Uts Pmi (English)

Fundamentals of
Human Resource Management 11e
Chapter 1 The Dynamic Environment of

HRM
Introduction
HRM is a subset of management that has five main
goals:
attract
employees
retain hire
Goals employees
employees
of
HRM
motivate train
employees employees
Strong employees = competitive advantage.

Understanding Cultural
Environments
▪ HRM operates in a global business
environment
▪ Countries have different
• values
• morals
• customs
• political, economic, and legal systems
HRM helps employees understand other countries’

political and economic conditions.
Exhibit 1-1: Cultural Values
Understanding Cultural Environments
The Heritage Foundation’s Index of Economic Freedom rates
179 countries on openness to trade, business, investment, and
property rights. The U.S. was #10 in 2012. North Korea is the
most repressed.
TOP 10 FREE COUNTRIES TOP 10 LEAST-FREE COUNTRIES
1. Hong Kong 1. North Korea
2. Singapore 2. Zimbabwe
3. Australia 3. Cuba
4. New Zealand 4. Libya
5. Switzerland 5. Eritrea
6. Canada 6. Venezuela
7. Chile 7. Burma
8. Mauritius 8. Dem. Rep. of Congo
9. Ireland 9. Iran
10. United States 10. Equatorial Guinea
2012 Country Rankings, see www.heritage.org/index/Ranking.aspx
The Changing World of Technology
▪ HRM operates in a technologically changing

environment
▪ Thomas Friedman:
Globalization 1.0 Globalization 2.0 Globalization 3.0

(1492-1800) (1800 -2000) (2000 -????)
Driven by transportation Driven by communication Driven by technology
3.0 fueled by instant communication and the Internet.

The Impact of Technology
▪ HR is increasingly using IT
▪ Knowledge workers focus on the acquisition and
application of information for decision making.
▪ Some books for aspiring knowledge workers:
1. Learning as a Way of Being by Peter B. Vaill

2. Thinking for a Living: How to Get Better Performance and
Results from Knowledge Workers by Thomas H. Davenport
3. Information Anxiety 2 by Richard S. Wurman
▪ HRM information systems help to

• facilitate HR plans
• make decisions faster
• clearly define jobs
• evaluate performance
• provide desirable, cost-effective benefits
▪ HR managers use technology to:

• recruit, hire, and train employees
• motivate and monitor workers
• research fair compensation packages
• communicate throughout the organization
• evaluate decentralized employees’
performance
Workforce Diversity
▪ HRM has moved from the melting pot assumption to

celebrating workforce diversity.
▪ The U.S. Dept. of the Interior’s website overviews major U.S.
civil rights legislation. Click here
The Civil Rights Acts of 1964 and 1991

Equal Pay Act of 1963
Americans with Disabilities Act of 1990
The Age Discrimination in Employment Act
The Rehabilitation Act
Workforce Diversity
▪ Today’s workers want a healthy work/life balance.

▪ They can work any time, from almost anywhere
▪ Work more than 40 hours per week
▪ Part of a dual-income household
#1 reason
for leaving a company:
lack of work schedule flexibility
The Labor Supply
▪ HR managers monitor the labor supply.

▪ Trend is to rightsize: fit company goals to
workforce numbers.
▪ For agility, companies build a contingent
workforce of:
• Part-time workers
• Temporary workers
• Contract workers
Continuous Improvement
Programs
focus
on
customer
concern for
empowerment continuous
of employees continuous improvement
improvement
components
accurate concern for

measurement total quality
HR managers help workers adapt to continuous improvement changes

through retraining, providing answers, and monitoring expectations.
Employee Involvement
It’s all about employee empowerment through

involvement, which increases worker
productivity and loyalty.
Employee Involvement Concepts
delegation • participative management

work teams • goal setting • employer training
Other HRM Challenges
▪ Challenges for HRM:

• The recession has brought layoffs and low morale.
• Increased offshoring means jobs can move
overseas, even HR.
• Current trend of mergers and acquisitions increase
HR’s role.
A Look at Ethics
▪ Code of ethics: a formal statement of an

organization’s primary values and the ethical
rules it expects members to follow.
▪ HR managers must take part in enforcing
ethics rules.
Sarbanes-Oxley Act of 2002

Requires proper financial recordkeeping
for public companies
True or False?
1. HRM should assume all countries have the same cultures.
False!
2. Technology and information technology have little impact on HRM.
False!
3. Today’s workforce is composed of diverse groups.
True!
4. Rightsizing is a strategy companies use to balance their labor supply.
True!
5. Continuous improvement programs eliminate change in an organization.
False!
6. Employee empowerment increases worker involvement and productivity.
True!
7. HRM is affected by the economy.
True!
8. HRM can play a vital role in enforcing ethical codes of conduct.
True!
Fundamentals of
Chapter 2 Fundamentals of
Strategic HRM
Importance of HRM
HRM has a dual nature:

supports the
organization’s strategy
represents and advocates

for the employees
Strategic HRM provides a clear connection between the

organization’s goals and the activities of employees.
Fundamentals of Human Resource Management 11e

HR and Organizational Strategy
Strategy Type What It Looks Like Implications for HR
Cost differentiation: Provide Emphasize acquiring low cost Structure jobs, departments to maximize
great value and low cost. materials, streamlining cross training, knowledge sharing.
processes, reducing waste, Design compensation programs to reward
maximizing efficiencies (e.g., Wal- efficiency, cost savings.
Mart, Hyundai). Select employees with versatile skill sets.
Product differentiation: Emphasize creativity and Design compensation systems to reward

Deliver product/service that innovation. Consumers faced creativity, innovation.
is similar to competitors with multiple choices; identify Educate employees about product/service
but incorporates a those features that make the differentiating features.
feature(s) that differentiates product/service stand out (e.g., Create marketing campaign to promote
it. Apple, Netflix, Aveda). special product features.
Customer Intimacy Emphasize relationship between Recruit and select job candidates with
Strong personal consumers, point person. strong customer service and customer
relationship between Personalized service relations skills to help fortify the
provider of product or differentiates the product/service provider/consumer relationship.
service and customer. from competitors (e.g., local hair Focus reward strategies on customer
salon, Pandora, Nordstrom). attraction, satisfaction and retention.
Customer/Market Focus Emphasize the needs of a specific Use strong market research to drive
Unique target market target market, like generational or recruitment and selection so employees
characteristics lifestyle (e.g., Abercrombie & have a strong understanding of the target
Fitch. Harley-Davidson, Urban market.
Outfitters). Emphasize versatility and adaptability as
products and services are subject to rapid
change.

The HRM Functions
HRM has four basic functions:
staffing
training and
developme
nt motivation
maintenanc
e
In other words, hiring people, preparing them, stimulating

them, and keeping them.

The HRM Functions
▪ Strategic human resource

planning staffing
• Match prospects’ skills to the
company’s strategy needs
▪ Recruiting
• Use accurate job descriptions
to obtain an appropriate pool
of applicants
▪ Selection
• Thin out pool of applicants to
find the best choice
Fundamentals of Human Resource Management
11e
The HRM Functions
training
and
developm
ent
▪ Orientation
• Teach the rules, regulations, goals, and culture of the company
▪ Employee training The goal is to have
• Help employees acquire better skills for the job competent, well
▪ Employee development adapted
• Prepare employee for future position(s) in the company
employees.
▪ Organizational development
• Help employees adapt to the company’s changing strategic directions
▪ Career development
• Provide necessary information and assessment in helping employees realize career goals

The HRM Functions
motivati
on
Theories and job design:
▪ Environment and well-constructed jobs factor heavily
in employee performance
▪ Performance appraisals:
• Standards for each employee; must provide feedback
▪ Rewards and compensation:
• Must be link between compensation and performance
▪ Employee benefits:
• Should coordinate with a pay-for-performance plan

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The HRM Functions
maintenan
ce
Safety and health:

▪ Caring for employees’ well-being
has a big effect on their commitment
▪ Communications and employee
relations:
• Keep employees well-informed of company
doings, and provide a means of venting
frustrations
Job loyalty has declined over the past decade.

External Influences on HRM
dynamic
environ
ment
manage laws
and
ment HRM regulati
thought
ons
labor
unions
External influences affect HRM functions.

Dynamic Environment
• Dynamic environment
• Globalization
• Workforce diversity
• Teams
HR Professionals • Changing skill requirements
need to keep
current with • Continuous improvement
classes,
• Decentralized work sites
workshops and
seminars • Technology
• Employee involvement
• Ethics

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laws and
regulation
s
▪ Legislation has an enormous effect on HRM
▪ Laws protect employee rights to union representation, fair
wages, family medical leave, and freedom from discrimination
based on conditions unrelated to job performance
▪ The U.S. Equal Employment Opportunity Commission
www.eeoc.gov enforces federal laws on civil rights at work.

