CHAPTER 10: MANAGING CAREERS & RETENTION

LO 10-1
Career: the occupational positions a person has had over many years
● Career management: the process for enabling employees to better understand and
develop their career skills and interests, and to use these skills and interests more
effectively
● Career development: the lifelong series of activities that contribute to a person’s career
exploration, establishment, success, and fulfillment
● Career planning: the deliberate process through which someone becomes aware of
personal skills, interests, knowledge, motivations, and other characteristics and
establishes action plans to attain specific goals
○ Matching individual strengths and weaknesses with occupational opportunities
and threats
● Portfolio Careers: Careers based on using one’s skills to create a livelihood from
multiple income sources, often from several jobs paying different rates.

Careers today:
- People once viewed careers as a sort of upward stairway from job to job, more often
than not with one or a few firms
- Careers today differ
- With many more women pursuing professional and managerial careers, families
must balance the challenges associated with dual-career pressures
- People entering the job market now often covet opportunities for more balanced
work-family lives

Psychological contract: what the employer and employee expectations of each other
- An unwritten agreement that exists between employers and employees
- Identifies each party’s mutual expectations
- Employees are expected to respond by demonstrating a good attitude, following
directions, and showing loyalty to the organization
Employees’ role in career management:
- The manager should provide timely and objective performance feedback, offer
developmental assignments and support, and have career development discussions with
the employee
- Should act as a coach, appraiser, advisor, and mentor
- The employer should provide career-oriented training, development, and promotional
opportunities, offer career information and career programs and give employees a
variety of career options
- The employee is responsible for his or her own career
- Must assess interests, skills, and values
- Seek out career information resources and take steps to ensure a happy and
fulfilling
- Personality is an important career choice determinant

Employer’s role in career management:

- For example, before hiring, realistic job interviews can help prospective employees more
accurately gauge whether the job is a good fit for them
- Reality shock: results of a period that may occur at the initial career entry when the new
employee’s high job expectations confront the reality of a boring or otherwise
unattractive work situation
- Periodic job rotation can help the person develop a more realistic picture of what he or
she is good at
- After an employee has been on the job for a while, career-oriented appraisals are
important
- Not only appraises but also uses the results to help the person to match his or
her strengths and weaknesses with a feasible career path

Employee career management methods

● Career planning workshop: a planned learning event in which participants are
expected to be actively involved
○ Career coaches: generally help employees create 1-5 year plans showing where
their careers with the firm may lead
● Mentoring: advising, counseling, and guiding employees’ longer-term career
development
 - Formal: the employer may pair proteges with potential mentors and provide
training to help mentor
- Informal: senior-level managers may voluntarily help less experienced employees
- Effective mentoring requires trust
- The level of trust reflects on the mentor’s professional competence, consistency,
ability to communicate, and readiness to share control
● Coaching: educating, instructing, and training candidates
- focuses on teaching daily tasks that you can easily relearn

LO 10-2
- With a career-oriented appraisals, the supervisor and employee jointly merge the
latter’s past performance, career preferences, and developmental needs into a formal
career plan

LO 10-3
● Turnover: the rate at which employees leave the firm

Managing voluntary turnover:

- The manager should understand that retaining employees is a talent management issue
and that the best retention strategies are therefore multifunctional

Comprehensive approach to retaining employees (IDENTIFYING PROBLEMS):

1. Conduct exit interviews - to get useful insights into turnover problem areas
2. Administer attitude surveys - to monitor employees on matters such as supervision
and pay
3. Stay off interview - to head off retention problems by finding out how the employee is
doing
4. Realistic previews - about the job’s demands and work hours

Comprehensive approach to retaining employees (BOOST RETENTION):

1. Raise pay
2. Hire smart
3. Discuss careers
4. Provide direction0
 5. Offer flexibility
6. Use high-performance HR practices
7. counteroffer

● Job Withdrawal: Separating oneself from one’s current situation due to dissatisfaction
or fear
- Actions intended to place physical or psychological distance between employees
and their work environments
- Two types:
- Absence
- Voluntary turnover
- Job withdrawal process tends to be incremental, often evolving from
daydreaming to absences to quitting
- Because of the desire to get away
- People are repelled by situations that produce unpleasant, uncomfortable
emotions, and are attracted to those that produce pleasant, comfortable ones

LO 10-4
Making Promotion decisions:
- Promotion: advancement to a position of increased responsibility
- An effective promotion strategy, therefore, includes effective promotion from within
systems and practices, making more promotions available, and ensuring that your
employees are as aware of their own company’s job openings as they are of other
companies

Crucial promotion-related decisions

1. Is seniority or competence the rule
2. How should we measure competence
3. Is the process formal or informal
4. Vertical, horizontal, or other?

