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HUMAN RESOURCE MANAGEMENT

December, 2008

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Lecture outline

• Managing workflow and conducting job analysis

• Managing Diversity

• Recruitment and Selecting Employees

• Managing employee satisfaction, downsizing and outplacement

• Rewarding performance

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Job Design

• The process of organising work into the tasks required to perform a specific job.

• Job design are influenced by– Work flow analysis– Business strategy – Organisational structure

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Approaches to Job Design

• Industrial engineering

• Human engineering: core job dimensions include skill variety; task identity; task significance and autonomy

• Job design strategies: job enlargement; job enrichment and job rotation

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Approaches to Job Design

• Work simplification– Simple and repetitive tasks– Narrowly defined tasks– No planning or organising involved– Ads: efficiency in a stable environment– Disads: inefficiency in a changing

environment, boredom, high turnover, low satisfaction, lack of understanding of the bigger picture

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Approaches to Job Design

• Job enlargement and job rotation– Enlargement: expanding a job’s duties– Rotation: rotating workers among different narrowly

defined tasks without disrupting the flow of work

• Job enrichment– Horizontal expansion– Vertical expansion

• Team-based job design

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Job Analysis

• The systematic process of collecting information used to make decisions about jobs. Job analysis identifies the tasks, duties, and responsibilities of a particular job.

Tasks Duties Responsibility

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Job Analysis: A Basic HR Management Tool

EqualEmployment

HRPlanning

PerformanceAppraisal

Recruitment Selection

HRResearch

Employee & LabourRelations

Compensation& Benefits

Safety &Health

HRDevelopmentJob Analysis

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Job Analysis

• Job analysis seeks to answer the following:– Where does the work come from?– What equipments must be used?– What are KSAs needed to perform to job?– How much supervision necessary?– Working condition?– Performance standards– Who are suppliers and customers of the jobs

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Job Analysis

• Methods of gathering job information– Interviews: structured interviews with job-related

questions– Observations: observe the job performed to records

the core job characteristics– Diaries: keep track of job activities and related data– Questionnaires: include job-related questions with

quantitative scales– Mechanicals devices

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Job Analysis

• Job analysis information helps organisations defend their actions in recruitment, promotions or terminations.

• Also job analysis is useful for HR activities such as Recruitment, Selection, Performance Appraisal, Compensation, Training and Career Development

• Brief description of techniques of job analysis (pp. 63 – 66)

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What is a good job analysis

• Which job analysis method is best?– More concrete and observable information the

better– Economic constraints and purposes of the

analysis decide the method for job analysis

• How does detailed job-analysis information fit into today’s organisations?– What are the outcomes of a job analysis job

characteristics or worker characteristics

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Job Description

• A summary statement of information collected in a job analysis. It identifies, describes, and defines a job in terms of its duties, responsibilities, working condition, and specifications.– Specific job description is associated with work flow

strategies emphasize efficiency, control and detailed work planning

– General job description is associated with work flow strategies emphasize innovation, flexibility and loose work planning.

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Elements of a Job Description

• Identification information

• Job summary

• Job duties and responsibilities

• Job specification

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What is Diversity

• Diversity refers to human characteristics that make people different from one another

• There are two broad categories of sources of individual variation– No control: race, sex, age or family and

society into which he or she is born – Some control: work background, income,

marital status, military experience, political beliefs, geographic location and education

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Assets of Diversity

• Company can use diversity to gain competitive advantages and enhance effectiveness– Product development– Marketing tools– Stimulate greater creativity– Better problem solving– Greater system flexibility

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Diversity in Workplace

• Cultural diversity among population and workforce, globalization.

• Personal status, gender, physical and intellectual impairment, age, sexual preference…

• Diversity management – To harness the talents of most able workers from a diversity of backgrounds

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Improving the Management of Diversity

• Top-management commitment to valuing diversity

• Create an inclusive environment• Communicate commitment to all staff• Involve all when designing the program• Avoid stereotyping• Respect affirmative action and EEOs• Recognize those who are part of a solution • All training is inclusive and ongoing • Value differences

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Hiring Process

• Recruitment: The process of generating a pool of qualified candidates for a particular job

• Selection: The process of making a “hire” or “no hire” decision regarding each applicant for a job.

• Socialization: The process of orienting new employees to the organisation or the unit in which they will be working.

