Management Chapter 8 PDF

In this chapter we will cover the following topics: Topic 8.1 – Strategic Human Resource Management LG 8-1 Topic 8.2 – Human Resource Management Functional Activities Topic 8.3 – Human Resource Related Legal Compliance Organizations need talented people in order to get work “Done Well”. How do organ...

In this chapter we will cover the following topics: Topic 8.1 – Strategic Human Resource Management LG 8-1 Topic 8.2 – Human Resource Management Functional Activities Topic 8.3 – Human Resource Related Legal Compliance Organizations need talented people in order to get work “Done Well”. How do organizations determine which people are needed today, and in the future, and which skills and experience? Where do they find these people? How do they attract them to the organization and keep them once they are hired? How do they make sure that their skills remain relevant as the organization evolves? How does the organization align its Human Resources Management practices with the Goals, Strategies, and Culture of the organization? How does the organization make sure its Human Resources Management Practices are fully compliant with legal requirements and ethical expectations? This chapter will provide answers to these important questions. LG 8-2 Human Resources Management (HRM) plays a critical strategic role in assuring the success of an organization and is an essential element of getting work “Done Well”. HRM begins by creating a strategic Human Resources (HR) plan aligned with the organization’s Goals, Strategy, Core Values, and Culture. This plan provides rou-tine management of key HR activities such as recruitment and selection, training and development, compensation and benefits, and employee relations. In addition, there are numerous laws that govern how organizations must handle their employ-ment policies and interactions with employees. Maintaining compliance with these laws can be a challenging and a time-consuming task with severe consequences if mismanaged. Beyond legal compliance, it is important to engage in ethically respon-sible and pro-employee practices to enhance and protect the reputation of the organization as a desirable place to work. Strategic Human Resources Management is the identification of current and future talent require-ments necessary to support the goals and strategy of the organization as well as the development and implementation of the plans and programs to assure the organization recruits, trains, develops, supports, and retains that talent. understanding what talent is required to staff key positions within the organization today and tomorrow is a critically important aspect of ensuring the “Right Work” gets “Done Well”! Talent is a strategic resource for an organization and helps the organiza-tion to develop distinctive competencies critical for building competitive advantage. unlike many resources, talent often takes time to acquire and to fully develop before it can contribute effectively. Identifying, recruiting, developing, and retaining the right talent can be a major challenge for organizations. Consequently, Strategic Human Resources Management is key to an organization anticipating and addressing both current and future needs for talent and overcoming the challenges to ensure that talent is available and fully prepared when needed. By evalu-ating the “Right Work” described in Part II of this textbook, an organization can deter-mine the talent that will likely be needed to get that work “Done Well” and put in place the plans and actions to assure the necessary talent is on board and fully prepared and motivated. Doing Strategic HRM effectively is generally a joint effort among senior lead-ership, the Human Resources function, and various departments in the identification of the needs and in the development and execution of the plans to address those needs. Many organizations also perform succession planning as part of their Strategic Human Resources planning. Succession Planning is the process of identifying likely candidates for future openings in key positions in the organization as well as evaluating each employee’s potential for taking on added responsibility. By conducting Succession Planning, organizations can anticipate the availability of qualified talent to fill key positions and work towards developing employees to be ready to fill those positions. Succession Planning also includes evaluating each employee in terms of their potential for performing at higher levels in the organiza-tion now or in the near future. Strategic Human Resources Management, therefore, is a key component of a well-developed strategic plan for the organization. Without the right talent in place, it is unlikely work will get “Done Well”! There are five key activities typically coordinated by the Human Resources (HR) Function: 8.2.1 Recruitment and Selection 8.2.2 Training & Development 8.2.3 Performance Appraisal & Feedback LG 8-3 8.2.4 Compensation & Benefits 8.2.5 Employee Relations Collectively, these five activities are intended to allow the orga-nization to attract, develop, and retain the talent necessary to achieve the organi-zation’s goals and to support the organization’s strategy, core values and desired culture. In this Topic we will explore each of these HR activities in more detail. 8.2.1 Recruitment and Selection LG 8-4 Recruitment and Selection is a process for identifying, pursuing, and hiring qualified candidates to fill current and future available positions within an organization. Recruitment starts with having a well-developed Organization Design (see Chapter 7 – “Organization Design”). This includes clear job descriptions, the necessary qualifications for those jobs, a clear organization structure, who those jobs will report to, and what other jobs they will interface with regularly. Once provided with this information, the HR function can determine the ideal types of candidates to recruit for a particular job. By referring to the Strategic Human Resources Management plan described in Topic 8.1, HR can anticipate how many people are needed for various jobs both in the short term and in the longer term and whether those candidates will be sourced internally and/or need to be hired externally. In addition, due to unexpected turnover or promotions, openings for some positions can occur randomly throughout the year and will also need to be addressed. Once