● Managing transfers: reassignments to similar positions in other parts of the firm

- Move from one job to another, usually with no change in salary or grade
 ● Managing retirements: Employers face a problem: either retain and attract potential
retirees or face the possibility of not filling all their open positions. “Retirement planning”
is no longer just about helping current employees slip into retirement. It should also help
the employer to retain, in some capacity, the skills and brainpower of those who would
normally retire and leave the firm.

LO 10-5
Dismissal: involuntary termination of an employee’s employment with the firm

Grounds for dismissal:

● Unsatisfactory performance: refers to a persistent failure to perform assigned duties or
to meet prescribed standards on the job
● Misconduct: deliberate and willful violation of the employer’s rules
● Lack of qualifications: an employee’s inability to do the assigned work, although he or
she wants to
● Changed requirements of the job: an employee’s incapability of doing the job after the
nature of the job has changed

● Insubordination: willful disregard or disobedience of the boss’ authority or legitimate

orders; criticizing the boss in public
1. Unwillingness to carry out the manager’s order
2. Disrespectful behavior

Examples of insubordination:
- Direct disregard of the boss’ authority
- Direct disobedience of, or refusal to obey, the boss’ orders, particularly in from of others
- Deliberate defiance of clearly stated company policies, rules, regulations, and
procedures
- Public criticism of the boss
- Blatant disregard of reasonable instructions
- Contemptuous display of disrespect
- Disregard for the chain of command
- Participation in an effort to undermine and remove the boss from power
Wrongful discharge: occurs when an employee’s dismissal does not comply with the law or
with the contractual arrangement stated or implied by the employer

Termination interview: the interview in which an employee is informed of the fact that he or
she has been dismissed
1. Plan the interview
2. Get to the point
3. Describe the situation
4. Listen
5. Review the severance package
6. Identify the next step

● Outplacement counseling: a formal process by which a terminated person is trained

and counseled in the techniques of self-appraisal and securing a new position
● Exit interviews: interviews with employees who are leaving the firm, conducted for
obtaining information about the job or related matters, to give the employer insight about
the company
● Layoff: an employer sending employees home due to a lack of work; this is typically a
temporary situation
Downsizing: the process of reducing, usually dramatically, the number of people employed by a
firm:
1. Making sure the right people are let go
2. Compliance with all applicable laws
3. Executing dismissals that is just and fair
4. Security
5. Reducing the remaining employees’ uncertainty and addressing their concerns
CHAPTER 11: ESTABLISHING STRATEGIC PAY PLANS
LO 11-1
Employee compensation: all forms of pay or rewards going to employees and arising from
their employment
1. Direct Financial Payments
a. Wages
b. Salaries
c. Incentives
d. Commissions
e. Bonus
2. Indirect Financial Payments
a. Insurance

Total rewards: encompass traditional pay, incentives, and benefits but also “rewards” such as
more challenging jobs (job design), career development, and recognition.

Equity and pay rates:

● External equity: refers to how a job’s pay rate in one company compares to the job’s
pay rate in other companies
● Internal equity: refers to how fair the job’s pay rate is when compared to other jobs
within the same company
● Individual equity: refers to the fairness of an individual’s pay as compared with what his
or her coworkers are earning for the same or very similar jobs within the company, based
on performance
● Procedural equity: the perceived fairness of the processes and procedures used to
make decisions regarding the allocation of pay

- Davis bacon act (1931) - law that sets wage rates for laborers, employed by contractors
working for the federal government
- Walsh-healey public contract act (1936) - law that requires minimum wage and
working conditions for employees working on any government contract amounting to
more than $10,000

Addressing Equity Issues

1. Job analysis
2. Salary surveys
 3. Performance appraisal
4. Incentive pay
5. Communications
6. Grievance mechanisms
7. Employees’ participation

LO 11-2
Job evaluation: a systematic comparison done in order to determine the worth of one job
relative to another
- Eventually results in a wage or salary structure or hierarchy

- The basic principle of job evaluation is this: Jobs that require greater qualifications, more
responsibilities, and more complex job duties should receive more pay than jobs with
lesser requirements.

