Business in changing the world

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Instructions: Each Question must be answered with at least 250 words each (this does not include references). A minimum of THREE references, along with in-text citations is required. The textbook can be used as a reference. Note: Please keep the answer and format setup. For example: Question: XYZ Answer: XYZ Reference: XYZ 1. In a narrative format discuss the key facts and critical issues presented in the case. 2. How does Patagonia provide a work environment and values that enhances the lives of their employees? 3. Do you think all companies could inspire Patagonia's level of loyalty by employees by providing work environments with similar benefits? Provide an example of a company who you think could benefit from their HR practices? 4. As CEO of Patagonia, how would you deal with criticism that you focus more on hiring employees that are social cause oriented, vs. the most talented and skilled employees? NOTE: Three references are required. The textbook may be one. The case study for these questions start on page 352 (if viewing from PDF it’s page 60). Reference for book: Ferrell, O., Hirt, G. & Ferrell, L. (2009). Business in a Changing World. (7th ed.). McGraw Hill Publishing Company. Confirming Pages part Creating the Human H I G Resource Advantage 4 G S , A N G E the Workforce CHAPTER 10 Motivating L CHAPTER 11 Managing A Human Resources APPENDIX C Personal Career Plan 1 0 3 8 2 fer11722_ch10_293-319.indd 293 9/17/08 4:58:39 PM Confirming Pages chapter 10 CHAPTER OUTLINE Introduction Nature of Human Relations Motivating the Workforce Historical Perspectives on Employee Motivation Classical Theory of Motivation The Hawthorne Studies Theories of Employee Motivation Maslow’s Hierarchy of Needs Herzberg’s Two-Factor Theory McGregor’s Theory X and Theory Y Theory Z Variations on Theory Z Equity Theory Expectancy Theory Strategies for Motivating Employees Behavior Modification Job Design Importance of Motivational Strategies fer11722_ch10_293-319.indd 294 OBJECTIVES H I G G S , After reading this chapter, you will be able to: A N Summarize early studies that laid the groundwork for understanding employee motivation. G E human-relations theories of Abraham Compare and contrast the Maslow and Frederick Herzberg. L Investigate various theories A of motivation, including theories X, Y, • Define human relations, and determine why its study is important. • • • and Z; equity theory; and expectancy theory. • Describe some of the strategies that managers use to motivate 1 employees. 0 • Critique a business’s program for motivating its sales force. 3 8 2 9/17/08 4:58:40 PM H I G G Amadeus Consulting: Where Employees S Are the Company , At a time when Americans are among those working the longest hours of individuals in any developed country, many employees are tired, stressed, A and pining for jobs in which they receive even the smallest amount of respect N and attention. Therefore, when a company actually goes above and beyond G take notice. Founded in the rare pat on the back, we should stand up and E The company develops 1994, Amadeus Consulting is one such company. custom software from its headquarters in Boulder, L Colorado. Founders Lisa Calkins and John Basso intended, from the beginning, A to create a company for which people would be motivated to work long term. To retain employees, Calkins and Basso believe that it is important to 1 acknowledge the fact that employees have lives outside their jobs and to encourage a balance between life and work. To 0 achieve this mind-set, they 3 strive to help their employees blend work, family, community involvement, and the meeting of customer needs. It helps that8Calkins and Basso are not interested in building a business only to sell it to2the highest bidder; rather, they are dedicated to creating lifelong customers and employees. Amadeus’s attention to employee well-being begins with the headquarters itself. The 11,000-square-foot building is completely free from cubicles and full of windows letting in tons of light. Employees may make use of a bistrolike lounge, a living room–like meeting place, and a library. Going beyond the setting is the way employees approach their jobs. Life at Amadeus includes team lunches, at which employees are likely to discuss personal as well as work-related topics. Like many companies, Amadeus takes its employees on ENTER THE WORLD OF BUSINESS Confirming Pages continued fer11722_ch10_293-319.indd 295 9/17/08 4:58:40 PM Rev. Confirming Pages retreats, but here families come along. Employees are also encouraged to champion causes, which Amadeus then supports. Amadeus sounds like an ideal place to work, but does the performance match up? According to Inc. magazine it does. In 2007, the magazine placed Amadeus number 1,155 on its list of the 5,000 Fastest Growing Private Companies in America. Also in 2007, the company doubled its employee count and brought its revenue up to $2.6 million. Amadeus has been named a Microsoft Gold Certified Partner, and it has won awards such as the Microsoft XP Solution Challenge for Ascriptus. The company was also named 2004 Colorado Woman-Owned Business of the Year by Business & Professional Women. Amadeus is proof that it is possible to succeed in business without leaving life behind.1 H I G G S Introduction , teach some important lessons about how to Successful businesses like Amadeus interact with and motivate employees to do their best. Because employees do the actual work of the business and influence whether the firm achieves its objectives, most top managers agree A that employees are an organization’s most valuable resource. To achieve organizational N objectives, employees must have the motivation, ability (appropriate knowledge and skills), and tools (proper training and equipG topices are the subject of Chapter 11; this chapment) to perform their jobs. These ter focuses on employee motivation. E We examine employees’ needs and motivation, managers’ views of workers, and L several strategies for motivating employees. Managers who understand the needs of A higher levels of productivity and thus contribtheir employees can help them reach ute to the achievement of organizational goals. 1 Nature of Human0Relations human relations the study of the behavior of individuals and groups in organizational settings motivation an inner drive that directs a person’s behavior toward goals What motivates employees to perform on the job is the focus of human rela3 of individuals and groups in organizational settions, the study of the behavior tings. In business, human relations involves motivating employees to achieve 8 organizational objectives efficiently and effectively. The field of human relations 2 has become increasingly important over the years as businesses strive to understand how to boost workplace morale, maximize employees’ productivity and creativity, and motivate their ever more diverse employees to be more effective. Motivation is an inner drive that directs a person’s behavior toward goals. A goal is the satisfaction of some need, and a need is the difference between a desired state and an actual state. Both needs and goals can be motivating. Motivation explains why people behave as they do; similarly, a lack of motivation explains, at times, why people avoid doing what they should do. A person who recognizes or feels a need is motivated to take action to satisfy the need and achieve a goal (Figure 10.1). Consider a person who feels cold. Because of the difference between the actual temperature and the desired temperature, the person recognizes a need. To satisfy the need 296 fer11722_ch10_293-319.indd 296 9/19/08 11:23:32 AM Confirming Pages CHAPTER 10 Motivating the Workforce 297 FIGURE 10.1 Need The Motivation Process Goal-Directed Behavior Need Satisfaction H I G and achieve the goal of being warm, the person mayGadjust the thermostat, put on a sweater, reach for a blanket, start a fire, or hug a friend. S Human relations is concerned with the needs of employees, their goals and how they try to achieve them, , and the impact of those needs and goals on job performance. One prominent aspect of human relations is morale—an employee’s attitude toward his or her job, employer, and colleagues. High morale contributes to high A levels of productivity, high returns to stakeholders, and employee loyalty. Conversely, N turnover (when employees low morale may cause high rates of absenteeism and quit or are fired and must be replaced by new employees). Google recognizes the G value of happy, committed employees and strives to engage in practices that will minimize turnover. Employees have the opportunityEto have a massage every other week; onsite laundry service; free all-you-can-eat gourmet L meals and snacks; and the “20% a week” rule, which allows engineers to work on whatever project they want A faced turnover of employees for one day each week. However, Google has recently wanting to start their own businesses and going to other companies such as Facebook. Although morale is high, employees see opportunities and are solicited heav1 ily by other firms.2 Employees are motivated by their perceptions of 0 extrinsic and intrinsic rewards. An intrinsic reward is the personal satisfaction and enjoyment that you feel from 3 personal enjoyment in learnattaining a goal. For example, in this class you may feel ing how business works and aspire to have a career8in business or to operate your own business one day. Extrinsic rewards are benefits and/or recognition that you receive from someone else. In this class, your grade 2 is extrinsic recognition of your efforts and success in the class. In business, praise and recognition, pay increases, and bonuses are extrinsic rewards. If you believe that your job provides an opportunity to contribute to society or the environment, then that aspect would represent an intrinsic reward. Both intrinsic and extrinsic rewards contribute to motivation that stimulates employees to do their best in contributing to business goals. Respect, involvement, appreciation, adequate compensation, promotions, a pleasant work environment, and a positive organizational culture are all morale boosters. Nike seeks to provide a comprehensive compensation and benefits package, which includes traditional elements such as medical, dental, vision, life and disability insurance, paid holidays and time off as well as sabbaticals, and team fer11722_ch10_293-319.indd 297 morale an employee’s attitude toward his or her job, employer, and colleagues intrinsic rewards the personal satisfaction and enjoyment feel after attaining a goal extrinsic rewards benefits and/or recognition received from someone else 9/17/08 4:58:52 PM Confirming Pages 298 PART 4 Creating the Human Resource Advantage TABLE 10.1 1. Satisfied employees know clearly what is expected from them every day at work. Top 10 Ways to Retain Great Employees 2. The quality of the supervision an employee receives is critical to employee retention. 3. The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. 4. Talent and skill utilization is another environmental factor your key employees seek in your workplace. 5. The perception of fairness and equitable treatment is important in employee retention. 6. Employees must have the tools, time, and training necessary to do their jobs well—or they will move to an employer who provides them. 7. The best employees, those employees you want to retain, seek frequent opportunities to learn and grow in their careers, knowledge, and skill. 8. Take time to meet with new employees H to learn about their talents, abilities, and skills. Meet with each employee periodically. I never, ever threaten an employee’s job or income. 9. No matter the circumstances, never, 10. Staff members must feel rewarded, G recognized, and appreciated. G S , Source: Susan M. Heathfield, “Top Ten Ways to Retain Your Great Employees,” About.com, http://humanresources.about. com/od/retention/a/more_retention.htm (accessed May 15, 2008). as well as individual compensation plans. More comprehensive benefits include employee discounts on Nike products, health care and family care reimbursement accounts, scholarships for children A of employees, employee assistance plans, work/ life balance resources and referrals, adoption assistance, tuition assistance, group legal plan, group long-term careN plan, and matching gift programs. At the Beaverton, Oregon, world headquarters, employees may take G advantage of onsite day care; onsite fitness centers, E and restaurants; a convenience store; an onsite Did You Know? Absenteeism costs a typical cafés large company more than $3 million a year3 hair L and nail salon, annual TriMet transit pass ($20 annual fee versus $600); chances to test products A under development; and an opportunity to become a headquarters tour guide.4 Many companies offer a diverse array of benefits designed to improve the quality of employees’ lives and increase their morale and satisfaction. As mentioned earlier, 1 many companies offer reward programs to improve morale, lower turnover, and motivate employees. Some of the0“best companies to work for” offer onsite day care, TABLE 10.2 You Can Make Their Day: Tips for the Leader about Employee Motivation 1. 