STRATEGIC HR MANAGEMENT

LESSON 1 3. NONFINANCIAL COMPENSATION – Satisfaction receives from

HUMAN RESOURCE MANAGEMENT the job itself or from the psychological or physical environment in
which the person works.
HRM is the utilization of individuals to achieve organizational
objectives. EMPLOYEE AND LABOR RELATIONS
 Labor relations is an HR activity which handles the job of
CHARACTERISTICS: collective bargaining when a labor union represents the
 Diverse and human capital as an asset. company’s employees.
 Unitarist rather than pluralist, individualistic rather than  Law requires to recognize a union and bargain with it in good
collective (approach to employee relations) faith if the firm’s employees want the union to represent
 Strategic with an emphasis on integration. them.
 A management-driven activity.  Internal employee relations comprise the HRM activities
 Commitment-oriented and focused on business values. associated with the movement of employees within the
organization such as promotions, demotion, terminations,
FUNCTIONS and resignation.
1. Staffing
2. Performance Management SAFETY AND HEALTH
3. Human Resources Development  Safety involves protecting employees from injuries caused
4. Compensation by work-related accidents.
5. Employee and Labor Relations  Health refers to the employees’ freedom from physical or
6. Safety and Health emotional illness.
 Human Resources Research These aspects of the job are important because employees who works
in a safe environment and enjoy good health are more likely to be
STAFFING - it is the process through which an organization ensures productive and yield long-term benefits to the organization.
that it always has the proper number of employees with the appropriate
skills in the right jobs, at the right time, to achieve organizational Human Resource Research
objectives. It is not a distinct HRM function yet, it pervade all functional areas, and
the researcher’s laboratory is the entire work environment. It is an
It involves: important key to developing the most productive and satisfied
 Job analysis workforce possible.
 Human resource planning
 Recruitment and selection

PERFORMANCE MANAGEMENT - it is a goal-oriented process that

is directed toward ensuring that organizational processes are in place
to maximize the productivity of employees, teams, and ultimately, the
organization.

It involves:
 Performance appraisal

HUMAN RESOURCES DEVELOPMENT

 A major function consists of:
 Training
 Development
 Organizational development
 Career planning
 Career development
 Performance management and appraisal
WHO PERFORMS HUMAN RESOURCE MANAGEMENT
EMPLOYEE COMPENSATION AND BENEFITS ACTIVITIES?
Compensation is the total of all rewards provided to employees in HUMAN RESOURCE PROFESSIONAL - an individual who normally
return for their services. It may be one or a combinations of the acts in an advisory or staff capacity, working with other managers to
following: help them address human resource matters.
1. DIRECT FINANCIAL COMPENSATION (CORE LINE MANAGERS - individuals who are directly involved in
COMPENSATION) – Pay that a person receives in the form of accomplishing the primary purpose of the organization, by assuming
wages, salaries, commissions, and bonuses. some tasks typically done by HR professionals.
2. INDIRECT FINANCIAL COMPENSATION (EMPLOYEE HR OUTSOURCING - process of hiring external HR professionals to
BENEFITS) – All financial rewards not included in direct do the HR work that was previously done internally.
compensation, such as paid vacations, sick leave, holidays, and  Discrete services outsourcing
medical insurance.  Business process outsourcing (BPO)
1
 STRATEGIC HR MANAGEMENT
HR SHARED SERVICE CENTER (SSC) - a center that takes routine,
transaction-based activities dispersed throughout the organization and
consolidates them in one places.
PROFESSIONAL EMPLOYER ORGANIZATION (PEO) - a company
that leases employees to other business.
ELEMENTS OF HUMAN RESOURCE MANAGEMENT
ENVIRONMENT
IMPORTANCE OF HUMAN RESOURCE MANAGEMENT
“Maybe the best definition of company culture is what everyone
does when no one is looking.”
– Max Caldwell, Managing Director at Towers Watson
IHRM THROUGH THE LENS OF CORPORATE CULTURE
 It gives applicants and newcomers a sense of how to behave
and what they out to be doing.
 It influences the employees’ degree of satisfaction with the
job as well as the level and quality of their performance.
 It provides a degree of perception with the management on
how fit is the prospective employees with the firm’s culture
or value system.
 It enables optimal use of employees to reach short-term
results for the organization.
 Through organization development, the company has the
means of changing the corporate culture.
EMPLOYER BRANDING
1. Company Name - it is an extension of product or business
branding.
2. Logo Design - it is the firm’s corporate image or culture created
to attract and retain the type of employees the firm seeking.
3. Importance - its values and standards guide most workers to
stay as both shares the same ideas and principles.
ISSUES IN HR MANAGEMENT
 HR Management promises more than it can deliver.
 The morality of HR Management.
 Small businesses often do not have a formal HR unit or an
HRM specialist.
 Cultural barriers.
PROFESSION IN HR MANAGEMENT
 HR executives
 HR generalists
 HR specialists
 HR managers
 Instructional coordinators
LESSON 2
BUSINESS ETHICS & CORPORATE SOCIAL RESPONSIBILITIES
ETHICS - the discipline dealing with what is good and bad, right and
wrong, or with moral duty and obligation.
CORPORATE SOCIAL RESPONSIBILITY (CSR) - the implied,
enforced, or felt obligation of managers, acting in their official capacity,
to serve or protect the interests of groups other than themselves.
CORPORATE SUSTAINABILITY - focuses on the possible future
impact of an organization on society, including social welfare, the
economy, and the environment.
Business Ethics
 Business is not alone.
 There must be leaders who are able and willing to instill
ethics throughout the culture of organization.
 Ethical decisions are major and some are minor. But
decisions in small matters often set a pattern for the more
important decisions a manager makes.
Source of Ethical Guidance
1. Religion 2. Law 3. Culture
LEGISLATING ETHICS
Although laws cannot mandate ethics, they may be able to identify the
baseline separating what is good and what is bad.
 Labor Code of the Philippines (Presidential Decree No.
442) - the law that governs employment practices and labor
relations in the Philippines.
 Philippine Cooperative Code of 2008 (R.A. 9520) - the law
governing the registrations, regulation and promotion of
cooperatives in the Philippines.
 Foreign Investments Act of 1991 (R.A. No. 7042) - the law
that governs foreign investments in the Philippines.
 Securities Regulation Code of the Philippines (R.A. No.
8799) - the law that governs the registration and regulation
of securities, pre-need plans, and securities market
professionals – and the protection of shareholder interests
in the Philippines.
 Task Reform Act of 1997 (Republic Act No. 8424) - the
law that governs the national taxation in the Philippines and
gives the Bureau of Internal Revenue (BIR) the power and
duty to assess and collect national internal revenue taxes in
the country.
 Consumer Act of the Philippines (Republic Act No.
7394) - the law that protects the interest of consumers in the
Philippines, promote their general welfare, and establish
standards of conduct for business and industry.
 Intellectual Property Code of the Philippines (R.A.
8293) - the law that governs the registration of patents,
trademarks and copyright, and the enforcement of
intellectual property rights in the Philippines.
2
 STRATEGIC HR MANAGEMENT
 FREELANCE WORKERS PROTECTION ACT (BILL NO.
8817)
- requires a contract, additional payments (such as night shift
pay, and hazard pay), and measures to protect freelance
workers.
- penalize companies who pay their freelance workers more
than 15 days beyond the agreed payment date, and
companies that retaliate against freelance workers for using
the law to seek just compensation.
CREATING AN ETHICAL CULTURE AND A CODE OF ETHICS
ETHICAL CULTURE
- Requires a foundation of practices that continue even when
leaders change, for it to last.
- It is made up of factors such as ethical leadership,
accountability, and values.
- The climate with top management is fundamental to a
company’s ethical culture. It is where it starts and continues
to middle managers, supervisors, and employees.
ETHICS AUDIT - it is a systematic, independent, and documented
process for obtaining evidence regarding the status of an
organization’s ethical culture.
GOOD PEOPLE MUST BE EMPLOYED
FOSTER A STRONG ETHICAL CULTURE
 Organizations are redesigning their ethics program to
facilitate a broader and more consistent process that
incorporates the analysis of outcomes and continual
improvement. They need a comprehensive framework that
encompasses communication of behavior expectations,
training on ethics and compliance issues, stakeholder input,
resolution of reported matters, and analysis of the entire
ethics program.
 Larger firms appoint an ethics officer.
DISTINCTION OF CODE OF CONDUCT AND A CODE OF ETHICS
 The code of conduct should tell employees what the rules of
conduct are.
 The code of ethics helps employees know what to do when
there is not a rule for something. It typically covers business
conduct, fair competition, and workplace and HR issues.
 The code is a statement of the values adopted by the
company, its employees, and its directors and sets the
official tone of top management regarding expected
behavior.
HUMAN RESOURCE ETHICS
 It is the application of ethical principles to HR relationships
and activities.
 HR should review, develop, and enforce organizational
policies to ensure a high level of ethics throughout the
organization. All employees should know what is ethical and
unethical in their specific area of operations. It is insufficient
to say that everyone should behave ethically.
LINKING PAY TO ETHICAL BEHAVIOR
“When employees behave in undesirable ways, it’s a good idea to look
at what you’re encouraging them to do.”
ETHICS TRAINING
 It should be part of a proactive, not creative, strategy.
 Regular training builds awareness of common ethical issues
and provides tools for effective problem-solving.
 Ethics training should begin at the top and continue through
all levels in the organization. However, training should take
into consideration the differences in these levels.
CORPORATE SOCIAL RESPONSIBILITY
 It is the model in which economic, social, and environmental
responsibilities are satisfied concurrently.
 When a corporation behaves as if it has a conscience, it is
said to be socially responsible. CSR considers the overall
influence of corporations on society at large and goes
beyond the interests of shareholders. It is how a company
as a whole behaves toward society. In many companies,
social responsibility has moves from nice to do to must do.
CARROLL’S PYRAMID OF CORPORATE SOCIAL
RESPONSIBILITY
Carroll’s Pyramid of Corporate Social Responsibility helps to explain
the social, ethical, legal and economic responsibilities by which a
business should operate. A Master of Business Administration
program, like the one offered by Victoria University Online, can help
professionals understand the framework that helps a business function
ethically and sustainably through courses like Business Ethics and
Sustainability.
CORPORATE SUSTAINABILITY
It is “meeting the needs of the present without compromising the ability
of future generations to meet their own needs.”
– World Commission on Environment and Sustainability
“An approach to creating long-term shareholder value by embracing
opportunities and managing risks deriving from economic,
environmental and social trends and challenges.”
– Dow Jones World Sustainability Index (DJSI)
SOCIAL AUDIT - it is a systematic assessment of a company’s
activities in terms of its social impact. Included in its focus on core
values such as social responsibility, open communication, treatment
of employees, confidentiality, and leadership.
3 POSSIBLE TYPES OF SOCIAL AUDITS ARE BEING USED:
1. Simple inventory of activities.
2. Compilation of socially relevant expenditures; and
3. Determination of social impact.
3
 STRATEGIC HR MANAGEMENT
How CSR succeed in the Global environment? 4. HR expertise – the knowledge and skills that define the unique
- it may be easier to be socially responsible in a prospering economy contribution the HR professional can make to effective people
but more difficult when the economy is bad. management.

“Can firms competing in the global environment continue the lowest A. The internal consultancy role.
possible production costs while complying with national laws and being B. The monitoring role.
socially responsible?” C. The guardian of values role.

1. INSTITUTE OF HUMAN RESOURCE PROFESSIONALS MODELS OF THE PRACTITIONERS OF HR

2. INTERNATIONAL FEDERATION OF PROFESSIONAL
MANAGERS Karen Legge (1978). 2 Types of HR Managers:
3. CHARTERED PROFESSIONALS IN HUMAN RESOURCES 1. Conformist innovators – who go along with their
(CPHR) organization’s ends and adjust their means to achieve them.
Their expertise is used as a source of professional power to
THE ROLE OF HR FUNCTION improve the position if their departments.
Competency framework for HR Professionals: 2. Deviant innovators – who attempt to change this
 Business and cultural awareness. means/ends relationship by gaining acceptance for a
 Strategic capability. different set of criteria for the evaluation of organizational
 Organizational effectiveness. success and their contribution to it.
 Internal consultancy.
 Service delivery. The Tyson and Fell (1968) model. 3 Types of Practitioners:
 Continuous professional development. 1. The clerk of works – all authority for action is vested in the
 Service delivery. line managers. HR policies are created after the actions led
to the need. Policies are not integral to the business and are
 Continuous professional development.
short term and ad hoc. Authority is vested in line managers
and HR activities are largely routine – employment and day-
Chartered Institute of Personnel and Development (CIPD, 2009)
to-day administration.
listed competencies required by its professional members:
2. The contracts manager – policies are well established,
 Personal drive and effectiveness.
often implicit, with a heavy industrial relations emphasis,
 People management and leadership. possibly derived from an employers association. The HR
 Professional competence. manager is likely to be very experienced in industrial
 Adding value through people. relations; will not be on the board and, but have some
 Continuing learning. authority to ‘police’ the implementation of policies; acts
 Thinking and applied resourcefulness. mainly in an interpretative role.
 ‘Customer’ focus. 3. The architect – explicit HR policies exist as part of the
 Strategic capability. corporate strategy. Human resource planning and
 Influencing and interpersonal skills. development are important concepts and a long-term view
is taken. Systems tend to be sophisticated. The head of the
CONFLICT IN THE GR CONTRIBUTION can arise in the following HR function is probably on the board and his or her power is
ways: derived from professionalism and perceived contribution to
 A death of values. the business.
 Different priorities.
 Freedom versus control. Kathleen Monks (1992). 4 Types of Practitioner following research
 Disputes. in 97 organizations in Ireland extended those developed by Tyson
 Ambiguities in the role. and Fell:
 Traditional/administrative – the personnel have mainly a
BASIC ROLES OF AN HR PRACTITIONER support role with the focus on administrative matters, record-
 Service provision to internal customers. keeping and adherence to rules and regulations.
 Guidance and advice to management.  Traditional/industrial relations – practitioners’
 The business partner role. concentration on industrial relations, giving their other
functions lower priority.
 The strategist role.
 The innovation and change agent role.  Innovative/professional – specialists are professional and
expert. They aim to remove traditional practices and replace
Caldwell (2001) categorizes HR change agents in four dimensions them with improved human resource planning, recruitment
1. Transformational change – a major change that has a dramatic and development, and reward policies and practices.
effect on HR policy and practice across the whole organization.  Innovative/sophisticated – personnel specialists are on
2. Incremental change – gradual adjustments of HR policy and the board, take part in integrating HR and business
practices that affect single activities or multiple functions. strategies, and are recognized as making an important
3. HR vision – a set of values and beliefs that affirm the legitimacy of contribution to organizational success. They develop in each
the HR function as strategic business partner. of the main HR areas.