Market competitive pay plan: pay plan where pay rates are equitable both internally (based on
each job’s relative value) and externally (in other words when compared with what other
employers are paying)

Compensable factor: a fundamental, compensable, element of a job, such as skills, effort,

responsibility, and working conditions
- The factors that establish how the jobs compare to one another, and that determine the
pay for each job

Preparing for the job evaluation:

1. Identifying the need for job evaluation
2. Getting employees to cooperate in the evaluation
3. Choose a job evaluation committee
4. Identify 10 to 15 benchmark jobs

Benchmark job: a job that is used to anchor the employer’s pay scale and around which other
jobs are arranged in order of relative worth
A. Job evaluation - RANKING METHOD: The simplest method of job evaluation that
involves ranking each job relative to all other jobs, usually based on overall difficulty
1. Obtain job information
2. Select and group jobs
3. Select compensable factors
4. Rank jobs
5. Combine ratings
6. Compare current pay with what others are paying based on salary survey
7. Assign a new pay scale

- Factor comparison method: requires ranking each of a job’s factors and then adding
up the points representing the number of degrees of each factor each job has

B. Job evaluation - JOB CLASSIFICATION: A method for categorizing jobs into groups
● Classes: grouping jobs based on a set of rules for each group or class, such as
the amount of independent judgment, skill, physical effort, and so forth. Usually
contain similar jobs
● Grades: a job classification system like the class system, although grades often
contain dissimilar jobs, such as secretaries, mechanics, and firefighters
○ Written based on compensable factors listed in classification systems
● Grade definition: a written description of the level of, responsibility and
knowledge required by jobs in each grade

○ Similar jobs can then be combined into grades or classes

 C. Job Evaluation - POINT METHOD: the job evaluation method in which a number of
compensable factors are identified and then the degree to which each of these factors is
present on the job is determined

D. Computerized Job Evaluation

LO 11-3
How to Create a Market Competitive Pay Plan
1. Choose benchmark jobs
2. Select compensable factors
3. Assign weights to compensable factors
4. Convert percentages to points for each factor
5. Define each factor’s degrees
6. Determine for each factor its factor degrees’ points
7. Review job descriptions and job specification
8. Evaluate the jobs
● Market competitive pay system: a pay system in which the employer’s actual
pay rates are competitive with those in the relevant labor market
9. Draw the current (internal) wage curve
● Wage curve: shows the relationship between the value of the job and the
average wage paid for this job
10. Conduct a market analysis: salary surveys
● Salary Survey: a survey aimed at determining prevailing wage rates. A good
salary survey provides specific wage rates for specific jobs. Formal written
questionnaire surveys are the most comprehensive, but telephone surveys and
newspaper ads are also sources of information
11. Draw the market (external) wage curve
12. Compare and adjust current and market wage rates for jobs
13. Develop pay grades
● Pay grade: composed of jobs of approximately equal difficulty
14. Establish rate ranges
 ● A series of steps or levels within a pay grade, usually based upon years of
service
● Compa ratio: equals an employee’s pay rate divided by the pay range midpoint
for his or her pay grade
15. Address remaining jobs
16. Correct out of line rates

LO 11-5
● Competency-Based Pay – Where the company pays for the employee’s range, depth,
and types of skills and knowledge, rather than for the job title he or she holds.
● Broadbanding – Consolidating salary grades and ranges into just a few wide levels or
“bands,” each of which contains a relatively wide range of jobs and salary levels.
● Comparable Worth – The concept by which women who are usually paid less than men
can claim that men in comparable rather than strictly equal jobs are paid more.