2. 3 8 Use simple, powerful words. Make sure people know what you2expect. 3. Provide regular feedback. 4. People need positive and not so positive consequences. 5. It ain’t magic. It’s discipline. 6. Continue learning and trying out new ideas for employee motivation. 7. Make time for people. 8. Focus on the development of people. 9. Share the goals and the context: communicate. Source: Susan M. Heathfield, “You Can Make Their Day: Ten Tips for the Leader About Employee Motivation,” About.com, http://humanresources.about.com/od/motivationsucces3/a/lead_motivation.htm (accessed May 15, 2008). fer11722_ch10_293-319.indd 298 9/17/08 4:58:56 PM Confirming Pages CHAPTER 10 Motivating the Workforce 299 concierge services (e.g., dry cleaning, shoe repair, prescription renewal), domestic partner benefits to same-sex couples, and fully paid sabbaticals. Table 10.2 offers suggestions as to how leaders can motivate employees on a daily basis. Historical Perspectives on Employee Motivation Throughout the 20th century, researchers have conducted numerous studies to try to identify ways to motivate workers and increase productivity. From these studies have come theories that have been applied to workers with varying degrees of success. A brief discussion of two of these theories—the classical theory of motivation and the Hawthorne studies—provides a background for understanding the present H state of human relations. I G to time and motion studThe birth of the study of human relations can be traced ies conducted at the turn of the century by Frederick GW. Taylor and Frank and Lillian Gilbreth. Their studies analyzed how workers perform specific work tasks in an effort to improve the employees’ productivity. TheseS efforts led to the application of scientific principles to management. , Classical Theory of Motivation According to the classical theory of motivation, money is the sole motivator for workers. Taylor suggested that workers who were paid more would produce more, an idea that would benefit both companies and Aworkers. To improve productivity, Taylor thought that managers should break down each job into its component tasks (specialization), determine the best way toNperform each task, and specify the output to be achieved by a worker performing the Gtask. Taylor also believed that incentives would motivate employees to be more productive. Thus, he suggested E He developed the piecethat managers link workers’ pay directly to their output. rate system, under which employees were paid a certain L amount for each unit they produced; those who exceeded their quota were paid a higher rate per unit for all A the units they produced. We can still see Taylor’s ideas in practice today in the use of mathematical models, statistics, and incentives. Moreover, companies are 1 increasingly striving to relate pay to performance at both the hourly and managerial level. According to Marriott Hotels, roughly 40 percent of incentive planners0choose an individual incentive to motivate and reward their employees. In contrast, 3 team incentives are used to generate partnership and working together to accomplish organizational goals. The 8 state of Washington offers teams 25 percent of the revenue generated (not to exceed $10,000) as the result of a continuous improvement2or total quality process.5 More and more corporations are tying pay to performance in order to motivate— even up to the CEO level. The topic of executive pay has become controversial in recent years, and many corporate boards of directors have taken steps to link executive compensation more closely to corporate performance. CEO compensation, although increasing, is not rising at the level of previous years. Compensation rose 5 percent, which is down from 13 percent in the previous year. Larry Elllison, CEO of Oracle, topped the list with total compensation of $192.92 million and is considered by many to be a valuable CEO.6 Like most managers of the early 20th century, Taylor believed that satisfactory pay and job security would motivate employees to work hard. However, later studies showed that other factors are also important in motivating workers. fer11722_ch10_293-319.indd 299 classical theory of motivation theory suggesting that money is the sole motivator for workers 9/17/08 4:58:58 PM Confirming Pages Going Green Motivating Employees by Being Green Interface Inc., the largest modular tile carpet maker in the United States, was founded in 1973. At the time, it was simply another company. Today, thanks to its founder Ray Anderson, Interface is a leader in sustainable and environmentally sound practices. Anderson has been featured in two environmental documentaries and received numerous awards such as the Purpose Prize from Civic Ventures and the International Quality of Life award from Auburn University. So, what makes this company so unique and so green? Simply put, it’s the company’s Mission Zero, involving all employees. While team efforts to reduce the company’s environmental footprint to zero by 2020 is a target, they don’t plan to stop there. Once they’ve achieved carbon neutrality, Interface employees plan to begin working toward restoring portions of the earth in need of care. In the move toward Mission Zero, Interface recycles old carpet to avoid filling up landfills; created Cool Carpet to offset emissions; uses 100 percent recycled carpet tile backing on its Cool Blue line; and is partially powering the Cool Blue line with landfill gas captured by a method invented, in part, by Interface. Interface has also reduced its greenhouse gas emissions by 60 percent in absolute tonnage and runs many of its operations on wind and solar power. And this is just the tip of the iceberg! Interface has achieved about 50 percent of Mission Zero. Anderson and Interface’s other executives know full well that they could not achieve their goals without their dedicated employees. In fact, Anderson recently stepped down as CEO in order to educate companies and individuals around the world about sustainability and environmentally sound practices. When the push toward Mission Zero began, Anderson asked his employees to work with him to achieve this goal. Initially, employees reacted to Mission Zero with skepticism, but today this goal gives Interface employees something to be passionate about at work—it makes their jobs meaningful, and some note that they feel great about giving their children and children around the world a better future. To motivate employees, Interface has invented the Fast Forward training program to establish every employee as a Mission Zero ambassador. Interface believes that by encouraging employees at work, they then become better spouses, parH ents, friends, and community members. Employees have also I encouraged to take their own steps toward helping the been environment. For example, a night shift factory worker helped G suggest what has become the Cool Co2mmute program for G employee commuting emissions. offsetting SThere is no arguing that Mission Zero is an important step and that businesses and individuals would do well to take note of, Ray Anderson and Interface and to follow this example.7 Discussion Questions 1.AHow does Ray Anderson set an example as CEO to motivate employees toward green business practices? 2.NHow does being green motivate employees in their everyGday jobs? 3. What does Interface do to involve employees in its deciEsions for running a green business? L A The Hawthorne Studies Elton Mayo and a team of researchers from Harvard University wanted to determine what physical conditions 1 in the workplace—such as light and noise levels— would stimulate employees to be0most productive. From 1924 to 1932, they studied a group of workers at the Hawthorne Works Plant of the Western Electric Company and measured their productivity3under various physical conditions. What the researchers discovered 8 was quite unexpected and very puzzling: Productivity increased regardless of the physical conditions. This phenomenon has 2 been labeled the Hawthorne effect. When questioned about their behavior, the employees expressed satisfaction because their co-workers in the experiments were friendly and, more importantly, because their supervisors had asked for their help and cooperation in the study. In other words, they were responding to the attention they received, not the changing physical work conditions. The researchers concluded that social and psychological factors could significantly affect productivity and morale. Medtronic, often called the “Microsoft of the medical-device industry,” has a built-in psychological factor that influences employee morale. The company makes life-saving medical devices, such as pacemakers, neurostimulators, and stents. New hires at Medtronic receive medallions inscribed with a portion of the firm’s mission statement, “alleviate pain, restore health, and extend life.” There is 300 fer11722_ch10_293-319.indd 300 9/17/08 4:58:58 PM Confirming Pages CHAPTER 10 Motivating the Workforce FIGURE 10.2 Percent 29 30 25 301 Work/Life Balance Is More Important than Pay 23 What is the primary reason you accepted your current position? 20 15 Source: “Work-life Balance Tops Pay,” USA Today Snapshots, March 13, 2008, p. B1. 13 10 5 5 H I G G S , W or an k/L d ife Fle B xib ala ili nc Co ty e m pe ns at io n W or kC Tr ai ul ni tu ng re Op po rtu ni tie s Ad Op va po nc rtu em ni en tie t s 0 5 an annual party where people whose bodies function thanks to Medtronic devices give testimonials. Obviously, Medtronic employees feel a sense ofA satisfaction in their jobs. Figure 10.2 indicates thatN work/life balance is important to many employees. The Hawthorne experiments marked the begin-G ning of a concern for human relations in the work-E place. They revealed that human factors do influence workers’ behavior and that managers who under-L stand the needs, beliefs, and expectations of peopleA have the greatest success in motivating their workers. 1 0 3 The employees who participated in the Hawthorne studies responded The research of Taylor, Mayo, and many others has to the attention they received during the study and thereby improved led to the development of a number of theories8 their performance, not the changing of the physical characteristics of that attempt to describe what motivates employees2 their workplace. Do you think the workers in this photo improved their pace or level of quality as this photo was taken? Theories of Employee Motivation to perform. In this section, we will discuss some of the most important of these theories. The successful implementation of ideas based on these theories will vary, of course, depending on the company, its management, and its employees. It should be noted, too, that what worked in the past may no longer work today. Good managers must have the ability to adapt their ideas to an ever-changing, diverse group of employees. Maslow’s Hierarchy of Needs Psychologist Abraham Maslow theorized that people have five basic needs: physiological, security, social, esteem, and self-actualization. Maslow’s hierarchy arranges these needs into the order in which people strive to satisfy them (Figure 10.3).8 fer11722_ch10_293-319.indd 301 Maslow’s hierarchy a theory that arranges the five basic needs of people—physiological, security, social, esteem, and self-actualization— into the order in which people strive to satisfy them 9/17/08 4:59:08 PM Confirming Pages 302 PART 4 Creating the Human Resource Advantage FIGURE 10.3 Maslow’s Hierarchy of Needs Source: Adapted from Abraham H. Maslow, “A Theory of Human Motivation,” Psychology Review 50 (1943), pp. 370–396. American Psychology Association. SelfActualization Needs H I G G S , Esteem Needs Social Needs Security Needs A N G Physiological Needs E L A New parents who work for Colgate-Palmolive get three additional weeks of paid leave in addition to the leave mandated by the Family Leave Act. Employees can also take advantage of onsite banking, a travel agency, and film processing at work. physiological needs the most basic human needs to be satisfied— water, food, shelter, and clothing security needs the need to protect oneself from physical and economic harm fer11722_ch10_293-319.indd 302 1 0 3 8 2 Physiological needs, the most basic and first needs to be satisfied, are the essentials for living—water, food, shelter, and clothing. According to Maslow, humans devote all their efforts to satisfying physiological needs until they are met. Only when these needs are met can people focus their attention on satisfying the next level of needs—security. Security needs relate to protecting yourself from physical and economic harm. Actions that may be taken to achieve security include reporting a dangerous workplace condition to management, maintaining safety equipment, and purchasing insurance with income protection in the event you become unable to work. Once security needs have been satisfied, people may strive for social goals. 