Human

Resource
Management
and Labor
Relations

# 10

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The Foundations of Human Resource Management

• Human resource management (HRM)

– the set of organizational activities directed at
attracting, developing, and maintaining an
effective workforce.
• Human Capital
– reflects the organization’s investment in
attracting, retaining, and motivating an
effective workforce

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 HR Planning
• Job Analysis
– systematic analysis of jobs within an organization
• Job Description
– description of the duties and responsibilities of a job,
its working conditions, and the tools, materials,
equipment, and information used to perform it
• Job Specification
– description of the skills, abilities, and other credentials
and qualifications required by a job

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The HR Planning Process

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 Forecasting HR Demand and Supply

1. Forecasting internal supply

– the number and type of employees who will
be in the firm at some future date
2. Forecasting external supply
– the number and type of people who will be
available for hiring from the labor market at
large

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Forecasting HR Demand and Supply (cont.)

• Replacement Chart
– list of each management position, who
occupies it, how long that person will likely
stay in the job, and who is qualified as a
replacement
• Employee Information System (Skills
Inventory)
– computerized system containing information
on each employee’s education, skills, work
experiences, and career aspirations

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 The Legal Context of HRM
• Title VII of the Civil Rights Act of 1964
– forbids discrimination in all areas of the employment
relationship
• Adverse Impact
– when minorities and women meet or pass the
requirement for a job at a rate less than 80 percent of
the rate of majority group members
• Equal Employment Opportunity Commission
(EEOC)
– federal agency enforcing several discrimination-
related laws

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 The Legal Context of HRM (cont.)

• Age Discrimination in Employment Act

– outlaws discrimination against people older
than 40 years
• Equal Employment Opportunity
– legally mandated nondiscrimination in
employment on the basis of race, creed, sex,
or national origin

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 Affirmative Action

• Affirmative Action
– intentionally seeking and hiring employees
from groups that are underrepresented in the
organization
• Affirmative Action Plan
– written statement of how the organization
intends to actively recruit, hire, and develop
members of relevant protected classes

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 The Legal Context of HRM

• Americans With Disabilities Act

– forbids discrimination on the basis of
disabilities and requires employers to provide
reasonable accommodations for disabled
employees
• Civil Rights Act of 1991
– amended the original Civil Rights Act

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 Compensation and Benefits

• Fair Labor Standards Act

– sets a minimum wage and requires the
payment of overtime rates for work in excess
of 40 hours per week
• Equal Pay Act of 1963
– requires that men and women be paid the
same amount for doing the same job

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 Compensation and Benefits (cont.)

• Employee Retirement Income Security

Act (ERISA) of 1974
– ensures the financial security of pension
funds by regulating how they can be invested
• Family and Medical Leave Act (FMLA)
of 1993
– requires employers to provide up to 12 weeks
of unpaid leave for family and medical
emergencies

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The Legal Context of HRM

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 Labor Relations
• National Labor Relations Act (also known as
the Wagner Act)
– sets up a procedure for employees to vote on whether
to have a union
• National Labor Relations Board (NLRB)
– established by the Wagner Act to enforce its
provisions
• Labor-Management Relations Act (also
known as the Taft-Hartley Act)
– passed to limit union power

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 Health and Safety

• Occupational Safety and Health Act

(OSHA) of 1970
– federal law setting and enforcing guidelines
for protecting workers from unsafe conditions
and potential health hazards in the workplace

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 Other Legal Issues

• Sexual Harassment
– making unwelcome sexual advances in the
workplace
• Quid Pro Quo Harassment
– form of sexual harassment in which sexual favors are
requested in return for job-related benefits
• Hostile Work Environment
– form of sexual harassment derived from off-color jokes,
lewd comments, and so forth

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 Other Legal Issues (cont.)

