HRM K59 2022 S2

HUMAN RESOURCE MANAGEMENT
Global Edition 12e
Chapter 6
Employee Testing
and Selection
Part 2 Recruitment and Placement
PowerPoint Presentation by Charlie Cook

Copyright © 2011 Pearson Education GARY DESSLER The University of West Alabama
LEARNING OUTCOMES
1. Explain what is meant by reliability and validity.
2. Cite and illustrate our testing guidelines.
3. Give examples of some of the ethical and legal
considerations in testing.
4. List eight tests you could use for employee selection
and how you would use them.
5. Explain the key points to remember in conducting
background investigations.
Copyright © 2011 Pearson Education 6–2

Why Careful Selection is Important
The Importance of Selecting

the Right Employees
Organizational Costs of recruiting Legal obligations

performance and hiring and liability

Avoiding Negligent Hiring Claims
• Carefully scrutinize information on employment
applications.
• Get written authorization for reference checks, and
check references.
• Save all records and information about the applicant.
• Reject applicants for false statements or conviction
records for offenses related to the job.
• Balance the applicant’s privacy rights with others’
“need to know.”
• Take immediate disciplinary action if problems arise.

Basic Testing Concepts
• Reliability
 Describes the consistency of scores obtained by the same
person when retested with the identical or alternate forms of the
same test.
 Are test results stable over time?
• Validity
 Indicates whether a test is measuring what it is supposed to be
measuring.
 Does the test actually measure what it is intended to measure?

Types of Validity
Types of
Test Validity
Criterion validity Content validity

Evidence-Based HR: How to Validate a Test
Steps in Test Validation
1 Analyze the Job: predictors and criteria
2 Choose the Tests: test battery or single test
3 Administer the Test: concurrent or predictive validation
4 Relate Your Test Scores and Criteria: scores versus

actual performance
5 Cross-Validate and Revalidate: repeat Steps 3 and 4

with a different sample

TABLE 6–1 Testing Program Guidelines
1. Use tests as supplements.

2. Validate the tests.
3. Monitor your testing/selection program.
4. Keep accurate records.
5. Use a certified psychologist.
6. Manage test conditions.
7. Revalidate periodically.

How Do Employers Use Tests at Work?
• Major Types of Tests
 Basic skills tests
 Job skills tests
 Psychological tests
• Why Use Testing?

 Increased work demands = more testing
 Screen out bad or dishonest employees
 Reduce turnover by personality profiling

Computerized and Online Testing
• Online tests
 Telephone prescreening
 Offline computer tests
 Virtual “inbox” tests
 Online problem-solving tests
• Types of Tests
 Specialized work sample tests
 Numerical ability tests
 Reading comprehension tests
 Clerical comparing and checking tests

Types of Tests
What Different Tests Measure
Cognitive Motor and Personality Current

abilities physical abilities and interests achievement

The “Big Five”
Extraversion
Emotional stability/
Conscientiousness
Neuroticism
Openness to
Agreeableness
experience

Work Samples and Simulations
Measuring Work Performance

Directly
Management Video-based Miniature job

Work
assessment situational training and
samples
centers testing evaluation

Background Investigations and
Other Selection Methods
• Investigations and Checks
 Reference checks
 Background employment checks
 Criminal records
 Driving records
 Credit checks
• Why?
 To verify factual information provided by applicants
 To uncover damaging information

Background Investigations and
Reference Checks
Former Employers
Current Supervisors
Sources of Commercial Credit

Information Rating Companies
Written References
Social Networking Sites

Limitations on Background Investigations
and Reference Checks
Legal Issues:
Defamation
Background
Employer Legal Issues:
Guidelines
Investigations and Privacy
Reference Checks
Supervisor
Reluctance

Making Background Checks More Useful
1. Include on the application form a statement for
applicants to sign explicitly authorizing a background
check.
2. Use telephone references if possible.
3. Be persistent in obtaining information.
4. Compare the submitted résumé to the application.
5. Ask open-ended questions to elicit more information
from references.
6. Use references provided by the candidate as a source
for other references.

Using Preemployment Information Services
Acquisition and Use of Background Information
1 Disclosure to and authorization by applicant/employee
2 Employer certification to reporting agency
3 Providing copies of reports to applicant/employee
4 Notice of adverse action to applicant/employee

Honesty Testing Programs:
What Employers Can Do
• Antitheft Screening Procedure:
 Ask blunt questions.
 Listen, rather than talk.
 Do a credit check.
 Check all employment and personal references.
 Use paper-and-pencil honesty tests and psychological tests.
 Test for drugs.
 Establish a search-and-seizure policy and conduct searches.

Physical Examinations
• Reasons for preemployment medical examinations:
 To verify that the applicant meets the physical requirements of
the position.
 To discover any medical limitations to be taken into account in
placing the applicant.
 To establish a record and baseline of the applicant’s health for
future insurance or compensation claims.
 To reduce absenteeism and accidents.
 To detect communicable diseases that may be unknown to the
applicant.

