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Chapter five

Human Resource Management

Human resource management (HRM)- refers to


the policies and practices involved in carrying
out the people or human resource aspects of a
management position, including recruiting,
screening, training, rewarding, and appraising.

Human resource management functions

Conducting job analyses (determining the nature of each


employees job)

Planning labor needs and recruiting job candidates

Selecting job candidates

Orienting and training new employees

Managing wages and salaries (compensating employees)

Providing incentives and benefits

Appraising performance

Communicating (interviewing, counseling, disciplining)

Training and developing managers

Building employee commitment

Personnel Mistakes

Hire the wrong person for the job

Experience high turnover

Have your people not doing their best

Waste time with useless interviews

Have your company in court because of discriminatory


actions

Salaries are unfair and inequitable relative to others in the


organization

Commit any unfair labor practices

Examples of HR Job Duties

Recruiters
Search for qualified job applicants.
Equal employment opportunity (EEO) coordinators
Investigate and resolve EEO grievances, examine
organizational practices for potential violations, and
compile and submit EEO reports.
Job analysts
Collect and examine information about jobs to
prepare job descriptions.

Examples of HR Job Duties (contd)

Compensation managers

Training specialists

Plan, organize, and direct training activities.

Labor relations specialists

Develop compensation plans and handle the


employee benefits program.

Advise management on all aspects of union


management relations.

HR Metrics

Absence Rate
[(Number of days absent in month) (Average number of employees during mo.)
(number of workdays)] 100

Cost per Hire


(Advertising + Agency Fees + Employee Referrals + Travel cost of applicants and
staff + Relocation costs + Recruiter pay and benefits) Number of Hires

Health Care Costs per Employee


Total cost of health care Total Employees

HR Expense Factor
HR expense Total operating expense

Human Capital ROI


Revenue (Operating Expense [Compensation cost + Benefit cost])
(Compensation cost + Benefit cost)

HR Metrics (contd)
Training Investment Factor

Total training cost Headcount


Turnover Costs

Cost to terminate + Cost per hire + Vacancy Cost + Learning curve loss
Turnover Rate

[Number of separations during month Average number of employees


during month] 100
Workers Compensation Cost per Employee

Total WC cost for Year Average number of employees

5.2. Job Analysis

What is a Job?
Job
A group of related activities and duties
Position
The different duties and responsibilities performed by
only one employee
Job Family
A group of individual jobs with similar characteristics

Job Analysis

The process of obtaining information about jobs by


determining what the duties, tasks, or activities of jobs
are.
Also involves determining the kind of person who
should be hired for it.

Job Requirements
To determine requirements of a job which include:
Job Specification
Statement of the needed knowledge, skills,
and abilities (KSAs) of the person who is to
perform the job
Job Description
Statement
of the tasks, duties, and
responsibilities (TDRs) of a job to be
performed

Job Analysis contd


Nature of:

Basis for:

Job Analysis

What
Whatemployee
employeedoes
does
Why
Whyemployee
employeedoes
doesitit
How
Howemployee
employeedoes
doesitit

Determining
Determiningjob
jobrequirements
requirements

Job Description
Summary
Summarystatement
statementof
ofthe
thejob
job

List
Listof
ofessential
essentialfunctions
functionsof
ofthe
thejob
job

Employee
Employeeorientation
orientation
Employee
Employeeinstruction
instruction
Disciplinary
Disciplinaryaction
action

Recruitment
Recruitment
Selection
Selection
Development
Development

Job Specification
Personal
Personalqualifications
qualificationsrequired
required
in
interms
termsof
ofskills,
skills,education
educationand
and
experience
experience
10

Job analysiscontd

11

Job analysis
The procedure for determining the duties and skill
requirements of a job and the kind of person who
should be hired for it.
Job description
A list of a jobs duties, responsibilities, reporting
relationships, working conditions, and supervisory
responsibilities
one product of a job analysis.
Job specifications
A list of a jobs human requirements, that is, the
requisite education, skills, personality, and so on
another product of a job analysis.