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labor
unions
▪ Assist workers in dealing with
company management
▪ Negotiate wages, hours, and other
terms of employment
▪ Promote and foster a grievance
procedure between workers and
management
When a union is present, employers can
not fire workers for unjustified reasons.
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managem
ent
thought
▪ Frederick Taylor developed principles to enhance worker productivity
▪ Hugo Munsterberg devised improvements to worker testing, training,
evaluations, and efficiency
▪ Mary Parker Follet advocated people-oriented organizations
▪ Elton Mayo’s Hawthorne Studies: dynamics of informal work groups
have a bigger effect on worker performance than do wage incentives
The Hawthorne Studies gave rise to the human relations movement:

benefits, healthy work conditions, concern for employee well-being.
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Structure of the HR Department
Employment
• Promotes staffing activities,

recruits new employees, but
does not make hiring decision
Training and development
• Helps workers adapt to

change in the company’s
external and internal
Compensation/benefits environments
• Pays employees and

administers their benefits
package
Employee relations
• Ensures open communication

within the company by
fostering top management
commitment, upward and
11e accurate communication,
feedback, and effective
Careers in HR
HR positions include:
• Assistants
• support other HR professionals
• Generalists
• who provide service in all four HR functions
• Specialists
• work in one of the four HR functions
• Executives
• report to top management and coordinate HR functions
to organizational strategy
Interpersonal communication skills and ambition are two

factors that HR professionals say advance their careers.
HR Certification
▪ Human Resource Certification Institute has

established these certifications for HR Professionals:
• PHR
• SPHR
• GPHR
• PHR-CA/SPHR CA
• To learn more about the requirements, go to HRCI.org

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Careers in HR
▪ Organizations that spend money for quality HR

programs perform better than those that don’t.
(HCI study)
▪ Quality programs:
• reward productive work
• offer a flexible, work-friendly environment
• properly recruit and retain quality employees
• provide effective communications
Make sure HR services match the overall
organizational strategy.
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Exhibit 2-6

HR Trends and Opportunities
▪ Outsourcing
• More than half of all companies outsource all or some parts
of their HR functions
▪ Professional Employer Organizations (PEO)
• Help small- to medium-size companies attract stronger
candidates and handle new laws in HR
▪ Shared Services
• Allow organizations with several divisions or locations to
consolidate some HR functions into one central location
while retaining certain functions in divisional locations
▪
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Entrepreneurial, Global, Ethical
HR
▪ Small business HR
• Managers in small businesses perform the same
functions of those in larger businesses, but on a
smaller scale
▪ Global HRM
• Growing area of HR
• Complex environment

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Entrepreneurial, Global, Ethical
HR
▪ Ethics
• Sarbanes-Oxley act (sox) enacted in response to
ethical failures in several large companies
• Seeks to hold top management responsible for
ethical practices
• HR is responsible for much employee ethics
training
• HR communicates employee legal rights

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Match the Fours
Four major HR positions staffing, training, motivation, maintenance
Four HR department environment, laws, labor unions, management

areas thought
Four quality programs employment, training, compensation,

employee relations
Four HRM functions

assistants, generalists, specialists, executives
reward productive work

Four external influences
offer a flexible, work-friendly environment
on HRM
properly recruit and retain quality employees
provide effective communications

Fundamentals of
Chapter 5
Human Resource Planning and Job Analysis
Introduction
Human resource planning is a process by

which an organization ensures that
▪ It has the right number and kinds of people
▪ At the right place
▪ At the right time
▪ Capable of effectively and efficiently completing those
tasks that will help the organization achieve its overall
strategic objectives
Fundamentals of Human Resource Management 11e 2

An Organizational Framework
▪ A mission statement defines what business

the organization is in, including
• Why it exists
• Who its customers are
• Strategic goals set by senior management to
establish targets for the organization to achieve
Goals are generally defined for the next 5-20 years.

Linking Organizational Strategy to
HR Planning
▪ During a corporate assessment:
• SWOT Analysis determines what is needed to
meet objectives
▪ Strengths
▪ Weaknesses
▪ Opportunities
▪ Threats
HRM determines what knowledge, skills, and abilities are needed by

the organization’s human resources through a job analysis.

HR Planning
STRATEGIC DIRECTION HR LINKAGE
mission determining organization’s

business
setting goals and

objectives and goals
objectives
strategy determining how to attain

goals and objectives
determining what jobs need to be

structure
done and by whom
matching skills, knowledge,

people and abilities to required jobs
HR Planning
HR must ensure staff levels meet strategic
planning goals.
• An HR inventory report summarizes information
on current workers and their skills
• HR information systems (HRIS)
▪ Process employee information
▪ Quickly generate analyses and reports
▪ Provide compensation/benefits support

HR Planning
▪ Succession planning includes the development
of replacement charts that
• Portray middle- to upper-level management positions that
may become vacant in the near future
• List information about individuals who might qualify to fill
the positions
Carolyn
Beth Carlos Gus

HR Planning
HR must forecast staff requirements:
▪ HR creates an inventory of future staffing needs for
job level and type, broken down by year
▪ Forecasts must detail the specific knowledge, skills,
and abilities needed, not just “we need 25 new
employees”

HR Planning
HR predicts the future labor supply:
▪ A unit’s supply of human resources comes from:
• New hires
• Contingent workers
• Transfers-in
• Individuals returning from leaves
▪ Predicting these can range from simple to complex
▪ Transfers are more difficult to predict since they depend on
actions in other units

HR Planning
Decreases in internal supply come about through:
▪ retirements easiest to forecast
▪ dismissals possible to forecast
▪ transfers possible to forecast
▪ layoffs possible to forecast
▪ sabbaticals possible to forecast
▪ voluntary quits difficult to forecast
▪ prolonged illnesses difficult to forecast
▪ deaths hardest to forecast

HR Planning
Candidates come from
• Migration into a community
• Recent graduates
• Individuals returning from military service
• Increases in the number of unemployed and employed
individuals seeking other opportunities, either part-time or
full-time
The potential labor supply can be expanded by formal or

on-the-job training.

HR Planning
To match labor demand and supply, HR
▪ Compares forecasts for demand and supply of
workers
▪ Monitors current and future shortages, and
overstaffing. Sometimes, strategic goals must change
as a result
▪ Uses downsizing to reduce supply and balance
demand

HR Planning
Employment Planning and the Strategic Planning
Process
demand for labor Outcomes
demand exceeds recruitment

assess current supply
define establish human resources compare demand
organization corporate goals -- - - - - - - - - - - - - for and supply of
mission and objectives HRMS: human resources
job analysis supply exceeds
demand decruitment
supply of
human resources

Job Analysis
Job analysis is a systematic exploration of the

activities within a job.
▪ It defines and documents the duties, responsibilities,
and accountabilities of a job and the conditions under
which a job is performed
▪ Click here to see a sample job analysis

Job Analysis
Job Analysis Methods

▪ observation– job analyst watches employees directly or reviews film of
workers on the job
▪ individual interview– a team of job incumbents is selected and extensively
interviewed
▪ group interview– a number of job incumbents are interviewed
simultaneously
▪ structured questionnaire– workers complete a specifically designed
questionnaire
▪ technical conference– uses supervisors with an extensive knowledge of
the job
▪ diary– job incumbents record their daily activities
The best results are usually achieved with some combination of methods.
Job Analysis
understand the purpose review draft
of the job analysis with supervisor
understand the roles of

develop draft
jobs in the organization
benchmark positions seek clarification
determine how to collect

job analysis information
Job Analysis
▪ Occupational Information Network

• O*NET Content Model
See online at
http://online.onetcenter.org/

Job Analysis
Position Analysis Questionnaire (PAQ)

▪ Jobs are rated on 194 elements, grouped in six major
divisions and 28 sections
▪ The elements represent requirements applicable to all
types of jobs
▪ Its quantitative structure allows many job
comparisons, however, it appears to apply to only
higher-level jobs

Job Analysis
Job descriptions list:

▪ Job title
▪ Job identification
▪ Job duties/essential functions in order of importance
▪ Job specifications - minimal qualifications for job
They are critical to:
▪ Describing job to candidates
▪ Guiding new-hires
▪ Developing performance evaluation criteria
▪ Evaluating job’s compensation worth

Job Analysis
Almost all HRM
activities are tied recruiting
to job analysis; it labor selection
relations
is the starting
point for sound
HRM. safety &
HR
job planning
health analysis
job
description
job
employee
specificatio development
compensation
ns
performance employee
management training
career
development

Job Design
▪ Job Design is how a position and its tasks are

organized. Every job should
• Be organized to provide a sense of purpose and
accomplishment
• Have a clear relationship to the organizational
purpose and mission.

