CH 12 Notes

 Human resource management (HRM) refers to the design & application of formal systems to ensure the effective &
efficient use of human talent to accomplish organizational goals. HRM includes activities undertaken to attract, select,
develop, & maintain an effective workforce.
 Human capital refers to the economic value of the combined knowledge, experience, skills, & capabilities of employees.
 HR managers are vital players in corporate strategy because no strategy can be effective w/out the right people to put it
into action. HR managers must understand & apply a variety of federal laws that prohibit discrimination, establish safety
standards, or require organizations to provide certain benefits.
 Discrimination means making hiring & promotion decisions based on criteria that are not job-relevant.
 Affirmative action requires that employers take positive steps to guarantee equal employment opportunities for people
w/in protected groups.
 The National Labor Relations Board (NLRB) filed its first social media suit in 2011.
 The new social contract between employers & employees is based on the notion of employability & personal
responsibility rather than lifelong employment by an organization.
 Blind Hiring - w/out résumés or redacting information on résumés & asking applicants to complete assignments,
focusing on the applicant’s job skills & performance rather than educational credentials or prior experience.
 Employer Brand - like a product brand except it promotes the organization as a great place to work, rather than
promoting a specific product or service.
 Return Path Inc., Chipotle, & AppDynamics are using fast track hiring to bring on new employees in a matter of days or
even hours.
 Acqui-hiring means buying an early-stage start-up (& usually shutting it down) to obtain the creative talent. Yahoo
acquired 52 start-ups in less than three years, adding about 3,000 acqui-hires.
 Finding the right people starts w/ human resource planning, which refers to the forecasting of HR needs & the projected
matching of individuals w/ anticipated job vacancies.
 The matching model is an HR approach in which the organization & the individual attempt to match each other’s needs,
interests, & values.
 Recruiting refers to activities or practices that define the desired characteristics of applicants for specific jobs. Many of
today’s organizations use social media, including Twitter, Weibo, LinkedIn, Tianji, & Facebook, for recruiting.
 Job analysis is the systematic process of gathering & interpreting information about the essential duties, tasks, &
responsibilities of a job.
 Managers prepare a job description for each open position, which is a concise summary of the specific tasks &
responsibilities of that job.
 A job specification outlines the knowledge, skills, education, physical abilities, & other characteristics needed to perform
a specific job adequately.
 Managers use realistic job previews (RJPs) in recruiting to give applicants all pertinent & realistic information—both
positive & negative—about a job & the organization.
 Internships are an increasingly popular approach to recruiting because they provide a way to “test-drive” a potential
employee.
 Internship - an arrangement whereby an intern (usually a high school or college student) exchanges his or her services for
the opportunity to gain work experience & see whether a particular career is appealing.
 Interview Q’s: Can you do the job (your strengths, not just in terms of technical ability, but also your leadership,
teamwork, & interpersonal skills.)? Will you love the job (bring enthusiasm & positive energy)? Can we tolerate working
w/ you (good fit w/ the culture)? Interview Strats: Do research. Turn Qs into convos. Think the way they do.
 Selection is the process of assessing the skills, abilities, & other attributes of applicants in an attempt to determine the fit
between the job & each applicant’s characteristics.
 The application form is a selection device that collects information about the applicant’s education, previous work
experience, & other background characteristics.
 A structured interview uses a set of standardized questions that are asked of every applicant so that comparisons can be
made easily. Types of questions include biographical questions, behavioral questions, & situational or case questions.
 In a nondirective interview, the interviewer asks broad, open-ended questions & permits the applicant to talk freely w/
minimal interruption in an attempt to bring to light information, attitudes, & behavioral characteristics that might not
come out in a structured interview.
 A panel interview is an interview in which the candidate meets w/ several interviewers who take turns asking questions.
 Some companies are using offbeat approaches, called extreme interviewing, to test job candidates’ ability to handle
problems, cope w/ change, & work well w/ others.
 Employment tests assess candidates on various factors considered important for the job to be performed; they include
cognitive ability tests, physical ability tests, & personality tests.
 One way in which HR managers gauge an applicant’s suitability for an open position is by checking what the applicant
says on social media sites.
 Many states have passed laws making it illegal to ask job applicants for their social media passwords.
 Training typically refers to teaching people skills needed in their current job, whereas development refers to teaching
people broader career skills.
 The most common method of training is on-the-job-training (OJT), in which an experienced employee is asked to teach
a new employee how to perform job duties.
 Social learning refers to using social media tools to network & learn informally.
 A corporate university is an in-house training & development facility that offers broad-based learning opportunities for
employees.
 McDonald’s Hamburger University has seven management training centers around the world, including one in Shanghai
& one in São Paulo.
 Performance appraisal is the process of observing & evaluating an employee’s performance, recording the assessment,
& providing feedback.
 A recent trend is 360-degree feedback, which uses multiple raters, including self-rating, to appraise employee
performance & guide development.
 Performance review ranking systems, sometimes called “rank & yank,” are increasingly being criticized because they tend
to pit employees against one another rather than promoting cooperation & teamwork.
 Stereotyping is a performance evaluation error that occurs when a manager places an employee into a class or category
based on one or a few traits or characteristics.
 The halo effect occurs when a manager gives an employee the same rating on all dimensions of the job, even though
performance may be good on some dimensions & poor on others.
 One way to overcome evaluation errors is to use a behaviorally anchored rating scale (BARS), which is a performance
evaluation technique that relates an employee’s performance to specific job-related incidents.
 Compensation refers to all monetary payments & all nonmonetary goods or benefits used to reward employees.
 Most companies use the term rewards or total rewards rather than compensation to include a broad range of rewards such
as wages & salaries, incentive payments, bonuses, & benefits.
 Managers strive to maintain fairness & equity in the pay system.
 Job evaluation is the process of determining the value of jobs w/in an organization through an examination of job
content.
 Wage & salary surveys show what other organizations pay incumbents in jobs that match a sample of key jobs selected
by the organization.
 Pay-for-performance, also called incentive pay, means tying at least a portion of compensation to employee effort &
performance.
 Benefits make up a large portion of labor costs in the United States.
 Pest services company Alterra & many other low-tech companies are offering lavish perks once found only in high-term
firms such as Google & Facebook.
 An exit interview is an interview conducted w/ departing employees to determine reasons for their departure & learn
about potential problems in the organization.
 Campbell Soup Company & some other organizations let people complete an online exit questionnaire, so they can
express their complaints or ideas freely, w/out having to talk face to face w/ a manager.
 Lvl 1 Business Results: Revenue Growth, ROIC/ROE, Total Return to stakeholders. Lvl 2 Key Performance Drivers:
Productivity, Quality, Innovation, Customer Service. Lvl 3 Human Capital Processes: Career Development, Rewards &
Recognition, Human Capital Strategy, Performance Appraisal, Recruiting, Workforce Planning.
The Changing Social Contract
New Contract Old Contract
Emplo Employability; personal Job security
yee responsibility A cog in the machine
Partner in business improvement Knowing
 New Contract Old Contract
Learning; skill development
Emplo Creative development opportunities Standard training
yer Lateral career moves; incentive programs
compensation Traditional
Challenging assignments compensation package
Information & resources; decision- Routine jobs
making authority Limited information &
authority

