MOS 3383 Final PDF

§ May be beyond the person’s control § Define performance in terms of job outcomes § Objective and naturally occurring outcomes of performance at work § Measurement does not rely on one person rating another § Less subjective than other appraisa...

§ May be beyond the person’s control § Define performance in terms of job outcomes § Objective and naturally occurring outcomes of performance at work § Measurement does not rely on one person rating another § Less subjective than other appraisal methods § Less likely to result in charges of favoritism and subjectivity o Goal setting § Extension of results-based performance is to engage in goal setting § Useful for feedback purposes § Behaviours are observable and are typically under the control of the employee § Plays a key role in management by objectives (MBO) § Key performance indicators (KPIs): measurable business metrics that are aligned with a company’s strategy Translated into individual-level goals for employees as discussed between the employee and manager § SMART goals are the greatest motivational goals Specific, Measurable, Achievable, Reasonable, Time-bound An eMective way of measuring and managing performance o Electronic monitoring § Using technology to observe, record, and analyze information that directly or indirectly relates to an employee’s job performance § Creating a surveillance culture where employees feel their every move is recorded and managed Rating methods - Absolute ratings: comparing employee behaviours or outcomes to performance criteria o Comparison of the employee’s performance to predetermined criteria o Treat each performance score within a workgroup as independent of other employees’ scores o All employees can technically be rated as exceptional or need improvement o The rater gathers data about each employee’s performance, compares performance to agreed-upon criteria, and then rates each employee *EXAM* (know the diMerence between the BARS and BOS and what they both entail, BOS always has more questions) o Behaviorally Anchored Rating Scale (BARS) and Behavioural Observation Scale (BOS) o Can use BOS information to create a BARS § Behaviorally Anchored Rating Scale (BARS) Scale points represent actions o e.g., job knowledge – awareness of laws/rules High score = fully aware of rules/laws Low score = misinforms others about rules/laws Incidents are ranked on a scale o E.g. How much do you know about the laws/rules in the company o E.g. What do you know u can do legally vs. what you can’t do § Behavioural Observation Scale (BOS) Also based on critical incidents Longer than BARS Rate employees on the frequency of actions Incidents are individual items Frequency of each item Example... o Knows the price of competitive products § 1 = never § 2 = seldom § 3 = sometimes § 4 = generally § 5 = always - Relative rankings: involves comparison of each employee’s performance to that of coworkers o Forces the rater to diMerentiate among followers o Using ranking may yield results that are more useful for decision-making purposes such as distributing bonuses, increasing pay according to merit and making promotions o Straight rankings: involves having the rater rank-order all employees from best to worst § E.g. Who’s your best employee, who’s the second best, etc. § Can’t do this in a large organization § Doesn’t work with a large span of control § Maybe a cumbersome process  o Paired comparisons: involves creating rankings by comparing two employees at a time until every unique pair of employees has been compared and then compiling the results § Takes two people and compares them § Takes forever in large organizations, mentally taxing on rater § Basically, duel to see who is better in each o Forced distribution: involves the rater placing a specific percentage of employees under the exceptional adequate, and poor performer categories § Rankings are inconsistent with norms of cooperation § Employee performance doesn’t typically follow a normal distribution, irregular § Managers and employees dislike these systems, given the necessity to diMerentiate between employees even when diMerences in performance are not large enough to be meaningful - Qualitative Assessment o Rely on qualitative assessment or describing the area of strengths and limitations for feedback purposes without assigning a numerical rating to each employee o Critical incident method: managers identify examples of exceptionally high and low incidents of performances and document them in narrative form o Diary helps keep notes of when people excel or mess up o Hard to defend o Typically done when a company is starting up o Managers comments on employee performance often converge with manager ratings and provide additional useful data Source of performance information Managers - Naturally involves in performance management - Most knowledgeable source in the assessment of employee performance, and they are in a position to collect more information if needed - May provide higher-quality data to the performance assessment compared to other sources - May know little about the employee’s performance - Nature of relationship with employee can aMect rating and interactions during performance review Coworkers - Ability to rate certain aspects of performance more eMectively - Could increase perceived fairness of ratings - Potential to show bias due to liking - Best to have at least 3 coworkers provide ratings - Reviews should be in a form that preserves anonymity Direct Reports - Relevant and important source of information - Provide useful and actionable information and help the manager develop leadership skills - Anonymity is essential to maintain quality of subordinate feedback - Feedback provided by subordinates shows more evidence of a leniency bias as a result of likin compared to assessments managers for their employers Customers - Unique perspective to performance measurement - Internal customers are uses of an employee’s output within the same firm - External customer are outside an organization - Relevant and often is one of the more important indictors of performances - Signals to customers their opinions matter, may contribute to organizational reputation and customer relationships - O uninterested in giving feedback unless they have complaints - Little accountability and motivation to provide fair feedback, along with little training - Ratings may suMer from bias Self-Assessment - May capture intentions in addition to actual behaviours and outcomes observable to others - Rating inflation is more likely to occur if the information will be used for decision making purposes - Leniency of appraisals is reduced when appraisals would be verified through other methods - Most useful for developmental purposes, as a way of getting employees to think about their strengths and weaknesses and to have