4
 STRATEGIC HR MANAGEMENT
John Storey (1992a). TYPES OF PERSONNEL MANAGEMENT
SYSTEMS AND STRATEGIC HUMAN RESOURCES
Dave Ulrich & Wayne Brockbank (2005a and 2005b)
Formulated the 1997 model in 2005, listing the following roles:
 Employee advocate – focuses on the needs of today’s
employees through listening, understanding, and
empathizing.
 Human capital developer – in the role of managing and
developing human capital (individuals and teams), focuses
on preparing employees to be successful in the future.
 Functional expert – concerned with the HR practices that
are central to HR value, acting with insight on the basis of
the body of knowledge they possess. Some are delivered
through administrative efficiency (such as technology or
process design), and others through policies, menus and
interventions. Necessary to distinguish between the
foundation of HR – practices, learning and development,
rewards, etc – and the emerging HR practices such as
communications, work process, and organization design,
and executive leadership development.
 Strategic partner – consists of multiple dimensions:
business expert, change agent, strategic HR planner,
knowledge manager and consultant, combining them to
align HR systems to help accomplish the organization’s
vision and mission, helping managers to get things done,
and disseminating learning across the organization.
 Leader – leading the HR function, collaborating with other
functions and providing leadership to them, setting and
enhancing the standards for strategic thinking and ensuring
corporate governance.
LESSON 3
MANAGEMENT
STRATEGIC PLANNING is the process by which top management
determines overall organizational purposes and objectives and how
they are achieved.
 It is an ongoing process that is constantly changing to find a
competitive advantage.
HRM versus HR Strategies
The HR strategies guides HRM development and implementation
programme.
“There is no great strategy, only great execution.”
— Gratton, 2000
DEVELOPMENT PROCESS
LEVELS OF STRATEGIC DECISION-MAKING Purcell (1989)
1. ‘Upstream’ first order missions– concerned with the long-term
direction of the enterprise or the scope of its activities.
2. ‘Downstream’ second-order decisions – concerned with internal
operating procedures and how the firm is organized to achieve its
goals.
3. ‘Downstream’ third-order decisions – concerned with choices on
human resource structures and approaches and are strategic in sense
of establishing basic parameters of employee relations management.
APPROACHES TO STRATEGIC HRM
OVER-ALL RESOURCES BASED STRATEGIC HRM (PENROSE,
1959)
 Focuses on satisfying the human capital requirements of the
organizations.
 Developed by Hamel and Prahalad (1989), who declared
that competitive advantage is obtained if a firm can obtain
and develop Human Resources that enable it to learn faster
and apply its learning more effectively than its rivals.
 The aim of a resource-based approach is to improve
resource capability which can produce ‘human resource
advantage’ (Boxall and Purcell, 2003).
(1) HIGH-PERFORMANCE MANAGEMENT APPROACH
(STEVENS, 1998)
 Involves the development of a number of interrelated
processes which together make an impact on the
performance of the firm through its people in such areas as
productivity, quality, levels of customer service, growth
profits, and, ultimately, the delivery of increased shareholder
value; can be achieved by ‘enhancing the skills and
engaging the enthusiasm of employees’.
 May be expressed as a drive to develop a performance
culture in an organization.
(2) HIGH-COMMITMENT MANAGEMENT MODEL (WOOD, 1996)
Described by Wood (1996):
 A form of management which is aimed at eliciting a
commitment so that behavior is primarily self-regulated
rather than controlled by sanctions and pressures external
to the individual, and relations with the organization are
based on high levels of trust.
 It creates development of career ladders and emphasis on
traceability and commitment, a high level of functional
flexibility with the abandonment of potentially rigid job
5
 STRATEGIC HR MANAGEMENT
descriptions; reduction of hierarchies and the ending of THE CONFIGURATIONAL (BUNDLING APPROACH)
status differentials; heavy reliance on team structure for Figure 4.1 Strategic Planning Process
disseminating information (team briefing), structuring work Derivative of the SWOT framework but it is less structured.
(team working), and problem solving (quality circles).

(3) HIGH-INVOLVEMENT MANAGEMENT

 Involves treating employees as partners in the enterprise
whose interests are respected and who have a voice matters
that concern them. It is concerned with communication and
involvement. The aim is to create a climate in which a
continuing dialogue between managers and the members of
their teams take place to define expectations and share
information on the organization’s mission, values, and
objectives. This establishes mutual understanding of what is
to be achieved and a framework for managing and
developing people to ensure that it will be achieved.

TYPES OF HR STRATEGIES
(1) OVERARCHING HR STRATEGIES
Describe the general intentions of the organization expressed as
broad-brush statements of aims and purpose that set the scene for
more specific strategies. They are concerned with overall
organizational effectiveness.

(2) SPECIFIC HR STRATEGIES CRITERIA FOR AN EFFECTIVE HR STRATEGY

Set out what the organization intends to do in different areas of HR.
APPROACHES TO HR STRATEGIES DEVELOPMENT
DELERY AND DATY (1996) IDENTIFIED THE:
- universalistic - contingency - configurational
RICHARDSON AND THOMPSON (1999)
- best practice approach - best fit approach - bundling approach
 It will satisfy business needs.
 It is founded on detailed analysis and study, not just wishful
thinking.
 It can be into actionable programmes that anticipate
implementation requirement s and problems.
 It is coherent and integrated, being composed of
components that fit with and support each other.
 It takes account of the needs of EVERYONE.

THE BEST PRACTICE STRATEGY IMPLEMENTATION

 The assumption that there is a set of best HRM practices  It is the most difficult and important part of strategic
and that adopting them will inevitably lead to superior management. No matter how creative and well formulated
organizational performance. the strategic plan, the organization will not benefit of it is
 Criticisms: inconsistency, focuses on the intangible assets, incorrectly implemented. It requires changes in the
difficult and impossible. organization’s behavior, either one or more organizational
 Ensure the importance of HR strategies’ appropriateness to dimensions.
the circumstances of the organization, including its culture,
operational processes and external environment. The Human Resource Planning Process
 Benchmarking is useful to pick and mix various ‘best
practice’ ingredients and develop an approach that applies
those.
 Criticisms: the impossibility of modeling all the contingent
variables, the difficulty of showing their interconnection, and
how changes in one variable have an impact on others.

‘A strategy’s success turns on combining “vertical” or external fit and

“horizontal” or internal fit.’

- Bundle are development and implementation of several HR practices

together so that they are interrelated and therefore complement and
reinforcement each other.
Criticisms: deciding which is the best way to relate different practices
together.