Job Enrichment
▪ Job Enrichment motivates through

• Skill variety
• Task identity
• Task significance
• Autonomy
• Feedback from job itself
If you want people to do a good job,
give them a good job to do…
Frederick Herzberg

Flexible Work Schedules
▪ Types of flexible schedules:

• Compressed work week
• Flex time
• Job Sharing
• Telecommuting

Job Design and Teams
▪ Effective work teams

• Are flexible
• Continually make adjustments
• Have competent individuals with appropriate skills
▪ Technical
▪ Teamwork
▪ Interpersonal
• Good feedback

True or False?
1. HR planning must be separate from the organization’s overall strategy.
False!
2. A mission statement defines what business the organization is in.
True!
3. To forecast staff requirements, HR creates an inventory of future
staffing needs for job level and type, broken down by decade.
False!
4. Job analysis is a systematic exploration of the activities within a job.
True!
5. A position analysis questionnaire is more qualitative than quantitative in
nature.
False!
6. Job design is how a position and its tasks are organized.
True!
Fundamentals of
Chapter 6 Recruiting
Introduction
Once an organization identifies its human resource

needs through employment planning, it can begin
recruiting candidates for actual or anticipated vacancies.
Recruiting brings together
those with jobs to fill and those seeking jobs

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Recruiting Goals
▪ Recruiting provides information that will attract a

significant pool of qualified candidates and
discourage unqualified ones from applying
▪ Recruiters promote the organization to prospective
applicants
▪ Minimize costs of processing unqualified candidates

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Recruiting Goals
▪ Factors that affect recruiting efforts:

• Organizational size
• Employment conditions in the area
• Effectiveness of past recruiting efforts
• Working conditions, salary, and benefits offered
• Organizational growth or decline

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Recruiting Goals
▪ Constraints on recruiting efforts:

• Organization’s image
• Job attractiveness
• Internal organizational policies
• Government policy and laws
• Recruiting costs

Recruiting Sources
internal
searches
employee
referrals
external
searches
Online recruiting is online and

increasing alternative
dramatically

Recruiting Sources
internal search
Organizations that promote from within identify current

employees for job openings by
• Having individuals bid for jobs
• Using their HR management system
• Utilizing employee referrals

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Recruiting Sources
Promoting from within

Advantages Disadvantages
• good public relations • possible lack of internal

• morale building candidates
• encouragement of employees and • infighting and morale problems
members of protected groups • may perpetuate cultural problems
• knowledge of existing employee • less diversity
performance
• fewer new ideas
• Recruiting cost-savings
• candidates’ knowledge of the
organization
• opportunity to develop mid- and
top-level managers

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Recruiting Sources
employee
referrals
Current employees can be asked to recommend recruits.

▪ Advantages:
• The employee’s motivation to make a good recommendation
• The availability of accurate job information for the recruit
• Employee referrals tend to be more acceptable applicants, more likely
to accept an offer, and have a higher survival rate
▪ Disadvantages:
• The possibility of friendship being confused with job performance
• The potential for nepotism
• The potential for adverse impact

Recruiting Sources
external
searches
Advertisements: Must decide type and location of ad, depending

on job; decide whether to focus on job (job description) or on
applicant (job specification).
Three factors influence the response rate:
• Identification of the organization
• Labor market conditions
• The degree to which specific requirements are listed.
Blind box ads do not identify the organization.

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Recruiting Sources
Employment Agencies:
▪ Public or state employment services
• Focus on helping unemployed individuals to find jobs
www.careeronestop.org
▪ Private employment agencies
• Provide more comprehensive services and are perceived to offer
positions and applicants of a higher caliber
▪ Management consulting firms (“headhunters”)
• Research candidates for mid- and upper-level executive placement
▪ Executive search firms
• Screen potential mid/top-level candidates while keeping prospective
employers anonymous
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Recruiting Sources
Schools, colleges, and universities:

▪ May provide entry-level or experienced workers
through their placement services
▪ May also help companies establish cooperative
education assignments and internships

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Recruiting Sources
Job Fairs
▪ Attended by company recruiters seeking resumes and
info from qualified candidates
▪ Virtual online job fairs could bring employers and job
seekers together online by logging into a specific Web
site at a certain time. Some sites use avatars as
candidates and recruiters.

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Recruiting Sources
Professional organizations
• Publish rosters of vacancies
• Run placement services at meetings
• Control the supply of prospective applicants
• Labor unions are also in this category
▪ Unsolicited applicants (walk-ins)
• May provide a stockpile of prospective applicants
if there are no current openings

Recruiting Sources
online
sources
▪ Most companies use the Internet to recruit employees

• CareerBuilder
• Monster
• Manpower
• Adecco
• Dice
• Facebook
• LinkedIn
▪ Job seekers use online resumes and create Web pages about
their qualifications
Recruiting Sources
recruiting
alternatives
Temporary help Independent

Employee leasing:
services: contractors:
• Temporary • Trained workers are • Do specific work
employees help employed by a either on or off the
organizations meet leasing company, company’s premises
short-term which provides them • Costs of regular
fluctuations in HRM to employers when employees (i.E.
needs needed for a flat fee Taxes and benefits
• Older workers can • Typically remain costs) are not
also provide high- with an organization incurred
quality help for longer periods of
time

A Global Perspective
▪ For some positions, the whole world is a relevant

labor market. So, HR can recruit
▪ Home-country nationals who provide extensive
company experience to launch a product in a country
where it has never sold before
▪ Host-country nationals when a foreign subsidiary is
being established and HQ wants to retain control yet
hire someone with local market knowledge
▪ Candidates of any nationality, creating a truly
international perspective
Your Own Job Search
Preparing Your Resume

• Use quality paper and easy-to-read type
• Proofread carefully
• Include volunteer experience
• Use keywords
• Use a cover letter to highlight your
greatest strengths
Develop a network to gain access to prospective

employers.

Matching
temp services and employee
constraints on
leasing
recruiting efforts
recruiting sources matching those with jobs to fill

with those seeking jobs
recruiting
employment conditions in the

affects recruiting area
efforts
recruiting alternatives organization’s image
internal/external searches
Fundamentals of
Chapter 7 Foundations of Selection

The Selection Process
The selection initial screening
Failed to meet minimum qualifications
process typically Passed
consists of eight completed application

Failed to complete application or
steps. Passed failed job specifications
employment test
Failed test
Passed
conditional comprehensive interview
job offer Passed Failed to impress interviewer and/or
meet job expectations
background examination
if required Problems encountered
Passed
permanent
job offer medical/physical examination
(conditional job offer made) reject applicant
Unfit to do essential
elements of job
Able to perform essential elements of the job

initial screening
interview
Job description information is shared along with a

salary range
• Weeding out of applicants who don’t meet general job
requirements
• Screening interviews help candidates decide if position is
suitable

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completing
the application
Gives a job-performance-related synopsis of what applicants have

been doing, their skills and accomplishments.
▪ Legal considerations
• Omit items that are not job-related such as gender, religion, age
• Includes statement giving employer the right to dismiss an employee
for falsifying information
• Asks for permission to check work references
• Typically includes “employment-at-will” statement

completing
the application
Weighted application forms

• Individual pieces of information are validated against
performance and turnover measures and given appropriate
weights
• Data must be collected for each job to determine how well
a particular item (Years of schooling, tenure on last job)
predicts success on target job

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completing
the application
▪ Information collected on application forms can be

highly predictive of successful job performance
▪ Forms must be validated and continuously reviewed

and updated
▪ Data should be verified through background

investigations
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pre-employment testing
▪ Performance simulation tests

• Require applicants to engage in job behaviors necessary for doing the
job successfully
▪ Work sampling
• Uses job analysis to develop a miniature replica of the job so the
applicant can demonstrate his/her skills
▪ Assessment centers
• Give tests and exercises, (individual and group), to assess managerial
potential or other complex skills
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comprehensive
interviews
▪ Assesses motivation, values, ability to work under

pressure, attitude, ability to fit in
▪ Can be traditional, panel, or situational
▪ Especially useful for high-turnover jobs and less
routine ones
The interview is only as effective as those conducting it.
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comprehensive
interviews
▪ Impression management
• Applicant’s attempts to project the “right image” may skew interview results
▪ Interviewer bias
• Created by reviewing materials such as the resume, application, or test scores
prior to the actual interview
▪ Interviewers have short and inaccurate memories, note-taking and video
may help
▪ Behavioral interviews are much more effective at predicting job
performance than traditional interviews
▪ Realistic job previews (brochures, videos, plant tours, work sampling) help
reduce turnover rates
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conditional
job offer
▪ HR manager makes an offer of employment,

contingent on successful completion of background
check, physical/medical exam, drug test, etc.
▪ May use only job-related information to make a

hiring decision

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Verifies information from the application form:
▪ References
background
▪ Former employers
investigation
▪ Education
▪ Third-Party
▪ Legal status to work in U.S.
▪ Credit references
▪ Criminal records
▪ Online Searches
What employers look for on Facebook
What are employee and employer rights when doing online background
checks?

