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naln08

Business Finance

Advance HR Management

University of Virginia

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Discuss the following questions from the concepts covered in Chapters 12, 13, 14 of our course text Be sure to follow the instructions for each prompt.

Responses to each prompt should be at least 150 words AND provide an APA reference citation for the sources of the response.

  1. Find an article that explains/gives an example of an innovative program or an organization that promotes internal employee relations and give a brief description of the program and why you think the program is or will be successful. Explain as an employee why you feel it would be beneficial in your own organization.
  2. Find an article that explains/gives an example of an innovative employee wellness program. Think outside of the box – not health insurance or OSHA, but innovative programs that address wellness related to mental, physical, Maslow's Hierarchy of Needs, work/life balance etc. Give a brief description of the program and why you think that program is or will be successful. Explain as an employee why you feel it would be beneficial in your own organization.
  3. Find an article that explains/gives an example of an organization using the evolution of global business to transform their business. Explain how they have used this strategy to improve their business or how they found the strategy unsuccessful. What do you find most intriguing or motivating about this strategy as an employee?
  4. Find an article that explains/gives an example of strategies to either (1) manage employees who are located globally (2) global employee recruitment (3) employee and labor relations practices or (4) global compensation practices. Give a brief description of the strategy and why you think that the program is or will be successful. How do you think this strategy could be applied to other organizations and be successful?

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MyManagementLab : Improves Student Engagement Before, During, and After Class ™ Prep and Engagement • Video exercises – engaging videos that bring business concepts to life and explore business topics related to the theory students are learning in class. Quizzes then assess students’ comprehension of the concepts covered in each video. • Learning Catalytics – a “bring your own device” student engagement, assessment, and classroom intelligence system helps instructors analyze students’ critical-thinking skills during lecture. • Dynamic Study Modules (DSMs) – through adaptive learning, students get personalized guidance where and when they need it most, creating greater engagement, improving knowledge retention, and supporting subject-matter mastery. Also available on mobile devices. • Business Today – bring current events alive in your classroom with videos, discussion questions, and author blogs. Be sure to check back often, this section changes daily. • Decision-making simulations – place your students in the role of a key decision-maker. The simulation will change and branch based on the decisions students make, providing a variation of scenario paths. Upon completion of each simulation, students receive a grade, as well as a detailed report of the choices they made during the simulation and the associated consequences of those decisions. Decision Making Critical Thinking • Writing Space – better writers make great learners—who perform better in their courses. Providing a single location to develop and assess concept mastery and critical thinking, the Writing Space offers assisted graded and create your own writing assignments, allowing you to exchange personalized feedback with students quickly and easily. Writing Space can also check students’ work for improper citation or plagiarism by comparing it against the world’s most accurate text comparison database available from Turnitin. • Additional Features – included with the MyLab are a powerful homework and test manager, robust gradebook tracking, comprehensive online course content, and easily scalable and shareable content. http://www.pearsonmylabandmastering.com This page intentionally left blank Human Resource Management R. Wayne Mondy Joseph J. Martocchio Fourteenth Edition Global Edition Boston Columbus Indianapolis New York San Francisco Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Vice President, Business Publishing: Donna Battista Operations Specialist: Diane Peirano Editor-in-Chief: Stephanie Wall Senior Art Director: Jon Boylan Acquisitions Editor: Kristin Ellis-Levy Interior and Cover Designer: Integra Software Services Pvt. Ltd. Program Manager Team Lead: Ashley Santora Cover Image: Marcel Jancovic/Shutterstock Program Manager: Sarah Holle VP, Director of Digital Strategy & Assessment: Paul Gentile Editorial Assistant: Bernard Ollila Manager of Learning Applications: Paul Deluca Director of Marketing: Maggie Moylan Digital Editor: Brian Surette Executive Marketing Manager: Erin Gardner Digital Studio Manager: Diane Lombardo Project Manager Team Lead: Judy Leale Digital Studio Project Manager: Robin Lazrus Project Manager: Tom Benfatti Digital Studio Project Manager: Alana Coles Acquisitions Editor, Global Edition: Vaijyanti Ghose Digital Studio Project Manager: Monique Lawrence Senior Project Editor, Global Edition: Daniel Luiz Digital Studio Project Manager: Regina DaSilva Manager, Media Production, Global Edition: M. Vikram Kumar Full-Service Project Management and Composition: Integra Software Services Pvt. Ltd. Senior Manufacturing Controller, Production, Global Edition: Trudy Kimber Pearson Education Limited. Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsonglobaleditions.com © Pearson Education Limited 2016 Acknowledgements of third-party content appear on the appropriate page within the text, which constitutes an extension of this copyright page. Unless otherwise indicated herein, any third-party trademarks that may appear in this work are the property of their respective owners and any references to third-party trademarks, logos or other trade dress are for demonstrative or descriptive purposes only. Such references are not intended to imply any sponsorship, endorsement, authorization, or promotion of Pearson’s products by the owners of such marks, or any relationship between the owner and Pearson Education, Inc. or its affiliates, authors, licensees or distributors. The rights of R. Wayne Mondy and Joseph J. Martocchio to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. Authorized adaptation from the United States edition, entitled Human Resource Management, 14th edition, ISBN 978-0-13-384880-9, by R. Wayne Mondy and Joseph J. Martocchio, published by Pearson Education © 2016. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, withouteither the prior written permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. ISBN 10: 1292094370 ISBN 13: 9781292094373 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. 10 9 8 7 6 5 4 3 2 1 14 13 12 11 10 Typeset in Times LT Std Roman by Integra Software Services. Printed and bound by Courier Kendallville in United States of America. To Judy Bandy Mondy, my love, my inspiration, and my travel partner. —R. Wayne Mondy To my parents, for their sacrifices, which have provided me with great opportunities. —Joe Martocchio This page intentionally left blank Brief Contents Part One Setting the Stage 23 Chapter 1 Human Resource Management: An Overview 24 Chapter 2 Business Ethics and Corporate Social Responsibility 46 Chapter 3 Equal Employment Opportunity, Affirmative Action, and Workforce Diversity 64 Part Two Staffing 99 Chapter 4 Strategic Planning, Human Resource Planning, and Job Analysis 100 Chapter 5 Recruitment 130 Chapter 6 Selection 154 Part Three Performance Management and Training 185 Chapter 7 Performance Management and Appraisal 186 Chapter 8 Training and Development 212 Part Four Compensation 245 Chapter 9 Direct Financial Compensation (Core Compensation) 246 Chapter 10 Indirect Financial Compensation (Employee Benefits) 278 Part Five Labor Relations, Employee Relations, Safety and Health 305 Chapter 11 Labor Unions and Collective Bargaining 306 Chapter 12 Internal Employee Relations 338 Chapter 13 Employee Safety, Health, and Wellness 360 Part Six Operating in a Global Environment 387 Chapter 14 Global Human Resource Management 388 7 This page intentionally left blank Contents Part One Setting the Stage 23 Chapter 1 ■■ETHICAL DILEMMA: A Selection Quandary Human Resource Management: An Overview 24 Defining Human Resource Management 25 Human Resource Management Functions 25 Staffing 25 Performance Management 26 Human Resource Development 26 Compensation 27 Employee and Labor Relations 27 Safety and Health 27 Human Resource Research 27 Interrelationships of Human Resource Management Functions 27 Who Performs Human Resource Management Activities? 28 Human Resource Management Professional 28 Line Managers 28 Human Resources Outsourcing 29 Human Resources Shared Service Centers 30 Professional Employer Organizations 30 ■■HR BLOOPERS: Staffing Stone Consulting 30 Human Resources as a Strategic Business Partner 31 Dynamic Human Resource Management Environment 32 Legal Considerations 33 Labor Market 33 Society 33 Political Parties 33 Unions 33 Shareholders 33 Competition 34 Customers 34 HR Technology 34 Economy 35 Unanticipated Events 35 Corporate Culture and Human Resource Management 35 Employer Branding 36 Human Resource Management in Small Businesses 37 Country Culture and Global Business 37 Human Resource Management Profession 38 Scope of This Book 41 Summary 42 • Key Terms 43 • Exercises 43 • Questions for Review 44 • Incident 1: HR after a Disaster 44 • Incident 2: Downsizing 45 Chapter 2 Business Ethics and Corporate Social Responsibility 46 Defining Ethics, Corporate Social Responsibility, and Corporate Sustainability 47 Business Ethics 47 Sources of Ethical Guidance 48 49 Legislating Ethics 49 Procurement Integrity Act 50 Federal Sentencing Guidelines for Organizations Act 50 Corporate and Auditing Accountability, Responsibility and Transparency Act 50 Dodd–Frank Wall Street Reform and Consumer Protection Act 51 Whistleblower Protection 51 Creating an Ethical Culture and a Code of Ethics 52 Human Resource Ethics 53 Linking Pay to Ethical Behavior 54 Ethics Training 54 ■■HR BLOOPERS: Sales Incentives at Pinser Pharmaceuticals 55 Corporate Social Responsibility 55 Corporate Sustainability 57 Conducting a Social Audit 59 Can Corporate Social Responsibility Succeed in the Global Environment? 60 Summary 61 • Key Terms 61 • Exercises 62 • Questions for Review 62 • Incident 1: Is It Private and Confidential? 62 Incident 2: “You Can’t Fire Me” 63 Chapter 3 Equal Employment Opportunity, Affirmative Action, and Workforce Diversity 64 Equal Employment Opportunity: An Overview 66 Federal Laws Affecting Equal Employment Opportunity 66 Constitutional Amendments and the Civil Rights Act of 1866 66 Title VII of the Civil Rights Act of 1964, Amended in 1972 66 Equal Pay Act of 1963, Amended in 1972 69 Lilly Ledbetter Fair Pay Act of 2009 69 Pregnancy Discrimination Act of 1978 69 Civil Rights Act of 1991 70 Age Discrimination in Employment Act of 1967, Amended in 1978 and 1986 70 Age Can Actually Be a Bona Fide Occupational Qualification 71 Rehabilitation Act of 1973 71 Vietnam Era Veteran’s Readjustment Assistance Act of 1974 71 Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as Amended 72 Americans with Disabilities Act of 1990 72 Americans with Disabilities Act Amendments Act of 2008 72 Immigration Reform and Control Act of 1986 73 Uniformed Services Employment and Reemployment Rights Act of 1994 73 Genetic Information Nondiscrimination Act of 2008 73 State and Local Laws 74 Who’s Responsible for Ensuring Equal Employment Opportunity? 74 Equal Employment Opportunity Commission 74 9 10 CoNTENTS Forecasting Human Resource Availability 108 Shortage or Surplus of Workers Forecasted 109 Office of Federal Contract Compliance Programs 74 Employers 75 Defining and Operationalizing Illegal Discrimination 76 ■■ETHICAL DILEMMA: Which “Thinker” Should Go? Uniform Guidelines on Employee Selection Procedures 76 Concept of Disparate Treatment 76 Concept of Adverse Impact 77 Affirmative Action 78 Uniform Guidelines on Preventing Specific Illegal Employment Discrimination 81 Guidelines on Sexual Harassment 81 Guidelines on Discrimination Because of National Origin 82 Guidelines on Discrimination Because of Religion 83 Guidelines on Caregiver (Family Responsibility) Discrimination 84 Discrimination Because of Disability 84 ■■ETHICAL DILEMMA: What Was the Real Message? 