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HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer CHAPTER 8: TRAINING AND DEVELOPMENT I. Orienting and Onboarding New Employees Carefully selecting employees doesn’t guarantee they’ll perform effectively. Making sure your employees do know what to do and how to do it is the purpo...

HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer CHAPTER 8: TRAINING AND DEVELOPMENT I. Orienting and Onboarding New Employees Carefully selecting employees doesn’t guarantee they’ll perform effectively. Making sure your employees do know what to do and how to do it is the purpose of orientation and training. The human resources department usually designs the orientation and training programs, but the supervisor does most of the day-to-day orienting and training. A. The Purposes of Employee Orientation/Onboarding Employee orientation or onboarding: A procedure for providing new employees with basic background information about the firm. The manager wants to accomplish four things when orienting new employees: 1. Make the new employee feel welcome and at home and part of the team. 2. Make sure the new employee has the basic information to function effectively, such as e-mail access, personnel policies and benefits, and work behavior expectations. 3. Help the new employee understand the organization in a broad sense (its past, present, culture, and strategies and vision of the future). 4. Start socializing the person into the firm’s culture and ways of doing things. B. The Orientation Process Onboarding ideally begins before the person’s first day, with a welcome note, orientation schedule, and list of documents (such as tax documents) needed the first day. ○ On the first day, make sure colleagues know the new employee is starting, and arrange for one or more of them to take the person to lunch. ○ On subsequent days, the new employee should meet colleagues in other departments. ○ After about two weeks, speak with the employee to identify any concerns. The length of the onboarding program depends on what you cover. The human resource specialist (or, in smaller firms, the office manager) performs the first part of the orientation by explaining basic matters like working hours and benefits. Then the supervisor continues by explaining the department’s organization, introducing the person to his or her new colleagues, familiarizing him or her with the workplace, and reducing first-day jitters. Supervisors should be vigilant. Those being oriented should show they’re involved. II. The Training Process Training: The process of teaching new or current employees the basic skills they need to perform their jobs. Or giving new or current employees the skills that they need to perform their jobs. A. ADDIE Five-Step Training Process The employer should use a rational training process. The gold standard here is still the basic analysis-design-develop-implement-evaluate (ADDIE) training process model that training experts have used for years ○ Analyze the training need. ○ Design the overall training program. ○ Develop the course (actually assembling/creating the training materials). ○ Implement training, by actually training the targeted employee group using methods such as on-the-job or online training. ○ Evaluate the course’s effectiveness. 1. Analyzing the Training Needs The training needs analysis may address the employer’s strategic/longer-term training needs and/or its current training needs. Strategic training needs analysis identifies the training employees will need to fill these future jobs. Task Analysis: A detailed study of a job to identify the specific skills required. Performance Analysis: Verifying that there is a performance deficiency and determining whether that deficiency should be corrected through training or through some other means (such as transferring the employee). Can’t-do Problem: employees don’t know what to do or what your standards are. Won’t-do Problem: employees could do a good job if they wanted to. Competency Model: A graphic model that consolidates, usually in one diagram, a precise overview of the competencies (the knowledge, skills, and behaviors) someone would need to do a job well. 2. Designing the Training Program Design: planning the overall training program including training objectives, delivery methods, and program evaluation. ○ Substeps include: setting performance objectives creating a detailed training outline (all training program steps from start to finish) choosing a program delivery method (such as lectures or Web) verifying the overall program design with management. ○ The design should include summaries of how you plan to set a training environment that motivates your trainees both to learn and to transfer what they learn to the job. Setting Learning Objectives: At the outset, the trainer should clearly define the program’s desired learning outcomes. ○ Training, development, learning, or (more generally) instructional objectives should specify in measurable terms what the trainee should be able to do after successfully completing the training program. ○ The learning objectives should first address any performance deficiencies that you identified. K. Calangi | 1 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer ○ One constraint is financial. The employer will generally want to see and approve a training budget for the program. Creating a Motivational Learning Environment: In setting the learning environment, the manager therefore should address several trainee-ability issues. The Cloud: placing software programs and services on vendors’ remote servers, from which they can then deliver these programs and services seamlessly to employees’ digital devices. 3. Developing the Program Program Development: assembling the program’s training content and materials. It means choosing the specific content the program will present, as well as designing/choosing the specific instructional methods (lectures, cases, Web-based, and so on) you will use. ○ Training equipment and materials include (for example) iPads, workbooks, lectures, PowerPoint slides, Web- and comp 4. Implementing the Training Program Implement: provide the training, using one or more of the instructional methods. ○ Before the actual training, send announcements far in advance, provide directions, provide a contact, and make sure participants have pretraining materials. ○ During training, make sure all participants have a point of contact in case they have questions or need guidance. ○ After training, remember training does not end when the program ends. Instead, periodically ascertain that trainees are transferring their learning to the job. On-the-Job Training (OJT): Means having a person learn a job by actually doing it. Types of OJT: 1. Coaching or understudy method: an experienced worker or the trainee’s supervisor trains the employee. This may involve simply observing the supervisor, or (preferably) having the supervisor or job expert show the new employee the ropes, step-by-step. 2. Job rotation: an employee (usually a management trainee) moves from job to job at planned intervals, is another OJT technique 3. Special assignments: ive lower-level executives firsthand experience in working on actual problems. 