Substance Abuse Screening
• Types of Screening
 Before formal hiring
 After a work accident
 Presence of obvious behavioral symptoms
 Random or periodic basis
 Transfer or promotion to new position
• Types of Tests
 Urinalysis
 Hair follicle testing

Substance Abuse Screening Issues
Safety:
impairment vs.
presence
American with Recreational use

Disabilities Act vs. addiction
Ethical and
Legal Issues
Drug Free
Intrusiveness of
Workplace Act of
testing procedures
1998
Accuracy of tests

Global Edition 12e
Chapter 7
Interviewing
Candidates
Part 2 Recruitment and Placement

LEARNING OUTCOMES
1. List the main types of selection interviews.
2. List and explain main errors that can undermine an
interview’s usefulness.
3. Define a structured situational interview.
4. Explain and illustrate each guideline for being a more
effective interviewer.
5. List the steps in a streamlined interview process.
6. List guidelines for interviewees.

Basic Types of Interviews
Selection Interview
Types of
Appraisal Interview
Interviews
Exit Interview

Selection Interview Structure
Selection Interview
Characteristics
Interview Interview Interview

structure content administration

Selection Interview Formats
Interview Structure
Formats
Unstructured Structured
(nondirective) (directive)
interview interview

EEOC Aspects of Interviews
Use objective/job-related questions
Avoiding
Discrimination Standardize interview administration
in Interviews
Use multiple interviewers

Interview Content
Types of Questions Asked
Situational Behavioral Job-related Stress

interview interview interview interview

Administering the Interview
Unstructured
sequential interview
Structured Panel
sequential interview interview
Ways in
Which
Mass
Interview Can Phone
interview be Conducted interviews
Computerized Video/Web-assisted
interviews interviews

Three Ways to Make the Interview Useful
Structure the interview to

increase its validity
Making the Carefully choose what sorts of

Interview Useful traits are to be assessed
Beware of committing
interviewing errors

What Can Undermine An Interview’s Usefulness?
Nonverbal behavior
First impressions (snap
and impression
judgments)
management
Interviewer’s Factors Affecting

Applicant’s personal
misunderstanding An Interview’s characteristics
of the job Usefulness
Candidate-order
Interviewer’s
(contrast) error and
inadvertent behavior
pressure to hire

How to Design and Conduct
An Effective Interview
• The Structured Situational Interview
 Use either situational questions or behavioral questions that
yield high criteria-related validities.
Step 1: Analyze the job.
Step 2: Rate the job’s main duties.
Step 3: Create interview questions.
Step 4: Create benchmark answers.
Step 5: Appoint the interview panel and conduct
interviews.

How to Conduct a More Effective Interview
Being Systematic and Effective
1 Know the job.

2 Structure the interview.
3 Get organized.
4 Establish rapport.
5 Ask questions.
6 Take brief, unobtrusive notes.
7 Close the interview.
8 Review the interview.

Creating Effective Interview Structures
• Base questions on actual job duties.
• Use job knowledge, situational or behavioral
questions, and objective criteria to evaluate
interviewee’s responses.
• Use the same questions with all candidates.
• Use descriptive rating scales (excellent, fair,
poor) to rate answers.
• If possible, use a standardized interview form.

FIGURE 7–2 Examples of Questions That Provide Structure
Situational Questions
1. Suppose a more experienced coworker was not following standard work procedures and
claimed the new procedure was better. Would you use the new procedure?
2. Suppose you were giving a sales presentation and a difficult technical question arose that
you could not answer. What would you do?
Past Behavior Questions

3. Based on your past work experience, what is the most significant action you have ever taken
to help out a coworker?
4. Can you provide an example of a specific instance where you developed a sales
presentation that was highly effective?
Background Questions
5. What work experiences, training, or other qualifications do you have for working in a
teamwork environment?
6. What experience have you had with direct point-of-purchase sales?
Job Knowledge Questions

7. What steps would you follow to conduct a brainstorming session with a group of employees
on safety?
8. What factors should you consider when developing a television advertising campaign?

FIGURE 7–3 Suggested Supplementary Questions for Interviewing Applicants
1. How did you choose this line of work?

2. What did you enjoy most about your last job?
3. What did you like least about your last job?
4. What has been your greatest frustration or disappointment on your present job? Why?
5. What are some of the pluses and minuses of your last job?
6. What were the circumstances surrounding your leaving your last job?
7. Did you give notice?
8. Why should we be hiring you?
9. What do you expect from this employer?
10. What are three things you will not do in your next job?
11. What would your last supervisor say your three weaknesses are?
12. What are your major strengths?
13. How can your supervisor best help you obtain your goals?
14. How did your supervisor rate your job performance?
15. In what ways would you change your last supervisor?
16. What are your career goals during the next 1–3 years? 5–10 years?
17. How will working for this company help you reach those goals?
18. What did you do the last time you received instructions with which you disagreed?
19. What are some things about which you and your supervisor disagreed? What did you do?
20. Which do you prefer, working alone or working with groups?
21. What motivated you to do better at your last job?
22. Do you consider your progress in that job representative of your ability? Why?
23. Do you have any questions about the duties of the job for which you have applied?
24. Can you perform the essential functions of the job for which you have applied?
Using a Streamlined Interview Process
1. Prepare for the interview 3. Conduct the interview
• Knowledge and experience • Have a plan
• Motivation • Follow your plan
• Intellectual capacity 4. Match the candidate to the job
• Personality factor
2. Formulate questions to ask
in the interview
• Intellectual factor
• Motivation factor
• Personality factor
• Knowledge and experience
factor

Guidelines for Interviewees
• Preparation is essential.
• Uncover the interviewer’s real needs.
• Relate yourself to the interviewer’s needs.
• Think before answering.
• Remember that appearance and enthusiasm are
important.
• Make a good first impression.
• Ask questions.

