Download chapter 19 lecture notes

19
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1
Managing Human Resources
CHAPTER 19 LECTURE NOTES
Explain the importance of employee recruitment and list some sources
that can be useful in finding suitable applicants.
PPT 19-1
Chapter 19
Managing Human Resources
PPT 19-2
Looking Ahead
PPT 19-3
Recruiting Personnel
PPT 19-4
The Lure of Entrepreneurial
Firms
PPT 19-5/TM 19-5
Sources of Employees
[Acetate 19-5]
A.
Recruiting personnel
1. The need for quality employees

Cite positive examples; use your personal experience or find a recent
story in Inc. or a similar periodical.

Cite negative examples; use similar sources as with positive examples.
2. The lure of small firms

How can small firms compete for employees?

Discuss special “carrots” available to small firms:
Freedom from bureaucracy
Compensation packages
Flexibility in work schedules
Creative challenge
Diversified experience
Satisfaction in knowing efforts make a difference to the company
3. Sources of employees—Review the various sources, considering values and
limitations of each. (To identify practical examples, see “Finding and
Keeping Entry-Level Workers,” Nation’s Business, [November 1998], pp. 2829.)
a. Help-wanted advertising
b. Walk-ins
c. Schools
d. Public employment offices
e. Private employment agencies
f. Executive search firms
g. Employee referrals
h. Internet recruiting
i. Temporary help agencies
 What is the experience of your school’s placement office with small
firms? If possible, have someone give a brief report on this.
 Note the need for aggressive recruitment. Ask how small firms can be
PPT 19-6
Diversity in the Workforce
PPT 19-7
Job Descriptions
PPT 19-8
Job Description for a Stock
Clerk in Retail Food Store
[Acetate 19-8]
4.
5.
aggressive.
Diversity in the workforce

Shift toward women, older workers, and racial minorities

Change recruitment approach to match the shift
Job descriptions

Point out that job descriptions clarify duties and provide a basis for
judging performance.

Note the use of job specifications (e.g., must be able to lift 50 pounds).
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Part 5 Managing Growth in the Small Business
Identify the steps to take in evaluating job applicants.
B.
PPT 19-9/TM 19-9
Evaluating Prospects and
Selecting Employees
3
Describe the role of training for both managerial and nonmanagerial
employees in a small firm.
PPT 19-10/TM 19-10
Types of Training and
Development
C.
PPT 19-11
Training and Developing
Employees
PPT 19-12
Steps in Job Instruction
[Acetate 19-12]
PPT 19-13
Training and Developing
Employees
4
Evaluating prospects and selecting employees
Review the steps in evaluation, showing them as a series of hurdles. Any step
may eliminate an applicant.
1. Step 1: Using application forms
2. Step 2: Interviewing the applicant (note tips for improved
interviewing)
3. Step 3: Checking references and other background information
4. Step 4: Testing the applicant
5. Step 5: Requiring physical examinations (following a job offer)
 Select one or two students who have recently started new jobs and have them
report on selection procedures they experienced. Did these fit the text's
prescriptions?
Training and developing employees
1. Purposes of training and development

For an article on in-house training that helps small firms attract and
retain employees, see “Corporate Universities for Small Companies,”
Inc. (February 1999), pp. 95-96.

Small companies often train employees who then move on to big
business or competitors.

The need for training is clear, and it boosts morale and recruitment.
2. Orientation for new personnel—see Situation 1 at the end of the chapter.
3. Training to improve quality (teaches employees about the importance of
quality control and ways to produce high-quality work)
4. Training of nonmanagerial employees

Review Figure 19-1 regarding Job Instruction Training
5. Development of managerial and professional employees—compare this
process with planning for succession in a family business.
Explain the various types of compensation plans including the use of
incentive plans.
D.
PPT 19-14
Compensation and Incentives
for Employees
PPT 19-15, 16
Compensation and Incentives
for Employees
PPT 19-17
Some Affordable Perks
Compensation and incentives for small business employees
1. Wage or salary levels—these must be competitive.
2. Financial incentives (e.g., commissions, stock option, bonuses, profit
sharing)
Review the keys to developing effective bonus plans:

