Ait

ManagingHuman

Resources

Productivity, Quality of Work Life, ProfitsNinth Edition

Wayne F. CascioThe Business School

University of Colorado Denver

I McGraw-Hill1 Irwin

ONTENTS

Boxes and Special Features xxPreface xxv

PART ONE ENVIRONMENT 1

CHAPTER 1 HUMAN RESOURCES IN A GLOBALLY COMPETITIVEBUSINESS ENVIRONMENT 2Questions This Chapter Will Help Managers Answer 2Human Resource Management in Action 3

The 21st-century Corporation 3The Enterprise Is the People 5Managing People: A Critical Role for Every Manager 6Why Does Effective HRM Matter? 9Features of the Competitive Business Environment 9

Globalization 9Technology 11E-Commerce 12Demographic Changes and Increasing CulturalDiversity 13

Responses of Firms to the New Competitive Realities 14New Forms of Organization 15Quality-Management Programs 17Reengineering 18Flexibility 18

Productivity: What Is It and Why Is It Important? 21Quality of Work Life: What Is It? 24Business Trends and HR Competencies 24Human Resource Management in Action: Conclusion. 26

The 21st-century Corporation 26Summary 28Key Terms 29Discussion Questions 29Applying Your Knowledge 29 _

Case 1-1: Smashing the Clock 29References 35

CHAPTER 2 THE FINANCIAL IMPACT OF HUMAN RESOURCEMANAGEMENT ACTIVITIES 38Questions This Chapter Will Help Managers Answer 38Human Resource Management in Action 39

Linking Worker Beliefs to Increased Productivity and Profitability 39vi

Contents VII

Orientation 40The LAMP Model: Foundation for Workforce Measurement 41

Logic: The "Story" That Connects Numbers and Outcomes 42Analytics: Drawing Appropriate Conclusions from Data 42Measures: Getting the Numbers Right 42Process: Creating Actionable Insights 43Some Definitions 44Controllable versus Uncontrollable Costs 45

Financial Effects of Employee Attitudes 46Behavior Costing and Employee Attitudes 47Logic: Linking Management Practices to Financial Outcomes 47Analytics: Connecting the Model to Management Behaviors 48Measures 48Analytics Combined with Process: The Sysco Web Portal 49Monetary Payoffs 49Integrating the Value-Profit Chain into Organizational Systems 50

Costing Employee Absenteeism 50Analytics and Measures for Employee Absenteeism 52Process: Interpreting the Costs of Absenteeism 53

Costing Employee Turnover 53Analytics: The Components of Turnover Costs 54The Total Cost of Turnover 5 7

Financial Effects of Work-Life Programs 58The Logic of Work-Life Programs 58Analytics and Measures: Connecting Work-Life Programs and Outcomes 59Talent Management 61Human-Capital Outcomes—Employee Commitment 61Financial Performance, Operational and Business Outcomes—ClientService 61Stock Market Reactions to Work-Life Initiatives 62Cautions in Making the Business Case for Work-Life Programs 62

Costing the Effects of Training Activities 63Indirect Measures of Training Outcomes 64Direct Measures of Training Outcomes 66

Human Resource Management in Action: Conclusion 69Linking Worker Beliefs to Increased Productivity andProfitability 69

Summary 70Key Terms 71Discussion Questions 71Applying Your Knowledge 71

Case 2-1: Absenteeism at ONO Inc. 71References 72

CHAPTER 3 THE LEGAL CONTEXT OF EMPLOYMENTDECISIONS 76Questions This Chapter Will Help Managers Answer 76Human Resource Management in Action 77

Retaliation: A New Legal Standard and Some PreventiveMeasures 77

VIII Contents

Societal Objectives 78EEO and Unfair Discrimination: What Are They? 79The Legal Context of Human Resource Decisions 81