FIGURE 7–5 Interview Questions to Ask
1. What is the first problem that needs the attention of the person you hire?
2. What other problems need attention now?
3. What has been done about any of these to date?
4. How has this job been performed in the past?
5. Why is it now vacant?
6. Do you have a written job description for this position?
7. What are its major responsibilities?
8. What authority would I have? How would you define its scope?
9. What are the company’s five-year sales and profit projections?
10. What needs to be done to reach these projections?
11. What are the company’s major strengths and weaknesses?
12. What are its strengths and weaknesses in production?
13. What are its strengths and weaknesses in its products or its competitive position?
14. Whom do you identify as your major competitors?
15. What are their strengths and weaknesses?
16. How do you view the future for your industry?
17. Do you have any plans for new products or acquisitions?
18. Might this company be sold or acquired?
19. What is the company’s current financial strength?
20. What can you tell me about the individual to whom I would report?
21. What can you tell me about other persons in key positions?
22. What can you tell me about the subordinates I would have?
23. How would you define your management philosophy?
24. Are employees afforded an opportunity for continuing education?
25. What are you looking for in the person who will fill this job?
Global Edition 12e
Chapter 10
Coaching, Careers,
And Talent
Management
Part 3 Training and Development

LEARNING OUTCOMES
1. Compare and contrast coaching and mentoring and
describe the importance of each.
2. Compare employers’ traditional and career planning-
oriented HR focuses.
3. Explain the employee’s, manager’s, and employer’s
career development roles.
4. Describe the issues to consider when making promotion
decisions.
5. List and briefly explain at least four methods for better
managing retirements.
6. Define talent management and give an example of an
actual talent management system.

Coaching and Mentoring
• Coaching
 Involves educating, instructing, and training subordinates
 Focuses on teaching shorter-term job-related skills
• Mentoring
 Is actively advising, counseling, and guiding
 Is helping employees navigate longer-term career hazards
 Is leading highly trained employees and self-managing teams
 Supplants the need for authority and for giving orders for getting
things done
• Coaching and mentoring require both analytical and
interpersonal skills.

Improving Your Coaching Skills
The Four-Step Coaching Process
1 Preparing to coach
2 Developing a mutually agreed change plan
3 Engaging in active coaching
4 Evaluating for feedback and follow-up

Preparing to Coach:
Applying the ABC Approach
• Antecedents
 What things must come before the person does the job?
• Behavior
 Can the person do the job if he or she wanted to?
• Consequences
 What are the consequences of doing the job right?

The Basics Of Career Management
Career Management
Career
Career Development
Terminology
Career Planning

Careers Today and
Employee Commitment
Old Contract New Contract

(Employer-focused) (Employee-focused)
“Do your best and be “I’ll do my best for you,

loyal to us, and we’ll take but I expect you to
care of your career.” provide the development
and learning that will
prepare me for the day
I must move on, and for
having the work-life
balance that I desire.”

TABLE 10–1 Traditional Versus Career Development Focus
HR Activity Traditional Focus Career Development Focus

Human resource Analyzes jobs, skills, tasks— Adds information about individual interests,
planning present and future. Projects preferences, and the like to replacement
needs. Uses statistical data. plans.
Recruiting and Matching organization’s needs Matches individuals and jobs based on
placement with qualified individuals. variables including employees’ career
interests and aptitudes.
Training and Provides opportunities for Provides career path information.

development learning skills, information, Adds individual development plans.
and attitudes related to job.
Performance Rating and/or rewards. Adds development plans and individual

appraisal goal setting.
Compensation Rewards for time, productivity, Adds tuition reimbursement plans,

and benefits talent, and so on. compensation for non–job-related activities
such as United Way.

Why Offer Career Development?
Better equips employees

to serve the firm
Career
Boosts employee
Development commitment to the firm
Benefits
Supports recruitment and
retention of efforts

TABLE 10–2 Roles in Career Development
Individual Manager
• Accept responsibility for your own career. • Provide timely and accurate performance
• Assess your interests, skills, and values. feedback.
• Seek out career information and resources. • Provide developmental assignments and
support.
• Establish goals and career plans.
• Participate in career development
• Utilize development opportunities.
discussions with subordinates.
• Talk with your manager about your career.
• Support employee development plans.
• Follow through on realistic career plans.
Employer
• Communicate mission, policies, and procedures.
• Provide training and development opportunities, including workshops.
• Provide career information and career programs.
• Offer a variety of career paths.
• Provide career-oriented performance feedback.
• Provide mentoring opportunities to support growth and self-direction.
• Provide employees with individual development plans.
• Provide academic learning assistance programs.