two-way dialogue during performance-related conversations, coaching sessions, ad performance review meetings - Ensures employee is part of the conversation, chance to highlight their greatest contributions, and learns what their manager sees as their greatest strengths - More useful if the criteria used for performance assessment are clear, objective, and unambiguous 360-Degree - Performance is evaluated for multiple perspective all Feedback around the focal person - Each provide information that is not necessarily captured by the other, providing new perspectives Team Appraisals - Better to have an independent team - Done at a team level, average rating Performance reviews and compensation - Risk that mangers won’t remember how employees were performing at the beginning of the review period - Needs to be coupled with frequent check ins and coaching meetings between employees and managers to make sure that performance is actually managed - Focal date reviews: performance reviews take place on the same date for all employees o Easier for the organization to allocate its bonus or merit pay budget o All reviews take place within the same short time period, resulting in a significant time investment for each manager supervising multiple employees - Anniversary review: employee is rated on the anniversary of their staM start date in the organization o Generally used if evaluations are not tied to compensation o Allows reviews to be spread out so the performance review period does not become a significant burden on employees and managers Factors leading to rating errors *EXAM* - Impression management o Behaviours individuals demonstrate to portray a specific image o Particularly eMective in positively influencing performance ratings are supervisor-focused tactics - Stereotypes & bias – depending on the prejudices or stereotypes held by the rater - Liking – liking or favorable attitudes toward the ratee leading to benefit of the doubt - Rater motivation – how motivated the rate is to provide an accurate evaluation Leniency Error - The tendency of a rater to rate most employees highly - Hard time making an extreme decision Severity Error - The tendency to rate most employees close to the lower end of the scale - Either completely agree, or completely disagree Central Tendency Error - The tendency to rate almost all employees in the middle category Halo EPect - Basing performance ratings on one or two performance dimensions, with one prominent dimension positively aMecting how the employee us perceived on other dimensions Horns EPect - The opposite of halo eMect; ratings on one dimension negatively influence how the employee ius perceived on other dimensions Recency EPect - Rater will focus on the most recent employee behaviours they have observed rather than focusing on the entire rating period Improving the ePectiveness of performance management - Training managers and employees o The frame of Reference (FOR): having raters observe specific instances of performance through videotapes or vignettes and then telling them the true score § Want diversity in raters and rating system § Rating awareness training § Ensures all raters have a standard § Reduces errors and increases accuracy - Increasing rater accountability o Three primary means to increase rate accountability: § Manager’s eMectiveness in giving feedback and conducting appraisals may be a performance dimension in their evaluations § Managers’ supervisors may have to sign oM on the appraisals, introducing accountability to a higher-level manager § Utilize calibration meetings Calibration meetings: groups of managers come together and discuss the rating they will give their employees before ratings are finalized § Ratings are dependent on managers’ communication and negotiation abilities § Rater accountability improves ratees reactions to performance appraisals - Having raters keep records of employee performance o Diary keeping: keeping records of employee performance, this method has been shown to improve rating accuracy by enabling raters to recall specific information about their employee o Managers may find it cumbersome o Allows managers to remember and recognize important milestones and provide feedback-rich detail - Auditing the System o It might reveal if raters are serious about evaluations, whether employees are satisfied with the quality of the feedback, and if they feel their eMorts are fairly rewarded and recognized o Uncover address problems (e.g., rater errors) § If one person is rating everyone the same and diMerent as other raters, address the potential for rating errors o Measure improvements by conducting another audit - Teaching managers how to be good coaches and build trust o Trust-based relationship between the manager and employee is essential to positive outcomes in relation to performance management o Focus on coaching performance improvements o Trust provides context - Feedback Delivery Best Practices o Recognize contributions o Conduct regular one-on-one meetings o Be a role model for feedback o Focus on actual behaviours, not personality o Use the start-stop-continue model (what employees should s-s-c doing) - Developing a feedback culture o Feedback culture: employees and managers feel comfortable giving and receiving feedback § Comfortable giving feedback § Comfortable receiving feedback § Real-time feedback – diary keeping/critical incidences, make sure it’s relevant and up to date § Must understand why you are doing it, what you are covering § HR employees meet to discuss what they are going to tell employees - Establishing Performance Improvement Plans (PIP) o Keep poor performers accountable and give them a chance to improve o Use SMART goals to make it clear whether the struggling employee meets expectations o Concludes when the employee’s performance improves and reaches the established goals § If performance does not improve actions to transfer or terminate must be taken o Poor performers are given a fair chance, increasing perception of fairness o Similar to project management o Ghantt charts – provide realistic goal timelines § Discuss with the employee: do u think this is a realistic amount of time to improve to whatever level, must be reasonable Lecture 10: Training CHAPTER 8: Training, Development & Careers Reinforcement: indirect or direct feedback from the job performance Practice: increase familiarity with the task Repetitive practice: ideal for motor skills (massed practice) Distributive Practice: repeat aspects of a job (learn a bit at a time); better for more complex jobs Anderson's (1985) Three Phases of Skill Acquisition - Declarative Knowledge o Known facts by memorizing or reasoning o Slow performance o Error-prone o General intelligence (g) important to master - Knowledge Compilation o Integrate cognitive and motor processes o Streamline behaviour o