Job
JobRequirements
Requirements

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Relationship of Job Requirements


to Other HRM Functions

Recruitment
Recruitment

Determine
Determinerecruitment
recruitmentqualifications
qualifications

Selection
Selection

Provide
Providejob
jobduties
dutiesand
andjob
job
specifications
for
selection
process
specifications for selection process

Performance
Performance
Appraisal
Appraisal

Provide
Provideperformance
performancecriteria
criteriafor
for
evaluating
employees
evaluating employees

Training
Trainingand
and
Development
Development

Determine
Determinetraining
trainingneeds
needsand
anddevelop
develop
instructional
programs
instructional programs

Compensation
Compensation
Management
Management

Provide
Providebasis
basisfor
fordetermining
determining
employees
rate
employees rateof
ofpay
pay

Uses of Job Analysis Information

13

Figure 51

The Process of
Job Analysis

Figure 5.2

14

Types of Information Collected

15

Work activities
Human behaviors
Machines, tools, equipment, and work aids
Performance standards
Job context
Human requirements

Steps in Job Analysis

Step 1:

Decide how youll use the


information.

Step 2:

Review relevant background


information.

Step 3:

Select representative positions.

Step 4:

Actually analyze the job.

Step 5:

Verify the job analysis information.

Step 6:

Develop a job description and job


specification.

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Methods of Collecting Job Analysis Information: The Interview

Information sources
Individual employees
Groups of employees
Supervisors with
knowledge of the job
Advantages
Quick, direct way to find
overlooked information.
Disadvantages
Distorted information

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Interview formats
Structured

(Checklist)
Unstructured

Interview Guidelines

The job analyst and supervisor should work together to


identify the workers who know the job best.

Quickly establish rapport with the interviewee.

Follow a structured guide or checklist, one that lists openended questions and provides space for answers.

Ask the worker to list his or her duties in order of


importance and frequency of occurrence.

After completing the interview, review and verify the data.

18

Methods of Collecting Job Analysis Information:


Questionnaires

Information source
Have employees fill out
questionnaires to describe
their job-related duties and
responsibilities.
Questionnaire formats
Structured checklists
Open-ended questions

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Advantages
Quick and efficient way to
gather information from
large numbers of employees
Disadvantages
Expense and time
consumed in preparing and
testing the questionnaire

Methods of Collecting Job Analysis Information:


Observation

Information source

Observing and noting


the physical activities
of employees as they
go about their jobs.

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Advantages
Provides first-hand
information
Reduces distortion of
information
Disadvantages
Time consuming
Difficulty in capturing entire
job cycle
Of little use if job involves
a high level of mental
activity.

Methods of Collecting Job Analysis Information:


Participant Diary/Logs

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Information source
Workers keep a
chronological diary/
log of what they do
and the time spent in
each activity.

Advantages
Produces a more
complete picture of the
job
Employee participation
Disadvantages
Distortion of
information
Depends upon
employees to
accurately recall their
activities

Quantitative Job Analysis Techniques


Some time qualitative approach like interview and questionnaire are
not suitable. For example, if we want to compare job for pay
purposes.
The position analysis questionnaire (PAQ)
A very structured questionnaire used to collect quantifiable
data concerning the duties and responsibilities of various
jobs.
Job Classification procedure
A standardized method by which different jobs can be
quantitatively rated, classified, and compared.
Functional job analysis
Not just rate the job based on the data, people and things
but also takes into account the extent to which instructions,
reasoning, judgment, and mathematical and verbal ability
are necessary for performing job tasks.

22

Writing Job Descriptions

A job description
A written statement of what the worker actually does, how he
or she does it, and what the jobs working conditions are.
Sections of a typical job description

Job identification

Job summary

Responsibilities and duties

Authority of incumbent

Standards of performance

Working conditions

Job specifications
23

Sample Job
Description

Source: Courtesy of HR Department,


Pearson Education.

24

Figure 57

Sample Job
Description

Source: Courtesy of HR
Department, Pearson
Education.

25

Figure 58

The Job Description

Job identification
Job title: name of job
Job summary
Describes the general nature of the job
Lists the major functions or activities

26

The Job Description (contd)

Relationships (chain of command)

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Reports to: employees immediate supervisor

Supervises: employees that the job incumbent directly


supervises

Works with: others with whom the job holder will be


expected to work and come into contact with internally.

Outside the company: others with whom the job holder


is expected to work and come into contact with
externally.

The Job Description (contd)

Responsibilities and duties

Defines limits of jobholders decision-making


authority, direct supervision, and budgetary
limitations.
Standards of performance and working conditions
Lists the standards the employee is expected to
achieve under each of the job descriptions main
duties and responsibilities.