4. Peer training or peer-to-peer development: The employer selects several employees who spend several days per week over several months learning what the technology or change will entail, and then spread the new skills and values to their colleagues back on the job. Steps of OJT: 1. Prepare the learner. 2. Present operation. 3. Do a tryout. 4. Follow-up Apprenticeship Training: A structured process by which people become skilled workers through a combination of classroom instruction and on-the-job training. Informal learning: 70% of job learning occurs informally on or off the job, 20% reflects social interactions (for instance, among employees on the job), and only 10% is actual formal training. Job Instruction Training (JIT): Listing each job’s basic tasks, along with key points, in order to provide step-by-step training for employees. Lectures: a quick and simple way to present knowledge to large groups of trainees Programmed learning: A systematic method for teaching job skills, involving presenting questions or facts, allowing the person to respond, and giving the learner immediate feedback on the accuracy of his or her answers. Behavior Modeling: A training technique in which trainees are first shown good management techniques in a film, are asked to play roles in a simulated situation, and are then given feedback and praise by their supervisor. ○ It involves: 1. Modeling 2. Role-playing 3. Social Reinforcement 4. Transfer of training Audiovisual-Based Training: using DVDs, films, PowerPoint, and audiotapes. Vestibule Training: trainees learn on the actual or simulated equipment but are trained off the job (perhaps in a separate room or vestibule). Electronic Performance Support Systems (EPSS): Sets of computerized tools and displays that automate training, documentation, and phone support; integrate this automation into applications; and provide support that’s faster, cheaper, and more effective than traditional methods. ○ Job Aid: A set of instructions, diagrams, or similar methods available at the job site to guide the worker. Videoconferencing: delivering programs over broadband lines, the Internet, or satellite. K. Calangi | 2 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer Computer-Based Training: uses interactive computer-based systems to increase knowledge or skills. ○ Interactive multimedia training ○ Simulated learning and gaming ○ Virtual Reality (VR) Online/Internet-based Training: Most employers are moving from classroom-based to online-based learning because of the efficiencies involved. ○ Employers use online learning to deliver almost all the types of training to this point. ○ Learning management systems (LMS): special software tools that support online training by helping employers identify training needs and to schedule, deliver, assess, and manage the online training itself ○ Learning portals ○ Virtual classroom: Teaching method that uses special collaboration software to enable multiple remote learners, using their PCs or laptops, to participate in live audio and visual discussions, communicate via written text, and learn via content such as PowerPoint slides. ○ Mobile learning or on-demand learning: delivering learning content on the learner’s demand, via mobile devices like smartphones, laptops, and tablets, wherever and whenever the learner has the time and desire to access it. ○ Web 2.0 Learning: Training that uses online technologies such as social networks, virtual worlds (such as Second Life), and systems that blend synchronous and asynchronous delivery with blogs, chat rooms, bookmark sharing, and tools such as 3-D simulations. Lifelong and Literacy Training Techniques: Provides employees with continuing learning experiences over their tenure with the firm, with the aims of ensuring they have the opportunity to learn the skills they need to do their jobs and to expand their occupational horizons. Cross Training: Training employees to do differ ent tasks or jobs than their own; doing so facilitates flexibility and job rotation. 5. Evaluating the Training Effort Time Series Design: you take a series of performance measures before and after the training program. Controlled experimentation: Formal methods for testing the effectiveness of a training program, preferably with before-and-after tests and a control group. Training Effects to Measure: Kirkpatrick Model of training evaluation 1. Reaction. Evaluate trainees’ reactions to the program. Did they like the program? Did they think it worthwhile? 2. Learning. Test whether they learned the principles, skills, and facts they were supposed to learn. 3. Behavior. Ask whether the trainees’ on-the-job behavior changed because of the training program. For example, are employees in the store’s complaint department more courteous toward disgruntled customers? 4. Results. Most important, ask, “What results did we achieve, in terms of the training objectives previously set?” For example, did the number of customer complaints diminish? Reactions, learning, and behavior are important. But if the training program doesn’t produce measurable performance-related results, then it probably hasn’t achieved its goals. III. Managing Organizational Change Programs Lewin’s Change Process ○ Kurt Lewin formulated a model to summarize the basic process for implementing a change with minimal resistance. ○ To Lewin, all behavior in organizations was a product of two kinds of forces: those striving to maintain the status quo and those pushing for change. ○ Implementing change thus means reducing the forces for the status quo or building up the forces for change. ○ Lewin’s process consists of three steps: 1. Unfreezing means reducing the forces that are striving to maintain the status quo, usually by presenting a provocative problem or event to get people to recognize the need for change and to search for new solutions. 2. Moving means developing new behaviors, values, and attitudes. The manager may accomplish this through organizational structure changes, through conventional training and development activities, and sometimes through the other organizational development techniques (such as team building) we’ll discuss later. 3. Refreezing means building in the reinforcement to make sure the organization doesn’t slide back into its former ways of doing things—for instance, change the incentive system. In practice, to deal with employee intransigence, some experts suggest that the manager use a process such as the following to implement the change. To bring about a desired organizational change at work: 1. Establish a sense of urgency. For example, present employees with a (fictitious) analyst’s report describing the firm’s imminent demise. 2. Mobilize commitment through joint diagnoses of problems. Create a task force to diagnose the problems facing the department or the company. This can help to produce a shared understanding of what can and must be improved. 3. Create a guiding coalition. It’s never easy to implement big changes alone. Therefore, create a “guiding coalition” of influential people. They’ll act as missionaries and implementers. 