Perceptual speed important to master - Procedural Knowledge o Skill is automatic o Able to do skill and other tasks o Psychomotor ability important to master (coordination) Training Strategies - Speed Strategy o Competitive edge from reduced time for products/services o Train in teamwork and streamline methods - Innovation Strategy o Develop products or services diMerent from the competition o Train to think creatively - Quality-Enhancement Strategy o OMer better product or service - Cost-Reduction Strategy o Provide a cheaper product or service Needs assessment: systematic evaluation of the organization, the jobs, and the employees to determine where training is most needed and what type of training is needed - Three Steps: Organizational Analysis Task Analysis Person Analysis - Goals, strategies, - KSAOs and tasks - Asses current KSAOs and objectives, of the focal job competencies of culture - Competencies employees - Resources - Critical incidents - Develop training goals - External employees face - Consider employee environment on the job characteristics (e.g., demographics, motivation, education) o Organizational Analysis § Can new behaviour be learned and transferred to on-the-job behaviour § Steps for understanding the organization at a broader level: Understanding the company goals & strategies so the goals of the training program are aligned with them Understanding the organization’s culture, including the attitudes toward training among managers and employees Identifying the resources the organization can devote to training Analyzing the organization’s external environment o Task Analysis § Determine training objective § 4 Steps: Develop Task Statements o What do workers do? o How does the worker do their job? o To whom or what does the worker work with? o Why do the workers do what they do? Develop Task Clusters o Group tasks into similar groups Prepare knowledge, skill, and ability analysis (KSAs) o Knowledge: needed info. to do the job o Skills: psychomotor abilities o Abilities: cognitive capabilities Develop Training Programs for the KSA Task Links o Train KSAs o Person Analysis § Who needs training? § What kind of training is needed?  § Information from: Performance appraisal scores Surveys of employees Interviews with employees Skill and knowledge test scores Critical incidents on the job Trainee Characteristics - Trainee characteristics may aMect the success of a training program: o Self-ePicacy: A person's belief that they can accomplish a task is one of the most important predictors of training eMectiveness o Trainee motivation § Goal-setting theory states that setting specific, diMicult yet achievable goals for people will lead to the highest performance § Performance can be further enhanced by adding rewards and providing feedback as to how well the person is achieving their goals o Metacognitive skills: a person's ability to step back and assess their performance § Some people are better at assessing their performance than others, and this ability can have a serious eMect on whether they learn o Personality and cognitive ability can aMect a person’s learning Training Delivery Characteristics - Providing feedback to learners as to their training performance can greatly enhance the eMectiveness of training - Training relevance: the degree to which trainees see the training as important to their jobs o Can have a significant impact on the amount of eMort they invest in the training - Schema: outline or framework to help learners organize the training material so they will better retain the material o Providing trainees with a learning schema at the beginning of the training process can also enhance learning - Overlearning: occurs when trainees repeatedly practice a particular behaviour in the training situation so they can perform the behaviour automatically without much cognitive eMort o Takes additional resources (time of trainer & trainees) o Should not be used except under special circumstances - Massed learning: training occurs in one large chunk o Chosen by many large organizations, less expensive for large groups - Spaced learning: training occurs through several sessions o Generally, more eMective, allows learners to absorb the material, build self- eMicacy incrementally, and even practice the newly learned skill on the job Transfer - Training transfer: whether the training results in changes in performance on the job o Create increased knowledge among employees, but if performance is not aMected the training is not creating value for the organization - Training transfer climate: whether there is support for training within an organization - Identical elements: the training environment is similar to that of the work environment, increases likelihood of transfer - Transfer through principles: when transfer is enhanced by training employees on principles behind the content being taught - Behavioural tracking: trainees keep track of their on-the-job behaviours and whether they are performing the behaviours they learned in training Methods of Training - On-Site Training o On The Job Training § a.k.a. coaching § Instructors are senior workers § Imitate behaviour § Maximum transfer of training (same content and location) § Easy to administer § Brief and poorly structured o Vestibule Training § Typical for production lines § Equipment is near the actual line § Workers practice at the same pace § Only a few can be trained at once o Job Rotation § Used for blue- and white-collar jobs § Can move people to cover absences § Typical method in early career § People may not want to rotate o Apprentice Training § The new worker works under a journeyman (experienced worker) § At the end apprentice becomes a journeyman § Expensive method (1:1 ratio) § Fixed length of apprentice time - OM-Site Training o Lectures § An expert group speaks to a group of workers to explain and impart knowledge § A large # of people taught at the same time § One-way communication, little feedback o Audiovisual Material § The initial cost is expensive but can then be used repeatedly § Allows for a visual demonstration § Can be used to provide feedback (worker can be taped) o Conferences § Focus on discussion § Depends on the verbal abilities of the leader and group o Programmed Instruction § Based on work by B.F. Skinner § Operant conditioning (shaping) § “Teaching machine" or instructional manual § Participants determine their own pace § Information learned is broken into small steps § Feedback on each step § Material in an organized sequence § Time-consuming § Limited to structured behaviour o Computer-Assisted Instruction § Individual instruction § Reduces the need for an instructor § No travelling required § Costly o Simulation § Train in a model of work sit § e.g., pilots o Role Playing § ¾ used to enhance human relations skills or sales techniques § ¾ groups with discussion § ¾ can demonstrate other people's perspective o E-learning § Delivered through an online platform via computers or mobile devices, is growing exponentially as an industry that provides training to organizations § OMers specific training through a variety of modules § OMers flexibility o Behavioural Modeling Training: trainee observing a person performing a behaviour, practicing it, and then receiving feedback about their own performance Management Development - Three Issues: o Cultural diversity § Two approaches: Colour blind: ignore diMerences Embrace diPerences: educate and adjust to diMerences § Two programs: Attitude-change programs: self-assessment of stereotypes held Behaviour change approach: change behaviours to value diMerences o Sexual harassment § Stopping Harassment: Have a policy against sexual harassment Properly investigate complaints of harassment Properly discipline oMenders § Written Harassment Policies Should Contain: Definition of sexual harassment Statement encouraging complaints Promise of confidentiality Alternative channel for filing complaints Promise of proper investigation of all complaints Will take an interim step while waiting for a full investigation Appropriate disciplinary measures No retaliation or punishment for filing a complaint o Mentoring § Advising young managers § Hunt & Michael (1983) Four Stages of mentor relationship: o Initiation phase: mentor accepts apprentice as a protégé o Protégé phase: the apprentice's work is not their own but a by-product of the mentor's advice, support, etc. o Breakup stage: protégé goes to work on own (final stage if didn't get along) o Lasting-friendship stage: peer-like relationship Evaluating Training - Goldstein (1991) - Four Dimensions of Validity of Training Programs: o Training validity § Did trainees learn the behaviour? o Transfer validity § Did trainees match job performance criteria after training? o Intra-organizational validity § Is training eMective for diMerent groups within the organization? o Interorganizational validity § Is training eMective for diMerent organizations? Training for Managers & Leaders - Roleplays: trainees act in managerial situations such as counselling a diMicult subordinate - Case studies: participants analyze a diMicult business case - Games & simulations: teams challenge each other as if they were business in competition - Assessment centers: used for selecting managers, can do double-duty as training and development exercises, providing managers with useful feedback about their strengths and weaknesses and giving advice for future development - Executive coaching: provides individual advice and counselling to managers regarding their work and careers Onboarding (organizational socialization): the process of helping new employees adjust to their new organizations by imparting them the knowledge, skills, behaviours, culture, and attitudes required to function successfully within the organization - When done right, can lead to positive outcomes for both organizations and individuals including: o Better employee role clarity o Feelings of connectedness with coworkers o Confidence in their new role o Higher performance o Better job attitudes o Higher retention - EMective organizational onboarding o Welcoming: includes actives such as giving employees a welcome kit, giving them a personalized e-mail or call, or having the new employee meet their manager o Informing: new employees receive resources such as websites, internal discussion boards, materials, or orientations and additional material to help them, learn what is expected of them and how to do their job well o Orientation program: a specific type of training deigned to help welcome, inform, and guide new employees in a short period of time Training EPectiveness - Kirkpatrick’s four levels of training outcomes o Reactions criteria: assessing how trainees react to the training, namely, whether they liked it § Training utility reactions: trainees believe that the training was actually relevant and useful to their jobs o Learning criteria: whether the trainee actually gained some sort of knowledge or skill while in training o Behaviour: actual behaviour on the job, perhaps as measured by the supervisor o Results criteria: whether the training actually translates into an improvement in organizational outcomes such as profits and performance Definitions - Mindfulness training: state in which a person allows themselves to be in the present moment and learns to notice things around them in a nonjudgemental way - Gamification: includes training that is made into a game or simply competition among employees in terms of scores on their training performance - Career management: the continual process of setting career-related goals and planning a route to achieve those goals Lecture 11: Downsizing & Restructuring CHAPTER 10: Managing Employees Separation & Retention Voluntary turnover: departure initiated by an employee and is typically because of the availability of better alternatives or unhappiness with current work - Occurs when an employee quits their job - Forms of withdrawal without quitting: o Tardiness: being late without giving advance notice o Absenteeism: unscheduled absences from work - Turnover rate = (# of departures during the year / average # of employees during the year) x 100 - Retention rate = (# of employees who stayed during the entire period / # of employees at the beginning of the period) x 100 - Costs of voluntary turnover: o Direct costs to replace, onboard, and train new employees o The organization loses human capital, or the collective KSAOs that employees bring to the organization o Loss of “social capital”, or interpersonal connections employees have developed with coworkers managers, and clients o Turnover is often contagious - Causes of voluntary turnover o Job satisfaction o Organizational commitment o Rewards oMered beyond pay (benefits, career & growth opportunities, & training time) o Sense of fairness in the workplace - Ease of movement: examine the availability of alternative jobs, and think about the likelihood of finding a job that is at least as good as their current job - Unfolding model of turnover: model recognizing that employees often leave without lining up a new job o Explains the turnover decision as a result of “shocks” to the system o Employee experiences a critical incident or change, which shakes them out of their status quo and gets them to consider turnover as an option - Job embeddedness model: employees stay because of their links to others and fit with the context at work and their communities and how much they would have to sacrifice by leaving their work and communities o Both on- and oM-the-job embeddedness are negatively related to turnover  Work Community Links - Relations with manager - Memberships in clubs & - Relations with coworkers organizations - Spouse’s work - Children’s school & friends - Friends, neighbors Fit - Fit with organizational values - Fit with community - Fit with job - Fit with city Losses - Ability to negotiate parts of job - Short commute - Nonportable benefits - Familiarity with - Job stability & security neighborhood - Social network - Pride of organizational membership Managing Employee Retention - Gain upper management support - Competitive pay, benefits, & working conditions - Leverage engagement & attitude surveys o Pulse surveys: short, frequent surveys; do not replace the rich and detailed information obtained via annual survey but can be used to predict and manage turnover and to detect “shocks” like those discussed earlier in the chapter - Utilize exit interviews - Hire for fit - Structure onboarding experiences - Invest in high-commitment HR practices - Focus on turnover predictors o Job satisfaction: employees’ contentment with diMerent facets of their work, including the work itself, supervision, pay, and advancement opportunities o Work engagement: feelings of emotional connection to work and a state of being in which employees bring their personal selves to work - Learn how to cope with turnover - Managing relations with former employees o Boomerang employees: former employees decide to return to an organization - Retirements Involuntary turnover: discharge initiated by the organization - The worker failed to meet organizational expectations - Dismissals o Costs of dismissal § Employee may say negative things about the company in person or online § Employee may sue company for wrongful dismissal § Terminated employees may engage in acts of sabotage or aggression o Progressive discipline system: aim to ensure that employees have a chance to correct their behaviour and are given multiple chances § Stages: verbal warning, written warning, suspension, termination - LayoPs: involuntary turnover of employees due to organizational restructuring, downsizing, or other strategic or economic reasons Bonuses for Organizations may oMer bonuses to employees who improve productivity productivity or cut costs. Reduced hours The company may cut back on the hours of nonexempt employees or cut the number of workdays along with the pay of exempt employees. Furlough Employees may be put on mandatory unpaid time oM. Unpaid time oP Employees may be oMered unpaid time oM for a period of time on a voluntary basis Seek ideas from The organization may share information about the current employees financials of the company and seek ideas to save money. Pay cut The salaries or wages of some or all employees may be reduced. Hiring freeze The organization may cease hiring anyone for an extended period of time. Job sharing One full-time job may be divided between multiple part-time workers. OPering early The organization may oMer enticements to encourage retirement employees to retire early. Moving toward a By utilizing temporary workers for jobs in which the demand for contingent workforce employees fluctuates, the organization may avoid seasonal layoMs, Temporarily stopping The organization may stop production for a period of time and production not pay employees for that period. Retraining Instead of laying oM workers, the organization may invest in employees retraining and redeploying these employees. Utilizing work-share The organization may apply for state work-share programs to programs reduce work hours and pay of some employees, and employees  receive unemployment insurance benefits while keeping their jobs. Mergers & Acquisitions *EXAM* (know the diMerence between merger & acquisition) - Merger: join two organizations of equal status and power o Marriage o Rare - Acquisition: A more powerful company obtains a less powerful company o Could be a “hostile” take-over o Parent organization: organization doing the taking-over o Target organization: organization being taken over Issues with Mergers & Acquisitions - Parent culture: if a parent culture is strong, belief systems may be imposed onto the target - Parents’ arrogance: parents may view their own organization as “better” than their target’s o Three types of arrogance: *EXAM* (scenario asking which is happening) § Interpersonal: we’re better than you are § Cultural: our ways of doing things are better than your ways § Managerial: our bosses are better than your bosses - Fit: how well the two organizations fit/operate together o Strategic fit § Fit business strategies § Fit financial goal o Organizational fit § Often ignored § Match workforces and cultures § Pair people Downsizing Phenomenon - Downsizing: activities undertaken to improve organizational eMiciency, productivity, and/or competitiveness o eMects the size of the firm’s workforce, the costs, and the work processes - Downsizing strategies o Strategies to improve an organization’s eMiciency by: § Reducing the workforce § Redesigning the work § Changing the systems of the organization Organizational Downsizing - Can indicate a violation of the psych contract - AMected people: o Terminated personnel § The stress of losing a job § Physical stress symptoms: Headaches Stomach problems High blood pressure § Behavioural stress symptoms: Learned helplessness behaviours (“burnout”) Decreased sense of self-worth Increased depression Possible increase in violent behaviours o Surviving personnel § Job changes § Typical to experience pay cuts § May have to job share or reduce hours § Required to work harder § May feel guilt § May feel less committed to the organization § Tend to look for new jobs § Work teams tend to “unite” and resist the organization Downsizing Strategies - Workforce reduction: o Short-term strategy o Cut the number of employees through: § Attrition § Early retirement or voluntary severance packages § LayoMs or terminations (expensive) - Work redesign: o A medium-term strategy in which the organization focus on work processes o Assess whether specific functions, products, and/or services should be changed or eliminated - Systematic change: o A long-term strategy that changes the organization’s culture, attitudes, and values of employees o The goal is to reduce costs and enhance quality Reason for Downsizing - Declining profits - Business downturn or increased pressure from competitors - Merging with another organization, resulting in duplication of eMorts - Introduction of new technology - The need to reduce operating costs - The desire to decrease levels of management - Getting rid of employee “deadwood” Alternatives to Downsizing - Cutting non-personnel costs - Cutting personnel costs - Providing incentives for voluntary resignation or early retirement Inplacement & Outplacement Issues - Outplacement: providing a program of counselling and job-search assistance for workers who have been terminated - Inplacement: reabsorbing