6
 STRATEGIC HR MANAGEMENT
(CONT. OF STRATEGY IMPLEMENTATION)
I. LEADERSHIP
II. ORGANIZATIONAL STRUCTURE
III. INFORMATION AND CONTROL SYSTEMS
IV. TECHNOLOGY
V. HUMAN RESOURCES
WORKFORCE PLANNING
1. REQUIREMENTS FORECAST – determining the number, skill, and
location of employees the organization will need at future dates to
meet its goals.
2. AVAILABILITY FORECAST – whether the firm will be able to
secure employees with the necessary skills, and from what sources.
FORECASTING HUMAN RESOURCE REQUIREMENTS
1. ZERO-BASED FORECAST – uses the organization’s current level
of employment as the starting point for determining future staffing
needs.
2. BOTTOM-UP FORECAST – each successive level in the
organization, starting with the lowest, forecasts its requirements,
ultimately providing an aggregate forecast of employees needed.
FORECASTING HUMAN RESOURCE AVAILABILITY
When shortage or surplus Workers Forecasted…
 INNOVATIVE RECRUITING – a shortage of personnel often
means that new approaches to recruiting must be used.
 COMPENSATION INCENTIVES – premium pay is one
obvious methods; however, this approach may trigger a
bidding war that the organization cannot sustain for an
extended period.
 ALTERNATIVES TO LAYOFFS – special training programs
may be needed to prepare previously unemployable
individuals for positions with a firm. Remedial education and
skills training are programs that may help attract individuals.
ALTERNATIVES TO LAYOFFS
To implement a restricted hiring policy that reduces the workforce by
not replacing employees who leave.
1. HARD FREEZE – no new workers are hired to replace a vacated
position.
2. SOFT FREEZE – the company is only hiring to fill critical positions;
it is only when the overall performance of the organization may be
affected.
3. SMART FREEZE – HR and managers evaluate every position to
determine the ones the company could not survive without and
those that are difficult to fill and continue to hire them.
SUCCESSION PLANNING – the process of ensuring that qualified
persons are available to assume key managerial positions once the
positions are vacant.
 Its goal is to help ensure a smooth transaction and
operational efficiency, but the transition is often difficult.
 A firm might have a good succession plan for top-level
positions but few plans for the levels where all the work is
performed.
 Succession planning is often neglected in small business
because it is generally thought of in terms of replacing CEOs
and key executives within larger businesses.
Job Analysis: A Basic Human Resource Management Tool
I. Competencies and competency modeling.
II. Concept of Job Design
 Job enrichment
 Job enlargement
 Job rotation
 Re-engineering
III. Global Talent Management
LESSON 4
DIVERSITY AND MULTICULTURALISM
DIVERSITY – refers to any actual or perceived difference among
people.
UNLAWFUL EMPLOYMENT DISCRIMINATION
Disparate treatment – employer treats some employees less
favorably than others because of race, religion, color, sex, national
origin, or age. It is the most easily understood form of discrimination.
Adverse impact – occurs if women and minorities are not hired at
least 80 percent of the best-achieving group.
Republic Act No. 10524: EQUAL OPPORTUNITY FOR
EMPLOYMENT (2012) – no person with disability shall be denied
access to opportunities for suitable employment. They shall be subject
to the same terms and conditions of employment with the others.
Republic Act No. 9710: THE MAGNA CARTA OF WOMEN (2009) –
the state that equality of men and women and that it shall develop
plans, policies, programs, measures, and mechanisms to address
discrimination and inequality in the economic, political, social, and
cultural life of women and mean.
WHO’S RESPONSIBLE FOR ENSURING EOE?
National Government and its department such as
 Department Of Labor and Employment (DOLE)
 Civil Service Commission (CSC)
 National Council on Disability Affairs (NCDA)
 Governance Commission for Government-Owned or -
Controlled Corporations (GCG)
 Department of Health (DOH)
 Department of Social Welfare and Development (DSWD)
 Bureau of Internal Revenue (BIR)
In consultation with the concerned Senate and House committees and
other agencies, organizations and establishments take responsibility
for establishing and supporting EOE.
7
 STRATEGIC HR MANAGEMENT
DIVERSITY MANAGEMENT
 It is ensuring that there is continued development of a
diverse workforce by combining actual and perceived
differences among workers to achieve maximum
productivity.
 Focuses on the principle that all workers regardless of any
factor are entitled to same privileges and opportunities.
ELEMENTS OF THE DIVERSE WORKFORCE
 Single parents and Working mothers
 Women in Business
 Mothers returning to the Workforce (on Ramping)
– returnship
 Dual-career families
 Ethnic and Race
 Older Workers
 People with Disabilities
 Immigrants, Foreign Workers
 Young Persons, Some with Limited Education or Skills
 Multigenerational Diversity – Baby Boomers, Gen X, Gen
Y, and Gen Z
 Lesbian, gay, bisexual, and transgender (LGBT) employees
LESSON 5
RECRUITMENT
Process of attracting individuals on a timely basis, in sufficient
numbers, and with appropriate qualifications to apply for jobs with an
organization.
RECRUITMENT PROCESS
1. Employee Requisition – Document that specifies job title,
department, the date the employee is needed for work, and
other details.
2. Recruitment Sources – Where qualified candidates are
located.
3. Recruitment Methods – are the specific means used to
attract potential employees to the firm, such as online
recruiting.
When a firm identifies the sources of candidates,
it uses appropriate methods for either internal or external
recruitment to accomplish recruitment objectives.
Internal Recruitment Methods
Management should be able to identify current employees who are
capable of filling positions as they become available. Helpful tools
used for internal recruitment include human resource databases, job
postings and job bidding, and employee referrals.
Human Resource Databases
Human resource databases permit organizations to determine
whether current employees possess the qualifications for filling open
positions. As a recruitment device, these databases have proven to be
extremely valuable to organizations. Databases can be valuable in
locating talent internally and supporting the concept of promotion from
within.
JOB POSTING AND JOB BIDDING
Job Posting – Procedure for informing employees that job openings
exist.
Job Bidding – Procedure that permits employees who believe that
they possess the required qualifications to apply for a posted position.
 The job posting and bidding procedures can help minimize
the commonly heard complaint that insiders never hear of a
job opening until it is filled.
 Today, companies use the intranet, the Internet, or post the
job on the company Web site or company Facebook page.
Employee Referral
 An employee of the company recommends a friend or
associate as a possible member of the company; this
continues to be the way that top performers are identified.
Example: Organizations such as Southwest Airlines,
Microsoft, Disney, and Ritz typically employ many of their
new hires exclusively through employee referrals.
 Employee enlistment is a unique form of employee referral
in which every employee becomes a company recruiter.
EXTERNAL RECRUITMENT SOURCES
At times, a firm must look beyond its own borders to find employees,
particularly when expanding its workforce. External recruitment is
needed to…
(1) Fill entry-level jobs;
(2) Acquire skills not possessed by current employees; and
(3) Obtain employees with different backgrounds to provide a diversity
of ideas.
 High Schools and Vocational Schools – Some companies
work with schools to ensure a constant supply of trained
individuals with specific job skills. In some areas, companies
even loan employees to schools to assist in the training
programs.
 Community Colleges – Many community colleges are
sensitive to the specific employment needs in their local
labor markets and graduate highly sought-after students
with marketable skills.
 Colleges and Universities – Establishing a relationship
with faculty members is important because most professors
are well aware of their students’ academic performance and
abilities. Because on-campus recruitment is mutually
beneficial, both employers and universities should take
steps to develop and maintain close relationships. It is
important that the firm knows the school and the school
knows the firm.
 Competitors in the Labor Market – When recent
experience is required, competitors and other firms in the
same industry or geographic area may be the most
important source of recruits. Another name for actively
recruiting employees from competitors is called poaching.
 Former Employees – Today’s young workers are more
likely to change jobs and later return to a former employer
than their counterparts who entered the workforce 20 or 30
years ago, and smart employers try to get their best ex-
employees to come back. The boomerang effect might
happen because there was a strong bond with previous
coworkers or the new job was not what the employee
envisioned.
 Unemployed – The unemployed often provide a valuable
source of recruits. Companies may downsize their
operations, go out of business, or merge with other firms,
leaving qualified workers without jobs.
 Military Personnel – Hiring former service members makes
sense to a lot of employers because many of these
8
 STRATEGIC HR MANAGEMENT
individuals have a proven work history and are flexible,
motivated, and drug-free.
 They were found to be hardworking, smart, and intense;
they had leadership experience and were flexible. They
are prompt, used to reporting for work on time, and know
the importance of a professional appearance and
presence.
 Self-Employed Workers – Such individuals may constitute
a source of applicants for any number of jobs requiring
technical, professional, administrative, or entrepreneurial
expertise within a firm.
 Ex-Offenders – Some organizations have found it beneficial
to hire ex-offenders.
 As an example, supermarket retail consultant and
restaurateur Howard Solganik has launched a program
that puts ex-offenders to work helping area farmers
increase the supply of local, seasonal produce to
consumers. Solganik said, “My experience in the
restaurant business exposed me to ex-offenders. I saw
that most were hard workers and also were grateful for
the jobs they were given.”
HR Internet Guides – www.hr-guide.com
This Web site contains links to other Internet-based resources for topics such as
recruitment, selection, and equal employment opportunity.
RECRUITING TECHNOLOGY
 Mobile Recruiting – Recruiters use mobile apps to post
jobs, run text message–based recruiting campaigns, create
online communities for potential new hires to learn about
their companies, monitor social networks for news about
industries they hire for, and keep in touch with staff and
outside agencies.
 Internet Recruiter – Person whose primary responsibility is
to use the Internet in the recruitment process (also called
cyber recruiter).
 Virtual Job Fair – Online recruiting method engaged in by
a single employer or group of employers to attract a large
number of applicant.
 Corporate Career Web Sites – Job sites accessible from a
company home page that list available company positions
and provide a way for applicants to apply for specific jobs.
 Weblogs (Blogs for Short) – Weblogs, or blogs, have
changed the ways in which individuals access information.
Some employers and employment agencies have also
discovered that blogging is a way to do detailed and stealthy
background checks.
 General-Purpose Job Boards – Firms use general-
purpose job boards by typing in key job criteria, skills, and
experience, and indicating their geographic location. Job
seekers can search for jobs by category, experience,
education, location, or any combination of categories.
 NACElink network – The result of an alliance among the
National Association of Colleges and Employers,
DirectEmployers Association, and Symplicity Corporation, it
is a national recruiting network and suite of Web-based
recruiting and career services automation tools serving the
needs of colleges, employers, and job candidates.
 .Jobs – Network of employment Web sites where any
company can list job openings for free.
 AllianceQ – Group of Fortune 500 companies, along with
more than 3,000 small and medium-sized companies, that
have collaborated to create a pool of job candidates.
 Niche Sites – Web sites that cater to highly specialized job
markets such as a particular profession, industry, education,
location, or any combination of these specialties.
 Contingent Workers – Described as the “disposable
American workforce” by a former secretary of labor, have
a nontraditional relationship with the worksite employer, and
work as part-timers, temporaries, or independent
contractors.
 These disposable workers permit maximum flexibility for
the employer and lower labor costs. Historically,
contingent workers have been called the bookends of
recessions. They are the first to go when a recession
begins and the last to be recalled when the economy gets
better.
 Hourly Workers’ Sites – Most hourly workers pursue jobs
by filling out applications rather than creating and sending
out résumés. So sites allow job seekers to build an
application that can be viewed by employers.
TRADITIONAL EXTERNAL RECRUITMENT METHODS
Although online recruiting has greatly impacted how recruiting is
accomplished, traditional methods are not dead.
 Media Advertising – Advertising communicates the firm’s
employment needs to the public through media such as
newspapers, trade journals, radio, television, and billboards.
 Private Employment Agencies – Private employment
agencies, often called “headhunters,” are best known for
recruiting white collar employees and offer an important
service in bringing qualified applicants and open positions
together.
 Public Employment Agencies – Public employment
agencies are operated by each state but receive overall
policy direction from Employment Services.
 They typically use computerized job-matching systems to
aid in the recruitment process, and they provide their
services without charge to either the employer or the
prospective employee.
 Executive Search Firms – Executive search firms are used
by some firms to locate experienced professionals and
executives when other sources prove inadequate. The key
benefit of executive search firms is the targeting of ideal
candidates. In addition, the executive search firm can often
find passive candidates, those not actively looking for a job.
 There are two types of executive search firms:
contingency and retained.
1) Contingency search firms – receive fees only on
successful placement of a candidate in a job opening.
2) Retained search firms – are considered consultants to
their client organizations, serving on an exclusive
contractual basis, and typically recruit top business
executives.
 Recruiters – Recruiters most commonly focus on technical
and vocational schools, community colleges, colleges, and
universities
 Job Fair – Recruiting method engaged in by a single
employer or group of employers to attract a large number of
applicants to one location for interviews.
9
 STRATEGIC HR MANAGEMENT
 Internship – Special form of recruitment that involves
placing a student in a temporary job with no obligation either
by the company to hire the student permanently or by the
student to accept a permanent position with the firm
following graduation.
 Professional Associations – Virtually every professional
group publishes a journal and has a Web site that is widely
used by its members. Many professional associations in
business areas including finance, marketing, accounting,
and human resources provide recruitment and placement
services for their members.
 Unsolicited Applicants – A company must have a positive
image or employer brand to attract unsolicited applicants. If
an organization has the reputation of being a good place to
work, it may be able to attract qualified prospects even
without extensive recruitment efforts.
 Open Houses – Open houses pair potential hires and
recruiters in a warm, casual environment that encourages
on-the-spot job offers. There are pros and cons to holding a
truly open house. If the event is open, it may draw a large
turnout, but it also may attract a number of unqualified
candidates.
 Event Recruiting – Recruiters going to events being
attended by individuals the company is seeking.
 Sign-on Bonuses – Employers use sign-on bonuses to
attract top talent, particularly in high-demand fields such as
health care, sales, marketing, and accounting. Bonuses
allow a firm to pay a premium to attract individuals without
dramatically upsetting its salary scale.
 Competitive Games – companies uses games as a
recruiting tool.
 Example: Code Jam is an international programming
competition hosted and administered by Google. The
competition began in 2003 as a means to identify top
engineering talent for potential employment at Google.
The competition consists of a set of algorithmic problems
that must be solved in a fixed amount of time.
TAILORING RECRUITMENT METHODS TO SOURCES
Because each organization is unique, so are the needed types and
qualifications of workers to fill positions. Thus, to be successful, a firm
must tailor its recruitment sources and methods to its specific needs.
 Managers must first identify the source (where prospective
employees are located) before choosing the methods (how
to attract them). It is likely that other firms, possibly
competitors, employ such individuals.
 After considering the recruitment source, the recruiter must
then choose the method (or methods) of recruitment that
offers the best prospects for attracting qualified candidates.
ENVIRONMENT OF RECRUITMENT
Factors external to the organization can significantly affect the firm’s
recruitment efforts.
Labor Market Conditions – Of particular importance to the success
of recruitment is the demand for and supply of specific skills in the
labor market. In general, a firm’s recruitment process is often simplified
when the unemployment rate in an organization’s labor market is high.
 The number of unsolicited applicants is usually greater, and the
increased size of the labor pool provides a better opportunity for
attracting qualified applicants.
Active or Passive Job Seekers
The recruitment method that proves to be most successful will depend
to an extent on whether the recruited individual is an active or passive
job seeker.
a) Active Job Seekers – Individuals committed to finding another job
whether presently employed or not.
b) Passive Job Seekers – Potential job candidates, who are typically
employed, satisfied with their employer, and content in their current
role but if the right opportunity came along, they might like to learn
more.
Legal Considerations – A poorly conceived recruiting process can do
much to create problems in the selection process. Therefore, it is
essential for organizations to emphasize nondiscriminatory practices
at this stage.
ALTERNATIVES TO RECRUITMENT
Even when HR planning indicates a need for additional employees, a
firm may decide against increasing the size of its workforce.
 Promotion From Within (PFW) – Policy of filling vacancies
above entry-level positions with current employees.
 Overtime – Perhaps the most commonly used alternative to
recruitment, especially in meeting short-term fluctuations in
work volume, is overtime. Overtime may help both employer
and employee.
 The employer benefits by avoiding recruitment, selection,
and training costs. The employees gain from increased
income during the overtime period.
 Onshoring – Moving jobs not to another country but to
lower-cost U.S. cities.
GLOBAL IMPLICATIONS FOR RECRUITMENT
Outsourcing, offshoring, and reshoring are three global activities that
affect recruitment activities.
1) Outsourcing – Process of hiring an external provider to do the
work that was previously done internally.
2) Offshoring – Migration of all or a significant part of the
development, maintenance, and delivery of services to a vendor
located in another country.
3) Reshoring – Reverse of offshoring and involves bringing work
back to the United States.
LESSON 6
SELECTION
SIGNIFICANCE OF EMPLOYEE SELECTION
Selection – Process of choosing from a group of applicants the
individual best suited for a particular position and the organization.
Selection Process
1) Companies make selection decisions to determine whether
individuals who were identified through the selection process will be
offered employment.
2) This process typically begins with preliminary screening. Next,
applicants complete the firm’s application for employment or provide
a résumé.
3) Then they progress through a series of selection tests, one or more
employment interviews, and pre-employment screening, including
background and reference checks. The hiring manager then offers
the successful applicant a job, subject to successful completion of a
10
 STRATEGIC HR MANAGEMENT
medical examination. Notice that an applicant may be rejected or
opt out at any time during the selection process.
PRELIMINARY SCREENING
Preliminary Screening – In employee selection, a review to eliminate
those who obviously do not meet the position’s requirements.