4. Develop and communicate a shared vision of what you see coming from the change. Keep the vision simple (for example, “We will be faster than anyone at satisfying customer needs.”). 5. Help employees make the change. Eliminate impediments. For example, do current policies or procedures make it difficult to act? Do intransigent managers discourage employees from acting? K. Calangi | 3 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer 6. Aim first for attainable short-term accomplishments. Use the credibility from these to make additional changes. 7. Reinforce the new ways of doing things with changes to the company’s systems and procedures. For example, use new appraisal systems and incentives to reinforce the desired new behaviors. 8. Monitor and assess progress. In brief, this involves comparing the company's progress with where it should be. Using Organizational Development ○ Organizational Development: A special approach to organizational change in which employees themselves formulate and implement the change that’s required, often with the assistance of trained consultants. OD has several distinguishing characteristics: 1. It usually involves action research, which means collecting data about a group, department, or organization, and feeding the information back to the employees so they can analyze it and develop hypotheses about what the problems might be. 2. It applies behavioral science knowledge to improve the organization’s effectiveness. 3. It changes the organization in a particular direction—toward empowerment, improved problem solving, responsiveness, quality of work, and effectiveness. ○ Survey research is another of many OD options. It requires having employees, usually throughout the organization, complete attitude surveys. CHAPTER 9: PERFORMANCE MANAGEMENT AND APPRAISAL I. Basics of Performance Appraisal A. The Performance Appraisal Process Performance Appraisal: Evaluating an employee’s current and/or past performance relative to his or her performance standards. Process/Steps: 1. setting work standards 2. assessing the employee’s actual performance relative to those standards 3. providing feedback to the employee with the aim of helping him or her to eliminate performance deficiencies or to continue to perform above par. Defining the job means making sure that you and your subordinate agree on his or her duties and job standards and on the appraisal method you will use. B. Why Appraise Performance? 1. First we’ll see that although many employers are replacing or complementing annual reviews with frequent, informal discussions between managers and employees, most employers base pay, promotion, and retention decisions in large part on the employee’s appraisal. 2. Appraisals play a central role in the employer’s performance management process. Performance management means continuously ensuring that each employee’s performance makes sense in terms of the company’s overall goals. 3. The appraisal lets the manager and subordinate develop plans for correcting deficiencies, and to reinforce strengths. 4. Appraisals provide an opportunity to review the employee’s career plans in light of his or her strengths and weaknesses. 5. Appraisals enable the supervisor to identify if there is a training need, and the training required. A. Defining the Employee’s Goals and Performance Standards The performance appraisal should compare “what should be” with “what is.” Managers use one or more of three bases—goals, job dimensions or traits, and behaviors or competencies—to establish ahead of time what the person’s performance standards should be. The manager can assess to what extent the employee is attaining his or her numerical goals. Such goals should derive from the company’s overall profitability, cost reduction, or efficiency goals. II. Traditional Tools for Appraising Performance 1. Graphic Rating Scale Method: Simplest and most popular method of appraising performance. A scale that lists a number of job dimensions or traits (e.g: communication and teamwork) and a range (from “below expectations” to “role model” or “unsatisfactory” to “outstanding”) of performance for each. The employee is then rated by identifying the score that best describes his or her level of performance for each trait. 2. Alternation Ranking Method: Ranking employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked. 3. Paired Comparison Method: Ranking employees by making a chart of all possible pairs of the employees for each trait and indicating which is the better employee of the pair. 4. Forced Distribution Method: Similar to grading on a curve; predetermined percentages of ratees are placed in various performance categories. 5. Critical Incident Method: Keeping a record of uncommonly good or undesirable examples of an employee’s work-related behavior and reviewing it with the employee at predetermined times. K. Calangi | 4 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer 6. Narrative Forms: The person’s supervisor assesses the employee’s past performance and required areas of improvement. The supervisor’s narrative assessment helps the employee understand where his or her performance was good or bad, and how to improve that performance. 7. Behaviorally Anchored Rating Scales (BARS): An appraisal method that aims at combining the benefits of narrative critical incidents and quantified ratings by anchoring a quantified scale with specific narrative examples of good and poor performance. a. Developing a BARS typically involves five steps: 1. Write critical incidents. Ask the job’s jobholders and/or supervisors to write specific illustrations (critical incidents) of effective and ineffective performance on the job. 2. Develop performance dimensions. Have these people cluster the incidents into five or ten performance dimensions, such as “salesmanship skills.” 3. Reallocate incidents. To verify these groupings, have another team who also knows the job reallocate the original critical incidents to the cluster they think it fits best. Retain a critical incident if most of this second team assigns it to the same cluster as did the first. 4. Scale the incidents. This second group then rates the behavior described by the incident as to how effectively or ineffectively it represents performance on the dimension. 5. Develop a final instrument. Choose about six or seven of the incidents as the performance dimension’s behavioral anchors. 8. Management by Objectives (MBO): usually refers to a multistep company wide goal-setting and appraisal program. MBO requires the manager to set specific measurable, organizationally relevant goals with each employee, and then periodically discuss the latter’s progress toward these goals. a. The steps are: 1. Set the organization’s goals. Establish a company-wide plan for next year and set goals. 2. Set departmental goals. Department heads and their superiors jointly set goals for their departments. 3. Discuss departmental goals. Department heads discuss the department’s goals with their subordinates and ask them to develop their own individual goals. They should ask, “How could each employee help the department attain its goals?” 