CHAPTER 1 THE REWARDS AND CHALLENGES OF HUMAN RESOURCES MANAGEMENT

COMPETITIVE CHALLENGES FACING HRM DEPARTMENTS:

1 Responding strategically Human Resource Managers and Business Strategies:

to changes in the - HR professionals can improve the top line by redesigning work to
marketplace: foster innovation, forecasting labour trends, recruiting and
motivating employees, and measuring their effectiveness.

- HR managers can help their firms with business strategies, as well

as mergers, acquisitions, and ways to enter new and global markets.

- Adjusting the labour force:

i. Downsizing – The planned elimination of jobs
ii. Outsourcing – Contracting outside the organization to have
work done that formerly was done by internal employees
iii. Offshoring – The business practice of sending jobs to other
countries

- Provide knowledge on key business issues:

i. Company may assign HR representatives to their core
business teams
ii. Rotate non-HR managers into HR positions and vice versa.

2 Competing, recruiting, Due to globalisation, firms have to balance a complicated set of

and staffing globally issues to:
i) Different geographies
ii) Different culture
iii) Employment law
iv) Safety
v) Facilities aboard

3 Setting and achieving Corporate Social Responsibility – The responsibility of the firm to
corporate social act in the best interests of the people and communities affected by
responsibility and its activities. Being ethical and socially responsible helps companies
sustainability goals avoid lawsuits and improve their earnings.

Sustainability Goals – Doing business in a way that does as little

harm to the environment and depletes as few natural resources as
possible. E.g. reduce “carbon footprints.”

4 Technology Advancements in information technology have enabled

organizations to take advantage of the information explosion.

1. Computer networks
2. “Cloud computing”
3. Document-sharing platforms
4. Videoconferencing
5. Social media networking.

- Technology has reduced the number of jobs that require tasks and
little skill and has increased the number of jobs that require
 considerable skill.

- Workers whose responsibilities extend beyond the physical

execution of work to include planning, decision-making, and
problem-solving.

Technology’s Effect on HRM

i) Human resources information system (HRIS)
– A computerized system that provides current and accurate HR-
related data for purposes of control and decision-making.
Used to:
- Automate payroll processing and administer the benefits
program
- Access employee records
- Recruit, screen, and pretest applicants online
- Train, track, and promote employees

ii) Big data

– A buzzword that describes the massive amounts of data available
online and offline today that can be “crunched” to make decisions.

iii) Workforce HR Analytics

– The process of gathering and analyzing data to improve a firm’s
human resources management.

iv) An HRIS should provide HR personnel with analytical information

that helps them to analyze, refine, and better implement a firm’s
strategic direction.
Includes:
- Forecasting personnel needs
- Planning for career and employee promotions
- Evaluating the impact of the firm’s policies

5 Containing costs while - Organizations can increase their productivity either by: reducing
retaining top talent & their inputs or by increasing the amount that employees produce by
Maximizing productivity adding more human and/or physical capital to the process.

- Additional productivity will have to come from the enhanced ability

of employees, their motivation, and their work environment.

- Managing productivity involves matching the size of the workforce

to the firm’s demand requirements given technology, the firm’s
strategic direction, and global competition.

- To manage the size of the workforce, many companies are using:

i. Offshoring
ii. Outsourcing
iii. Nearshoring – Occurs when a firm relocates jobs abroad to
nations closer to its domestic market.
iv. Homesharing – The practice of outsourcing work to
domestic workers who work out of their homes
 v. Downsizing
vi. Furloughing – A situation in which an organization asks or
requires employees to take time off for either no pay or
reduced pay
vii. Part-time or contract employees

6 Employee challenges/ Ethnic and Racial Diversity in the Workforce

Responding to the
Demographic and Age Distribution of the Workforce
Diversity Challenges of - Many babyboomers (individuals born between 1946 and
the Workforce. 1964) are remaining in the labour force due to advances in
medicine that keep them healthier, an increase in the official
retirement age (from 65 to 67), and economic factors. Gen Y
has different work values, balanced life style.
- (Baby boomers – Gen X – Gen Y – Gen Z)

Gender Distribution of the Workforce

Changing Employee Rights

- Union representation
- A safe and healthy work environment
- Unemployment and health care benefits
- Regulation of pension plans
- Equal pay for equal work

Privacy Concerns of Employees

Employers are:
- Implementing privacy policies
- Restricting access to employee files
- Conducting background checks on employees
- Contracting with outside firms that specialize in identity
theft to prevent the abuse of employee information
- Using the global positioning system (GPS) and smartphone
applications to monitor employees
- Scrutinizing information employees post on the Web and
social media.

Changing attitudes toward work and how they relate to Employee

Engagement
Employee Engagement:
– The extent to which employees are enthused about their work and
committed to it.

- Many employees believe satisfaction in life is more likely to result

from balancing their work challenges and rewards with those in their
personal lives.

- Employees today are focused on finding interesting work and are

more inclined to pursue multiple careers.
Role of Line Manager
Line managers – non-HR managers who are responsible for overseeing the work of other employees
Responsibilities of Human Resource Managers

1 Strategic advice - HR managers often serve as in-house consultants to supervisors,

and counsel managers, and executives.

- Given their knowledge:

i. Internal employment information and productivity metrics
ii. External trends such as economic and unemployment data
and new legal and regulatory issues.
- HR managers are an invaluable resource for making decisions.

- HR managers are also being relied on more heavily to advise

compensation committees.

2 Service - HR managers perform such services as recruiting, selecting, testing, and

planning and conducting training programs.

3 Policy formation - HR managers generally propose and draft new policies or policy revisions
and to cover recurring problems or to prevent anticipated problems.
implementation
- HR managers monitor the firm’s managers and employees to ensure they
follow established HR policies, procedures, and practices.

- HR managers are a resource to whom managers can turn for policy

interpretation.

4 Employee - HR managers listen to employee concerns and represent their needs.

advocacy
- HR manager must ensure that the interests of the employee align with
the interests of the organization.

Human Resource Competency Model

1 Business mastery - HR professionals need to know the businesses of their organizations

and their strategies thoroughly.

- This requires an understanding of an organization’s customers and

economic and financial capabilities to help a firm shape and achieve its
strategic direction and adjust it as needed.

- Human resource managers who have good problem-solving skills and

are also innovative and creative are a strategic asset to their firms.

2 HR mastery - HR professionals are the organization’s behavioral science experts.

- They should develop expert knowledge in the areas of staffing,
development, appraisals, rewards, team building, performance
measurement, and communication.
 - Good interpersonal skills are essential.

3 Personal credibility - HR professionals must establish personal credibility in the eyes of

people internal and external to the firm.

- Credibility and trust are earned by developing good relationships with

people both internal and external to the firm, demonstrating the
values of the firm, standing up for one’s own beliefs, and dealing with
all parties equitably.

CHAPTER 2 STRATEGY AND HUMAN RESOURCES PLANNING

Step 1 Mission, Vision, and Values

 Step 2 External Analysis
Step 3 Internal Analysis
Step 4 Strategy Formulation
Step 5 Strategy Execution
Step 6 Evaluation

HR’s Role in Establishing and Reinforcing a Firm’s Mission, Vision, and Values

- Communicating them frequently, both informally and formally, via verbal and written
communications

- Recruiting and hiring employees whose values are consistent with the organization

- Translating the mission, vision, and values into job descriptions and specific behaviours and
recognizing and rewarding employees based on them.

Sustaining a Competitive Advantage Through People

i) The resources must be valuable.

- People are a source of competitive advantage when they improve the efficiency or effectiveness
of the organization.

- This value is increased when employees find ways to decrease costs and provide something
unique to customers.

ii) The resources must be rare.