REVIEW OF APPLICATIONS AND REVIEW OF RÉSUMÉS
Having the candidate complete an application for employment is
another early step in the selection process. This may either precede
or follow preliminary screening. The employer then evaluates it to see
whether there is an apparent match between the individual and the
position.
 Employment-at-will is a policy that either the employer or
the employee can terminate employment at any time for any
reason.
Résumé – Goal-directed summary of a person’s experience,
education, and training developed for use in the selection process.
 Historically, a one-page résumé was the standard that applicants
were told to use.
 Keyword résumé – Résumé that contains an adequate
description of the job seeker’s characteristics and industry
specific experience presented in keyword terms in order to
accommodate the computer search process.
 Keywords – Words or phrases that are used to search
databases for résumés that match.
SELECTION TESTS
Tests are essential components of employee selection. There are
many considerations, including advantages and disadvantages,
property of tests, validation approaches, and test type.
Preliminary Considerations – Recognizing the shortcomings of other
selection tools, many firms have added selection tests to their hiring
process. These tests rate factors such as aptitude, personality,
abilities, and motivation of potential employees, allowing managers to
choose candidates according to how they will fit into the open positions
and corporate culture.
Advantages and Disadvantages of Selection Tests
Advantages
 Research indicates that customized tests can be a reliable
and accurate means to predict on-the job performance.
 Organizations use tests to identify attitudes and job-related
skills that interviews cannot recognize.
 Also, the cost of employment testing is small in comparison
to ultimate hiring costs. They are a more efficient way to get
at information that results in better-qualified people being
hired.
Disadvantages
 Employers should be aware that tests might be
unintentionally discriminatory.
 When a test excludes a protected class at a significant rate,
the test should be avoided unless the employer can show
that the test is job related for the position in question and
consistent with business necessity. Test anxiety can also be
a problem. Applicants often become quite anxious when
confronting yet another hurdle that might eliminate them
from consideration.
 Using selection tests carries with it legal liabilities of
two types:
1) One is a lawsuit from rejected applicants who claim a test
was not job related or that it unfairly discriminated against
a protected group, violating federal employment laws.
2) The second potential legal problem relates to negligent
hiring lawsuits filed by victims of employee misbehavior
or incompetence
CHARACTERISTICS OF PROPERLY DESIGNED SELECTION
TESTS
Properly designed selection tests are standardized, objective, based
on sound norms, reliable, and of utmost importance, valid.
Standardization – Uniformity of the procedures and conditions related
to administering tests.
Objectivity – Condition that is achieved when everyone scoring a
given test obtains the same results.
Norm – Frame of reference for comparing an applicant’s performance
with that of others.
RELIABILITY
Extent to which a selection test provides consistent results.
For example, if a person were to take the same test of personality
several times and received highly similar scores (consistent results),
this personality test would be judged to be reliable.
VALIDITY
Extent to which a test measures what it claims to measure.
If a test cannot indicate ability to perform the job, it has no value. And
if used, it will result in poor hiring decisions and a potential legal liability
for the employer.
Test Validation Approaches
The Uniform Guidelines on Employee Selection Procedures
established three approaches to validating selection tests: criterion-
related validity, content validity, and construct validity.
11
 STRATEGIC HR MANAGEMENT
1) Criterion-Related Validity – Test validation method that compares
the scores on selection tests to some aspect of job performance
determined, for example, by performance appraisal.
2) Concurrent validity is determined when the firm obtains test
scores and the criterion data at essentially the same time.
 For instance, it administers the test to all currently employed
telemarketers and compares the results with company records that
contain current information about each employee’s job
performance. If the test is able to identify productive and less
productive workers, one could say that it is valid
3) Predictive Validity involves administering a test and later obtaining
the criterion information.
 For instance, all applicants take the test but the firm uses other
selection criteria, not the test results, to make the selection decision.
a) Content Validity – Test validation method whereby a person
performs certain tasks that are actually required by the job or
completes a paper-and-pencil test that measures relevant job
knowledge.
b) Construct Validity – Test validation method that determines
whether a test measures certain constructs, or traits, that job
analysis finds to be important in performing a job.
EMPLOYMENT TESTS
Individuals differ in characteristics related to job performance. Broadly,
tests fall into one of two categories: aptitude tests and achievement
tests.
1) Aptitude Tests – A test of how well a person can learn or acquire
skills or abilities.
2) Achievement Tests – A test of current knowledge and skills.
3) Cognitive Ability Tests – Tests that determine general reasoning
ability, memory, vocabulary, verbal fluency, and numerical ability.
4) Psychomotor Abilities Tests – Psychomotor abilities refer to the
capacity to connect brain or cognitive functions and functions of the
body such as physical strength.
 An example of a psychomotor ability is reaction time, which is
defined as “the ability to quickly respond (with the hand, finger, or
foot) to a signal (sound, light, picture) when it appears.”
5) Personality Tests – Self-reported measures of traits,
temperaments, or dispositions.
 Personality – Individual differences in characteristic patterns of
thinking, feeling, and behaving.
 Generally, fire departments and law enforcement agencies
use the Minnesota Multiphasic Personality Inventory (MMPI)
test, which consists of 567 statements that help to determine a
subject’s degree of paranoia, depression, mania, or anxiety.
 In police departments the MMPI is used to detect the
inclination toward substance abuse. These types of tests are
typically used in the early stage of the selection process.
6) Integrity tests represent a specific type of personality attribute.
Integrity refers to “being honest and ethical.”
 Employers have used them to measure candidates’ attitudes
toward theft, dishonesty, absenteeism, violence, drug use,
alcohol abuse, and other counterproductive behaviors.
7) Job-knowledge Tests – Tests designed to measure a candidate’s
knowledge of the duties of the job for which he or she is applying.
8) Work-sample Tests – Tests that require an applicant to perform a
task or set of tasks representative of the job.
Assessment Center – Selection technique that requires individuals to
perform activities similar to those they might encounter in an actual
job.
 Typical assessment center tests include having applicants complete
in-basket exercises and perform in management games,
leaderless discussion groups, mock interviews, and other
simulations.
 Research has shown that the in-basket exercise, a typical
component of assessment centers, is a good predictor of
management performance. Its validity provides an alternative to
paper-and-pencil tests.
UNIQUE FORMS OF TESTING
Genetic tests – Tests given to identify predisposition to inherited
diseases, including cancer, heart disease, neurological disorders, and
congenital diseases.
Graphoanalysis – Use of handwriting analysis as a selection factor.
Polygraph Tests – For many years, another means used to verify
background information was the polygraph, or lie-detector test. One
purpose of the polygraph was to confirm or refute the information
contained in a candidate’s application.
EMPLOYMENT INTERVIEW
A. Employment Interview – Goal-oriented conversation in which an
interviewer and an applicant exchange information.
B. Interview Planning
Interview planning is essential to effective employment interviews. A
primary consideration should be the speed in which the process
occurs. Many studies have demonstrated that the top candidates for
nearly any job are hired and off the job market within anywhere from 1
to 10 days.
C. Content of the Interview
Both the interviewer and the candidate have agendas for the interview.
After establishing rapport with the applicant, the interviewer seeks
additional job-related information to complement data provided by
other selection tools.
 Occupational Experience – The interviewer will explore the
candidate’s knowledge, skills, abilities, and willingness to
handle responsibility.
 Academic Achievement – In the absence of significant
work experience, a person’s academic record takes on
greater importance.
 Interpersonal Skills – An individual may possess important
technical skills significant to accomplishing a job.
 Personal Qualities – Personal qualities normally observed
during the interview include physical appearance, speaking
ability, vocabulary, poise, adaptability, assertiveness,
leadership ability, and cooperative spirit.
CANDIDATE’S ROLE AND EXPECTATIONS
 Although the interviewer will provide information about the
company, it is still important for candidates to do their
homework, including studying the job description and
checking the Internet (including the firm’s Web site) before
the interview.
 Employees are also conducting background checks on
companies to check out potential employers on such
things as financial stability, whether or not the company
would be a good place to work, and career opportunities.
12
 STRATEGIC HR MANAGEMENT
Recruiters need to remember that interviewees also have objectives
for the interview. One might be to determine what the firm is willing to
pay as a starting salary.
Job seekers have other goals that may include the following:
 To be listened to and understood.
 To have ample opportunity to present their qualifications.
 To be treated fairly and with respect.
 To gather information about the job and the company.
 To make an informed decision concerning the desirability of
the job.
GENERAL TYPES OF INTERVIEWS
Types of interviews are often broadly classified as structured,
unstructured, behavioral, and situational.
Unstructured Interview – Interview in which the job applicant is asked
probing, open-ended questions.
Structured Interview – Interview in which the interviewer asks each
applicant for a particular job the same series of job-related questions.
Behavioral Interview – Structured interview in which applicants are
asked to relate actual incidents from their past relevant to the target
job.
 Behavioral interviewers look for three main things: a description
of a challenging situation, what the candidate did about it, and
measurable results.
Situational Interview – Gives interviewers better insight into how
candidates would perform in the work environment by creating
hypothetical situations candidates would be likely to encounter on the
job and asking them how they would handle them.
METHODS OF INTERVIEWING
Organizations conduct interviews in several ways. The level of the
open position and the appropriate labor market determine the most
fitting approach.
1) One-on-one Interview – In a typical employment interview, the
applicant meets one-on-one with an interviewer.
 As the interview may be a highly emotional occasion for the
applicant, meeting alone with the interviewer is often less
threatening. This method provides a better opportunity for an
effective exchange of information to take place.
2) Group Interview – Meeting in which several job applicants interact
in the presence of one or more company representatives.
3) Board Interview (Panel Interview) – An interview approach in
which several of the firm’s representatives interview a candidate at
the same time.
4) Multiple Interviews – At times, applicants are interviewed by peers,
subordinates, and potential superiors.
 This approach permits the firm to get a more encompassing view of
the candidate. It also gives the candidate a chance to learn more
about the company from a variety of perspectives.
 The result of this type of interview is a stronger, more cohesive team
that shares the company’s culture and helps ensure organizational
fit.
5) Stress Interview – Form of interview in which the interviewer
intentionally creates anxiety.
6) Realistic Job Preview (RJP) – Method of conveying both positive
and negative job information to an applicant in an unbiased manner.
 Employers who give detailed RJPs get two results: fewer
employees accept the job offer, and applicants who do accept the
offer are less likely to leave the firm.
POTENTIAL INTERVIEWING PROBLEMS
Potential interviewing problems that can threaten the success of
employment interviews.
 Inappropriate Questions – Many questions are clearly
hiring standards to avoid. When they are asked, the
responses generated create a legal liability for the employer.
The most basic interviewing rule is this: “Ask only job-related
questions.”
 Permitting Non–job-related Information – If a candidate
begins volunteering personal information that is not job
related, the interviewer should steer the conversation back
on course.
 Interviewer Bias – Often a problem that may arise in an
interview is interviewer bias where the interviewer makes
assumptions about the interviewee that may be incorrect
and lets these biases influence the selection decision.
1) Stereotyping bias occurs when the interviewer assumes
that the applicant has certain traits because they are
members of a certain class.
 The classic case of stereotyping bias is when an
interviewer assumes that a woman applicant cannot
meet a certain physical requirement such as being able
to lift 50 pounds.
2) A positive halo bias occurs when the interviewer
generalizes one positive first impression feature of the
candidate.
 Such might be the case with discovering that you have
something in common with the applicant. The opposite
could occur with negative horn bias where the
interviewer’s first negative impression of the candidate
generalizes throughout the interview.
3) Contrast errors may occur when, for example, an
interviewer meets with several poorly qualified applicants
and then confronts a mediocre candidate.
 By comparison, the last applicant may appear to be
better qualified than he or she actually is. The opposite
can also occur. Suppose that a clearly outstanding
candidate is followed by a very good candidate. The
second candidate may not be considered even if the
first candidate turns down the job offer.
4) Premature judgment bias suggests that interviewers
often make a judgment about candidates in the first few
minutes of the interview.
 Apparently, these interviewers believe that they have
the ability to determine immediately whether a
candidate will be successful or not. When this occurs,
a great deal of potentially valuable information is not
considered.
 Even if an interviewer spent a week with an applicant,
the sample of behavior might be too small to judge the
candidate’s qualifications properly.
 In addition, the candidate’s behavior during an
interview is seldom typical or natural, thereby making a
quick judgment difficult.
5) Interview illusion bias is closely related to premature
judgment but not the same.
 Managers may say something to the effect “Give me
just five minutes with an applicant and I can tell if they
will be successful with our company.” Their belief in
their interview ability was likely exaggerated.
13
 STRATEGIC HR MANAGEMENT
 Recruiters are often overconfident about their ability to judge
others in general. Interviewers have to be careful about placing
excessive weight on interviews and thinking “I just feel good
about this applicant” when making the hiring decision.
Interviewer Domination – In successful interviews, relevant
information must flow both ways.
 Sometimes, interviewers begin the interview by telling candidates
what they are looking for, and then are excited to hear candidates
parrot back their own words.
Lack of Training – Interviewers should be trained to have a job-
related purpose for asking each question. When the cost of making
poor selection decisions is considered, the expense of training
employees in interviewing skills can be easily justified.
Nonverbal Communication – Body language is the nonverbal
communication method in which physical actions such as motions,
gestures, and facial expressions convey thoughts and emotions.
CONCLUDING THE INTERVIEW
When the interviewer has obtained the necessary information and
answered the applicant’s questions, he or she should conclude the
interview. Management must then determine whether the candidate is
suitable for the open position and organization.
PRE-EMPLOYMENT SCREENING AND BACKGROUND CHECKS
Background investigation is more important than ever because of the
rise in negligent hiring lawsuits, recent corporate scandals, and
national security concerns.
 At this stage of the selection process, an applicant has normally
completed an application form or submitted a résumé, taken the
necessary selection tests, and undergone an employment
interview.
 On the surface the candidate looks qualified. It is now time to
determine the accuracy of the information submitted or to
determine whether vital information was not submitted.
CONTINUOUS BACKGROUND INVESTIGATION
Background investigations are not just for pre-employment any more.
 Some employers are screening their employees on an ongoing
basis. In certain industries, such as banking and health care,
employers are required by regulation to routinely research the
criminal records of employees.
BACKGROUND INVESTIGATION WITH SOCIAL NETWORKING
An increasing number of employers are using social networking to
conduct background investigations. Employers use an applicant’s
Facebook page, LinkedIn profile, and postings made on an industry
blog to find out about individuals they are considering hiring.
REMEMBERING HIRING STANDARDS TO AVOID
Some of the standards used in the background investigation have the
potential to violate a hiring standard to avoid. A word of caution is
advised in situations when an applicant acknowledges that he or
she has been convicted of a crime.
Reference Checks – Validations from individuals who know the
applicant that provide additional insight into the information furnished
by the applicant and verification of its accuracy.
Negligent Hiring – Liability a company incurs when it fails to conduct
a reasonable investigation of an applicant’s background, and then
assigns a potentially dangerous person to a position in which he or she
can inflict harm.
SELECTION DECISION
 At this point, the focus is on the manager who must take the
most critical step of all: the actual hiring decision.
 In making this decision, the manager will review results of
the selection methods used.
MEDICAL EXAMINATION
 At this stage, some companies may also require drug testing
to determine whether applicants are using chemical
substances or alcohol.
 There are a variety of reasons for choosing to test applicants
for drug use. Primarily, the use of illegal drugs, which impairs
judgment and psychomotor coordination, may create
workplace hazards.
NOTIFICATION OF CANDIDATES
 Management should notify both successful and
unsuccessful candidates of selection decisions as soon as
possible.
 This action is a matter of courtesy and good public relations.
Any delay may also result in the firm losing a prime
candidate because top prospects often have other
employment options.
METRICS FOR EVALUATING THE EFFECTIVENESS OF
RECRUITMENT/SELECTION
There is, however, no one-size-fits-all metric that employers can adopt
to achieve greater hiring efficiency. The metrics that best suit each
company depends on a variety of factors, including its business goals.
a) Quality of Hire – Many recruiters believe that quality of hire is the
most important metric to use in the selection process. Some
possible measures to determine the quality of hire might be
communication effectiveness, ability to motivate others, leadership
ability, and cultural fit.
b) Time Required to Hire – The shorter the time to hire, the more
efficient the HR department is in finding the replacement for the job.
The top candidates for nearly any job are hired and off the job
market within anywhere from 1 to 10 days.
c) New-Hire Retention – New-hire retention is calculated by
determining the percentage of the new hires that remain with the
company at selected intervals, typically one or two years.
d) Hiring Manager Overall Satisfaction
The manager is largely responsible for the success of his or her
department. It is the quality of the employees in the workgroup that
have a major impact on success of the department.
e) Turnover Rate – Turnover rate is the number of times on average
that employees have to be replaced during a year.
 For example, if a company has 200 employees and 200 workers