9/17/08 4:59:35 PM Confirming Pages CHAPTER 10 Motivating the Workforce Social needs are the need for love, companionship, and friendship—the desire for acceptance by others. To fulfill social needs, a person may try many things: making friends with a co-worker, joining a group, volunteering at a hospital, throwing a party. Once their social needs have been satisfied, people attempt to satisfy their need for esteem. Esteem needs relate to respect—both self-respect and respect from others. One aspect of esteem needs is competition—the need to feel that you can do something better than anyone else. Competition often motivates people to increase their productivity. Esteem needs are not as easily satisfied as the needs at lower levels in Maslow’s hierarchy because they do not always provide tangible evidence of success. However, these needs can be realized through rewards and increased involvement in organizational activities. Until esteem needs are met, people focus their attention on achieving respect. When they feel they have achievedHsome measure of respect, selfactualization becomes the major goal of life. I hierarchy, mean being the best Self-actualization needs, at the top of Maslow’s you can be. Self-actualization involves maximizing your G potential. A self-actualized person feels that she or he is living life to its fullest in every way. For Stephen King, G fiction writer in the world; self-actualization might mean being praised as the best for actress Halle Berry, it might mean winning an Oscar. S Maslow’s theory maintains that the more basic needs at the bottom of the hierarchy must be satisfied before higher-level goals can, be pursued. Thus, people who are hungry and homeless are not concerned with obtaining respect from their colleagues. Only when physiological, security, and social needs have been more or less A suggests that if a low-level satisfied do people seek esteem. Maslow’s theory also need is suddenly reactivated, the individual will tryN to satisfy that need rather than higher-level needs. Many laid off workers probably shift their focus from highG level esteem needs to the need for security. Almost 10,000 employees in 32 counE tries in business, government, and nonprofit organizations were surveyed for the Global Employee Relationship Report. Fifty percent of the respondents said they L believe their organization cares about developing people for the long term, not A just for their current job. Just over half of the employees believed their employers show them genuine care and concern.9 Managers should learn from Maslow’s hierarchy that employees will be motivated to contribute to organizational goals 1 security, and social needs only if they are able to first satisfy their physiological, through their work. 0 303 social needs the need for love, companionship, and friendship—the desire for acceptance by others esteem needs the need for respect— both self-respect and respect from others self-actualization needs the need to be the best one can be; at the top of Maslow’s hierarchy 3 In the 1950s psychologist Frederick Herzberg proposed 8 a theory of motivation that focuses on the job and on the environment where work is done. Herzberg studied 2 various factors relating to the job and their relation to employee motivation and Herzberg’s Two-Factor Theory concluded that they can be divided into hygiene factors and motivational factors (Table 10.3). Hygiene factors, which relate to the work setting and not to the content of the work, include adequate wages, comfortable and safe working conditions, fair company policies, and job security. These factors do not necessarily motivate employees to excel, but their absence may be a potential source of dissatisfaction and high turnover. Employee safety and comfort are clearly hygiene factors. Many people feel that a good salary is one of the most important job factors, even more important than job security and the chance to use one’s mind and abilities. Salary and security, two of the hygiene factors identified by Herzberg, make it possible for employees to satisfy the physiological and security needs identified by fer11722_ch10_293-319.indd 303 hygiene factors aspects of Herzberg’s theory of motivation that focus on the work setting and not the content of the work; these aspects include adequate wages, comfortable and safe working conditions, fair company policies, and job security 9/17/08 5:00:25 PM Confirming Pages 304 PART 4 Creating the Human Resource Advantage TABLE 10.3 Hygiene Factors Motivational Factors Herzberg’s Hygiene and Motivational Factors Company policies Achievement Supervision Recognition Working conditions Work itself Relationships with peers, supervisors, and subordinates Responsibility Salary Advancement Security Personal growth motivational factors aspects of Herzberg’s theory of motivation that focus on the content of the work itself; these aspects include achievement, recognition, involvement, responsibility, and advancement Maslow. However, the presence H of hygiene factors is unlikely to motivate employees to work harder. I relate to the content of the work itself, include Motivational factors, which achievement, recognition, involvement, responsibility, and advancement. The abG sence of motivational factors may not result in dissatisfaction, but their presence is likely to motivate employees G to excel. Many companies are beginning to employ methods to give employees more S responsibility and control and to involve them more in their work, which serves to motivate them to higher levels of productiv, have tremendous latitude to satisfy customer’s ity and quality. L.L. Bean employees needs. One employee drove 500 miles from Maine to New York to deliver a canoe to a customer who was leaving on a trip. L.L. Bean was number two on BusinessWeek’s A list of “Customer Service Champs” behind USAA Insurance. Besides empowering N service training, answering every call within 20 employees, the company has strict seconds.10 Disney has a similar commitment to empowering employees and making G customers happy.11 E and Maslow’s esteem and self-actualization needs Herzberg’s motivational factors are similar. Workers’ low-level needs L (physiological and security) have largely been satisfied by minimum-wage laws and occupational-safety standards set by various A government agencies and are therefore not motivators. Consequently, to improve productivity, management should focus on satisfying workers’ higher-level needs (motivational factors) by providing opportunities for achievement, involvement, 1 good performance. and advancement and by recognizing 0 3 Douglas McGregor related Maslow’s ideas about In The Human Side of Enterprise, personal needs to management.8McGregor contrasted two views of management— the traditional view, which he called Theory X, and a humanistic view, which he 2 called Theory Y. McGregor’s Theory X and Theory Y Theory X McGregor’s traditional view of management whereby it is assumed that workers generally dislike work and must be forced to do their jobs fer11722_ch10_293-319.indd 304 According to McGregor, managers adopting Theory X assume that workers generally dislike work and must be forced to do their jobs. They believe that the following statements are true of workers: 1. The average person naturally dislikes work and will avoid it when possible. 2. Most workers must be coerced, controlled, directed, or threatened with punishment to get them to work toward the achievement of organizational objectives. 3. The average worker prefers to be directed and to avoid responsibility, has relatively little ambition, and wants security.12 9/17/08 5:00:27 PM Confirming Pages Consider Ethics and Social Responsibility Best Buy Brings Diversity to the Geek Squad Almost all corporations use methods to motivate the workforce. Some of them are inventive, some bizarre, some fall flat, and not all have impact. However, Best Buy is taking a stance on diversity and using a powerful method to motivate its managers to support the cause. Since 2004, Best Buy has been conducting its diversity training at the Lorraine Motel, made famous by the assassination of Dr. Martin Luther King Jr. in 1968. The motel has been converted into the National Civil Rights Museum, and those who enter the museum are given a glimpse into the powerful civil rights movement. Those at Best Buy believe that immersion is the best way to educate its managers about the need for diversity, hence H the trip to Memphis. The company says it is dedicated to I inclusion and wants managers to personalize this message and take it back with them to their stores to share with their G employees. Through diversity training, those at Best Buy say G they hope to encourage employees to be themselves. Best Buy is also working to increase diversity in terms S of its male to female employee ratios. In 2003, the company started WOLF, its Women’s Leadership Forum. Through the, program, Best Buy aims to improve the experiences of both female employees and female customers. As of fiscal 2007, Best Buy had increased the number of female general managers by 40 percent, female sales managers by 100 percent, and female district managers by 200 percent. Female employees working in home theater departments increased by 100 percent, and female Geek Squad employees increased by 284 percent. Those at Best Buy say that both methods for increasing diversity have helped the company create a more familylike atmosphere while helping increase the bottom line as well.13 Discussion Questions: 1. Why is racial and gender diversity important when motivating employees? 2. How does Best Buy’s trip to Memphis encourage racial diversity among managers and employees? 3. Why does a diverse workforce help increase the bottom line in a retail company such as Best Buy? A N Managers who subscribe to the Theory X view maintain tight control over workers, provide almost constant supervision, try to motivate through fear, and make G decisions in an autocratic fashion, eliciting little or no input from their subordinates. The Theory X style of management focusesEon physiological and security needs and virtually ignores the higher needs discussed L by Maslow. The Theory X view of management does not take into account people’s needs for A Theory Y, the contrasting companionship, esteem, and personal growth, whereas view of management, does. Managers subscribing to the Theory Y view assume that workers like to work and that under proper conditions employees will seek 1 esteem, and self-actualization out responsibility in an attempt to satisfy their social, needs. McGregor describes the assumptions behind 0 Theory Y in the following way: 1. The expenditure of physical and mental effort3 in work is as natural as play or rest. 8 2. People will exercise self-direction and self-control to achieve objectives to 2 which they are committed. 3. People will commit to objectives when they realize that the achievement of those goals will bring them personal reward. 4. The average person will accept and seek responsibility. 5. Imagination, ingenuity, and creativity can help solve organizational problems, but most organizations do not make adequate use of these characteristics in their employees. 