- People are a source of competitive advantage when their skills, knowledge, and abilities are not
equally available to competitors. Eg: Facebook

iii) People are a source of competitive advantage when employee capabilities and contributions
are inimitable, or cannot be copied by other firms.
E.g. Disney creates unique cultures that are difficult to imitate.

iv) People are a source of competitive advantage when the resources are organized in such a way
that their talents can be combined and deployed to work on new assignments at a moment's
notice.
Eg: IBM closely “track” employees and their talents.

Types of Talent and Their Composition in the Workforce

 1) Strategic Knowledge Workers
- Have unique skills directly linked to the company’s strategy and are difficult to replace.
- E.g. research and development scientists in a pharmaceutical company.
- Companies make long-term commitments to these employees, investing in their continuous
training and development, and perhaps giving them an equity stake in the organization.

2) Core Employees
- Valuable to a company but not particularly unique or difficult to replace.
- Eg: salespeople in a department store or truckdrivers for a courier service
- Because their skills are transferable, it is quite possible that they could leave to go to another
firm. As a consequence, managers frequently invest less to train and develop these employees
and focus more on paying them for their short-term performance achievements.

3) Supporting Workers
- Have skills that are less central to creating customer value and are generally available in the
labour market.
- Eg: clerical workers and customer service representatives.
- Hired from external agencies on a contract basis to support the strategic knowledge workers and
core employees.
- Less investment is made in their development.

4) Complementary (External) Partners

- Have skills that are unique and specialized but not directly related to a company’s core strategy.
- Are external people and firms.
- Eg: External companies that work with the firm, such as research and development firms.
- Companies to establish longer-term alliances and partnerships with them and nurture an
ongoing relationship focused on mutual learning.

3 KEY ELEMENTS IN THE HR FORECASTING PROCESS:

(1) Forecasting the demand for labour

- Employment forecasting involves estimating in advance the number and type of people needed
to meet organizational objectives. It may involve a quantitative approach using statistical analysis
and mathematical models or a qualitative approach focusing on employee performance and
promotability.

Quantitative Approaches
Trend analysis – A quantitative approach to forecasting labour demand based on a factor such as
sales.

Qualitative Approaches
Management forecasts – The opinions of supervisors, department managers, experts, or others
knowledgeable about the organization’s future employment needs.

Delphi technique – Attempts to decrease the subjectivity of forecasts by soliciting and

summarizing the judgments of a preselected group of individuals.

(2) Forecasting the supply of labour

- Supply analysis determines if there are sufficient numbers and types of employees available to
 staff anticipated openings. Sources of supply can be external or internal.

Staffing table
– A table that shows a firm’s jobs, along with the numbers of employees currently occupying
those jobs and future (monthly or yearly) employment requirements.

Markov analysis
– A method for tracking the pattern of employee movements through various jobs in a firm.

Quality of fill
– A metric designed to measure how well new hires that fill positions are performing on the job.

Skill inventories
– Files of personnel education, experience, interests, skills, and so on that allow managers to
quickly match job openings with employee backgrounds.

Management inventories
– Data gathered on managers.

Replacement charts
– Listings of current jobholders and people who are potential replacements if an opening occurs.

Succession planning
– The process of identifying, developing, and tracking key individuals for executive positions.

(3) Balancing supply and demand considerations.

- HR planning should strive for a proper balance between the emphasis placed on demand
considerations and that placed on supply considerations. Demand considerations are based on the
forecast of trends in business activity. Supply considerations involve the determination of where
and how candidates with the required qualifications are to be found to fill vacancies.

Strategy formulation builds on a SWOT analysis.

- A SWOT analysis can help a company move from formulating a strategy, to devising a plan, to
capitalizing on opportunities, to counteracting on threats, to alleviating internal weaknesses.

The 4As Framework of Execution Capability

Alignment • Clear strategic intent

• Shared performance expectations/culture
• Accountability for results

Agility • External connection

• Strengthening the core
• Organizational learning.

Ability • Talent capacity

• Leadership bench
• Engagement and collaboration
 Architecture • Simplified structures System and technology utilization
• Streamlined processes
• Architecture.

Balanced scorecard (BSC)

– A measurement framework that helps managers translate strategic goals into operational
objectives

CHAPTER 4 JOB ANALYSIS AND JOB DESIGN

Job analysis information is useful in a variety of HRM functions:

1) Strategic HR planning.

A job analysis is used to examine a company’s organizational structure and strategically position it
for the future. E.g. Are the jobs aligned with one another?

2) Workflow analysis and job design.

The information generated by a job analysis can be used to analyse a company’s work processes. E.g.
Would rearrange an organization’s workflow help a company better compete?

3) Recruitment and selection.

Some of the information provided in job analysis is contained in job advertisements. The information
and qualifications provide a basis for attracting qualified applicants and discouraging unqualified
ones.

4) Training and development.

Any discrepancies between the abilities of jobholders and a firm’s job descriptions provide clues
about the training need to succeed and advance into different jobs as well as the training the firm
needs to provide.

5) Performance appraisal.

A job analysis provides the criteria for evaluating what constitutes a good performance versus a poor
performance; the firm can then take steps to improve the latter.

6) Compensation management.

Conducting a job analysis helps HR managers figure out the relative worth of positions so the
compensation for them is fair and equitable, and employees want to remain with the firm rather
than search for other jobs.

7) Legal compliance.

If the criteria used to hire and evaluate employees are not job-related, employers are more likely to
find themselves being accused of discrimination.

Sources of Job Analysis Information

 1. Interviews
- A job analyst interviews individual employees and their managers about the parameters of the
job. - When a job is particularly complex, firms sometimes interview a panel of subject matter
experts (SMEs). SMEs are job experts who actually do the job or train and supervise others to do
the job.

2. Questionnaires
The job analyst or supervisor circulates standard questionnaires for jobholders to fill out
individually. The forms contain questions similar to those asked in an interview.

3. Observation
The job analyst learns about the job by observing and recording the activities associated with it on
a standardized form.

4. Diaries
Jobholders are asked to keep diaries of their work activities for an entire work cycle. The diaries
are normally filled out at specific times of the work shift (such as every half hour or hour) and
maintained for a 2- to 4-week period.

Other sources of Job Analysis Information – Quantitative Approach

1) Functional Job Analysis (FJA)

- A job analysis approach that utilizes an inventory of the various types of work activities that can
constitute any job.
- Describe what workers do with regard to “information, people, and things” as part of this
system.

2) Position Analysis Questionnaire (PAQ)

- The questionnaire covers approximately 300 tasks and asks the analyst to indicate the degree to
which each task is involved in performing a particular job.

3) The Critical Incident Method (CIT)

- Critical incident method – A job analysis method used to identify both desirable and undesirable
behaviours that resulted in either a very good outcome or a very bad outcome on the job ->
success of failure at the job.

4) Task Inventory Analysis

- An organization-specific list of tasks and their descriptions is used as a basis to identify
components of jobs.

5) Competency-Based Approach
- A job analysis method that relies on building job profiles that look at not only the responsibilities
and activities of jobs a worker does currently but the competencies or capabilities he or she needs
to do them well and to adapt to new job challenges.
- Eg: interpersonal communication skills, decision-making ability, and conflict resolution skills.

3 parts of a Job Description:

 1) Job title
- Provides status to the employee
- Provides an indication of what the duties of the job entail
- Indicates the level of the job in the organization

2) Job identification section

- Contains administration information such as a numerical code for the job, to whom the
jobholder reports, and wage information
- Contains a “Purpose” statement which distinguishes the job from other jobs in the organization

3) Job duties section

- Task, duties and responsibility of the jobholder
- Typically arranged in order of their importance and sometimes indicate the percentage of time
devoted to each duty

- If the job specification is not prepared as a separate document, it is usually stated in the concluding
section of the job description.