The Thirteenth and Fourteenth Amendments 81The Civil Rights Acts of 1866 and 1871 82The Equal Pay Act of 1963 82Title VII of the Civil Rights Act of 1964 83Litigating Claims of Unfair Discrimination 85The Civil Rights Act of 1991 85The Age Discrimination in Employment Act of 1967 (ADEA) 87The Immigration Reform and Control Act of 1986 (IRCA) 88The Americans with Disabilities Act of 1990 (ADA) 89The Family and Medical Leave Act of 1993 (FMLA) 91Executive Orders 11246, 11375, and 11478 92The Rehabilitation Act of 1973 92The Vietnam Era Veterans Readjustment Act of 1974 93Uniformed Services Employment and Reemployment Rights Actof 1994 93

Federal Enforcement Agencies: EEOC and OFCCP 93EEOC Guidelines 95The Office of Federal Contract Compliance Programs 96Affirmative Action Remedies 97

Employment Case Law: Some General Principles 97Sex Discrimination 97Pregnancy 98Reproductive Hazards 98Sexual Harassment 99Age Discrimination 102"Overqualified" Job Applicants 102Seniority 103Testing and Interviewing 104Personal History 105Preferential Selection 106

Human Resource Management in Action: Conclusion 109Retaliation: A New Legal Standard and Some PreventiveMeasures 109

Summary 110Key Terms 111Discussion Questions 111Applying Your Knowledge 111

Case 3-1: A Case of Harassment? I l lReferences 113

CHAPTER 4 DIVERSITY AT WORK 118Questions This Chapter Will Help Managers Answer 118Human Resource Management in Action 119

Making the Business Case for Diversity 119Workforce Diversity: An Essential Component of HR Strategy 121

The Service Economy 122The Globalization of Markets 124

Contents IX

New Business Strategies That Require More Teamwork 124Mergers and Strategic International Alliances 125The Changing Labor Market 126

Diversity at Work—A Problem for Many Organizations 126Culture—The Foundation of Group Differences 127African Americans in the Workforce 127Hispanics in the Workforce 129Asian Americans in the Workforce 132Women in the Workforce 133Age-Based Diversity 136

Managing Diversity 137Racial and Ethnic Minorities 137Female Workers 139Generations X and Y 139Older Workers 140Workers with Disabilities 141Gay/Lesbian/Bisexual/Transsexual Employees 142

Human Resource Management in Action: Conclusion 145Making the Business Case for Diversity 145

Summary 146Key Terms 147Discussion Questions 147Applying Your Knowledge 148

Case 4-1: The Challenge of Diversity 148References 149

PART Two EMPLOYMENT 155CHAPTER 5 PLANNING FOR PEOPLE 156Questions This Chapter Will Help Managers Answer 156Human Resource Management in Action 157

Leadership Succession—A Key Challenge for AllOrganizations 157

Business Strategy—Foundation for All Organizational Decisions 159Ensuring Coherence in Strategic Direction 159

Relationship of HR Strategy to Business Strategy 161Strategic Workforce Plans 162

The End of the Job? 164Alternative Perspectives on Jobs 165

Job Design 165Scientific Management—"One Best Way" 167Job Design Today 168Identifying the Work to Be Done and the Personal Characteristics Neededto Do the Work 169Competency Models 172How Do We Study Job Requirements? 172Job Analysis: Relating Method to Purpose 174

From Job Analysis to Strategic Workforce Planning 176Strategic Workforce-Planning Systems 177

Talent Inventory 178

Contents

Workforce Forecasts 180Forecasting External Workforce Supply 180Forecasting Internal Workforce Supply 181Forecasting Workforce Demand 184Identify Pivotal Talent 186Assessing Future Workforce Demand 186How Accurate Is Accurate? 186Integrating Supply and Demand Forecasts 186Make or Buy? 187

Control and Evaluation of SWP Systems 188Human Resource Management in Action: Conclusion 190

Leadership Succession—A Key Challenge for All Organizations 190Summary 191Key Terms 192Discussion Questions 192Applying Your Knowledge 192

Case 5-1: Leadership-Succession Planning—Successes andFailures 192

References 193

CHAPTER 6 RECRUITING 198Questions This Chapter Will Help Managers Answer 198Human Resource Management in Action 199