Major Federal Laws Related to Human Resource Management

Federal Law Year Provisions
Federal Law Year Provisions
Equal Opportunity/
Discrimination Laws
Civil Rights Act 1991 Provides for possible compensatory and
punitive damages, plus traditional back
pay, for cases of intentional
discrimination brought under Title VII
of the 1964 Civil Rights Act. Shifts the
burden of proof to the employer.
Americans with 1990 Prohibits discrimination against
Disabilities Act qualified individuals by employers on
the basis of disability and demands that
“reasonable accommodations” be
provided for the disabled to allow
performance of duties.
Vocational 1973 Prohibits discrimination based on
Rehabilitation Act physical or mental disability and
requires that employees be informed
about affirmative action plans.
Age Discrimination in 1967 Prohibits age discrimination and
Employment Act (amended in restricts mandatory retirement.
(ADEA) 1978 and
1986)
Civil Rights Act, Title 1964 Prohibits discrimination in employment
VII on the basis of race, religion, skin color,
sex, or national origin.
Compensation/
Benefits Laws
Health Insurance 1996 Allows employees to switch health
Portability and insurance plans when changing jobs
Accountability Act and get the new coverage regardless of
(HIPAA) preexisting health conditions; prohibits
group plans from dropping a sick
employee.
Federal Law Year Provisions
Federal Law Year Provisions
Family and Medical 1993 Requires employers to provide up to 12
Leave Act weeks unpaid leave for childbirth,
adoption, or family emergencies.
Equal Pay Act 1963 Prohibits sex differences in pay for
substantially equal work.
Health/Safety Laws
Patient Protection and 2010 Imposes a fee on firms with 50 or more
Affordable Care Act employees if the government subsidizes
(PPACA) their employees’ health care coverage;
prevents insurers from denying
coverage based on preexisting
conditions or charging women more
than men.
Consolidated Omnibus 1985 Requires continued health insurance
Budget Reconciliation coverage (paid by employee) following
Act (COBRA) termination.
Occupational Safety 1970 Establishes mandatory safety and health
and Health Act standards in organizations.
(OSHA)