- Covers two areas of qualifications:

1. The skills required to perform the job - Include the education, experience, and specialized training
the job requires, and the personal traits or abilities and manual dexterities it requires

2. The job’s physical demands - Refer to how much walking, standing, reaching, lifting, bending, or
talking must be done on the job

Synergistic Team Characteristics

Support The team exhibits an atmosphere of inclusion. All team members speak up and
feel free to offer constructive comments
Listening and Members honestly listen to others and seek clarification on discussion points.
Clarification The team members summarize the discussions held.
Disagreement Disagreements are seen as natural and are expected. The members' comments
are non-judgmental and focus on factual issues rather than personality
differences.

Consensus The team members reach agreements through consensus. Proposals that are
acceptable to all team members are adopted, even if they are not the first
choice of some of the individual members. Common ground among ideas is
sought.
Acceptance The team members value one another as individuals. They recognize that each
person brings a valuable mix of skills and abilities to the team.
Quality Each team member is committed to excellence. There is emphasis on
continuous improvement and attention to detail.

Flexible Work Schedules


Flex time
– Flexible working hours that
give employees the option of
choosing daily starting and
quitting times, provided that
they work a set number of
hours per day or week.
Advantages
Reduced tardiness,
absenteeism, reduce traffic
congestion, improve customer
service (open for longer hours)
Disadvantages
Difficulty in scheduling
meetings & supervision.

A compressed workweek is Reduce absenteeism, easy to Long workdays can be stressful

one in which the number of retain staff and exhausting.
days in the workweek is
shortened by lengthening the
number of hours worked per
day (e.g., 10 hours a day for 4
days a week).

Job sharing Helps older workers phase into Does not provide an individual
– An arrangement whereby retirement. with full-time employment
two part-time employees do a
job normally held by one full-
time employee.

Telecommuting Ability for people in different Collaboration and

– The use of personal locations to work together, communication may suffer.
computers, networks, and lesser office politics.
other communications
technology to do work in the
home that is traditionally done
in the workplace.

CHAPTER 5 EXPANDING THE TALENT POOL: RECRUITMENT AND CAREERS

External Recruiting Methods

1 Advertisements - Job advertisements are placed on websites, social media, newspapers,

trade journals, banners, posters, billboards, radio, and television.

- Advantages: Advertising can reach a large audience of possible

applicants.

- Disadvantages: Time-consuming and requires creativity in terms of

developing their design and message content.

- There appears to be a correlation between the accuracy and

completeness of information provided in job advertisements and an
organization’s recruitment success. The more information disclosed, the
better.

2 Walk-Ins and - It is often believed that individuals who contact employers on their own
Unsolicited initiative will be better employees than those recruited through ads.
Applications
and Résumés - Eg: Initiates walk-ins, phone call and sending resume.

3 The Internet - Looking on the Internet is the most commonly used search tactic by
jobseekers and recruiters to connect with one another.

- Both companies and applicants find the Internet cheaper, faster, and
potentially more effective.

- Eg: On-line job agency (Jobstreet & Jobs DB) & company websites

4 Social Media - Firms are utilizing social media websites (e.g., Facebook, LinkedIn) to
recruit employees.

- Passive job seekers – People who are not looking for jobs but could be
persuaded to take new ones given the right opportunity.

5 Mobile – The process of recruiting candidates via their mobile devices.

Recruiting
- Recruiters are also using text messages, sometimes to announce job
openings and to communicate information about interview schedules and
speed up the recruitment process.

- Advantages: Text messages work well because they are inexpensive, easy
to send, and fast.

6 Job Fairs - At a job fair company and their recruiters set up booths, meet with
prospective applicants, and exchange employment information. Eg: The
Star Job Fair.

- Virtual job fair – Job fairs are conducted online. Uses online and webcam
to communicate with candidates. Eg: LinkedIn, Facebook, and Twitter.
7 Employee - Word-of-mouth recommendations are the way most job positions are
 Referrals filled.

- Negative factors:
i) Corporate “inbreeding” – Occurs when firms hire employees similar to
those who provided the referrals and thereby discriminate against
protected classes.
ii) Nepotism – A preference for hiring the relatives of current employees.

8 Re-recruiting – The process of keeping track of and maintaining relationships with

former employees to see if they would be willing to return to the firm.

9 Executive - Help employers find the right person for a job.

Search Firms
(often called - Do not advertise in the media for job candidates, nor do they accept a
“headhunters”) fee from the individual being placed.

- The fees charged by search firms can range anywhere from 25 to 40

percent of the annual salary for the position to be filled.

10 Educational A suitable source of young applicants with formal education with little
Institutions work experience.
- High schools and community colleges
- Work-study programs
- Internships
- Eg: sales and management trainees
- Advantages: Win- win situation.

11 Professional - Placement centers are usually included at the national meetings of

Associations professional associations.
and Labor
Unions - LaboUr unions have been a principal source of applicants for blue-collar
and some professional jobs. Eg: NUBE

12 Public - The Ministry of Human Resources created JobsMalaysia. provide

Employment terminals at its offices.
Agencies
- Non-Profit organizations: Teach for Malaysia www.teachformalaysia.org

13 Private - Private employment agencies are companies that, for a fee, match
Employment people with full-time jobs.
Agencies
- commonly specialize in providing services for a specific occupational
area.

14 Staffing - Staffing agencies (e.g., Adecco, Kelly Services) are firms that hire and
Agencies place workers in temporary positions.

15 Independent – Workers who are self-employed and do project work on a contract basis
Contractors for different organizations.

16 Employee – The process of dismissing employees who are then hired by a leasing
 Leasing company (which handles all HR-related activities) and contracting with
that company to lease back the employees.

Internal Recruiting Methods

Internal Job Postings & Job Bidding
- Bulletin boards
- Intranets

Advantages of External sources of recruitment:

• Applicants who often bring new and innovative ideas to the workplace. They are less likely to think
in the same manner as the current employees.
• External candidates can be used to provide the knowledge, skills, and abilities that are lacking in
the current workforce.

Advantages of Internal sources of recruitment:

• Motivation and enhances the morale of the current workforce by linking performance to rewards.
• Applicants hired by internal sources of recruitment are well known to the management
• Require less training than applicants employed by external sources of recruitment.

Improving the Effectiveness of Recruiting

A firm can improve its effectiveness when it comes to recruiting by doing the following:
- Recruiters need an accurate job analysis.
- Line managers and employees need to be intimately involved in the process.
- A job-starting date that works for both the organization and the potential new hire needs to be
established.
- After the person has been hired, the firm should conduct a “debrief” and identify any lessons to
improve the recruiting process.

Stage of Career Development

Stage 5: Late Career (ages 55-retirement): Continue to improve one's productivity, mentor other
employees, and prepare for retirement.

Stage 4: Midcareer (ages 40-55): Reappraise early career and early adulthood goals, reaffirm or
modify goals, continue to improve one's productivity, and mentor other employees.

Stage 3: Early Career (ages 25–40): Learn job, learn organizational rules and norms, fit into chosen
occupation and organization, increase competence, pursue goals.

Stage 2: Organizational Entry (ages 18–25): Obtain job offer(s) from desired organization(s), select
appropriate job based on complete and accurate information.

Stage 1: Preparation for Work (ages 0-25): Develop occupational self-image, assess alternative
occupations, develop initial occupational choice, pursue necessary education.

Career Plateau Initiatives

Career plateau – A situation in which for either organization or personal reasons the probability of
moving up the career ladder is low

3 types of plateaus:

1) Structural plateau

– Marks the end of promotions

2) Content plateau

– Occurs when a person has learned a job too well and is bored with day-to-day activities

3) Life plateau

– Is more profound and may feel like a midlife crisis.

• Organizations can help individuals cope with plateaus by providing them with opportunities for
lateral growth

• Allowing them to choose their own assignments when opportunities for advancement do not exist.

• Companies with international divisions can encourage employees to take assignments abroad to
expand their horizons

• Lead philanthropic and volunteer

• Take Sabbaticals and volunteer

Developing a Diverse Talent Pool

Employers often develop formal EEO/affirmative action policies to recruit and promote members of
protected classes so that their representation at all levels within the organization approximates their
proportionate numbers in the labour market.