The Perils and Promise of Social Media 199Recruitment as a Strategic Imperative 200The Employee Recruitment/Selection Process 201

Developing Recruitment Policies: Labor-Market Issues 203Internal versus External Labor Markets 205Recruitment Policies and Labor-Market Characteristics 205An Integrated Model of the Recruitment Process 206

Recruitment Planning 207Internal Recruitment 208

Job Posting 208Employee Referrals 210Temporary Worker Pools 211

External Recruitment 211University Relations 212Virtual Job Fairs 213Executive Search Firms 214Employment Agencies 215Recruitment Advertising 215Special Inducements—Relocation Aid, Help for the Trailing Spouse,and Sign-On Bonuses 216Summary of Findings Regarding Recruitment Sources 217

Diversity-Oriented Recruiting 218Managing Recruitment Operations 218

Evaluation and Control of Recruitment Operations 220Realistic Job Previews 222

The Other Side of Recruitment—Job Search 223Scenario 1: Unemployed 223Scenario 2: Employed, But Searching for a New Job 225

Contents XI

Human Resource Management in Action: Conclusion 226The Perils and Promise of Social Media 226

Summary 227Key Terms 227Discussion Questions 228Applying Your Knowledge 228

Case 6—1: Small Businesses Confront Recruiting Challenges 228References 229

CHAPTER 7 STAFFING 234Questions This Chapter Will Help Managers Answer 234Human Resource Management in Action 235

Organizational Culture—Key to Staffing "Fit" 235Organizational Considerations in Staffing Decisions 236

Business Strategy 236Organizational Culture 237The Logic of Personnel Selection 238Reliability of Measurement 239Validity of Measurement 239

Screening and Selection Methods 240Employment Application Forms 240Recommendations, References, and Background Checks 241

Assessment Methods in Selection 244Drug Screening 245Two Controversial Selection Techniques 247Integrity Tests 248Mental-Ability Tests 248Validity Generalization 250Personality Measures 250Measures of Emotional Intelligence 251Personal-History Data 252Employment Interviews 252Work-Sample Tests 255Leaderless Group Discussion 256In-Basket Test 257The Situational-Judgment Test 257Assessment Centers 260

Choosing the Right Predictor 264Human Resource Management in Action: Conclusion 265

Organizational Culture—Key to Staffing "Fit" 265Summary 266Key Terms 268Discussion Questions 268Applying Your Knowledge 269

Exercise 7-1: An In-Basket and an LGD for SelectingManagers 269

Technical Appendix 273The Estimation of Reliability 273Validation Strategies 273Estimating the Economic Benefits of Selection Programs 275

References 276

XII Contents

PART THREE DEVELOPMENT 287

CHAPTER 8 WORKPLACE TRAINING 288Questions This Chapter Will Help Managers Answer 288Human Resource Management in Action 289

Technology-Delivered Instruction (TDI) Catches On 289Employee Training 290

What Is Training? 290Training Trends 291Impact of Training on Individuals, Teams, Organizations, and Society 293

Characteristics of Effective Training Practice 295The Training Paradox 295How Training Relates to Competitive Strategies 295

What Determines Effective Training? 296Assessing Training Needs and Designing Training Programs 296

An Alternative Approach: Rapid Prototyping 297Assessing Training Needs 297

Principles That Enhance Learning 301Motivating the Trainee: Goal Setting 301Behavior Modeling 302Meaningfulness of the Material 304Practice (Makes Perfect) 304Feedback 305Transfer of Training 305Team Training 306Selecting Training Methods 309

Evaluating Training Programs 311Additional Considerations in Measuring the Outcomes of Training 312New-Employee Orientation: The On-Boarding Process 314Planning, Packaging, and Evaluating an On-Boarding Program 316

Orientation Follow-Up 318Evaluation of the Orientation Program 319

Lessons Learned 319Human Resource Management in Action: Conclusion 320

Technology-Delivered Instruction (TDI) Catches On 320Summary 322Key Terms 323Discussion Questions 323Applying Your Knowledge 323