4. Define expected results (set individual goals). Department heads and their subordinates set short-term performance targets for each employee. 5. Conduct performance reviews. After a period, department heads compare each employee’s actual and expected results. 6. Provide feedback. Department heads hold periodic performance review meetings with subordinates. Here they discuss the subordinates’ performance and make any plans for rectifying or continuing the person’s performance. 9. Appraisal in Practice: Using Forms, Installed Software, or Cloud-Based Systems: Employers use either hard-copy forms, installed appraisal software packages, or cloud based systems to actually conduct appraisals. Many smaller employers use hard-copy forms, available from vendors such as Staples and HR Direct. Forms are simple to use, but become time-consuming as headcount rises. 10. Electronic Performance Monitoring (EPM): Having supervisors electronically monitor the amount of computerized data an employee is processing per day, and thereby his or her performance. 11. Conversation Days: The stress in these manager–employee conversations is on areas for improvement and growth, and on setting stretch goals that align with the employee’s career interests. There are no explicit performance ratings. 12. Using Multiple Methods: In practice, most use a rating form that merges several approaches. III. Dealing with Rater Error Appraisal Problems A. Potential Rating Problems 1. Unclear Standards: An appraisal that is too open to interpretation. The traits and degrees of merit are ambiguous. The way to fix this problem is to include descriptive phrases that define or illustrate each trait. 2. Halo Effect: In performance appraisal, the problem that occurs when a supervisor’s rating of a subordinate on one trait biases the rating of that person on other traits. The influence of a rater’s general impression on ratings of specific ratee qualities. 3. Central Tendency: A tendency to rate all employees the same way, such as rating them all average. Doing so distorts the evaluations, making them less useful for promotion, salary, or counseling purposes. Ranking employees instead of using graphic rating scales can reduce this problem, since ranking means you can’t rate them all average. 4. Leniency/Strictness: The problem that occurs when a supervisor has a tendency to rate all subordinates either high or low. Especially severe with graphic rating scales. Ranking forces supervisors to distinguish between high and low performers. 5. Recency Effect: Recency means letting what the employee has done recently blind you to what his or her performance has been over the year. B. The Problem of Bias Bias: The tendency to allow individual differences such as age, race, and sex to affect the appraisal ratings employees receive. K. Calangi | 5 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer C. The Need for Fairness The employees’ standards should be clear, employees should understand the basis on which you’re going to appraise them, and the appraisal should be objective. The quality of the interpersonal relationship between the supervisor and employee will shape the appraisal’s impact. To facilitate this, the employer should evaluate supervisors partly based on their effectiveness in managing performance. IV. Performance Management A. Total Quality Management and Performance Appraisal Total quality management (TQM) programs are organization programs that integrate all functions and processes of the business such that all aspects of the business including design, planning, production, distribution, and field service are aimed at maximizing customer satisfaction through continuous improvements. Built on a philosophy encapsulated by several principles, such as: cease dependence on inspection to achieve quality; aim for continuous improvement; institute extensive training; drive out fear so that everyone may work effectively; remove barriers that rob employees of their pride of workmanship TQM advocates argue that the organization is a system of interrelated parts, and that employees’ performance is more a function of things like training, communication, tools, and supervision than of their motivation. B. What is Performance Management? It is the continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning their performance with the organization’s goals. We can summarize performance management’s six basic elements as follows: 1. Direction sharing means communicating the company’s goals to all employees and then translating these into departmental, team, and individual goals. 2. Goal alignment means having a method that enables managers and employees to see the link between the employees’ goals and those of their department and company. 3. Ongoing performance monitoring usually means computerized systems to continuously measure the team’s and/ employee’s progress toward meeting performance goals. 4. Ongoing feedback means providing face-to-face and computerized continuous feedback regarding progress toward goals. 5. Coaching and developmental support should be part of the feedback process. 6. Recognition and rewards should provide incentives to keep the employee’s goal directed performance on track. CHAPTER 10: CAREER MANAGEMENT AND RETENTION I. Career Management Career: The occupational positions a person has had over many years. Career Management: The process for enabling employees to better understand and develop their career skills and interests, and to use these skills and interests more effectively. Career Development: The lifelong series of activities that contribute to a person’s career exploration, establishment, success, and fulfillment. Career Planning: The deliberate process through which someone becomes aware of personal skills, interests, knowledge, motivations, and other characteristics and establishes action plans to attain specific goals. Psychological Contract: “an unwritten agreement that exists between employers and employees.” A. The Employee’s Role in Career Management The employee is responsible for his or her own career. ○ He or she must assess interests, skills, and values; seek out career information resources; and take steps to ensure a happy and fulfilling career. ○ For the employee, career planning means matching individual strengths and weaknesses with occupational opportunities and threats. ○ In other words, the person wants to pursue occupations, jobs, and a career that capitalize on his or her interests, aptitudes, values, and skills. As one example, career-counseling expert John Holland says that personality (including values, motives, and needs) is an important career choice determinant. Portfolio Careers: Careers based on using one’s skills to create a livelihood from multiple income sources, often from several jobs paying different rates. B. The Employer’s Role in Career Management Before hiring, realistic job interviews can help prospective employees more accurately gauge whether the job is a good fit for them. Reality Shock: Results of a period that may occur at the initial career entry when the new employee’s high job expectations confront the reality of a boring or otherwise unattractive work situation. C. Employee Career Management Methods 1. Self-help e-learning tools appear to be the most popular employer-provided career services, followed by career assessment and feedback, and on-site training. 