85 Global Sexual Harassment 85 Diversity 86 Diversity Management 86 Elements of the Diverse Workforce 87 Job Descriptions 116 Job Identification 118 Date of the Job Analysis 118 Job Summary 118 Duties Performed 118 Job Specification 118 Standard Occupational Classification (SOC) and the Occupational Information Network (O*NET) 119 Diversity 91 The Occupational Information Network (O*NET) 120 Multigenerational Diversity 93 Lesbian, Gay, Bisexual, and Transgender Employees 93 Summary 94 • Key Terms 95 • Exercises 95 • Questions for Review 95 • Incident 1: I Feel Great 96 • Incident 2: Gender Diversity: Change for the Better? 96 Part Two Staffing 99 Strategic Planning, Human Resource Planning, and Job Analysis 100 Job Enrichment 124 Job Enlargement 124 Job Rotation 124 Reengineering 125 Summary 126 • Key Terms 127 • Exercises 128 Questions for Review 128 • Incident 1: A Degree for Meter Readers 128 • Incident 2: Strategic HR? 129 Environmental Assessment 103 Objective Setting 104 Strategy Setting 104 Employee Roles Associated with Competitive Strategies 105 Strategy Implementation 105 Chapter 5 Recruitment 130 Recruitment Defined 131 Human Resource Planning 106 Zero-Base Forecast 108 Bottom-Up Forecast 108 Relationship between Volume of Sales and Number of Workers Required 108 Job Analysis for Team Members 120 Job Analysis and the Law 122 Competencies and Competency Modeling 122 Job Design Concepts 123 Global Talent Management 125 Strategic Planning Process 101 Mission Determination 102 ■■HR BLOOPERS: Workforce Planning at Master Cleaners Reasons for Conducting Job Analysis 114 Staffing 114 Training and Development 114 Performance Appraisal 114 Compensation 115 Safety and Health 115 Employee and Labor Relations 115 Legal Considerations 115 Questionnaires 116 Observation 116 Interviews 116 Employee Recording 116 Combination of Methods 116 ■■HR BLOOPERS: Affirmative Action and Workforce Forecasting Human Resource Requirements 108 Succession Planning: A Component of Strategic Planning 112 Job Analysis: A Basic Human Resource Management Tool 113 Types of Job Analysis Information 115 Job Analysis Methods 115 Single Parents and Working Mothers 87 Women in Business 87 Mothers Returning to the Workforce (on Ramping) 88 Dual-Career Families 88 Ethnicity and Race 89 Older Workers 89 People with Disabilities 89 Immigrants 90 Foreign Workers 90 Young Persons, Some with Limited Education or Skills 90 Baby Boomers, Gen X, Gen Y, and Gen Z 91 Chapter 4 109 Innovative Recruiting 110 Compensation Incentives 110 Alternatives to Layoffs 110 107 Recruitment Process 131 Internal Recruitment Methods 132 Human Resource Databases 132 Job Posting and Job Bidding 132 ■■HR BLOOPERS: Recruiting Skilled Machinists Employee Referrals 133 External Recruitment Sources 134 High Schools and Vocational Schools 134 Community Colleges 134 133 CoNTENTS Review of Applications and Review of Résumés 157 Colleges and Universities 135 Competitors in the Labor Market 135 Former Employees 136 Unemployed 136 Military Personnel 136 ■■ETHICAL DILEMMA: Unfair Advantage? ■■ETHICAL DILEMMA: Employee Selection Criteria? 159 Selection Tests 159 136 Self-Employed Workers 137 Ex-Offenders 137 Recruiting Technology 137 Mobile Recruiting 137 Internet Recruiter 138 Virtual Job Fair 138 Corporate Career Web Sites 138 Weblogs (Blogs for Short) 138 General-Purpose Job Boards 138 NACElink Network 139 .Jobs 139 AllianceQ 139 Niche Sites 139 Contingent Workers’ Sites 140 Hourly Workers’ Sites 141 Traditional External Recruitment Methods 141 Media Advertising 141 Private Employment Agencies 142 Public Employment Agencies 142 Executive Search Firms 142 Recruiters 143 Job Fairs 143 Internships 143 Professional Associations 144 Unsolicited Applicants 144 Open Houses 144 Event Recruiting 144 Sign-on Bonuses 144 Competitive Games 145 Tailoring Recruitment Methods to Sources 145 Environment of Recruitment 146 Labor Market Conditions 146 Active or Passive Job Seekers 147 Legal Considerations 147 Alternatives to Recruitment 148 Promotion Policies 148 Overtime 148 Onshoring 149 Global Implications for Recruitment 149 Summary 150 • Key Terms 151 • Exercises 151 • Questions for Review 151 • Incident 1: A Problem Ad? 152 • Incident 2: I Am Qualified, Why Not Me? 152 Chapter 6 Selection 154 Significance of Employee Selection 155 Selection Process 155 Preliminary Screening 156 Preliminary Considerations 159 Advantages and Disadvantages of Selection Tests 159 Characteristics of Properly Designed Selection Tests 160 Test Validation Approaches 161 Employment Tests 162 Unique Forms of Testing 164 Employment Interview 165 Interview Planning 165 ■■HR BLOOPERS: The First Interview 165 Content of the Interview 166 Candidate’s Role and Expectations 166 General Types of Interviews 167 Methods of Interviewing 168 Potential Interviewing Problems 169 Concluding the Interview 171 Pre-employment Screening and Background Checks 171 Employment Eligibility Verification (Form I-9) 171 Continuous Background Investigation 172 Background Investigation with Social Networking 172 Remembering Hiring Standards to Avoid 172 Selection Decision 174 Medical Examination 174 Notification of Candidates 175 Metrics for Evaluating the Effectiveness of Recruitment/Selection 175 Quality of Hire 175 Time Required to Hire 175 New-Hire Retention 175 Hiring Manager Overall Satisfaction 176 Turnover Rate 176 Cost Per Hire 176 Selection Rate 176 Acceptance Rate 176 Yield Rate 176 Environmental Factors Affecting the Selection Process 177 Other HR Functions 177 Legal Considerations 177 Speed of Decision Making 178 Organizational Hierarchy 178 Applicant Pool 178 Type of Organization 179 Probationary Period 179 Organizational Fit 179 Selection Technology 179 Selection in a Global Environment 180 Summary 181 • Key Terms 182 • Exercises 183 Questions for Review 183 • Incident 1: A Matter of Priorities 184 • Incident 2: But I Didn’t Mean To! 184 11 12 CoNTENTS Part Three Performance Management and Training 185 Chapter 7 National Culture and Performance Appraisal 207 Summary 208 • Key Terms 209 • Exercises 209 Questions for Review 209 • Incident 1: These Things Are a Pain 210 • Incident 2: Performance Appraisal? 210 Performance Management and Appraisal 186 Performance Management 187 Performance Appraisal 188 Uses of Performance Appraisal 188 Chapter 8 Human Resource Planning 188 Training and Development 188 Career Planning and Development 189 Compensation Programs 189 Internal Employee Relations 189 Assessment of Employee Potential 189 Organizational Analysis 215 Task Analysis 215 Person Analysis 215 Establish Training and Development Program Objectives 216 Training Methods 216 Performance Appraisal Process 189 Establish Performance Criteria (Standards) 190 Classroom Method 217 E-Learning 217 Case Study 218 Behavior Modeling and Tweeting 218 Role-Playing 218 Training Games 218 In-Basket Training 219 On-the-Job Training 219 Apprenticeship Training 219 Team Training 220 Traits, Behaviors, and Competencies 190 Goal Achievement 191 Improvement Potential 191 Responsibility for Performance Appraisal 191 Immediate Supervisor 192 Subordinates 192 Peers and Team Members 192 Self-Appraisal 192 Customer Appraisal 193 360-Degree Feedback 193 Training and Development Delivery Systems 220 Corporate Universities 220 Colleges and Universities 221 Community Colleges 221 Online Higher Education 221 Vestibule System 222 Video Media 222 Simulators 222 Social Networking 222 Performance Appraisal Period 194 Choosing a Performance Appraisal Method 194 Trait Systems 195 Comparison Systems 195 Behavioral Systems 197 Results-Based Systems 199 ■■HR BLOOPERS: Appraising Performance at Global Implementing Training and Development Programs 223 Metrics for Evaluating Training and Development 223 Insurance 199 Problems in Performance Appraisal 201 Reactions 223 Learning 223 Behavior 224 Organizational Results 224 Appraiser Discomfort 201 Subjectivity of Performance Evaluations 201 Employee Anxiety 203 Characteristics of an Effective Appraisal System 203 Factors Influencing Training and Development 225 Job-Related Criteria 203 Performance Expectations 203 ■■ETHICAL DILEMMA: Abdication of Responsibility Standardization 204 Trained Appraisers 204 Continuous Open Communication 204 Conduct Performance Reviews 205 Due Process 205 Legal Considerations in Performance Appraisal 205 Performance Appraisal Interview 206 Scheduling the Interview 206 Interview Structure 206 Use of Praise and Criticism 206 Employees’ Role 207 Concluding the Interview 207 Training and Development 212 Training and Development Process 214 Determine Specific Training and Development Needs 215 204 Top Management Support 225 Shortage of Skilled Workers 225 Technological Advances 226 Global Complexity 226 Learning Styles 226 ■■ETHICAL DILEMMA: The Tough Side of Technology 227 Other Human Resource Functions 227 Human Resource Management Training Initiatives 227 Careers and Career Paths 229 Traditional Career Path 229 Network Career Path 229 Lateral Skill Path 230 Dual-Career Path 230 Adding Value to Your Career 230 Demotion 230 Free Agents (Being Your Own Boss) 231 CoNTENTS Career Planning Approaches 231 Self-Assessment 231 Formal Assessment 232 Career Development and Career Development Methods 234 Manager/Employee Self-Service 235 Discussions with Knowledgeable Individuals 235 Company Material 235 Performance Appraisal System 235 Workshops 235 Management Development 235 Mentoring and Coaching 236 ■■HR BLOOPERS: Management Development at Trends Apparel 237 Reverse Mentoring 237 Organization Development: A Strategic Human Resources Tool 237 Survey Feedback 238 Quality Circles 238 Team Building 238 Learning Organization as a Strategic Mindset 239 Training in the Global Context 239 Summary 240 • Key Terms 241 • Exercises 241 Questions for Review 242 • Incident 1: Training at Keller-Globe 242 • Incident 2: There’s No Future Here! 242 Part Four Compensation 245 Chapter 9 Direct Financial Compensation (Core Compensation) 246 Compensation: An Overview 247 Components of Direct Financial Compensation 249 Employee Base Pay 249 Base Pay 249 Cost-of-Living Adjustments 249 Seniority Pay 249 Performance-Based Pay 251 ■■HR BLOOPERS: Motivating Software Development Teams 256 Person-Focused Pay 257 Determinants of Direct Financial Compensation 258 Contextual Influences on Direct Financial Compensation 259 Labor Market 259 Labor Unions 259 Economy 259 Interindustry Wage Differentials 259 Legislation 260 Build Job Structures Using Job Evaluation 262 Ranking Method 262 Classification Method 262 Factor Comparison Method 263 Point Method 263 Competitive Compensation Policies 263 Pay Level Compensation Policies 264 Pay Mix 265 Ability to Pay 265 Market Competitive Pay Structures: Job Pricing Using Compensation Surveys 266 Pay Grades 266 Pay Ranges 267 Broadbanding 268 Two-Tier Wage System 268 Adjusting Pay Rates 268 Salary Compression 269 ■■ETHICAL DILEMMA: But He’s a Friend 269 Sales Representative Compensation 270 Contingent Worker Compensation 270 Executive Compensation 270 Base Salary 271 Bonuses and Performance-Based Pay 271 Stock Option Plans 271 Perquisites (Perks) 271 Severance Packages 271 Executive Compensation Issues in the United States 272 Executive Compensation in the Global Environment 273 Summary 274 • Key Terms 275 • Exercises 275 Questions for Review 276 • Incident 1: A Motivated Worker 276 • Incident 2: The Controversial Job 277 Chapter 10 Indirect Financial Compensation (Employee Benefits) 278 Indirect Financial Compensation (Employee Benefits) 279 Legally Required Benefits 280 Social Security 280 Unemployment Insurance 281 ■■ETHICAL DILEMMA: A Poor Bid 281 Workers’ Compensation 282 Discretionary Benefits 282 Health Care 282 Fee-for-Service Plans 283 Managed Care Plans 283 Specialized Insurance Plans 284 Consumer-Driven Health Care Plans 285 Retirement Plans 286 Defined Benefit Plans 286 Defined Contribution Plans 286 Cash Balance Plans 287 Life Insurance and Disability Insurance 287 Paid Time-Off 287 Vacation 287 Sick Pay and Paid Time Off Banks 288 Sabbaticals 288 Other Types of Paid Time Off 289 Employee Services 289 Child Care 289 Educational Assistance 289 Food Services/Subsidized Cafeterias 290 Scholarships for Dependents 290 Relocation 290 Domestic Partner Benefits and Same-Sex Marriage 290 Premium Pay 291 13 14 CoNTENTS Voluntary Benefits 291 Employee Benefits Legislation 292 Laws Affecting Collective Bargaining 314 National Labor Relations Act 314 ■■ETHICAL DILEMMA: A Strategic Move Employee Retirement Income Security Act 292 Consolidated Omnibus Budget Reconciliation Act 292 Older Workers Benefit Protection Act 292 Health Insurance Portability and Accountability Act 292 Family and Medical Leave Act 293 Pension Protection Act 293 Patient Protection and Affordable Care Act 293 Industries 315 Labor—Management Relations Act 316 Antidiscrimination Laws and Executive Orders 316 Steps that Lead to Forming a Bargaining Unit 316 Customized Benefit Plans 295 Global Customized Benefits 295 Communicating Information about the Benefits Package 296 Workplace Flexibility (Work–Life Balance) 296 Flextime 297 Compressed Workweek 298 Job Sharing 298 Two-in-a-Box 298 ■■HR BLOOPERS: The Job-Sharing Problem at SunTrust Bank 299 Telecommuting 299 Part-Time Work 300 Summary 300 • Key Terms 301 • Exercises 302 Questions for Review 302 • Incident 1: Is Flextime the Way Forward? 