TABLE 10–3 Possible Employer Career Planning and Development Practices
Job postings Career booklets/pamphlets

Formal education/tuition Written individual career plans
reimbursement
Career workshops
Performance appraisal
Assessment center
for career planning
Upward appraisal
Counseling by manager
Appraisal committees
Lateral moves/job rotations
Training programs for managers
Counseling by HR
Orientation/induction programs
Preretirement programs
Special needs (highfliers)
Succession planning
Special needs (dual-career couples)
Formal mentoring
Diversity management
Common career paths
Expatriation/repatriation
Dual ladder career paths

Innovative Corporate Career
Development Initiatives
1. Provide individual lifelong learning budgets.
2. Encourage role reversal.
3. Help organize “career success teams.”
4. Provide career coaches.
5. Offer online career development programs.

Commitment-Oriented
Career Development Efforts
• Change in Employee Commitment
 Globalization raising productivity and efficiency requirements
 Employees thinking of selves as free agents
• Career-oriented Appraisals
 Provide an opportunity to discuss and link the employee’s
performance, career interests, and developmental needs into a
coherent career plan.

Establishing an Effective
Mentoring Program
• Require mentoring?
• Provide mentoring training?
• Does distance matter?
• Same or different departments?
• Big or small difference in rank?

Characteristics of Effective Mentors
• Are professionally competent
• Are trustworthy
• Are consistent
• Have the ability to communicate
• Are willing to share control
• Set high standards
• Are willing to invest time and effort
• Actively steer protégés into important work

Choosing a Mentor
• Choose an appropriate potential mentor.
• Don’t be surprised if you’re turned down.
• Be sure that the mentor understands what you expect in
terms of time and advice.
• Have an agenda.
• Respect the mentor’s time.

Enhancing Diversity Through
Career Management
• Sources of Bias and Discrimination
 A lack of diversity in the hiring department
 The “old-boy network” of informal friendships

 A lack of women mentors
 A lack of high-visibility assignments and developmental
experiences (glass ceiling)
 A lack of company role models for members of the same
racial or ethnic group
 Inflexible organizations and career tracks

Taking Steps to Enhance Diversity:
Women’s and Minorities’ Prospects
Eliminate institutional barriers
Improve networking and mentoring

Supporting
Diversity
Abolish the glass ceiling
Adopt flexible career tracks

Employer Life-Cycle Career Management
Making Promotion and

Transfer Decisions
Decision 1: Decision 2: Decision 3: Decision 4:

Is Seniority or How Should Is the Process Vertical,
Competence We Measure Formal or Horizontal,
the Rule? Competence? Informal? or Other?

Managing Transfers
• Employees’ reasons for desiring transfers
 Personal enrichment and growth
 More interesting jobs
 Greater convenience (better hours, location)
 Greater advancement possibilities
• Employers’ reasons for transferring employees

 To vacate a position where an employee is no longer needed
 To fill a position where an employee is needed
 To find a better fit for an employee within the firm
 To boost productivity by consolidating positions

Attracting and Retaining Older Workers
Create a culture that honors experience
Modify selection procedures

HR Policies for
Older Workers
Offer flexible or part-time work
Implement phased retirement programs

Managing Retirements
• Preretirement Counseling Practices
 Explanation of Social Security benefits
 Leisure time counseling
 Financial and investment counseling
 Health counseling
 Psychological counseling
 Counseling for second careers
 Counseling for second careers inside the company

Talent Management
• Talent Management
 Is the automated end-to-end process of planning,
recruiting, developing, managing, and compensating
employees throughout the organization
 Requires coordinating several human resource
activities, in particular workforce acquisition,
assessment, development, and retention
 Is career management from the employer’s point
of view

FIGURE 10–6 The Talent Management Process

Global Edition 12e
Chapter 11
Establishing
Strategic Pay
Plans
Part 4 Compensation

LEARNING OUTCOMES
1. List the basic factors determining pay rates.
2. Define and give an example of how to conduct a job
evaluation.
3. Explain in detail how to establish pay rates.
4. Explain how to price managerial and professional jobs.
5. Explain the difference between competency-based and
traditional pay plans.

Basic Factors in Determining
Pay Rates
Employee Compensation
Components
Direct financial Indirect financial

payments payments

TABLE 11–1 Developing an Aligned Reward Strategy
Questions to Ask:
1. What must our company do, (for instance in terms of improving

customer service), to be successful in fulfilling its mission or
achieving its desired competitive position?
2. What are the employee behaviors or actions necessary to
successfully implement this competitive strategy?
3. What compensation programs should we use to reinforce those
behaviors? What should be the purpose of each program in
reinforcing each desired behavior?
4. What measurable requirements should each compensation
program meet to be deemed successful in fulfilling its purpose?
5. How well do our current compensation programs match these
requirements?

Compensation Policy Issues
• Pay for performance
• Pay for seniority
• The pay cycle
• Salary increases and promotions
• Overtime and shift pay
• Probationary pay
• Paid and unpaid leaves
• Paid holidays
• Salary compression
• Geographic costs of living differences

Equity and Its Impact on Pay Rates
Forms of Compensation
Equity
External Internal Individual Procedural

equity equity equity equity

Addressing Equity Issues
Area wage and salary surveys
Job analysis and job evaluation

Methods to
Address Equity
Issues
Performance appraisal and incentive pay
Communications, grievance mechanisms,

and employees’ participation

Establishing Pay Rates
Steps in Establishing Pay Rates
Conduct a salary survey of what other employers are

1
paying for comparable jobs (to help ensure external equity).
2
Determine the worth of each job in your organization
through job evaluation (to ensure internal equity).
3 Group similar jobs into pay grades.
4 Price each pay grade by using wave curves.
5 Fine-tune pay rates.

