BUS 1201 - Chapter 9 (Lecture) PDF

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ATTRACTING AND RETAINING THE BEST EMPLOYEES ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- UNIT 9.1 - NOV 19 *BACKGROUND READING: CHAPTER 9  An Overview of Human Resources Management ● HUMAN RESOURCE MANAGEMENT (HRM) is all of the activities involved in acquiring, maintaining, and developing an organization’s human resources ● The phases of HRM: ○ (1) ACQUISITION which  is the recruiting and hiring of new personnel ○ (2) MAINTENANCE is  encouraging employees to remain with the business and work effectively ○ (3) DEVELOPMENT is the improving of employee skills and expanding their capabilities ● The scope of HRM is best appreciated when viewed from the perspective of an organization that is growing or changing rapidly  MAINTENANCE

ACQUISITION ● ● ● ● ●

Planning: How many people will we need? Job analysis: What does each person need to do? Recruiting: How do we find qualified candidates? Selection: Whom should we hire? Orientation: How do we get new employees up and running?

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Training and development: How do we teach employees new skills and prepare them for advancement opportunities? Performance appraisal: How do we assess employee performance and potential?

DEVELOPMENT ●

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Employee relations: How do we track and maintain good employees relations? Compensation: How much money should employees be paid? Benefits: What non-monetary compensation should we provide?

 The Shared Responsibility of HRM ● Most managers spend significant time acquiring, maintaining, and developing employees  ORGANIZATION SIZE

ALLOCATION OF HRM DUTIES

Small

Performed by line manager or owner

Medium

Hired HR managers and share with business managers

Large

Highly specialized with separate groups dealing with compensation, benefits, training and development

 Key Takeaway ● HRM consists of all the activities involved in acquiring, maintaining, and developing an organization’s human resources ● The people in an organization are a unique and valuable resource, which makes the efforts dedicated to HRM worth an investment  Planning Human Resource Needs ● Below is the HRM process:

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First step in the acquisition phase of HRM is planning ○ Managers must determine future HR needs so that they can plan to meet those needs Planners must forecasts of the demand for HR on as much relevant information as they can assemble Company’s overall strategic plan will provide information about future business ventures, new products, and projected expansions ○ Past information on staffing levels or the existing number of employees in each department can also be helpful Planners also stay aware of industry and economic trends: ○ Changes in management practices ○ Advances in technology ○ Growth prospects ○ Competition for talent A REPLACEMENT CHART is  a list of key employees and their possible replacements within a company ○ Important to maintain this chart to ensure that top management positions can be filled quickly in the event of an unexpected death, resignation, or retirement ○ Some organizations provide additional training for employees who might eventually replace top managers A SKILLS  INVENTORY is a computerized database containing information on the skills and experience on all current employees ○ This can be mined to find candidates to fill available positions ○ Can quickly identify qualified employees

 Human Resource Management ● Below, all are designed to achieve organizational goals within the laws that affect human resource management

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Work is different today Retraining, re-tasking and new challenges for managing people Biggest asset is often people Not just about hiring, etc. Needs to be part of strategy

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 Determining our Needs ● Below is the human resource planning process

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The five steps to determining human resource needs are: ○ (1) Prepare HR inventory ○ (2) Prepare job analysis ○ (3) Assess demand ○ (4) Assess supply ○ (5) Establish strategic plan

 Prepare HR Inventory ● Preparing a human resources inventory of the organization’s employees ● This inventory should include ages, names, education (eg., languages spoken), capabilities, training, specialized skills, and other information pertinent to the specific organization  Job Analysis ● A JOB ANALYSIS is  a systematic approach that identifies and determines the job duties and requirements and their importance to the organization ○ The goal of job analysis is to create a job description and a job specification ● A JOB DESCRIPTION is  a list of the tasks and responsibilities for a particular job ● A JOB SPECIFICATION is  a list of the qualifications required to perform a particular job ● Job description and job specification form the basis of the job posting that a company publishes on its website and on job boards when recruiting potential employees ● A variety of factors that require that a new job analysis be done, includes . . . ○ Reorganization of departments that may expand or contract objectives for a particular position ○ Expansion of the business into new segments or geographies that may change objectives for a particular position ○ Industry or technology changes that alter the desired qualifications for a particular position  JOB ANALYSIS Observe current sales representatives doing the job ● Discuss job with sales managers Have current sales representatives keep a diary of their activities ●

