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Human Resource Management
HR Activities (External)
HR Activities
Human Capital (a.k.a. intellectual capital)
Core Competency
Direction of organizational systems to ensure that
human talent is used effectively and efficiently to
accomplish organizational goals
Strategic HR Management
- HR Planning
- HR Measurement
- HR Technology
Equal Employment Opportunity
- Compliance
- Diversity
- Affirmative Action
- Job analysis
- Recruiting
- Selection
Talent Management
- Orientation
- Training
- HR Development
- Career Planning
- Performance Management
Total Rewards
- Compensation
- Incentives
- Benefits
Risk Management and Worker Protection
- Health and Wellness
- Safety
- Security
- Disaster and recovery planning
Employee and Labor Relations
- Employee rights and privacy
- HR policies
- Union/Management relations
Collective value of the capabilities, knowledge,
skills, life experiences, and motivation of an
organizational workforce (what ppl bring to org)
Unique capability that creates high value and
HR Management Challenges
HR management roles
Human resource management system (HRMS)
Four elements of ethics program -> ethical
HR Ethics and Sarbanes-Oxley (SOX)
HR Competencies
HR generalist
HR specialists
Strategic HR Management
differentiates an organization from its
competition. (strengths that are foundation for
creating a competitive adv for an organization)
Globalization of Business
Economic and Technological Changes
Occupational Shifts (from manu and agri to
Workforce availability and quality concerns
Growth in contingent (temporary) workforce
Technological shifts and the internet
Workforce demographics and diversity
Racial/Ethnic Diversity
Women in the workforce
Aging workforce
Administrative (50% -> 10%) – focus on admin and
Operational and employee advocate (30% -> 30%)
– HR activities and employee ‘champion’
Strategic (20% -> 60%) – contributor to org results
and keeper of org ethics; workforce planning,
compensation strategies
Integrated system providing information used by
HR management in decision making. Emphasizes
that making HR decisions, not just building
databases, is primary reason for compiling data in
information system.
- Written code of ethics and std of conduct
- Training on ethical behavior
- Means for employees to get advice on
ethical situations they face
- Systems for confidential reporting of
ethical misconduct or ques. Behavior
Sox was passed by congress to make certain that
publicly traded companies followed accounting
controls that would reduce the likelihood of illegal
and unethical behaviors
Strategic contribution
Business knowledge
HR delivery
HR technology
Personal Credibility
Person who is responsible for performing a variety
of HR activities
People who have in-depth knowledge and
expertise in limited areas of HR
Use of employees to gain or keep a competitive
adv, resulting in greater organizational
Cost Leadership (organizational strategy)
Differentiation (organizational strategy)
Factors that affect strategic HR management
HR management plays sig role in dimensions or
organizational effectiveness
Approaches to improving Organizational Prod.
Unit Labor cost
Organizational culture
Human Resource Planning
Approaches competition on the basis of low price
and high quality of product or service (Wal-Mart)
More appropriate in a more dynamic environment
characterized by rapid change, and requires
continually finding new products and new markets
(Intel or Microsoft)
Organizational strategies + Organizational culture
- (a) Need for HR: Quantity and skill levels
Competitive/financial environment + current
organizational situation
- (b) Available financial resources
A + B - >>
- Equal employment
- Recruiting and selection
- Hr development
- Compensation
- Performance management
- Employee relations
- Organizational productivity & hr efforts
- Org effectiveness and Fin contributions
- Cust Service and quality linked to HR strat
- Org culture and org effectiveness
Restructuring the organization
- revising org structure
- reducing staff
- aiding in m&a
Re-designing work
- changing workloads and combining jobs
- re-shaping jobs due to tech changes
-- Goals INCREASE Org Prod
Aligning HR activities
- attracting and retaining employees
- Training & dev and eval employees
- compensating emp and other HR act
- using domestic vendors/contractors opposed to
- Outsourcing op internationally
--Goals – Reduce unit labor costs
Useful way of measuring HR productivity;
calculate: avg cost of workers/avg levels of output
Shared values and beliefs in an organization
Process of analyzing and identifying the need for
and availability of HR so that the organization can
meet its objectives
Steps in HR planning Process
HR strategies
Internal Jobs and Skills Audit
Estimating Internal Labor Supply for given unit
Succession planning
Worker adjustment and retraining notification
HR Metrics
To have
- right number of human resources
- with the right capabilities
at the right times in the right places
- Review organizational objectives and strat
o Scan external environment for labor
supply changes
o Assess internal workforce capabilities
- Develop forecasting
o Id organizational need for people
o Forecast supply of ppl available
- Formulate HR strategies and plans
Means used to anticipate and manage the supply
of and demand for human resources
- What jobs exist now?