302 • Incident 2: A Benefits Package Designed for Whom? 303 Part Five Labor Relations, Employee Relations, Safety and Health 305 Chapter 11 Labor Unions and Collective Bargaining 306 Why Do Unions Exist? 307 Why Employees Join Unions 308 Compensation and Employee Benefits 308 Job Security 309 Attitude of Management 309 Union Structure 309 Local Union 309 National Union 310 American Federation of Labor and Congress of Industrial Organizations 310 Change to Win Coalition 310 Prevalence of Unions 311 Organized Labor’s Strategies for a Stronger Movement 312 Strategically Located Union Members 312 Pulling the Union Through 312 Political Involvement 312 Union Salting 313 Flooding the Community 313 Public Awareness Campaigns 313 Building Organizing Funds 313 Unions Partnering with High Schools 313 Organizing Younger Workers 313 Organizing through the Card Check 314 314 ■■HR BLOOPERS: Stopping Unionization at Packer Signing of Authorization Cards 317 Petition for Election 317 Election Campaign 318 Election and Certification 318 Collective Bargaining 319 Collective Bargaining Process 319 Bargaining Issues 320 Recognition 320 Management Rights 320 Union Security 321 Compensation 321 Grievance Procedure 322 Employee Security 322 Job-Related Factors 322 Preparation for Negotiations 322 Negotiating the Agreement 323 Breakdowns in Negotiations 325 Third-Party Intervention 325 Union Strategies for Overcoming Negotiation Breakdowns 326 Management Strategies for Overcoming Negotiation Breakdowns 327 Reaching the Labor–Management Agreement 327 Ratifying the Labor–Management Agreement 328 Administration of the Labor–Management Agreement 328 Grievance Procedure in a Union Environment 328 Union Decertification 330 Collective Bargaining in the Public Sector 331 Labor Unrest in China 332 Summary 333 • Key Terms 334 • Exercises 335 Questions for Review 335 • Incident 1: Bargaining Process for Amico Holdings 336 • Incident 2: You Are Out of What? 336 Chapter 12 Internal Employee Relations 338 Employment at Will 339 Discipline and Disciplinary Action 340 Disciplinary Action Process 340 Approaches to Disciplinary Action 342 Hot Stove Rule 342 Progressive Disciplinary Action 342 Disciplinary Action without Punishment 344 Problems in the Administration of Disciplinary Action 344 ■■ETHICAL DILEMMA: To Fire or Not to Fire 345 Termination 345 “Just Cause” as a Standard for Choosing to Terminate Employment 345 CoNTENTS Considerations in Communicating the Termination Decision 346 ■■HR BLOOPERS: Effective Discipline at Berries Groceries Termination of Employees at Various Levels 347 Termination of Nonmanagerial/Nonprofessional Employees 347 Termination of Middle- and Lower-Level Managers and Professionals 347 Termination of Executives 347 Demotion as an Alternative to Termination 348 Downsizing 348 Negative Aspects of Downsizing 349 Worker Adjustment and Retraining Notification Act 349 Outplacement 350 Severance Pay 350 Ombudsperson 351 Alternative Dispute Resolution 351 Transfers 352 Promotions 352 Resignations 353 Employee Safety, Health, and Wellness 360 Nature and Role of Safety, Health, and Wellness 361 Occupational Safety and Health Administration 362 OSHA and Whistle-blowers 364 OSHA and the Small Business 365 ■■HR BLOOPERS: Health and Safety Problems at XIF Chemicals 365 Safety: The Economic Impact 366 Focus of Safety Programs 366 Unsafe Employee Actions 366 Unsafe Working Conditions 366 Developing Safety Programs 366 Musculoskeletal Disorders 369 Ergonomics 369 Workplace Bullying and Violence 370 Workplace Bullying 370 Workplace Violence 371 Vulnerable Employees 371 Burnout 376 Physical Fitness Programs 377 Substance Abuse 377 Alcohol Abuse 378 Drug Abuse 378 Substance-Abuse-Free Workplace 378 Implementing a Drug-Testing Program 380 Employee Assistance Programs 381 Health Care in the Global Environment 381 Chapter 14 Summary 356 • Key Terms 357 • Exercises 357 Questions for Review 357 • Incident 1: Should He Be Fired? 358 • Incident 2: To Heck with Them! 358 Accident Investigation 368 Evaluation of Safety Programs 368 Potential Consequences of Stress 375 Stressful Jobs 375 Part Six Retirements 354 Administering Disciplinary Action in Other Countries 355 ■■ETHICAL DILEMMA: Illegal Dumping Employee Wellness 373 Social Networking and Wellness 374 Nature of Stress 375 Summary 382 • Key Terms 383 • Exercises 383 Questions for Review 384 • Incident 1: What a Change! 384 • Incident 2: A Commitment to Safety? 384 Analyzing Voluntary Resignations 353 Attitude Surveys: A Means of Retaining Quality Employees 354 Offboarding 354 Chapter 13 346 Legal Consequences of Workplace Violence 372 Individual and Organizational Characteristics to Monitor 372 Preventive Actions 372 367 Operating in a Global Environment 387 Global Human Resource Management 388 Evolution of Global Business 389 Exporting 390 Licensing 390 Franchising 390 Multinational Corporation 391 Global Corporation 391 Global Strategic Human Resource Management 391 Setting the Stage for Global HR Practice 392 Country Politics and Economic Structure 392 Legal System 393 National Cultural Norms 393 Labor Force Characteristics and Dynamics 394 Global Staffing 395 Expatriate 395 Host-Country National 395 Third-Country National 395 Approaches to Global Staffing 395 Recruiting Host-Country Nationals 396 Selecting Expatriates 396 Background Investigation 397 ■■HR BLOOPERS: United Architect’s Expatriate Problems 397 Global Performance Management and Human Resource Development 398 Performance Management 398 Expatriate Human Resource Development 399 Pre-Move Orientation and Training 399 15 16 CoNTENTS Continual Development: Online Assistance and Training 399 Repatriation Orientation and Training 399 Global E-learning 400 Virtual Teams in a Global Environment 401 Summary 406 • Key Terms 406 • Exercises 407 Questions for Review 407 • Incident 1: The Overseas Transfer 407 • Incident 2: Expat in the Heartland 408 Global Compensation 401 Compensation for Host-Country Nationals 401 Expatriate Compensation 402 Global Safety and Health 403 Global Employee and Labor Relations 404 ■■ETHICAL DILEMMA: Mordita 404 Globalization for Small to Medium-Sized Businesses 405 Glossary 409 Name Index 420 Company Index 421 Subject Index 423 Preface Approach to Writing Human Resource Management We approach the study of human resource management (HRM) in a realistic, practical, interesting, and stimulating manner. We focus on showing how HRM is practiced in the real world. Throughout the book, you will see examples of how organizations practice HRM. In explaining a concept, we often quote human resources (HR) professionals, yet all HR discussion is based on sound theoretical concepts and practice. Throughout this book, the strategic role of HR is apparent in the discussion of each major HRM function. In addition, we show how HR topics are related to other HR topics. For instance, a firm that emphasizes recruiting top-quality candidates but neglects to provide satisfactory compensation is wasting time, effort, and money. A firm’s compensation system will be inadequate unless employees are provided a safe and healthy work environment. If a firm’s compensation system pays below-market wages, the firm will always be hiring and training new employees only to see the best leave for a competitor’s higher wages. This interrelationship will become more obvious as these topics are addressed throughout the book. These interrelationships are also shown to be important as organizations work within the global environment. Course Prerequisite This book is designed primarily for the first undergraduate course in HRM. It is intended primarily for students who are being exposed to HRM for the first time. It is designed to put them in touch with the field through the use of numerous examples and company material and will reinforce the notion that, by definition, all managers are necessarily involved with HR. The book provides helpful insights for those students who aspire to management positions. Overview of the 14th Edition of Human Resource Management HRM is arguably the most exciting area in business. Much has changed in the world since the writing of the 13th edition. The continuing uncertainty of the economy affected many aspects of HRM. Debates about whether to raise the minimum wage pay rate rage on at the national and local levels. Provisions of health-care reform have been implemented with many more to come online. Major technological changes appear to be increasing with no end in sight. These changes have dramatically affected how the work of the HR professional is performed such as with mobile recruiting and learning. Social media tools such as wikis, blogs, LinkedIn, Facebook, and Twitter have become an integral part of the world of the HR professional. Each edition seems to provide new examples to be discussed. The need for companies to operate in the global environment continues to expand. The interrelationship of the HRM functions and the increasing use of technology and the importance of global influences is reflected throughout this book. The 14th edition of Human Resource Management reveals HR as strategically important to management in a practical, realistic manner yet maintains a balance of pragmatism and theoretical concepts. As will be noted throughout this edition, much continues to be done regarding who performs the HR tasks. HR outsourcing, HR shared service centers, professional employer organizations, and line managers now assist in the accomplishment of HR activities. As a shift is made in the allocation of those who perform the HR function, many HR departments continue to get smaller. This shift should permit HR to shed its administrative image and focus on mission-oriented activities. Dr. Joseph J. Martocchio, a professor of HR at the University of Illinois, Urbana–Champaign for 25 years, has joined Dr. R. Wayne Mondy as a co-author. Their efforts have built on the excellence of previous editions of this textbook. What’s New to This Edition • • A new section on competencies and competency modeling has been added to Chapter 4. Selection test reliability has been expanded; drug testing has been added to Chapter 6. 