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JOB DESCRIPTION Primary objective is to sell the company's products to stores in Territory Z. Duties include servicing accounts and maintaining

JOB SPECIFICATIONS Characteristics of the person qualifying for this job include: 

positive relationships with clients. Responsibilities include: ● Introducing the new products to store managers in the area ● Helping the store managers estimate the volume to order ● Negotiating prime shelf space ● Explaining sales promotion activities to store managers ● Stocking and maintaining shelves in stores that wish such service

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Two years sales experience Positive attitude Well-groomed appearance Good communication skills High-school diploma and two years of post-secondary credit

 Assess Demand ● Organizations need to be ahead of the curve in terms of planning for future HR needs ● Lots of things change rapidly (technology, external business environment, regulation and legislation) ● Training is critical in order to get things into place  Assess Supply ● Workforce is changing ● Earlier in the course: need to keep an eye on demographic shifts.. This is why: ○ People needs may be shifting ○ May have more options  Establish Strategic Plan ● Time to act ● Plan must address: ○ Recruitment ○ Selection ○ Training and development ○ Evaluation ○ Compensation ○ Scheduling ○ Career management  Cultural Diversity in Human Resources ● As an organization plans for future needs or is recruiting for open positions, it must consider the topic of cultural diversity ● CULTURAL/WORKPLACE DIVERSITY i s the differences among people in the workforce in terms of ethnicity, gender, religion, age, and physical or learning abilities ● The Canadian workforce continues to become more diverse ● This increase in cultural diversity is an important consideration for today’s managers for three reasons: ○ (1) Increased diversity requires managers to successfully integrate employees with a broader range of value systems and working styles ○ (2) Canadian companies operate in global markets and must integrate cultural differences when staffing and marketing in these markets ○ (3) Global competition has increased, both for talent and for customers ■ Companies must expand the scope of their staffing and marketing strategies in order to compete  Benefits of Diversity ● In Canada, businesses have the opportunity to benefit from a very diverse population ● Canada is a multicultural nation ○ Indigenous people ○ Immigration in the early 17th century ● Diversity comes with challenges and opportunities  The Three Benefits of a Diverse Workforce ● (1) Provides businesses a marketing edge ● (2) Drives creativity and innovation ● (3) Attracts top talent  Recruiting and Hiring Employees

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RECRUITING is the process of attracting qualified job applicants Steps of the recruitment process: ○ (1) Attract Candidate Pool ■ Recruit internally through company memos or job postings ● The advantage of this is that the knowledge, skills, and abilities of the candidates are already known ● Disadvantage is that promoting a current employee leaves another position to be filled ● May be impossible to recruit internally, such as when no current employee is qualified or the company is growing rapidly ■ Recruit externally through advertised job postings, job fairs, etc ○ (2) Screen Candidates ■ Review resumes and cover letters to eliminate candidates that do not meet minimum qualifications ■ Candidates are usually ranked according to their qualifications and perhaps contacted for preliminary interviews ○ (3) Interview Candidates ■ Top candidates selected during screening process ■ May be with single manager or a hiring committee ■ Candidates for higher level jobs may also meet with a department head or vice president over the course of several interviews ○ (4) Compare Candidates ■ Select the top two or three candidates ■ Managers must consider which candidates have the best qualifications and will be able to contribute the most to their team ○ (5) Check References ■ Includes speaking with former employer of the candidates, and may involve criminal background checks and drug tests ■ Companies select two or three candidates for this stage because of the possibility of their top candidate could be eliminated if reference checks uncover negative information  ○ (6) Make a job offer ■ Where the candidate and the company discuss compensation ■ Once agreement is reached, candidate accepts the offer and the job is filled RECRUITMENT i s the set of activities used to obtain a sufficient number of the right people at the right time

