CHAPTER 12:

Human resource
management
 Human resource management
Some key definitions for HRM and its context
Human resource management (HRM) is the set of organizational
activities directed at attracting, developing, and maintaining
a well-functioning workforce
Employee relations are the activities that help to effectively manage
the relationship between employers and employees (includes the
legal responsibilities, and good mgmt practices)

Collective bargaining is the process used when management

negotiates wages and other terms of employment with a union
A labor union is an organization that represents workers and
negotiates with their employers on the workers’ behalf

A collective agreement is a contract negotiated by employers and

unions that specifies and regulates duties and responsibilities
employees and employers have to one another
 Human resource management
More key definitions/context of HRM
Discrimination is evident when someone is treated unjustly or badly
based on their race, age, gender, or disability
 Human resource management
Component #1: Job analysis and design
Job analysis gathering and interpreting information in order to identify
the knowledge, skills, abilities, and other characteristics (KSAOs)
necessary to perform a particular job
A job description specifies what tasks are to be performed in a
particular position, as well as the knowledge, skills, education and
training, credentials, prior experience, physical abilities, and other
characteristics that are required

Job characteristics theory looks at the motivational effect of six job

design factors on jobholder performance and satisfaction:
Autonomy (freedom, discretion, and independence)
Skill variety
Task identity (job creates a visible outcome)
Feedback from the job (signals how well job is being performed)
Task significance (job has an effect on others’ work/lives)
Interdependence (reliance on/collaborate with others)
 Human resource management
Component #1: Job analysis and design (cont’d)

Differences among the different management approaches

FBL Mgmt SET Mgmt

Use input from HR staff Use input from multiple

and current jobholders stakeholders
Emphasize levels of Focus on levels of
standardization, experimentation,
specialization, sensitization,
centralization, and dignification, and
departmentalization participation
Focus on individual jobs Focus on workgroup/team
Emphasize efficiency, Emphasize meaningful
financial well-being work, socio-ecological
well-being
 Human resource management
Component #2: Staffing
Staffing is the HRM process of identifying, attracting, hiring, and
retaining people with the necessary KSAOs to fulfill the
responsibilities of current and future jobs in the organization
Staffing has two components: A) recruitment, and B) selection
A) Recruitment is the process of identifying and attracting people
with the KSAOs an organization needs
Recruiting channels include campus visits at universities,
employment agencies, job fairs, internships, referral by current
employees, and postings on the organization’s website or on
external websites such as www.Monster.com
A realistic job preview provides information to prospective employees
regarding the activities and the positive and negative aspects of a
position they are applying for
Turnover refers to the rate at which employees leave an organization
and are replaced (replacement cost = 1.5 times salary)
 Human resource management
Component #2: Staffing (continued)
B) Selection is the process of choosing whom to hire among a pool
of recruited job applicants
Selection validity: the relationship between the scores applicants
receive during assessment and their subsequent job performance

Selection reliability: the ability of a selection method or tool to

consistently provide accurate assessments

Situational interview questions ask applicants to respond to a

specific scenario that is likely to arise on-the-job in the future

Behavioral interview questions ask applicants to draw from their past

experience to share an example of their work-related actions
 Human resource management
Component #2: Staffing (continued)

Differences among the different management approaches

FBL Mgmt SET Mgmt

Recruit from traditional Recruit from chronically

applicant pools
Selection tests based on
fit with individual jobs
Use input of managers
Recruitment focuses on
applicants’ ability to
contribute to a firm’s
financial well-being
under-employed pools
Selection based on fit with
team job requirements
Use input of co-workers
Recruitment focuses on
applicants’ ability to
contribute to a financial
and socio-ecological well-
being
 Human resource management
Component #3: Training and development
A) Training refers to the provision of learning activities that
improve a jobholder’s skills or performance.
On-the-job training (OJT) occurs when someone who knows how to
perform a particular task shows and teaches someone else how to
do it (often the best way to train someone)
Three keys to effective off-the-job training (e.g., classroom).
1) Train people who have interest and aptitude
2) Provide relevant content and opportunities to practice it
3) Provide support to put training into practice on the job

Take the time to measure training effectiveness (e.g., do before vs after)

B) Development = learning activities that result in broad growth

and training beyond the scope of one’s current job.
A succession plan refers to identifying and grooming talented
employees who have the potential of doing well in jobs of
increased responsibility within the organization
 Human resource management
Component #3: Training and development (cont’d)

