MGT 420 Human Resource Management Exam 1

What is HRM?

The application of organizational behavior principles to organizations with the goal of improving attitudes and behaviors of employees

Does HRM matter lead to a competitive advantage?

an organizations has a sustainable competitive advantage if it is better than competitors at something and can hold that advantage over a prolonged period of time

Resource-based view

Resource is valuable when rare and difficult to imitate

Resources include

• financial

• physical

• interpersonal

Are good people rare?

Yes depending on the economy (rarer when economy is good)

Are good people inimitable?

Yes because

• the create specialized knowledge about the job

• they create culture

• they make numerous small decisions

• none of these can be copied

Case studies

• we could examine companies that do well finanically and see whether they do a good job of managing HR

• we could examine companies that struggle financially and see if they do a poor job or managing HR

Quantitative Analysis

we could also look at companies who have been recognized for their HRM quality, to see if their practives have seemed to create a sustainable competitive advantage

Quantitative Analysis example

are the 100 best more profitable than similar companies in those industries?

• study found a “matched firm” for each of the 100 best of 1998

  • matched firms were similar in size and industry but never made the list

• the 100 best firms outperformed their matches over a five year period

Who does HRM?

If you are in charge of employees then you will perform many HR tasks yourself

-Performance management

-Training

-Recruitment and selection

Your efforts may supplement or even replace this of the HR department

The changing role of HRM

• Historically viewed as one of the less important organizational functions

• But, HRM has become more important in recent years

• Most importantly, the HR department has become more involved in strategic planning

Old role

Cost center

• keep track of forms

• policy and procedure enforcement

• payroll and insurance

• cost reduction oriented

• example: putting new employees through orientation through orientation with videotape and a package of forms

New role

Strategic partner

• employee development

• integration with the core operations of the organization

• change management

• results oriented

• example: developing a program to select employees for a dynamic work environment

Recapping HRM

• HR can provide competitive advantage

• HR is no longer seen as the party planning committee

• most companies HR has a seat at the table

• there is a chief human resources officer

• decisions are based on data- similar to marketing and finance

• companies that get it integrate HR into the core aspects of the business

Job analysis definition

the process of getting detailed information about jobs in organizations

Importance of job analysis

• before you can know

  • what kind of people to recruit and select

  • what to train them on

  • what basis to evaluate and compensate them

  • you must understand the job they will perform

Job description

identify the essential tasks, duties, and responsibilities (TDRs) that a job entails

Job Specification

come up with knowledge, skills, abilities, and other factors needed to perform the most important tasks. In contrast to TDR’s, KSAO’s are characteristics of people and are not directly observable.

KSAO’s

Knowledge: a persons theoretical understanding, academic background, and specific expertise in a field. :Know what Trainable

Skills: practical, learned abilities that enable someone to perform tasks: Know how Trainable

Abilities: innate or developed personal attributes that allow for effectiveness in a role. :Can do Less trainable (born with)

Other: personal attributes including interests, personality traits, and or values: Less trainable (born with)

Job analysis- job description

Step 1: Divide a job into 4-5 major dimensions

Step 2: List 2 key tasks within each of those dimensions

Step 3: rate the tasks on frequency and importance

Step 4: Use the most frequent and important tasks to define the job

Example of KSAO’s

I can know what is wrong with my computer but not have the skills to fix it

• K vs. S

I can be taugh to read a map but still not have a good sense of direction

• S vs. A

O*NET

The occupational information network: an online resource that describes the tasks involved in many jobs, along with their KSAO

Government database by the US department of labor. it replaces an earlier resocue called the dictionary of occupational titles

How do we use this info?

Recruitment: the important tasks get grouped into a job description that defines the job. the accompanying KSAO’s are included in the job posting

Selection: the KSAO’s become the things we look for in resumes, references, interviews, ability tests, personality tests

Legal issues in selection: important tasks become essentail job functions under the americans with disabilities act. companies can refuse to hire disabled applications if they cannot perform these functions (vs. “marginal job functions”) with some exceptions

Training: we design training to improve the K’s and S’s inherent in important tasks. they also form the basis for our evaluation of training success

Performance management: performance of the important tasks and KSAOs is what gets measured with our evaluation instruments

Compensation: the KSAO’s become compensable factors used in job evaluation to assign a base salary to a given job. the rarer the KSAO, the more money the organization must pay for it.