Set attainable goals—so workers believe they are achievable

Set meaningful goals—that employees can understand

Bring workers in—give them a voice in the process

Keep targets moving—adjust to meet the changing needs of employees
and customers

Aim carefully—be sure to reward desired behavior
3. Fringe benefits

Note the high cost—40 percent of payroll.
Chapter 19 Managing Human Resources
PPT 19-18/TM 19-18
Employee Stock
Ownership Plans
5
4.
Employee stock ownership plans (ESOPs)
Discuss the human resource issues of employee leasing, legal protection,
labor unions, and the formalizing of employer-employee relationships.
E.
PPT 19-19
Special Issues in HRM
PPT 19-20/TM 19-20
What Employee-Leasing
Companies Offer to
Small Firms
PPT 19-21, 22, 23, 24, 25, 26
Special Issues in HRM
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Special issues in human resource management
1. Employee leasing

Set up by professional employment organizations (PEOs).

Note the rapid growth of this arrangement.

Discuss advantages for the small business: escape from some
paperwork and possible improvement in employee benefits.

Discuss disadvantages: financially troubled PEOs leave employers with
unpaid claims, PEO-supplied employees are subject to laws that may
not apply to small businesses.
2. Legal protection of employees

Civil Rights Act (see steps on dealing with sexual harassment)

Occupational Safety and Health Act (OSHA) (For an excellent review of
small-business relationships with OSHA, see “When OSHA Calls,”
Nation’s Business [September 1998], pp. 14-22.)

Fair Labor Standards Act

Family and Medical Leave Act
3. Labor unions

Much more common in large businesses

Law requires collective bargaining when requested—even in small
businesses
4. Formalizing of employer-employee relationships

Growth requires formal personnel policies and procedures (or an
employee handbook).

A personnel policy manual may be created. In some situations, the
manual can be considered part of the employment contract.
5. The need for a human resource manager

The firm has more than 100 employees.

Employees are represented by a union.

Labor turnover is high.

Skilled or professional personnel are needed.

Much training is required for personnel.

Morale is low.