LO 11-6
Employee Engagement for Managers
1. Total rewards programs

CHAPTER 12: PAY FOR PERFORMANCE AND FINANCIAL INCENTIVES

LO 12-1
● Financial incentives: financial rewards paid to workers whose production exceeds
some predetermined standard
● Productivity: the ratio of outputs (goods and services) divided by the inputs (resources
such as labor and capital)
● Fair day’s work: output standards devised based on careful, scientific analysis
● Scientific management movement: management approach based on improving work
methods through observation and analysis

Incentive pay terminology

● Pay for performance: any plan that ties pay to some measure of performance, such as
productivity or profitability
● Variable pay: any plan that ties pay to productivity or profitability, usually as one-time
lump payments
Motivation and incentives:
1. Motivators and Frederick Herzberg → intrinsic motivation & hygiene factors
- Intrinsic motivation: motivation that derives from the pleasure someone gets from
doing the job or task
2. Demotivators and Edward Deci → extrinsic rewards may backfire
3. Expectancy theory and Victor Vroom → a person’s motivation to exert some level of
effort depends on three things:
a. The person’s expectancy (in terms of probability)
b. Instrumentality (the perceived connection between successful performance and
rewards)
c. Valence (the value the person attaches to the reward)

4. Behavior modification/reinforcement and

B.F. Skinner → using incentives also assumes the manager understands how
consequences affect behavior
- Behavior modification means using contingent rewards or punishment to change
behavior
- First, that behavior that appears to lead to a positive consequence tends to be
repeated, whereas behavior that appears to lead to a negative consequence
(punishment) tends not to be repeated

LO 12-2
● Piecework: a system of pay based on the number of items processed by each individual
worker in a unit of time, such as items per hour or items per day
○ Straight piecework: an incentive plan in which a person is paid a sum for each
item he or she makes or sells, with a strict proportionality between results and
rewards
○ Standard hour plan: A plan by which a worker is paid a basic hourly rate but is
paid an extra percentage of his or her rate for production exceeding the standard
per hour or per day. Similar to piecework payment but based on a percent
premium.
Adv:
1. Easy to calculate
 2. Easy to understand by employees
3. Ties pay directly to performance
Dis:
1. Employers may focus less and quality
2. Equipment may suffer due to overuse

● Merit pay: any salary increase awarded to an employee based on his or her individual
performance

Nonfinancial and recognition based awards:

● Recognition program
● Social recognition program → informal manager-employee exchanges such as praise,
approval, or expressions of appreciation for a job well done
● Performance feedback

LO 12-3
Incentives for Salespeople:
1. Salary plan
2. Commission plan
3. Combination plan

LO 12-4
● Annual Bonus – Plans that are designed to motivate short-term performance of
managers and that are tied to company profitability.
● Long-Term Incentives
1. Stock option
● Golden Parachute – A payment companies make in connection with a change in
ownership or control of a company.

LO 12-5
Team (group) incentive plan: a plan in which a production standard is set for a specific work
group, and its members are paid incentives if the group exceeds the production standard
● Organization-wide incentive plan: incentive plan in which all or most employees can
participate
 ● Profit-sharing plan: a plan whereby employees share in the company’s profits
● Scanlon plan: an incentive developed in 1937 by Joseph Scanlon and designed to
encourage cooperation, involvement, and sharing of benefits
● Gainsharing plan: an incentive plan that engages employees in a common effort to
achieve productivity objectives and share the gains
● Earnings-at-risk pay plan: a plan that puts some portion of employees’ normal pay at
risk if they don’t meet their goals, in return for possibly obtaining a much larger bonus if
they exceed their goals
● Employee stock ownership (ESOP): A corporation contributes shares of its own stock
to a trust in which additional contributions are made annually. The trust distributes the
stock to employees on retirement or separation from service

LO 12-6
Incentives and Engagement

CHAPTER 13: BENEFITS AND SERVICES

LO 13-1
Benefits: indirect financial and nonfinancial payments employees receive for continuing their
employment with the company

A. PAY FOR TIME NOT WORKED

1. Unemployment insurance: provides benefits if a person is unable to work through
some fault other than his or her own
2. Sick leave: provides pay to an employee when he or she is out of work because of
illness
3. Severance pay: a one time payment some employers provide when terminating an
employee
4. Supplemental unemployment benefits: provide for a “guaranteed annual income” in
certain industries where employers must shut down to change machinery or due to
reduced work.
- These benefits are paid by the company and supplement unemployment benefits
B. INSURANCE BENEFITS
1. Workers’ compensation: provides income and medical benefits to work-related
accident victims or their dependents regardless of fault
2. Long term care: long term care insurance - for things like nursing assistance for former
employees in their old age
3. Life insurance
a. Group life insurance: provides lower rates for the employer or employee and
includes all employees, including new employees, regardless of health or
physical condition