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background
investigation
▪ Qualified privilege:
• Former employers may discuss employees with prospective employers
without fear of reprisal as long as the discussion is about job-related,
documented facts
▪ One-third of all applicants exaggerate their backgrounds or
experiences
▪ A good predictor of future behavior is an individual’s past
behavior
Companies can be held liable for failure to properly hire.
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medical investigation
▪ Used only to determine if the individual can comply

with essential functions of the job
▪ Americans with Disabilities Act requires that exams
be given only after conditional job offer is made
▪ Drug tests can be given at this time
▪ Company health & life insurance policy qualifier

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job offer
▪ Actual hiring decision generally made by the department

manager, not HR manager
▪ Candidates not hired deserve the courtesy of prompt
notification
Resources for Job Seekers: Evaluating Companies
Dun & Bradstreet’s Million Dollar Directory
Standard and Poor’s Register of Corporations
Mergent’s Industrial Review (formerly Moody’s Industrial Manual)
Thomas Register of American Manufacturers
Ward’s Business Directory
From: http://www.bls.gov/oco/oco20046.htm
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The Comprehensive Approach

▪ Comprehensive selection
• Puts applicants through all the steps in the selection process
before making a decision.
• Assesses both strengths and weaknesses, and is considered
more realistic
• May only measure factors related to the job
• Typically more costly and time consuming

11e
Now it’s up to the candidate

▪ Most people want jobs compatible with their
personality
▪ Applicants who are not hired this time will still form
an impression about the company
▪ Management should make sure the selection process
leaves candidates with a favorable impression of the
company

11e
Key Elements for Successful
Predictors
What test elements help predict which applicants will

be successful on the job?
reliability
validity
cut scores

Predictors
reliability
▪ The ability of the selection tool to measure an

attribute consistently
▪ HR managers need reliable tests to make sure the
applicant will perform satisfactorily
There are companies that specialize in employment testing. For

example, watch the demo at www.eSkill.com
11e
Predictors
validity
▪ The relationship between scores on a selection tool

and a relevant criterion, such as job performance.
• Content validity
• Construct validity
• Criterion-related validity

11e
Predictors
validity
Content validity Construct validity Criterion-related validity

• Degree to which the content • Degree to which a particular • Degree to which a selection
of the test, as a sample, (abstract) trait is related to device accurately predicts
represents situations on the successful job performance important elements of work
job behavior
• Predictive validity uses test
scores of applicants to
compare with their future
job performance
• Concurrent validity
correlates test scores of
current employees with
measures of their job
performance

Predictors
Predictive
Give test to Hire based on Evaluate Analyze test
all criteria other performance scores and
applicants, than test one year performance
record score results after evaluations for
and file beginning significant
work relationship; does
it exist?
Develop a Yes
battery of No
tests
Analyze test
scores and Set and
performance implement
Give test
evaluations valid cut
to all
for significant scores
current
relationship: Yes
employees
does it exist?
Concurrent No
Predictors
cut scores
The cut score separates successful from unsuccessful

performers.
▪ Cut scores on a selection device can be determined by
validity studies
▪ Applicants scoring below the cut score are predicted
to be unsuccessful on the job and are rejected

11e
Selection From a Global
Perspective
▪ Selection criteria for international assignments:
1. Interest in working overseas
2. Ability to relate to different cultures and environments
3. Supportiveness of the candidate’s family
▪ Female executives have done well abroad in Asia and Latin
America, despite past reluctance to assign them to these
countries
For Further Information

www.expatwomen.com: resources for women taking overseas positions
Best Practices for Managers and Expatriates:
A Guide on Selection, Hiring and Compensation
By Stan Lomax: book for managers and overseas assignees
11e
Excelling at the Interview
To excel in your own job interview

▪ Do some homework on the company
▪ Get a good night’s rest the night before
▪ Dress appropriately
▪ Arrive for the interview a few minutes early
▪ Use a firm handshake
▪ Maintain good eye contact
▪ Take the opportunity to have practice interviews
▪ Thank the interviewer in person, and send a thank-you note

11e
Fill-in-the-blanks
1. The _____ is the first step in the selection process.
initial screening interview
2. _____ assign values to application information in order to determine job success.
Weighted application forms
3. _______ require applicants to engage in job behaviors necessary for doing the job successfully.
Performance simulation tests
4. Three types of comprehensive interviews are _____, ______, and _____.
traditional, panel, and situational
5. In a _____, HR manager makes an offer of employment, contingent upon successful completion of
background check, physical/medical exam, drug test, etc.
conditional job offer
6. _________ means employers may discuss employees with prospective employers without fear of
reprisal as long as the discussion is about job-related, documented facts.
Qualified privilege
7. There three types of validity are _______, ________, and _______.
Content, construct, criterion-related
8. On an employment test, the _____ separates successful from unsuccessful performers.
cut score

Fundamentals of
Chapter 10 Establishing the Performance

Management System
Introduction
Employees see performance evaluations as having a

direct effect on their work lives
▪ Questions regarding the performance management
process:
• What is the purpose of the evaluation?
• Who should be evaluated?
• What format should be used?
• Who will do the evaluation?

Performance Management
Systems
Performance management systems have three
main purposes:
• Two-way feedback – performance measures
mutually set between employee and employer
• Development – identify areas in which employees
have deficiencies or weaknesses
• Documentation - to meet legal requirements

Systems
Improving performance management systems
▪ Focus on the individual
• Discussions of performance may be emotional and may generate
conflicts when subordinates and supervisors do not agree
▪ Focus on the process
• Company policies and procedures may present barriers to a properly
functioning appraisal process
▪ Train appraisers
• Training reduces appraiser uncertainty and errors in the process

Performance Management and
EEO
EEO laws require performance management systems to
be objective and job-related
▪ ADA: performance management systems must measure
“reasonable” success.
• Click here to see EEOC guidelines for appraising employees with
disabilities.
▪ Valid performance appraisals are conducted at established
intervals
▪ Evaluations done by trained appraisers
▪ Poorly trained supervisors may show bias

Appraisal Process
1
establish performance standards with employees
2
communicate expectations and set goals
3
measure actual performance
4
compare actual performance with standards
5
discuss the appraisal with the employee
6
if necessary, initiate corrective action

Appraisal Process
▪ Establish performance standards

• Derived from company’s strategic goals
• Based on job analysis and job description
▪ Communicate expectations
• Goals must be articulated from supervisor to
employee and from employee to supervisor

Appraisal Process
▪ Measure actual performance using

• Personal observation
• Statistical reports
• Oral reports
• Written reports
▪ Compare performance with standards
• Explain different levels of performance and how
acceptable they are compared to the standard

Appraisal Process
▪ Discuss appraisal with the employee

• Feedback has strong impact on employee self-
esteem and future performance
• Feedback can be positive or negative
▪ Initiate corrective action if necessary
• Immediate action deals with symptoms of the
problem
• Basic corrective action deals with the source of the
problem
Appraisal Process
Five common mistakes managers can make in giving a

performance review:
1
waiting for the performance appraisal to give feedback
2
overemphasizing recent performances
3
being too positive or negative
4
being critical without being constructive
5
talking not listening

Appraisal Methods
The Three Appraisal Approaches
absolute standards
relative standards
achieved outcomes
no single approach is best; each has its strengths and weaknesses

Appraisal Methods
Absolute standards
▪ Employee’s performance is measured against
established standards
▪ Evaluation is independent of any other
employee

Appraisal Methods
absolute standards
▪ Critical incident appraisal

• Based on key behavior anecdotes illustrating effective or ineffective job
performance
▪ Checklist appraisal
• Appraiser checks off behaviors that apply to the employee
▪ Graphic rating scale appraisal
• Appraiser rates employee on a number of job-related factors; avoids
abstract categories

Appraisal Methods
absolute standards
▪ Forced-choice appraisal
• Appraisers ponder sets of statements that appear to be equally
favorable, then choose the statement that best describes the employee
▪ Behaviorally anchored rating scales (bars)
• Appraiser rates employee on factors that are defined by behavioral
descriptions illustrating various dimensions along each rating scale

Graphic Rating Scale

Behaviorally Anchored Rating
Scale

Appraisal Methods
relative standards
▪ Group order ranking

• Employees are placed in a classification reflecting their relative
performance, such as “top one-fifth”
▪ Individual ranking
• Employees are ranked from highest to lowest
▪ Paired comparison
• Each individual is compared to every other final ranking is based on
number of times the individual is preferred member in a pair

Appraisal Methods
achieved outcomes
▪ Management by Objectives (MBO)

• Includes mutual objective-setting and evaluation based on the
attainment of the specific objectives
• The organizational objectives translate into specific objectives for the
divisional/departmental/ individual levels

Appraisal Methods
achieved outcomes
▪ Common elements in an MBO program are:

• Goal specific
• Participative decision making
• Specific time period
• Performance feedback
▪ Effectively increases employee performance and
organizational productivity, especially when goals are difficult
enough to require stretching

Factors that distort appraisals

Factors That Distort Appraisals
▪ Leniency error
• Each evaluator has his/her own value system; Some
evaluate high (positive leniency) and others, low (negative
leniency)
▪ Halo error
• Evaluator lets an assessment of an individual on one trait
influence evaluation on all traits

▪ Similarity error
• Evaluator rates others in the same way that the evaluator
perceives him or herself
▪ Low appraiser motivation
• Evaluator may be reluctant to give an accurate appraisal if
it means the employee may not attain expected rewards as a
result

▪ Central tendency
• The reluctance to use the extremes of a rating scale
resulting in all employees being rated close to average
▪ Inflationary pressures
• Rater feels pressures for equality or fear of retribution from
unhappy employees
• Rater ranks employees better than they deserve to avoid
conflict