had been hired during the year, a 100 percent turnover rate would
be experienced.
f) False Starts – Employees who are hired and then quit within 120
days.
g) Cost Per Hire
 In determining the recruiting cost per hire, the total recruiting
expense must first be calculated.
 Then, the cost per hire may be determined by dividing the
recruiting expenses (calculation of advertising, agency fees,
14
 STRATEGIC HR MANAGEMENT
employee referrals, relocation, recruiter pay, and benefits costs) by the
number of recruits hired.
h) Selection Rate – The number of applicants hired from a group of
candidates expressed as a percentage is the selection rate.
 For example, if 100 qualified candidates are available and 25 are
chosen, the selection rate would be 25 percent.
i) Acceptance Rate – The acceptance rate is the number of
applicants who accepted the job divided by the number who were
offered the job.
 If this rate is unusually low, it would be wise to determine the reason
that jobs are being turned down. A low acceptance rate increases
recruiting cost.
j) Yield Rate – A yield rate is the percentage of applicants from a
particular source and method that make it to the next stage of the
selection process.
ENVIRONMENTAL FACTORS AFFECTING THE SELECTION
PROCESS
A standardized selection process followed consistently would greatly
simplify the selection process. However, circumstances may require
making exceptions.
The following sections describe environmental factors that affect
the selection process:
a) Other HR Functions
b) Legal Considerations – Legal matters play a significant role in HR
management because of EEOC legislation, executive orders, and
court decisions.
c) Speed of Decision Making – The time available to make the
selection decision can also have a major effect on the selection
process. Conditions also can impact the needed speed of decision
making.
d) Organizational Hierarchy – Organizations usually take different
approaches to filling positions at varying levels.
e) Applicant Pool – Number of qualified applicants recruited for a
particular job.
f) selection ratio – Number of people hired for a particular job
compared to the number of qualified individuals in the applicant
pool.
e) Type of Organization
 The type of organization employing individuals, such as
private, governmental, or not for profit, can also affect the
selection process.
 Most private-sector businesses are heavily profit oriented.
Prospective employees who can help achieve profit goals
are the preferred candidates.
 Consideration of the total individual, including job-related
personality factors, is involved in the selection of employees
for this sector.
f) Probationary Period
 Many firms use a probationary or introductory period that
permits them to evaluate an employee’s ability based on
established performance.
 The purpose of a probationary period is to establish the
suitability of a new employee for the position and to resolve
any issues there might be in the new employee’s
performance over the first three months or so.
g) Organizational Fit – Management’s perception of the degree to
which the prospective employee will fit in with the firm’s culture or
value system.
h) Selection Technology – Two tools that are invaluable to the
selection process in the technology boom that is sweeping HR today
are applicant-tracking systems (ATSs) and candidate
relationship management (CRM).
SELECTION IN A GLOBAL ENVIRONMENT
When determining which leadership style will be more appropriate for
a company, a country’s culture plays a major role in determining
whether an executive will be successful or not.
LESSON 7: PERFORMANCE MANAGEMENT AND APPRAISAL
Performance Management (PM) – Goal-oriented process directed
toward ensuring that organizational processes are in place to
maximize the productivity of employees, teams, and ultimately, the
organization.
 It is a major player in accomplishing organizational strategy
in that it involves measuring and improving the value of the
workforce.
 PM includes incentive goals and the corresponding incentive
values so that the relationship can be clearly understood and
communicated. There is a close relationship between
incentives and performance.
Performance Appraisal (PA) – Formal system of review and
evaluation of individual or team task performance.
A critical point in the definition is the word formal because, in actuality,
managers should be reviewing an individual’s performance on a
continuing basis.
USES OF PERFORMANCE APPRAISAL
1. Human Resource Planning. In assessing a firm’s HR, data must
be available to identify those who have the potential to be promoted
or for any area of internal employee relations. Through PA it may be
discovered that there is an insufficient number of workers who are
prepared to enter management.
2. Training and Development. Performance appraisal should point
out an employee’s specific needs for training and development.
 By identifying deficiencies that adversely affect performance,
training and development (T&D) programs can be developed that
permit individuals to build on their strengths and minimize their
deficiencies.
3. Career Planning and Development
Career planning is an ongoing process whereby an individual sets
career goals and identifies the means to achieve them. On the other
hand, career development is a formal approach used by the
organization to ensure that people with the proper qualifications and
experiences are available when needed.
4. Compensation Programs
“the behaviors you reward are the behaviors you get.”
Rewarding behaviors necessary for accomplishing organizational
objectives is at the heart of a PM system. To encourage good
performance, a firm should design and implement a reliable PA system
and then reward the most productive workers and teams accordingly.
5. Internal Employee Relations. PA data are also used for decisions
in several areas of internal employee relations, including promotion,
demotion, termination, layoff, and transfer.
15
 STRATEGIC HR MANAGEMENT
6. Assessment of Employee Potential. Some organizations attempt
to assess an employee’s potential as they appraise his or her job
performance. Although past behaviors may be a good predictor of
future behaviors in some jobs, an employee’s past performance
may not accurately indicate future performance in other jobs.
PERFORMANCE APPRAISAL PROCESS
ESTABLISH PERFORMANCE CRITERIA (STANDARDS)
Management must carefully select performance criteria as it pertains
to achieving corporate goals. The most common appraisal criteria are
traits, behaviors, competencies, goal achievement, and improvement
potential.
TRAITS, BEHAVIORS, AND COMPETENCIES – Traits, behaviors,
and competencies are often used as PA standards.
Traits represent an individual’s predisposition to think, feel, and
behave, and many traits are usually thought of as being biologically
created. A personality trait is more ingrained with an individual as with
a person being introverted or extroverted, or less conscientious or
more conscientious.
Behaviors are typically viewed as resulting from a variety of
sources including traits and situational context.
For example, a highly conscientious person is more likely to engage in
behaviors that lead to timely task completion than someone who is
less conscientious because conscientiousness is associated with
dutifulness.
 An appropriate behavior to evaluate for a manager might be
leadership style. For individuals working in teams,
developing others, teamwork and cooperation, or customer
service orientation might be appropriate.
 Desired behaviors may be appropriate as evaluation criteria
because if they are recognized and rewarded, employees
tend to repeat them. If certain behaviors result in desired
outcomes, there is merit in using them in the evaluation
process.
Competencies, as we discussed in Chapter 4, refer to an individual’s
capability to orchestrate and apply combinations of knowledge,
skills, and abilities consistently over time to perform work
successfully in the required work situations.
 Competencies may be technical in nature, relate to
interpersonal skills, or are business oriented.
 For example, analytical thinking and achievement
orientation might be essential in professional jobs. In
leadership jobs, relevant competencies might include
developing talent, delegating authority, and people
management skills. The competencies selected for
evaluation purposes should be those that are closely
associated with job success.
GOAL ACHIEVEMENT
If organizations consider ends more important than means, goal
achievement outcomes become an appropriate factor to evaluate. The
outcomes established should be within the control of the individual or
team and should be results that lead to the firm’s success.
 This aspect of employee appraisal should be the most positive
element in the entire process and help the employee focus on
behavior that will produce positive results for all concerned.
IMPROVEMENT POTENTIAL
 When organizations evaluate their employees’ performance,
many of the criteria used focus on the past.
 From a PM viewpoint, the problem is that you cannot change
the past. Unless a firm takes further steps, the evaluation
data become merely historical documents. Therefore, firms
should emphasize the future, including the behaviors and
outcomes needed to develop the employee, and in the
process, achieve the firm’s goals.
 This involves an assessment of the employee’s potential.
Including potential in the evaluation process helps to
ensure more effective career planning and development.
RESPONSIBILITY FOR PERFORMANCE APPRAISAL
Often the human resource department is responsible for coordinating
the design and implementation of PA programs. However, it is
essential that line managers play a key role from beginning to end.
These individuals usually conduct the appraisals, and they must
directly participate in developing the program if it is to succeed.
IMMEDIATE SUPERVISOR
An employee’s immediate supervisor has traditionally been the most
logical choice for evaluating performance, and this continues to be the
case. The supervisor is usually in an excellent position to observe the
employee’s job performance, and the supervisor has the responsibility
for managing a particular unit.
SUBORDINATES
Some firms conclude that evaluation of managers by subordinates is
both feasible and needed. They reason that subordinates are in an
excellent position to view their superiors’ managerial effectiveness.
 Advocates believe that this approach leads supervisors to become
especially conscious of the work group’s needs and to do a better
job of managing.
PEERS AND TEAM MEMBERS – A major strength of using peers to
appraise performance is that they work closely with the evaluated
employee and probably have an undistorted perspective on typical
performance, especially in team assignments.
16
 STRATEGIC HR MANAGEMENT
SELF-APPRAISAL
If employees understand their objectives and the criteria used for
evaluation, they are in a good position to appraise their own
performance. Many people know what they do well on the job and
what they need to improve. If they have the opportunity, they will
criticize their own performance objectively and take action to improve
it.
CUSTOMER APPRAISAL
 Customer behavior determines a firm’s degree of success.
Therefore, some organizations believe it is important to
obtain performance input from this critical source.
 Organizations use this approach because it demonstrates a
commitment to the customer, holds employees accountable,
and fosters change.
 Customer-related goals for executives generally are of a
broad, strategic nature, whereas targets for lower-level
employees tend to be more specific.
360-DEGREE FEEDBACK
People all around the employee whose performance is being judged
may provide input. Those sources, as we have already discussed,
include senior managers, the employee himself or herself, a
supervisor, subordinates, peers, team members, and internal or
external customers. By shifting the responsibility for evaluation to
more than one person, many of the common appraisal errors can be
reduced or eliminated.
360-degree feedback evaluation method – Popular performance
appraisal method that involves evaluation input from multiple levels
within the firm as well as external sources.
PERFORMANCE APPRAISAL PERIOD
Formal performance evaluations are usually prepared at specific
intervals. Although there is nothing magical about the period for
formal appraisal reviews, in most organizations they occur either
annually or semiannually.
 Even more significant, however, is the continuous interaction
(primarily informal), including coaching and other developmental
activities, that continues throughout the appraisal period.
CHOOSING A PERFORMANCE APPRAISAL METHOD
The various methods are next presented as if they are separate and
distinct when in actuality each may be used in conjunction with another
method. For instance, the 360-degree feedback method may
incorporate portions of the ranking scale. There are multiple
approaches to appraising employee performance. It is instructive to
group them into categories according to what they are designed to
measure.
PA methods fall into four broad categories:
 Trait systems
 Comparison systems
 Behavioral systems
 Results-based systems
TRAIT SYSTEMS – Type of performance-appraisal method, requiring
raters (e.g., supervisors or customers) to evaluate each employee’s
traits or characteristics (e.g., quality of work and leadership).
COMPARISON SYSTEMS – A type of performance-appraisal method,
require that raters (e.g., supervisors) evaluate a given employee’s
performance against other employees’ performance attainments.
Employees are ranked from the best performer to the poorest
performer.
FORCED DISTRIBUTION METHOD
Performance appraisal method in which the rater is required to
assign individuals in a work group to a limited number of categories,
similar to a normal frequency distribution.
 An alternative approach, called a forced distribution method PA
and sometimes referred to as a stacked ranking system, assigns
employees to groups that represent the entire range of
performance. For example, three categories that might be used are
best performers, moderate performers, and poor performers.
Forced distribution approaches have drawbacks. The forced
distribution approach can distort ratings because employee
performance may not fall into these predetermined distributions.
Let’s assume that a supervisor must use the following forced
distribution to rate her employees’ performance:
 15 percent well below average
 25 percent below average
 40 percent average
 15 percent above average
 5 percent well above average
This distribution is problematic to the extent that the actual distribution
of employee performance is substantially different from this forced
distribution. If 35 percent of the employees’ performance were either
above average or well above average, then the supervisor would be
required to underrate the performance of 15 percent of the employees.
Based on this forced distribution, the supervisor can rate only 20
percent of the employees as having demonstrated above-average or
well-above- average job performance.
Paired Comparisons. Supervisors compare each employee to every
other employee, identifying the better performer in each pair.
BEHAVIORAL SYSTEMS
 Performance appraisal methods that focus on
distinguishing between successful and unsuccessful
behaviors.
 Behavioral systems rate employees on the extent to which
they display successful job performance behaviors. In
contrast to trait and comparison methods, behavioral
methods rate objective job behaviors. When correctly
developed and applied, behavioral models provide results
that are relatively free of rater errors and biases.
The three main types of behavioral systems are the critical
incident technique (CIT), behaviorally anchored rating scales
(BARS), and behavioral observation scales (BOS).
Critical Incident Technique (CIT)
 Performance appraisal method that requires keeping
written records of highly favorable and unfavorable
employee work actions.
 The critical incident technique (CIT) requires job incumbents
and their supervisors to identify performance incidents (e.g.,
on-the-job behaviors and behavioral outcomes) that
distinguish successful performances from unsuccessful
ones. The supervisor then observes the employees and
records their performance on these critical job aspects.
Behaviorally Anchored Rating Scale (BARS)
 Performance appraisal method that combines elements of
the traditional rating scale and critical incident
17
 STRATEGIC HR MANAGEMENT
methods; various performance levels are shown along a
scale with each described in terms of an employee’s specific
job behavior.
 Behaviorally anchored rating scales (BARS) are based on
the CIT, and these scales are developed in the same fashion
with one exception. For the CIT, a critical incident would be
written as “the incumbent completed the task in a timely
fashion.”
 A typical job might have 8–10 dimensions under BARS,
each with a separate rating scale.
Behavioral Observation Scale (BOS)
 A specific kind of behavioral system for evaluating job
performance by illustrating positive incidents (or
behaviors) of job performance for various job dimensions.
 BOS is developed in the same way as a BARS instrument,
except that it incorporates only positive performance
behaviors. The BOS method tends to be difficult and time-
consuming to develop and maintain.
RESULTS-BASED PERFORMANCE APPRAISAL
 Performance appraisal method in which the manager and
subordinate jointly agree on objectives for the next
appraisal period; in the past a form of management by
objectives.
 Results-based performance appraisal methods focus on
measurable outcomes such as an individual’s or team’s
sales, customer service ratings, productivity, reduced
incidence of workplace injuries, and so forth. The selection
of results largely depends on three factors.
 The first factor is the relevance of the results that may
be used to judge a company’s progress toward meeting
its strategic goals.
 The second factor is the reliability with which results can
be measured.
 The third factor is the extent to which the results
measure is truly a measure of performance over which an
employee has the resources and latitude to achieve the
designated results.
 Various segments of the MBO process can easily be
integrated into an effective goal-oriented system. Goal-
oriented systems are often a component of broader
development programs that help employees achieve
career goals.
Work Standards Method
Performance appraisal method that compares each employee’s
performance to a predetermined standard or expected level of
output.
 The work standards method is often coupled with a particular
incentive pay plan known as the piecework plan. Piecework plans
typically found in manufacturing settings, rewards employees based
on their individual hourly production against an objective output
standard and is determined by the pace at which manufacturing
equipment operates. For each hour, workers receive piecework
incentives for every item produced over the designated production
standard.
PROBLEMS IN PERFORMANCE APPRAISAL
PA is constantly under a barrage of criticism. The rating scales method
seems to be the most vulnerable target. Yet in all fairness, many of the
problems commonly mentioned are not exclusive to this method but
rather, reflect improper implementation.
The following section highlights some of the more common
problem areas.
APPRAISER DISCOMFORT
 Conducting PAs is often a frustrating task for managers. If a
PA system has a faulty design, or improper administration,
employees will dread receiving appraisals and the managers
will despise giving them.
 In fact, some managers have always loathed the time,
paperwork, difficult choices, and discomfort that often
accompanies the appraisal process.
 Going through the procedure cuts into a manager’s high-
priority workload and the experience can be especially
unpleasant when the employee in question has not
performed well.
SUBJECTIVITY OF PERFORMANCE EVALUATIONS
A potential weakness of many PA methods is that they lack objectivity.
For example, commonly used factors such as traits, behaviors, and
competencies are virtually impossible to measure with objective
measures.
Rating Errors
In performance appraisals, differences between human judgment
processes versus objective, accurate assessments uncolored by bias,
prejudice, or other subjective, extraneous influences.
Major types of rater errors include:
 Bias Errors. Evaluation errors that occur when the rater
evaluates the employee based on a personal negative or
positive opinion of the employee rather than on the
employee’s actual performance.
1. First-impressionIeffect.OAn initial favorable or
unfavorable judgment about an employee’s which is
ignored or distorted.
2. Positive halo effect (or halo effect). Evaluation error
that occurs when a manager generalizes one positive
performance feature or incident to all aspects of
employee performance, resulting in a higher rating.
3. Negative halo effect (or horn error). Evaluation error
that occurs when a manager generalizes one negative
performance feature or incident to all aspects of
employee performance, resulting in a lower rating.
4. A similar-to-me effect refers to the tendency on the part
of raters to judge favorably employees whom they