Women - Avoid Glass ceiling, fair recruitment, training and compensation, alternative work
schedule, sexual harassment policy

Minorities - Fair employment opportunities

People who are disabled - Disable facilities, Fair hiring

Older employees - Continue working beyond retirement, Improved health care.

CHAPTER 6 EMPLOYEE SELECTION

Types of Interviews

1 Nondirective interview - In a nondirective interview, the interviewer allows the applicant

the maximum amount of freedom in determining the course of
the discussion.

- The interviewer asks broad, general questions, but permits the

applicant to talk freely with little interruption.

- The greater freedom afforded to the applicant in non-directive

interviews is particularly valuable in bringing to the interviewer's
attention any information, attitudes, or feelings that may be
concealed by a more structured approach.

- However, the unstructured nature of this approach limits the

consistency of information provided and makes it difficult to
crosscheck agreement with other interviewers.

- Thus, the reliability and validity of the nondirective approach are

suspected.

- Eg: “Tell me more about your experiences in your previous job…”

2 Structured interview – An interview in which a set of standardized questions having an

established set of answers is used. Questions are job-related
based upon job analysis. Since applicants are asked identical
questions, the structured interview provides a more consistent
basis for evaluating job candidates. This interview strives to
maximize the validity of selection decisions.

3 Situational interview – An interview in which an applicant is given a hypothetical

incident and asked how he or she would respond to it

4 Behavioural description – An interview in which focus on actual work incidents in the

interview (BDI) interviewee’s past and what the applicant did in response. This
interviewing approach assumes that past performance is the best
predictor of future performance.

5 Sequential interview – A format in which a candidate is interviewed by multiple people,

one right after another

6 Panel interview – An interview in which a board of interviewers questions and

observes a single candidate.

Types of Tests
 1 Job Knowledge Tests
- An achievement tests designed to measure people’s level of understanding, or
knowledge, about a particular job.

2 Work Sample Tests or job sample tests

- Require the applicant to perform tasks that are part of the work required on the job.
- Eg: Map reading test for traffic controllers officer, Microsoft Office for admin assistant
position

3 Assessment Center Tests

– A process by which managerial candidates are evaluated at an assessment center as
they participate in a series of situations that resemble what they might need to handle
on the job. Series of test such as interview, role play, presentation and many more.

4 Cognitive ability tests

- Measure mental capabilities such as general intelligence, verbal fluency, numerical
ability, and reasoning ability.

5 Biographical Data (Biodata) Tests

- Collect biographical information about candidates who have shown to correlate with
on-the-job success.

6 Personality Test
- Personality tests have been found to be good predictors of applicants’ motivation, such
as their leadership efforts and propensity to adhere to rules.
- measure dispositional characteristics such as the big five personality traits of
extroversion, agreeableness, conscientiousness, neuroticism, and openness to
experience.

7 Physical Ability Tests

- Assess a job candidate's physical abilities, such as strength and endurance.
- For some jobs, such as firefighters and police officers, employers need to assess a
person’s physical abilities.

8 Medical Examinations
- The law prohibits a medical examination being administered to an applicant before he
or she has been made a conditional employment offer and agreed to undergo it.

9 Drug Tests
- A candidate can refuse to take a drug test, but that is tantamount to turning down the
job.
- There are mixed results regarding the effectiveness of drug testing.

Reliability & Validity

- Reliability describes the degree to which interviews, tests, and other selection procedures yield
comparable data over a period of time.

- For example, if an interviewer judges the capabilities of a group of applicants differently today than
yesterday, his or her judgment is unreliable.

- Reliability can also be determined by interrater reliability or agreement between two or more
ratters.

- Selection decision data that are unreliable cannot be used as predictors of job success.

- Validity refers to what a selection procedure measures and how well it measures it.

- In other words, the selection process should be able to predict how well a person performs on the
job.

Determining the Validity of Tests

1 Criterion-Related Validity – The extent to which a selection tool predicts, or

significantly correlates with, important work behaviours.

There are 2 types of criterion-related validity:

i. Concurrent validity – The extent to which the test
scores of current employees correlate with their job
performance.
ii. Predictive validity – The extent to which candidates’
test scores match criterion data obtained from
them after they have been hired and on the job for
a period of time.

Regardless of the method used, cross-validation is essential.

Cross-validation
– Verifying the results obtained from a validation study by
administering a test or test battery to a different sample
(drawn from the same population)

2 Content Validity – The extent to which a selection instrument, such as a test,

adequately samples the knowledge and skills needed to do
a particular job
- Content validity is the most direct and least complicated
type of validity to assess.

3 Construct Validity – The extent to which a selection tool measures a

theoretical construct or trait.
- Typical constructs are intelligence, mechanical
comprehension, and anxiety.

CHAPTER 7 TRAINING AND DEVELOPMENT

Strategic Model of Training and Development

Phase 1 Needs Assessment

- Organization
- Task Analysis
- Person Analysis

Phase 2 Design
- Objectives
- Trainee Readiness
- Principles of Learning

Phase 3 Implementation
- Methods
- Learning Outcomes

Phase 4 Evaluation
- Reactions
- Learning
- Behaviour
- Results

Designing the Training Program

- Once you have assessed your firm’s training needs, the next step is to design the training program.
- Experts believe that the design of training programs should focus on at least four related issues:

1) The training’s instructional objectives

Instructional objectives – The desired outcomes of a training program (describe the skills or
knowledge to be acquired and/or the attitudes to be changed.)

2) Readiness of trainees and their motivation

refers to whether or not the experience of trainees has made them receptive to the training they will
receive.

3) Principles of learning
Training programs are likely to be more effective if they incorporate the principles of learning

Characteristics of Instructors:
Knowledge, adaptability, sincerity, humour, clear instructions, individual assistance and enthusiasm.

1) On-the-Job Training (OJT)

 – A method by which employees are given hands-on experience with instructions from their
supervisor or other trainer
- OJT is by far the most common informal method used to train employees.
- Apprenticeship training – A system of training in which a worker entering the skilled trades is
given thorough instruction and experience, both on and off the job, in the practical and
theoretical aspects of the work.

Suggestions to overcome the drawbacks related to on-the-job training

- By far the most common informal method used for training employees is on-the-job training
(OJT). OJT has the advantage of:
- providing hands-on experience under normal working conditions.
- an opportunity for the trainer —a manager or senior employee—to build good relationships with
new employees.
- OJT is viewed by some to be potentially the most effective means of facilitating learning in the
workplace.

Although it is used by all types of organizations, OJT is sometimes a poorly implemented training
method because of its informal nature. To overcome these problems, training experts suggest
firms develop:
- realistic goals and/or measures for the training
- a specific training schedule for each trainee.
- conducting periodic evaluations after the training is completed can help ensure employees have
not forgotten what they have learned

The PROPER way to do on-the-job training:

Prepare. Decide what employees need to be taught.
Reassure. Put each employee at ease.
Orient. Show the employee the correct way to do the job.
Perform. Give the employee an opportunity to practice the job.
Evaluate. Check the employees’ performance.
Reinforce and Review. Provide praise and feedback about how the employee is doing.

2) Special Assignments
- Special job assignments involve assigning trainees, who are often but not always on managerial
tracks, to different jobs in different areas of a firm, often in different regions and countries.

3) Cooperative Training & Internships

- Cooperative training is a training program that combines practical on-the-job experience with
formal educational classes.
- Internship programs are jointly sponsored by colleges, universities, and a variety of organizations,
and offer students the chance to get real-world experience while finding out how they will perform
in work organizations.

4) Simulations
- Simulations are used when it is either impractical or unwise to train employees on the actual
equipment used on the job.
5) Games
- Because games have a competitive component and are fun, trainers have found people are more
likely to want to engage with them as well as remember what they learned from them.