Job design

the process of defining the way work will be performed and the tasks that will be required in a given job

Motivational approach to job design

Human resources are easier to manage if jobs are designed to be intrinsically enjoyable

Jobs are more intrinsically enjoyable when work tasks are more challenging fulfilling

Five “core job characteristics” combine to make some jobs more rewarding than

Motivational approach (job characteristics model)

Job redsign: changing job characteristics

Job enlargement: broadening the types of tasks performed

• to make jobs less repetitive and more interesting

Job enrichment: empowering employees by adding more decision-making authority to their jobs

Flexible work schedules:

• flextime: control over hours worked

• telework: working in other locations

• compressed work week

Efficiency

• Roots in classical industrial engineering: study of jobs to find simplest way to structure work to maximize efficiency

• Emphasis on reduction of complexity of work

  • Less training; allows almost anyone to be trained quickly and easily perform the job

• Used for highly specialized and repetitive jobs

Safety and Health

• Based in ergonomics

• Structure job tasks and the work environment to reduce physical fatigue and health problems

Mental Capacity

Similar to safety and health, but focuses on mental (cognitive) capacities and limitations rather than physical

Examples

• decrease amount of information and memorization

• increase lighting and make visual displays clear

• provide easy to follow instructions

Trade offs in job design

*see page 57 of ppt

Key question: Are some of the job design approaches at odds with one another?

Skill Variety

Different tasks/skills/talents in one’s job

High: owner operator of garage who does electrical repair, rebuilds engines, does body work, and interacts with customers

Low: A bodyshop worker who sprays paint 8 hours a day

Task Identity

Completion of whole piece of work

High: A cabinetmaker who designs a piece of furniture, selects the wood, builds the object, and finishes it to perfection

Low: A worker in a furniture factory who operates a machines to make table legs

Task Significance

The impact of the job on others

High: Nursing sick patients in a hospital intensive care unit

Low: Sweeping hospital floors

Meaningfulness of work (psychological state)

the degree to which work tasks are viewed as something that “counts” in the employees system of philosophies and beliefs

—>Skill Variety, Task Identity, and Task Significance

Autonomy

Level of discretion in decision making

High: A telephone installer who schedules their own workday and decides the best techniques for a given installation

Low: A telephone operator who must handle calls as they come according to a routine, highly specified procedure

Responsibility for outcomes (psychological state)

the degree to which employees feel that they are “key drivers” of the quality of the work

—>Autonomy

Feedback

Amount of direct and clear information on performance

High: An electronics factory worker who assembles a radio and tests it to determine if it operates correctly

Low: An electronics facory worker who assembles a radio and then routes it to a quality control inspector who tests and adjusts it

Knowledge of results (psychological state)

the extent to which employees know how well or how poorly they are doing

—>Feedback

Planning

Planning encompasses the answers to the following questions

• What kind of human resources will we need?

• What kind of human resources will we have?

• How do we bring those into alignment?

  • Demand forecasting

  • Supply forecasting

Demand forecasting

tells us how much labor we will need. Organizations often use a combination of all three: benchmarking, statistical methods, and educated guesses

Benchmarking

Tells us how much labor we will need

How much labor does a business like ours use? is there any reason why we may differ?

Statistical methods

Example: Sales this year correlate with labor demand next year

• leading indicators: economic variables that suggest future conditions (price of corn in beef industry)

• Pro: often much more accurate than subjective judgement

• Con: Many important events in the labor market have no hsitorival precedent (covid 19)

Educated guesses

Take into account other factors (new product launches, changes with competitors)

Supply forecasting

How much labor will we have?

• Requires us to anticipate how people will move up, through, and out of the company

• Examine our business environment by asking these questions

  • Whats the unemployment rate?

  • How does that break down by age, gender, and background of the people we would target?

  • Is there seasonality in those rates?