▪ Inappropriate substitutes for performance

• Effort, enthusiasm, appearance, etc., are less relevant for
some jobs than others
▪ Attribution theory
• Evaluations are affected based on whether someone’s
performance is due to:
▪ Internal factors they can control
▪ External factors they cannot control
If poor performance is attributed to internal control, the judgment is

harsher than when it is attributed to external control

Creating effective performance
management systems
To create better performance management systems:
▪ Use behavior-based measures
• They’re more job-related and elicit more inter-rater agreement than
traits such as “loyalty” or “friendliness”
▪ Combine absolute and relative standards
• Absolute standards tend to be positively lenient
• Relative standards suffer when there is little variability
▪ Provide ongoing feedback
• Expectations and disappointments should be shared with employees on
a frequent basis

management systems
To create better performance management systems:
▪ Use multiple raters
• The more used, the more reliable and valid the results
• Peer evaluations, Upward evaluations and 360-degree appraisals)
▪ Rate selectively
• Appraisers should evaluate only in areas about which they have
sufficient knowledge, they should be organizationally close the
individual being evaluated, and should be an effective rater
▪ Train appraisers
• Poor appraisals can demoralize employees and increase legal liabilities

management systems

management systems
For an effective performance appraisal meeting
▪ Prepare/schedule meeting in advance
▪ Create supportive aura about meeting
▪ Describe appraisal’s purpose
▪ Involve employee in appraisal discussion
▪ Focus on behaviors, not employee
▪ Cite specific examples
▪ Give positive and negative feedback
▪ Ensure employee understood appraisal
▪ Generate a development plan

International Performance
Appraisal
Challenges in evaluating overseas employees:
▪ Different cultural perspectives and expectations
between the parent and local country may make
evaluation difficult
▪ Evaluation forms may not be translated accurately
▪ Quantitative measures may be misleading

Matching
internal and external control
three appraisal approaches
factors weigh heavily in the
appraisal
communicate expectations
two-way feedback,
development,
documentation
three purposes of performance
management systems
factors that can
distort appraisals
attribution theory
absolute standards, relative
standards, achieved
leniency error, halo error,
outcomes
similarity error, central
tendency, inflationary
pressures, inappropriate
substitutes step in the appraisal process

Fundamentals of
Chapter 11 Establishing Rewards and

Pay Plans
Introduction
▪ What is your biggest

motivator at work?
• Promotions
• Great work assignments
• Recognition
• Control over your own work?
• Pay – covered in this chapter

Rewards Review
Intrinsic Extrinsic
Financial Non-financial
participation in
decision making
Performance Implied Explicit assigned

greater job based membership-based membership-based parking space
freedom
preferred
cost of living protection
more bonuses assignments
increase Program
responsibility
business
labor market pay for time
opportunities piecework cards
adjustment not worked
for growth
own
services/
diversity commission profit sharing secretary
perks
of activities
incentive impressive
plans time-in-rank title
increase
merit pay
plans

Intrinsic versus Extrinsic Rewards
Extrinsic rewards
Intrinsic rewards
come from a source outside
come from the job itself, such
the job, mainly by
as:
management:
• Pride in one’s work • Money
• Feelings of accomplishment • Promotions
• Being part of a work team • Benefits

Types of Reward Plans
▪ Financial rewards
• Wages
• Bonuses
• Profit sharing
• Pension plans
• Paid leaves
• Purchase discounts
▪ Nonfinancial rewards
• Make life on the job more attractive
• Employees vary on the rewards they prefer

Performance-based versus
Membership-Based Rewards
▪ Performance-based rewards are tied to specific job
performance criteria
• Commissions
• Piecework pay plans
• Incentive systems
• Group bonuses
• Merit pay
▪ Membership-based rewards are offered to all employees
• Cost-of-living increases
• Benefits
• Salary increases

Compensation Administration
▪ Companies derive their compensation programs from job

evaluation, which defines the appropriate worth of each job.
▪ An effective, fair compensation program attracts, motivates
and retains competent employees
Both employees and employers

can research compensation
facts and issues at
www.salary.com
http://salary.nytimes.com/
http://www.salaryexpert.com/

▪ The Fair Labor Standards Act (FSLA) requires:

• Minimum wage The Fair Labor Standards Act is
• Overtime pay administrated by the Wage and Hour
Division of the U.S. Department of Labor
• Record-keeping Click here to see the website
• Child labor restrictions
▪ Exempt employees
• Include professional and managerial employees not covered under
FSLA overtime provisions
▪ Exempt employees
• Include professional and managerial employees not covered under
FSLA overtime provisions

Equal Pay Act of 1963 requires that men and women

hired for the same job be paid the same.
▪ Civil Rights Act:
• Broader than Equal Pay Act
• Prohibits discrimination on the basis of gender
• Used to support comparable worth concept
• Salaries established based on skill, responsibility, effort,
and working conditions

Job Evaluation and the Pay
Structure
Job evaluation helps set pay structure.
▪ Job analysis information determines the relative
value, or rank, of each job in the organization.
▪ Other pay structure factors:
• Labor market conditions Research wage information at
• Collective bargaining the Bureau of Labor Statistics
http://www.bls.gov/bls/blswage.htm
• Individual skill differences

Structure
Ordering method
• A committee places jobs in a simple rank order from highest (worth

highest pay) to lowest.
Classification method
• Jobs placed in grades to compare their descriptions to the benchmarked

jobs. Look for a common denominator (skills, knowledge, responsibility).
Point method
• Jobs are rated and allocated points on several criteria.

• Jobs with similar point totals are placed in similar pay grades. Offers the
greatest stability.

Structure
Establishing the Pay Structure
▪ Compensation Surveys
• Used to gather factual data on pay rates for other organizations.
Information is often collected on associated employee benefits as well.
▪ Wage Curves
• Drawn by plotting job evaluation data (such as job points or grades)
against pay rates (actual or from survey data).
• Indicates whether pay structure is logical.
▪ Wage Structure
• Designates pay ranges for jobs of similar value. Results in a logical
hierarchy of wages, in overlapping ranges.

Structure
External factors also influence pay structure
▪ Geographic differences (local supply and demand)
▪ Labor supply (low supply = higher wages and vice
versa)
▪ Competition (HR can match, lead, or lag)
▪ Cost of living as determined
by the CPI
▪ Collective bargaining (unions)

Special Cases of Compensation
Incentive Compensation Plans
individual organization-wide
group
Incentives can be added to the basic pay structure to provide rewards for performance

Individual Incentives
• Merit pay plans (annual increase, based on
performance)
• Piecework plans (pay based on number of units
produced typically in a specified time period)
• Time-savings bonuses and commissions
These work best where clear objectives are set
and tasks are independent

Group Incentives
▪ Incentives can be offered to groups, rather than individuals, when
employees' tasks are interdependent and require cooperation.
Advantages Disadvantages
• Focuses the group on specific • Can be costly to install and administer.
performance targets. • De-emphasizes individual performance,
• Since rewards are controllable by may create excessive peer pressure.
individuals, the programs can be very • Requires open communication with
motivational. employees on costs, profitability, etc. If
• The program can be integrated with the performance targets are not
other corporate initiatives and leads to carefully selected, adverse results may
improved communication and occur.
employee relations

Organization-wide Incentives
▪ Direct employee efforts toward organizational goals (such as
cost reduction)
• Scanlon Plan - supervisor and employee committees
suggest labor-saving improvements.
▪ See http://www.scanlon.org/
• IMPROSHARE - formula is used to determine bonuses
based on labor cost savings.
▪ See http://www.qualitydigest.com/jul/gainshre.html

Paying for performance

▪ Competency-based compensation
• Rewarded for skills, knowledge and behaviors
• Leadership
• Problem solving
• Decision making
• Strategic planning
▪ Broad-banding
• Pre-set pay levels that determine what people are paid
based on their type and level of competency.

Team-Based Compensation
▪ Incentives for empowered work teams to exceed
established goals and share equally in rewards
▪ Depends on:
• Clarity of team purpose and goals
• Ability of the team to obtain needed
resources
• Effective team communication skills
and trust

Executive Compensation
Programs
Salaries of Top Managers
▪ Executive pay can run 400 times higher than that of the
average worker
▪ Competition for executive talent raises the price of hiring an
executive
▪ High salaries can be a motivator for executives and lower-level
managers
▪ Click here to see some of the highest paid executives

Programs
Supplemental Financial Compensation
▪ Deferred bonuses
• Paid to executives over extended time periods, to
encourage them to stay with the company
▪ Stock options
• Allow executives to purchase stock in the future at a fixed
price
▪ Hiring bonuses
• Compensate for the deferred compensation lost when
leaving a former company

Executive Compensation Program
Supplemental Nonfinancial Compensation Perquisites
club
memberships paid life insurance
free financial, legal and
tax counseling
supplemental
retirement accounts
interest-
free loans perks
may postretirement
include consulting contracts
mortgage assistance
expense accounts
company cars supplemental

disability insurance
Programs
Supplemental Nonfinancial Compensation Perks
▪ Golden parachutes
• Protect executives when a merger or hostile takeover
occurs by providing severance pay or a guaranteed
position
• Click here for a list of some of the most expensive golden
parachutes awarded

International Compensation
International compensation packages generally utilize the

“balance-sheet approach,” using these four factors:
▪ Base pay
• Pay of employees in comparable jobs at home
▪ Differentials
• Compensation given to offset higher costs of living abroad
▪ Incentives
• Inducements given to encourage employees to accept overseas assignments
▪ Assistance programs
• Payment for expenses involved in moving a family abroad and in providing
some services overseas
HR needs to understand the statutory requirements of each country

Fill-in-the-blanks
1. _________ rewards come from the job itself; _________ rewards come
from outside the job.
Intrinsic; extrinsic
2. Wages, bonuses, and pension plans are examples of _________ rewards.
financial
3. The _________ is the source of companies’ compensation programs.
job evaluation
4. Scanlon and IMPROSHARE are examples of ________ incentives.
organization-wide
5. Using pre-set pay levels that determine what people are paid based on
their type and level of competency is called _______.
Broad-banding
6. _______ protect executives when a merger or hostile takeover occurs by
providing severance pay or a guaranteed position.
Golden parachutes