HR has identified positions to be filled it can develop a recruitment plan to fill those positions. The first decision is whether the position can and should be filled internally. Both strategic and policy considerations are typically evaluated in making this decision. Some organizations have a strict “promote from within” policy because they believe this creates a positive employee environment and/or the skills required are dependent on experience within the organization. Other organizations believe that it is a good idea to periodically seed the organization with outside talent to avoid the organization becoming too inbred. These organizations see advantage in the new perspectives and diverse views that external new hires can offer. Exter-nally hired employees may also bring expertise acquired in other organizations that may be valuable to their new employer. Ideally, organizations will use a fair and objective process to identify and evalu-ate potential candidates for a position whether they are sourced internally or exter-nally. Typically, candidates’ qualifications are screened against the job requirements to see if there is a match. Today, sophisticated tools can scan resumes to quickly determine if a candidate has the required skills and experience. In some cases, there are “Search Firms” that will proactively search Facebook, LinkedIn, and other social media sites as well as resume databases to help identify potential candidates who may not even be actively looking for a job and to reach out to those qualified individuals to see if they might be interested in changing jobs. For some positions, organizations hire a “Headhunter” (a professional talent search organization) to help them find qualified candidates. Depending on the organization, its reputation, its location, the type of job, pay & benefits, turnover rate, and other factors it can be a challenging and lengthy process to find and recruit qualified talent. Most organiza-tions have a web page where they list all of their current job openings and required qualifications. There are also other websites that specialize in listing available jobs from multiple organizations. While employers have many tools to help them find employees, potential employ-ees have much greater access today to information about available jobs and prospec-tive employers allowing them to make much more informed decisions about where to work. There are many job posting web sites that make it easier for individuals looking for a job to search for available positions based on a variety of criteria and filters. There are also readily available ratings of organizations including the Fortune Magazine “100 Best Companies to Work For” edition which is published annually. Reality Checks: Because of the challenges and time involved in finding and recruiting qualified tal-ent, it is not uncommon for organizations to seek “shortcuts” rather than using a pre-established fair and objective process. These shortcuts often include having the desired person in mind when a position becomes open and essentially “going through the motions” to accelerate the process to eventually hire this pre-selected individual. Factors that encourage shortcuts are when the person responsible for making the hiring decision has prior working experience with an individual and thus knows the person is hard-working and loyal. In other “shortcut” cases – personal friend-ships, recommendations from senior employees, and other considerations that are not directly related to a candidates qualifications can unduly influence a hiring man-ager’s judgment about who to hire and can diminish their willingness to adhere to the formally established processes. These cases raise an ethical question as to the fair treatment of the other candidates. These candidates believe they will be given equi-table consideration when participating in the recruitment process. Clearly this does not occur when the hiring decision has already been made before the process starts. Another important Reality Check occurs when the organization does not have in-depth familiarity with a candidate they would like to hire. It is important in these situations that the organization make a concerted effort to conduct background checks to make sure the employee has been honest in their interviews and provided accurate information in their resume. As we will discuss in Topic 8.3, there are some legal and ethical considerations that may limit the breadth of information that can and should be sought in performing this background check. Legal considerations can also discourage many previous employers of the job candidates to provide any information beyond verification that the candidate worked at their company during a stated timeframe. Further, relying solely on candidate provided references can also be unreliable as it is difficult to verify the authenticity of these references and they may be favorably biased towards the candidate given the candidate is the one who selected them. In the end, recruiting and selecting the right candidate is a challenge for many organizations. Many factors can affect the ability of the organization to attract quali-fied candidates or to retain them once they are hired. It may require going beyond simply having a fair and objective process and require organizations to be proactive in their search efforts relying, in some cases, on external professional support to assist in their recruitment efforts. Finally, for recruitment and selection to be effective it is important to under-stand that this process does not work in isolation from the other HR processes and policies that collectively make an organization an attractive place to work. Training is teaching employees the skills necessary to perform effectively in their cur-rent job Development is preparing employees to take on additional responsibilities for future roles or expanded responsibilities in their current role. Training can be accomplished in several ways including classroom instruction, online instruction, use of procedure manuals/checklists, supervisor instruction, peer instruction, or self-instruction learned from performing the job. An initial train-ing session or orientation program can help familiarize the employee with company values, policies, employee support programs, and other information to aid the employee in becoming quickly acclimated to their new