excess or inappropriately placed workers into a restructured organization Planning for Downsizing - Determining how many people will lose their jobs, who will be let go, how the reduction will be carried out - Determine the legal consequences - Designing current and future work plans - Implementing the decision - Performing follow-up evaluation and assessment Adjusting to Job Loss - Advance notification of layoMs - Severance pays and extended benefits - Education and retirement programs - Outplacement assistance - Clear, direct, and empathetic announcement of layoM decisions - Consideration of HR planning practices that represent alternatives to large-scale layoMs Survivors of Downsizing - Job insecurity: Feelings of concern about the continuing existence of a job Perceptions of Justice - Three types of justice warrant consideration: o Procedural justice o Interactional justice o Distributive justice § Distributing who will remain and who goes in an equitable manor Survivor Reactions - Negative attitudes and behaviours - Reduced performance capabilities - Lower organizational productivity - Emotions: anger, anxiety, cynicism, resentment, retribution, hope EPective Downsizing Strategy - EMective downsizing strategy requires consideration of: o The tactics used to reduce the workforce o The implementation processes used during downsizing and the redesign of work o The changes to, or impacts on, structures and processes within the organization Best Practices of Downsizing - Downsizing should be initiated from the top - Workforce reduction must be selective in application and long-term in emphasis - Special attention should be paid to both those who lose their jobs and to the survivors who remain in the organization - Decision-makers should identify where ineMiciencies and costs exist - This should result in the formation of small, semi-autonomous organizations within the broader organization - Must be a proactive strategy focused on increasing performance - OMer severance pay & outplacement assistance to victims - Emphasize communication among survivors HRM Issues - Managing the changing psychological contract - The “new deal” in employment - Altering the psychological contract - Downsizing and “high-involvement” HRM - Labour relations issues Lecture 12: Strategic International HRM CHAPTER 16: Challenges & Opportunities in International HRM Definitions - International companies: companies export and import, but their investments are within one home country - Multinational companies: operate in multiple countries but with clearly designated headquarters in their home country - Transitional companies: have operations in multiple countries, act like borderless companies and do not consider any one country as the center of operations - OPshoring: producing overseas or performing some operations overseas - Outsourcing: moving some operations of the company to a diMerent company (does not necessarily involve an international operation) - Global integration: ensures companies establish a common corporate culture and common ways of doing business, which could be helpful in achieving fairness across diMerent operations - Local diPerentiation: transfer of practices across units through the use of people, information technology, standardized procedures and rules, centralizing particular decisions in one location o People-based: transferring managers, meetings, & use of expatriates o Information-based: centralized information technology structure, intranet & internet o Formalization-based: standardized work procedures, rules, policies & manuals o Centralization-based: shifting decision-making to headquarters, setting up goals & targets Issues - Projecting global competence supply - Forecasting global competence needs - Developing a blueprint to establish global competence pools within companies Strategic International HRM - HRM issues, functions, policies, and practices - Result from the strategic activities of multinational enterprises - AMect the international concerns and goals of those enterprises Dimensions of Culture (Hofstede) Dimension Definition Example Individualism Degree to which individuals define Highly individualistic: Australia, vs. themselves as individuals as opposed USA, UK collectivism to through their relationships. Highly collectivist: Collectivists emphasize loyalty to the Ecuador, Guatemala, West group, face saving, and cooperation Africa within the in-group. Power Degree to which the society accepts High power distance: distance power in the society ius distributed Guatemala, Panama, Slovakia unequally and hierarchy is naturally Low power distance: distributed Austria, Denmark, Israel Uncertainty Degree to which the society feels High uncertainty avoidance: avoidance uncomfortable with uncertainty and Australia, Greece, Portugal risk and emphasizes procedures or Low uncertainty avoidance: traditions to deal with it Denmark, Jamaica, Singapore Masculinity Masculine cultures are those that Highly masculine cultures: vs. embrace values such as achievement Japan, Slovakia femininity and materialism. Feminine cultures Highly feminine cultures: emphasize modesty, caring for the Costa Rica, Sweden, Norway weak, and quality of life. Corporate International Business Strategies - Four stages of growth as multinational corporations evolve: Domestic strategy: internationalizing by Multi-domestic strategy: a strategy that exporting goods abroad as a means of concentrates on the development of seeking new markets foreign markets by selling to foreign - Anywhere nationals - Have a product, look to see where - E.g., Johnson & Johnson (modify else there is demand for your product, labelling, etc. based on product within your country market) - Create products specifically for certain markets - Pilot testing in other countries, testing market for your product in other countries Multinational strategy: standardizing the Global strategy: a strategy that aims to products and services around the world to introduce products in chosen countries gain eMiciency with the least amount of cost - Exactly the same everywhere - Modified based on country - E.g., Starbucks (modifies pH of - E.g., Microsoft (same, but in water so drinks taste the same at all diMerent languages) locations) Strategic IHRM - Fit: the degree to which the needs, demands, goals, objectives, and/or structure of one component - Consistent with the needs, demands, goals, objectives, and/or structure of another component - Three IHRM approaches: *EXAM* (which approach is used within the scenario) o Adaptive § Flexibility: the ability to respond to various demands from a dynamic competitive environment § Adapting to the needs of the area § E.g., McDonald’s o Exportive § Taking a product, putting it in a box, shipping it to a location, exact same when it arrives § E.g., Coke & Starbucks o Integrative § Piggybacks oM another company to expand § Most common for large companies § *Look for merger hint on exam* § E.g., Target with Sobeys Cross-Cultural Training (CCT) - Positive influences: o Expatriate self-development § Figure out how to negotiate and communicate o Interpersonal skills § Adoption of common phrases etc. o Cross-cultural perception § How countries view other countries - Some countries have specific traditions and norms around particular HR practices, necessitating that multinational companies adopt local practices - Suggestions for facilitating the transfer of HR practices to diMerent cultural contexts o Explain the intent behind practices o Consider having a cultural liaison to interpret the practice and provide support o Provide a space for experimentation and learning from failures o Do not blame employees for failing to embrace a practice that may be a misfit for their cultural context Selection of Global Manager Candidates - Personality as a Selection Criterion o Five-factor personality model (OCEAN) includes the following: § Openness § Conscientiousness Number one predictor of job performance, all other factors are job-dependent § Extraversion § Agreeableness § Neuroticism / Emotional stability o Trainability: an individual’s ability to acquire certain skills to a desired level of performance o Other Personal Characteristics: Self-maintenance competencies, relationship competencies/interpersonal skills § Eating, staying hydrated, wellness, sleep, etc. § Relationship competencies and interpersonal skills are important in reducing the eMects of culture shock § Typically knows self-maintenance competencies by working with a person for a long time § Improve relationship competencies and interpersonal skills by testing and piloting diMerent things Guidelines for EPective Training - Assess and evaluate the need for training - Clarify the purpose and goals of training - Plan and design the training programs - Implement the training plan - Evaluate the plan Career Development - Repatriation: return to home headquarters or home subsidiaries Other Issues in Strategic IHRM - International performance appraisals - International compensation - International labour relations Managing HR Globally Advantages Disadvantages - Access to wider talent pool - Understanding the fundamental cultural, - Ability to transfer expertise legal and economic diMerences - Adapting practices accordingly - Recruitment & selection o Hiring employees in diverse national contexts could be a major challenge o Key to determining the proper mix of parent-country nationals, host-country nationals, and third-country nationals to be employed in a specific overseas operation § Home-country nationals: individuals from the subsidiary country who know the foreign cultural environment well § Parent-country nationals: individuals from headquarters who are highly familiar with the firm’s products and services, as well as with its corporate culture § Third-country nationals: individuals from a third country who have intensive international experience and know the corporate culture from previous working experience with corporate branches in the third country - Motivating, rewarding, & managing employees o Companies diMerentiate their reward systems and benefits to stand out o Be aware of diMerences in legal requirements that aMect compensation o OMering extrinsic rewards that fit a given context is essential for attracting and retaining talent o Cultural diMerences and workforce demographics may necessitate regional adaptation - Employee separations o Be aware of how separations are handled given labour o Approaching the termination process systematically and respectfully, creating strong employment contracts, specifying how performance and absenteeism are to be handled, and ensuring that notice periods and severance pay follow the national legal requirements in each locality Internationalization - Sometimes subsidiaries require close coordination with the parent company - Other times, subsidiaries exist to reach overseas markets, as in cases of global companies - Companies may give greater autonomy to subsidiaries and make greater eMorts to ensure HR practices fit the needs of each locality - The amount of autonomy a company has will depend on the structure of its internationalization eMorts - A company may also have wholly-owned subsidiaries o Wholly owned subsidiaries: giving the parent company full control over its overseas operations - A company may have less control over its overseas operations if it has a joint venture or strategic alliance o Joint venture: involves two companies coming together and investing to create a new company o Strategic alliance: partnership with other companies o The advantage of allowing the company to access local resources and expertise will also prevent the organization from exercising complete control over overseas operations Managing of Expatriates - Expatriate: person who is living and working in a diMerent country than their country of origin o Typically a move overseas longer than 6 months o Multinational enterprises have organizationally assigned expatriates o o Organizationally assigned expatriates: employees who are sent by the organization for a predetermined time to work in an overseas operation - Self-initiated expatriate: skilled professional who moves to diMerent countries for a specific period of time with the intention of gaining overseas work experience - Expatriate assignment: degree of comfort and lack of stress associated with being an expatriate o Three forms of adjustment are shown to matter for expatriates § Cultural adjustment: adjusting to the new culture one is now living in, including factors such as transportation, entertainment, health systems, education, and general living conditions § Work adjustment: feeling comfortable at work and with one’s new tasks § Interactional adjustment: comfort felt with interacting with local individuals inside or outside work  Benefits Downsides - May be a boon to the career of the - Over reliance on expatriate, helping them develop unique expatriates or using skills and achieve visibility expatriates for the wrong - Important role in knowledge diMusion, types of positions may such as transferring innovations across backfire units - Run risk of failure and - Can facilitate direct knowledge sharing necessitate careful across units and indirect knowledge planning sharing by linking home- and host-country - Stress and poor operations and acting as “boundary adjustment can result in spanners” that tie units to each other low job satisfaction, low - Inpatriates facilitate knowledge transfer eMectiveness, and from local operations to headquarters premature return from - Inpatriates: country employees working assignment in headquarter locations - Failed assignments are - Help build