17 18 PREFACE • • • • • HR Bloopers, a scenario-based exercise, has been added to every chapter. The ordering of Chapters 7 and 8 has been reversed. Chapter 7 addresses performance management and appraisal, whereas Chapter 8 focuses on HR development and training. A new section on team training and the types and applications of team training has been added to Chapter 8. Chapters 11 through 13 have been reordered to emphasize the role of labor unions. A new section on Global HR has been added to Chapter 14. Features of the Book • • • • • • • • HR Bloopers present scenarios that describe potential mistakes that may occur in HR practice. Questions that follow in MyManagement Lab® provide students with the opportunity to test their understanding and recall of the chapter material based on the information contained in the scenario. Ethical Dilemma offers challenging ethical considerations in HR practice when HR professionals must make choices between what is right and wrong as well as appropriate versus inappropriate application of HR practices. Questions that follow provide students with the opportunity to express what they would do and to consider the factors in the ethical dilemma that might influence a person to make an unethical choice. Social media topics are examined throughout the text. Many HR professionals use social media for recruitment. Employees and HR professionals use social media to share knowledge. Increasingly, HR professionals understand social media as a communication tool that distinguishes between generations in the workplace, which is an element of diversity management. Understanding applications of social media is essential to effective HR activities. End-of-chapter exercises provide in-depth, thought-provoking questions to the material covered in the text. Dodd–Frank Wall Street Reform and Consumer Protection Act addresses a variety of executive compensation issues with which HR professionals should be familiar. Executive compensation is determined quite differently than compensation for other employee groups. We highlight these differences in the relevant chapters. Patient Protection and Affordable Care Act has created requirements that employers provide health insurance to their employees or pay substantial penalties. This law has influenced the minimum benefits that must be included in health insurance. Prior to the passage of this law, health insurance was offered as a discretionary benefit. New tables and figures are included throughout the text to enhance student learning by providing visual examples of HR practices or analytical tools (for example, the series of “what-if” questions that help companies to determine whether individuals are contingent workers or full-fledged employees). Small business and HR provides students with an appreciation of how HR practices in small businesses are often different than in larger companies because not all students will choose to work for large corporations. Topics relevant to small businesses are brought up throughout the text where relevant differences are evident. For example, some employment laws do not apply to small businesses. MyManagementLab Suggested Activities For the 14th edition we the authors are excited that Pearson’s My Management Lab has been integrated fully into the text. These new features are outlined below. Making assessment activities available online for students to complete before coming to class will allow you the professor more discussion time during the class to review areas that students are having difficulty in comprehending. Learn it Students can be assigned the Chapter Warm-Up before coming to class. Assigning these questions ahead of time will ensure that students are coming to class prepared. Watch It Recommends a video clip that can be assigned to students for outside classroom viewing or that can be watched in the classroom. The video corresponds to the chapter material and is accompanied by multiple choice questions that re-enforce student’s comprehension of the chapter content. PREFACE 19 Try It Recommends a mini simulation that can be assigned to students as an outside classroom activity or it can be done in the classroom.. As the students watch the simulation they will be asked to make choices based on the scenario presented in the simulation. At the end of the simulation the student will receive immediate feedback based on the answers they gave. These simulations re-enforces the concepts of the chapter and the students comprehension of those concepts. Talk About It These are discussion type questions which can be assigned as an activity within the classroom. Assisted Graded Writing Questions These are short essay questions which the students can complete as an assignment and submit to you the professor for grading. New or Substantially Updated Topics by Chapter We especially appreciate the efforts of the professionals who reviewed and provided valuable suggestions for this edition. Many of the changes listed are based on their suggestions. Chapter 1 Expanded discussions of the HR profession and HR as a strategic business partner are included. A competency model for the work HR professionals perform has been added as well as a brief introduction to the idea that employees are assets (human capital) and necessary to business success like other forms of business capital such as manufacturing equipment and monetary resources. HR Bloopers: Staffing Stone Consulting. Chapter 2 Several new examples are added throughout the chapter to put corporate social responsibility and corporate sustainability practices in context. HR Bloopers: Sales Incentives at Pinser Pharmaceutical. Chapter 3 The introduction compares and contrasts equal employment opportunity (EEO) and workforce diversity. The order of presentation of the two main topics has been changed. EEO precedes diversity management to better correspond with the unfolding of societal changes. A discussion of the Genetic Information Nondiscrimination Act (GINA) of 2008 has been added. The discussion of the role of the Office of Federal Contract Compliance Programs (OFCCP) has been expanded. HR Bloopers: Affirmative Action and Workforce Diversity. Chapter 4 The discussion of strategic planning takes place at the beginning of the chapter and the logic for how HR planning and job analysis are informed by the strategic planning process is presented. The material on strategic planning has been enhanced with additional concepts (for example, different types of strategies) and business examples. A new section on competencies and competency modeling has been added given the increased use along with or instead of traditional job analysis. HR Bloopers: Workforce Planning at Master Cleaner. Chapter 5 The discussion of contingent workers has been expanded. Explicit criteria for distinguishing between contingent workers and employees are now included. HR Bloopers: Recruiting Skilled Machinists. Chapter 6 The discussions of selection norms and selection test reliability have been expanded. Drug testing has been added as a possible component of the selection process. The discussion of legal considerations has been expanded and points to specific legal concerns and particular selection tests. HR Bloopers: The First Interview. 20 PREFACE Chapter 7 The ordering of Chapters 7 and 8 in the 13th edition have been reversed in the 14th edition. Chapter 7 addresses performance management and appraisal, whereas Chapter 8 focuses on HR development and training. This change was made because performance management and appraisal often inform the need for training. The discussion of performance appraisal methods has been expanded greatly and organized into four categories: trait, comparison systems, behavioral systems, and results-based systems. In addition, samples of many of the methods have been added to this chapter. HR Bloopers: Appraising Performance at Global Insurance. Chapter 8 The presentation of training needs assessment was expanded. A brief discussion of massive open online courses has been added to the e-learning section. A new section on team training and the types and applications of team training has been included. HR Bloopers: Management Development at Trends Apparel. Chapter 9 The focus on components of compensation system design has been enhanced. The discussions on seniority pay, merit pay, incentive pay, and person-focused pay (skill-based and competency-based) have been expanded. The discussion of pay policy incorporates the role of pay mix as an important element. Interindustry wage differentials are introduced as an explanation to further help understand why pay differs from company to company. HR Bloopers: Motivating Software Development Teams. Chapter 10 A brief historical explanation has been added to help students understand the existence of some employee benefit offerings as well as why some are required by law and others are not. The discussion of health-care plans has been expanded to include fee-for-service plans. Additional information has been added to the section on consumer-driven health care. The life insurance section has been expanded by including specific kinds of life insurance options. HR Bloopers: The Job-Sharing Problem at SunTrust Bank. Chapter 11 Chapters 11 through 13 have been reordered to emphasize the role of labor unions (Chapter 11), internal employee relations (Chapter 12), and employee safety, health, and wellness (Chapter 13). A brief historical perspective on the economy and nature of the workplace is presented to help set the context for unionization. An expanded discussion to help explain the rise of unionization is included. An expanded discussion of the challenges to the status of unions today is added. Additional reasons for union decertification are discussed. HR Bloopers: Stopping Unionization at Packer Industries. Chapter 12 The discussion of employment at will has been expanded to more fully explain the three exceptions. The just cause standard for terminations is introduced. Along with this discussion, the seven tests to determine whether a planned termination decision meets the just cause standard are included. HR Bloopers: Effective Discipline at Berries Groceries. Chapter 13 Several new examples are added throughout the chapter to enhance the context of safety, health, and wellness in companies. HR Bloopers: Health and Safety Problems at XIF Chemicals. Chapter 14 A new section that more effectively sets the context for global HR has been added. It is organized into four areas—country politics and economic structure, national cultural norms, legal system, and labor force characteristics and dynamics. HR Bloopers: United Architect’s Expatriate Problems Instructor Resources At the Instructor Resource Center, www.pearsonglobaleditions.com/Mondy, instructors can easily register to gain access to a variety of instructor resources available with this text in downloadable format. If assistance is needed, our dedicated technical support team is ready to help with the media supplements that accompany this text. Visit http://247.pearsoned.com for answers to frequently asked questions and toll-free user support phone numbers. PREFACE 21 The following supplements are available with this text: • • • • Instructor’s Resource Manual Test Bank TestGen® Computerized Test Bank PowerPoint Presentation CourseSmart* CourseSmart eTextbooks were developed for students looking to save the cost on required or recommended textbooks. Students simply select their eText by title or author and purchase immediate access to the content for the duration of the course using any major credit card. With a CourseSmart eText students can search for specific keywords or page numbers, take notes online, print out reading assignments that incorporate lecture notes, and bookmark important passages for later review. For more information or to purchase a CourseSmart eTextbook, visit www.coursesmart.co.uk 2015 Qualitative BusinessVideo Library Additional videos illustrating the most important subject topics are available in MyManagementLab, under Instructor Resources: Business Today. Acknowledgments As with the previous editions, the support and encouragement of many practicing HRM professionals and faculty members has helped to make this book possible. The reviewers for this edition were especially valuable. These individuals are: Bruce Louis Rich California State University–Saint Marcos Thomas Norman California State University–Dominguez Hills Carolyn A. Waits Cincinnati State Technical & Community College Dr.Darlene M. Andert Florida Gulf Coast University Denise H. Barton Wake Technical Community College Bobbie Knoblauch Wichita State University Nancy Zimmerman Community College of Baltimore County–Cantonsville The authors would also like to acknowledge the following contributors for the hard work they did in providing content for the MyLab activities: Dan Morrell, Middle Tennessee State University Gordon Schmidt, Indiana University-Purdue University Fort Wayne Susan C. Schanne, Eastern Michigan University About R. Wayne Mondy I have always had a strong interest in business practices as evidenced by my many years of academic and professional experience. I believe that managing people is the crucial side of business because a firm’s human resources are the foundation on which everything is accomplished. Prior to entering academics, I had business experience with such companies as Peat, Marwick, Mitchell, and Co. (now KPMG), General Electric Corporation, Gulf South Research Institute, and Houston Data Center. In addition, I served in the U.S. Air Force as a management analysis officer. Several examples in your text relate to my business experience. I received my DBA from Louisiana Tech University and have enjoyed many years of teaching and administration, having served as professor, department head of the Department of Management & Marketing, and Dean of the College of Business. I have authored or co-authored seven college textbooks in a total of thirty-one editions, fifty-four articles, and twenty papers. The textbooks are Management: Concepts, Practices, and Skills (8th edition); Human Resource Management (14th edition); Personal Selling: Function, Theory and Practice * This product may not be available in all markets. For more details, please visit www.coursesmart.co.uk or contact your local representative. 