Competition for personnel is keen.
SOURCES OF AUDIO, VIDEO, AND OTHER INSTRUCTIONAL
MATERIALS
South-Western’s BusinessLink video Wainwright Industries: A Study in Quality may be used with this
chapter. For a description of it, see the video section in Chapter 19 of this manual.
Something Ventured is a comprehensive video primer with 26 half-hour programs produced to parallel
this textbook. The video entitled The Human Factor states that the quality of personnel and the relationship
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between and among the manager and employees are critical to any business. In a small business, where the
numbers are few, the importance of each employee becomes even greater. This video segment looks at a
challenging aspect of small business management: the recruitment, training, and maintaining of its
employee base. Contact your South-Western/ITP sales rep or ITP Faculty Support (fax (415) 592-9081 or Email [email protected]).
The Human Challenge, part of the Venturing: The Entrepreneurial Challenge series produced by Vermont
ETV, illustrates several creative ways in which founders of entrepreneurial companies have involved their
employees in the growth and success of their ventures. When business owners understand and embrace the
notion that motivated employees can make a major contribution to a company’s development, they are then
able to work with employees to promote structures and activities that increase employee motivation,
satisfaction, and performance. The entire series of 13 half-hour videos costs less than $100. Call (800) 8661666.
Inc. Business Resources produces a videotape titled Managing People, which deals with recruiting,
motivating, and leading a team of employees. At 120 minutes, it costs $99. Call (800) 468-0800.
Two practical workbooks published by PSI Research/Oasis Press are entitled People Investment ($19.95)
and Company Policy and Personnel Workbook ($19.95). Call (800) 228-2275.
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ANSWERS TO END-OF-CHAPTER
DISCUSSION QUESTIONS
1.
As a customer of small businesses, you can appreciate the importance of employees to their success. Describe one
experience you had in which an employee’s contribution to his or her employer’s success was positive and one in
which it was negative.
The question calls for examples from students.
2.
What factor or factors would make you cautious about going to work for a small business? Could these reasons for
hesitation be overcome? How?
The question asks for individual opinions. The text points out that small businesses offer employees the
opportunity to perform responsible work, freedom in work, recognition for achievement, special
incentives, flexible work arrangements, greater prospects for job sharing, and the potential for growth
of the business, any of which might overcome an applicant’s hesitation to work for a small firm.
3.
In what ways is the workforce becoming more diverse, and how do these changes affect recruitment by small
firms?
In the future, firms in the United States will encounter greater racial and gender diversity. That is, the
applicant pool will include a much higher proportion of non-Anglo and female individuals. To recruit
well, small firms will need to consider more minority applicants (in accord with U.S. law, which
prohibits discrimination) and tailor their recruitment approaches to attract these individuals.
4.
Based on your experience as an interviewee, what do you think is the most serious weakness in the interviewing
process? How could it be remedied?
The question calls for a report on a student’s interviewing experience. Answers might be considered in
light of the interviewing principles cited in the chapter on page xxx.
5.
What steps and/or topics would you recommend for inclusion in the orientation program of a printing firm with
65 employees?
Steps should include discussion periods with the owner and the immediate supervisor, a tour of the
business, and introductions to employees with whom the newcomer will have contact. Topics should
include specific job duties, company personnel policies, payroll practices, benefits, quality standards,
service expectations, company history, and so on. A follow-up orientation after a week or so is
advisable.
p. 424
p. 425
p. 427-428
Chapter 19 Managing Human Resources
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6.
Choose a small business with which you are well acquainted. Determine whether adequate provisions have been
made for replacement of key management personnel when it becomes necessary. Is the firm using any form of
executive development?
This question calls for an individual answer from each student.
7.
What problems are involved in using incentive plans in a small firm? How would the nature of the work affect
management’s decision concerning the use of such a plan?
Some problems are the conflicts between management and labor over standards, the necessary record
keeping, and the negative effects on quality that often result from such systems. Such problems are less
serious in small firms because of the close personal relationship between the owner and employees. The
nature of the work would have a significant effect on the decision to use incentive wages. For example,
if the work requires high-quality workmanship, it might not be advisable to use incentive wages. By the
same token, individual incentive wages are not appropriate for work that is not easily measurable.
8.
Is the use of a profit-sharing plan desirable in a small business? What might lessen such a plan’s effectiveness in
motivating employees?
If the small firm is highly profitable and its total employee group is fully cohesive, the use of profit
sharing may be desirable. Employees in small firms can appreciate the connection between their
personal efforts and the firm’s success. But if the small firm is battling to stay alive with uncertain
profits, profit sharing would be undesirable.
One weakness in using a profit-sharing plan to provide an incentive is that the individual
employee’s contribution to company profit often seems insignificant. The company may earn a profit
regardless of whether an individual works diligently. Another problem is that profits may be low or
losses may be incurred in spite of an employee’s best efforts. Thus, there is no certain and sure
connection between hard work and financial reward. Also, in companies that insist on secrecy,