Fundamentals of
Chapter 12 Employee Benefits

Introduction
Employee Benefits
▪ Have become important tools for recruiting and
retention of qualified workers
▪ Do not directly affect a worker’s performance, but
inadequate benefits lead to employee dissatisfaction
▪ Competition for the best employees required
employers to offer creative benefit packages

Introduction
▪ Benefit and service offerings add about 30% to

an organization’s payroll cost
▪ Benefits may become the focus of negotiations
with employees when large wage and salary
increases are not feasible
Some of the benefits we enjoy today were established under
Franklin Roosevelt’s New Deal as a response to the Great Depression--
most notably unemployment insurance and social security.
To get a taste of this extraordinary time, watch
http://www.youtube.com/watch?v=4F4yT0KAMyo

Introduction
Benefits are
approximately 30% of
total compensation

Legally Required Benefits
Social Security
▪ Financed by equal employee and employer
contributions, based on a percentage of earnings
▪ Provides income for retirees, disabled workers and
surviving dependents
▪ Provides some health insurance coverage through
Medicare
▪ Social Security Administration website: Click here

Unemployment Compensation
▪ Funded by employers who pay combined federal and state tax
imposed on taxable wage base
▪ Tax varies based on organization’s unemployment experience:
the more layoffs, the higher the rate
▪ Provides employees with some income continuation during
periods of involuntary unemployment
▪ Typical coverage is for 26 weeks
▪ May be extended beyond 26 weeks when unemployment is
high

Requirements to Receiving Unemployment Benefits:

▪ Involuntary loss of job (but not having been fired)
▪ Must have worked a minimum number of weeks
▪ Have applied to a state agency for unemployment
▪ Have registered for available work
▪ Are willing to accept any suitable job offered through the state
agency

Workers’ Compensation
▪ Paid for by the organization
▪ Rates based on likelihood of accidents,
past history, and the type of industry
▪ Benefits pay expenses and/or compensate
for losses resulting from work-related
accidents or illness, regardless of fault

Family and Medical Leave Act

▪ Requires employers with 50 or more employees to allow up to
12 weeks of unpaid leave for family or medical reasons
▪ Specifies record-keeping and communication requirements
▪ Employer must maintain health benefits.
Chapter 3 contains detailed coverage of FMLA

Voluntary Benefits
Health Insurance
▪ Increases in healthcare costs have made health
insurance a critical benefit
▪ Healthcare costs are growing faster than wages
▪ Purpose is to protect employee from
catastrophic loss should a serious illness occur
The Affordable Care Act survived a challenge in the Supreme Court in 2012
and is fully implemented in 2014
Click here to go to the implementation timeline at the Healthcare.gov site.

Voluntary Benefits
Traditional Health Insurance

▪ Typically has the fewest coverage limitations for the employee
▪ Usually the most expensive
▪ Provides coverage in three areas:
▪ Hospitalization
▪ Medical/surgical
▪ Major medical
Major insurers include:

Voluntary Benefits
Health Maintenance Organizations (HMOs)

▪ Alternative benefit required by Health Maintenance Act of
1973
▪ Broad comprehensive care provided by physicians who are “in
network”
▪ Employee incurs small co pay
▪ Health care choices significantly limited
Major HMOs include:

Voluntary Benefits
Preferred Provider Organizations (PPOs)

▪ Member health care providers agree to provide services at a
fixed fee
▪ Employees are encouraged by lower rates to use member or
“preferred” providers
▪ Combine best of HMOs and traditional insurance
Point-of-Service Plans (POS)
▪ Require primary care physicians
▪ Employee can go out of network, but pays up front and seeks
reimbursement

Voluntary Benefits
Consumer-driven Health Plans

▪ High deductible
▪ Health savings account
▪ Support services help employees make decisions
Employer-operated Coverage
▪ Employers self-fund insurance programs
▪ Operated under a voluntary employees beneficiary association
(veba) to reduce costs
▪ Often hire third party to administer

▪ Which types of
health plans are
most commonly
offered?

Voluntary Benefits
Health Insurance Continuation

▪ The Consolidated Omnibus Budget Reconciliation
Act (COBRA)
▪ Provides for continuation of benefits for up to three
years after an employee leaves a job
▪ Cost is paid by the employee

Voluntary Benefits
The HIPAA Requirement

▪ The Health Insurance Portability and Accountability Act of
1996
▪ Imposed on employers and health providers regulations
regarding the confidentiality of employee health information
▪ Click here for more information from the U.S. Department of
Health and Human Services

Patient Protection and Affordable Care Act expands
availability and regulation of health insurance.
Includes:
▪ Individual responsibility
• Individuals must purchase minimum coverage or pay fine
▪ Health Insurance Exchanges
• Created by states for individuals and small businesses to buy insurance
▪ Employer responsibility
• Penalties for employers with over 50 employees who do not provide
coverage
• Employers with more than 200 employees must provide coverage
• Penalties for coverage that is inadequate or too expensive
▪ Insurance Industry responsibility
• Ends restrictions on pre-existing coverage and lifetime limits
• Must provide coverage for employee's children up to age 26
Retirement Benefits
Employee Retirement Income Security Act (ERISA) of

1974
▪ Vesting rights – right to pension benefits even if one leaves the
company
▪ Enables pension rights to be portable
▪ Sets up pension benefit guaranty corporation (PBGC)
▪ Claims corporate assets to cover inadequately funded pension
plans
▪ Requires summary plan description (SPD)

Retirement Benefits
Defined Benefit Plans

▪ Plan specifies the dollar benefit workers receive at
retirement
▪ Usually based on some formula of years of service
and average final compensation
▪ More common in government and unionized
industries

Retirement Benefits
Defined Contribution Plans

▪ Employee and employer may contribute to account
based on rules established for contributions
▪ Amount of benefits depends on success of account
investments
money purchase profit-sharing
pension plans plans
IRAs 401Ks

Retirement Benefits
Money Purchase Pension Plan
• Type of defined contribution plan
• Organization commits to depositing fixed amount of money or percentage of employee’s pay
annually
Profit-Sharing Plans
• Variation of defined contribution plan
• Company amount contributed depends on profit level in the organization
• Contribution is optional, not required
Individual Retirement Accounts (IRAs)

• Employer makes contributions
• Can defer taxes on amount deposited and interest earned in retirement account
• Two types exist for small businesses and self-employed
401(k)s:
• Permit workers to set aside specified amount of income on tax-deferred basis
• Employers may match employee contribution

Paid Time Off
Vacation and Holiday Leave

▪ Vacation time is usually related
to the length of time on the job
▪ Some companies also allow
personal days that can be used
for any reason

Paid Time Off
Disability Insurance Programs

▪ Provides salary continuation for:
▪ Short-term disabilities (sick leave)
▪ Long-term disabilities (coverage usually effective
after 6 months)
▪ Some companies provide financial incentives to
employees to not use their sick leave
▪ Long-term disability plans usually replace a portion
of the employee’s salary, often 60%

Survivor Benefits
Group Term Life Insurance

▪ Benefit is usually based on one’s annual rate of pay
▪ Supplemental insurance increases coverage to two to
five-times the employee’s salary
Travel Insurance
▪ Life insurance for business travel-related deaths (not
including normal commuting)

Employee Services
The Service Side of Benefits:

Employers often can provide services at no cost or at a significant
reduction from the usual cost. May include:
▪ Employee assistance programs
▪ Credit unions
▪ Housing
▪ Tuition reimbursement
▪ Uniforms
▪ Company-paid transportation
▪ Social and recreational events
▪ Parking

An Integrative Perspective on
Employee Benefits
Flexible Spending
Modular Plans Core-Plus Options
Accounts
• Employees set • Employees may • Employees may
aside money for choose from select benefits to
expenses not pre-determined add to core
covered by benefit packages benefit package
insurance

Employee Benefits
Flexible Spending Accounts
▪ Under Section I25 of the Internal Revenue Code employees
can set aside a designated dollar amount before taxes for
specified services such as
• Health-care premiums
• Medical expenses
• Dependent child or elder care
• Group legal services
▪ IRS requires that accounts for different purposes be separate
and that all money be spent during the year or forfeited
▪ Not subject to federal, state, and social security taxes

Employee Benefits
▪ Modular Plans
• Employees choose a pre-designed package of
benefits from several options
▪ Core-Plus Options Plans
• Employees given core coverage (e.g. medical, life,
disability) with option to select other benefits

Let’s Play Jeopardy-style!
1. Social Security, unemployment compensation, workers’ compensation, FMLA.

What are legally required benefits?
2. Benefits that pay expenses and/or compensate for losses resulting from work-
related accidents or illness, regardless of fault.
What is workers’ compensation?
3. Health insurance, retirement plans, time off, disability, life insurance.
What are voluntary benefits?
4. Requires employers with 50 or more employees to allow up to 12 weeks of unpaid
leave for family or medical reasons.
What is the Family Medical Leave Act?
5. Money purchase pension plans, profit-sharing plans, IRAs, 401Ks.
What are defined contribution plans?
6. Flexible spending accounts, modular plans, core-plus plans.
What are flexible benefits?