C. RETIREMENT BENEFITS
1. Social security:
a. retirement income
b. survivor’s or death benefits payable to the employee’s dependents regardless of
age at the time of death
c. disability benefits payable to disabled employees and their dependents
2. Pension plans: plans that provide a fixed sum when employees reach a predetermined
retirement age or when they can no longer work due to disability
a. Defined benefit pension plan: a plan that contains a formula for determining
retirement benefits
b. Defined contribution pension plan: a plan in which the employer’s contribution
to employees’ retirement savings funds is specified
c. Portability: instituting policies that enable employees to easily take their
accumulated pension funds when they leave an employer
d. Savings and thrift plan: plan in which employees contribute a portion of their
earnings to a fund the employer usually matches this contribution in whole or in
part
e. Deferred profit-sharing plan: a plan in which a certain amount of profits is
credited to each employee’s account, payable at retirement, termination, or death
f. Employee stock ownership plan (ESOP): a qualified, tax-deductible stock
bonus plan in which employers contribute stock to a trust for eventual use by
employees
 g. Cash balance plans: plans under which the employer contributes a percentage
of employees’ current pay to employees’ pension plans every year, and
employees earn interest on this amount
3. Early retirement window: a type of offering by which employees are encouraged to
retire early, the incentive being liberal pension benefits plus perhaps a cash payment

D. PERSONAL SERVICES AND FAMILY-FRIENDLY BENEFITS

1. Personal services: credit unions, legal services, counseling, and social and recreational
opportunities
a. Employee assistance program (EAO): a formal employer program for providing
employees with counseling and/or treatment programs for problems such as
alcoholism, gambling, or stress
2. Family-friendly benefits: benefits such as child care that make it easier for employees
to balance their work and family responsibilities
a. Subsidized child care
b. Sick child benefits
c. Elder care
d. Educational subsidies

E. FLEXIBLE BENEFITS PROGRAMS

1. Cafeteria benefits plan: individualized tax-qualified plans allowed by employers to
accommodate employee preferences for benefits
a. Accident and health benefits
b. Adoption assitance
c. Dependent care assistance
d. Group term life insurance coverage
2. Flexible work schedules (flextime) : a work schedule in which employees’ workdays
are built around a core of midday hours, and employees determine, within limits, what
other hours they will work
a. Compressed workweek: schedule in which employee works fewer but longer
days each week
b. Job sharing: allows two or more people to share a single full time job
c. Work sharing: a temporary reduction in work hours by a group of employees
during economic downturns as a way to prevent layoffs
CHAPTER 17: MANAGING GLOBAL HUMAN RESOURCES
LO 17-1
International HRM: the hrm concepts and techniques employers use to manage the human
resource aspects of their international operations, including acquiring, training, appraising, and
compensating employees, and attending to their labor relations, health and safety, and fairness
concerns

LO 17-2

Intercountry Differences that Influence HR

1. Cultural factors
2. Legal factors
a. Work councils: formal, employee-elected groups of worker representatives
 b. Codetermination: employees that have the legal right to a voice in setting
company policies
3. Economic systems
a. Market economies, planned economies, mixed economies
4. Political
5. Labor restrictions

LO 17-2
Expatriates (expats): noncitizens of the countries in which employees are working
● Parent or home country nationals: citizens of the country in which the multinational
company has its headquarters
● Third-country nationals: citizens of the country other than the parent or the host
country
● Locals: citizens of the countries in which employees are working

1. Ethnocentric: here the company staffs its positions abroad with employees from its
headquarters- with parent country nationals
2. Polycentric: the company staffs positions abroad with local or host country employees
3. Global: the global company aims to attract the best candidates globally, including freely
using third-country nationals to staff its positions around the world with the best people
available

Reduce Expat Costs

1. Increase the number of short-term assignments
2. Offshoring

Selecting International Managers

1. Realistic Preview – Gives realistic expectation of what the job entails
2. Adaptability Screening – Assess the assignee’s probable success in handling foreign
transfer.
3. Testing
Avoiding Early Expatriate Returns
1. Expat’s personality
2. Family pressure