22 PREFACE (4th edition); Supervision (3rd edition); Management Concepts and Canadian Practices (2nd edition); Staffing the Contemporary Organization; and Management and Organizational Behavior. In addition to the 14th edition of Human Resource Management, the book has been translated into Spanish (Administracin de Recursos Humanos, Prentice Hall, 1997, 2001, and 2005), and Chinese (Prentice Hall, 1998, 2002, 2005, and 2011). A special 2008 two-part international edition of the 10th edition was prepared for India, Bangladesh, Bhutan, Pakistan, Nepal, Sri Lanka, and the Maldives. In addition, a Pearson International Edition was prepared for the 10th edition. A 2010 international edition was prepared for the 11th edition. Articles have been published in such journals as Business Journal, Journal of Education for Business, HR Magazine, and The Journal of Business Ethics. I am also Life Certified as a Senior Professional in Human Resources (SPHR) by the Human Resource Certification Institute. During my career at various universities, I have had the opportunity to charter three student chapters of the Society for Human Resource Management. In one instance, about 20 students wanted to take the certification examination. I was excited about their enthusiasm until they informed me, “Dr. Mondy, you have to take it, too.” I have never studied so hard but we all were successful in achieving our objectives. That is how I received my SPHR designation—I earned it. R. Wayne Mondy, SPHR About Joseph J. Martocchio My interest in the human resource management field began while I was a junior at Babson College. I found myself wanting to practice in the field as well as to become a university professor and researcher. I pursued both professional desires by working at Cameron and Colby (a reinsurance company) in Boston and for General Electric’s Aerospace business group in Valley Forge, Pennsylvania. I advanced my education in the HR field by earning a master’s degree and Ph.D. degree at Michigan State University. My master’s degree enabled me to build an even stronger foundation in practice and my doctoral degree provided me with the skills to conduct scholarly research and teach college-level courses. Since earning my graduate degrees, I have been a professor in the School of Labor and Employment Relations at the University of Illinois, Urbana–Champaign and assumed administrative roles as a Provost Fellow, Associate Dean for Academic Affairs, and Interim Dean. All the while, I have taught a variety of courses in the HR field. These include compensation systems, employee benefits, employment systems (HR and labor relations), HR planning and staffing, and statistics. For many years, I served as the faculty advisor to the student chapter of the Society for Human Resource Management at the University of Illinois during which time students earned Merit Awards and Superior Merit awards on multiple occasions. As a researcher, I have studied a variety of topics that include employee absenteeism, employee training and development, compensation systems, employee benefits, and generational diversity. My work appears in leading scholarly journals such as Academy of Management Journal, Academy of Management Review, Journal of Applied Psychology, Journal of Management, and Personnel Psychology. I received the Ernest J. McCormick Award for Distinguished Early Career Contributions from the Society for Industrial and Organizational Psychology (SIOP), and I was subsequently elected as a Fellow in both the American Psychological Association and SIOP. Following the attainment of this recognition, I served as the Chair of the HR Division of the Academy of Management as well as in various other leadership roles within that organization. Besides writing scholarly articles, I have two sole-authored textbooks: Strategic Compensation: A Human Resource Management Approach (Pearson Higher Education), which is in its 8th edition, and Employee Benefits: A Primer for Human Resource Professionals (McGraw-Hill), which is in its 5th edition. The compensation textbook was translated for use in China and India. Joining as a co-author on the 14th edition of Human Resource Management has been an exciting opportunity. Joe Martocchio Pearson gratefully acknowledges and thanks the following people for their work on the Global Edition: Contributors: Hussein Nabil Ismail, School of Business, Lebanese American University (LAU), Lebanon Anita Peša, Department of Economics, University of Zadar, Croatia Reviewers: Roshidi Hassan, Department of Management, Universiti Teknologi Mara Anna Tsui, Department of Management, The Chinese University of Hong Kong Sun Li Yun, School of Business, Macau University of Science and Technology Part One Setting the Stage Chapter 1 Human Resource Management: An Overview Chapter 2 Business Ethics and Corporate Social Responsibility Chapter 3 Equal Employment Opportunity, Affirmative Action, and Workforce Diversity 1 Human Resource Management: An Overview Chapter ObjeCtives After completing this chapter, students should be able to: 1 Define human resource management. 2 Identify the human resource management functions. 3 Describe who performs human resource management activities. 4 Explain how HR serves as a strategic business partner. 5 Identify the elements of the dynamic HRM environment. 6 Explain the importance of corporate culture and human resource management. 7 Describe the importance of employer branding. 8 Discuss human resource management issues for small businesses. 9 Identify ways that country culture influences global business. 10 Describe the human resource management profession. MyManagementLab® Improve Your Grade! Over 10 million students improved their results using the Pearson MyLabs.Visit mymanagementlab.com for simulations, tutorials, and end-of-chapter problems. Learn It If your professor has chosen to assign this, go to mymanagementlab.com to see what you should particularly focus on and to take the Chapter 1 Warm-Up. 24 ObjeCtive 1.1 Define human resource management. human resource management (HRM) Utilization of individuals to achieve organizational objectives. ObjeCtive 1.2 Identify the human resource management functions. staffing Process through which an organization ensures that it always has the proper number of employees with the appropriate skills in the right jobs, at the right time, to achieve organizational objectives. Defining human resource Management human resource management (hrM) is the use of individuals to achieve organizational objectives. Basically, all managers get things done through the efforts of others. Consequently, managers at every level must concern themselves with HRM. Individuals dealing with human resource matters face a multitude of challenges, ranging from a constantly changing workforce to ever-present government regulations, a technological revolution, and the economy of the United States and the world. Furthermore, global competition has forced both large and small organizations to be more conscious of costs and productivity. Because of the critical nature of human resource issues, these matters must receive major attention from upper management. The remainder of this chapter will enable you to gain an appreciation of HRM as a critical business function. In the next sections, we will introduce you to the functions that make up HRM and identify who is responsible for managing human resources (HR). Then, we will discuss HR as a strategic business partner and the dynamic role of the environment that influences HRM practice. Finally, we turn our attention to the importance of corporate and national culture and discuss the HRM profession. human resource Management Functions People who are engaged in managing HR develop and work through an integrated HRM system. As Figure 1-1 shows, six functional areas are associated with effective HRM: staffing, human resource development, performance management, compensation, safety and health, and employee and labor relations. These functions are discussed next. Staffing staffing is the process through which an organization ensures that it always has the proper number of employees with the appropriate skills in the right jobs, at the right time, to achieve organizational objectives. Staffing involves job analysis, human resource planning, recruitment, and selection, all of which are discussed in this text.1 25 Part 1 • Setting the Stage Human Resource Development Sta Figure 1-1 Human Resource Management Functions ffi ng 26 HR Web Wisdom Pearson Web site for 14th Edition of Human Resource Management www.pearsonhighered.com/ mondy Students can visit this Web site to get additional HR Web Wisdoms, in-the-news articles, cases, and chapter quizzes. performance management (PM) Goal-oriented process directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization. human resource development (HRD) Major HRM functions consisting not only of training and development but also of individual career planning and development activities, organization development, and performance management and appraisal. Sa fet He y an alt d h Employee and Labor Relations ion sat en mp Co ce an t rm en rfo em Pe nag Ma Human Resource Management Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization. It impacts virtually every aspect of HRM, including planning, recruitment, and selection. Human resource planning is the systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period. The data provided set the stage for recruitment or other HR actions. Recruitment is the process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications to apply for jobs with an organization. Selection is the process of choosing the individual best suited for a particular position and the organization from a group of applicants. Successful accomplishment of the staffing function is vital if the organization is to effectively accomplish its mission. These topics are collectively often referred to as staffing. Performance Management performance management is a goal-oriented process that is directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization. Performance appraisal is a formal system of review and evaluation of individual or team task performance. It affords employees the opportunity to capitalize on their strengths and overcome identified deficiencies, thereby helping them to become more satisfied and productive employees. Human Resource Development human resource development is a major HRM function consisting not only of training and development but also of career planning and development activities, organization development, and performance management and appraisal. Training is designed to provide learners with the knowledge and skills needed for their present jobs. Development involves learning that goes beyond today’s job and has a more long-term focus. Organization development (OD) is planned and systematic attempts to change the organization (corporate culture), typically to a more behavioral environment. OD applies to an entire system, such as a company or a plant. A number of OD methods are discussed that serve to improve a firm’s performance. Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. According to the U.S. Bureau of Labor Statistics, today’s employees will work for approximately 9 to 11 companies during their careers based on the assumption that ChaPter 1 • human reSourCe management: an overview 27 most people will work 30 to 40 years.2 A survey conducted by NYU’s School of Continuing and Professional Studies showed that on average, individuals will change careers (not merely “jobs”) three times in their life.3 Employee loyalty loses its meaning in this environment. Career development is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed. Individual careers and organizational needs are not separate and distinct. Organizations should assist employees in career planning so the needs of both can be satisfied. Compensation The question of what constitutes a fair day’s pay has plagued management, unions, and workers for a long time. A well-thought-out compensation system provides employees with adequate and equitable rewards for their contributions to meeting organizational goals. As used in this book, the term compensation includes the total of all rewards provided to employees in return for their services. The rewards may be one or a combination of the following: direct financial compensation (core compensation) Pay that a person receives in the form of wages, salary, commissions, and bonuses. indirect financial compensation (employee benefits) All financial rewards that are not included in direct financial compensation. nonfinancial compensation Satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works. • • • Direct Financial Compensation (Core Compensation): Pay that a person receives in the form of wages, salaries, commissions, and bonuses. indirect Financial Compensation (employee benefits): All financial rewards that are not included in direct compensation, such as paid vacations, sick leave, holidays, and medical insurance. Nonfinancial Compensation: Satisfaction that a person receives from the job itself or from the psychological or physical environment in which the person works. Employee and Labor Relations Businesses are required by law to recognize a union and bargain with it in good faith if the firm’s employees want the union to represent them. In the past, this relationship was an accepted way of life for many employers, but most firms today would rather have a union-free environment. When a labor union represents a firm’s employees, the human resource activity is often referred to as labor relations, which handles the job of collective bargaining. Internal employee relations comprise the HRM activities associated with the movement of employees within the organization such as promotions, demotion, termination, and resignation. Safety and Health safety Protection of employees from injuries caused by work-related accidents. health Employees’ freedom from physical or emotional illness. safety involves protecting employees from injuries caused by work-related accidents. health refers to the employees’ freedom from physical or emotional illness. These aspects of the job are important because employees who work in a safe environment and enjoy good health are more likely to be productive and yield long-term benefits to the organization. Today, because of federal and state legislation that reflect societal concerns, most organizations have become attentive to their employees’ safety and health needs. Human Resource Research Although human resource research is not a distinct HRM function, it pervades all functional areas, and the researcher’s laboratory is the entire work environment. For instance, a study related to recruitment may suggest the type of worker most likely to succeed in the culture of a particular firm. Research on job safety may identify the causes of certain work-related accidents. The reasons for problems such as excessive absenteeism or excessive grievances may not be readily apparent. However, when such problems occur, human resource research can often find the causes and offer possible solutions. Human resource research is clearly an important key to developing the most productive and satisfied workforce possible. Interrelationships of Human Resource Management Functions All HRM functional areas are highly interrelated. Management must recognize that decisions in one area will affect other areas. For instance, a firm that emphasizes recruiting top-quality candidates but neglects to provide satisfactory compensation is wasting time, effort, and money. 28 Part 1 • Setting the Stage In addition, a firm’s compensation system will be inadequate unless employees are provided a safe and healthy work environment. If a firm’s compensation system pays below-market wages, the firm will always be hiring and training new employees only to see the best leave for a competitor’s higher wages. The interrelationships among the HRM functional areas will become more obvious as these topics are addressed throughout the book. ObjeCtive 1.3 Describe who performs human resource management activities. Who performs human resource Management activities? The person or units who perform the HRM tasks have changed dramatically in recent years, and today there is no typical HR department. Many of these changes are being made so that HR professionals can accomplish a more strategic role. Also, the recent recession forced some HR departments to accomplish more with less, and some companies have downsized the HR department to keep production-oriented people. This restructuring often resulted in a shift in who carries out each function, not the elimination of the previously identified HR functions. Some organizations continue to perform the majority of HR functions within the firm. However, as internal operations are reexamined, questions are raised, such as: Can some HR tasks be performed more efficiently by line managers or outside vendors? Can some HR tasks be centralized or eliminated altogether? Can technology improve the productivity of HR professionals? One apparent fact is that all functions within today’s organizations are being scrutinized for cost cutting, including HR. All units must operate under a lean budget in this competitive global environment, and HR is no exception. Evidence provided by The Hackett Group shows that the HR functions have been impacted more than other support functions with regard to reductions in staff and operating budgets.4 In fact, the most efficient companies typically spend nearly 30 percent less per employee on HR and operate with 25 percent fewer HR employees.5 Mobile HR has been a major factor in this trend as we discuss later in the chapter. Many HR departments continue to get smaller because others outside the HR department now perform certain functions. HR outsourcing, shared service centers, professional employer organizations, and line managers now assist in the accomplishment of many traditional HR activities. Let us first look at the role of the traditional HR professional. Human Resource Management Professional human resource professional Individual who normally acts in an advisory or staff capacity, working with other professionals to help them deal with human resource matters. Historically, the HR manager was responsible for each of the six HR functions. A human resource management professional is an individual who normally acts in an advisory or staff capacity, working with other managers to help them address human resource matters. Often, HR departments are created, with the central figure being the HR manager or executive. The HRM professional is primarily responsible for coordinating the management of HR to help the organization achieve its goals. Figure 1-2 displays a summary of a typical human resource professional’s job along with the typical tasks performed by these professionals. Line Managers line managers Individuals directly involved in accomplishing the primary purpose of the organization. All managers get things done through the efforts of others. Consequently, managers at every level naturally concern themselves with HRM, for example, making decisions about which job candidates are likely to meet the needs of company, conducting employee performance evaluations, and determining pay raise amounts. Individuals directly involved in accomplishing the primary purpose of the organization are line managers. As the traditional work of HR managers evolves, line managers have assumed some tasks typically done by HR professionals.6 Automation has assisted greatly in this process. Managers are being assisted by manager self-service, the use of software, and the corporate network to automate paper-based human resource processes that require a manager’s approval, recordkeeping or input, and processes that support the manager’s job. Everything from recruitment, selection, and performance appraisal to employee development has been automated to assist line managers in performing traditional HR tasks. There is a shared responsibility between line managers and HR professionals. Frequently, the line manager looks to HR for guidance in topics such as selection, training, promotion, and ChaPter 1 • human reSourCe management: an overview Figure 1-2 Human Resource Professional Job Description Source: National Center for O*NET Development. 11-3121.00. O*NET OnLine. Retrieved January 14, 2014, from http://www.onetonline.org/ link/summary/11-3121.00 29 Plan, direct, or coordinate hr activities and staff of an organization. Sample of reported job titles: human resources manager (hr manager), Director of human resources, human resources Director (hr Director), employee Benefits manager, human resources vice President, employee relations manager Tasks • • • • • • • • • • Serve as a link between management and employees by handling questions, interpreting and administering contracts and helping resolve work-related problems. analyze and modify compensation and benefits policies to establish competitive programs and ensure compliance with legal requirements. advise managers on organizational policy matters such as equal employment opportunity and sexual harassment, and recommend needed changes. Perform difficult staffing duties, including dealing with understaffing, refereeing disputes, firing employees, and administering disciplinary procedures. Plan and conduct new employee orientation to foster positive attitude toward organizational objectives. identify staff vacancies and recruit, interview, and select applicants. Plan, direct, supervise, and coordinate work activities of subordinates and staff relating to employment, compensation, labor relations, and employee relations. Plan, organize, direct, control, or coordinate the personnel, training, or labor relations activities of an organization. represent organization at personnel-related hearings and investigations. administer compensation, benefits and performance management systems, and safety and recreation programs. taking disciplinary action. The relationship between HR professionals and line managers is illustrated by the following account: Bill Brown, the production supervisor for Ajax Manufacturing, has just learned that one of his machine operators has resigned. He immediately calls Sandra Williams, the HR manager, and says, “Sandra, I just had a Class A machine operator quit down here. Can you find some qualified people for me to interview?” “Sure Bill,” Sandra replies. “I’ll send two or three down to you within the week, and you can select the one that best fits your needs.” In this instance, both Bill and Sandra are concerned with accomplishing organizational goals, but from different perspectives. As an HR manager, Sandra identifies applicants who meet the criteria specified by Bill. Yet, Bill will make the final decision about hiring because he is responsible for the machine operators’ performance. His primary responsibility is production; hers is human resources. As an HR manager, Sandra must constantly deal with the many problems related to HR that Bill and the other managers face. Her job is to help them meet the human HR needs of the entire organization. Human Resources Outsourcing HR outsourcing (HRO) Process of hiring external HR professionals to do the HR work that was previously done internally. hr outsourcing (hrO) is the process of hiring external HR professionals to do the HR work that was previously done internally. It is estimated that HRO is a $42 billion industry with expected future annual growth to be approximately 5 percent.7 In the early days of HRO, cost savings was the primary driver in determining which activities to outsource. Today, outsourcing agreements are focusing more on quality of service and saving time, which is often more important than saving money.8 Ron Gier, vice president of human capital planning and employee relations for Sprint, said, “Outsourcing is about concentrating where you are going to put your energy, where you are going to build competency as a company and where you can use a partner to perform activities that are not core to your business.”9 This permits HR to focus on strategic organizational issues.10 As will be stressed throughout the text, strategic HR has become a major driver for HR professionals.11 Discrete services outsourcing involves one element of a business process or a single set of high-volume repetitive functions to be outsourced.12 Benefits have often been the HR task 30 Part 1 • Setting the Stage most likely to be outsourced. Dan Thomas, president of Trivalent Benefits Consulting Inc., said, “Benefits administration has become so complex that it really takes someone who