Differences among the different management approaches

FBL Mgmt SET Mgmt

Maximize the Provide training as a

organization’s financial long-term investment to
benefits of training and promote community
minimize its costs overall well-being
Emphasize the Emphasize group-
development of those focused training and
individuals most likely development, with an
to enhance the emphasis on enhancing
organization’s future socio-ecological well-
financial well-being being
 Human resource management
Component #4: Performance management
A) Performance appraisal specifies, assesses, and provides
feedback to jobholders regarding what they are expected to do
Performance appraisal has three components
1. Design a system with clear purpose/roles/criteria
- based on organizational goals
- determine type of appraisal:
Administrative appraisals justify pay, promotion, and termination
decisions
Developmental appraisals provide feedback on progress toward
expectations and identify areas for improvement
- determine frequency of appraisals

2. Equip appraisers with necessary skills and tools.

- see next slide

3. Reinforce and review the appraisal process

 Human resource management
Component #4: Performance management (cont’d)
A) Performance appraisal (continued)
2. Equip appraisers with necessary skills and tools.
i) Provide “frame of reference” training
 Human resource management
Component #4: Performance management (cont’d)
A) Performance appraisal (continued)
2. Equip appraisers with necessary skills and tools.
ii) Provide well-designed ratings forms (list KSOAs, assess, summarize)
 Human resource management
Component #4: Performance management (cont’d)
B) Compensation refers to monetary payments such as wages,
salaries, and bonuses as well as other goods, commodities, and
intangible rewards that are given to organizational members
Job-based pay refers to a standardized system where employees
receive financial rewards based on their position title.

Pay-for-performance refers to a system where employees’

compensation is based on activities and outputs of individual
employees, and/or their workgroup, and/or the entire
organization.

Compensation also includes the idea of benefits, which are non-pay

based compensation (e.g., retirement plans, health, disability, and life
insurance, and perks such as access to exercise facilities, on-site day
care, subsidized cafeteria food, education reimbursement).

There are also intangible benefits (e.g., workplace friendships and

the camaraderie that from working with fun people).
 Human resource management
Component #4: Performance management (cont’d)

Differences among the different management approaches

FBL Mgmt SET Mgmt

Use administrative Use developmental

appraisals to reward appraisals to provide
employees constructive feedback
Top-down emphasis Bottom-up emphasis
(fewer stakeholders) (more stakeholders)
Recognize individual Recognize collective
performance, and performance, and
reinforce independence reinforce community via
via individual rewards group-based rewards
Focus on financial Address income
rewards inequality, value non-
financial rewards
 Human resource management
Entrepreneurship implications
Entrepreneurial start-ups (because of their scarce resources)
often outsource HRM duties
This consistent with the larger trend for all firms, who are
increasingly hiring contingent workers and thus outsourcing HRM

Contingent workers are individuals who are contracted for a specific

project or fixed time period, but are not considered to be
permanent employees of the host organization.

Modern work is being referred to as the “gig economy, ” where a

“gig” is a temporary job, and individuals are hired for a fixed fee
or time period to complete a specific task

Most of the recent new jobs created in the U.S. are gigs, and gigs
may soon be more common than traditional employment

Do the benefits of the gig economy (more flexibility for

workers) outweigh the costs (less security)?
 QUESTIONS FOR REFLECTION AND DISCUSSION
1. Keeping job analysis and planning information up-to-date
can be a time consuming and laborious task. If you were asked
by someone whom you are managing to explain why job
analysis and HRM planning is worth the time, what would you
say?

2. Do the selection processes you’ve experienced (or heard

about from others) seem fair to you? Why or why not?

3. Think of a time when you were interviewed for a job. Was the
interview structured or not? Did you get any strong
impressions that would allow you to classify it as an FBL, TBL, or
SET organization? If so, elaborate. What advice would you have
for interviewers from organizations associated with each of the
three approaches to management?
 QUESTIONS FOR REFLECTION AND DISCUSSION
4. What are the pros and cons of hiring people who might be
the best and brightest for an organization, but not for a
particular job?

5. Have you ever worked with someone that had disabilities?

What effect did it have on you, on other co-workers, and on the
person?

6. Explain the difference between an administrative appraisal

and a developmental appraisal. Which would you rather
receive? Which would you rather give? Why?
 QUESTIONS FOR REFLECTION AND DISCUSSION
7. One study showed most Millennials would rather work in a
job they love that pays $40,000 per year, rather than a boring
job that pays $100,000 per year. Does the same hold true for
you? What are the key non-financial rewards that can make a
$40,000 job more attractive than a $100,000 job? What are the
implications of your answer for HRM?

8. Have you ever been a contingent worker, or worked with

contingent workers? What are the pros and cons of hiring a
contingent worker, of working with one, and of being one?

9. If you were to start your own organization, which parts of the

HRM process would you outsource, and which would you
manage yourself. Explain your answer.