Case 8-1: Evaluating Training at Hutchinson Inc. 323References 324

CHAPTER 9 PERFORMANCE MANAGEMENT 330Questions This Chapter Will Help Managers Answer 330Human Resource Management in Action 331

Performance Reviews: The Dilemma of Forced Ranking 331Managing for Maximum Performance 332

Define Performance 333Facilitate Performance 334Encourage Performance 334Performance Management in Practice 336

Contents XIII

Purposes of Performance-Appraisal Systems 336Requirements of Effective Appraisal Systems 337The Strategic Dimension of Performance Appraisal 341

Alternative Methods of Appraising Employee Performance 342Behavior-Oriented Rating Methods 343Results-Oriented Rating Methods 347When Should Each Technique Be Used? 347

Who Should Evaluate Performance? 349Are Supervisors' Ratings Affected by Other Sources of Information aboutPerformance? 352Multirater or 360-Degree Feedback 353

When and How Often Should Appraisal Be Done? 354Evaluating the Performance of Teams 355Appraisal Errors and Rater-Training Strategies 357Secrets of Effective Performance-Feedback Interviews 359Human Resource Management in Action: Conclusion 363

Performance Reviews: The Dilemma of Forced Ranking 363Summary 364Key Terms 365Discussion Questions 365Applying Your Knowledge 366

Case 9-1: Problems in Appraisal at Peak Power 366References 367

CHAPTER 10 MANAGING CAREERS 376Questions This Chapter Will Help Managers Answer 376Human Resource Management in Action 377

Self-Reliance: Key to Career Management 377Toward a Definition of Career 378Proactive Career Management 379

Toward a Definition of Career Success 380Adult Life-Cycle Stages 380

Career Management: Individuals Focusing on Themselves 382Selecting a Field of Employment and an Employer 382Knowing Where You Are 382Planning Your Exit 383The Role of the Organization 383Dual-Career Couples: Problems and Opportunities 383

Career Management: Organizations Focusing on Individuals 385Organizational Entry 385Mentoring 386Early Career: The Impact of the First Job 387Managing Men and Women in Midcareer 388Managing the Older Worker 391Myths versus Facts about Older Workers 392Implications of the Aging Workforce for HRM 394

Career Management: Organizations Focusing on Their Own Maintenanceand Growth 395

Internal Staffing Decisions: Patterns ofCareer Change 396

XIV Contents

Human Resource Management in Action: Conclusion 404Self-Reliance: Key to Career Management 404

Summary 405Key Terms 405Discussion Questions 405Applying Your Knowledge 406

Exercise 10-1: Self-Assessment and Career Planning 406References 408

PART FOUR COMPENSATION 415CHAPTER 11 PAY AND INCENTIVE SYSTEMS 416Questions This Chapter Will Help Managers Answer 416Human Resource Management in Action 417

The Trust Gap 417Changing Philosophies Regarding Pay Systems 419

Cost-Containment Actions 419Paying What the Company Can Afford 420Programs That Encourage and Reward Performance 420

Components and Objectives of Organizational Reward Systems 422Strategic Integration of Compensation Plans andBusiness Plans 424Determinants of Pay Structure and Level 425

Labor Market Conditions 425Legislation 426Collective Bargaining 429Managerial Attitudes and an Organization's Ability to Pay 429

An Overview of Pay-System Mechanics 430Linking Internal Pay Relationships to Market Data 431Developing a Pay Structure 433Alternatives to Pay Systems Based on JobEvaluation 434

Policy Issues in Pay Planning and Administration 437Pay Secrecy 437The Effect of Inflation 438Pay Compression 438Pay Raises 439

Performance Incentives 440Requirements of Effective Incentive Systems 441Merit-Pay Systems 442

Barriers Can Be Overcome 443Guidelines for Effective Merit-Pay Systems 443Incentives for Executives 444Incentives for Lower-Level Employees 445