6. Organizations today do not make full use of workers’ intellectual potential.14 Theory Y McGregor’s humanistic view of management whereby it is assumed that workers like to work and that under proper conditions employees will seek out responsibility in an attempt to satisfy their social, esteem, and self-actualization needs Obviously, managers subscribing to the Theory Y philosophy have a management style very different from managers subscribing to the Theory X philosophy. 305 fer11722_ch10_293-319.indd 305 9/17/08 5:00:29 PM Confirming Pages 306 PART 4 Creating the Human Resource Advantage Theory Y managers maintain less control and supervision, do not use fear as the primary motivator, and are more democratic in decision making, allowing subordinates to participate in the process. Theory Y managers address the high-level needs in Maslow’s hierarchy as well as physiological and security needs. Today, Theory Y enjoys widespread support and may have displaced Theory X. Theory Z Theory Z a management philosophy that stresses employee participation in all aspects of company decision making Theory Z is a management philosophy that stresses employee participation in all aspects of company decision making. It was first described by William Ouchi in his book Theory Z—How American Business Can Meet the Japanese Challenge. Theory Z incorporates many elements associated with the Japanese approach to management, such as trust and intimacy, but Japanese ideas have been adapted for use in the United States. In a Theory Z organization, managers and workers share responsibilities; the H management style is participative; and employment is long term and often lifelong. Theory Z results in employees feeling I organizational ownership. Research has found that such feelings of ownership may produce positive attitudinal and behavioral G effects for employees.15 In a Theory Y organization, managers focus on assumptions about the nature of the worker.GThe two theories can be seen as complementary. Table 10.4 compares the traditional S American management style, the Japanese management style, and Theory Z (the modified Japanese management style). , Variations on Theory Z Theory Z has been adapted and modified for use in a number of U.S. companies. One A adaptation involves workers in decisions through quality circles. Quality circles (also called quality-assurance teams) are small, usually having five to eight members who N discuss ways to reduce waste, eliminate problems, and improve quality, communication, and work satisfaction. Such G quality teams are a common technique for harnessing the knowledge and creativity of hourly E employees to solve problems in companies. TABLE 10.4 L Comparison of American, Japanese, and Theory A Z Management Styles American Japanese Theory Z Duration of employment Relatively short term; workers subject to layoffs when business slows Lifelong; 1 no layoffs Long term; layoffs rare Rate of promotion Rapid Amount of specialization Considerable; worker develops expertise in one area only Decision making Individual 0 3 Minimal; worker develops 8 in all aspects of expertise the organization 2 Consensual; input from Slow all concerned parties is considered Slow Moderate; worker learns all aspects of the organization Consensual; emphasis on quality Responsibility Assigned to the individual Shared by the group Assigned to the individual Control Explicit and formal Less explicit and less formal Informal but with explicit performance measures Concern for workers Focus is on work only Focus extends to worker’s whole life Focus includes worker’s life and family Source: Adapted from William Ouchi, Theory Z—How American Business Can Meet the Japanese Challenge, p. 58. © 1981 by Addison-Wesley Publishing Company, Inc. Reprinted by permission of Perseus Books Publishers, a member of Perseus Books, L.L.C. fer11722_ch10_293-319.indd 306 9/17/08 5:00:46 PM Confirming Pages CHAPTER 10 Motivating the Workforce 307 Even more involved than quality circles are programs that operate under names such as participative management, employee involvement, or self-directed work teams. Regardless of the term used to describe such programs, they strive to give employees more control over their jobs while making them more responsible for the outcome of their efforts. Such programs often organize employees into work teams of 5 to 15 members who are responsible for producing an entire product item. Team members are cross-trained and can therefore move from job to job within the team. Each team essentially manages itself and is responsible for its quality, scheduling, ordering and use of materials, and problem solving. Many firms have successfully employed work teams to boost morale, productivity, quality, and competitiveness. Equity Theory H According to equity theory, how much people are willing to contribute to an organization depends on their assessment of Ithe fairness, or equity, of the rewards they will receive in exchange. In a fair situation, G a person receives rewards proportional to the contribution he or she makes to the organization. However, G in practice, equity is a subjective notion. Each worker regularly develops a personal input-output ratio by taking stock of his orSher contribution (inputs) to the organization in time, effort, skills, and experience , and assessing the rewards (outputs) offered by the organization in pay, benefits, recognition, and promotions. The worker compares his or her ratio to the input-output ratio of some other person—a “comparison other,” who may be A a co-worker, a friend working in another organization, or an “average”of several people working in the organiN feel that he or she is being zation. If the two ratios are close, the individual will treated equitably. G Let’s say you have a high-school education and earn $25,000 a year. When you E who has a college degree compare your input-output ratio with that of a co-worker and makes $35,000 a year, you will probably feel thatLyou are being paid fairly. However, if you perceive that your personal input-output ratio is lower than that of your college-educated co-worker, you may feel that youA are being treated unfairly and be motivated to seek change. But, if you learn that co-worker who makes $35,000 has only a high-school diploma, you may feel cheated by your employer. To achieve 1 equity, you could try to increase your outputs by asking for a raise or promotion. You could also try to have your co-worker’s inputs 0 increased or his or her outputs decreased. Failing to achieve equity, you may be motivated to look for a job at a dif3 ferent company. Because almost all the issues involved in equity 8 theory are subjective, they can be problematic. Author David Callahan has argued2that feelings of inequity may underlie some unethical or illegal behavior in business. Due to employee theft and shoplifting, Wal-Mart is experiencing increased inventory losses to nearly $3 billion on sales of more than $348 billion. The growth is possibly tied to the company’s decision to not prosecute minor cases of shoplifting. Declines in economic condition may also contribute to this growth.16 Callahan believes that employees who do not feel they are being treated equitably may be motivated to equalize the situation by lying, cheating, or otherwise “improving” their pay, perhaps by stealing.17 Managers should try to avoid equity problems by ensuring that rewards are distributed on the basis of performance and that all employees clearly understand the basis for their pay and benefits. fer11722_ch10_293-319.indd 307 equity theory an assumption that how much people are willing to contribute to an organization depends on their assessment of the fairness, or equity, of the rewards they will receive in exchange 9/17/08 5:00:48 PM Rev. Confirming Pages Destination CEO Corporate Health Workers’ Worth Percentage of employers attributing certain traits to workers by career stage Source: “Workers’ Worth,” USA Today Snapshots, April 21, 2008, p. A1. Percent 60 50 40 30 20 10 0 expectancy theory the assumption that motivation depends not only on how much a person wants something but also on how likely he or she is to get it H Discussion Questions 1.I What is the primary motivation of companies such as GPitney Bowes in investing in health care programs? 2. Which theory of motivation would Pitney Bowes’s Gemphasis on health care programs be most aligned with? 3. Would a health care onsite facility be a motivator Sor hygiene factor according to Herzberg’s theory of , motivation? A N G E 54 L A 38 122 0 3 8 2 35 34 22 Early Mid Late FIGURE 10.4 These types of programs must be driven from the top down, and this is true at Pitney Bowes. The CEO walks the talk, literally. He wears a pedometer on his waist throughout the working day to ensure that he is walking a sufficient amount. If he finds that he is not meeting his goals, he will have those in his meetings walk around with him and hold the meeting in that fashion. The key to successfully promoting this proactive approach is education. More companies will be willing to make an investment in improving the health of their employees given the outstanding financial results from the Pitney Bowes experience. Early Mid Late U.S. corporations are confronting a crisis of epic proportions. Health care and insurance costs are exorbitant. Companies have come to realize and embrace the fact that investment in proactive programs designed to promote health and healthy lifestyles is an important business decision. In fact, an investment of $1 in proactive healthy choice programs such as exercise clinics, nutritional education, or even onsite health care clinics, saves an average of $2 to $3 on lost productivity. Pitney Bowes is a leader among businesses in programs designed to promote and develop healthy lifestyles among their employees. In their corporate facilities, there is a fully staffed health care clinic, an exercise facility, and a cafeteria that emphasizes nutritionally healthy food choices including fresh fruits and vegetables. In addition, there are numerous educational programs designed to promote healthy lifestyles. According to Pitney Bowes and to its employees, healthy employees are happier and more productive than those who are not focused on promoting healthy lifestyles. For the corporation, promoting health is a sound business decision that positively affects the bottom line, and that is great for shareholders. Loyalty Creativity Expectancy Theory Psychologist Victor Vroom described expectancy theory, which states that motivation depends not only on how much a person wants something but also on the person’s perception of how likely he or she is to get it. A person who wants something and has reason to be optimistic will be strongly motivated. For example, 308 fer11722_ch10_293-319.indd 308 9/19/08 11:24:00 AM Confirming Pages CHAPTER 10 Motivating the Workforce 309 say you really want a promotion. And, let’s say because you have taken some night classes to improve your skills, and moreover, have just made a large, significant sale, you feel confident that you are qualified and able to handle the new position. Therefore, you are motivated to try to get the promotion. In contrast, if you do not believe you are likely to get what you want, you may not be motivated to try to get it, even though you really want it. Strategies for Motivating Employees Based on the various theories that attempt to explain what motivates employees, businesses have developed several strategies for motivating their employees and boosting morale and productivity. Some of these techniques include behavior modification and job design, as well as the already described H employee involvement programs and work teams. I Behavior Modification G Behavior modification involves changing behavior and encouraging appropriate G actions by relating the consequences of behavior to the behavior itself. The concept S B. F. Skinner, who showed of behavior modification was developed by psychologist that there are two types of consequences that can ,modify behavior—reward and punishment. Skinner found that behavior that is rewarded will tend to be repeated, while behavior that is punished will tend to be eliminated. For example, employees who know that they will receive a bonus such as anAexpensive restaurant meal for making a sale over $2,000 may be more motivated to make sales. Workers who know they will be punished for being tardy are likely to N make a greater effort to get to work on time. G However, the two strategies may not be equally effective. Punishing unacceptEto undesirable long-term side able behavior may provide quick results but may lead effects, such as employee dissatisfaction and increased L turnover. In general, rewarding appropriate behavior is a more effective way to modify behavior. behavior modification changing behavior and encouraging appropriate actions by relating the consequences of behavior to the behavior itself A Job Design Herzberg identified the job itself as a motivational factor. Managers have several 1 strategies that they can use to design jobs to help improve employee motivation. 