Step1: The Salary Survey
Uses for Salary Surveys
To make
To price To market-price
decisions about
benchmark jobs wages for jobs
benefits

Sources for Salary Surveys
Sources of Wage and

Salary Information
Self-
Consulting Professional Government The
Conducted
Firms Associations Agencies Internet
Surveys

Step 2: Job Evaluation
Identifying Compensable Factors
Working
Skills Effort Responsibility
conditions

The Job Evaluation Process
Preparing for the Job Evaluation
1 Identifying the need for the job evaluation
2 Getting the cooperation of employees
3 Choosing an evaluation committee

4 Performing the actual evaluation

How to Evaluate Jobs
Methods for Evaluating Jobs
Job Factor
Ranking Point method
classification comparison

Job Evaluation Methods: Ranking
• Ranking each job relative to all other jobs, usually
based on some overall factor.
• Steps in job ranking:
1. Obtain job information.
2. Select and group jobs.
3. Select compensable factors.
4. Rank jobs.
5. Combine ratings.

Job Evaluation Methods:
Job Classification
• Raters categorize jobs into groups or classes of jobs that
are of roughly the same value for pay purposes.
 Classes contain similar jobs.
Administrative assistants

 Grades are jobs similar in difficulty but otherwise different.
 Mechanics, welders, electricians, and machinists
 Jobs are classed by the amount or level of compensable factors
they contain.

Job Evaluation Methods: Point Method
• A quantitative technique that involves:
 Identifying the degree to which each compensable factor is
present in the job.
 Awarding points for each degree of each factor.
 Calculating a total point value for the job by adding up the

corresponding points for each factor.

Step 3: Grouping Jobs
Point Method
Grouping
Similar Jobs
Ranking Method
into Pay
Grades
Classification Methods

Step 4: Price Each Pay Grade
• The Wage Curve
 Shows the pay rates paid for jobs in each pay grade, relative to
the points or rankings assigned to each job or grade by the job
evaluation.
 Shows the relationships between the value of the job as
determined by one of the job evaluation methods and the
current average pay rates for your grades.

FIGURE 11–5 Plotting a Wage Curve

Step 5: Fine-Tune Pay Rates
• Developing Pay Ranges
 Flexibility in meeting external job market rates
 Easier for employees to move into higher pay grades
 Allows for rewarding performance differences and seniority
• Correcting Out-of-Line Rates

 Raising underpaid jobs to the minimum of the rate range
for their pay grade
 Freezing rates or cutting pay rates for overpaid (“red circle”)
jobs to maximum in the pay range for their pay grade

HR in Practice:
Developing a Workable Pay Plan
• Simplified Approach:
 Conduct a wage survey
 Conduct a job evaluation
 Conduct once-a-year job appraisals
 Compile the compensation budget
for upcoming year

Pricing Managerial and Professional Jobs
Compensating Executives
and Managers
Base Short-term Long-term Executive

pay incentives incentives benefits/perks

Pricing Managerial and Professional Jobs
• What Determines Executive Pay?
 CEO pay is set by the board of directors taking into account
factors such as the business strategy, corporate trends, and
where they want to be in the short and long term.
 CEOs can have considerable influence over the boards that
determine their pay.
 Firms pay CEOs based on the complexity of the jobs they fill.
 Shareholder activism and government oversight have tightened

the restrictions on what companies pay top executives.
 Boards are reducing the relative importance of base salary while
boosting the emphasis on performance-based pay.

Compensating Professional Employees
• Employers can use job evaluation for professional jobs.
• Compensable factors focus on problem solving,
creativity, job scope, and technical knowledge and
expertise.
• Firms use the point method and factor comparison
methods, although job classification is most popular.
• Professional jobs are market-priced to establish the
values for benchmark jobs.

Competency-Based Pay
• Competencies
 Demonstrable characteristics of a person, including knowledge,
skills, and behaviors, that enable performance
• What is Competency-Based Pay?
 Paying for the employee’s range, depth, and types of skills and
knowledge, rather than for the job title he or she holds

Why Use Competency-Based Pay?
Competency-Based Pay Supports
High-Performance Strategic Performance

Work Systems Aims Management

Competency-Based Pay in Practice
• Main elements of skill/competency/knowledge–based
pay programs:
1. A system that defines specific skills
2. A process for tying the person’s pay to his or her skill
3. A training system that lets employees seek and acquire skills
4. A formal competency testing system
5. A work design that lets employees move among jobs to
permit work assignment flexibility

Competency-Based Pay: Pros and Cons
• Pros
 Higher quality
 Lower absenteeism
 Fewer accidents
• Cons
 Pay program implementation problems
 Costs of paying for unused knowledge, skills, and behaviors
 Complexity of program
 Uncertainty that the program improves productivity

Global Edition 12e
Chapter 13
Benefits and
Services
Part 4 Compensation

LEARNING OUTCOMES
1. Name and define each of the main pay for time not
worked benefits.
2. Describe each of the main insurance benefits.
3. Discuss the main retirement benefits.
4. Outline the main employees’ services benefits.
5. Explain the main flexible benefit programs.