management’s reluctance to divulge financial operating results constitutes a problem.
9.
How does employee leasing differ from using a temporary help agency? What are the greatest benefits of employee
leasing?
Temporary help agencies supply employees who are needed only on a temporary basis. In contrast,
employee leasing transfers a firm’s full-time employees to the payroll of the leasing company. The
benefits of leasing include a transfer of paperwork, such as the writing of payroll checks and
preparation of reports to government agencies. Also, leasing companies may be able to provide
employee benefits superior to those small companies are able to provide.
p. 430-431
p. 430-431
p. 432
10. Explain the impact of the Civil Rights Act and the Fair Labor Standards Act on human resource management?
p. 432-433
These laws obviously affect selection practices by prohibiting discrimination against protected groups.
Even interviewing and testing must be designed to avoid discriminatory behavior, as well as practices
related to promotion and compensation. Furthermore, such laws have alerted firms and employees to
the problem of gender discrimination, which has become a serious matter in recent years.
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COMMENTS ON CHAPTER “YOU MAKE THE CALL” SITUATIONS
Situation 1
1.
To what extent should a small firm use “old-timers” to help introduce new employees to the workplace? Is it
inevitable that newcomers will look to old-timers to find out how things really work?
Old-timers will always have some input into the orientation process. Their association with
newcomers in the workplace makes it inevitable. If the quality of management is good, the old-timers
should reflect loyalty to the employer and exert a positive influence—in contrast to the situation
reported here. However, management should not abdicate its own responsibility for providing a sound
orientation by assuming that it will occur automatically as new employees interact with others.
2.
How would you rate this firm’s orientation efforts? What are its strengths and weaknesses?
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On the plus side, this firm does have some orientation—a pamphlet and a warning. Unfortunately,
this orientation is so minimal that it cannot be considered adequate. It is little wonder that the oldtimers taught the newcomer how to avoid work!
3.
Assume that this firm has fewer than 75 employees and no human resource manager. Could it possibly provide
more extensive orientation than that described here? How? What low-cost improvements, if any, would you
recommend?
Small size need not preclude proper orientation. Some manager—perhaps the owner-manager—
should spend time going over the company history and the new employee’s role. A supervisor should
have a checklist of information to cover. And a trustworthy senior employee might be assigned to
answer questions and help the newcomer as needed.
Situation 2
1.
What are the most important reasons for structuring the profit-sharing plan as a retirement program?
This encourages longevity. At a minimum, employees have an incentive to stay for five years. A
good retirement program helps provide retirement income for employees, many of whom have
difficulty saving a portion of their paychecks.
2.
What is the probable motivational impact of this compensation system?
The amount of profit is not stated. The larger the profit, the greater the motivation. Since only eight
employees are involved, their own contributions to earning this profit should be clear, and this should
provide strong personal motivation. The immediate effect on effort might be greater if the money were
paid out immediately. However, the program looks attractive and should motivate employees to stay
with this company.
3.
How will an employee’s age affect the appeal of this plan? What other factors are likely to strengthen or lessen its
motivational value? Should it be changed in any way?
Younger people think less about retirement, so the plan will probably have less effect on them. The
amount of the profits and the extent to which profits depend on the input of employees will affect the
plan’s motivational value. The company’s periodic communication about the program can also keep it
in the minds of employees and affect the way it is perceived. There is no obvious need for change, but
employees might be given the option of taking a portion of the profits in cash.
Situation 3
—
1.
What is the most obvious weakness in the human resource management of this small cafe?
One obvious weakness is the lack of any substantial restaurant experience on the part of the owner.
Even Zhanna Suleymenova, the assistant manager, has only very limited food service experience. As a
result, it is not surprising that operations do not yet run smoothly. We do not know about the
background and work experience of other personnel, but there is no indication that the operation is
benefiting from the business insights of any of these additional employees.
2.
Given that the restaurant has just opened, is it overstaffed or understaffed?
We must remember that this is a very small cafe, with space for only 20 customers. For such a
small restaurant, the staff seems to be too large. Seemingly, one cook and one waitress should be
adequate for such a small clientele. It is unlikely that all seating would be occupied at the same
moment.
It would also seem logical that the owner and assistant manager could perform non-supervisory
duties while the restaurant is getting started. In fact, one supervisor/host(ess) should be adequate.
(Perhaps they are each working only on a part-time basis.)
ANSWERS TO EXPLORING THE WEB EXERCISES
For each chapter, the instructor’s manual will include a short summary of suggested results students will have after
Chapter 19 Managing Human Resources
189
completing the various Web exercises. Because the Web is a constantly changing medium, the answers may vary, and
the links may change as well. Thus, answers are only suggested, and the URL for resources, where required, is
provided.
Exercise 1
a.
Answers will vary; however, various internal and external techniques of recruitment that are listed in
the text are covered on this Web site.
b.
Answers will vary.
Exercise 2
a.
According to the Web site, to be in the “margins” of society means that one is not in the mainstream.
One is in the “margin” of society if you answer yes to one of the following statements.