6) E-Learning
– Learning that takes place via electronic media
- Learning management system (LMS) – Online system that provides a variety of assessment,
communication, teaching, and learning opportunities
- A major advantage of e-learning is that it is more efficient and cost effective.
- Just-in-time training – Electronic training delivered to trainees when and where they need it to do
their jobs
- Microlearning – Training sessions that take place in a very short timeframe, usually 5 minutes or
less
- MOOC – An online course anyone can take.

7) Behaviour Modeling
- A learning approach in which work behaviors are modeled, or demonstrated, and trainees are
asked to mimic them.

8) Role-Playing
- Role-playing consists of playing the roles of others, often a supervisor and a subordinate who are
facing a particular problem, such as a disagreement or a performance problem.

9) Coaching
- Coaching consists of a continuous flow of instructions, comments, and suggestions from the
manager to a subordinate.

10) Case Studies

- A particularly useful method used in classroom learning situations is the case study.

11) Seminars and Conferences

- Seminars and conferences are good for raising points of debate and discussing issues that have no
set answers or resolutions.
- For this reason, seminars and conferences are often used when change is an organization’s goal.

12) Blended Learning

– The use of both in-person classroom learning and online learning.

Evaluating the Training Program

Criterion 1: Reactions One of the simplest approaches to evaluating a training program is to assess
participants’ reactions to it. In addition to indicating whether they enjoyed the training, they can give
insights into the content and techniques they found most useful.

Criterion 2: Learning Beyond what participants think about the training, did they actually learn
anything? Testing the knowledge and skills of trainees before and after a training program will help
determine their improvement. The skill and knowledge levels of employees who have undergone a
training program can also be compared to employees who have not.
Criterion 3: Behaviour The transfer of training refers to how well employees apply what they have
learned to their jobs. There are several ways to assess the transfer of learned skills back to the job.

Criterion 4: Results, or Return on Investment (ROI) Human resource managers are under pressure
from top managers to show that their training programs produce bottom-line results. Most
organizations today measure their training in terms of its return on investment (ROI), which is also
sometimes referred to as the utility the firm gets for its training dollars. A company’s ROI refers to
the benefits it derives from training compared to what it costs.

CHAPTER 8 PERFORMANCE MANAGEMENT

Purposes of a Performance Review

Developmental
- Provide performance feedback
- Identify individual strengths and weaknesses
- Recognise individual performance
achievements
- Help employees identify goals
- Evaluate goal achievement of employees
- Identify individual training needs
- Determine organizational training needs
- Allow employees to discuss concerns
- Improve communication
- Provide a forum for leaders to help employees
Administrative
- Document personnel decisions
- Promote employees
- Determine transfers and assignments
- Identify performance problems and develop
ways to correct them
- Make retention, termination, and layoff
decisions
- Validate selection criteria
- Meet legal requirements
- Evaluate training programs/ progress
- Assist with human resources planning
- Make reward and compensation decisions

Reasons why performance reviews can fail

• Inadequate preparation on the part of the manager.
• The employee is not given clear objectives at the beginning of performance period.
• The manager may not be able to observe performance or have all the information.
• The performance standards may not be clear.
• Inconsistent ratings among supervisors or other raters.
• Manager rates employee's personality rather than performance.
• The halo effect, contrast effect, or some other perceptual bias.
• Inappropriate time span for review (either too short or too long).
• Overemphasis on uncharacteristic performance.
• Inflated ratings because managers do not want to deal with “bad news."
• Subjective or vague language in written reviews.
• Organizational politics or personal relationships cloud judgments.
• No thorough discussion of causes of performance problems.
• Manager may not be trained at evaluation or giving feedback.
• No follow-up and coaching after the review.

What Are the Performance Standards?

1) Strategic Relevance
- Strategic relevance refers to the extent to which the performance standards relate to the
strategic objectives of the organization.
 2) Criterion Deficiency
- When performance standards focus on a single criterion (such as sales revenues) to the exclusion
of other important but less quantifiable performance dimensions (such as customer service), then
the performance management system is said to suffer from criterion deficiency.

3) Criterion Contamination
- There are factors outside an employee’s control that can influence his or her performance.
- Eg: A comparison of performance of production workers, for example, should not be
contaminated by the fact that some work with newer machines than others do.
- Eg: comparison of the performance of traveling salespeople should not be contaminated by the
fact that territories differ in terms of their sales potential.

4) Reliability
- Reliability refers to the stability or consistency of a standard or the extent to which individuals
tend to maintain a certain level of performance over time.
- Reliability can be measured by correlating two sets of ratings made by a single rater or by two
different raters.
- To make sure managers are rating employees consistently, some companies use a process called
calibration.
- Calibration – A process whereby managers meet to discuss the performance of individual
employees to ensure their employee reviews are in line with one another.

Sources of Performance Review Information

1 Manager and/or – A performance evaluation done by an employee’s manager and

supervisor evaluation often reviewed by a manager one level higher

2 Self-evaluation – A performance evaluation done by the employee being evaluated,

generally on an evaluation form completed by the employee prior
to the evaluation meeting

3 Subordinate – A performance evaluation of a superior by an employee, which is

evaluations often used for developmental rather than for administrative
purposes

4 Peer evaluation – A performance evaluation done by one’s fellow employees,

generally on forms compiled into a single profile for use in the
evaluation meeting conducted by the employee’s manager.

5 Team evaluation – A performance evaluation that recognizes team accomplishments

rather than individual performance.

6 Customer evaluation – A performance evaluation that includes evaluations from both a

firm’s external and internal customers.
Training Appraisers (Eliminating Rating Errors)
- A weakness of many performance review programs is that raters are not adequately trained for the
task, and so the feedback they provide their subordinates is not as accurate or useful as it might be,
or is actually destructive.

Establishing a Review Plan

- A training program for raters is most effective when it follows a systematic process that begins by
explaining the objectives of the firm’s performance management system and its philosophy on
reviews.

- The mechanics of the rating system should also be explained, including how managers keep
performance records and review them, how frequently the reviews are to be conducted, who will
conduct them, what the standards of performance are, and how to go about preparing for reviews.

1) Distributional Errors
- A distributional rating error occurs when a single rating is skewed toward an entire group of
employees.

Error of Central Tendency

– A performance rating error in which all employees are rated about average

Leniency or Strictness Error

– A performance rating error in which the appraiser tends to give employees either unusually high
or unusually low ratings

Ways to reduce distributional errors:

i) Explain to raters that when you are looking at large groups of employees, you should generally
expect to find significant differences among them.
ii) Use “anchors”—clearly defined characteristics or dimensions of performance and meaningful
descriptions of behaviour on the scale.
iii) Require ratings to conform to a Forced Distribution—a performance ranking system whereby
raters are required to place a certain percentage of employees into various performance
categories.
iv) Use peer rankings, whereby employees in a workgroup are ranked against one another from
best to worst.

2) Temporal Errors

Recency Error
– A performance rating error in which the evaluation is based largely on the employee’s most
recent behaviour rather than on behaviour throughout the evaluation period

3) Contrast Error
- A performance rating error in which an employee’s review is biased either upward or downward
because of comparison with another employee just previously evaluated
- For example, an average employee may appear very productive when compared with a poor
performer.
 4) Similar-to-Me Error
- A performance rating error in which an appraiser inflates the review of an employee because of
a mutual personal connection
- For example, if both the manager and the employee are from the same state or went to the
same schools, the manager may unwittingly have a more favourable impression of the employee.
- The similar-to-me error can be powerful, and when the similarity is based on race, religion,
gender, or some other protected category, it can result in discrimination.

Performance Review Methods

i) Trait approaches are based on people’s characteristics.
ii) Behavioural approaches provide more action-oriented information to employees and may be best
for development.
iii) Results-oriented approach focuses on the measurable contributions that employees make to the
organization.

Trait Methods

1 Graphic rating A trait approach to performance rating whereby each employee is rated
scale method according to a scale of characteristics.