Benefits
Types of Employee Benefits
Supplemental Insurance Retirement Executive

pay benefits benefits services

Policy Issues in Designing Benefit Packages
Which benefits to offer Who will be covered
Whether to include Coverage during

retirees probation
Policy Issues
Degree of employee
How to finance benefits
choice
Cost containment Communicating

procedures benefits options

Pay For Time Not Worked
Unemployment Vacations and

insurance holidays
Supplemental
Sick leave Parental leave
Pay Benefits
Supplemental
Severance pay unemployment
benefits

Pay for Time Not Worked
• Unemployment Insurance
 Provides for benefits if a person is unable to work through
no fault of his or her own.
 Is an employer payroll tax that is determined by an
employer’s rate of personnel terminations.
 Tax is collected and administered by the state.
• Vacations and Holidays

 Number of paid leave days and holidays varies by employer.
 Qualification for and calculation of holiday and leave pay
varies by employer.
 Premium pay for those who work on holidays.

Pay for Time Not Worked (cont’d)
• Sick Leave
 Provides pay to an employee when he or she is out of work
because of illness.
 Costs for misuse of sick leave
 Pooled paid leave plans
• Parental Leave
 The Family Medical Leave Act of 1993 (FMLA)
 Up to 12 weeks of unpaid leave within a one-year period.
 Employees must take unused paid leave first.
 Employees on leave retain their health benefits.
 Employees have right to return to job or equivalent position.

• Severance Pay
 A one-time payment when terminating an employee.
• Reasons for granting severance pay:

 Acts as a humanitarian gesture and good public relations.
 Mirrors employee’s two-week quit notice.

 Avoids litigation from disgruntled former employees.
 Reassures employees who stay on after the employer
downsizes its workforce of employer’s good intentions.

• Supplemental Unemployment Benefits (SUB)
 Payments that supplement the laid-off or furloughed employee’s
unemployment compensation.
 The employer makes contributions to a SUB reserve fund.
 SUB payments are made to employees for the time the
employee is out of work due to layoffs, reduced workweeks,
or relocations.
 SUB payments are considered previously earned
compensation for unemployment calculation purposes.

Insurance Benefits
• Workers’ Compensation
 Provides income and medical benefits to work-related
accident victims or their dependents, regardless of fault.
 Death or disability: a cash benefit based on earnings
per week of employment.
 Specific loss injuries: statutory list of losses.
 Injured workers are protected by ADA provisions.
 Controlling workers’ compensation costs
 Screen out accident-prone workers.
 Make the workplace safer.
 Thoroughly investigate accident claims.
 Use case management to return injured employees to
work as soon as possible.

Insurance Benefits (cont’d)
• Hospitalization, Health, and Disability Insurance
 Provide for loss of income protection and group-rate
coverage of basic and major medical expenses for
off-the-job accidents and illnesses.
 Accidental death and dismemberment
 Disability insurance
 Mental health benefits

• Health Maintenance Organization (HMO)
 A medical organization consisting of specialists
operating out of a health care center.
 Provides routine medical services to employees
who pay a nominal fee.
 Receives a fixed annual contract fee per employee
from the employer (or employer and employee),
regardless of whether it provides that person with
service.

• Preferred Provider Organizations (PPOs)
 Groups of health care providers that contract to provide
services at reduced fees.
 Employees can select from a list of preferred individual
health providers.
 Providers agree to discount services and to submit to
utilization controls.
 Employees using non-PPO-listed providers may pay
all costs or only costs above the reduced fee structure
for services.

Laws Influencing Health Care Benefits
• Health Services and Insurance
 COBRA notification and insurance continuance requirements
 Health Insurance Portability and Accountability Act of 1996
(HIPAA)
• Retirement and Pension Plans
 Employee Retirement Income Security Act of 1974 (ERISA)
• Mental Health Benefits
 Mental Health Parity Act of 1996
• Family Leave
 Pregnancy Discrimination Act
 Family Medical Leave Act
 The Newborn Mother’s Protection Act of 1996

Trends in Health Care Cost Controls
Premiums and co-pays
Communication and
empowerment
Cost-Control
Wellness programs
Trends
Health savings accounts
Claim audits

Other Cost-Control Options
Mandatory online plan

enrollment
Defined contribution
health care plans
Controlling
Outsourced health care
Health Care plan administration
Costs
Reduced retiree
health care coverage
Benefits purchasing
alliances

Other Benefits Issues
• Long-Term Care
 Insurance for older workers is a growing issue.
• Life Insurance
 Types
Group life insurance

 Accidental death and dismemberment
 Personnel policy considerations
 Benefits-paid schedule
 Supplemental benefits
 Financing (employee contribution)
• Benefits for Part-Time and Contingent Workers

 Leave and health benefits available to part-time workers.
 Benefits for long-term independent contractors.