organization. Development is achieved through many of the same approaches used to train an employee plus some of the following: Job rotations to expand the experience of the employee with other jobs at the same level as their current job. These job rotations can be in different departments in the same function, different functions, different businesses, and/or different geographies. Sponsoring formal education programs including tuition reimbursement for advanced studies, seminars, or workshops. Some organizations have internal programs for developing managerial and leadership skills which are made available to selected participants based on recommendations from supervisors or through identification of the employee as someone capable of moving to higher positions as part of the formal employee appraisal process as discussed later in this Topic. Mentorship programs where employees meet regularly with more senior members of the organization to discuss issues and development challenges and to gain valuable insights in how to advance their career. Training and Development are important activities essential to preparing employees to do their jobs today and preparing them to take on added responsibilities in the future. Work is more likely to get “Done Well” when employees have been properly prepared to do their jobs! Performance Appraisal & Feedback is a process of employee evaluation and commu-nication with the goal of providing timely and beneficial information to the employee, and to the organization, on the value of the contributions of the employee to the orga-nization as well as identifying opportunities for improving employee performance. To be effective, performance appraisals should be: Based on pre-established standards, and/or realistic and achievable performance goals, that were understood and agreed to by the employee Conducted on pre-established regular intervals in a timely manner Objective and constructive with the goal of helping the employee to understand current performance and to encourage continued excellent performance or to identify opportunities for and/or necessary areas in need of improved performance Balanced in highlighting areas of good performance as well as opportunities for improvement Clear on the employee’s performance rating relative to an overall rating standard (though there is not necessarily a consensus on this requirement, it is helpful if compensation levels and adjustments are tied to an employee’s overall performance) A two-way discussion, with the employee given the opportunity to respond and challenge conclusions in the appraisal or the recommendations for improvement and with a willingness on the part of the manager to revise the appraisal for identified inaccuracies, unfair conclusions, or unrealistic expectations for improvement. Conducted with a goal of reaching consensus with the employee on the fairness of the evaluation and the areas in need of improvement with a joint commitment of the manager and the employee to support pursuit of those improvement opportunities Not used for the employee to provide feedback to the manager on the manager’s performance or on other employees’ performance in the organization Not used to discuss changes in compensation (though this is not always the case in some organizations. Generally, it is agreed that it is better to separate performance evaluation from the compensation discussion with the idea that there should be agreement on performance with the employee before compensation decisions are finalized.) Performance appraisals for managerial level employees may also include: The managerial level employee originally submitting proposed performance goals for discussion and agreement with their supervisor at the beginning of the evaluation period Submission of a self-evaluation at the end of the evaluation period in preparation for the supervisor completing the evaluation use of “360 feedback” (a process of collecting feedback from the employees of the managerial level employee being evaluated, his/her peers, and others who routinely interact with him/her). This feedback is generally used as input for identifying areas in need of improvement and used less as a basis for performance evaluation due to the more subjective nature of that feedback. In many organizations, it is common for managers to periodically conduct interim discussions with their direct reports to monitor progress against goals/standards and to identify any needed corrections to the performance plans. This avoids any big surprises during the final annual review. Performance Appraisal & Feedback is an important process for helping employees understand how they are performing and how they can improve. It also provides input in determining appropriate compensation rewards and other forms of recognition as well as determining whether employees should be considered for promotions or other assignments, or in extreme cases, for disciplinary action, probation, or dismissal. The HR professionals in the organization play a key role in developing a fair process and assuring that it is done in a timely and appropriate manner. This often includes training managers on how to develop performance plans with their direct reports, how to prepare performance evaluations, and how to deliver the appraisal feedback in a constructive and objective way. The goal is for Performance Appraisal & Feedback to provide the organization and its employees with accurate assessments of employee performance and to provide direction to employees on the areas in need of improvement while also having employees feel that the process is constructive, objective, fair, and supportive of helping them to improve. When the process is designed with these goals in mind, the result is more engaged employees and improved employee performance. Compensation and Benefits is a program and process for providing competitive pay and other incentives to employees in support of the organization’s goals, strategy, and values. How do employees typically get paid in an organization? In most organizations, base compensation for employees is either an hourly wage paid for the number of hours worked times an hourly pay rate, or a salary paid at a fixed dollar amount for a given period of time (weekly, bi-weekly, or monthly). In addition to the base compensation, hourly paid employees can earn overtime pay (usually 1.5 times their standard hourly