2. A career planning workshop is “a planned learning event in which participants are expected to be actively involved, completing career planning exercises and inventories and participating in career skills practice sessions.” K. Calangi | 6 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer 3. Career coaches generally help employees create 1- to 5-year plans showing where their careers with the firm may lead. II. Employee Engagement Guide for Managers A. Commitment-Oriented Career Development Efforts The employer’s career development process should send the signal that the employer cares about the employee’s career success. With career-oriented appraisals, the supervisor and employee jointly merge the latter’s past performance, career preferences, and developmental needs into a formal career plan. B. Managing Employee Turnover and Retention Turnover: the rate at which employees leave the firm. C. A Comprehensive Approach to Retaining Employees 1. Raise pay 2. Hire smart 3. Discuss careers 4. Provide direction 5. Offer flexibility 6. Use high-performance HR practices 7. Counteroffer D. Job Withdrawal “actions intended to place physical or psychological distance between employees and their work environments.” ○ Absences and voluntary turnover are two obvious types of job withdrawal. ○ “taking undeserved work breaks, spending time in idle conversation and neglecting aspects of the job one is obligated to perform.” ○ stop “showing up” mentally III. Employee Life Cycle Career Management Promotions: Advancement to a position of increased responsibility Transfers: Reassignments to similar positions in other parts of the firm. Retirement IV. Managing Dismissals Dismissal: Involuntary termination of an employee’s employment with the firm. Insubordination: Willful disregard or disobedience of the boss’s authority or legitimate orders; criticizing the boss in public. Termination Interview: The interview in which an employee is informed of the fact that he or she has been dismissed. Outplacement counseling: A formal process by which a terminated person is trained and counseled in the techniques of self-appraisal and securing a new position. Exit Interview: Interviews with employees who are leaving the firm, conducted for obtaining information about the job or related matters, to give the employer insight about the company Layoff: An employer sending employees home due to a lack of work; this is typically a temporary situation. Downsizing: The process of reducing, usually dramatically, the number of people employed by a firm. CHAPTER 11: ESTABLISHING STRATEGIC PAY PLANS I. Basic Factors in Determining Pay Rates A. Aligning Total Rewards with Strategy Employee Compensation: All forms of pay or rewards going to employees and arising from their employment. Direct Financial Payments: Pay in the form of wages, salaries, incentives, commissions, and bonuses. Indirect Financial Payments: Pay in the form of financial benefits such as insurance and paid vacations. Employers can make direct financial payments to employees based on increments of time or based on performance. Time-based pay still predominates The compensation plan should first advance the firm’s strategic aims—management should produce an aligned reward strategy. ○ Creating a compensation package that produces the employee behaviors the firm needs to achieve its competitive strategy. ○ Total rewards encompass traditional pay, incentives, and benefits, but also “rewards” such as more challenging jobs (job design), career development, and recognition. B. Equity and Its Impact on Pay Rates The equity theory of motivation postulates that people are motivated to maintain a balance between what they perceive as their contributions and their rewards. ○ If a person perceives an inequity, a tension or drive will develop that motivates him or her to reduce the tension and perceived inequity In compensation, one can address external, internal, individual, and procedural equity. 1. External equity refers to how a job’s pay rate in one company compares to the job’s pay rate in other companies. 2. Internal equity refers to how fair the job’s pay rate is when compared to other jobs within the same company (for instance, is the sales manager’s pay fair, when compared to what the production manager earns?). K. Calangi | 7 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer 3. Individual equity refers to the fairness of an individual’s pay as compared with what his or her coworkers are earning for the same or very similar jobs within the company, based on each person’s performance. 4. Procedural equity refers to the “perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay.” II. Job Evaluation Methods Employers use two basic approaches to setting pay rates: market-based approaches and job evaluation methods. ○ Market-based approaches: Involves conducting formal or informal salary surveys to determine what others in the relevant labor markets are paying for particular jobs. ○ Job Evaluation methods: Assigning values to each of the company’s jobs. Helps produce a pay plan in which each job’s pay is equitable based on what other employers are paying for these jobs and based on each job’s value to the employer. ○ Job Evaluation: Formal and systematic comparison of jobs to determine the worth of one job relative to another. eventually results in a wage or salary structure or hierarchy. Jobs that require greater qualifications, more responsibilities, and more complex job duties should receive more pay than jobs with lesser requirements. Market-competitive pay plan: Pay plan where pay rates are equitable both internally (based on each job’s relative value) and externally (in other words when compared with what other employers are paying). A. Compensable Factors A fundamental, compensable element of a job, such as skills, effort, responsibility, and working conditions. Two basic approaches to compare the worth of several jobs: ○ Decide that one job is more important than another is, and not dig any deeper. ○ Compare the jobs by focusing on certain basic factors the jobs have in common. Factors that establish how the jobs compare to one another, and that determine the pay for each job. B. Preparing for the Job Evaluation Job evaluation is a judgmental process and demands close cooperation among supervisors, HR specialists, and employees and union representatives. ○ Identifying the need ○ Getting employees to cooperate ○ Choose a job evaluation committee Benchmark job: A job that is used to anchor the employer’s pay scale and around which other jobs are arranged in order of relative worth. C. Job Evaluation Methods: Ranking The simplest method of job evaluation involves ranking each job relative to all other jobs, usually based on overall difficulty. There are several steps in the job ranking method. 