0 These include job rotation, job enlargement, job enrichment, and flexible scheduling strategies. 3 Job Rotation. Job rotation allows employees to8move from one job to another in an effort to relieve the boredom that is often associated with job specialization. 2 Businesses often turn to specialization in hopes of increasing productivity, but there is a negative side effect to this type of job design: Employees become bored and dissatisfied, and productivity declines. Job rotation reduces this boredom by allowing workers to undertake a greater variety of tasks and by giving them the opportunity to learn new skills. With job rotation, an employee spends a specified amount of time performing one job and then moves on to another, different job. The worker eventually returns to the initial job and begins the cycle again. Job rotation is a good idea, but it has one major drawback. Because employees may eventually become bored with all the jobs in the cycle, job rotation does not totally eliminate the problem of boredom. Job rotation is extremely useful, however, fer11722_ch10_293-319.indd 309 job rotation movement of employees from one job to another in an effort to relieve the boredom often associated with job specialization 9/17/08 5:00:58 PM Confirming Pages 310 PART 4 Creating the Human Resource Advantage in situations where a person is being trained for a position that requires an understanding of various units in an organization. Eli Lilly is a strong believer in the benefits of job rotation. The company leaves employees in their current jobs and asks them to take on additional assignments outside their field of expertise or interest. The results of the process have been positive, and Nokia is trying the same process with similar outcomes.18 Many executive training programs require trainees to spend time learning a variety of specialized jobs. Job rotation is also used to cross-train today’s self-directed work teams. H Enlargement. Job enlargement adds Job more I tasks to a job instead of treating each task as separate. Like job rotation, job enlargement was G developed to overcome the boredom associated with specialization. The rationale behind this strategy is G that jobs are more satisfying as the number of tasks S performed by an individual increases. Employees sometimes enlarge, or craft, their jobs by noticing , what needs to be done and then changing tasks and relationship boundaries to adjust. Individual orientation A and motivation shape opportunities to craft new jobs and job relationships. Job enlargement N strategies have been more successful in increasing G satisfaction than have job rotation strategies. job IBM, E AT&T, and Maytag are among the many companies that have used job enlargement to motivate L employees. A Enrichment. Job enrichment incorpoJob rates motivational factors such as opportunity for achievement, recognition, responsibility, and ad1 vancement into a job. It gives workers not only more tasks within the job, but more control and author0 ity over the job. Job enrichment programs enhance 3 a worker’s feeling of responsibility and provide opportunities for growth and advancement when the worker is8able to take on the more challenging tasks. Hyatt Hotels Corporation and General Foods use job enrichment to improve the quality 2 of work life for their employees. The potential benefits of job enrichment are great, but it requires careful planning and execution. Nucor Corporation’s 11,000-plus nonunion employees in Charlotte, North Carolina, don’t see themselves as ordinary workers. There are no special benefits or compensation plans for executives, and the company’s flat organizational structure encourages employees to adopt the mind-set of owner-operators. job enlargement the addition of more tasks to a job instead of treating each task as separate job enrichment the incorporation of motivational factors, such as opportunity for achievement, recognition, responsibility, and advancement, into a job fer11722_ch10_293-319.indd 310 Flexible Scheduling Strategies. Many U.S. workers work a traditional 40-hour workweek consisting of five 8-hour days with fixed starting and ending times. Facing problems of poor morale and high absenteeism as well as a diverse workforce with changing needs, many managers have turned to flexible scheduling strategies such as flextime, compressed workweeks, job sharing, part-time work, and telecommuting. A survey by CareerBuilder.com showed that 40 percent of working fathers were offered flexible work schedules versus 53 percent of working mothers.19 9/17/08 5:00:58 PM Confirming Pages CHAPTER 10 Motivating the Workforce 311 FIGURE 10.5 11 12 Core Time 10 Flextime, Showing Core and Flexible Hours 1 2 9 3 8 Start Time 7 End Time 6 4 5 H I G Flextime is a program that allows employees to choose their starting and ending times, as long as they are at work during a specified G core period (Figure 10.5). It does not reduce the total number of hours that employees work; instead, it gives S employees more flexibility in choosing which hours they work. A firm may specify that employees must be present from 10:00 a.m. to, 3:00 p.m. One employee may choose to come in at 7:00 a.m. and leave at the end of the core time, perhaps to attend classes at a nearby college after work. Another employee, a mother who A to have time to drop off her lives in the suburbs, may come in at 9:00 a.m. in order children at a day-care center and commute by public N transportation to her job. Flextime provides many benefits, including improved ability to recruit and retain G workers who wish to balance work and home life. Customers can be better served by allowing more coverage of customers over longerEhours, workstations and facilities can be better utilized by staggering employee use, and rush hour traffic may L associated with an increase be reduced. In addition, flexible schedules have been in healthy behaviors on the part of employees. More A flexible schedules are associated with healthier lifestyle choices such as increased physical activity and healthier sleep habits.20 Related to flextime are the scheduling strategies1of the compressed workweek and job sharing. The compressed workweek is a four-day (or shorter) period 0 in which an employee works 40 hours. Under such a plan, employees typically work 3 weekend. The compressed 10 hours per day for four days and have a three-day workweek reduces the company’s operating expenses 8 because its actual hours of operation are reduced. It is also sometimes used by parents who want to have more 2 of Labor Statistics notes that days off to spend with their families. The U.S. Bureau the following career options provide greater flexibility in scheduling: medical transcriptionist, financial manager, nurse, database administrator, accountant, software developer, physical therapist assistant, paralegal, graphic designer, and private investigator.21 Job sharing occurs when two people do one job. One person may work from 8:00 a.m. to 12:30 p.m.; the second person comes in at 12:30 p.m. and works until 5:00 p.m. Job sharing gives both people the opportunity to work as well as time to fulfill other obligations, such as parenting or school. Thirty percent of companies allow job sharing.22 With job sharing, the company has the benefit of the skills of fer11722_ch10_293-319.indd 311 flextime a program that allows employees to choose their starting and ending times, provided that they are at work during a specified core period compressed workweek a four-day (or shorter) period during which an employee works 40 hours job sharing performance of one full-time job by two people on part-time hours 9/17/08 5:01:25 PM Confirming Pages 312 PART 4 Creating the Human Resource Advantage two people for one job, often at a lower total cost for salaries and benefits than one person working eight hours a day would be paid. Two other flexible scheduling strategies attaining wider use include allowing fulltime workers to work part time for a certain period and allowing workers to work at home either full or part time. Employees at some firms may be permitted to work part time for several months in order to care for a new baby or an elderly parent or just to slow down for a little while to “recharge their batteries.” By 2020, 40 percent of U.S. workers will be caring for an aging parent, and employees are expected to demand benefits that reflect this major shift.23 When the employees return to fulltime work, they are usually given a position comparable to their original full-time position. Other firms are allowing employees to telecommute or telework (work at home a few days of the week), staying connected via computers, modems, and telephones. More than 45 million Americans work from home. Of those who work “at H home,” the average number of places these individuals work is 3.4, and these places I can include home, car, and restaurant or coffee shop.24 Table 10.6 shows the companies in the Fortune 100 Best Companies to Work For with the highest percentage of G telecommuters. Although many employees ask for the option of working at home G for family members, some have discovered that to ease the responsibilities of caring they are more productive at home S without the distractions of the workplace. An assessment of 12 company telecommuting programs, including Apple, AT&T, and , positive productivity changes occurred. Traveler’s the state of California, found that Insurance Company reports its telecommuters to be 20 percent more productive than its traditional employees.25 Other employees, however, have discovered that they are not suited for workingA at home. Human resource management executives are split as to whether telecommuting N helps or hurts employees’ careers. Thirty percent feel telecommuting helps their careers, 25 percent feel that it hurts, while 39 G percent feel it does neither.26 Still, work-at-home programs do help reduce overhead E some companies used to maintain a surplus of costs for businesses. For example, office space but have reduced theLsurplus through employee telecommuting, “hoteling” (being assigned to a desk through a reservation system), and “hot-desking” A but at different times). (several people using the same desk Companies are turning to flexible work schedules to provide more options to employees who are trying to juggle their work duties with other responsibilities and TABLE 10.6 Company Best Companies to Work For Cisco Systems Companies with Most Opportunities for Telecommuters in the Fortune “100 Best Companies to Work For” Booz Allen Hamilton eBay 1 0 3 8 2 Best Companies Rank 6 69 81 S.C. Johnson & Son 27 American Fidelity Assurance 24 Shared Technologies 25 Principal Financial Group 21 Goldman Sachs Yahoo Qualcomm 9 87 8 Source: http://money.cnn.com/magazines/fortune/bestcompanies/2008/benefits/telecommuting.html, (accessed June 2, 2008). fer11722_ch10_293-319.indd 312 9/17/08 5:01:27 PM Confirming Pages Entrepreneurship in Action Matching Workers with Employers Eli Portnoy Business: HireWorkers.com Founded: 2005 Success: Eli Portnoy founded HireWorkers.com in 2005 with $20,000 startup money. The company has done almost $2 million in sales. A large number of low-wage jobs in the United States are filled by Latin American immigrants. Both finding and filling these jobs can be difficult. Jobseekers looking for lowwage jobs such as janitor, housekeeper, dishwasher, and so on often lack access to the Internet. As a result, those H looking to hire these workers have three options: posting a I “help wanted” sign, advertising in print classifieds, or hiring a staffing agency. The last two commonly used options can G be expensive for employers. As a Mexican immigrant himself, G Portnoy understood the problems immigrant jobseekers face and saw an opportunity to fill a void and help both low-wage S , jobseekers and their employers. Portnoy designed HireWorkers.com. Jobseekers are able to fill out HireWorkers.com postcards with their job experience and background information. Portnoy’s company distributes these postcards to a large number of retail locations (a form is also available online for those who do have Internet access). The HireWorkers.com