehler, 2000).

Class Exercise:

Break students into groups. Assign half the class the “POINT” and the other half the “COUNTER POINT.” Ask
them to respond to the issues raised in their assigned reading. Also ask them to propose a viable
alternative. Additionally, ask them what the company would lose or gain by their viewpoint.

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TEAM EXERCISE – Evaluating Performance and Providing Feedback

Purpose: To experience the assessment of performance and observe the providing of performance feedback
Time: Approximately 30–45 minutes
Instructions
1. Choose a class leader. He/she may be either a volunteer or chosen by your instructor.
2. The class leader will preside over the class discussion and perform the role of manager in the evaluation
review.
3. The instructor leaves the room.
4. As a class, you will evaluate your instructor.
• The class leader will facilitate class discussion for up to 15 minutes.
• Remember this is only a class exercise. Be prepared to accept criticism. You may learn some
helpful things.
• The leader’s evaluation is actually a composite of many students’ input.
5. Students will use the following seven performance dimensions:
• Instructor knowledge
• Testing procedures
• Student-teacher relations
• Organizational skills
• Communication skills
• Subject relevance
• Utility of assignments
6. Student discussion of your performance should focus on these seven dimensions. The leader may want to
take notes for personal use but should not be required to give them to you.
7. When the 15-minute class discussion is complete, the leader will invite the instructor back into the room.
8. The performance review will begin as soon as the instructor walks through the door, with the class leader
becoming the manager and with the instructor playing himself/herself.
9. The class leader/manager should conduct the feedback session according to the process described in the
text.
10. When processing the learning, think about the following:
• How behavioral and specific the feedback was
• What you learned through it
11. When you discuss how well your class leader did in providing performance feedback, be careful to be fair and
low key. This exercise can build trust for later exercises or alienate the students, especially the leader.

Class Exercise:

1. This is a high risk exercise—for you. If it is done well, you can build rapport and trust and learn something
valuable to your own teaching effectiveness. Be careful to neither be defensive nor take their comments too
much to heart.
2. Remember you are probably dealing with an evaluation “team” made up largely of inexperienced young
adults. Help them to understand that evaluation goes both ways. Ask them to use these same evaluation
criteria on presentations that they have made recently. What criteria should be used for their work and how
should feedback be provided?

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ETHICAL DILEMMA – Is It Unethical to “Shape” Your Resume?

When does “putting a positive spin” on your accomplishments step over the line, to become
misrepresentation or lying? Does a resume have to be 100 percent truthful? Consider the following three
situations.
Sean left a job for which his title was “credit clerk.” When looking for a new job, he describes his previous
title as “credit analyst.” He thinks it sounds more impressive. Is this retitling of a former job wrong?
About eight years ago, Emily took nine months off between jobs to travel overseas. Afraid that people
might consider her unstable or lacking in career motivation, she put down on her resume that she was engaged in
“independent consulting activities” during the period. Was she wrong?
Michael is 50 years old with an impressive career record. He spent five years in college 30 years ago, but
he never got a degree. He is being considered for a $175,000-a-year vice presidency at another firm. He knows
that he has the ability and track record to do the job, but he would not get the interview if he admits to not having a
college degree. He knows that the probability that anyone would check his college records, at this point in his
career, is very low. Should he put on his resume that he completed his degree?

Class Exercise:

Ask students to bring in their resumes. Also bring in a variety of resumes (many samples can be found on web
sites focused on resume writing).
Group the students by similar job titles found on resumes. (All the titles do not need to be the same—one job is
enough. They can simply be grouped by professional, entry level, typical college jobs, etc.)
Ask the students to “creatively” rewrite the information provided for a job title. Ask them to rewrite it “accurately
creative,” “conservatively creative,” and “outrageously creative.”
When they have finished (and hopefully there have been a few laughs here) have them read the three versions.
What is the difference between them? Where do you draw the line between accurately creative and
outrageously creative? Did any of the versions get to outright lying?
Is it possible to write a better resume without lying? Would lying really improve this person’s chances for a job?
Why or Why not?

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CASE INCIDENT – Is This Anyway to Run a Business?

SAS Institute Inc. is probably the least-well-known major software company in the world. The company
makes statistical analysis software (hence the acronym SAS). It is growing very rapidly. From 1,900 employees
five years ago, it now has 5,400. SAS is not your typical software company, it is not your typical anything
company!
At its headquarters, just outside Raleigh, North Carolina, there is a 36,000-square-foot gym for
employees. There is a large, hardwood aerobic floor; two full length basketball courts; pool tables; a private, sky-
lighted yoga room; and workout areas. Outside, there are soccer and softball fields. Massages are available
several times a week, and classes are offered in golf, African dance, tennis, and tai chi. The company also
operates the largest on-site day-care facility in North Carolina. To encourage families to eat lunch together, the
SAS cafeteria supplies baby seats and high chairs. To encourage families to eat dinner together, the company
has a seven-hour workday, five days a week. Unlike many work-obsessive software firms, most SAS employees
leave the office by 5 P.M. Management likes to call its workplace culture “relaxed.”
The list of employee amenities at SAS goes on and on. Unlimited soda, coffee, tea, and juice. One week
paid vacation between Christmas and New Year’s Day. An on-site health clinic staffed with six nurse practitioners
and two physicians. Zero cost to employees for health insurance. Dirty workout clothes laundered overnight at no
charge. Casual dress every day. Elder-care advice and referrals. Unlimited sick days, and use of sick days to care
for sick family members.
Is this anyway to run a business? Management thinks so. SAS’s strategy is to make it impossible for
people not to do their work. Even though the company provides no stock options and salaries no better than
competitive, the company has built an unbelievably loyal workforce. Whereas competitors typically have turnover
rates above 30 percent, SAS’s rate has never been higher than five percent. Management claims that it saves
$67 million a year just in employee replacement–related costs such as recruitment, interviews, moving costs for
new hires, and lost work time. That gives it an extra $12,500 per year per employee to spend on benefits.
Just in case anyone wonders if the company makes any money, we will add the following: SAS is owned
by just two people—Jim Goodnight and John Sall. Forbes magazine recently listed Goodnight, with $3 billion, as
number 43 on its list of the 400 richest people in America. Sall, with $1.5 billion, was number 110.