wage) for working more than a given number of hours each week (usually in excess of 40 hours per week). They can also earn additional pay for work-ing holidays, or in some industries for working Saturdays or Sundays. This “holiday” rate is often paid at 2 times the standard hourly pay rate. For salaried employees, there is generally no overtime pay for extra hours worked but these employees are often included in programs that pay a periodic bonus based on performance by the employee and/or the organization’s overall results. Less common are other forms of compensation based on for example, “piece work” which pays an employee a fixed amount for completing a given work task such as sewing a pair of pants or assembling a product. In a “piece work” shop, however, there are typically substantial wage reduction penalties for any defective products that are produced to discourage poor quality by employees in their effort to perform tasks quickly. Another alternative form of compensation is “commission pay” where an employee is paid a percentage of the proceeds from making a sale of merchandise or for signing up a customer for a program or service. In the food service business, it is customary for employees to earn part of their pay from “tips” left by customers which are usually based on a percentage of the cost of the meal but are given at the discretion of the customer. Employee Benefits often include health insurance, dental insurance, life insur-ance, vacation time, sick days, dependent day care assistance, and other programs that are valuable to employees. These benefits are generally provided, or are available, to all employees. As part of participating in some benefit programs, the employee may need to share in the cost of that benefit. This is common for healthcare insurance or dental insurance where the employer may pay the majority of the cost, but the employee will still pay a portion of that cost. In some cases, the amount they pay may be dependent on their wage level with higher wage employees paying more and lower wage employ-ees paying less. The cost can also depend on whether the employee’s family mem-bers are also to be included in the benefit program. Recently, organizations have begun to offer “cafeteria plans” whereby the employee can pick and choose from various benefits with corresponding differences in the cost to the employee based on their choices. In order to achieve this goal, compensation and benefit programs must be com-petitive and influential. A key role the HR function plays is to coordinate the organi-zation’s compensation and benefits program consistent with the goals and strategy of the organization (as discussed in Chapter 3). If the organization’s strategy is to “differentiate” its product and services, it may need to pay higher wages than com-petitors in order to attract the best talent. On the other hand, if the organization’s strategy is “low-cost” then they may need to try to keep compensations costs lower than competitors in order to achieve an overall cost advantage. Part of the challenge for HR functions is to assist the compensation decision makers in determining competitive compensation and benefit packages for employ-ees. To do this, many HR functions belong to professional associations that provide benchmark compensation and benefits data for standard job categories. In addition, there are external consultants that will benchmark positions within specific indus-tries or for specific geographic areas to assist organizations in determining appropri-ate compensation levels for various job categories. Beyond making sure that compensation and benefit packages are competitive for attracting and retaining employees, compensation can also play a role in motivating good job performance. When an employee’s compensation can increase more or less based on the level of their performance, and/or when an employee can earn a bonus based on good performance, then compensation can also be used as a tool to motivate employees to do their best. Beyond setting initial compensation levels for new employees, it is common practice for organizations to conduct an annual review of compensation for all employees. As part of this review the HR department will follow industry norms for establishing average wage or salary increases based on the rate of overall inflation in the economy and to increase real wages (increases in excess of inflation) to match industry trends and to remain competitive. This also is a time to correct inequities that may have occurred in the average compensation levels for certain categories of jobs as a result of a more recent short supply of qualified candidates for that job cat-egory. HR departments should also be vigilant to make sure there are no inequities in compensation that are based on certain legally protected groups of employees (specifically, inequities based on race, gender, religious affiliation, sexual orienta-tion, or other categories that are legally protected from discrimination (see Topic 8.3)). This equity review can extend to other employees based on the organization’s policies and values. For example, it is common for some organizations to normalize wages (provide an increase in salary to reflect the change in cost-of-living) when transferring an employee from a low cost-of-living area to a high cost-of-living area. Employee Relations are the various programs, services, activities, and communica-tions enacted by the organization to foster a positive relationship between the orga-nization and its employees. Employee Relations programs often include some of the following: “Town Halls” where management meets with employees to share news about the organization and to answer employees’ questions. Company websites where Information about employee programs and organization announcements are routinely shared with employees and employee questions can be submitted and answered. “Suggestion Boxes” where employees can anonymously share ideas for improving the organization, raise employee issues, or share complaints. Organization sponsored social events such as company picnics, holiday parties, or outings to local attractions or sporting events. Company sponsored clubs/teams to organize activities for employees with similar interests Employee surveys to evaluate employee attitudes towards the company, and formation of employee committees to address employee concerns