- How many ppl are performing each job?
- What are the reporting relationships of
- How essential is each job?
- What jobs will be needed to implement
future organizational strategies?
- What are the characteristics of anticipated
Uses information from the past and the present to
identify expected future conditions. – short range,
intermediate range (1-5 years) and long range 5+
Current Staffing – Projected outflows + inflows
- External hires
- Internal transfers
- Promotions
- Recalls
- Promotions
- Turnover
- Terminations
- Demotions
- Retirements
- Deaths
- Layoffs
Process of identifying a longer-term plan for the
orderly replacement of key employees
Requires employers to give 60-day notice before
implementing a layoff or facility closing that
involves more than 50 people
Specific measures tied to hr performance
indicators. Developed using costs, quantity,
Full-time equivalents (FTEs)
Return on Investment (ROI)
Economic Value Added (EVA)
Strategic and Operational HR Metrics
Balance Scorecard (four perspectives)
HR Audit
Psychological contract
quality, timeliness and other designated goals
Measure equal to one person working full-time for
a year
Calculation showing the value of expenditures for
HR activities
Net operating profit of a firm after the cost of
capital is deducted
- Rev. generated/FTE
- NI before tax/FTE
- Ratio of managers to non-managers
- labor costs as % of total Op costs
- ROI of human cap ex
- HR dept exp as % of total exp
- Payroll/benefits costs as % of rev
- annual turnover rate
- benefits costs as % of payroll
- Training ex/FTE
- Avg time to fill openings
- workers comp costs/FTE
- # of applicants per opening
- Absenteeism by employee level/dept
Internal business process
Learning and growth
Compares specific measures of performance
against data on those measures in other
Formal research effort that evaluates the current
state of HR management in an organization.
Attempts to evaluate how well HR activities in
each of the HR areas (staffing, compensation, etc)
have been performed, so that management can id
areas for improvement
Unwritten expectations employees and employers
have about the nature of their work relationships
Employers provide:
- Competitive compensation and benefits
- Career development opportunities
- Flexibility to balance work and home life
Employees contribute:
- Continuous skill improvement and
increased productivity
Job satisfaction
Job dissatisfaction
Organizational commitment
Employee engagement
Continuance Commitment Factors
Factors affecting job satisfaction and org commit
Measuring absenteeism
Approaches to control absenteeism
Types of Turnover
- Reasonable time with the organization
- Extra effort when needed
Positive emotional state resulting from evaluating
one’s job experiences
Occurs when one’s expectations are not met
Degree to which employees believe in and accept
organizational goals and desire to remain with the
Extent to which an employee is willing and able to
Suggests that decisions to remain with or leave an
organization ultimately are reflected in employee
absenteeism and turnover stats
The Individual (Ability + Motivation + Support)
The Job (Design + Job Elements)
- Job satisfaction/dissatisfaction
- Organizational commitment
 Absenteeism/Turnover
Any failure to report for work as scheduled or to
stay at work when scheduled (cost ~$645/emp/yr)
Voluntary (avoidable)
Involuntary – illness, death in family
(# of person-days lost through job absence during
period / (Avg # employees) X (# workdays)) X 100
Incidence Rate - # of absences / 100 employees
each day
Inactivity Rate - % of time lost to absenteeism
Severity Rate – Avg time lost/absent employee
during specified period (month or yr)
Attendance reward programs
“no fault” policies
Paid time off programs
Unused leave buy-back
Illness verification
Disciplinary actions
Occurs when employees leave an organization and
have to be replaced. – related to job satisfaction
and organizational commitment
Involuntary Turnover – terminated for poor
performance or work rule violations
Voluntary Turnover – leave by choice
Functional turnover – lower performing or
disruptive employees leave
Dysfunctional turnover – key individuals and high
performers leave at critical times
Measuring Turnover (Separations = departures)
Determining Turnover Costs
Individual Performance factors
Performance (P) Formula
Organizational Culture
Myths of retaining employees
Drives of Retention
Uncontrollable Turnover –reasons outside the
control of the employer
Controllable – could be influenced by the emp
# of emp separations during month/Total #
employees at midmonth X 100
Separation Costs – HR staff/supervisor time to
prevent separations, exit int time, unemployment
exp, legal fees, accrued vacation, cont benefits
Replacement Costs – recruiting/advertising exp,
search fees, staff time salaries, emp referral fees,
relocation, testing
Training Costs – paid orientation, training staff
Hidden Costs – lost productivity, decreased
customer service, other employee turnover
1. Individual ability to do the work
2. Effort expended
3. Organizational support
Ability (A) X Effort (E) X Support(S)
Desire within a person causing that person to act;
usually act for one reason: to reach a goal
Pattern of shared values and beliefs of a workforce
Money is the main reason people leave
Hiring has nothing to do with retention
If you train people you are only training them for
another employer
Do not be concerned about retention during a
If solid performers want to leave, the company
cannot hold them
Job design and work
- Job/person matching
- Time flexibility
- Work/life balancing
Career Opportunities
- Training/development and mentoring
- Career planning/advancement
- Competitive pay and benefits
- Performance and compensation
- Recognition
Employee relationships
- Fair, nondiscriminatory treatment
- Supervisory/management support
- Coworker relations
Characteristics of the employer
- Culture and values
Job design
Job enlargement
Job enrichment
Person/job fit
Characteristics of People and Jobs
Flex time
Job sharing
Work/Life balancing
Exit Interview
Keys to managing retention
- Management
- Job security
Organizing tasks, duties and responsibilities into a
productive unit of work. Can influence:
performance, job satisfaction, physical and mental
Broadening the scope of a job by expanding the #
of different tasks to be performed
Increasing the depth of a job by adding
responsibility for planning, organizing, controlling
or evaluating the job. Examples – giving an entire
job rather than piece, providing more freedom and
authority, increasing accountability etc.