a woman

have ANY ethnic background that is non-white

are not a heterosexual

are not a Christian

are not between the ages of 21-50
b.
Answers will vary.
Exercise 3
a.
b.
According to the Web site, training and development can be initiated for the following reasons:

When a performance improvement is needed to "benchmark" the status of improvement

As part of an overall professional development program

As part of succession planning

To "pilot" the operation of a new performance management system

To train about a specific topic
Communications, computer skills, customer service, diversity, ethics, human relations, quality
initiatives, safety, and sexual harassment are topics covered on a regular basis in training and
development programs.
Exercise 4
Employers with fifteen (15) or more employees must follow Title VII of the Civil Rights Act of 1964 and Title
I of the Americans with Disabilities Act of 1990 (ADA) laws. Employers with twenty (20) or more
employees must follow the Age Discrimination in Employment Act of 1967 (ADEA). The Equal Pay Act of
1963 (EPA) applies to all employers.
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SUGGESTED SOLUTION TO CASE 19:
GIBSON MORTUARY
1.
Evaluate the human resource problems facing this firm. Which appears most serious?
The most general problem is the lack of a pool of qualified applicants. This is caused by a number
of specific factors. One factor is the nature of the industry. The business deals with death, and many
potential applicants find such an atmosphere unattractive. (Question 4 permits a sampling of student
attitudes on this point.) In addition, social critics have strongly criticized the industry, in such books as
The American Way of Death. Another factor is the small size of the mortuary. As with all very small firms,
the number of advancement opportunities is limited. In addition, the fact that this is a family business
means that top management spots, at least for the present, are assigned to family members, reducing
the potential for advancement. Finally, the irregular hours and interruptions in this type of work create
a pattern of employment that is unattractive to many people.
The seriousness of these factors is difficult to evaluate. No doubt, individuals will have different
opinions as to their relative importance. Students could be asked to rank these and possibly other
factors in some way. The idea of working with the dead may well be the biggest deterrent.
2.
How can Gibson Mortuary be more aggressive in recruitment? How can it make itself more attractive to
prospective employees?
The first question to ask is “How aggressive is Gibson Mortuary at present in searching for
qualified applicants?” One gets the impression from the recorded facts that management is concerned
with the problem of recruitment but is not pursuing the matter aggressively. Students may have
imaginative suggestions as to how an aggressive program might work. Mortuary colleges would seem
to be a likely source of applicants. The case provides no information as to the enrollment of such
colleges or their location relative to the Gibson Mortuary.
What steps might be taken to build a strong relationship with potential applicants from mortuary
colleges? To make such a career attractive to applicants, the firm must emphasize positive factors. The
opportunities for service could be emphasized in talking with prospective employees. Personnel in this
industry deal with bereaved people who are appreciative of service that is offered. In addition,
management could point out the income that is possible in the mortuary industry and the opportunities
for entrepreneurship for people who gain experience in this field. Also, applicants will be attracted to
employers who use career development planning and periodic performance reviews.
3.
Does the fact that Gibson Mortuary is a family firm create a significant problem in recruitment? How can the
firm overcome any problem that may exist in this area?
The fact that Gibson Mortuary is a family firm does create a problem in recruitment. It is the same
problem faced by all small family firms. Most applicants prefer to work for firms in which all positions
are potentially available to them. The fact that family members occupy key positions means that these
jobs are not available to other qualified personnel.
To overcome problems in this area, the manager must make it clear that good performance will be
recognized and rewarded. The manager can also point out the potential for advancement that does exist
in the firm. The fact that the top management spot is filled by a family member at present should not
mean that all opportunities for advancement are shut off. In fact, a well-developed program for career
advancement might be the most attractive aspect of a good recruitment program. A well-developed
career plan would provide a schedule for training and periodic evaluation. It might also suggest the
possibility of eventually starting a business for oneself or perhaps acquiring an ownership interest in
Gibson Mortuary.
Chapter 19 Managing Human Resources
4.
191
Assuming that you are the proper age to consider employment with Gibson Mortuary, what is the biggest
question or problem you would have as a prospective employee? What, if anything, might the Gibsons do to deal
with that type of question or problem?
The students’ responses to this question should be tabulated in order to gain a picture of the factors
that are most important to young people. After the problem areas have been identified, feasible
solutions for each should be discussed. Personalizing the question in this way will help students to
understand some of the crucial issues and to see some of the possibilities and frustrations involved in
solving them. Some factors are obviously difficult to resolve. For example, it will be hard to change the
thinking of people who are strongly repelled by the thought of working in a mortuary.