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Recruitment

• Attract qualified job candidates with basic qualifications.• Recruitment sources

– Current employees– Referrals from current employees– Former employees– Advertisements– Internet advertising and career sites– Employment agencies– Temporary workers– College recruiting– Customers

• Non-traditional sources

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Recruitment Source Evaluation

• Which sources are appropriate depends on – The type of job to be filled – The state of the economy (unemployment rate

etc.)

• Evaluating the effectiveness of the sources – How long employees recruited from different

sources stay with the company– The cost of the recruitment– Quality of the recruitment source

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External Vs Internal Candidates

External• Ads

– Fresh perspective and different approach

– Cut cost

• Disads– Resistance from

current employees– Take time to

familiarize– Inappropriate culture

Internal• Ads

– Cut cost– Motivate current

employees– Understand the

context

• Disads– Less innovation and

new perspectives– Undercut in the

authority

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Selection

• The mechanism that determines the overall quality of an organisation’s human resource

• Two criteria important to selection:– Reliability: consistency of measurement usually

across time but also across judges. It is an index of how much errors have influenced the measure

– Validity: the extent to which scores on a test or interview correspond to actual job performance. It is at the heart of effective selection.

• Content validity strategy: assesses the degree to which the content of the selection method is representative of job content

• Empirical validity strategy: demonstrates the relationship between the selection method and job performance

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Selection Tools

• Any selection tools should be identified through or linked with results from job analysis

• Letter of recommendation– Low validity in predicting job performance– Should use the content approach in considering LOR

to increase the validity of the method• Application forms (biodata forms)

– To measure applicants’ basic job specification.– Consist of questions about past jobs, present

employment status, background, experience and preference

– Moderate validity in predicting job performance.

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Selection Tools

• Ability test: To measure a wide range of abilities from verbal and qualitative skills to perceptual skills– General cognitive ability (g) tests measure the verbal

and qualitative ability of the job applicants. It is a valid predictor of job performance

– Physical ability tests measure how safely and productively a person can perform a job’s physical task.

• Work sample tests measure how well a person perform an actual task. It is a fair and valid predictor of job performance.

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Selection Tools

• Personality test– To assess the traits of individual workers– Low reliability and validity because

• traits are subjective and unreliable• unrelated to job performance• not legally acceptable• no commonly agreed-upon set of trait measures

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Selection Tools

• Personality tests– “Big Five” factors

• Extroversion: talkative, sociable, active• Agreeableness: trusting, generous, cooperative,

flexible• Conscientiousness: organised, dependable• Emotional stability: secure, calm, independent• Openness to experience: intellectual, insightful,

creative, curious

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Selection Tools

• Psychological tests– To predict whether the employees will engage

in a negative conduct in the work place– Consist of questions to uncover likely

behaviors i.e. who is more motivated or has strong work ethics

– It is a valid method if questions and scoring method are consistent and job related

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Selection Tools

• Interviews– Traditional unstructured interview has been viewed as unreliable

and low valid selections method• Differences between interviewers in assessment• Human judgment limitation and biases • Inconsistent among interviewee which is not fair and equal

– Structured interview is yet a quite valid selection method• Based on a thorough job analysis and limited to job-related factors• Consist of job-related questions with predetermined answers for all

interviewees• Interviewees are scored in the same way• Created and conducted through a panel of interviewers to avoid

individual biases

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Selection Tools

• Interviews– Organisational should consider both

structured and unstructured interview because unstructured interview can offer

• More comfortable interviewing environment• Serves more than selection• See if there is a “fit”• Easier in screening out unsuitable applicants

– Questions in interviews must be legal

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Selection Tools

• Assessment centers– A set of stimulated tasks or exercises that

candidates are asked to perform.– Assess candidates’ managerial skills and

abilities in four main areas: organizing, planning, decision making and leadership.

– In-basket exercise is a most common type of assessment

– It is a valid selection method

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Selection Tools

• Drug tests– Applicants are tested by a urinalysis– Research has shown that it is a valid method

• Honesty tests– Measure the attitudes toward honesty and

integrity– It is a moderate valid predictor of job

performance, however, controversial

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Selection Tools

• Reference and background checks– It is a valid predictor– Must follow the rules

• It must determine that the inquirer has a job-related need to know

• Truthful information ONLY• EEO - related information should not be released

• Handwriting Analysis– Analysis of the handwriting based on its slop, size,

height or pressure of the writing– Reliable but not valid– Should not be used in selection process

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Employees Separations

• Employee Separation: The termination of an employee’s membership in an organisation

• Turnover rate: The rate of employee separations in an organisation– It is important for organisation to monitor and

control the turnover rate and the costs of replacing employees.