LO 17-4
Orienting and training employees on international assignments
1. The basics of the new country’s history, politics, business norms, education system, and
demographics
2. An understanding of how cultural values affect perceptions, values and communications
3. Examples of why moving to a new country can be difficult, and how to manage these
challenges

Performance appraisal of international managers:

1. Adapt the performance criteria to the local job and situation
2. Weigh the evaluation more toward the on-site manager’s appraisal than toward the
home-site manager’s
3. If the home office manager does the appraisal, have him or her use a former expatriate
from the same location abroad or advice

Compensating Managers Abroad

1. Balance sheet approach – Equalize purchasing power across countries so expatriates
can have the same standard of living they would have at home.
2. Localization approach – Expatriate salaries are comparable to what a local person
would earn, but add supplements so expat can maintain their home country's standard of
living.
3. Split pay – Half pay in the home-country currency and the other half in the host-country
currency.

Encouraging Employees to Work Abroad

1. Foreign Service Premium – Financial payments offered above the base pay.
2. Hardship Allowances – Compensations for hard living and working conditions at certain
foreign locations.
3. Mobility Premiums – Lump-sum payments in form of rewards from moving to different
assignments.
Establishing Global Pay System
1. Set strategy
2. Identify crucial executive behaviour
3. Global philosophy framework
4. Identify gaps
5. Systematize pay systems
6. Adapt pay policies

Repatriation
1. Involve a psychologist
2. In the-home-office loops
3. Repatriation service

INDUSTRIAL RELATIONS (Guest Lecture) (MAKASOIIIII NAJLA)

Social dialogue: all types of negotiation, consultation, or simply an exchange of information

between, or among representatives of governments, employers and workers, on issues of
common interest relating to economic and social policy.
- can exist as a tripartite process with the government or bipartite relations between labour
and management or union and employer with or without government involvement.
- can be informal or institutionalized or both
- can be at the national, regional, or enterprise level.

Two main objectives of social dialogue:

1. Promote consensus and build democratic involvement.
2. Successful social dialogue structures can potentially resolve important economic and
social issues, encourage good governance, advance social and industrial peace and
stability and boost economic progress.

In order for social dialogue to take place, the following must exist:
● Strong, independent workers’ and employers’ organizations with technical capacity and
access to relevant information.
● Political will and commitment to engage.
● Respect for fundamental rights of freedom of association
 ○ Collective bargaining and appropriate institutional support.

● The impact of COVID-19 has impacted the most disadvantaged and vulnerable
disproportionately.
○ 1.6B of the world’s 2B informal workers are considered at risk of losing their
livelihoods in 2020.
○ 13M fewer women in employment in 2021 compared to 2019.
○ 8.7% fall in global youth employment in 2020 compared with 3.7% for adults.

● Impact of COVID:
○ Decrease in the aggregate working hours in Q4 of 2019 in Indonesia.
○ Due to the missing working hours, the income level in Indonesia also decreased
significantly.
○ Massive employment gap compared to the non-pandemic scenario

● New developments in labour market from COVID:

○ Schooling and training closures in digital learning,
○ Hybrid work arrangements,
○ Tourism and hospitality jobs were devastated,
○ The emergence of e-commerce and growth in platform economy jobs.

● The future of work challenges now requires innovative policies

○ Demographic shifts,
○ Climate change, green jobs,
○ Deeper globalization, trade negotiation, and decent work,
○ Automation, technology and digital transformations.

● The International Labor Organization has implemented a global call of action for
labourers consisting of two sets of actions:
○ Measures taken by the government and employers’ and workers’ organizations.
○ Actions covered by ILO.

● Four pillars in tackling COVID-19

○ Stimulating the economy and employment,
 ○ Supporting enterprises, jobs, and incomes,
○ Protecting workers in the workplace,
○ Relying on social dialogue for solutions.
● Six items of labor market priorities for the recovery and beyond:
○ Foster enterprise sustainability,
○ Upgrade skills,
○ Accelerate formalization,
○ Extend employment and social protection,
○ Promote gender equality,
○ Strengthen social dialogue.