2 Mixed-standard A trait approach to performance rating similar to other scale methods

scale method but based on a comparison with (better than, equal to, or worse than) a
standard.
3 Forced-choice A trait approach to performance rating that requires the rater to choose
method from statements designed to distinguish between successful and
unsuccessful performance.
4 Essay method A trait approach to performance rating that requires the rater to write a
statement describing an employee’s behaviour.
Behavioural Methods

1 Critical Incident Method

- When using the critical incident method, the manager keeps a log or diary for each
employee throughout the review period and notes specific critical incidents related to how
well they perform.

2 Behavioural Checklist Method

- The behavioural checklist method requires the rater to check statements on a list that
describe characteristics of the employee’s behaviour.
A checklist developed for salespeople who sell electronic products might include the
following:
- Questions customers about their needs.
- Identifies products that meet customers’ needs.
- Keeps abreast of new developments in technology.
- Processes orders correctly.

3 Behaviour Observation Scale (BOS)

– A behavioural approach to performance rating that measures the frequency of observed
behaviour.

4 Behaviourally Anchored Rating Scale (BARS)

– A behavioural approach to performance rating that consists of a series of vertical scales,
one for each important dimension of job performance
- These dimensions are “anchored” by behaviours identified through a critical incident job
analysis.
- The critical incidents are placed along the scale and are assigned point values according to
the opinions of experts.

Results Methods

1) Sales, Productivity, and Quality Measures

- Sales, productivity, and quality measures directly link what employees accomplish to results that
benefit the organization.

2) Management by Objectives
- A philosophy of management that rates the performance of employees based on their achievement
of goals set mutually by them and their managers
- In an MBO, employees establish objectives (such as production costs, sales per product, quality
standards, and profits) by consulting with their managers and are then evaluated based on meeting
those objectives.

3) The Balanced Scorecard

- A balanced-scorecard review takes into account four related categories:
(1) financial measures, (2) customer measures, (3) process measures, (4) learning measures.
Types of Performance Review Meetings and Feedback Sessions

1 Tell-and-sell - This requires a manager to skillfully use motivational and persuasive

techniques to try to change an employee’s behavior.
- This may require the development of new behaviors on the part of
the employee and skillful use of motivational incentives on the part of
the appraiser/supervisor.
- But because there is less communication on the part of the employee,
this format is less than ideal.
- However, it may be used if other formats haven’t worked, the
employee is resistant to change, or the employee is reluctant to
participate in the discussion.

2 Tell-and-listen - 1 st part of session =>The appraiser or supervisor communicates the

strong and weak points of an employee’s job performance
- 2 nd part of session => , the employee’s feelings about the review are
thoroughly explored.
- The tell-and-listen method gives both managers and employees the
opportunity to release and iron out any frustrating feelings they might
have.

3 Problem-solving - This format is the most proactive.

- Listening, accepting, and responding to feelings are essential
elements of it.
- It seeks to obtain the employees’ buy-in for a mutually agreed upon
way to overcome obstacles and actually improve the person’s actual
performance.
- Managers shouldn't assume that one format is best for every review
session. Rather, they can use one or more of the formats depending on
the purpose of the session, the topic being discussed, and the
receptiveness of the employee.

CHAPTER 9 MANAGING COMPENSATION

Discuss the factors necessary to successfully tie OKRs to compensation.

Tech companies such as Google, Oracle, Twitter, LinkedIn, and MoneyDesktop (MX) have adopted
what is known as an Objectives and Key Results (OKR) system to tie compensation to objectives.

1) Set up objective for your team and individuals in the team

2) Set of metrics that measure your progress towards the Objective

E.g.: Objective: Create an Awesome Customer Experience

If OKRs are tied to compensation, the following must be kept in mind.

1) Clarify expectations. If you intend to reward contributors who go above and beyond to complete
their objectives, you must first identify the criteria for outstanding performance versus just
completing your OKRs on time.

2) Balance aspirational with operational. Some OKRs can be big stretch goals while others can be
simply operational. Once you’ve determined how many of the goals were stretch from stuff that
needed to be done, you can determine a ratio and increase people’s performance based on work
that they did that was a stretch.

3) Consider additional performance factors. Hitting your objectives demonstrates hard work, but
they do not cover everything that should be rewarded.

4) Drive collaboration, not competition. One of the biggest dangers that comes from rewarding
people based on reaching their OKRs is that they may focus too much on their individual OKRs at the
expense of those of a team or group. Eg: So you might want to provide bonuses or pay raises based
on a combination of individual-level and group-level OKR.

3 kinds of pay equity:

1 External equity
- People in similar jobs compare themselves to what others are making in different
organizations.

2 Internal equity
- People compare themselves to peers in different jobs in the same organization.

3 Individual equity
- People compare themselves to others in their organization with the same job.

The Bases for Compensation

1 Hourly employees
– Work paid on an hourly basis

2 Piecework
– Work paid according to the number of units produced.

3 Salaried employees
- Compensation is computed on the basis of weekly, biweekly, or monthly pay periods.
- They also usually receive certain benefits not provided to hourly employees.

4 Non-exempt employees
– Employees covered by the overtime provisions of the Fair Labour Standards Act. Non-
exempt employees must be paid at a rate of one and a half times their regular pay rate
worked in excess of 40 hours in their workweek.

5 Exempt employees
– Employees not covered by the overtime provisions of the Fair Labour Standards Act
Government Regulation of Compensation

Minimum Wage Rate

- The minimum wage prescribed by federal law has been raised many times, from an original figure
of $0.25 per hour to $7.25 per hour on July 24, 2009. This is where the minimum wage stands today
(see Highlights in HRM 5 for the federal minimum wage poster that employers are required to
display).
- Assessed every few years and adjusted for cost-of-living factors (e.g., consumer price index).
- Applies to actual earning rate BEFORE any added overtime premiums.

Overtime Wage Rate

- 1.5 times the base rate must be paid for all hours worked over 40 during a given week.
- Base wage rate must include incentive payments or bonuses received during that period.
- Employees paid on piecework basis must receive premium for overtime work.

Compensatory Time (Comp Time)

- When employees are given time off in return for overtime work.
– Granted at 1.5 times the number of hours worked as overtime.

Child Labour Provisions

- Age 16 is the basic minimum age required for employment.
- Regarding child labour, the FLSA forbids minors between 16 and 18 years of age to be employed in
hazardous occupations.
- Those under 16 years of age cannot be employed in work destined for interstate commerce unless
performed under a temporary work permit or for a parent.

Pay Equity Provisions

- Laws exist to protect employees against pay discrimination.
- Yet, pay discrimination is still found in many companies today.
CHAPTER 10 PAY-FOR-PERFORMANCE: INCENTIVE REWARDS

Advantages of Incentive Pay Programs

• Incentives focus employee efforts on specific performance targets. They provide real motivation
that produces important employee and organizational gains.
• Incentive payouts are variable costs linked to the achievement of results. Base salaries are fixed
costs largely unrelated to output.
• Incentive compensation is directly related to operating performance. If performance objectives
(quantity and/or quality) are met, incentives are paid. If objectives are not achieved, incentives are
withheld.
• Incentives foster teamwork and unit cohesiveness when payments to individuals are based on
team results.
• Incentives are a way to distribute success among those responsible for producing that success.
• Incentives are a way to increase equity and justice in an organization.
• Incentives are a means to reward or attract top performers when salary budgets are low.

Gainsharing Incentive Plans

Gainsharing plans – Programs under which both employees and the organization share financial
gains according to a predetermined formula that reflects improved productivity and profitability.

a) The Scanlon Plan

– A bonus incentive using employee and management committees to gain cost-reduction
improvements
- The philosophy behind the Scanlon plan is that employees should offer ideas and suggestions to
improve productivity and, in turn, be rewarded for their constructive efforts.

b) Improshare
– A gainsharing program under which bonuses are based on the overall productivity of the work
team

4 types of individual plans:

1 Piecework Straight piecework

– An incentive plan under which employees receive a certain rate for each
unit produced

Differential piece work

– A compensation rate under which employees whose production exceeds
the standard amount of output receive a higher rate for all of their work
than the rate paid to those who do not exceed the standard amount.