Questions:
1. One critic calls SAS “a big brother approach to managing people.” Is the company too paternalistic? Can a
company be too paternalistic?
Answer – This question reflects a value judgment by students. What will be important is having students
explain their basis of their answer. Most will say how great it would be to have such benefits. Can a company
“handcuff” employees to it by offering them too much, so when they should leave, they don’t?

2. When, if ever, does family-friendly become paternalistic?


Answer – See #1 above.

3. What negatives, if any, would you find working for SAS?


Answer – Students may need help to see the negatives. Help them focus on what these practices might do to
hinder personal responsibility, appropriate mobility of workers, etc.

4. Are progressive HR practices like those at SAS a cause or result of high profits? Discuss.
Answer – This is a chicken and the egg question. In one sense, they are not, because there is little research
support for the linkage between job satisfaction and employee productivity and effectiveness. Yet, if SAS is
telling the truth, there are clearly significant savings if turnover is managed.

5. Microsoft is an unbelievably successful software company, but no one would ever call their culture relaxed. It
is “frantic.” Employees regularly put in 12- to 14-hour days, six and seven days a week. How does Microsoft
keep people? Do you think SAS and Microsoft attract different types of employees? Explain.
Answer – Ask students to refer to earlier text material on organizational culture and how companies use their
selection practices to find employees who fit in. What type of people would succeed at each company?
Students might also note that, at Microsoft, janitors and secretaries can become millionaires. This is not
mentioned in the material about SAS.

Source: Based on C. Fishman, “Sanity Inc.,” Fast Company, January 1999, pp. 85–96.]

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Exploring OB Topics on the World Wide Web


Search Engines are our navigational tool to explore
the WWW. Some commonly used search engines
are:

www.goto.com www.google.com
www.excite.com www.lycos.com
www.hotbot.com www.looksmart.com

1. Do you have a job in mind once you graduate from college, or maybe a dream job that you hope
to land someday? Write a job description for the job. Include as much detail as possible,
including qualifications, nature and scope, etc. If you are not sure what to include do a web
search on job descriptions, there are many free sites that will give you the needed categories.

Once you have written the job description for your dream job, try to find a site that has that job
listed and compare what you wrote to the on-line version of the job description. One place that
is a reservoir of job descriptions is the state of Idaho’s HR site. Go to:
http://www.dhr.state.id.us/Classifications.asp to compare your description with the one they
have. Were there any differences in the two descriptions? What will you need to do to prepare
for that job? Be prepared to discuss your findings in class.

2. Are you looking for a job now or plan to once you graduate? Is there help for you as you begin
your quest? Try http://www.jobweb.com/home.cfm for information on starting salaries, salary
information, job market research and more. Try to find a career fair that you might be interested
in. Then go to the pages that offer advice on attending career fairs. Print and bring this
information to class for discussion.

3. Rank and Yank. This is not are “official term” you will see in the textbooks, but it is how
employees often refer to Forced Rankings as a method of evaluation. Below are three web
sites (a web search will yield more) that discuss this topic. Write a short two page paper on
your reaction to the term “rank and yank” after reading on or more of the articles found on these
web pages.

http://www.resourcesconnection.com/aboutus/newsroom/article24.htm
http://www.laweekly.com/ink/02/08/on-powers.php
http://www.darwinmag.com/connect/opinion/column.html?ArticleID=105

4. Termination. Not a friendly term, but employees are fired everyday. What would you do if you
were the person who is to deliver the bad news to the employee? There are better ways than
others to let an employee go, and they involve “due process.” Learn more about how to conduct
yourself in this situation at: http://www.hrzone.com/topics/firing.html . Write a short reaction
paper on what you learned. Include not only what you learned if you were the person delivering
the bad news, but what you think you would do if you were the one being terminated.

5. Writing a job analysis is one of those duties that managers typically only do rarely in their
careers, but it is important when a new job is created or when making decisions about what
training should take place for new employees. Go to: http://www.hrzone.com/topics/joba.html
and read about how to conduct a job analysis. Select a job and then write a job analysis for it
based on the recommendations of the article. Try to select a “public” job or one that everyone in
the class would be familiar with. For example: bank teller, flight attendant, customer service
representative, travel agent, even—college professor! Bring your analysis to class for feedback.

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