28

A listing of the jobs major responsibilities and duties


(essential functions)

Writing Job Specifications

29

Specifications Based on Judgment


Self-created judgments (common sense)
List of competencies in Web-based job descriptions
(e.g., www.jobdescription.com)
Standard Occupational Classification
Specifications Based on Statistical Analysis
Attempts to determine statistically the relationship
between a predictor or human trait and an indicator or
criterion of job effectiveness.

Writing Job Specifications (contd)

30

Steps in the Statistical Approach

Analyze the job and decide how to measure job


performance.

Select personal traits that you believe should predict


successful performance.

Test candidates for these traits.

Measure
the
performance.

Statistically analyze the relationship between the


human trait and job performance.

candidates

subsequent

job

Techniques for Job analysis

Job enlargement

Job enrichment

Assigning workers additional same level activities, thus


increasing the number of activities they perform.
Redesigning jobs in a way that increases the opportunities
for the worker to experience feelings of responsibility,
achievement, growth, and recognition.

Job rotation

31

Moving a trainee from department to department to


broaden his or her experience and identify strong and
weak points to prepare the person for an enhanced role
with the company
Systematically moving workers from one job to another to
enhance work team performance.

Summary Question for section 5.1

32

What is Job analysis?


How can you make use of the information it
provides?
Do you think companies can really do without
detailed job description?
Why or why not?

5.2. Personnel Planning and Recruiting

Last section discussed job analysis and the


methods managers use to create job descriptions
and job specifications.
The purpose of this section is to improve our
effectiveness in recruiting candidates.

33

FIGURE 58

Steps in Recruitment and Selection Process

The recruitment and selection process is a series of hurdles aimed at selecting the best candidate for the job.

534

FIGURE 58

Linking Employers Strategy to Plans

Employment planning should flow from the firms strategic plans.


535

Planning and contd

Employment or Personnel Planning

positions

Succession Planning

The
process
of
deciding
what
the firm will have to fill, and how to fill them.

The process of deciding how to fill the companys most


important executive jobs.

What to Forecast?

Overall personnel needs

The supply of inside candidates

The supply of outside candidates

536

Copyright 2011 Pearson Education, Inc.


publishing as Prentice Hall

Forecasting Demand for


Employees
Quantitative
QuantitativeMethods
Methods

Forecasting
Forecasting Demand
Demand
Qualitative
QualitativeMethods
Methods

237

2a. Forecasting the


Supply of Inside
Candidates
Qualification
Inventories

Manual systems and


replacement charts

Computerized skills
inventories

Knowing your staffing needs satisfies only half the staffing equation. Next, you have to estimate the
likely supply of both inside and outside candidates. Most firms start with the inside candidates

538

FIGURE 54

Management Replacement Chart Showing Development


Needs of Potential Future Divisional Vice Presidents

539

personnel replacement chart for some of a firms top positions. It


shows the present performance and promotability for each
positions potential replacement.

2b. Forecasting Outside Candidate Supply

If there wont be enough inside candidates to fill the


anticipated openings (or you want to go outside for another
reason), you will turn to outside candidates
Factors In Supply of Outside Candidates

General economic conditions


Expected unemployment rate

Sources of Information

Periodic forecasts in business publications


Online economic projections
MOFED Budget Office (CBO)
Bureau of Labor Statistics (BLS)
Other federal agencies and private sources
What about your country

540

Effective Recruiting
Mean finding or attracting applicants for the companys open position. Effective recruiting
is increasingly important.

External factors affecting recruiting:


undersupply of workers
Increasingly fewer qualified candidates

Recruiting complexities (Internal factors affecting recruiting):


The consistency of the firms recruitment efforts with its strategic goals (e.g
decision to expend etc. need to think when and how to recruit)
The available resources, types of jobs to be recruited and choice of recruiting
methods which one is more superior)
Non-recruitment HR issues and policies (how to attract bigger applicants pool)
Understand the law
Line and staff cooperation. HRM in-charge with recruiting must know exactly
what the job entail with cooperation from line personnel.