Setting Performance Standards 446Union Attitudes 447

Team Incentives 448Organizationwide Incentives 449

Profit Sharing 449Gain Sharing 450Employee Stock-Ownership Plans 451

Contents XV

Human Resource Management in Action: Conclusion 454The Trust Gap 454

Summary 455Key Terms 456Discussion Questions 456Applying Your Knowledge 457

Case 11-1: Nucor: The Art of Motivation 457References 458

CHAPTER 12 INDIRECT COMPENSATION: EMPLOYEE BENEFITPLANS 464Questions This Chapter Will Help Managers Answer 464Human Resource Management in Action 465

The New World of Employee Benefits 465Strategic Considerations in the Design of Benefits Programs 466

Long-Term Strategic Business Plans 467Diversity in the Workforce Means Diversity in Benefits Preferences 468Legal Requirements 468Competitiveness of the Benefits Offered 471Total Compensation Strategy 471

Components of the Benefits Package 472Cost 472Security and Health Benefits 472Group Life Insurance 473Workers' Compensation 473Disability Insurance 475Hospitalization, Surgical, and Maternity Coverage 476Cost-Containment Strategies 479Toward the Future 481Other Medical Coverage 482Sick-Leave Programs 482Pensions 482Social Security 486Unemployment Insurance 488Severance Pay 490Payments for Time Not Worked 490Employee Services 491

Benefits Administration 493Benefits and Equal Employment Opportunity 493Costing Benefits 494Cafeteria, or Flexible, Benefits 495Communicating the Benefits 496

Human Resource Management in Action: Conclusion 497The New World of Employee Benefits 497

Summary 498Key Terms 499Discussion Questions 499Applying Your Knowledge 499

Case 12-1: Reducing Health-Care Costs 499References 501

XVI Contents

PART FIVE LABOR-MANAGEMENT ACCOMMODATION 507CHAPTER 13 UNION REPRESENTATION AND COLLECTIVEBARGAINING 508Questions This Chapter Will Help Managers Answer 508Human Resource Management in Action 509

Restructuring through Union-Management Collaboration 509Why Do Employees Join Unions? 510Union Membership in the United States 511The Changing Nature of Industrial Relations in the United States 512Fundamental Features of the U.S. Industrial Relations System 513A Brief History of U.S. Labor Relations 515

Emergence of the American Federation of Labor (AFL) 515Emergence of the Congress of Industrial Organizations (CIO) 516Merger of the AFL-CIO 516Breaking Away from the AFL-CIO 516

The Unionization Process 517The Legal Basis 517The Organizing Drive 519The Bargaining Unit 520The Election Campaign 520The Representation Election and Certification 521The Decertification of a Union 523

Collective Bargaining: Cornerstone of American Labor Relations 524The Art of Negotiation 524

Bargaining Impasses: Strikes, Lockouts, or Third-Party Involvement 526Strikes 526Lockouts 529Third-Party Involvement 530

Administration of the Collective-Bargaining Agreement 531Union-Security Clauses 532Grievance Procedures in the Unionized Firm 532

Union Membership in Countries Other Than the United States 535Union Wage Premiums and the Spillover Effect 536Human Resource Management in Action: Conclusion 536

Restructuring through Union-Management Collaboration 536Summary 539Key Terms 540Discussion Questions 540Applying Your Knowledge 540

Exercise 13-1: Contract Negotiations at Moulton Machine Shop 540References 542

CHAPTER 14 PROCEDURAL JUSTICE AND ETHICS IN EMPLOYEERELATIONS 548Questions This Chapter Will Help Managers Answer 548Human Resource Management in Action 549

Alternative Dispute Resolution: Good for the Company, Good forEmployees? 549

Some Definitions 550

Contents XVII

Why Address Procedural Justice? 551Components of Procedural Justice 552

Procedural Justice in Action: Employee Voice Systems 552Characteristics of Effective Voice Systems 553