Retirement Benefits
• Social Security
(Federal Old Age and Survivor’s Insurance)
 A federal payroll tax (7.65%) paid by both the employee
and the employer on the employee’s wages
 Retirement benefits at the age of 62
 Survivor’s or death benefits paid
to the employee’s dependents
 Disability payments to disabled employees
and their dependents
 The Medicare program
 Health services to people age 65 or older

Retirement Benefits (cont’d)
Types of Pension Plans
Defined Defined
Qualified Nonqualified
benefit contribution
plans plans
plans plans

Retirement Benefits (cont’d)
401(k) plans
Savings and thrift plans
Types of Defined Deferred profit-sharing plans

Contribution Plans
Employee stock
ownership plans
Cash balance pension plans

Pension Plans
Policy Issues in
Pension Planning
Membership Plan Vesting

Benefit formula
requirements funding schedule

Employee Assistance Programs
Steps for Launching an EAP Program
1 Develop a policy statement.
2 Ensure professional staffing.
3 Maintain confidential record-keeping systems.
4 Be aware of legal issues.

Family-Friendly (Work–Life) Benefits
• Subsidized child care
• Sick child benefits
• Elder care
• Time off
• Subsidized employee transportation
• Food services
• Educational subsidies
• Fitness and medical facilities
• Flexible work scheduling

Flexible Benefits Programs
• Cafeteria (Flexible Benefits) Approach
 Each employee is given a limited benefits fund budget
to spend on preferred benefits.
 Types of plans
 Flexible spending accounts
 Core plus option plans
• Employee Leasing
 Professional employer organizations or staff leasing firms
 Handle human resources functions for leased employees
of small firms
 Can provide benefits by aggregating employees into
larger insurable groups
 Can raise worker commitment, co-employment, and
workers’ compensation issues

Flexible Work Schedules
• Flextime
• Compressed workweek schedules
• Workplace flexibility
• Job sharing
• Work sharing

Global Edition 12e
Chapter 17
Managing Global
Human Resources
Part 5 Employee Relations

LEARNING OUTCOMES
1. List the HR challenges of international business.
2. Illustrate with examples how intercountry differences
affect HRM.
3. List and briefly describe the main methods for staffing
global organizations.
4. Discuss some important issues to keep in mind in
training, appraising, and compensating international
employees.
5. Explain with examples how to implement a global
human resource management program.

HR and the Internationalization of Business
• The Global Challenges
 Coordinating market, product, and
production plans on a worldwide basis
 Creating organization structures capable
of balancing centralized home-office
control with adequate local autonomy
 Extending HR policies and systems
to service staffing needs abroad

Challenges of International HRM
• Deployment
 Getting the right skills to where they are needed,
regardless of geographic location
• Knowledge and Innovation Dissemination
 Spreading state-of-the-art knowledge and
practices throughout the organization regardless
of their origin
• Identifying and Developing Talent
on a Global Basis
 Identifying those who can function effectively in a
global organization and developing their abilities

Intercountry Differences Affecting HRM
Cultural factors
and ethics issues
International
Political/Legal Economic
systems
Human Resource systems
Management
Labor
relations

Global Differences and Similarities
in HR Practices
Personnel
selection
procedures
Purpose of
Use of pay and International
performance
other incentives HRM appraisal
Training and
development
practices

Staffing the Global Organization
• International staffing: Home or local?
 Expatriates (expats)
 Home-country nationals
 Third-country nationals
• Offshoring
 Having local employees abroad do jobs that the
firm’s domestic employees previously did in-house
• Offshoring Issues
 Effective local supervisory/management structure
 Screening and required training for locals
 Local compensation policies and working conditions

Management Values and
International Staffing Policy
Top Management Values
Ethnocentric Polycentric Geocentric

Selecting Expatriate Managers
• Adaptability Screening
 Assessing the assignee’s (and spouse’s)
probable success in handling the foreign transfer.
 Overseas Assignment Inventory
 A test that identifies the characteristics and
attitudes international assignment candidates
should have.
• Realistic Previews
 Cover problems to expect in the new job, as well as
the cultural benefits, problems, and idiosyncrasies
of the country.

Personality of Inability of spouse
expatriate to adjust
Why Expatriate Inability to cope

Personal
Assignments with overseas
intentions
Fail responsibilities
Family Lack of cultural

pressures skills

Making Expatriate Assignments Successful
Realistic previews
Careful screening
Helping
Expatriate Assignments Improved orientation
Succeed
Cultural and language
training
Improved benefits package

Orienting and Training Employees on
International Assignment
• Predeparture training is needed on:
 The impact of cultural differences on
business outcomes
 How attitudes (both negative and positive)
are formed and how they influence behavior
 Factual knowledge about the target country
 Language and adjustment and adaptation skills

Trends in Expatriate Training
• Use of returning managers as resources to cultivate
the “global mind-sets” of their home-office staff.
• Use of software and the Internet for cross-cultural
training.
• Rotating assignments that permit professional growth.
• Management development centers where executives
hone their overseas skills.
• Classroom programs provide overseas executives with
educational opportunities similar to stateside programs.
• Continuing, in-country cross-cultural training.

Compensating Expatriates
• The “Balance Sheet Approach”
 Home-country groups of expenses—income taxes,
housing, goods and services, and discretionary
expenses—are the focus of attention.
 The employer estimates what each of these four
expenses is in the expatriate’s home country,
and what each will be in the host country.
 The employer then pays any differences such
as additional income taxes or housing expenses.