works with it every single day to keep track of all of the different laws and changes that are going on.”13 For example, a survey conducted by the ADP Institute revealed that more than half of employers (52 percent of midsized and 54 percent of large) believe that benefits administration will be more complex as a result of the Affordable Care Act. An even higher percentage of employers (57 percent of midsized and 64 percent of large) believe that health care reform will cause the time spent on benefits administration to increase.14 Business process outsourcing (BPO) is the transfer of the majority of HR services to a third party. Typically larger companies are involved with BPO, both as a provider and a user. A major HR outsourcer is IBM that has more than $100 billion in revenue.15 Kraft Foods Inc. and IBM signed a multiyear BPO agreement in which IBM took over workforce administration, compensation, and performance reporting for all of Kraft’s 98,000 employees spread across 72 countries.16 Florida created a Web-based HR information system and outsourced administration of most HR functions for approximately 240,000 state employees and retirees. Outsourced services included recruiting, payroll, and HR administration services and benefits administration.17 Human Resources Shared Service Centers shared service center (SSC) A center that takes routine, transaction-based activities dispersed throughout the organization and consolidates them in one place. A shared service center (ssC), also known as a center of expertise, takes routine, transactionbased activities dispersed throughout the organization and consolidates them in one place. For example, a company with 20 strategic business units might consolidate routine HR tasks and perform them in one location. Shared service centers provide an alternative to HRO and can often provide the same cost savings and customer service. Fewer HR professionals are needed when shared service centers are used, resulting in significant cost savings. The most common HR functions that use SSCs are benefits and pension administration, payroll, relocation assistance and recruitment support, global training and development, succession planning, and talent retention. Professional Employer Organizations professional employer organization (PEO) A company that leases employees to other businesses. A professional employer organization (peO) is a company that leases employees to other businesses. When a decision is made to use a PEO, the company releases its employees, who are then hired by the PEO. The PEO then manages the administrative needs associated with employees. It is the PEO that pays the employees’ salaries; it also pays workers’ compensation premiums, payroll-related taxes, and employee benefits. The PEO is responsible to the IRS if, for example, the payroll taxes go unpaid. The company reimburses the PEO, which typically charges a fee Hr B looper s Staffing Stone Consulting Business at Stone Consulting is growing faster than Shelly Stone expected. She just signed a contract on another big project that she believes secures her future in the consulting business. However, she has been so busy selling the firm’s services that she has put little thought into how she is going to staff the projects she has recently sold. She opened the firm more than a year ago and quickly hired five consultants and an office manager to help her get the business off the ground. Unfortunately, one of the consultants has already left the firm after making a huge mistake that caused Shelly to lose a client. Some of the other consultants have raised some concerns with Shelly as well. They’ve asked about pay increases and also her promise to eventually provide them with health insurance. However, she hasn’t had time to even think about these issues because she has focused her attention on finding new clients. As she looks over her project list she realizes she needs to start thinking about staffing fast. Her current team is already committed to other projects and the new projects she has secured need to get started right away. The office manager interrupts her thoughts to tell her a potential client is on the line. Excited about yet another opportunity, Shelly jumps on the call, quickly forgetting her staffing concerns. If your professor has assigned this, go to mymanagementlab.com to complete the HR Bloopers exercise and test your application of these concepts when faced with real-world decisions. ChaPter 1 • human reSourCe management: an overview 31 of from 2 to 7 percent of the customer’s gross wages, with percentages based on the number of leased employees. Because the PEO is the employees’ legal employer it has the right to hire, fire, discipline, and reassign an employee. However, the client company maintains enough control so it can run the day-to-day operations of its business. Although PEOs have been available since the early 1980s, they have recently become a multibillion dollar industry. In fact, there is an estimated two to three million U.S. workers employed under a PEO-type arrangement and that number is certain to grow.18 PEOs permit business owners to focus on their core business, whereas the PEO handles HR activities.19 Companies using a PEO typically have a high level of benefits and greater HR expertise than they could possibly have had on their own. ObjeCtive 1.4 Explain how HR serves as a strategic business partner. human capital As defined by economists, refers to sets of collective skills, knowledge, and ability that employees can apply to create economic value for their employers. human resources as a strategic business partner In the environment presently confronting HR, many HR professions are increasingly taking on the role of being a strategic partner with upper management.20 In this role, HR professionals are able to focus on matters that are truly important to the company as a whole.21 For example, increasing sales and building customer loyalty to the brand are important goals of soft drink companies such as Coca Cola and PepsiCo. Increasing sales require hiring highly dedicated and motivated sales and distribution employees. As a strategic business partner, HR helps to identify and develop the employees necessary for excellent performance, builds recruitment systems, training programs for product distribution and interactions with customers, constructs performance management, and structures compensation programs that will greatly incentivize these employees to excel. The rapidly evolving world of HR will increasingly require HR professionals to thoroughly understand all aspects of what the companies they work for do. Essentially, they must know more than just HR work.22 In moving from a transactional to a strategic model, HR professionals work toward solving strategic problems in the organization. No longer is an administrative and compliance role appropriate as their primary jobs. For instance, preparing the company’s affirmative action plan or administering the payroll system are compliance and administrative tasks. HR executives today need to think like the CEO to become a strategic partner in achieving organizational plans and results.23 In doing so, they understand the production side of the business and help to determine the strategic capabilities of the company’s workforce, both today and in the future. HR professionals need to be agile in their thinking as they adapt to the ebbs and flows of business. Therefore, HR executives are ensuring that human resources support the firm’s mission. HR professionals have changed the way they work. Working as a strategic business partner requires a much deeper and broader understanding of business issues.24 What strategically should HR be doing exactly? Possible strategic tasks for HR include making workforce strategies fundamental to company strategies and goals; increasing HR’s role in strategic planning, mergers, and acquisitions; developing awareness or an understanding of the business; and helping line managers achieve their goals as in the previous example of soft drink companies. HR professionals can give the CEO and CFO a powerful understanding of the role that employees play in the organization and the way it combines with business processes to expand or shrink shareholder value. HR professionals are integrating the goals of HR with the goals of the organization and focusing on expanding its strategic and high-level corporate participation with an emphasis on adding value. In doing so, HR is demonstrating that it can produce a return on investment for its programs. It analyzes HR activities to determine whether they are maintaining acceptable profit margins. For example, HR professionals strive to develop cost-effective training strategies that boost sales revenue that far exceeds the cost of training. The CEO needs help in matters that HR professionals are qualified to handle. HR professionals are the enablers; they are the ones who should know about change and develop strategies to make it work. A useful way to better understand how HR serves as a strategic business partner is to think about the use of capital for value creation. Capital refers to the factors that enable companies to generate income, higher company stock prices, economic value, strong positive brand identity, and reputation. There is a variety of capital that companies use to create value, including financial capital (cash) and capital equipment (state-of-the-art robotics used in manufacturing). Employees represent a specific type of capital called human capital. human capital, as defined by economists, refers to sets of collective skills, knowledge, and ability that employees can apply to create value for their employers. Companies purchase the use of human capital by 32 Part 1 • Setting the Stage paying employees an hourly wage, salary, or bonuses and providing benefits such as paid vacation and health insurance. Also, companies help develop human capital to their advantage by offering training programs aimed at further boosting employee productivity. The meaning of value creation differs according to a company’s mission. It is useful to think about the differences between for-profit and not-for-profit organizations. For example, Microsoft and Frito Lay are for-profit companies that strive to generate annual profits for company shareholders. These companies promote profit generation by selling quality software and quality snack products, respectively. The American Red Cross is an illustration of a not-for-profit organization that relies on charitable monetary contributions and grant money to create societal value. The people who contribute money and other resources do not seek monetary gain. Instead, they value supporting humanitarian causes such as disaster relief. The American Red Cross provides disaster relief after the occurrence of devastating events, including the typhoon in the Philippines that destroyed cities and villages in 2013. Every organization relies on capital to create value, but the combination of capital used to create value differs from company to company. For example, Frito Lay uses state-of-the-art manufacturing equipment, and the American Red Cross does not. However, every organization shares in common the employment of individuals and the necessity of managing employees to successfully create value. Indeed, HRM is the business function of managing employees to facilitate an organization’s efforts to create value. ObjeCtive 1.5 Identify the elements of the dynamic HRM environment. Dynamic human resource Management environment Many interrelated factors affect HRM practice within and outside the organization. As illustrated in Figure 1-3, environmental factors include legal considerations, labor market, society, political parties, unions, shareholders, competition, customers, technology, the economy, and unanticipated events. Each factor, either separately or in combination with others, can create constraints or opportunities for HRM. EXTERNAL ENVIRONMENT Labor Market INTERNAL ENVIRONMENT Human Resource Development Operations Sta ffi ng Marketing Society Unanticipated Events Legal Considerations Competition Sa fet He y an alt d h Shareholders Other Functional Areas Unions Political Parties Employee and Labor Relations Economy on Customers Human Resource Management i sat Finance en mp Co ce an t rm en rfo em Pe nag Ma Technology Figure 1-3 Environment of Human Resource Management ChaPter 1 • human reSourCe management: an overview 33 Legal Considerations A significant external force affecting