Grievance Procedures in Nonunion Companies: Workplace Due Process 554Discipline 557Progressive Discipline 558Documenting Performance-Related Incidents 559The Disciplinary Interview 560Employment at Will 562Employment Contracts 564Termination 566

Employee Privacy and Ethical Issues 569Fair Information Practices in the Internet Age 570Assessment of Job Applicants and Employees 573Whistle-Blowing 573Conclusion 577

Human Resource Management in Action: Conclusion 577Alternative Dispute Resolution: Good for the Company, Good forEmployees? 577

Summary 578Key Terms 578Discussion Questions 579Applying Your Knowledge ' 579

Case 14-1: Blowing the Whistle 579References 580

PART SIX SUPPORT AND INTERNATIONAL IMPLICATIONS 587CHAPTER 15 SAFETY, HEALTH, AND EMPLOYEE ASSISTANCEPROGRAMS 588

Questions This Chapter Will Help Managers Answer 588Human Resource Management in Action 589

Substance Abuse on the Job Produces Tough Policy Choices forManagers 589

The Extent and Cost of Safety and HealthProblems 591The Occupational Safety and Health Act 591

Purpose and Coverage 591Administration 592Safety and Health Standards 592Record-Keeping Requirements 593OSHA Enforcement 593Penalties 594OSHA's Impact 596

Assessing the Costs and Benefits of Occupational Safety and HealthPrograms 597Organizational Safety and Health Programs 598

Loss Control 599The Role of the Safety Committee 600

XVIII Contents

Safety Rules 601Employee Selection 601Training for Employees and Supervisors 602Feedback and Incentives 604

Health Hazards at Work 606The Need for Safeguards 606HIV/AIDS and Business 607

Employee Assistance Programs 609Do Employee Assistance Programs Work? 609How Employee Assistance Programs Work 610More on the Role of the Supervisor 610Alcoholism 611Drug Abuse 612Violence at Work 613

Corporate Health Promotion: The Conceptof'Wellness" 615

Linking Unhealthy Lifestyles to Health-Care Costs 616Evaluation: Do Wellness Programs Work? 617Wellness Programs and the Americans withDisabilities Act 619

Human Resource Management in Action: Conclusion 620Substance Abuse on the Job Produces Tough Policy Choices forManagers 620

Summary 621Key Terms 622Discussion Questions 622Applying Your Knowledge 622

Case 15-1: Skyline Machine Shop 622References 623

CHAPTER 16 INTERNATIONAL DIMENSIONS OF HUMAN RESOURCEMANAGEMENT 632Questions This Chapter Will Help Managers Answer 632Human Resource Management in Action 633

What's It Like to Be a Global Manager? 633The Global Corporation: A Fact of Modern OrganizationalLife 634

Signs of Globalization 634The Backlash against Globalization 635The Costs of Overseas Executives 637

The Role of Cultural Understanding in International ManagementPractice 639Human Resource Management Practices as a CulturalVariable 639

Sense of Self and Space 640Dress and Appearance 640Food and Feeding Habits 640Communication and Language 640Time and Time Consciousness 641Relationships 641

Contents XIX

Values and Norms 641Beliefs and Attitudes 642Work Motivation and Practices 642Mental Processes and Learning 642Lessons Regarding Cross-Cultural Differences 645

Human Resource Management Activities of GlobalCorporations 647

Organizational Structure 648Workforce Planning 648Recruitment 649International Staffing 650Orientation 655Cross-Cultural Training and Development 656Integration of Training and Business Strategy 659International Compensation 660Labor Relations in the International Arena 666Toward International Labor Standards 668The North American Free Trade Agreement 669

Repatriation 670Planning 670Career Management 670Compensation 671

Human Resource Management in Action: Conclusion 671What's It Like to Be a Global Manager? 671

Summary 672Key Terms 673Discussion Questions 674Applying Your Knowledge 674

Exercise 16-1: Expatriate Orientation Role-Play 674References 675

GLOSSARY 682

CREDITS 701

NAME INDEX 703

SUBJECT INDEX 709