Performance
Management
Pengelolaan Modal Insani
Bagaimana menurut anda dengan system Performance Appraisal seperti
di kartun di atas?
Apa saja yang keliru? Apakah Performance akan meningkat dengan cara
seperti itu?
Bagaimana Performance bisa ditingkatkan dalam pekerjaan?
Performance Management System
Tujuan Performance Management
System:
° Feedback
° Motivating Employees
° Employee Development
° Documentation
Proses
Performance
Appraisal
Proses Performance Appraisal
1. Establish Performance Standards with employees
° The appraisal process begins with the establishment of performance standards in accordance with the
organization ’ s strategic goals. These should evolve out of the company ’ s strategic direction, the job analysis,
and the job description
° These performance standards should also be clear and objective enough to be understood and measured. Too
often, standards are subjective or unclear such as “meets expectations” or “needs improvement.”
2. Communicate Expectations
° Once performance standards are established, it is necessary to communicate these expectations; employees should
not have to guess what is expected of them.
° Expectations and standards should be communicated in a variety of ways. Written instructions, videos, and
demonstrations may be used in initial training and as periodic reminders
Proses Performance Appraisal
3. Measure Actual Performance
° Four common sources of information frequently used by managers address how to measure actual performance:
personal observation, statistical reports, oral reports, and written reports. Each has its strengths and weaknesses;
however, a combination of them increases both the number of input sources and the probability of receiving reliable
information.
4. Compare Actual Performance with Standard
° This step notes deviations between standard performance and actual performance. The performance appraisal form
should include a list and explanation of the performance standards. It should also include an explanation of the different
levels of performance and their degree of acceptability against the performance standard.
5. Discuss the Appraisal with the Employee
6. Initiate Corrective Action if necessary
° Corrective action can be of two types: one is immediate and deals predominantly with symptoms, and the other is basic
and examines causes. Immediate corrective action is often described as “putting out fires,” whereas basic corrective
action touches the source of deviation and seeks to adjust the difference permanently.
Tiga pendekatan dalam Mengevaluasi Performance
° Absolute Standard: employees are compared to a standard, and their
evaluation is independent of any other employee in a work group
° Relative Standard: compares individuals against other individuals
° Outcome: makes use of achieved performance outcomes
Metode-metode yang digunakan dalam pendekatan
Absolute Standard
Critical Incident Appraisal: focuses the rater ’s attention on critical or key behaviors
that make the difference between doing a job effectively and doing it ineffectively. The appraiser writes down
anecdotes describing employee actions that were especially effective or ineffective.
° Note that with this approach to appraisal, specific behaviors are cited, not vaguely defined individual traits.
A behavior‐based appraisal such as this should be more valid than trait‐based appraisals because it is clearly
more job related.
° The strength of the critical incident method is that it looks at behaviors. Additionally, a list of critical
incidents provides a rich set of examples that can be used to point out which employee behaviors are
desirable and which ones call for improvement. Its drawbacks are that appraisers must regularly write these
incidents down
Absolute Standard
Checklist Appraisal: the evaluator uses a list of behavioral descriptions and checks off behaviors
that apply to the employee
° Once the checklist is complete, it is usually evaluated by the HRM staff, not the appraiser completing the
checklist. The rater does not actually evaluate the employee ’ s performance; he or she merely records it.
° The checklist appraisal reduces some bias in the evaluation process because the rater and the scorer are
different. However, the rater usually can pick up the positive and negative connections in each item—so bias
can still be introduced. From a cost standpoint,too, this appraisal method may be inefficient and time
consuming
Absolute Standard
Graphic Rating Scale: A performance appraisal method that lists traits and a range of
performance for each.
° This method is most valid when abstract traits such as loyalty or integrity are avoided, unless they can be
defined in more specific behavioral terms.
Absolute Standard
Forced-Choice Appraisal: A performance evaluation in which the rater must choose between
two specific statements about an employee ’ s work behavior.
° The appraiser ’ s job is to identify which statement is most (or in some cases least) descriptive of the
individual being evaluated.
° For instance, students evaluating their college instructor might have to choose between “(1) keeps up with
the schedule identified in the syllabus, (2) lectures with confidence, (3) keeps interest and attention of class,
(4) demonstrates how concepts are practically applied in today ’ s organizations, or (5) allows students the
opportunity to learn concepts on their own.”
° As with the checklist method, to reduce bias, the right answers are unknown to the rater; someone in HRM
scores the answers based on the answer key for the job being evaluated.
Absolute Standard
Behaviorally-Anchored Rating Scale: A performance appraisal technique that generates
critical incidents and develops behavioral dimensions of performance. The evaluator appraises behaviors rather
than traits.
° Behaviorally anchored rating scales specify definite, observable, and measurable job behavior.
° Examples of job‐related behavior and performance dimensions are generated by asking participants to give
specific illustrations of effective and ineffective behavior regarding each performance dimension; these
behavioral examples are then translated into appropriate performance dimensions.
° BARS does tend to reduce rating errors. Possibly its major advantage stems from the specific feedback that it
communicates.
Contoh BARS
Relative Standard
Group-Ordered Ranking: requires the evaluator to place employees into a particular
classification, such as the “top 20 percent.”
° The advantage of this group ordering is that it prevents raters from inflating their evaluations so everyone
looks good or from forcing the evaluations so everyone is rated near the average outcomes. Problems arise
when the number of employees compared is small.
° Another disadvantage, which plagues all relative measures, is the zero‐sum game consideration.
° Because comparisons are relative, a mediocre employee may score highly only because he or she is the “best
of the worst.” In contrast, an excellent performer matched against “stiff ” competition may be evaluated
poorly, when in absolute terms his or her performance is outstanding.
Relative Standard
Individual Ranking: Ranking employees ’ performance from highest to lowest.
° In this process, only one employee can be rated “best.” If the evaluator must appraise 30 individuals, this
method assumes that the difference between the first and second employee is the same as that between
the 21st and the 22nd
° In terms of advantages and disadvantages, the individual ranking method carries the same pluses and
minuses as group‐order ranking.
Relative Standard
Paired Comparison: Ranking individuals ’ performance by counting the times any one individual is
the preferred member when compared with all other employees.
° selects one job trait and then compares each employee in a group with the others. A score is obtained for
each employee by simply counting the number of pairs in which the individual is superior at the job trait
Achieved Performance Outcomes
Management By Objectives (MBO): A performance appraisal method that includes
mutual objective setting and evaluation based on the attainment of the specific objectives.
° MBO makes objectives operational by a process in which they cascade down through the organization. The
organization ’ s overall objectives are translated into specific objectives for each succeeding level in the
organization—divisional, departmental, and individual
° Common elements in MBO:
• Specific Goals
• Participative Decision Making
• Specific Time Period
• Performance Feedback
Faktor-faktor yang mengganggu proses appraisal
° Leniency error: Performance appraisal distortion caused by evaluating
employees against one’s own value system
° Halo error: The tendency to let our assessment of an individual on one trait
influence our evaluation of that person on other specific traits
° Similarity error: Evaluating employees based on the way an evaluator
perceives himself or herself
° Low appraiser motivation: If the evaluator knows that a poor appraisal could
significantly hurt the employee’s future—particularly opportunities for
promotion or a salary increase—the evaluator may be reluctant to give a
realistic appraisal
° Central Tendency: The tendency of a rater to give average ratings
° Inflationary pressures: Inflating the ratings of employees because they are
afraid of repercussions
° Inappropriate substitutes: Using inappropriate factor in evaluating an
employee as a substitute for performance
Creating more
effective
performance
management
system
Mengadakan Performance Appraisal Meeting
° Managers should prepare for , and schedule the appraisal in advance
° Explaining the purpose of the meeting in advance creates a supportive environment and puts employees
at ease
° By describing the purpose of the appraisal to employees, they will know precisely how the appraisal will
be used
° It is important to involve the employee in the appraisal discussion, including a self‐evaluation
° The focus of the discussion should be on work behaviors, not on the employee
° The evaluation should be supported with examples
° Both positive and negative feedback should be given
° Evaluators should ensure that employees understand what was discussed in the appraisal
° A development plan should be generated
Thank You
JOB ANALYSIS
Job Analysis based on HayGroup
1 / Presentation _ _ _ _ _ / PBM / DD MM YYYYY Only for Praktisi Mengajar – Ubaya Psikologi

Agenda
❖ Introduction to Job Analysis
❖ Concept of Job / Understanding
Jobs
❖ Principles of Job Analysis
❖ Components of Job Descriptions
❖ Principles of Job Description
Interview

Objective
The Aim of The Job Analysis Workshop is …
To provide participant with the necessary skills to be able
to analyze jobs and to convey their understanding of
such jobs in the form of written job description

HayGroup : Manajemen SDM Terintegrasi
Core Job Family

Vision Competency Competency Competency
Modelling Modelling Input
Competency
Competency Based Human
Career & Succession Plan

Training & Development
Assesment & Selection
Reward Management
Organization Structure
Manpower Planning
Resources System
Work Culture
Mission People
Productivity
Accountability
Bussiness
Objective Job
Job KPI’s Evaluation &
Analysis Job Grade