• Employment at Will
– principle, increasingly modified by legislation
and judicial decision, that organizations
should be able to retain or dismiss employees
at their discretion
• Patriot Act
– legislation that increased U.S. government’s
power to investigate and prosecute suspected
terrorists

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 Staffing the Organization

• Recruiting
– process of attracting qualified persons to
apply for jobs an organization is seeking to fill
• Internal Recruiting
– considering present employees as candidates for
openings
• External Recruiting
– attracting persons outside the organization to
apply for jobs

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 Selecting Human Resources

Application
forms Tests Interviews

Credit
Polygraph Drug tests
checks

References

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 Compensation and Benefits

• Compensation System
– total package of rewards that organizations
provide to individuals in return for their labor
• Wages
– compensation in the form of money paid for
time worked
• Salary
– compensation in the form of money paid for
discharging the responsibilities of a job

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 Incentive Programs

• Incentive Program
– special compensation program designed to
motivate high performance
• Bonus
– individual performance incentive in the form of
a special payment made over and above the
employee’s salary
• Merit Salary System
– Individual incentive linking compensation to
performance in non-sales jobs
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 Incentive Programs (cont.)

• Pay For Performance (Variable Pay)

– individual incentive that rewards a manager
for especially productive output
• Profit-Sharing Plan
– incentive plan for distributing bonuses to
employees when company profits rise above
a certain level
• Gainsharing Plan
– incentive plan that rewards groups for
productivity improvements
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 Incentive Programs (cont.)

• Pay-for-Knowledge Plan
– incentive plan to encourage employees to
learn new skills or become proficient at
different jobs

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 Benefits Programs

• Benefits
– compensation other than wages and salaries
• Workers’ Compensation Insurance
– legally required insurance for compensating
workers injured on the job
• cafeteria benefits plan
– benefit plan that sets limits on benefits per
employee, each of whom may choose from a
variety of alternative benefits

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 Developing the Workforce

• Training
– usually refers to teaching operational or
technical employees how to do the job for
which they were hired
• Development
– usually refers to teaching managers and
professionals the skills needed for both
present and future jobs

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 Developing the Workforce (cont.)

• On-the-Job Training
– training, sometimes informal, conducted while
an employee is at work
• Off-the-Job Training
– training conducted in a controlled environment
away from the work site
• Vestibule Training
– off-the-job training conducted in a simulated
environment

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 Developing the Workforce (cont.)

• Performance
Appraisal
– evaluation of an
employee’s job
performance in order
to determine the
degree to which the
employee is
performing effectively

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 Developing the Workforce (cont.)

• 360-Degree Feedback
– performance appraisal technique in which
managers are evaluated by everyone around
them—their boss, their peers, and their
subordinates

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 New Challenges in the Changing Workplace

• Workforce Diversity
– the range of workers’ attitudes, values, beliefs, and
behaviors that differ by gender, race, age, ethnicity,
physical ability, and other relevant characteristics
• Knowledge Workers
– employees who are of value because of the
knowledge they possess
• HR managers must ensure that the proper
training is provided to enable knowledge
workers to stay current while also making sure
they are compensated at market rates

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 Distribution of the
labor force by race 1990-2050

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 Contingent and Temporary Workers

• Contingent Worker
– employee hired on something other than a
full-time basis to supplement an organization’s
permanent workforce
– includes independent contractors, on-call
workers, temporary employees, and contract
and leased employees.

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 Dealing with Organized Labor

• Labor Union
– group of individuals working together to
achieve shared job-related goals, such as
higher pay, shorter working hours, more job
security, greater benefits, or better working
conditions
• Labor Relations
– process of dealing with employees who are
represented by a union

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Percentage of Workers Who Belong to Unions:
1995–2010

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 Collective Bargaining

• Collective Bargaining
– process by which labor and management
negotiate conditions of employment for union-
represented workers

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The Bargaining Zone

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 Contract Issues
• Cost-of-Living Adjustment (COLA)
– labor contract clause tying future raises to changes in
consumer purchasing power
• Wage Reopener Clause
– clause allowing wage rates to be renegotiated during
the life of a labor contract

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 When Bargaining Fails

• Strike
– labor action in which employees temporarily
walk off the job and refuse to work
• Boycott
– labor action in which workers refuse to buy
the products of a targeted employer
• Work Slowdown
– labor action in which workers perform jobs at
a slower than normal pace

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 Management Tactics

• Lockout
– management tactic whereby workers are
denied access to the employer’s workplace
• Strikebreaker
– worker hired as a permanent or temporary
replacement for a striking employee

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 Mediation and Arbitration

• Mediation • Arbitration
– method of – method of
resolving a labor resolving a labor
dispute in which dispute in which
a third party both parties
suggests, but agree to submit
does not to the judgment
impose, a of a neutral
settlement party

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