41

Recruiting of current employees: Internal Sources


of Candidates
Advantages
Disadvantages

Foreknowledge of
candidates strengths
and weaknesses

More accurate view of


candidates skills

Candidates have a
stronger commitment
to the company

Increases employee
morale

Less training and


orientation required
542

Failed applicants
become discontented

Time wasted
interviewing inside
candidates who will not
be considered

Inbreeding strengthens
tendency to maintain
the status quo

5. Outside Sources of
Candidates

Locating Outside Candidates


1

Recruiting via the Internet

Executive Recruiters

Advertising

On Demand Recruiting
Services (ODRS)

Employment Agencies

College Recruiting

Temp Agencies and Alternative


Staffing

Referrals and Walk-ins

Offshoring/Outsourcing

543

Recruiting via the Internet

Advantages

Cost-effective way to publicize job openings


More applicants attracted over a longer period
Immediate applicant responses
Online prescreening of applicants
Links to other job search sites
Automation of applicant tracking and evaluation

Disadvantages
Unqualified applicants overload the system
Personal information privacy concerns of
applicants

544

Outside Sources of Candidates

45

Advertising
The Media: selection of the best medium depends on the
positions for which the firm is recruiting.
Internet with the help of applicant tracking system (pg
134)
Newspapers (local and specific labor markets)
Trade and professional journals
Internet job sites
Marketing programs
Constructing an effective ad
Wording related to job interest factors should evoke the
applicants attention, interest, desire, and action (AIDA) and
create a positive impression of the firm.

FIGURE 58

Ineffective and Effective Web Ads

546

External Recruitment
Considerations

Cost of Recruitment (per employee hired)


SC AC AF RB NC

H
H
SC
AC
AF
RB
NC
H

= source cost
= advertising costs, total monthly expenditure (example: $28,000)
= agency fees, total for the month (example: $19,000)
= referral bonuses, total paid (example: $2,300)
= no-cost hires, walk-ins, nonprofit agencies, etc. (example: $0)
= total hires (example: 119)

Cost to hire one employee = $414

FIGURE 59

Help Wanted Ad that Draws Attention

548

Why does this ad attract attention? The phrase next key player certainly helps.
Employers usually advertise key positions in display ads like this

Employment Agencies
Types of
Employment
Agencies

Public
agencies

549

Nonprofit
agencies

Private
agencies

Why Use a Private


Employment Agency?

No HR department: firm lacks recruiting and


screening capabilities to attract a pool of qualified
applicants.

To fill a particular opening quickly.

To attract more minority or female applicants.

To reach currently employed individuals who are


more comfortable dealing with agencies than
competing companies.

To reduce internal time devoted to recruiting.

550

Avoiding Problems with


Employment Agencies

Give agency an accurate and complete job


description.

Make sure tests, application blanks, and interviews


are part of the agencys selection process.

Review candidates accepted or rejected by your


firm or the agency for effectiveness and fairness of
agencys screening process.

Screen agency for effectiveness in filling positions.

Supplement the agencys reference checking by


checking the final candidates references yourself.
551

Specialized Staffing and


Recruiting

Alternative Staffing
In-house

contingent (casual, seasonal,


or temporary) workers employed by the
company, but on an explicit short-term
basis.

Contract

technical employees supplied


for long-term projects under contract
from outside technical services firms.

552

Temp Agencies and


Employers
have long
used temps to fill
Alternative
Staffing

in for permanent employees who were


out sick or on vacation.
The desire for ever-higher productivity
also contributes to temp workers
growing popularity. Productivity is
measured in terms of output per hour
paid.
Many firms also use temporary hiring to
give prospective employees a trial run
before hiring them as regular employees.
553

Copyright 2011 Pearson Education, Inc.


publishing as Prentice Hall

Alternative staffing

Outsourcing means having outside vendors supply


services (such as benefits management, market research,
or manufacturing) that the firms own employees previously
did in-house.
Offshoring is a narrower term. It means having outside
vendors abroad supply services that the firms own
employees previously did in-house

554

Offshoring and Outsourcing Jobs


Political and
military instability
Resentment and
anxiety of U.S.
employees/union
s

Cultural
misunderstandin
gs

Outsourcing/
Offshoring
Issues

Costs of foreign
workers

Special training
of foreign
employees

555

Customers
securing and
privacy concerns

Foreign
contracts,
liability, and
legal concerns

Copyright 2011 Pearson Education, Inc.


publishing as Prentice Hall

6. Executive Recruitment

556

Executive recruiters (also known as


headhunters)
are
special
employment agencies retained by
employers
to
seek
out
topmanagement talent for their clients.
The employer always pays the fees.

College Recruiting

On-campus recruiting goals

To determine if the candidate is


worthy of further consideration
To attract good candidates

557

On-site visits

Invitation letters

Assigned hosts

Information packages

Planned interviews

Timely employment offer

Follow-up

Internships

Summary Question for Section 5.2.

58

Analyze and briefly explain human resource planning and


employee recruitment in organization that you were in or
any organization of your choice.
Give your comment.