Concept of Job
Vision
(What We Want To Be) ❖ When an individual
Mission
(Why We Exist)
moves on, he brings
Value
along with him his
(What Important to Us)
Person Can
managerial style,
Strategy
(Our Game Plan) move on but
the job problem solving ability
remains
Organization Structure
and performance, he
Job Holder
(Competencies)
Job
(Accountabilities)
leaves behind would be
Jobs are :
his functions, scope of
1. Basic unit of organization structure work and
2. Belong to the Organization
3. Results Oriented accountabilities
4. Dynamic
5. Focus on output to achieve
organization objectives

What is Job Analysis
• Job Analysis is the process of gathering data and
understanding a job through out analysis and
presenting this information in format which will enable
others to understand the job
• Stages of Job Analysis :
❖ Gathering of information
❖ Analyzing and Organizing The Information
❖ What – The Job must produce
❖ Why – The Outputs are needed
❖ Presentation of The Information

Job Analysis – The Working Rules
• The Most Important Rule for Job Analysis :
The objective of a job analyst is to seek the data &
information needed to draft a clear and correct Job
Description, specific to a Job
The Job Analyst must NEVER make comments to current job
incumbent about the objectives or any the characteristics of
the job
We would not analyse the strengths and weakness of the
incumbent holding the job
We are to analyse the value of the job to the organizations if it
was performed at an acceptable level

Job Analysis : Summary
Kesimpulan :
Trainer
Job Analysis is about :

Recruiter Appraiser ☑ Analysis (not checklist)
☑ Jobs not people
☑ Facts not judgements
☑ The job as it is now
Job Analysis
Line Manager (a process of JobHolder
understanding Job Analysis is not :
jobs)
☑ A personal analysis
☑ A personnel analysis
☑ A performance analysis
Career /
Job
Succession
Evaluation
Planner
Organization
Planner

Job Description

Job Understanding
• The Analyst should initially seek to understand the
context in which the job operates. The information
needed may include :
❖ Organization
❖ Environment
❖ Major Activities in the job
❖ Nature of Subordinate Activities
❖ Boundaries
❖ Working Relationship
❖ Challenges
❖ Person Specification

Job Description Content
• Job description typically has :

Job identification
Job purpose
Main accountabilities
Dimensions
Working relationship
Authority
Job challenges
Job specifications
Organization structure

1. Job Identification
• The Brief identifying job details which are given at
the beginning of the job description and usually
include:
Job Title
Job Holder
Name of Department
Report to

2. Job Purpose
• Begin with a short and accurate statement of job
purpose
• Job Purpose is the macro level concise statement of
what the job must produce
• Job Purpose Statement :
Action Verbs Objective Results/Outputs
(How) (What) (Why)
• A Job Purpose Statement must be spesific to one job

only

2. Job Purpose (an example)
• Job Title : Production Shift Supervisor
• Job Purpose Statement : Supervise production process
in the plant to achieve output targets within set : safety
& quality standards and within agreed or reduced costs
• The component format :
What does the job holder do (action Supervises
verb/s)
What does it effect or provides Production process in the plant
Why does the job holder do it (what is To achieve output targets within set &
the output) quality standards, and within agreed
or reduced costs

3. Main Accountability : What is M.A
The Organisation purpose, business objectives, business strategy
What are the outputs needed to achieve the business objectives
What are the resources needed to achieve the outputs

1. Material /Technology/Equipment/building 2. Variety of specific skills, knowledge & experience
Main Accountability

3. Main Accountability : Characteristics
• A job normally has 5 to 8 Main Accountability
• Main Accountabilities are the high level end output or
final outcomes for one position. Represent all the key
output of the job
• Focus on result not duties or activities. Not list of task
• Timeless, standing permanently unless the job itself is
changed in fundamental way
• Describes an explicit area in which result must be
achieved by job holders
• Can not be delegated

3. Main Accountabilities
• Distinctions between list of task and accountability
Accountability : Task :
• Focus on “What” • Focus on “How”

• Concise • List
• Focus • May Change
• Control Result • Input
• Example :
Accountability Task (Supporting Action)
Achieve the agreed sales target It’s achieved by :
1. Identification of new clients
2. Marketing effort through Sales Call,
Selling Strategy

3. Main Accountabilities
• Step 1 : Identify the main contributor or area that are
covered by the job
• Step 2 : For each main areas, define its activity and end
results
Activity End Result

Key Measures
(How + What) (Why)
Activity :
How – the contribution is done,
What – is the object/specific contribution
End Result :
Why – do we need the area of contribution

3. Main Accountabilities – Common Mistakes
• Do not mention the result of activites
Perform analysis of the company financial statement
• Too general – not unique
Assist accounting manager in preparing monthly report
• Contain more than one result in one statement
Direct, coordinate, and control production activities, in order to meet
production target and minimize accident
• Consist of minor activities
Fill in absent form everyday

4. Dimensions – The “How Much” of the Job
• Financial (annual budget, annual revenue, annual profit,
sales target, annual target) and non financial (Number
of subordinate, number of clients, number of projects)
• Captures the quantitive term of the jobs on which it has
some direct or indirect impact
• Understand the nature and extent of the job
• Shows the scope and scale of activities involved in the
job
• Accuracy in defining is more important than exact
figures

4. Dimensions
• Dimension provides the numerical data which gives a
feeling for the scope and scale of the job
• Example #1 :
❖ Dimension HR Manager :
Number of employees,
Manpower budget,
Recruitment & Training budget
• Example #2 :
1. In one organization, the Transport manager may have to
coordinate 200 vehicles
2. In another organization, the Trasnport manager may have to
coordinate 2 vehicles

5. Working Relationship
• The focus here is what organizational position does the
jobholder need to interact with, to be able to achieve
the objective of this position
• Internal Position :
Other work units or other departments of the organization, not include
Immediate manager/peer/subordinate positions
• External Position :
External organization which interact with jobholder

5. Working Relationship
Example :
Internal External
Position Position Financial & Accounting Manager
❖ Internal :
✔ Production manager – to get
Job data for cost accounting
purposes
❖ External :
Consist : ✔ Tax office – to maintain good
relationship and ensure
• The Name of the position
compliance
• How often ✔ External auditor – to provide
• Simple Information about required financial information
“why”

6. Authority
• What are you authorized to do on behalf of your
company?
❖ Typical decision made by this position
❖ Recommendations made by this position for superior decision
• Decision Making (example) : signing contract, approving
staff matter
• Recommendation (example) : training for staff

7. Major Challenges
• Provides information on difficulty of the job
• Shows complexity of the job
• Describes problems faced on the job
• Useful Information Include :

What are the constraints faced
How these can be resolved or prevented
Critical aspects of the job to be handled with exceptional care

7. Major Challenges
• The Following questions can be used to guide your
thinking
What are the most complex issues faced on this job?
What are the critical aspects of this job that must be handled
with exceptional care?
What serious problems can arise from this job?
What can be done to prevent these problems from arising?
What can be done to minimize the impact of problems that
have arisen?
Challenge of a Head of HR
▪ Inconsistent changes in labor law causing confusion in developing HR policy and procedures.
On the other hand, as a reputable company, Head of HR needs to comply with the regulations

7. Major Challenges – Common Mistakes
• The nature of the job challenge is temporary
• More of a personal complaint
• Experienced by all jobs
• Not specific

8. Job Holder Requirement
• Job holder requirement :
Educational Qualifications
❖ Academic/Professional qualifications required
❖ Technical proficiency in a field
Professional Experience
❖ Length of Experience
❖ Type of Experience
Competencies
❖ Achieve minimum level of proficiency on the job
Be Realistic and Specific

8. Job Holder Requirement
The best way to fill out Job Holder

Requirement is to assume that someone is to be
hired at entry level for this job. Do not state
your personal qualifications, experience and
competencies, as this may not represent entry
level requirements

9. Organization Chart
The Manager or
Supervisor position
which the job reports
to
The Position Other same level

positions reporting to
being analyzed & the same manager or
documented supervisor
Immediate Immediate
subordinate position subordinate position
(one level down only) (one level down only)

Job Analysis Interview

Structure of The Job Analysis
• Explain the purpose of the interview discussion
• Start by looking at the organization chart (without names of the
current incumbents)
• Focus, one by one, on all the sections of the Job Description
• Using Ask open-ended questions :
What (does the position have to achieve)?
How (does the position achieve the expected end results)?
Why (does the position have to produce these end results)?
• Clarify that your understanding is correct
• Probe: you have a clear picture, ensure the details you have
differentiation from other jobs and probe sensitivearea in more
depth

Do’s - Don’ts
Do’s Don’ts
Tell the job holder, purpose of the inteview Comment to the current job
Seek the data & information Analyze the strength and weakness of the
incumbent job holder
Analyze the value of the job to the To approve or to change any aspect of the job
organization
Ensure job holder understanding that the draft To get discussion with job holder about
will approve by immediate higher level personal / job grade, salary and performance
appraisal
Write your draft as soon as posible and
deliver the first draft to job holder as soon as
possible

Management is doing things right,
Leadership is doing the right things
… Peter Drucker

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Fundamentals of

Human Resource Management 11e

Chapter 1 The Dynamic Environment of

Strong employees = competitive advantage.

HRM helps employees understand other countries’

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represents and advocates

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