Advantages: Piecework has the advantage of motivating employees who

want to increase their earnings.

Drawbacks: They may not always be an effective motivator. For example,

employees may not exert maximum effort if they feel it will lead to
disapproval from co-workers.

- Piecework incentive systems can work against an organizational culture

 promoting workforce cooperation, and creativity. or problem-solving
because these goals can infringe on an employee’s time and productivity
and, therefore, total pay earned.

2 Standard – An incentive plan that sets rates based on the completion of a job in a
hour plan predetermined standard time
- Standard hour plans are easily suited to operations with a long cycle or to
jobs that are nonrepetitive and require a variety of skills.
- While standard hour plans motivate employees to produce more, quality
may suffer if employees become careless and do their work too fast.

3 Bonuses – An incentive payment that is supplemental to the base wage

- Performance bonus
- Contractual bonus

Spot bonus
– An unplanned bonus given for employee’s effort unrelated to an
established performance measure

4 Merit Pay - A merit pay program (merit raise) links an increase in base pay to how
successfully an employee performs his or her job. Given on the basis of an
employee having achieved some objective performance standard.
- Merit increases are normally granted yearly in conjunction with an
employee's annual performance review

Possible problems with merit pay plans:

- Money available for merit increases may be inadequate to satisfactorily raise all employees’ base
pay.

- Managers may have no guidance in how to define and measure performance; there may be
vagueness regarding merit award criteria.

- Employees may not believe that their compensation is tied to effort and performance; they may be
unable to differentiate merit pay and other types of pay increases.

- Employees and their managers may hold different views of the factors that contribute to job
success.

- Merit pay plans may create feelings of pay inequity.

Merit guidelines – Guidelines for awarding merit raises that are tied to performance objectives.
Types of Sales Incentive Plans

1 Straight salary plan

– A compensation plan that permits salespeople to be paid for performing various duties that
are not reflected immediately in their sales volume
- It enables them to devote time to providing services and building customer goodwill
without jeopardizing their income.
- Limitation of this plan is that employees may not be motivated to maximize their sales
volume
2 Straight commission plan
– A compensation plan based on a percentage of sales.

Advantages:
a) keep sales cost proportionate to sales revenues.
b) easy to understand and compute.

Disadvantages:
a) Emphasis on sales volume instead of profits.
b) Customer service after the sale is likely to be a lower priority.

3 Combined salary and commission plan

- A compensation plan that includes a straight salary and a commission.

4 Salary plus bonus plan

– A compensation plan that pays a salary plus a bonus achieved by reaching targeted sales
goals
- Can be paid on monthly, quarterly or yearly schedule
- Based on the achieved targeted goals such as sales calls made, account servicing and quality
of sales.

Pros of high executive pay:

• Large financial incentives reward superior performance.

• Business competition is pressure filled and demanding.

• Good executive talent is in great demand.

• Effective executives create value for shareholders and organization’s.

Cons of high executive pay:

• High executive salaries and benefits look bad in an era of massive downsizing, low wage increases,
and increased workloads for layoff survivors.

• Cries for performance accountability and openness abound

CHAPTER 11 EMPLOYEE BENEFITS

Flexible Benefits (Cafeteria Plans)

- To make it easier to accommodate the individual needs of different employees
– Benefit plans that enable individual employees to choose the benefits that are best suited to their
particular needs.
Compensation specialists often see flexible benefits plans as ideal.
- Employees select the benefits of greatest value to them, while employers manage benefits costs by
limiting the dollars employees have to spend.
Typically, employees are offered a basic or core benefits package of life and health insurance, sick
leave, and vacation.
- Requiring a core set of benefits ensures that employees have a minimum level of coverage to
protect against unforeseen financial hardships.
- Employees are then given a certain amount of funds to purchase whatever other benefits they
need through the plan.
- Other benefit options might include prepaid legal services, financial planning, dental insurance, and
long-term care insurance.

Work-Life Discretionary Benefits

- Many organizations are seeking to create a work-life organizational climate that allows employees
to balance their work with their personal needs.

- Research shows that 60 percent of employees prefer to have work-life balance benefits, and that
employees are 20 percent more engaged in and satisfied with their job when they’ve hit the right
work-life balance.

Child and Elder Care

Elder Care
– Care provided to an elderly relative by an employee who remains actively at work
- Beyond the loss of organizational productivity and higher employee costs, a growing concern of
employers is the negative effects of caregiving on employee health.
- To help employees meet the challenges of caregiving, organizations may offer elder care
counselling, educational fairs and seminars, printed resource materials, support groups, and special
flexible schedules and leaves of absence.

Back Care Program

– A benefit program whereby an employer supplies or subsidizes temporary care for its employee’s
elders or children when their regular arrangements fall through.

Payment for time not worked

- The “payment for time not worked” category of benefits includes:
- Paid vacations
- Bonuses given in lieu of paid vacations
- Payments for holidays not worked
- Paid sick leave
- Military and jury duty
- Payments for absence due to a death in the family or other personal reasons
The United States is the only country in which paid time off is not mandatory.

Vacations with Pay

- Employees in the United States who work for large companies often get 10 paid days of vacation a
year.
- Most companies require their employees to take their vacation days by the end of the year or
forfeit them.

Paid Holidays
- Minimum 11 gazed public holidays. Total 17 public holiday

Sick Leave
Employees are entitled to paid sick leave:
14 days per year = worker has less than 2 years
18 days per year = 2 – 5 years
22 days per year = 5 years and above
- If needed to be hospitalized, he can take up to 60 days sick leave per years.

Sabbaticals
– Paid (or unpaid) time away from a job for 4 or more weeks employees take off to renew
themselves before returning to work.

Severance pay
– A one-time payment is sometimes given to an employee who is being involuntarily terminated
- Employers who are downsizing often use severance pay as a means of lessening the negative
effects of unexpected termination of employees.

Supplemental Unemployment Benefits

– A plan that enables an employee who is laid off to draw weekly benefits from the employer, which
draws from a fund created for this purpose, in addition to state unemployment compensation.

2 Types of Pension Plans

1) According to contributions made by the employer

Contributory plan – A pension plan in which contributions are made jointly by employees and
employers

Non-contributory plan – A pension plan in which contributions are made solely by the employer

2) According to the amount of pension benefits to be paid

Defined benefit plan – A pension plan in which the amount an employee is to receive on retirement
is specifically set forth

- The amount employees collect is usually based on their years of service, average earnings during a
specific period of time, and age at time of retirement.
Defined contribution plan – A pension plan that establishes the basis on which an employer will
contribute to the pension fund

- The employer’s contributions may be made through profit sharing, thrift plans, matches of
employee contributions, employer-sponsored individual retirement accounts (IRAs), and various
other means.

- The amount of benefits employees receive on retirement is determined by the funds accumulated
in their accounts and how well the investments purchased with the funds have grown over time

CHAPTER 12 PROMOTING SAFETY AND HEALTHTY

Power of Occupational Safety and Health Administration (OSHA) with respect to citations and
penalties
- OSHA citations may be issued immediately following the inspection or later by mail.
- Citations tell the employer and employees which
- regulations and standards are alleged to have been violated
- and the amount of time allowed for their correction.
- The employer must post a copy of each citation at or near the place the violation occurred for three
days or until the violation is abated, whichever is longer.
- Under the act, OSHA may cite the following violations and propose the following penalties:
- Other-Than-Serious: A violation that has a direct relationship to job safety and health, but one
unlikely to cause death or serious physical harm. Such a penalty could be as low as $100. However,
OSHA may propose a penalty of up to $7,000 for each violation depending upon the circumstances.
- Serious: A violation for which there is substantial probability that death or serious physical harm
could result and the employer knew, or should have known, of the hazard. The average penalty is
$3,000-$4,000, with a maximum penalty of $7,000.
- Willful: A violation that the employer intentionally and knowingly commits, or a violation that the
employer commits with plain indifference to the law. OSHA may propose penalties of up to $70,000
for each violation or $75,000 per exposed employee for a willful penalty.