service is free for jobseekers. Employers may use HireWorkers.com to post jobs and to search the company’s database. Fees begin at $69 to post a job for a month and go up to $99 to search the database. Once jobseekers and employers have entered information with HireWorkers.com, the company’s system goes to work. Via patent-pending technology, the company is able to match employers’ requests with appropriate jobseekers in as little as two hours. Once matches have been made, the system automatically sends phone calls to the jobseekers. Portnoy says there are currently around 1 million low-wage jobs available per month in the United States. HireWorkers.com makes filling and finding these jobs easier.27 needs. Preliminary results indicate that A flexible scheduling plans increase job satN isfaction, which, in turn, leads to increases in productivity. Some recent research, G however, has indicated there are potenE tial problems with telecommuting. Some managers are reluctant to adopt the pracL tice because the pace of change in today’s A workplace is faster than ever, and telecommuters may be left behind or actually cause managers more work in helping them stay 1 abreast of changes. Some employers also worry that telecommuting workers create 0 a security risk by creating more oppor3 tunities for computer hackers or equipment thieves. Some employees have found 8 that working outside the office may hurt 2 career advancement opportunities, and some report that instead of helping them balance work and family responsibilities, telecommuting increases the strain by blurring the barriers between the office and home. Co-workers call at all hours, and telecommuters are apt to continue to work when they are not supposed to (after regular business hours or during vacation time).28 After implementing its Initiative for the Retention and Advancement of Women, the accounting firm Deloitte can now boast that it has the highest percentage of women partners among America’s Big Four public accounting firms. The program has been successful because many of the initiatives are aimed at both women and men. For example, Deloitte is now testing a “mass career customization” program that allows employees to increase or decrease their work responsibilities as their personal needs change over the course of their careers. Importance of Motivational Strategies Motivation is more than a tool that managers can use to foster employee loyalty and boost productivity. It is a process that affects all the relationships within an 313 fer11722_ch10_293-319.indd 313 9/17/08 5:01:29 PM Confirming Pages 314 PART 4 Creating the Human Resource Advantage organization and influences many areas such as pay, promotion, job design, training opportunities, and reporting relationships. Employees are motivated by the nature of the relationships they have with their supervisors, by the nature of their jobs, and by characteristics of the organization. Even the economic environment can change an employee’s motivation. In a slow growth or recession economy, sales can flatten or decrease and morale can drop because of the need to cut jobs. The firm may have to work harder to keep good employees and to motivate all employees to work to overcome obstacles.29 New rewards or incentives may help motivate workers in such economies. Motivation tools, then, must be varied as well. Managers can further nurture motivation by being honest, supportive, empathetic, accessible, fair, and open. Motivating employees to increase satisfaction and productivity is an important concern for organizations seeking to remain competitive in the global marketplace. H I G So You Think You May Be GoodG at Motivating a Workforce S , If you are good at mediation, smoothing conflict, and have (bonuses, raises, and perks) may not be the same as what a good understanding of motivation and human relations theories, then you might be a good leader, human resource manager, or training expert. Most organizations, especially as they grow, will need to implement human relations programs. These are necessary to teach employees about sensitivity to other cultures, religions, and beliefs, as well as for teaching the workforce about the organization so that they understand how they fit in the larger picture. Employees need to appreciate the benefits of working together to make the firm run smoothly, and they also need to understand how their contributions help the firm. To stay motivated, most employees need to feel like what they do each day contributes something of value to the firm. Disclosing information and including employees in decision-making processes will also help employees feel valuable and wanted within the firm. There are many different ways employers can reward and encourage employees. However, employers must be careful when considering what kinds of incentives to use. Different cultures value different kinds of incentives more highly than others. For example, a Japanese worker would probably not like it if she were singled out from the group and given a large cash bonus as reward for her work. Japanese workers tend to be more group oriented, and therefore anything that singles out individuals would not be an effective way of rewarding and motivating. American workers, on the other hand, are very individualistic, and a raise and public praise might be more effective. However, what might motivate a younger employee fer11722_ch10_293-319.indd 314 motivates a more seasoned, experienced, and financially successful employee (recognition, opportunity for greater A influence, and increased training). Motivation is not an easy thing to understand, especially as firms become N more global and more diverse. GAnother important part of motivation is enjoying where you E work and your career opportunities. Here is a list of the best places to do business and start careers in the L States, according to Forbes magazine. Chances United are, A workers who live in these places have encountered fewer frustrations than those places at the bottom of the list and, therefore, would probably be more content with where 1 they work.30 Best 0 Places for Business and Careers 3 Rank 8 2 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Metro Area Raleigh, NC Boise, ID Fort Collins, CO Des Moines, IA Lexington, KY Atlanta, GA Richmond, VA Olympia, WA Spokane, WA Knoxville, TN Job Growth Rank Metro Area Population (in thousands) 21 13 80 60 110 69 75 22 36 84 1,034 585 281 543 443 5,266 1,211 240 452 673 9/17/08 5:01:59 PM Confirming Pages CHAPTER 10 Motivating the Workforce 315 Review Your Understanding Define human relations, and determine why its study is important. Human relations is the study of the behavior of individuals and groups in organizational settings. Its focus is what motivates employees to perform on the job. Human relations is important because businesses need to understand how to motivate their increasingly diverse employees to be more effective, boost workplace morale, and maximize employees’ productivity and creativity. Summarize early studies that laid the groundwork for understanding employee motivation. H Time and motion studies by Frederick Taylor and others I helped them analyze how employees perform specific work tasks in an effort to improve their productivity. TaylorG and the early practitioners of the classical theory of motivation felt that money and job security were the primaryG motivators of employees. However, the Hawthorne stud-S ies revealed that human factors also influence workers’ , behavior. Compare and contrast the human-relations theories of Abraham Maslow and Frederick Herzberg. A Abraham Maslow defined five basic needs of all people and arranged them in the order in which they must beN satisfied: physiological, security, social, esteem, and self-G actualization. Frederick Herzberg divided characteristics of the job into hygiene factors and motivational factors.E Hygiene factors relate to the work environment and mustL be present for employees to remain in a job. Motivational factors—recognition, responsibility, and advancement—A relate to the work itself. They encourage employees to be productive. Herzberg’s hygiene factors can be compared to Maslow’s physiological and security needs; motiva-1 tional factors may include Maslow’s social, esteem, and 0 self-actualization needs. work but seek out responsibility to satisfy their higherorder needs. Theory Z stresses employee participation in all aspects of company decision making, often through participative management programs and self-directed work teams. According to equity theory, how much people are willing to contribute to an organization depends on their assessment of the fairness, or equity, of the rewards they will receive in exchange. Expectancy theory states that motivation depends not only on how much a person wants something but also on the person’s perception of how likely he or she is to get it. Describe some of the strategies that managers use to motivate employees. Strategies for motivating workers include behavior modification (changing behavior and encouraging appropriate actions by relating the consequences of behavior to the behavior itself) and job design. Among the job design strategies businesses use are job rotation (allowing employees to move from one job to another to try to relieve the boredom associated with job specialization), job enlargement (adding tasks to a job instead of treating each task as a separate job), job enrichment (incorporating motivational factors into a job situation), and flexible scheduling strategies (flextime, compressed work weeks, job sharing, parttime work, and telecommuting). Critique a business’s program for motivating its sales force. Using the information presented in the chapter, you should be able to analyze and defend Eagle Pharmaceutical’s motivation program in “Solve the Dilemma” on page 317 including the motivation theories the firm is applying to boost morale and productivity. 3 Investigate various theories of motivation, including Theories X, Y, and Z; equity theory; and expectancy theory.8 Douglas McGregor contrasted two views of management:2 Theory X (traditional) suggests workers dislike work, while theory Y (humanistic) suggests that workers not only like Revisit the World of Business 1. 2. In what ways do founders Lisa Calkins and John Basso motivate employees for the long term? How does Amadeus’s office building help motivate employees? fer11722_ch10_293-319.indd 315 3. What could other companies learn from Amadeus’s performance in relation to its treatment of employees? 9/17/08 5:02:02 PM Confirming Pages 316 PART 4 Creating the Human Resource Advantage Learn the Terms behavior modification 309 classical theory of motivation compressed workweek 311 equity theory 307 esteem needs 303 expectancy theory 308 extrinsic rewards 297 flextime 311 human relations 296 299 hygiene factors 303 intrinsic rewards 297 job enlargement 310 job enrichment 310 job rotation 309 job sharing 311 Maslow’s hierarchy 301 morale 297 motivation 296 Check Your Progress 1. Why do managers need to understand the needs of their employees? 2. Describe the motivation process. 3. What was the goal of the Hawthorne studies? What was the outcome of those studies? 4. Explain Maslow’s hierarchy of needs. What does it tell us about employee motivation? 5. What are Herzberg’s hygiene and motivational factors? How can managers use them to motivate workers? 6. Contrast the assumptions of Theory X and Theory Y. Why has Theory Y replaced Theory X in management today? Get Involved 1. Consider a person who is homeless: How would he or she be motivated and what actions would that person take? Use the motivation process to explain. Which of the needs in Maslow’s hierarchy are likely to be most important? Least important? 2. View the video Cheaper by the Dozen (1950) and report on how the Gilbreths tried to incorporate their passion for efficiency into their family life. motivational factors 304 physiological needs 302 security needs 302 self-actualization needs 303 social needs 303 Theory X 304 Theory Y 305 Theory Z 306 H I 7. G What is Theory Z? How can businesses apply Theory Z to the workplace? G 8. Identify and describe four job-design strategies. S Name and describe some flexible scheduling 9. How can flexible schedules help , strategies. motivate workers? 10. Why are motivational strategies important to both A employees and employers? N G E L A 3. What events and trends in society, technology, and 1 economics do you think will shape human relations management theory in the future? 