Transitional matrix

Lists jobs categories held in one period (eg sales manager) and shows the proportion of employees in each of those job categories in the future

Answers 2 question

1. Where did people who were in each job category go?

2. Where did people now in each job category come from?

Benefits of a transition matrix

Provides snapshot of movement of people within an organizaition

Can identify jobs that appear to be dead ends or have excessive exit rates/terminations

indicates opportunities to solve those problems through changing HR policies/practices

How to correct a surplus?

Downsizing

The planned elimination of large numbers of personnel with the goal of enhancing the organization’s competitiveness,

85% of Fortune 1000 firms downsized between 1987 and 2001, in order to reduce labor costs, take advantage of new technologies, and decrease bureaucracy due to use of work teams or because of corporate mergers, and pave way for use of foreign labor

80% of these firms were profitable at the time of the layoffs

Why doesn’t it work?

• The wrong people may be let go, taking with them vital parts of the organizational memory

• Many downsizing cut too deep, causing the organization to replace workers and incur those expenses

• The effects on so-called “survivors” can be severe

• It can significantly alter the culture and climate of the organization

Temporary employees

About 5-10% of the workforce are temp employees

Advantages:

• saves benefits costs

• reduces need for selection

• reduces need for training

• these employees are unhindered by existing culture and may have valuable experiences from other firms

Disadvantages

• may cause friction with regular employees

• A 2 tier system may be created

• extra role behaviors will be limited

Outsourcing

Using an outside firm to perform some service rather than doing it “in house”

Advantages:

• take advantage of economies of scales

• foreign labor may have different wage standards

Disadvantages

• no control over performance mgt and compensation

• may have long term effects on economy

• can be bad for employee morale

Outsourcing has gradually shifted from being a strategy for correcting a shortage to a permanent means of structuring work

Such outsourcing often takes the form of offshoring as job functions are completed over seas

How to correct a shortage

Recruitment

The practices and activities firms use to identify and attract potential employees

Recruitment is used to initially staff an organization, to replace workers, and to cope with a labor shortage

Recruitment achievement indicators

Three goals:

1. Attract a lot of applicants

2. Attract applicants who “fit” the position

3. Increase likelihood of offer acceptances

4 recruitment influences

Vacancy characteristics

Personnel policies

Recruitment sources

Recruiter characteristics

Vacancy characteristics

What the job will provide

• job security

• advancement opportunites

• core job characteristics

• pay and benefits

• location and travel requirements

The most important predictor of whether a candidate selects the job

Personnel policies

Second biggest factor

What policies affect vacancy desirability?

• Lead-the-market pay

  • Paying more than current market wages

• Promoting from within

  • Opportunities for advancement

• Image advertising

  • Promoting the organization as a good place to work

Recruitment sources

Internal

• Promote from within

External

• Advertisements

• Employment agencies

  • Government, headhunters

• Colleges and universities

  • Biggest source for entry-level positions

  • Complemented by internship programs

• Electronic recruiting

• Referrals

  • usually results in a good fit

Recruitment sources pt 2

Advantages

• Internally: Cheaper and faster

• Externally: Brings in fresh ideas

  Disadvantages

• Internally: Not practical in smaller firms

• Externally: Riskier

Yield ratios

Expresses the percentage of applicants who successfully move from one stage of the recruitment and selection process to the next

Cost per hire

The total amount of money spent to fill a job

The cost of using a particular recruiting source/number of people hired to fill that type of vacancy

Recruiter Characteristics

• Small impact on job acceptance

• Larger impact on decision to accept a second interview

• Rarely trained (and can sometimes have a strong negative effect as a result)

• More effective if recruiting function separated from selection function

Recruiter characteristics

How to enhance recruiter impact

• provide timely feedback

• Avoid offensive behavior

• Recruit with teams rather than individual recruiters

Applicants do use the recruiter to judge “person-organization fit”

What do recruiters want?

• someone close to their age

• someone nice

• someone honest and informative

Many recruiters find themselves unsure about whether to “sell” a job or be realistic about its negative aspects

• initial turnover (within first 6 months) is particularly damaging to an employer

Realistic job preview

Can improve the following

• perceptions of employer fairness

• initial turnover