Important concept of matching characteristics of
people with characteristics of jobs
Job Characteristics (mgmt can control)
- tasks, authority/responsibility,
policies/procedures, tools, variety, time
requirements, social opportunities, working
conditions, stress
People Characteristics (mgmt cannot control)
- motivation, interests, energy level, personality
variables, physical characteristics, honesty,
Employees work a set number of hours a day but
vary starting and ending times
Two employees perform the work of one FT job
Different work arrangements
Leave for children’s school functions
Compressed workweek
Job sharing
On-site child/adult care
Employee assistance plans
On-site health services
Wellness programs
Fitness facility
Individuals are asked to give their reasons for
leaving the organization
Measurement and Assessment
- Absence/turnover measurement
- Employee surveys
- Exit interviews
- Data analysis
Managing Retention
- Recruiting and selection
- Orientation and training
Staffing process
Job analysis in perspective
Task based job analysis
Competency based job analysis
Essential Job Functions (required by ADA)
Marginal job functions
Job description
Performance standards
- Compensation and benefits
- Career development and planning
- Employee relations
Evaluation and follow-up
- Regular review of turnover data
- Tracking of intervention results
- Adjustment of intervention efforts
Matches people with jobs through job analysis,
recruiting and selection
- Methods (Questionnaires, interviews,
observation, logs/diaries)
- Sources of data (employees, supervisors,
managers, job analyst)
- Conducted by (job analyst (HR), outside
consultant, supervisor/manager
USED FOR –> Job Descriptions and Job
EEO/ADA, HR planning, recruiting, selection,
compensation, training, performance
management, health, safety, and security,
employee/labor relations
Most common and focuses on tasks, duties and
responsibilities performed in a job
Distinct, identifiable wk activity comp of motions
Larger work segment composed of several tasks
that are performed by an individual
Obligations to perform certain tasks and duties
Considers how the knowledge and skills are used
Individual capabilities that can be linked to
enhanced performance by individuals or teams
- Technical competencies – specific
knowledge and skills employees have
- Behavioral competencies – customer
focus, team orientation, technical
expertise, results orientation,
communication effectiveness, leadership,
conflict resolution, innovation,
adaptability, decisiveness
Are the fundamental duties of a job
Duties that are part of a job but are incidental or
ancillary to the purpose and nature of the job
Identifies the tasks, duties, and responsibilities of a
job (what, why, where and briefly it is done)
Flow directly from a job description and indicate
Job specifications
Labor markets
Flexible staffing
Job posting
External Recruiting sources
Advantages/Disadvantages of Internal Recruiting
Adv/disadv of external recruiting
what the job accomplishes and how performance
is measured in key areas of the job description
List the knowledge, skills and abilities (KSAs) an
individual needs to perform a job satisfactorily
(education, experience, work skill requirements,
personal abilities, mental and physical
Process of generating a pool of qualified applicants
for organizational jobs
The external supply pool from which employers
attract employees
Uses workers who are not traditional employees.
Allows an employer to avoid some of the cost of
full-time benefits such as vacation pay and pension
plans, as well as to recruit in a somewhat different
System in which the employer provides notices of
job openings and employees respond by applying
for specific opening.