Creating a Culture of Safety

- Firms today try to create a “culture” of safety within their organizations that goes beyond
managing operational processes and reducing accidents.
- A culture of safety exists when everyone within an organization consciously works to improve its
safety and health conditions.
- HR executives should be the point persons on creating and making sure that a corporate safety
culture exists.
- Some companies periodically conduct fitness-for-duty evaluations on their current employees.
- Fitness-for-duty evaluations – Evaluations are randomly conducted to determine an employee’s
physical, mental, and emotional fitness for a job.

Role of supervisors in promoting workplace safety

The role of supervisors in promoting workplace safety includes:
- communicating to employee’s the need to work safely
- stressing safety in orientation programs
- explaining proper safety procedures,
- including protection and equipment explaining potential hazards
- observing employees at work to ensure they are maintaining safety standards.

Enforcing Safety Rules

- Firms communicate specific safety rules and regulations in a variety of ways, including through
supervisors, bulletin board notices, employee handbooks, and signs attached to the equipment.
- In addition to safety labels and signs, many companies prominently display in their workplaces the
number of consecutive days they have operated without an injury.

Investigating and Recording Accidents

- The supervisor and a member of the safety committee should investigate every accident, even
those considered minor.
- Such an investigation may determine the factors contributing to the accident and reveal what
corrections are needed to prevent it from happening again.
- OSHA requirements mandate that employers with 11 or more employees maintain records of work-
related occupational injuries and illnesses.
- OSHA also requires a Log of Work-Related Injuries and Illnesses (OSHA Form 300) to be maintained
by the organization.
- All recordable cases are to be entered in the log.
- Recordable case – Any occupational death, illness, or injury to be recorded in the log
- Recordable cases include the following:
- Death
- Days away from work
- Restricted work or transfer to another job
- Medical treatment beyond first aid

Tips for Reducing Job-Related Stress

• Build rewarding relationships with your coworkers.
• Talk openly with managers or employees about your job or personal concerns.
• Prepare for the future by keeping abreast of likely changes in your job's demands.
• Do not greatly exceed your skills and abilities.
• Set realistic deadlines, negotiate reasonable deadlines with managers.
• Act now on problems or concerns of importance.
• Designate dedicated work periods during which time interruptions are avoided.
• When feeling stressed, find time for detachment or relaxation.
• Do not let trivial items take on importance; handle them quickly or assign them to others.
• Take short breaks from your work area as a change of pace.

Safety Hazards and Issues

Workplace Emergencies
A workplace emergency is an unforeseen situation that:
- Threatens employees, customers, or the public
- Disrupts or shuts down operations
- Causes physical or environmental damage
- In addition to workplace violence, they can include:
- Acts of nature (floods, hurricanes, and tornadoes)
- Fires and explosions
- Toxic gas releases, chemical spills, and radiological accidents
- Civil disturbances and terrorism’
OSHA requires companies to have emergency action plans to deal with incidents such as these.
- Emergency Action Plan– A plan an organization develops that contains step-by-step procedures for
dealing with various emergency situations.

Workplace emergencies and how employers can effectively deal with such situations.
- An emergency action plan must include, among other things, procedures for reporting a fire or
other emergency, evacuating a facility, and accounting for employees after an evacuation.
- The plan must also include procedures for employees who must remain in facilities to ensure
critical plant operations continue, as well as procedures for workers performing rescue and medical
duties.
- A copy of the emergency action plan should either be provided to employees or kept in a
convenient location where employees can access it.
- Organizations with 10 or fewer employees are allowed to communicate their emergency plans
orally to employees.

Health Hazards and Issues

Cumulative Trauma Disorders
– Injuries involving tendons of the fingers, hands, and arms that become inflamed from repeated
stresses and strains
- Eg: Meat cutter, cooks, flight attendants

Computer Workstation Issues

The problems that managers have to confront in this area fall into three major groups:
1. Visual difficulties - blurred visions, burning & inching eyes
2. Muscular aches and pains – back, neck and shoulder pain
3. Job stress – eyestrain, postural problem

Building Better Physical and Emotional Health among Employees

Job Stress and Burnout
Stress – Any adjustive demand caused by physical, mental, or emotional factors that requires coping
behaviour.
a) Eustress
– Positive stress that accompanies achievement and exhilaration.

b) Distress
– Harmful stress is characterised by a loss of feelings of security and adequacy
Burnout – A severe stage of distress, manifesting itself in depression, frustration, and loss of
productivity

2 general types of stress

Distress
- A negative type of stress characterized by feelings of inadequacy, overwork, desperation, lack of
control, fear, depression, and so on.
- If left unchecked, distress may eventually result in fatigue, exhaustion, or burnout.
- Example: John Jones has been working overtime on a major project for his boss. He learns that the
due date for his project has been changed from next Friday to tomorrow. Because John has strong
doubts that he will be able to complete his assignment on time, he feels his annual raise may be in
jeopardy. John is likely experiencing distress at this time.

Eustress
- A situation where an individual feels challenged and energized by the environment around himself
or herself.
- Eustress is characterized by feelings of achievement, accomplishment, and/or exhilaration.
- Without a minimal level of eustress, life would likely be considered boring.
- Too much eustress, however, may develop into the more destructive distress.
- Example: Sue Smith just received a major promotion. While the new job will require a much longer
workweek as well as a higher level of professional risk, Sue feels charged up to assume her new
responsibilities.

Different Factors that Create Stress for Employees

4 factors have a major influence on employee stress:
• High demand: having too much to do in too short a time
• High effort: having to expend too much mental or physical energy over too long a period
• Low control: having too little influence over the way a job is done on a day-to-day basis
• Low reward: receiving inadequate feedback on performance and no recognition for a job well
done.

CHAPTER 15 INTERNATIONAL HUMAN RESOURCES MANAGEMENT

Types of Organizations

Global Views the world as a single market; operations are controlled centrally from
the corporate office.
E.g. Japanese companies – NEC & Matsushita

Transnational High Specialized facilities permit local responsiveness; complex coordination

mechanisms provide global integration.
E.g. Mc Donald

Multinational Several subsidiaries operating as stand-alone business units in multiple

countries.
Eg: Shell, Phillips

International Uses existing capabilities to expand into foreign markets.

E.g. Honda, Procter & Gamble

Recruiting Internationally
- In terms of recruiting internationally, companies use:
- Executive recruiting firms for recruiting at the executive level and international recruiting firms for
non-executives
- Referrals and radio announcements for workers in lessdeveloped countries. Eg: In countries such as
India and China, an employer’s reputation is extremely important to candidates’ families—
sometimes more important than pay.

Apprenticeships
- A major source of trained labour in European nations is apprenticeship training programs.
- In Europe, a dual-track system of education directs a large number of youths into vocational
training.
- The German system of apprenticeship training, one of the best in Europe, provides training for
office and shop jobs.

Staffing Transnational Teams

Transnational teams – Teams composed of members of multiple nationalities working on projects
that span multiple countries.

Eg: For example, Tata Motors developed the Tata Nano, a car for nearly $2,000. As the cheapest car
in the world, the Tata Nano was developed by a large transnational team, with suppliers in different
countries designing specific parts to meet a price-sensitive threshold.

Content of Training Programs

At least 5 essential elements of training and development programs prepare employees for working
internationally:
1) Language training
2) Cultural training
3) Assessing and tracking career development
4) Managing personal and family life
Culture shock– Perpetual stress experienced by people who settle overseas
5) Repatriation – The process of transition for an employee home from an international assignment