0 3 8 2 Build Your Skills MOTIVATING Background: Do you think that, if employers could make work more like play, employees would be as enthusiastic about their jobs as they are about what they do in their leisure time? Let’s see where this idea might take us. fer11722_ch10_293-319.indd 316 Task: After reading the “Characteristics of PLAY,” place a 冑 in column one for those characteristics you have experienced in your leisure time activities. Likewise, check column three for those “Characteristics of WORK” you have experienced in any of the jobs you’ve held. 9/17/08 5:02:04 PM Confirming Pages CHAPTER 10 All That Apply Characteristics of PLAY Motivating the Workforce All That Apply Characteristics of WORK 1. New games can be played on different days. 1. Job enrichment, job enlargement, or job rotation. 2. Flexible duration of play. 2. Job sharing. 3. Flexible time of when to play. 3. Flextime, telecommuting. 4. Opportunity to express oneself. 4. Encourage and implement employee suggestions. 5. Opportunity to use one’s talents. 5. Assignment of challenging projects. 6. Skillful play brings applause, praise, and recognition from spectators. 7. Healthy competition, rivalry, and challenge exist. 8. Opportunity for social interaction. 9. Mechanisms for scoring one’s performance are available (feedback). 10. Rules ensure basic fairness and justice. Discussion Questions 1. What prevents managers from making work more like play? 2. Are these forces real, or imagined? H I G G S , A N G E L A 317 6. Employee-of-the-month awards, press releases, employee newsletter announcements. 7. Production goals with competition to see which team does best. 8. Employee softball or bowling teams. 9. Profit sharing; peer performance appraisals. 10. Use tactful and consistent discipline. 3. What would be the likely (positive and negative) results of making work more like play? 4. Could others in the organization accept such creative behaviors? Solve the Dilemma 1 Eagle Pharmaceutical has long been0 recognized for its innovative techniques 3 for motivating its salesforce. It features the salesperson who has been the most8 successful during the previous quarter in the company newsletter, “Touchdown.” The salesperson2 MOTIVATING TO WIN also receives a football jersey, a plaque, and $1,000 worth of Eagle stock. Eagle’s “Superbowl Club” is for employees who reach or exceed their sales goal, and a “Heisman Award,” which includes a trip to the Caribbean, is given annually to the top 20 salespeople in terms of goal achievement. Eagle employs a video conference hook-up between the honored salesperson and four regional sales managers to capture some of the successful tactics and strategies fer11722_ch10_293-319.indd 317 the winning salesperson uses to succeed. The managers summarize these ideas and pass them along to the salespeople they manage. Sales managers feel strongly that programs such as this are important and that, by sharing strategies and tactics with one another, they can be a successful team. Discussion Questions 1. Which motivational theories are in use at Eagle? 2. What is the value of getting employees to compete against a goal instead of against one another? 3. Put yourself in the shoes of one of the four regional sales managers and argue against potential cutbacks to the motivational program. 9/17/08 5:02:09 PM Rev. Confirming Pages 318 PART 4 Creating the Human Resource Advantage Build Your Business Plan MOTIVATING THE WORKFORCE As you determine the size of your workforce, you are going to face the reality that you cannot provide the level of financial compensation that you would like to your employees, especially when you are starting your business. Many employees are motivated by other things than money. Knowing that they are appreciated and doing a good job can bring great satisfaction to employees. Known as “stroking,” it can provide employees with internal gratification that can be valued even more that financial incen- See for H I G Yourself Videocase TAKING VACATIONS CAN IMPROVE YOURG CAREER S they felt more enthusiastic about their jobs. There are also It might surprise you to learn that about the 36 percent of workers use little or none , health benefits to consider of the reduced stress and of their paid vacation time. Much about the workplace contributes to this issue. Many companies, in America at least, maintain a work, work, work, 24/7 mind-set, causing employees to fear that taking time off will indicate that they lack the dedication needed to maintain or move up in their positions. Another major deterrent for the employee wary of taking a vacation is the amount of work that will be waiting upon his or her return. Some employees rack up so many e-mails and voice-mail messages that they are unable to get their main work done for days as they play catch-up. Not taking vacation time can be dangerous for both employers and employees. On the employer side, employees who lack energy and motivation can use up valuable work time puttering around. Tired employees can also make costly mistakes. On the employee side, not taking vacations can lead to burnout and serious mental and physical illness. If an employee gets ill due to the increased stress, this also has a negative impact on the employer. Vacation and down time have long been valued in other parts of the world such as Europe, Canada, and Australia, and now a small number of American companies are beginning to realize the benefits of employees taking their allotted vacation time, thanks to research to support these benefits. The Families and Work Institute states that employees should always take their vacations and that vacations lasting more than a few days create greater benefit. The Institute claims that employees who take vacations are more productive and more creative at work. A recent Expedia.com survey reported that 80 percent of those surveyed claimed that after taking a true vacation fer11722_ch10_293-319.indd 318 tives. Listening to your employees’ suggestions, involving them in discussions about future growth and valuing their input, can go a long way toward building loyal employees and reducing employee turnover. Think about what you could do in your business to motivate your employees without spending much money. Maybe you will have lunch brought in once a week or offer tickets to a local sporting event to the employee with the most sales. Whatever you elect to do, you must be consistent and fair with all your employees. extra rest time gained during a vacation. However, another problem presents itself. Even when one A takes a vacation, in the age of the Internet and remote access it’s challenging to truly get away. Rosemary HaefNof CareerBuilder.com suggests that advanced planning ner may be the ticket to a true vacation, and Deb Perelman of G eWeek.com offers the following advice: • E Let the office know about your vacation well in L advance. • Schedule vacations at times when you’re less likely A to be needed and when crises (if these are ever possible to predict) are less likely to occur, such as between major projects. 1 • Schedule one specific time to check in with the 0 office and stick to it. Make sure everyone else sticks to it as well. 3 • Make use of your “Out of the Office” auto reply on 8 both e-mail and voice-mail. This may cut down a bit on the number of messages waiting upon your return. 2For those who compulsively check in with the office, certain hotels offer to lock up cell phones and PDAs! A number of companies are beginning to encourage employees to take advantage of vacation time. Here are a few examples: • Electronics giant Sanyo gives employees who volunteer for social causes during certain workdays the chance to earn up to six extra paid days off annually. • Software company Hyperion allows its employees to earn Extended Paid Time Off if they remain employed 9/19/08 11:24:20 AM Confirming Pages CHAPTER 10 Motivating the Workforce 319 Discussion Questions with the company continuously from one year to the next. 1. What are some reasons employees do not take all of the vacation time allotted to them? • The wireless provider T-Mobile allows employees to begin earning paid vacation time as soon as they 2. What can employers do to actively encourage start working for the company. In many companies, employees to take their vacation time? vacation time is earned only after one or more years 3. What are the benefits of employee vacations, both to with the company. the employer and to the employee? Although there is often an imbalance between the work Remember to check out our Online Learning and personal lives of many employees throughout the Center at www.mhhe.com/ferrell7e. United States, research clearly states that both employers and employees would benefit by each person taking his or her allotted vacation time. Health, productivity, and creativity are all given a boost when employees take time H to relax and recuperate.31 I G G S , A N G E L A 1 0 3 8 2 fer11722_ch10_293-319.indd 319 9/17/08 5:02:32 PM Confirming Pages chapter 11 CHAPTER OUTLINE Introduction The Nature of Human Resources Management Managing Human Resources Planning for Human Resources Needs Recruiting and Selecting New Employees Recruiting Selection Legal Issues in Recruiting and Selecting Developing the Workforce Training and Development Assessing Performance Turnover Compensating the Workforce Financial Compensation Benefits Managing Unionized Employees Collective Bargaining Resolving Disputes The Importance of Workforce Diversity OBJECTIVES H I G G S , After reading this chapter, you will be able to: A N Summarize the processes of recruiting and selecting human G resources for a company. E trained and their performance appraised. Discuss how workers are L Identify the types of turnover companies may experience, and explain why turnover isAan important issue. • Define human resources management, and explain its significance. • • • • Specify the various ways a worker may be compensated. • Discuss some of the issues 1 associated with unionized employees, including collective bargaining and dispute resolution. 0 3 Assess an organization’s efforts to reduce its workforce size and 8 manage the resulting effects. 2 • Describe the importance of diversity in the workforce. • The Characteristics of Diversity Why Is Diversity Important? The Benefits of Workforce Diversity Affirmative Action fer11722_ch11_320-358.indd 320 9/22/08 2:07:20 PM H I G G Managing the Workforce during Slow Times S Developing and compensating the workforce is, challenging in good economic times but even more difficult during an economic slowdown. During the most recent downturn in the economy, many workers are faced with A a squeeze on their pay and benefits. The downturn, combined with rapidly N placed many employincreasing energy prices and declining home values, G have managed to keep ees’ standard of living in jeopardy. Millions of people their jobs, yet they have seen their pay slashed, E or they have lost important benefits. L While mergers and layoffs reduce the payroll for many companies, nearly A all employees who receive at least part of their compensation in the form of commissions suffer a snowball pay decline, affecting a number of industries. If a saleswoman receives a smaller commission, 1 for example, she is likely to 0 the wait staff’s salary. tip less at her next restaurant meal, in turn lowering It is estimated that 25 million employees at just the 3 1,500 largest companies receive some type of variable pay. This means at 8 least part of their pay is based on performance, commissions, or other nonguaranteed compensa2 tion. For example, there are 1.25 million real estate agents and 229,100 new car salespersons whose income depends on sales. In the recent economic downturn, these two industries saw a significant sales drop. Not included in these numbers are the 20 million individuals who the Small Business Administration says own their own businesses but have no employees. In addition, there are nearly 5 million small businesses that employ 10 or fewer workers, often using variable pay. With a downturn in the economy, everything slows down, including the time it takes to execute a business plan or gain partners ENTER THE WORLD OF BUSINESS Confirming Pages continued fer11722_ch11_320-358.indd 321 9/22/08 2:07:20 PM Confirming Pages to help financially as everyone becomes more cautious. In these situations, it is important to reassure good workers about their performance and how the organization plans to compensate them in the long run. While some workers