1. Obtain job information. 2. Select and group jobs. 3. Select compensable factors. 4. Rank jobs. 5. Combine ratings. 6. Compare current pay with what others are paying based on salary survey. 7. Assign a new pay scale. The factor comparison method is a special ranking method. It requires ranking each of a job’s “factors” (such as education required, experience, and complexity), and then adding up the points representing the number of “degrees” of each factor each job has. D. Job Evaluation Methods: Job Classification A method for categorizing jobs into groups. Classes: Grouping jobs based on a set of rules for each group or class, such as amount of independent judgment, skill, physical effort, and so forth, required. Classes usually contain similar jobs. Grades: A job classification system like the class system, although grades often contain dissimilar jobs, such as secretaries, mechanics, and firefighters. Grade descriptions are written based on compensable factors listed in classification systems. Grade definition: Written descriptions of the level of, say, responsibility and knowledge required by jobs in each grade. Similar jobs can then be combined into grades or classes. E. Job Evaluation Methods: Point Method The job evaluation method in which a number of compensable factors are identified and then the degree to which each of these factors is present on the job is determined. F. Computerized Job Evaluations Most such computerized systems have two main components: ○ There is, first, a structured questionnaire. This contains items such as “enter total number of employees who report to this position.” ○ Second, such systems may use statistical models. These allow the computer program to price jobs more or less automatically, by assigning points based on the questionnaire responses. III. Contemporary Topics in Compensation A. Competency-Based Pay: Where the company pays for the employee’s range, depth, and types of skills and knowledge, rather than for the job title he or she holds. You pay the employee for the skills and knowledge he or she is capable of using rather than for the responsibilities or title of the job K. Calangi | 8 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer B. Broadbanding: Consolidating salary grades and ranges into just a few wide levels or “bands,” each of which contains a relatively wide range of jobs and salary levels. C. Comparable Worth: The concept by which women who are usually paid less than men can claim that men in comparable rather than in strictly equal jobs are paid more. This may mean comparing dissimilar jobs, such as nurses to mechanics. IV. Employee Engagement Guide for Managers A. Total Rewards Programs: encompass not only compensation and benefits but also personal and professional growth opportunities and a motivating work environment. B. Total Rewards and Employee Engagement: When it comes to employee engagement, both material and nonmaterial rewards—total rewards—seem essential. However, intangible rewards (such as the nature of the job/quality of work and career development opportunities) had high or very high impacts on engagement and performance, when combined with base salary and short-term incentives or bonuses. CHAPTER 12: PAY FOR PERFORMANCE AND FINANCIAL INCENTIVES Frederick Taylor popularized using financial incentives—financial rewards paid to workers whose production exceeds some predetermined standard—in the late 1800s. ○ As a supervisor at the Midvale Steel Company, Taylor was concerned with what he called “systematic soldiering”—the tendency of employees to produce at the minimum acceptable level. I. Money’s Role in Motivation A. Incentive Pay Terminology Financial incentives: Financial rewards paid to workers whose production exceeds some predetemined standard. Productivity: The ratio of outputs (goods and services) divided by the inputs (resources such as labor and capital). Fair day’s work: Output standards devised based on careful, scientific analysis. K. Calangi | 9 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer Scientific management movement: Management approach based on improving work methods through observation and analysis Pay for performance: Any plan that ties pay to some measure of performance, such as productivity or profitability. Variable pay: Any plan that ties pay to productivity or profitability, usually as one-time lump payments. B. Linking Strategy, Performance, and Incentive Pay Incentive pay—tying worker pay to performance—is popular. The problem is that doing so is easier said than done. One problem is that many incentive plans incentivize the wrong behavior Another big reason for incentive plans’ often-dismal results is that incentives that may motivate some people won’t motivate others C. Motivation and Incentives 1. MOTIVATORS AND FREDERICK HERZBERG For him, the best way to motivate someone is to organize the job so that doing it provides the challenge and recognition we all need to help satisfy “higher-level” needs for things like accomplishment and recognition. Herzberg says the factors (“hygienes”) that satisfy lower-level needs are different from those (“motivators”) that satisfy or partially satisfy higher-level needs. If hygiene factors (factors outside the job itself, such as working conditions, salary, and incentive pay) are inadequate, employees become dissatisfied. Adding more of these hygienes (like incentives) to the job (supplying what Herzberg calls “extrinsic motivation”) is an inferior way to try to motivate someone, because lower-level needs are quickly satisfied. Intrinsic motivations: Motivation that derives from the pleasure someone gets from doing the job or task. 2. DEMOTIVATORS AND EDWARD DECI Deci found that extrinsic rewards could at times actually detract from the person’s intrinsic motivation. 3. EXPECTANCY THEORY AND VICTOR VROOM People won’t pursue rewards they find unattractive, or where the odds of success are very low. Expectancy: A person’s expectation that his or her effort will lead to performance. Instrumentality: The perceived relationship between successful performance and obtaining the reward. Valence: The perceived value a person attaches to the reward. 