HRM relates to federal, state, and local legislation and the many court decisions interpreting this legislation. For example, the Age Discrimination in Employment Act is an example of a federal law that protects older workers from illegal discrimination. In addition, presidential executive orders have had a major impact on HRM. These legal considerations affect virtually the entire spectrum of human resource policies. Laws, court decisions, and executive orders affecting other HRM activities will be described in the appropriate chapters. Labor Market Potential employees located within the geographic area from which employees are normally recruited comprise the labor market. The capabilities of a firm’s employees determine, to a large extent, how well the organization can perform its mission. Because new employees are hired from outside the firm, the labor market is considered an important environmental factor. The labor market is always changing, and these shifts inevitably cause changes in the workforce of an organization. For example, members of the aging baby boom cohort, the largest current generation of employees, are retiring in large numbers; however, younger generations are smaller and less well-prepared to assume leadership roles because they have had much less time in the workforce to develop them. Society Society may also exert pressure on HRM. The public is no longer content to accept, without question, the actions of business. To remain acceptable to the general public, a firm must accomplish its purpose while complying with societal norms. Ethics is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. Corporate social responsibility (CSR) is closely related to ethics. CSR is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves.25 We take up these subjects in Chapter 2. Political Parties Closely related to society, but not the same, are political parties. The Democratic and Republican parties are the two major political parties in the United States. These parties often have differing opinions on how HRM should be accomplished. For example, Democrats tend to favor government regulation that protects the rights of virtually all employees to receive at least a minimum wage (the Fair Labor Standards Act) and health insurance (Patient Protection Affordability and Accountability Act). Republicans, on the other hand, tend not to favor government regulation, believing that businesses should have as much flexibility as possible to operate successfully. Unions union Consists of employees who have joined together for the purpose of negotiating terms of employment such as wages and work hours. Wage levels, benefits, and working conditions for millions of employees reflect decisions made jointly by unions and management. A union consists of employees who have joined together for the purpose of negotiating terms of employment such as wages and work hours. The United Auto Workers is an example of a large labor union. Unions are treated as an environmental factor because, essentially, they become a third party when dealing with the company. Shareholders shareholders Owners of a corporation. The owners of a corporation are called shareholders. Because shareholders, or stockholders, have invested money in the firm, they may at times challenge programs considered by management to be beneficial to the organization. Stockholders are wielding increasing influence, and management may be forced to justify the merits of a particular program in terms of how it will affect future projects, costs, revenues, profits, and even benefits to society as a whole.26 Considerable pressure has recently been exerted by shareholders and lawmakers to control the salaries of corporate executives as we shall see in the discussion of the Dodd-Frank Act in Chapters 2 and 9.27 34 Part 1 • Setting the Stage Competition Firms may face intense global competition for both their product or service and labor markets. Unless an organization is in the unusual position of monopolizing the market it serves, other firms will be producing similar products or services. A firm must also maintain a supply of competent employees if it is to succeed, grow, and prosper. But other organizations are also striving for that same objective. A firm’s major task is to ensure that it obtains and retains a sufficient number of employees in various career fields to allow it to compete effectively. A bidding war often results when competitors attempt to fill certain critical positions in their firms. Even in a depressed economy, firms find creative ways to recruit and retain such employees. For example, a company may offer a signing bonus (that is, a one-time monetary payment) to offset lower pay. Customers The people who actually use a firm’s goods and services also are part of its external environment. Because sales are crucial to the firm’s survival, management has the task of ensuring that its employment practices provide excellent customer support service. Customers constantly demand high-quality products and after-purchase service. Therefore, a firm’s workforce should be capable of providing top-quality goods and after-sale customer support. These conditions relate directly to the skills, qualifications, and motivations of the organization’s employees. HR Technology human resource information system (HRIS) Any organized approach for obtaining relevant and timely information on which to base HR decisions. The rate of technological change is staggering. The development of technology has created new roles for HR professionals but also places additional pressures on them to keep abreast of the technology. We will briefly review three applications: human resource information systems, cloud computing, and social media. With the increased technology sophistication has come the ability to design a more useful human resource information system (hris), which is any organized approach for obtaining relevant and timely information on which to base HR decisions. The HRIS brings under one encompassing technology system many human resource activities. Think of an HRIS as an umbrella for merging the various subsystems discussed throughout this text. Today, mainstay HR responsibilities such as planning, recruitment, selection, oversight of legal and regulatory compliance, benefits administration, and the safeguarding of confidential employee information cannot be carried out effectively without an HRIS. Throughout the text, topics will be highlighted that are part of an HRIS. In addition, all of the HRIS applications may be accessed through cloud computing. A rapidly developing trend is the increased mobility of tasks performed by HR professionals.28 A major factor contributing to HR mobility is cloud computing, a means of providing software and data via the Internet. Cloud computing and the use of mobile devices are changing the way HR work is performed, and the change is moving at an amazing pace.29 With the cloud there is no more expensive, capital-intensive hardware and infrastructure and no more expensive, time-consuming, staff-intensive upgrades.30 Cloud computing permits businesses to buy and use what they need, when they need it. It allows large organizations to move away from managing their own computer centers and focus on the core competencies of the firm. Cloud users have the ability to access the application securely from anywhere in the world.31 HR professionals can be virtually anywhere and access the cloud, all through any standard Web. HR departments are leveraging the increasing popularity of social media, including LinkedIn, Facebook, YouTube, and Twitter. In the 2011 Achievers Social HR survey, respondents expressed the belief that social networking is an important tool for recruiting, retaining, and managing employees. The majority of respondents, 81.9 percent, believe that social networks will be used as an HR tool in their organizations within the next 12 months, and the low cost associated with using social media is a positive contributing factor.32 There are three main applications of social media. First, companies may engage in targeted recruiting and sourcing passive and active applicants. Second, companies may use social media to promote knowledge sharing, training and development, and reinforcing identification with the organization and promoting the brand. ChaPter 1 • human reSourCe management: an overview 35 Economy The economy of the nation and world is a major environmental factor affecting HRM. As a generalization, when the economy is booming, it is more difficult to recruit qualified workers. On the other hand, when a downturn is experienced, more applicants are typically available. To complicate this situation even further, one segment of the country may be experiencing an economic downturn, another a slow recovery, and another a boom. A major challenge facing HR is working within this dynamic, ever-changing economic environment because it impacts every aspect of HRM.33 Unanticipated Events Unanticipated events are occurrences in the environment that cannot be foreseen. The Deepwater Horizon oil spill off the Gulf Coast in 2010 caused major modifications in the performance of many HR functions. Every disaster—whether human-made or natural—likely requires a tremendous amount of adjustment with regard to HRM. For example, after Hurricane Katrina, Tulane University reduced the number of employees. On a global perspective, think of the many different ways HR was affected by the tsunami in Japan. Japanese automobile plants in the United States were forced to temporarily shut down because of a lack of parts produced in Japan. Other recent disasters, such as heat waves, earthquakes, tornadoes, floods, and fires, have created their own type of difficulty. ObjeCtive 1.6 Explain the importance of corporate culture and human resource management. corporate culture System of shared values, beliefs, and habits within an organization that interacts with the formal structure to produce behavioral norms. Corporate Culture and human resource Management As an internal environment factor affecting HRM, corporate culture refers to the firm’s social and psychological climate. Corporate culture is defined as the system of shared values, beliefs, and habits within an organization that interacts with the formal structure to produce behavioral norms. Culture gives people a sense of how to behave and what they ought to be doing. Each individual gradually forms such perceptions over a period of time as the person performs assigned activities under the general guidance of a superior and a set of organizational policies. The culture existing within a firm influences the employees’ degree of satisfaction with the job as well as the level and quality of their performance. The assessment of how desirable the organization’s culture is may differ for each employee. One person may perceive the environment as bad, and another may see the same...
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ORGANIZATION STRATEGIES

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Organization Strategies
Name of Student
Name of Affiliation

ORGANIZATION STRATEGIES

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Abstract

An internal employee relationship is an effort put by an organization to manage the
relationship between the employer and the employee. The relationship between the two parties
should be healthy and positive for a maximum corporation and faster achievement of the
organization's goals and objectives. To achieve such a relationship, an organization needs to
come with an innovative program to facilitate the relationship (Noe, Hollenbeck, Gerhart &
Wright, 2017). Effective communication is an innovative program that an organization ought to
implement in the workplace. Improving relationships and collaboration in the organization is the
main objective of every employee strategy. Effective communication is a way of engaging
employees in business activities. From various research that has been conducted on the globe
about engagement in the organization, the results have shown that in the organizations that
employees are engaged, the companies have registered high profit. The program will be
successful because communication is the central aspect that can only lead to a corporation in any
workforce; without communication, there can be no coordination, and with no coordination, it
means reduced production, which can result to collapsing of organization. In my organization,
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