– Figure 6-1: Turnover rates and costs for specific job categories

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Costs of Employee Separations

• The costs of employee separations depend on– Eliminating the position– Replacing the position

• Costs of replacing employees includes– Recruitment costs– Selection costs– Training costs– Separation costs

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Costs of Employee Separations

• Recruitment costs: The costs associated with recruiting a replacement– Advertising– Campus visits– Recruiter time– Search firm fees

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Costs of Employee Separations

• Selection costs: The cost associated with selecting, hiring, and placing a new employee in a job.– Interviewing– Testing– Reference checks– Relocation

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Costs of Employee Separations

• Training costs: The costs incurred in providing new employees with knowledge necessary to perform on the job– Orientation– Direct training costs– Trainers’ time– Lost productivity during training

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Costs of Employee Separations

• Separation costs: The costs for all employees to leave.– Separation pay– Benefits– Unemployment insurance cost– Exit interview– Outplacement– Vacant position

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Benefits of Employee Separations

• It is good to maintain a certain level of employee separations because– Reduced labor costs– Replacement of poor performers– Increased innovation– Opportunities for greater diversity

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Types of Employee Separation

• Voluntary separations: A separation that occurs when an employee decides, for a personal or professional reasons, to end the relationship with the employer.

• Involuntary separations: A separation that occurs when an employer decides to terminate its relationship with an employee due to (1) economic necessity or (2) a poor fit between the employee and the organisation.

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Managing Layoffs

• Alternatives to layoffs– Employment policies

• Deduction through attrition• Hiring freeze• Cut part-time employees• Cut internships or co-ops• Cut outsourcing• Voluntary time off• Reduced work hours

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Managing Layoffs

• Alternatives to layoffs– Changes in job design

• Transfer• Relocation• Job sharing• Demotion

– Training• Retraining

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Managing Layoffs

• Alternatives to layoffs– Pay and benefit policies

• Pay freeze• Cut overtime pay• Use vacation and leave days• Pay cuts• Profit sharing or variable pay

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Pay for Performance

• Pay-for-performance systems (incentive systems) reward employee performance on the basis of three assumptions:– Individual employees and work teams differ in how

much they contribute to the firm – not only in WHAT THEY DO but also HOW WELL THEY DO IT

– The firm’s overall performance depends to a large degree on the performance of individuals and groups within the firm

– To attract, retain, and motivate high performers and to be fair to all employees, a company needs to rewards employees on the basis of their relative performance

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Challenges of Pay for Performance

• The “Do only what you get paid for” syndrome• Negative effects on the spirit of cooperation• Lack of control on performance-related factors

and elements• Difficulties in measuring performance• Psychological contracts• The credibility gap• Job dissatisfaction and stress• Potential reduction of intrinsic drives

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Types of Pay for Performance Plans

Individual-Based PlansIndividual-Based Plans

Individual-Based PlansIndividual-Based PlansIndividual-Based Plans

Individual-Based Plans Individual-Based PlansIndividual-Based Plans

Team-Based PlansTeam-Based Plans

Team-Based PlansTeam-Based Plans

Team-Based Plans

Plantwide Plans Plantwide PlansPlantwide Plans

Corporatewide Plans

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Individual-Based Plans

• Individual-Based Plans are plans in which firms attempt to identify and reward the contributors of individual employees

• Most commonly used PPP

• Including merit pay, bonus program, and awards

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Individual-Based Plans

• Advantages of IBP– Performance that is rewarded likely to be repeated– Individuals are goal-oriented and financial incentives

can shape and individual’s goals– Assessing the performance of each employees

individually helps the firm achieve individual equity– Individual-based plan fit in with an individualistic

culture

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Individual-Based Plans

• Disadvantages of IBP– Create competition and destroy cooperation among

peers– Sour working relationships between subordinates and

supervisor– Tying pay to goals may promote single-mindedness– Many employees do not believe that pay and

performance are linked– Individual pay plans may work against achieving

quality goals– Individual-based programs promote inflexibility in

some organizations

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Individual-Based Plans

• When best to apply IBP– When the contributions of individual

employees can be accurately isolated– When the job demand autonomy– When cooperation is less critical to successful

performance or when competition is to be encouraged