individuals skills costly - Preparing expatriates for assignments o Ensure organizations are selecting the right person, prepare them for the role, and provide ongoing support o Selecting expatriates § Based on specific job knowledge and job-related skills § Global mindset: individuals who are open to learning about diMerent cultures, have a sense of adventure, are comfortable dealing with ambiguity, and have a nonjudgemental attitude toward those from other cultures are more likely to be successful in complex environments o Cultural training § Barrier to eMectiveness in a new location is a lack of understanding of cultural diMerences § Culture shock: feeling of disorientation individuals experience when they enter a new culture o Relocation assistance § Vary by the level of resources the company can aMord, the specific location one is moving to, and the organizational level of the expatriate § Moving to a remote location may mean that the expatriate will need to deal with a lack of adequate medical care, diMiculty identifying international schools for kids, and lack of housing that matches what the expatriate is used to  o Risk management § Ensure the safety and security of their employees when sending them overseas § The world is increasingly unpredictable, and political turmoil, health risks (remote location, unsanitary conditions), individual high crime rates (murder, theft, break-ins), organized crime (terrorism, gang activities, kidnappings), and natural risks (earthquakes extreme weather) pose serious threats and uncertainty to companies operating in some regions o Special considerations (women, LGBTQ+ employees as expatriates) § Stereotypes about unwillingness to serve as expatriates and their potential inability to operate in other cultures have been debunked § Organizational support and the absence of family problems serve as buMers for female expatriates dealing with local employees’ prejudices § Organizations are advised against excluding these employee groups from expatriate opportunities despite the challenges o Compensation § Ensure the expatriate does not suMer a serious financial penalty as a result of accepting the assignment § Key components of the pay package Component Explanation Base pay - Most companies use a home-country-based approach to determining expatriate’s base pay - The expatriate's regular pay in the home country is divided into taxes, housing, savings, and spending components, and the organization makes adjustments, so the employee does not lose money on the move - This approach protects the expatriate from cost diMerences in the new location. According to SHRM, 76% of all assignments use this approach - In a host-country-based approach, the expatriate is treated as a local employee for their salary - This approach is used in 14% of long-term assignments - The headquarters-based approach assumes that all expatriates are paid headquarters salaries regardless of location. Performance- - The expatriate may also be oMered financial incentives in based pay recognition of reaching performance targets or stock- based rewards Housing - In some locations, the company may oMer company- allowance owned housing or pay for the diMerences between housing in home- and host-country locations  - If the employee is moving with their family, this may be a larger allowance Cost-of-Living - The employee's pay is adjusted for cost-of-living adjustment diMerences between home and host locations. Hardship/hazard - When employees are assigned to a hazardous location, pay the pay package also includes hazard pay to compensate for the diMerences in living conditions and quality of life - This may be 10% to 50% of base pay Educational - When local educational options are inadequate, the assistance company may pay for the costs of dependents' educational expenses in a private school or oMer a stipend to partly cover the costs Home leave - Companies usually cover travel expenses of the expatriate and their family to their home country once a year or more, and in long assignments, they may oMer a period of leave to be spent in the home country - This policy will be more generous for expatriates § Benefits such as travel insurance; home, auto, and property insurance; and health insurance must be provided § When determining pay and benefits, one size does not fit all, it is important to consider the issues that are relevant for the expatriate and the family § Coreflex: provides some services (such as paying for movers and travel expenses) to all expatriates, with the remainder of benefits personalized to the unique situation of the expatriate o Repatriation § Conclusion of expatriate assignment often means repatriation, or relocating the expatriate to their country of origin § Presents challenges such as diMiculty retraining expatriates or expatriates not interested in returning to their home country § Upon return, expatriates may also experience reverse culture shock Reverse culture shock: expatriates may find they have changed during the assignment and that their home country and company have also changed during their absence, resulting in the feeling that their country of origin does not feel like home anymore Alternatives to Long-Term Relocation - Organizations are increasingly designing short-term assignments to conatin costs and reduce the disruptive eMects of long-term stays on employees and their families - Do not have much of the organizational support involved for expatriates  o Typically, there is no adjustment in pay or relocation allowances, and the company investment may be limited to travel expenses for the expatriate to and from the location - Cross-border commuters represent another alternative to expatriate assignments o Employees may work in a diMerent country during the week, returning home on weekends - Digital nomads: individuals who work remotely, without being tied to a specific location, and they decide how long to stay in each location - Global nomads: when digital nomads are working across the borders - When employees move to a diMerent country, organizations need to: o Adjust employee withholding of taxes given the new location of the employee o Consider any safety risk and any potential health insurance adjustments o Consider challenges communicating - Employer of record: an organization that serves as the employer for an employee who performs work in a diMerent country - OMering employees the opportunity to be global nomads provides many benefits: o Improved employee retention o Access to a greater pool of employees - Companies are advised to use a corporate mobility policy to outline employer and employee obligations and specify length of stay and location EXAM - Equity - Key terms for each preceding chapter - ½ old content and ½ new - Hiring laws (don’t read American) - Use key concepts that have been carried throughout