that are identified in the surveys  Diversity training for managers to develop their skills for creating a more inclusive environment within their departments Celebrations/Announcements of employee promotions, retirements, service anniversaries or other special events (weddings, births, adoptions, etc.) “Matching Gift Programs” where organizations will match employee contributions to charitable organizations or educational institutions In organizations with unionized labor, Employee Relations is usually referred to as “Labor Relations” and by contract with the labor union, often must follow more formal procedures in instituting any of the above Human Resources programs. Gen-erally, the adoption and implementation of any HR programs for union employees requires negotiations with the labor union and a vote by the members of the union to approve whatever agreements are reached. Maintaining positive relationships with employees is important to attracting and retaining good employees and motivating them to perform their best! Having a workforce comprised of motivated employees is a key success factor for getting work “Done Well”. anizations. These laws cover three major areas: LG 8-9 8.3.1 Equal Employment Opportunity 8.3.2 Compensation and Benefits 8.3.3 Health and Safety Let’s look at each of these areas in more detail. 8.3.1 Equal Employment Opportunity Essentially the laws covering this area are designed to deter employers from dis-criminating against protected classes of workers in their hiring and treatment of these employees. Organizations are prohibited from discriminating against job candidates and workers based on race, religion, color, gender, or national origin (Equal Employment Opportunity Act of 1972 or EEOC and the Civil Rights Act of 1964). This protected class of workers was expanded to include prohibitions against discrimination based on age specifically for workers over the age of 40 (Age Discrimination Act of 1967 as amended in 1978 and 1984) and also included a provision making it illegal to have a mandatory retirement age. The protected class of employees was further expanded to include those employees with physical or mental disability (Vocational Rehabili-tation Act of 1973 and the American with Disabilities Act, or ADA, of 1990) and included the requirement for employers to provide reasonable accommodations to allow disabled employees to work. One of the identified violations of the Civil Rights Act of 1964 is Sexual Harassment. Sexual Harassment is any unwelcomed behavior of a sexual nature. There are two major categories of illegal Sexual Harassment: i. Quid Pro Quo Sexual Harassment – occurs when consent to sexual acts affects job outcomes such as getting or keeping one’s job. ii. Hostile Work Environment Sexual Harassment – occurs when unwelcomed sexual behavior creates an intimidating and offensive workplace for anyone. In this case the behavior generally needs to be severe and pervasive. These laws addressed two key areas. The first was the requirement that men and women be paid the same for equal work (Equal Pay Act of 1963). The second was the require-ment that employers with over 49 workers provide up to 12 weeks unpaid leave for family (childbirth, adoption) or medical reasons (Family and Medical Leave Act of 1993). 8.3.3 Health and Safety These laws establish mandatory safety and health standards in organizations which are administered by an organization of the federal government – the Occupational Safety and Health Administration or OSHA (Occupational Safety and Health Act of 1970) Maintaining an organization’s compliance with these employment-related laws requires having well established procedures for conducting each of the five major activities coordinated by the HR function (recruitment and selection, training and development, performance appraisal and feedback, compensation and benefits, and employee relations). HR organizations need to stay up to date with any changes to these laws and how they are being interpreted by the courts. They also need to make sure that managers and employees are fully aware of their responsibilities for compliance with these laws. It is common today for training programs regarding compliance with these laws to be mandatory and conducted online with verification of participation by each employee. The costs of non-compliance can be severe making it more than worth-while to ensure that all employees are properly trained and understand their indi-vidual responsibilities for complying with the laws. In Chapter 4 – Doing What’s “Right”, we discussed why organizations go beyond legal compliance to fully meet the needs and expectations of their employees and why that is not only the “Right” thing to do but the “Smart” thing to do! That per-spective is equally relevant to Human Resource Related Legal Compliance activities covered in this chapter. Human Resources Management is critical for developing a skilled and motivated workforce. Such a workforce is essential for getting work “Done Well”! Having a genuine interest in an employee’s development is something we focus on at Salesforce” says Edweena Stratton, VP of employee success at Salesforce. Salesforce is a company that pioneered the development of cloud-based soft-ware for Customer Relationship Management or CRM. As of 2020, they have helped over 150,000 companies to improve their CRM process and have been rated one of the best places to work in multiple surveys. Among the development programs Salesforce offers to its management employ-ees are: coaching for success, leading for success, leading for growth, and “killer communicator”. “These programs provide ideas on ways to lead and engage at all levels, and how to stretch and build intelligence and best practices across the orga-nization,” according to Jeremy Ing, director of employee success. The company also employs a unique model which tightly aligns the company’s leadership and strategy with individual employee goals called V2MOM (vision, values, methods, obstacles, and measures). Ing describes the approach, “The process follows a back-and-forth, give-and-take course of development so that everyone has input. Giving every employee a voice in its development is critical to its success” Ing goes on to describe the benefits, “High levels of trust, retention, internal promotion and transfer rates across the business are the end result of such initiatives.”