perceive as similar to themselves. Supervisors biased
by this effect rate more favorably employees who have
attitudes, values, backgrounds, or interests similar to
theirs.
5. Illegal discriminatory bias. A bias error for which a
supervisor rates members of his or her race, gender,
nationality, or religion more favorably than members
of other classes.
 Contrast Errors. A rating error in which a rater (e.g., a
supervisor) compares an employee to other employees
rather than to specific explicit performance standards.
 Errors of central tendency/Central Tendency Error.
Evaluation appraisal error that occurs when employees
are incorrectly rated near the average or middle of a
scale.
18
 STRATEGIC HR MANAGEMENT
 Errors of leniency or strictness/Leniency Error. Giving
an undeserved high performance appraisal rating to an
employee. Strictness Errors – Being unduly critical of an
employee’s work performance.
Employee Anxiety
The evaluation process may also create anxiety for the appraised
employee. This may take the form of discontent, apathy, and turnover.
In a worst-case scenario, a lawsuit is filed based on real or perceived
unfairness.
CHARACTERISTICS OF AN EFFECTIVE APPRAISAL SYSTEM
The basic purpose of a PA system is to improve the performance of
individuals, teams, and the entire organization. The system may also
serve to assist in making administrative decisions concerning pay
increases, promotions, transfers, or terminations.
JOB-RELATED CRITERIA – Job-relatedness is perhaps the most
basic criterion needed in employee performance appraisals. The
evaluation instrument should tie in closely to the accomplishment of
organizational goals.
PERFORMANCE EXPECTATIONS
 Employees must understand in advance what is expected of
them. How can employees function effectively if they do not
know what they are being measured against?
 On the other hand, if employees clearly understand the
expectations, they can evaluate their own performance and
make timely adjustments as they perform their jobs, without
having to wait for the formal evaluation review.
STANDARDIZATION – Firms should use the same evaluation
instrument for all employees in the same job category who work for the
same supervisor.
TRAINED APPRAISERS
The training should be an ongoing process to ensure accuracy and
consistency. It should cover how to rate employees and how to
conduct appraisal interviews. Instructions should be rather detailed
and the importance of making objective and unbiased ratings should
be emphasized.
CONTINUOUS OPEN COMMUNICATION
 Most employees have a strong need to know how well they
are performing. A good appraisal system provides highly
desired feedback on a continuing basis.
 When something new surfaces during the appraisal
interview, the manager probably did not do a good enough
job communicating with the employee throughout the
appraisal period.
CONDUCT PERFORMANCE REVIEWS
In addition to the need for continuous communication between
managers and their employees, a special time should be set for a
formal discussion of an employee’s performance. Performance review
allows them to detect any errors or omissions in the appraisal, or an
employee may disagree with the evaluation and want to challenge it.
DUE PROCESS – Ensuring due process is vital. If the company does
not have a formal grievance procedure, it should develop one to
provide employees an opportunity to appeal appraisal results that they
consider inaccurate or unfair. They must have a procedure for
pursuing their grievances and having them addressed objectively.
LEGAL CONSIDERATIONS IN PERFORMANCE APPRAISAL
Employee lawsuits may result from negative evaluations. Employees
often win these cases, thanks in part to the firm’s own PA procedures.
A review of court cases makes it clear that legally defensible PA
systems should be in place.
PERFORMANCE APPRAISAL INTERVIEW
The appraisal interview is the Achilles’ heel of the entire evaluation
process. In fact, appraisal review sessions often create hostility and
can do more harm than good to the employee– manager relationship.
To minimize the possibility of hard feelings, the face-to-face meeting
and the written review must have performance improvement, not
criticism, as their goal.
SCHEDULING THE INTERVIEW
Supervisors usually conduct a formal appraisal interview at the end of
an employee’s appraisal period. It should be made clear to the
employee as to what the meeting is about.
INTERVIEW STRUCTURE
A successful appraisal interview should be structured in a way that
allows both the supervisor and the subordinate to view it as a problem-
solving rather than a fault-finding session. The manager has several
purposes when planning an appraisal interview.
Although costs are a consideration, there is merit in conducting
separate interviews for discussing (1) employee performance and
development and (2) pay. Many managers have learned that as soon
as the topic of pay emerges in an interview, it tends to dominate the
conversation, with performance improvement taking a back seat.
USE OF PRAISE AND CRITICISM
 Praise is appropriate when warranted, but it can have limited
value if not clearly deserved. If an employee must eventually
be terminated because of poor performance, a manager’s
false praise could bring into question the “real” reason for
being fired.
 Criticism, even if warranted, is especially difficult to give.
The employee may not perceive it as being constructive. It
is important that discussions of these sensitive issues focus
on the deficiency, not the person.
EMPLOYEES’ ROLE
 From the employees’ side, two weeks or so before the
review, they should go through their diaries or files and make
a note of all projects worked on, regardless of whether or not
they were successful.
 The best recourse for employees in preparing for an
appraisal review is to prepare a list of creative ways they
have solved problems with limited resources. They will look
especially good if they can show how their work contributes
to the value of the company.
CONCLUDING THE INTERVIEW
Ideally, employees will leave the interview with positive feelings about
management, the company, the job, and themselves. If the meeting
results in a deflated ego, the prospects for improved performance will
be bleak. Although you cannot change past behavior, future
performance is another matter. The interview should end with specific
and mutually agreed-on plans for the employee’s development.
19
 STRATEGIC HR MANAGEMENT
NATIONAL CULTURE AND PERFORMANCE APPRAISAL expected, and the law does not preclude supervisory discretion in the
PA is an area of human resource management that has special process. However, systems that possess certain characteristics are
problems when translated into different countries’ cultural more legally defensible.
environments. 10. Explain how the appraisal interview should be conducted and
discuss how performance appraisal is affected by a country’s
Culture also plays a significant role in the success and failure of PA
culture. A successful appraisal interview should be structured in a way
systems in the Middle East. In the Middle East there is a view called
that allows both the supervisor and the subordinate to view it as a
wasta, which significantly affects how business is conducted. Wasta
problem-solving rather than a fault-finding session. PA is an area of
refers to using mutual favors instead of merit to get things done.
human resource management that has special problems when
Because wasta implies reciprocity, it remains entrenched in society,
translated into different countries’ cultural environments. The use of
and it has a major effect on HR, especially PA.
PA in the United States is relatively new compared to many older
countries. Here, formal performance appraisal came into systematic
SUMMARY
use toward the beginning of the 20th century. However, PA in other
1. Describe performance management.
countries has evolved over many centuries and is strongly affected by
Performance management (PM) is a goal-oriented process that is
a country’s culture.
directed toward ensuring that organizational processes are in place to
maximize productivity of employees, teams, and ultimately, the LESSON 8: TRAINING AND DEVELOPMENT
organization. PM systems are one of the major focuses in business
today. With PM, the effort of each and every worker should be directed Training and Development (T&D). Heart of a continuous effort
toward achieving strategic goals. designed to improve employee competency and organizational
2. Define performance appraisal and identify the uses of performance.
performance appraisal. Training. Activities designed to provide learners with the knowledge
Performance appraisal (PA) is a system of review and evaluation of and skills needed for their present jobs.
individual or team task performance. PA data are potentially valuable
for use in numerous human resource functional areas, including Development. Learning that goes beyond today’s job and has a more
human resource planning, recruitment and selection, training and long-term focus.
development, career planning and development, compensation Organization Development (OD). Planned and systematic attempts
programs, internal employee relations, and assessment of employee to change the organization, typically to a more behavioral environment.
potential.
Figure 8-1: Organization of training and development elements
3. Discuss the performance appraisal process. The identification of
specific goals is the starting point for the PA process and the beginning
of a continuous cycle. Then job expectations are established with the
help of job analysis. The next step involves examining the actual work
performed. Performance is then appraised. The final step involves
discussing the appraisal with the employee.
4. Identify the various performance criteria (standards) that can
Learning Organization. Firm that recognizes the critical importance
be established. The most common appraisal criteria are traits,
of continuous performance-related T&D and takes appropriate action.
behaviors, competencies, goal achievement, and improvement
potential.
TRAINING AND DEVELOPMENT PROCESS
5. Identify who may be responsible for performance appraisal and
The general T&D process that anticipates or responds to change may
explain the performance period. People who are usually responsible
be seen in Figure 8-2. First, an organization must determine its specific
for PA include immediate supervisors, subordinates, peers and team
needs for training. As we will see, needs are considered at the levels
members, self-appraisal, and customer appraisal. Formal
of the organization, task, and persons.
performance evaluations are usually prepared at specific intervals.
Figure 8-2: Training and Development Process
Although there is nothing magical about the period for formal appraisal
reviews, in most organizations they occur either annually or
semiannually.
6. Identify the various performance appraisal methods. PA
methods include 360-degree feedback evaluation, rating scales,
critical incidents, work standards, ranking, forced distribution,
behaviorally anchored rating scales, and results-based approaches.
7. List the problems that have been associated with performance
appraisal. The problems associated with Pas include appraiser
discomfort, lack of objectivity, halo/ horn errors, leniency/strictness,
central tendency, recent behavior bias, personal bias (stereotyping),
and employee anxiety.
8. Explain the characteristics of an effective appraisal system.
Characteristics include job-related criteria, performance expectations,
standardization, trained appraisers, continuous open communication,
conduct performance reviews, and due process.
9. Describe the legal considerations associated with performance
appraisal. A review of court cases makes it clear that legally
defensible PA systems should be in place. Perfect systems are not
20
 STRATEGIC HR MANAGEMENT
Determine specific training and Development Needs
The first step in the T&D process is to determine specific T&D needs.
In today’s highly competitive business environment, undertaking a
program because other firms are doing it is asking for trouble. A
systematic approach to addressing bona fide needs must be
undertaken and must be done taking into consideration the mission of
the organization.
Training and Development Needs Assessment. Heart of a
continuous effort designed to improve employee competency and
organizational .performance.
ORGANIZATIONAL ANALYSIS
Organizational analysis focuses on the firm’s strategic mission, goals
and corporate plans are studied, along with the results of strategic
human resource planning
Organizational Analysis – Training needs assessment activity,
which focuses on the firm’s strategic mission, goals, and corporate
plans are studied, along with the results of strategic HR planning.
TASK ANALYSIS – A training needs assessment activity, which
focuses on the tasks required to achieve the firm’s purposes.
The following are some of the Customer Service Representative job
tasks that are specified in the Occupational Information Network
(O*NET).
 Confer with customers by telephone or in person to provide
information about products or services, take or enter
orders, cancel accounts, or obtain details of complaints.
 Check to ensure that appropriate changes were made to
resolve customers’ problems.
 Keep records of customer interactions or transactions,
recording details of inquiries, complaints, or comments, as
well as actions taken.
 Resolve customers’ service or billing complaints by
performing activities such as exchanging merchandise,
refunding money, or adjusting bills.
 Refer unresolved customer grievances to designated
departments for further investigation.
 Order tests that could determine the causes of product
malfunctions.
PERSON ANALYSIS – A training needs assessment activity that
focuses on finding answers to questions such as Who needs to be
trained? What do they need to do differently from what they’re
doing today? What kind of knowledge, skills, and abilities (KSAs)
do employees need?
Among many, O*NET lists the following most important KSAs,
respectively, to the customer service representative job:
Customer and Personal Service—Knowledge of principles and
processes for providing customer and personal services. This includes
customer needs assessment, meeting quality standards for services,
and evaluation of customer satisfaction.
Active Listening—Giving full attention to what other people are
saying, taking time to understand the points being made, asking
questions as appropriate, and not interrupting at inappropriate times.
Oral Comprehension—The ability to listen to and understand
information and ideas presented through spoken words and
sentences.
ESTABLISH TRAINING AND DEVELOPMENT PROGRAM
OBJECTIVES
T&D must have clear and concise objectives and be developed to
achieve organizational goals. Without them, designing meaningful
T&D programs would not be possible. Worthwhile evaluation of a
program’s effectiveness would also be difficult, at best.
As you see, the purpose is established first. The specific learning
objectives that follow leave little doubt about what the training should
accomplish. With these objectives, managers can determine whether
training has been effective. For instance, in the example, a trainee
either can or cannot state how to get help on equal employment
opportunity matters.
TRAINING METHODS
Regardless of whether programs are in-house or outsourced, firms use
a number of methods for imparting knowledge and skills to the
workforce and usually more than one method, called blended
training, is used to deliver T&D. As part of the blended training
process, mobile learning is enhancing or replacing some traditional
training methods.
CLASSROOM METHOD – The classroom method, in which the
instructor physically stands in front of students, continues to be
effective for many types of training. One advantage of instructor-led
training is that the instructor may convey a great deal of information in
a relatively short time.
E-LEARNING – The T&D method for online instruction using
technology based methods such as the DVDs, company intranets, and
the Internet. A takeoff on e-learning is the live virtual classroom,
often referred to as virtual instructor led, that uses a Web-based
platform to deliver live, instructor-led training to geographically
dispersed learners.
CASE STUDY – T&D method in which trainees are expected to study
the information provided in the case and make decisions based on it.
BEHAVIOR MODELING AND TWEETING
 Behavior Modeling – T&D method that permits a person to
learn by copying or replicating behaviors of others to
show managers how to handle various situations.
 Social networking, such as Twitter, has been used as a
learning tool involving behavior modeling. “In a
corporation, micro-blogging can be a way to augment
behavior modeling,” says Sarah Millstein, author of the
O’Reilly Radar Report. This works by having a person who
excels at a task send out frequent updates about what he or
she is doing.
21
 STRATEGIC HR MANAGEMENT
ROLE-PLAYING – T&D method in which participants are required to
respond to specific problems they may encounter in their jobs by
acting out real-world situations.
TRAINING GAMES
Games can be quite useful learning tools to aid in the group dynamic
process. Games are a cost-effective means to encourage learner
involvement and stimulate interest in the topic, thereby enhancing
employees’ knowledge and performance.
 Business Games – T&D method that permits participants to
assume roles such as president, controller, or marketing vice-
president of two or more similar hypothetical organizations and
compete against each other by manipulating selected factors in a
particular business situation.
IN-BASKET TRAINING – T&D method in which the participant is
asked to establish priorities for and then handle a number of
business papers, e-mail messages, memoranda, reports, and
telephone messages that would typically cross a manager’s desk.
ON-THE-JOB TRAINING (OJT)
An informal T&D method that permits an employee to learn job tasks
by actually performing them.
 The key to this training is to transfer knowledge from a highly
skilled and experienced worker to a new employee, while
maintaining the productivity of both workers.
 OJT is used to pass on critical “how to” information to the
trainee. Individuals may also be more highly motivated to
learn because it is clear to them that they are acquiring the
knowledge needed to perform the job.
APPRENTICESHIP TRAINING – Training method that combines
classroom instruction with on-the-job training.
TEAM TRAINING – Training focused on teaching knowledge and skills
to individuals who are expected to work collectively toward meeting a
common objective.
 Team Coordination Training. Team training focused on
educating team members how to orchestrate the individual
work that they do to complete The Task.
 Cross-training. Type of training for educating team
members about the other members’ jobs so that they may
perform them when a team member is absent, is assigned
to another job in the company, or has left the company
altogether.
TRAINING AND DEVELOPMENT DELIVERY SYSTEMS
The previous section focused on the various T&D methods available
to organizations, and the list is constantly changing. In this section, our
attention is devoted to how training may be delivered to participants.
CORPORATE UNIVERSITY
T&D delivery system provided under the umbrella of the
organization.
 The corporate T&D institution’s focus is on creating
organizational change that involves areas such as company
training, employee development, and adult learning.
 It aims to achieve its goals by conducting activities that foster
individual and organizational learning and knowledge.
COLLEGES AND UNIVERSITIES
ONLINE HIGHER EDUCATION
Educational opportunities including degree and training programs that
are delivered, either entirely or partially, via the Internet.
There are basically three categories of online higher education
programs available: hybrid, synchronous, and asynchronous.
1. Hybrid programs permit students to take some classes online and
some in a traditional university setting.
2. Online synchronized study offers students the choice of studying
through an online portal system; however, the student is expected
to appear for most classes on a real-time schedule. With this
approach, students interact with a real professor and obtain real-
time support for the learning material.
3. With asynchronous learning, students have a series of
assignments that need to be completed in a certain time frame. A
system is available that allows students to communicate with the
professor and classmates.
VESTIBULE SYSTEM – T&D delivery system that takes place away
from the production area on equipment that closely resembles
equipment actually used on the job.
VIDEO MEDIA
These media are especially appealing to small businesses that cannot
afford more expensive training methods and are often incorporated in
e-learning and instructor-led instruction. In addition, they provide the
flexibility desired by any firm. Behavior modeling, previously
mentioned, has long been a successful training method that uses
video media.
SIMULATORS – T&D delivery system comprised of devices or
programs that replicate actual job demands.
SOCIAL NETWORKING