Colleges, universities and schools
Labor unions
Employment agencies
Competitive and media sources
Job fairs and special events
- morale of the promotee is usually high
- Firm can better assess a candidates ability
- lower recruiting costs for some jobs
- process is a motivator for good performance
- causes a succession of promotions
- firm has to hire only at entry level
- ‘inbreeding’ results
- those not promoted may experience morale
- employees may engage in ‘political’ infighting for
- mgmt development program is needed
- new blood brings new perspectives
- training new hires is cheaper and faster b/c of
prior external exp.
- new hire has no group of political supporters in
- new hire may bring new industry insights
- firm may not select someone who will fit the job
Advantages and Disadvantages of Internet
Recruiting Evaluation and Metrics
Evaluating the cost of recruiting
Yield ratio
Selection rage
Selection and Placement Truisms
Person/job fit
Selection criteria
Job Performance, Selection Criteria
or org
- process may cause morale problems for internal
candidate not selected
- new employee may require longer adjustment
Advantages – saved money vs newspaper ad,
employment agencies and search firms – save time
Disadvantages – more unqualified applicants,
additional work for HR staff, just browsers, new
legal concerns
Quantity and quality of applicants; time to fill
Recruiting expenses/number of recruits hired –
problem what else should be
included…background checks, relocation etc.
Other methods:
- Cost benefit analysis
- Yield ratios
- Selection rate
Compare the number of applicants at one stage of
the recruiting process with the number at another
Percentage hired from a given group of candidates
Hire hard, manage easy
Good training will not make up for bad selection
Ultimate purpose of selection. Fitting a person to
the right job
Simple but important concept that involves
matching the KSAs of people with the
characteristics of jobs
Characteristic that a person must have to do a
specific job successfully
Elements of job performance (qty of work, quality
of work, compatibility with others, presence at
work, length of service, flexibility)
Selection criteria for employee characteristics
(Ability, motivation, intelligence,
conscientiousness, appropriate risk for employer,
appropriate permanence)
Predictors of selection criteria (experience, past
performance, physical skills, education, interests,
salary req, degrees, test scores, personality
measures, work references, prev job and tenure,
drug test, police record)
Correlation between a predictor and job
performance. Occurs to the extent that a predictor
actually predicts what it is supposed to predict
Realistic job preview (RJP)
Application forms – Purposes
Selection process flow chart
Selection testing
Cognitive Ability Tests
Physical Ability Tests
Work sample tests
Big five personality characteristics
Situational judgment tests
Structured Interviews
Extent to which it repeatedly produces the same
results over time – consistency of predictors used
in selection
Applicants are provided with an accurate picture
of the job, including organizational realities so they
can better evaluate their own job expectations.
Prevent unrealistic expectations
- Record of the applicants desire
- Provides interviewer with a profile
- Basic employee record for hired people
- Can be used for research on effectiveness
of selection process
Application job interest
Preemployment screening
Application form
Tests & interview
Background investigation
Additional interview (optional)
Conditional job offer
Medical exam/drug test
Job placement
Ability Tests
Personality tests
Honesty/integrity tests
Measures an individuals thinking, memory,
reasoning, verbal and mathematical abilities
Measure an individuals abilities such as strength,
endurance, and muscular movement
Require an applicant to perform a simulated task
that is part of the target job
Agreeableness (cooperative, good-natured,
softhearted, tolerant, trusting)
Extroversion (sociable, talkative)
Emotional Stability (NOT these characteristics –
Neurosis, depression, anger, worry, insecurity)
Openness to experience (flexibility in thought,
open to new ideas, broad minded, curious,
Conscientiousness (achievement – oriented,
careful, hardworking, organized, responsible)
Designed to measure a persons judgment in work
settings – situation and list of possible solutions
Uses a set of standardized questions asked of all
applicants so that comparisons can more easily be
interview, control the interview, use effective
questioning techniques
Less Structured interview
Problems in the interview
Background screening (four goals)
Negligent hiring
Negligent retention
Occurs when the interviewer wings it asking
questions that have no identified direct purpose
such as tell me about yourself
Snap judgments
Negative emphasis
Halo Effect – occurs when interviewer allows a
prominent characteristic to overshadow other
Baises and stereotyping
Cultural noise – comes from what the applicant
believes is socially acceptable rather than knows is
Show that the employer exercised due diligence in
Provide factual information about a candidate
Discourage applicants with something to hide
Encourage applicants to be honest on applications
and during interviews (costs $100-200/applicant)
When an employer fails to check an employees’
background and the employee later injures
someone on the job; hired an unfit employee,
background check was insufficient or did not
research potential risk factors that would have
prevented the positive decision
Employer becomes aware that an employee may
be unfit for employment but continues to employ
the person and the person injures someone