●  Recruiting Sources

 Selection ● SELECTION is the process of gathering information and deciding who should be hired, under legal guidelines, for the best interests of the individual and the organization ● Selecting and training employees has been extremely expensive processes in some firms  Application Materials ● Purpose: discovery ● Screening can be fast: employers looking for a reason (to either throw it in the rubbish or put it in the maybe pile for further review) 

Interviews ● Who does initial screening (varies by organization) ● Ask the same questions ● Cannot just ask anything, but can ask about ability to perform (eg., “can you work shifts?”) ● But do they work? ○ Lots of evidence in the academic literature that says what many have suggested for years: interviews are a weak predictor of future performance  Testing ● Can be simple tests to measure competencies ● Some may be use so-called ‘personality tests’ ● Purpose is to assess overall competence and fit  Background Checks ● Work history ● School records ● Credit checks ● References ● Social media  Trial Period ● Conditional/probationary hires ● Prove your value ● Time varies ● Efficient, but still costly  Realistic Job Preview (RJP) ● This is a missing step ● Allows potential employee to understand the job setting before a hiring decision ● Leads to less dissatisfaction because does away with unmet expectations ● Lower turnover rates ● Potential downside: some turn away  Employee Compensation Strategies ● COMPENSATION i s the payment employees receive in return for their labour ○ It’s an important component of human resources management ● Compensation plans must be: ○ Competitive enough to attract new talent ○ Fair enough to keep existing talent from leaving the company ○ Reasonable enough so that the company can still make a profit ● Building effective compensation plans is generally considered part of the maintenance phase of HRM ○ Attracting new talent is important ○ Existing employees represent the largest share of the company ■ Keeping them engaged and motivated is crucial for meeting organizational objectives ● HRM professionals must take into account several factors when building a compensation package ○ (1) Industry ■ Managers in the legal industry usually are better compensated than are managers in the fast food industry ■ To attract and maintain talent, HRM professionals must build compensation plans that are comparable or better than their competitors in the industry ○ (2) Level of the job ■ A division head is likely compensated at a much higher level than a data-entry clerk ■ One data-entry clerk might be better compensated than another data-entry clerk ● Based on years of experience or level of responsibility ■ Decisions about these compensation levels are usually based on a job evaluation that determines the relative worth of various jobs within the company

Goal: design compensation so that jobs in the organization that require similar levels of experience and qualifications will have similar levels of compensation ○ (3) Supply of candidates ■ A shortage of candidates for a certain position in an industry often increases the compensation package for the position to attract and retain talent HRM professionals also take into account the . . . ○ Nature of the position ○ Organizational culture ○ Individual employee’s preferences when designing a compensation package ■