4. BEHAVIOR MODIFICATION/REINFORCEMENT AND B. F. SKINNER Behavior modification: Using contingent rewards or punishment to change behavior. CHAPTER 13: BENEFITS AND SERVICES I. Introduction Benefits: Indirect financial and nonfinancial payments employees receive for continuing their employment with the company. ○ They include things like health and life insurance, pensions, paid time off, and child-care assistance. ○ Employee benefits account for about 31% of total compensation. K. Calangi | 10 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer ○ There are many benefits and ways to classify them. 1. pay for time not worked (such as vacations) 2. insurance benefits 3. retirement benefits 4. personal services benefits 5. flexible benefits Supplemental Pay Benefits: Benefits for time not worked such as unemployment insurance, vacation and holiday pay, and sick pay. Unemployment Insurance or Compensation: Provides benefits if a person is unable to work through some fault other than his or her own. II. Sick Leave and Severance Pay Sick Leave: Provides pay to an employee when he or she is out of work because of illness. Severance Pay: A one-time payment some employers provide when terminating an employee. III. Flexible Work Schedules Flextime: A work schedule in which employees’ workdays are built around a core of midday hours, and employees determine, within limits, what other hours they will work. Compressed workweek: Schedule in which employee works fewer but longer days each week. Job sharing: Allows two or more people to share a single full-time job. Work sharing: Refers to a temporary reduction in work hours by a group of employees during economic downturns as a way to prevent layoffs. CHAPTER 14: BUILDING POSITIVE EMPLOYEE RELATIONS I. What is Employee Relations? K. Calangi | 11 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer The managerial activity that involves establishing and maintaining the positive employee–employer relationships that contribute to satisfactory productivity, motivation, morale, and discipline, and to maintaining a positive, productive, and cohesive work environment. Managing employee relations is usually assigned to HR. Employers can do many things to build positive employee relations. Some examples include good training, fair appraisals, and competitive pay and benefits. II. Employee Relations Programs A. Ensuring Fair Treatment Fair Treatment: Reflects concrete actions, such as “employees are treated with respect,” and “employees are treated fairly.” ○ In terms of employee relations, employees’ perceptions of fairness relate positively to employee commitment; job involvement; satisfaction with the company, job, and leader; and organizational citizenship behaviors; and negatively to employees’ turnover intention. Procedural justice: Refers to just procedures in the allocation of rewards or discipline, in terms of the actual procedures being even handed and fair. ○ “In general, the department/college’s procedures allow for requests for clarification or for additional information about a decision.” Distributive justice: Refers to a system of distributing rewards and discipline in which the actual results or outcomes are even handed and fair. ○ “I am fairly rewarded considering the responsibilities I have.” B. Bullying and Victimization Bullying involves 3 things: 1. Imbalance of power. People who bully use their power to control or harm, and the people being bullied may have a hard time defending themselves. 2. Intent to cause harm. Actions done by accident are not bullying; the person bullying has a goal to cause harm. 3. Repetition. Incidents of bullying happen to the same person over and over by the same person or group, and that bullying can take many forms, such as: a. Verbal: name-calling, teasing b. Social: spreading rumors, leaving people out on purpose, breaking up friendships c. Physical: hitting, punching, shoving d. Cyberbullying: using the Internet, mobile phones, or other digital technologies to harm others C. Improving Employee Relations through Communications Programs Two-way communication also helps management know what’s bothering employees. Tactics include hosting employee focus groups, making available ombudsman and suggestion boxes, and implementing telephone, messaging, and Web-based hotlines. Exit interviews should enable the manager to sample the quality of employee relations and identify potential problem areas. Managers also use open-door policies and “management by walking around” to informally ask employees “how things are going.” Organizational climate: The perceptions a company’s employees share about the firm’s psychological environment, for instance, in terms of things like concern for employees’ well-being, supervisory behavior, flexibility, appreciation, ethics, empowerment, political behaviors, and rewards. D. Develop Employee Recognition/Relations Programs Recognition and service award programs requires planning. It also requires setting a budget, selecting awards, having a procedure for monitoring what awards to actually award, having a process for giving awards (such as special dinners or staff meetings), and measuring program success. Similarly, starting a recognition program requires developing criteria (such as customer service, and cost savings), creating forms and procedures for submitting and reviewing nominations, selecting awards, and having a process for awarding the awards. E. Use Employee Involvement Programs Suggestion teams: Temporary teams whose members work on specific analytical assignments, such as how to cut costs or raise productivity. Problem-solving teams: Teams that identify and research work processes and develop solutions to work-related problems. Quality circle: A special type of formal problem solving team, usually composed of 6 to 12 specially trained employees who meet once a week to solve problems affecting their work area. Self-managing/self-directed work team: A small (usually 8 to 10 members) group of carefully selected, trained, and empowered employees who basically run themselves with little or no outside supervision, usually for the purpose of accomplishing a specific task or mission. K. Calangi | 12 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer CHAPTER 15: LABOR RELATIONS AND COLLECTIVE BARGAINING I. The Collective Bargaining Process Collective Bargaining: The process through which representatives of management and the union meet to negotiate a labor agreement. ○ This means that both management and labor are required by law to negotiate wages, hours, and terms and conditions of employment “in good faith.” ○ The purpose of this is to reach an agreement about labor for the company and the employees. Good faith bargaining: Both parties communicate and negotiate, match proposals with counter proposals, and make a reasonable effort to arrive at an agreement. Its process includes: 1. Preparation 2. Negotiation 3. Agreement 4. Implementation 5. Renegotiation The Negotiating Team: Both union and management send negotiating teams to the bargaining table, and both go into the bargaining sessions having “done their homework.” Costing the Contract: Collective bargaining experts emphasize the need to cost the union’s demands carefully. Bargaining Items: Labor law sets out categories of specific items that are subject to bargaining: These are mandatory, voluntary, and illegal items. ○ Voluntary (or permissible) bargaining items: Items in collective bargaining over which bargaining is neither illegal nor mandatory—neither party can be compelled against its wishes to negotiate over those items. ○ Illegal bargaining items: Items in collective bargaining that are forbidden by law; for example, clause agreeing to hire “union members exclusively” would be illegal in a right-to-work state. ○ Mandatory bargaining items: Items in collective bargaining that a party must bargain over if they are introduced by the other party—for example, pay. Building Negotiating Skills: Experienced negotiators use leverage, desire, time, competition, information, credibility, and judgment to improve their bargaining positions. ○ Things you can leverage include necessity, desire, competition, and time. Impasse: Collective bargaining situation that occurs when the parties are not able to move further toward settlement, usually because one party is demanding more than the other will offer. Mediation: Intervention in which a neutral third party tries to assist the principals in reaching agreement fact find a neutral party who studies the issues in a dispute and makes a public recommendation for a reasonable settlement. Arbitration: The most definitive type of third party intervention, in which the arbitrator usually has the power to determine and dictate the settlement terms interest arbitration. Arbitration enacted when labor agreements do not yet exist or when one or both parties are seeking to change the agreement. Rights arbitration: Arbitration that interprets existing contract terms, for instance, when an employee questions the employer’s right to take some disciplinary action. Strike: A withdrawal of labor. ○ Economic strike: A strike that results from a failure to agree on the terms of a contract that involves wages, benefits, and other conditions of employment. ○ Unfair labor practice strike: A strike aimed at protesting illegal conduct by the employer. ○ Wildcat strike: An unauthorized strike occurring during the term of a contract. ○ Sympathy strike: A strike that takes place when one union strikes in support of the strike of another. Picketing: Having employees carry signs announcing their concerns near the employer’s place of business. Corporate campaign: An organized effort by the union that exerts pressure on the corporation by pressuring the company’s other unions, shareholders, directors, customers, creditors, and government agencies, often directly. Boycott: The combined refusal by employees and other interested parties to buy or use the employer’s products. Inside games: Union efforts to convince employees to impede or to disrupt production—for example, by slowing the work pace. Lockout: A refusal by the employer to provide opportunities to work. K. Calangi | 13 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer Injunction: A court order compelling a party or parties either to resume or to desist from a certain action. II. Dealing with Disputes and Grievances The grievance process is the process or steps that the employer and union agreed to follow to ascertain whether some action violated the collective bargaining agreement. It is the vehicle for administering the contract day to day. A. Sources of Grievance 1. Absenteeism. An employer fired an employee for excessive absences. The employee filed a grievance stating that there had been no previous warnings related to excessive absences. 2. Insubordination. An employee on two occasions refused to obey a supervisor’s order to meet with him, unless a union representative was present at the meeting. As a result, the employee was discharged and subsequently filed a grievance protesting the discharge. 3. Plant rules. The plant had a posted rule barring employees from eating or drinking during unscheduled breaks. The employees filed a grievance claiming the rule was arbitrary. B. The Grievance Procedure Formal process for addressing any factor involving wages, hours, or conditions of employment that is used as a complaint against the employer. K. Calangi | 14 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer CHAPTER 16: SAFETY, HEALTH, AND RISK MANAGEMENT I. OSHA Standards and Record Keeping Occupational Safety and Health Administration (OSHA): The agency created within the Department of Labor to set safety and health standards for almost all workers in the United States. Occupational illness: Any abnormal condition or disorder caused by exposure to environmental factors associated with employment. II. How to Prevent Accidents? 1. Reducing Unsafe Conditions: the employer’s first line of defense. Job hazard analysis: A systematic approach to identifying and eliminating workplace hazards before they occur. 2. Protecting Vulnerable Workers: In designing safe environments, employers need to pay special attention to vulnerable workers, such as young, immigrant, aging, and women workers. 3. Reducing Unsafe Acts: While reducing unsafe conditions is the first line of defense, human misbehavior will short-circuit even the best safety efforts. a. Through screening: the employer’s aim is to identify the traits that predict accidents on the job and then test candidates for these traits. b. Through training: Safety training reduces unsafe acts, especially for new employees.107 Here the employer should instruct employees in safe practices and procedures, warn them of potential hazards, and work to develop a safety-conscious employee attitude. c. Through posters, incentives, and positive reinforcement: Employers also use various tools to motivate worker safety. Employers should combine posters with other techniques (like screening and training) to reduce unsafe conditions and acts, and change the posters often. Posters should be easily visible, legible, and well-lit. d. By fostering culture and safety: Employers and supervisors should create a culture of safety by showing they take safety seriously. They must exhibit: i. Teamwork, in the form of management and employees both involved in safety. ii. Highly visible and interactive communication and collaboration on safety matters. iii. A shared vision of safety excellence (specifically, an overriding attitude that all accidents and injuries are preventable). iv. Assignment of critical safety functions to specific individuals or teams. v. A continuous effort toward identifying and correcting workplace safety problems and hazards. vi. Encouragement of incident reporting. e. By creating supportive environment: Organizations can develop a supportive environment by training supervisors to be better leaders, emphasizing the importance of teamwork and social support, and establishing the value of safety.” f. By establishing safety policy: The company’s written safety policy should emphasize that accident prevention is of the utmost importance, and that the firm will do everything practical to eliminate or reduce accidents and injuries. g. By setting specific loss control goals: Set specific safety goals to achieve. For example, set safety goals in terms of frequency of lost-time injuries per number of full-time employees. h. Through behavior-based safety and safety awareness programs: i. Behavior-based safety: Identifying the worker behaviors that contribute to accidents and then training workers to avoid these behaviors. ii. Safety awareness program: Program that enables trained supervisors to orient new workers arriving at a job site regarding common safety hazards and simple prevention methods. i. Through employee participation: “To be effective, any safety and health program needs the meaningful participation of workers and their representatives.... Worker participation means that workers are involved in establishing, operating, evaluating, and improving the safety and health program.” K. Calangi | 15 HRM WITH LABOR RELATIONS Chapter 8-16 | Finals Reviewer K. Calangi | 16