Today’s employees interact, learn, and work in much different ways
and styles than in the not-so-distant past. Increasingly mobile and
geographically dispersed workforces are becoming the norm. At the
same time, dwindling or stagnant travel budgets are creating a need
for different training methods. As a result, some organizations are
using social networking and collaborative tools to enable informal
learning.
 The premise behind the educational success of social networking is
the learning approach referred to as constructivism. A
constructivist learning environment differs from the traditional
model. In this setting, the teacher guides the learner toward
multiple learning sources, rather than acting as the sole source
of knowledge.
IMPLEMENTING TRAINING AND DEVELOPMENT PROGRAMS
A perfectly conceived training program will fail if management cannot
convince the participants of its merits. Participants must believe that
the program has value and will help them achieve their personal and
professional goals. A long string of successful programs certainly
enhances the credibility of T&D.
METRICS FOR EVALUATING TRAINING AND DEVELOPMENT
Managers should strive to develop and use T&D metrics because such
information can smooth the way to budget approval and executive buy-
in. Most managers agree that training does not cost, it pays, and that
training is an investment, not an expense. However, the actual value
of the training must be determined if top management will be ready to
invest in it.
The traditional framework for evaluation of training is based on
four criteria. Although this framework was developed decades ago,
HR professionals often rely on it to organize evaluation efforts.
22
 STRATEGIC HR MANAGEMENT
REACTIONS
 Training evaluation criterion focused on the extent to which
trainees liked the training program related to its usefulness,
and quality of conduct.
 The survey questions can be specific or general (“how
satisfied were you with the presentation of sales skill
strategies?” versus “how satisfied were you with the
overall training program?”).
LEARNING
 The extent to which an employee understands and retains
principles, facts, and techniques.
 As with trainee reactions, learning is often assessed on
completion of the training program (and sometimes,
throughout the training course) by the appropriate tests
(typing speed or recall of concepts from memory).
 The pretest–posttest control group design is one evaluation
procedure that may be used.
BEHAVIOR – The third criterion is behavior change.
 Behavior Change. Change in job-related behaviors or
performance that can be attributed to training.
 Transfer of Training. Training evaluation method
focusing on the extent to which an employee generalizes
knowledge and skill learned in training to the work
place, as well as maintains the level of skill proficiency or
knowledge learned in training.
ORGANIZATIONAL RESULTS – Typically, training outcomes such as
enhanced productivity, lower costs, and higher product or service
quality.
 Benchmarking. Process of monitoring and measuring a firm’s
internal processes, such as operations, and then comparing the
data with information from companies that excel in those areas.
FACTORS INFLUENCING TRAINING AND DEVELOPMENT
There are numerous factors that both impact and are impacted by
T&D.
 Shortage of Skilled Workers. Shortage of future skilled
workers was first projected in the 1980s but has recently
received additional attention.
 Technological Advances. Perhaps no factor has
influenced T&D more than technology. As technology
becomes capable of handling more and more tasks,
employers combine jobs and confer broader responsibilities
on remaining workers.
 Global Complexity. The world is simply getting more
complex, and this has had an impact on how an organization
operates. Now more than ever, to sustain competitive
advantage companies must provide their employees with
leading-edge skills, and encourage employees to apply their
skills proficiently.
 Learning Styles. Learning style supports the concept that
people have a natural preference, based on their dominant
sense, in how they choose to learn and process information.
It may be visual, hearing, or touching.
 Blended Training. The use of multiple training methods
to deliver T&D.
 Just-In-Time Training (on-demand training). Training
provided anytime, anywhere in the world when it is
needed.
 Other Human Resource Functions. Successful
accomplishment of other human resource functions can also
have a crucial impact on T&D.
 For instance, if recruitment-and-selection efforts or its
compensation package attract only marginally qualified
workers, a firm will need extensive T&D programs. Hiring
marginally qualified workers will likely have a significant
impact on the firm’s safety and health programs.
Therefore, additional training will be required.
HUMAN RESOURCE MANAGEMENT TRAINING INITIATIVES
HR is responsible for many company-wide training initiatives on HR-
related matters. Among these initiatives are orientation (onboarding),
ethics, compliance (equal employment opportunity, Occupational
Safety and Health), and diversity.
ORIENTATION – Initial T&D effort for new employees that informs
them about the company, the job, and the work group.
Orientation formats are unique to each firm. However, some basic
purposes are listed here.
 The Employment Situation. At an early point in time, it is
helpful for the new employee to know how his or her job
fits into the firm’s organizational structure and goals.
 Company Policies and Rules. Every job within an
organization must be performed within the guidelines and
constraints provided by policies and rules. Employees
must understand these to ensure a smooth transition into the
workplace.
 Compensation. Employees have a special interest in
obtaining information about the reward system.
Management normally provides this information during the
recruitment-and-selection process and often reviews it
during orientation.
 Corporate Culture. The firm’s culture reflects, in effect,
“How we do things around here.” This relates to
everything from the way employees dress to the way they
talk.
 Team Membership. A new employee’s ability and
willingness to work in teams was likely determined before
he or she was hired. In orientation, the program may again
emphasize the importance of becoming a valued member of
the company team.
 Employee Development. An individual’s employment
security is increasingly becoming dependent on his or her
ability to acquire needed knowledge and skills that are
constantly changing. Thus, firms should keep employees
aware not only of company-sponsored developmental
programs, but also of those available externally.
 Socialization. To reduce the anxiety that new employees
may experience, the firm should take steps to integrate
them into the informal organization. Some organizations
have found that employees subjected to socialization
programs, including the topics of politics and career
management, perform better than those who have not
undergone such training.
 To this list, add the fact that there are numerous forms and
documents a new employee must complete or read and
acknowledge.
CAREERS AND CAREER PATHS
 Career. General course that a person chooses to pursue
throughout his or her working life.
23
 STRATEGIC HR MANAGEMENT
 Career Path. A flexible line of movement through which a
person may travel during his or her work life.
TRADITIONAL CAREER PATH – Employee progresses vertically
upward in the organization from one specific job to the next.
NETWORK CAREER PATH – Method of career progression that
contains both a vertical sequence of jobs and a series of horizontal
opportunities.
LATERAL SKILL PATH – Career path that allows for lateral moves
within the firm, taken to permit an employee to become revitalized and
find new challenges.
DUAL-CAREER PATH – Career path that recognizes that technical
specialists can and should be allowed to contribute their expertise to a
company without having to become managers.
ADDING VALUE TO YOUR CAREER
Adding value to your career may appear to be totally self-serving, but
nevertheless, it is a logical and realistic career path. In the rapidly
changing world today, professional obsolescence can creep up on a
person. What makes a person valuable in today’s work environment is
the knowledge and experience he or she brings to a job.
DEMOTION – Process of moving a worker to a lower level of duties
and responsibilities, which typically involves a reduction in pay.
FREE AGENTS (BEING YOUR OWN BOSS)
FREE AGENTS. People who take charge of all or part of their careers
by being their own bosses or by working for others in ways that fit their
particular needs or wants.
CAREER PLANNING APPROACHES
 Career Planning. Ongoing process whereby an individual
sets career goals and identifies the means to achieve them.
 “If you don’t know where you’re going, any road will get
you there” is certainly true in career planning. Career
planning must now accommodate a number of objectives
and enable us to prepare for each on a contingency basis.
SELF-ASSESSMENT – Process of learning about oneself.
 Strength/Weakness Balance Sheet. A self-evaluation
procedure, developed originally by Benjamin Franklin that
assists people in becoming aware of their strengths and
weaknesses.
 Likes And Dislikes Survey. Procedure that helps
individuals in recognizing restrictions they place on
themselves.
FORMAL ASSESSMENT – The use of established external
approaches to facilitate evaluation of an issue at hand.
 Perhaps the most well-known example is the Myers-Briggs
Type Indicator.
The MBTI describes the following four preferences:
 Energy measures an individuals’ degree of extraversion or
introversion to determine whether a person gains energy through
interpersonal relationships (extraversion) or through self-reflection
(introversion).
 Information-Gathering measures a preference for gathering
information about facts to consider before making a decision
(Sensing) or a preference for gathering information about
possibilities before making a decision.
 Decision making measures a preference for the amount of
consideration a person gives to their own or others’ feelings and
values relative to facts and details. Preferences to consider the
effect of a decision on personal feelings as well as on others
(Feeling) stand in contrast to a preference to make objective
decisions (Thinking). Lifestyle refers to an individual’s inclination to
be either flexible or structured. A preference to establish goals,
strategies for goal attainment, and deadlines for meeting them
(Judging) stands in contrast to a preference for embracing the
unexpected, modifying decisions, and working without definitive
timelines and deadlines (Perceiving).
An example of a formal test is the Career Key, which is based on
Holland’s Theory of Career Choice. This theory is premised on the
idea that people are more likely to thrive in situations that match their
personalities. It specifies six personality and corresponding situational
types.
For example, according to Holland’s theory:
Persons having an Investigative personality type “dominate” this
environment. There are more of them than there are people of
other personality types. For example, in a scientific laboratory
there will be more persons having an “Investigative” personality
than there will be people who have an Enterprising type.
“Investigative” people create an “Investigative” environment. For
example, they particularly value people who are precise,
scientific, and intellectual—who are good at understanding and
solving science and math problems.
Examples of jobs that fit this description include architects and
physicians.
CAREER DEVELOPMENT AND CAREER DEVELOPMENT
METHODS
Career Development. Formal approach used by the organization to
ensure that people with the proper qualifications and experiences are
available when needed.
Career development programs are expected to achieve one or
more of the following objectives:
 Effective development of available talent. Individuals are
more likely to be committed to career development that is
part of a specific career plan. This way, they can better
understand the purpose of development. Career
development consistently ranks high on employees’ want
lists, and they can often be a less expensive option than pay
raises and bonuses.
 Self-appraisal opportunities for employees considering
new or nontraditional career paths. Some excellent
workers do not view traditional upward mobility as a career
option because firms today have fewer promotion options
available. Other workers see themselves in dead-end jobs
and seek relief. Rather than lose these workers, a firm can
offer career planning to help them identify new and different
career paths.
 Development of career paths that cut across divisions
and geographic locations. The development should not be
limited to a narrow spectrum of one part of a company.
 A demonstration of a tangible commitment to
developing a diverse work environment. Individuals who
recognize a company as desiring a diverse environment
often have greater recruiting and retention opportunities.
 Satisfaction of employees’ specific development needs.
Individuals who see their personal development needs being
met tend to be more satisfied with their jobs and the
organization. They tend to remain with the organization.
24
 STRATEGIC HR MANAGEMENT
 Improvement of performance. The job itself is the most
important influence on career development. Each job can
provide different challenges and experiences.
 Increased employee loyalty and motivation, leading to
decreased turnover. Individuals who believe that the firm is
interested in their career planning are more likely to remain
with the organization.
 A method of determining training and development
needs. If a person desires a certain career path and does
not currently have the proper qualifications, this identifies a
training and development need.
MANAGER/EMPLOYEE SELF-SERVICE
Manager and employee self-service have proven to be useful in career
development. Many companies are providing managers with the
online ability to assist employees in planning their career paths and
developing required competencies. Through employee self-service,
employees are provided with the ability to update performance goals
online and to enroll in training courses.
DISCUSSIONS WITH KNOWLEDGEABLE INDIVIDUALS
In a formal discussion, the superior and subordinate employees may
jointly agree on what career development activities are best. The
resources made available to achieve these objectives may also
include developmental programs. In some organizations, human
resource professionals are the focal point for providing assistance on
the topic. In other instances, psychologists and guidance counselors
provide this service. In an academic setting, colleges and universities
often provide career planning and development information to
students. Students often go to their professors for career advice.
COMPANY MATERIAL
Some firms provide material specifically developed to assist in career
development. Such material is tailored to the firm’s special needs. In
addition, job descriptions provide valuable insight for individuals to
personally determine whether a match exists between their strengths
and weaknesses and specific positions.
PERFORMANCE APPRAISAL SYSTEM
The firm’s performance appraisal system can also be a valuable tool
in career development. Discussing an employee’s strengths and
weaknesses with his or her supervisor can uncover developmental
needs. If overcoming a particular weakness seems difficult or even
impossible, an alternative career path may be the solution.
WORKSHOPS
Some organizations conduct workshops lasting two or three days for
the purpose of helping workers develop careers within the company.
Employees define and match their specific career objectives with the
needs of the company. At other times, the company may send workers
to workshops available in the community or workers may initiate the
visit themselves.
Consider just two of the developmental activities available for HR
professionals:
 Society for Human Resource Management Seminar
Series. Many HR seminars are available to SHRM
members.
 American Management Association, Human Resource
Seminars. There are numerous human resource seminars
offered through the AMA.
MANAGEMENT DEVELOPMENT
Consists of all learning experiences provided by an organization
resulting in upgrading skills and knowledge required in current and
future managerial positions.
MENTORING AND COACHING
 Mentoring and coaching have become important means of
management development. Because the purposes of
mentoring and coaching are similar in concept and the terms
are often used interchangeably in the literature, they are
discussed together.
 Coaching and mentoring activities, which may occur either
formally or informally, are primarily development
approaches emphasizing one-on-one learning.
 Mentoring. Approach to advising, coaching, and nurturing
for creating a practical relationship to enhance individual
career, personal, and professional growth and development.
 Coaching. Often considered a responsibility of the
immediate boss, who provides assistance, much like a
mentor.
REVERSE MENTORING – A process in which older employees learn
from younger ones.
ORGANIZATION DEVELOPMENT: A STRATEGIC HUMAN
RESOURCES TOOL
Individuals and groups receive the bulk of T&D effort. However, some
firms believe that to achieve needed change, they must move the
entire organization in a different direction. Efforts to achieve this are
the focus of OD—planned and systematic attempts to change the
organization, typically to a more behavioral environment.
SURVEY FEEDBACK – Organization development method of basing
change efforts on the systematic collection and measurement of
subordinate’s attitudes through anonymous questionnaires.
 It enables management teams to help organizations create working
environments that lead to better working relationships, greater
productivity, and increased profitability.
Survey feedback generally involves the following steps:
1. Members of the organization, including top management, are
involved in planning the survey.
2. All members of the organizational unit participate in the survey.
3. The OD consultant usually analyzes the data, tabulates results,
suggests approaches to diagnosis, and trains participants in the
feedback process.
4. Data feedback usually begins at the top level of the organization and
flows downward to groups reporting at successively lower levels.
5. Feedback meetings provide an opportunity to discuss and interpret
data, diagnose problem areas, and develop action plans.
QUALITY CIRCLES – Groups of employees who voluntarily meet
regularly with their supervisors to discuss problems, investigate
causes, recommend solutions, and take corrective action when
authorized to do so.
TEAM BUILDING – Conscious effort to develop effective work groups
and cooperative skills throughout the organization.
LEARNING ORGANIZATION AS A STRATEGIC MINDSET
A learning organization needs to provide a supportive
learning environment and it provides specific learning processes and
practices. Also, it is vital that management supports and reinforces
learning. A learning organization moves beyond delivering tactical
25
 STRATEGIC HR MANAGEMENT
training projects to initiating learning programs aligned with strategic
corporate goals.
Learning organizations view learning and development
opportunities in all facets of their business and try to constantly look
ahead and ensure that all employees are taking full advantage of their
learning opportunities. In a learning organization employees are
rewarded for learning and are provided enriched jobs, promotions, and
compensation. Organizations with a reputation for having a culture of
being a learning leader tend to attract more and better-qualified
employees.
TRAINING IN THE GLOBAL CONTEXT
 It is important to recognize that broadening training practice
to the world stage presents additional issues. For instance,
some countries distinguish themselves from others through
the widespread use of specific training models.
 For example, the apprenticeship training model is prevalent
in some European countries such as Germany, and it is
successful there for a number of reasons because of the
collaborative efforts between schools and industry.
on a variety of other training programs including ethics, compliance
(for example, safety and health), and diversity training.
9. Explain the concept of a careers and career paths.
A career is the general course that a person chooses to pursue
throughout his or her working life. A career path is a flexible line of
movement through which a person may travel during his or her work
life. Career paths include traditional career path, network career path,
lateral skill path, dual-career path, adding value to your career,
demotion, and free agents.
10. Identify career planning approaches. Career planning is an
ongoing process whereby an individual sets career goals and identifies
the means to achieve them. Self-assessment (for example, a likes
and dislikes survey) and formal assessment approaches (for example,
surveys that measure how an individual would behave in particular
situations) help organizations and employees with career planning.
LESSON 9: DIRECT FINANCIAL COMPENSATION
(CORE COMPENSATION)