Incentives for International Assignments
• Foreign Service Premiums
 Financial payments over and above regular
base pay, and typically range between 10%
and 30% of base pay
• Hardship Allowances
 Payments to compensate expatriates
for exceptionally hard living and working
conditions at certain foreign locations
• Mobility Premiums
 Lump-sum payments to reward employees
for moving from one assignment to another

Steps in Establishing a Global Pay System
1 Develop a global compensation philosophy framework.
2 Identify any gaps in existing rewards systems.
3 Systematize pay systems worldwide.
4 Adapt global pay policies to local conditions.
5 Conduct an ongoing pay policies program assessment.

Appraising Expatriate Managers
• Challenges
 Determining who should appraise the manager.
 Deciding on which factors to base the appraisal.
• Improving the Expatriate Appraisal Process

1. Stipulate the assignment’s difficulty level, and
adapt the performance criteria to the situation.
2. Weigh evaluation more toward on-site manager’s
appraisal than toward that of the home-site
manager.
3. If home-office manager does appraisal, use a former
expatriate from same overseas location for advice.
International Labor Relations
Characteristics of European
Labor Relations
Content and
Industry-wide Employer Multiple union
scope of
centralization organization recognition
bargaining

Terrorism, Safety, and Global HR
• Taking Protective Measures
 Crisis management teams
 Intelligence services
• Kidnapping and Ransom (K&R) Insurance
 Crisis situations
 Kidnapping: employee is a hostage
until employer pays a ransom
 Extortion: threatening bodily harm
 Detention: holding employee without
any ransom demand
 Threats to property or products unless
employer makes a payment
Repatriation: Problems and Solutions
• Problem
 Making sure that the expatriate and his or her family
don’t feel that the company has left them adrift.
• Solutions
 Match the expat and his or her family with
a psychologist trained in repatriation issues.
 Make sure the expat always feels “in the loop”
with what’s happening back at the home office.
 Provide formal repatriation services when
the expat returns home.

How to Implement a Global HR System
• Best practices in developing worldwide
human resource policies and practices:
 Form global HR networks that make local HR
managers a part of global teams.
 Remember that it’s more important to
standardize ends and competencies than
specific methods.

Making the Global HR System
More Acceptable
• Best practices for making a global HR system
more acceptable to local managers:
 Remember that global systems are more accepted in
truly global organizations.
 Investigate pressures to differentiate and determine
their legitimacy.
 Try to work within the context of a strong corporate culture.
• Implementing the global HR system:

 Constant contact: “You can’t communicate enough.”
 Dedicate adequate resources for a global HR effort.

HRM K59 2022 S2

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HUMAN RESOURCE MANAGEMENT

Global Edition 12e

Part 2 Recruitment and Placement

PowerPoint Presentation by Charlie Cook

Copyright © 2011 Pearson Education 6–2

The Importance of Selecting

Organizational Costs of recruiting Legal obligations

Copyright © 2011 Pearson Education 6–3

Copyright © 2011 Pearson Education 6–4

Copyright © 2011 Pearson Education 6–5

Criterion validity Content validity

Copyright © 2011 Pearson Education 6–6

Steps in Test Validation

1 Analyze the Job: predictors and criteria

2 Choose the Tests: test battery or single test

3 Administer the Test: concurrent or predictive validation

4 Relate Your Test Scores and Criteria: scores versus

5 Cross-Validate and Revalidate: repeat Steps 3 and 4

Copyright © 2011 Pearson Education 6–7

1. Use tests as supplements.

Copyright © 2011 Pearson Education 6–8

 Job skills tests

• Why Use Testing?

 Screen out bad or dishonest employees

 Reduce turnover by personality profiling

Copyright © 2011 Pearson Education 6–9

Copyright © 2011 Pearson Education 6–10

What Different Tests Measure

Cognitive Motor and Personality Current

Copyright © 2011 Pearson Education 6–11

Copyright © 2011 Pearson Education 6–12

Measuring Work Performance

Management Video-based Miniature job

Copyright © 2011 Pearson Education 6–13

Copyright © 2011 Pearson Education 6–14

Sources of Commercial Credit

Social Networking Sites

Copyright © 2011 Pearson Education 6–15

Copyright © 2011 Pearson Education 6–16

Copyright © 2011 Pearson Education 6–17

Acquisition and Use of Background Information

1 Disclosure to and authorization by applicant/employee

2 Employer certification to reporting agency

3 Providing copies of reports to applicant/employee

4 Notice of adverse action to applicant/employee

Copyright © 2011 Pearson Education 6–18

Copyright © 2011 Pearson Education 6–19

Copyright © 2011 Pearson Education 6–20

Copyright © 2011 Pearson Education 6–21

American with Recreational use

Copyright © 2011 Pearson Education 6–22

Part 2 Recruitment and Placement

PowerPoint Presentation by Charlie Cook

Copyright © 2011 Pearson Education 7–24

Copyright © 2011 Pearson Education 7–25

Interview Interview Interview

Copyright © 2011 Pearson Education 7–26

Copyright © 2011 Pearson Education 7–27

Use objective/job-related questions

Use multiple interviewers

Copyright © 2011 Pearson Education 7–28

Types of Questions Asked

Situational Behavioral Job-related Stress

Copyright © 2011 Pearson Education 7–29