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 Types of Compensation ● There are three primary forms of compensation, each offering a variety of options for companies to consider when building attractive compensation plans ○ (1) Benefits ■ FRINGE BENEFITS are forms of indirect compensation and may include: ● Health insurance ● Retirement and financial benefits: pension plans, RRSP’s, employee stock-ownership plans, stock options ● Paid vacation and sick leave ● Other employee benefits: tuition reimbursement, child care, wellness programs, free food and drinks, flexible work arrangements, paid time for volunteer work, etc ■ Some fringe benefits are required by law ○ (2) Incentives ■ PIECEWORK AND COMMISSION i s when some employees are paid according to how much they produce or sell ● eg. A car salesperson might be paid $600 for each car sold or a 3% commission on the car’s sale price ■ ACCELERATED COMMISSION SCHEDULE is to encourage sales ● eg. A salesperson could be paid a commission rate of 3% on the first $50000 of sales per month, 4% on the next $30000, and 5% on any sales beyond $80000 ■ BONUS is a payment for reaching a specific goal; it may be paid monthly, quarterly, or annually ■ PROFIT SHARING i s when a company pays employees a portion of the profits over a present level ○ (3) Salaries and Wages ■ HOURLY WAGES vary depending on the positions and job market ● Each province and territory in Canada sets a minimum hourly wage ■ SALARIES is a fixed regular payment  ● Managerial and professional employees are usually paid an annual salary on either a biweekly, bimonthly, or monthly basis  Key Takeaway ● Compensation is an important component of human resources management ● Compensation plans must be . . . ○ Competitive ○ Fair ○ Reasonable to attract and retain top talent ● The three types of compensation are: ○ (1) Salaries and wages ○ (2) Incentives ○ (3) Benefits ● HRM professionals must take into account a variety of factors when assembling and managing compensation plans that they hope will be attractive to new and current employees  Orientation and Training ● ORIENTATION is the process of acquainting new employees with an organization ○ Last step in the acquisition phase of HRM ● Orientation provides information about company . . . ○ Policies ○ Salary and benefits ○ Other trivial matters

■ eg. Parking The more important orientations are about: ○ Job assignments ○ Work rules ○ Equipment ○ Performance expectations ● Orientation may be . . . ○ (1) Short, informal presentation by employee’s manager ○ (2) Formal, elaborate program involving dozens of people, lasting several days or weeks ● A thorough orientation program will meet three key objectives: ○ (1) Complete hiring paperwork ■ Health insurance options ■ Confidentiality agreements ■ Information for payroll ○ (2) Learn administrative details ■ Use of computer and phone networks ■ Locations of key departments ■ Locations of equipment ○ (3) Employee introductions ■ Meet work team and other key contracts in the organization ● The importance of orientation programs can be underestimated or too informal ○ True for smaller companies ● Training is considered apart of the development phase of HRM ○ Important for both new and existing employees  Training vs. Development ● TRAINING i s the process of teaching new employees how to do their jobs, or teaching existing employees how to do their jobs more effectively and efficiently ○ Focuses on short-term skills ● DEVELOPMENT is the process of preparing employees to assume increased responsibility in both present and future positions ○ Often aimed at preparing employees for advancement in the organization ○ Focuses on long-term abilities ● Training and development include all attempts to improve productivity by increasing an employee’s ability to perform  Methods of Training and Development ● (1) On-the-job training ○ Trainee learns by doing the work under the supervision of an experienced employee or peer mentor ■ This is known as APPRENTICESHIP  ●

ADVANTAGES ● ● ●

Inexpensive Easy to implement Provides real-world immersion for the trainee

DISADVANTAGES ●

Distracts the trainer from their primary job duties

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(2) Simulations ○ Can be physical or computerized

 ADVANTAGES ●

Provide practical training without disrupting daily operations

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(3) Classroom Teaching

DISADVANTAGES ●

Expensive to administer

ADVANTAGES ● ●

Accommodate many trainees at once Provides personal interaction for trainees

DISADVANTAGES ●

Retention is lower with this teaching format

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(4) Online Training ○ Flexible option since it can incorporate several modes of teaching

 ADVANTAGES ●

Inexpensive

DISADVANTAGES ●

Trainee often lacks personal interaction with the trainers

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Training and development methods vary depending on the size of the company ○ Smaller companies use informal methods ■ eg. On-the-job training ○ Larger companies use formal methods ■ eg. Classroom teaching, online training

 The Three Steps in Training ● (1) Organizational needs + current skill levels of employees = training needs ● (2) Designing training activities that meet those needs ● (3) Evaluating the effectiveness of that training  Employee Performance Appraisal ● PERFORMANCE APPRAISAL is the evaluation of employees’ current and potential levels of performance to allow managers to make objective human resources decisions ○ Typically involves a meeting between the employee and their direct sup...