SUMMARY
1. Summarize the training and development process.
Training is designed to permit learners to acquire knowledge and
skills needed for their present jobs. Development involves learning
that goes beyond today’s job. The process begins with the
organization’s determination of its specific training needs. Then
specific objectives need to be established. After setting the T&D
objectives, management can determine the appropriate methods and
the delivery system to be used. Management must continuously
evaluate T&D to ensure its value in achieving organizational
objectives.
2. Explain how to determine specific training and development
needs and objectives. Training professionals rely on three analytic
approaches to determine training needs – organizational analysis, task
analysis, and person analysis.
3. Summarize various training methods. Training methods include
instructor-led training, e-learning, case study, behavior modeling, role-
playing, training games, in-basket training, on-the-job training, and
apprenticeship training.
4. Describe alternative training and development delivery
systems. Delivery systems include corporate universities, colleges
and universities, community colleges, online higher education,
vestibule system, video media, and simulators.
5. Summarize training and development implementation issues.
Implementing T&D programs is often difficult. One reason is that
managers are typically action-oriented and feel that they are too busy
for T&D. Training and development requires more creativity than
perhaps any other human resource function.
6. Explain the metrics for evaluating training and development.
Some possible metrics for evaluating training and development
include participants’ opinion, extent of learning, behavioral change,
accomplishment of T&D objectives, return on investment from training,
and benchmarking.
7. Explain factors influencing training and development.
There are numerous factors that both impact and are impacted by
T&D, including top management support, shortage of skilled workers,
technological advances, world complexity, lifetime learning, learning
styles, and other human resource functions.
8. Summarize some human resource management training
initiatives. Orientation is the guided adjustment of new employees to
the company, the job, and the work group. HR typically takes the lead

26