Chapter 9 Attracting and Retaining Employees 2021 PDF

Chapter 9 Attracting and Retaining the Best...

Chapter 9 Attracting and Retaining the Best Employees © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LEARNING OBJECTIVES 9-1 Describe the major components of human resources management. 9-2 Identify the steps in human resources planning. 9-3 Describe cultural diversity and understand some of the challenges and opportunities associated with it. 9-4 Explain the objectives and uses of job analysis. 9-5 Describe the processes of recruiting, employee selection and orientation. 9-6 Discuss the primary elements of employee compensation and benefits. 9-7 Explain the purposes and techniques of employee training and development. 9-8 Discuss performance appraisal techniques and performance feedback. 9-9 Outline the major legislation affecting human resources management. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Human Resources Management: An Overview Human resources, the people who work within an organisation, are the most important and valuable resource for a business. Human resources management (HRM) – all the activities involved in acquiring, maintaining and developing an organisation’s human resources © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HRM Activities (slide 1 of 3) Acquisition includes planning and the various activities that lead to hiring new personnel. The planning phase of HRM includes five separate activities: 1. Human resources planning – determining the business’s future human resources needs 2. Job analysis – determining the exact nature of the positions 3. Recruiting – attracting people to apply for positions 4. Selection – choosing and hiring the most qualified applicants 5. Orientation – acquainting new employees with the business © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HRM Activities (slide 2 of 3) Maintaining human resources consists primarily of encouraging employees to remain with the business and to work effectively by using a variety of HRM programmes, including: Employee relations – increasing employee job satisfaction through satisfaction surveys, employee communication programmes, exit interviews and fair treatment Compensation – rewarding employee effort through monetary payments Benefits – providing rewards to ensure employee well- being © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. HRM Activities (slide 3 of 3) The development phase of HRM is concerned with improving employees’ skills and expanding their capabilities. The two important activities of this phase are: 1. Training and development – teaching employees new skills and new jobs, and more effective ways of performing their present jobs 2. Performance appraisal – assessing employees’ current and potential performance levels © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Responsibility for HRM In general, HRM is a shared responsibility of line managers and staff HRM specialists. Specific HRM activities are assigned to those in the best position to perform them. Human resources planning and job analysis are usually carried out by staff specialists with input from line managers. Staff experts handle recruiting and selection, although line managers are involved in hiring decisions. Staff specialists devise orientation programmes that are carried out by both staff specialists and line managers. Compensation systems (including benefits) most often are developed and administered by the HRM staff. Training and development activities are the joint responsibility of staff and line managers. Performance appraisal is the job of the line manager, although HRM personnel design the business’s appraisal system in many organisations. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Human Resources Planning Human resources planning – the development of strategies to meet a business’s human resources needs The organisation’s overall strategic plan is the starting point of the process. From this, human resource planners can forecast future demand for human resources. Next, the planners must determine whether the needed human resources will be available. Finally, they have to take steps to match supply with demand. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Forecasting Human Resources Demand Planners should base human resource demand forecasts on all relevant information available. The business’s overall strategic plan will provide information about future business ventures, new products and projected expansions or contractions of specific product lines. Information on past staffing levels, evolving technologies, industry staffing practices and projected economic trends also can be helpful. Technological advances are creating new opportunities in forecasting and planning for human resources demand. Insights gained from such technology can help managers develop more cost-effective recruiting and selection strategies as well as recognise threats and opportunities. HRM managers use forecasting information to determine both the number of employees required and their qualifications. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Forecasting Human Resources Supply A forecast of human resources supply must take into account both the present workforce and any changes that may occur within it. Two useful techniques for forecasting human resources supply are the replacement chart and the skills inventory. Replacement chart – a list of key personnel and their possible replacements within a business Skills inventory – a searchable database containing information about the skills and experience of all present employees © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Matching Supply with Demand When demand is predicted to be greater than supply, HR planners must make plans to recruit new employees. When the supply of employees is predicted to be greater than the demand, the business must take steps to reduce the size of its workforce through: Layoffs Attrition – the normal reduction in the workforce when employees leave a business due to retirement or a new job Early retirement Retrenchment – when employees are offered a severance package to leave their job Firing © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cultural Diversity in Human Resources (slide 1 of 2) Today’s workforce is highly diverse, with employees bringing a wide variety of beliefs, expectations and behavioural norms to the workplace. Managers must be aware of these differences. o Examples: European businesspeople may offer a kiss on the cheek as a greeting; Latin Americans tend to stand closer to people with whom they are talking than North Americans prefer. Cultural (or workplace) diversity – differences among people in a workforce owing to race, ethnicity and gender Although cultural diversity presents a challenge, managers should view it as an opportunity rather than a limitation. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. TABLE 9-1 Advantages of Cultural Diversity © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cultural Diversity in Human Resources (slide 2 of 2) Numerous businesses have trained their managers to respect and manage diversity. Diversity training programmes may include: o Recruiting people from previously excluded groups o Training them to be managers o Training managers to view diversity positively o Teaching English as a second language o Facilitating support groups for immigrants A diversity programme will be successful only if it: o Is systematic o Is ongoing o Has a strong, sustained commitment from top leadership © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Job Analysis Job analysis – a systematic procedure for studying jobs to determine their various elements and requirements The job analysis for a particular position consists of two parts. 1. Job description – a list of the elements that make up a particular job 2. Job specification – a list of the qualifications required to perform a particular job © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. FIGURE 9-1 Job Description and Job Specification © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Recruiting (slide 1 of 3) Recruiting – the process of attracting qualified job applicants Recruiters may seek applicants outside the business, within the business, or both. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Recruiting (slide 2 of 3) External recruiting – attracting job applicants from outside an organisation External recruiting may include: o Activities on university campuses and open houses o Soliciting recommendations from current employees o Posting in newspapers o Employment agencies o Online Advantage: o Brings people into a business who have new perspectives and varied business backgrounds Disadvantages: o Is often expensive o May provoke resentment among present employees © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Recruiting (slide 3 of 3) Internal recruiting – considering present employees as applicants for available positions Advantages: o Provides strong motivation for current employees o Helps the business to retain quality personnel Disadvantages: o Leaves another position open - Thus, the business not only incurs recruiting and selection costs, but it also must train two employees instead of one. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Selection Selection – the process of gathering information about applicants for a position and then using that information to choose the most appropriate applicant Common means of obtaining information about applicants’ qualifications are: o Employment applications o Employment tests o Interviews o References o Assessment centres © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. FIGURE 9-2 Typical Employment Application © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Orientation Soon after a candidate joins a business, he or she goes through the business’s orientation programme. Orientation – the process of acquainting new employees with an organisation Orientation topics range from the location of the company cafeteria to career paths within the business. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Compensation Decisions (slide 1 of 3) Compensation – the payment employees receive in return for their labour Compensation system – the policies and strategies that determine employee compensation For most businesses, designing an effective compensation system requires two separate management decisions: 1. Wage level 2. Individual wages © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Compensation Decisions (slide 2 of 3) Wage Level Management first must position the business’s general pay level relative to pay levels of comparable businesses. To determine the average pay for a job, the business may use wage surveys. o Wage survey – a collection of data on prevailing wage rates within an industry or a geographic area Next, management must determine the wage structure by deciding on relative pay levels for all the positions within the business. The wage structure is developed on the basis of a job evaluation. o Job evaluation – the process of determining the relative worth of the various jobs within a business © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Compensation Decisions (slide 3 of 3) Individual Wages Finally, the company must determine the specific payments that individual employees will receive. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Comparable Worth Comparable worth – a concept that seeks equal compensation for jobs requiring about the same level of education, training and skills In recent decades, many countries have taken steps to ensure that all workers have equal pay for comparable worth. A few companies have taken steps to address the situation by publicising the results of their investigations into their own pay gaps. o Examples: Investec and Anglo American’s South African operations are compelled by UK law to include reporting about gender pay gaps. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Compensation Most forms of compensation fall into the following categories: Hourly wage – a specific amount of money paid for each hour of work Salary – a specific amount of money paid for an employee’s work during a set calendar period, regardless of the actual number of hours worked Commission – a payment that is a percentage of sales revenue Incentive payment – a payment in addition to wages, salary, or commissions Lump-sum salary increase – an entire pay raise taken in one lump sum Profit-sharing – the distribution of a percentage of a business’s profit among its employees © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Employee Benefits (slide 1 of 2) Employee benefit – a reward in addition to regular compensation that is provided indirectly to employees Types of Benefits Employee benefits take a variety of forms. Leave benefits o Covers such absences as holidays and sick leave Insurance packages o Include medical aid and life cover Pension and retirement programmes o May be borne entirely by the business or shared with the employee Unemployment insurance © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Employee Benefits (slide 2 of 2) Types of Benefits (continued) Workers’ compensation insurance o Pays medical bills for injuries that occur on the job and provides income for employees who are disabled by job-related injuries Other benefits o Include tuition-reimbursement plans, credit unions, child-care services, company cafeterias and exercise rooms Flexible Benefit Plans o Flexible benefit plan – compensation plan in which an employee receives a predetermined amount of benefit rands to spend on a package of benefit he or she has selected to meet individual needs © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Training and Development Training and development are usually differentiated as employee training or management development. Employee training – the process of teaching operations and technical employees how to do their present jobs more effectively and efficiently Management development – the process of preparing managers and other professionals to assume increased responsibility in both present and future positions © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Analysis of Training Needs When thinking about developing a training programme, managers first must determine whether training is actually needed and, if so, what types of training needs exist. Employers may find that sometimes employees need motivation more than they need training. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Training and Development Methods On-the-job methods Simulations Classroom teaching and lectures Conferences and seminars Role-playing e-Learning © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Evaluation of Training and Development To ensure that training and development are as cost-effective as possible, the managers responsible should evaluate the company’s efforts periodically. The results of training evaluations should be made known to all those involved in the programme – including trainees and upper management. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Performance Appraisal Performance appraisal – the evaluation of employees’ current and potential levels of performance to allow managers to make objective human resources decisions The process has three main objectives: 1. Managers use performance appraisals to let workers know how well they are doing and how they can improve in the future. 2. A performance appraisal provides an effective basis for distributing rewards, such as pay raises and promotions. 3. Performance appraisal helps the organisation monitor its employee selection, training and development activities. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. FIGURE 9-3 Performance Appraisal © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Common Evaluation Techniques (slide 1 of 2) Objective Methods Objective appraisal methods use some measurable quantity as the basis for assessing performance. Examples: units of output, rand volume of sales, and number of defective products Judgemental Methods Judgemental appraisal methods require that the manager judge or estimate the employee’s performance level. These methods are based on employee ranking or rating scales. When ranking is used, the manager ranks subordinates from best to worst. A rating scale consists of a number of statements, on which each employee is rated based on the degree to which the statement applies. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Common Evaluation Techniques (slide 2 of 2) Avoiding Appraisal Errors Managers must be cautious and avoid making mistakes when appraising employees. It is common to overuse one portion of an evaluation instrument, thus risking overemphasising or underemphasising issues. A manager must guard against allowing an employee’s poor performance on one activity to influence his or her judgement of that subordinate’s work on other activities. A manager must also guard against discrimination on the basis of race, age, gender, religion, national origin, or sexual orientation. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Performance Feedback (slide 1 of 2) There are three major approaches to performance feedback interviews: 1. Tell-and-sell o The superior tells the employee how good or bad the employee’s performance has been and attempts to persuade the employee to accept the evaluation. 2. Tell-and-listen o The supervisor tells the employee what the employee has done right and wrong and then gives him or her a chance to respond. 3. Problem-solving o Employees evaluate their own performance and set their own goals for future performance. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Performance Feedback (slide 2 of 2) o Another approach that has become popular is called a 360-degree evaluation. A 360-degree evaluation collects anonymous reviews about an employee from his or her peers, subordinates, and supervisors and compiles them into a feedback report for the employee. © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. TABLE 9-2 Legislation Affecting Human Resources Management © 2021 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.