may choose to keep their position in spite of pay cuts, the very best employees may always have other options. Fair treatment of employees includes honoring compensation contracts and not violating labor law. For example, the Fair Labor Standards Act in 2004 established guidelines that employees must make more than $455 a week to be ineligible for overtime pay, a sharp increase over the previous benchmark of $250 a week. As a result, 1.3 million workers suddenly qualified for extra pay. The number of overtime lawsuits has exploded over the last few years. This means employers can get caught off guard during slow times by pushing employees to work overtimeHwithout pay. With escalating gas prices, I some companies try to help employees save money by allowing them to work G four 10-hour days instead of five 8-hour days. A flexible schedule that helps G to eliminate one day of commuting improves the environment and improves morale. Some employers try to help workers S cope with higher gas prices by telecommuting (working from their home). , can do to appreciate and help employees durAnything that an organization ing a slow time in the economy can pay results in the long run.1 A N G E Introduction L such loyal and motivated employees, but these Of course, most firms do not recruit are vital tasks in any organization. A If a business is to achieve success, it must have sufficient numbers of employees who are qualified and motivated to perform the required duties. Thus, managing the quantity (from hiring to firing) and quality (through training, compensating, 1 and so on) of employees is an important business function. Meeting the challenge of managing increasingly diverse human resources effectively can give a company a0competitive edge in a global marketplace. This chapter focuses on the 3 quantity and quality of human resources. First we look at how human resources managers plan for, recruit, and select qualified employ8 ees. Next we look at training, appraising, and compensating employees, aspects of 2 human resources management designed to retain valued employees. Along the way, we’ll also consider the challenges of managing unionized and diverse employees. human resources management (HRM) all the activities involved in determining an organization’s human resources needs, as well as acquiring, training, and compensating people to fill those needs The Nature of Human Resources Management Chapter 1 defined human resources as labor, the physical and mental abilities that people use to produce goods and services. Human resources management (HRM) refers to all the activities involved in determining an organization’s human resources needs, as well as acquiring, training, and compensating people to fill those needs. Human resources managers are concerned with maximizing the satisfaction 322 fer11722_ch11_320-358.indd 322 9/25/08 4:53:37 PM Confirming Pages CHAPTER 11 Managing Human Resources 323 of employees and motivating them to meet organizational objectives productively. In some companies, this function is called personnel management. HRM has increased in importance over the last few decades, in part because managers have developed a better understanding of human relations through the work of Maslow, Herzberg, and others. Moreover, the human resources themselves are changing. Employees today are concerned not only about how much a job pays; they are concerned also with job satisfaction, personal performance, leisure, the environment, and their opportunities for advancement. Once dominated by white men, today’s workforce includes significantly more women, African Americans, Hispanics, and other minorities, as well as disabled and older workers. Human resources managers must be aware of these changes and leverage them to increase the productivity of their employees. Every manager practices some of the functions of human resources management at all times. H I Planning for Human Resources Needs G When planning and developing strategies for reaching the organization’s overall objecGhuman resources necessary to tives, a company must consider whether it will have the carry out its plans. After determining how many employees S and what skills are needed to satisfy the overall plans, the human resources department (which may range from , a large corporation) ascertains the owner in a small business to hundreds of people in how many employees the company currently has and how many will be retiring or otherwise leaving the organization during the planning period. With this informaA tion, the human resources manager can then forecast how many more employees the company will need to hire and what qualifications they N must have, or determine it layoffs are required to meet demand more efficiently. HRM planning also requires G forecasting the availability of people in the workforce who will have the necessary qualifications to meet the organization’s future needs.EThe human resources manager then develops a strategy for satisfying the organization’s L human resources needs. Next, managers analyze the jobs within the organization so that they can match A Job analysis determines, the human resources to the available assignments. through observation and study, pertinent information about a job—the specific tasks that comprise it; the knowledge, skills, and abilities necessary to perform if; and the environment in which it will be performed.1Managers use the information obtained through a job analysis to develop job descriptions and job specifications. 0 A job description is a formal, written explanation of a specific job that usually 3 waiting on customers), relaincludes job title, tasks to be performed (for instance, tionship with other jobs, physical and mental skills8required (such as lifting heavy boxes or calculating data), duties, responsibilities, and working conditions. A job 2 for a specific job, in terms of specification describes the qualifications necessary education (some jobs require a college degree), experience, personal characteristics (ads frequently request outgoing, hardworking persons), and physical characteristics. Both the job description and job specification are used to develop recruiting materials such as newspaper, trade publications, and online advertisements. Recruiting and Selecting New Employees job analysis the determination, through observation and study, of pertinent information about a job—including specific tasks and necessary abilities, knowledge, and skills job description a formal, written explanation of a specific job, usually including job title, tasks, relationship with other jobs, physical and mental skills required, duties, responsibilities, and working conditions job specification a description of the qualifications necessary for a specific job, in terms of education, experience, and personal and physical characteristics After forecasting the firm’s human resources needs and comparing them to existing human resources, the human resources manager should have a general idea of how many new employees the firm needs to hire. With the aid of job analyses, fer11722_ch11_320-358.indd 323 9/22/08 2:08:00 PM Confirming Pages 324 PART 4 Creating the Human Resource Advantage management can then recruit and select employees who are qualified to fill specific job openings. Recruiting Recruiting means forming a pool of qualified applicants from which management can select employees. There are two sources from which to develop this pool of applicants—internal and external. Internal sources of applicants include the organization’s current employees. Many firms have a policy of giving first consideration to their own employees—or promoting from within. The cost of hiring current employees to fill job openings is inexpensive when H compared with the cost of hiring from external sources, I it is good for employee morale. However, hiring and from G within creates another job vacancy to be filled. External sources consist of advertisements in G newspapers and professional journals, employment agencies, colleges, vocational schools, recomS mendations from current employees, competing , unsolicited applications, and online. There firms, are hundreds of Web sites where employers can post job openings and job seekers can post their A résumés, including Monster.com, Hotjobs.com, CareerBuilder.com., and Theladders.com. EmployN For more than 50 years, the U.S. Army has recruited soldiers from American colleges around the country. In fact, the Army generates ers looking for employees for specialized jobs can G more officers through its Reserve Officers Training Corps (ROTC) use more focused sites such as computerwork.com. college program than the U.S. Military Academy. E Increasingly, companies can turn to their own Web sites for potential candidates: Nearly all of the Fortune 500 firms provide career L Web sites where they recruit, provide employment information, and take applicarecruiting A forming a pool of tions. Using these sources of applicants is generally more expensive than hiring qualified applicants from within, but it may be necessary if there are no current employees who meet from which the job specifications or there are better-qualified people outside of the organimanagement can select zation. Recruiting for entry-level 1 managerial and professional positions is often employees carried out on college and university campuses. For managerial or professional 0 positions above the entry level, companies sometimes depend on employment 3 sometimes called headhunters, which specialize agencies or executive search firms, in luring qualified people away 8 from other companies. Selection selection the process of collecting information about applicants and using that information to make hiring decisions fer11722_ch11_320-358.indd 324 2 Selection is the process of collecting information about applicants and using that information to decide which ones to hire. It includes the application itself, as well as interviewing, testing, and reference checking. This process can be quite lengthy and expensive. Procter & Gamble, for example, offers a recruiting process that gives a realistic picture of skills, as well as strengths and interests. The process often starts with completing an online application tied to a matching process with open jobs. If your application does match an open position, then you are invited to complete an online questionnaire and a problem-solving test. If the results are positive, you then have an interview. P&G provides practice tests online for applicants.2 Such rigorous scrutiny is necessary to find those applicants who can do the work exp...
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Running Head: PATAGONIA CASE STUDY

PATAGONIA CASE STUDY

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PATAGONIA CASE STUDY

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PATAGONIA CASE STUDY

1. In a narrative format discuss the key facts and critical issues presented in the case.
The company’s focus on its employees and their role to change the world dominates the
whole case. The company has established and is supporting many environmental conservation
movements throughout its entire life in existence, and it is purposed to keep this focus. The
company’s founders are more family oriented than “real business.” It takes their employees
with their entire existence at heart and has even established children care facility to ensure
their employees’ children are cared for and remain close to their children. The company
encourages its employees to give enough attention to their families besides their job
assignments. The company has built a very casual relationship environment, and it encourages
the employees to keep their true nationalities within or without the workplaces (Ferrell, Hirt,
and Ferrell, 2009).
In its campaign to take care of the environment, Patagonia offers one percent of its profits
to the grass root environmental organizations. Besides, Patagonia also covers sixty days of
each employee’s working year and allows them to take part in grass root development
activities while expecting a report on their operations. This approach has attracted critics who
claim Patagonia’s business manner are unusual, but the company still maintains these. These
ways of business in Patagonia attracts about nine hundred applicants for every vacancy giving
it an opportunity to choose the one the one that best fits it the system. The company chooses
its employees based on ability and dedication to foster the company’...


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