Chapter Fifteen Key Terms Business 101

Human resource (HR) management

The management function focused on maximizing the effectiveness of the workforce by recruiting world-class talent, promoting career development, and determining workforce strategies to boost organizational effectiveness

Outsourcing

• The number of outsourced American jobs continues to grow

• Provides businesses with lower costs and access to a global talent pool

Wage Gap

• The average CEO at America’s top 350 firms earns 320 times what the average employee earns

• Harvard Business Review suggests that performance-based pay can actually have dangerous outcomes for companies

Older Workers

• Beginning in 2011 and continuing through 2030, every day more than 10,000 baby boomers reach the age of 65

• To retain their best employees, companies are implementing flexible schedules, training opportunities, and creative pay schedules

Younger Workers

• Often bring optimism, open minds, technological know-how, a team orientation, a proven ability to multitask, and a multicultural perspective

• May also have a sense of entitlement and high expectations about a job

Women Workers

• Women continue to face challenges to equity in pay and promotions

• Implementing retention plans for valued workers and proactive steps to reintegrating returning workers to the workforce

Work–Life Balance

• With tech capabilities that keep workers connected to the office, work-life balance is becoming what some call a work-life blend

• Worker flexibility is a significant issue, and one not all managers embrace

HR Problems

• HR professionals lack sufficient strategic skills

• Perception problems undermine the effectiveness of the HR’s strategies

HR Solutions

• HR professionals should implement ways to quantify their impact on the company

• HR people should remain open to exceptions while enforcing broad company policies

Job analysis

The examination of specific tasks that are assigned to each position, independent of who might be holding the job at any specific time

Job description

An explanation of the responsibilities for a specific position

Job specifications

The specific qualifications necessary to hold a particular position

First step in HR planning?

Evaluate the company’s current workforce

Second step in HR planning?

forecast future human resource requirements and compile a HR plan

HR Management Strategic Planning

• recruitment

• selection

• training

• evaluation

• compensations/benefits

• separation

Internal recruitment

The process of seeking employees who are currently
within the firm to fill open positions

• Boosts employee morale

• Reduces risk for the firm

• Lowers the cost of recruitment and training

External recruitment

The process of seeking new employees from outside the firm

Recruitment

Finding the Right People

Selection

Making the Right Choice

Applications

Help reject unqualified candidates, rather than to actually choose qualified candidates

(Interviews) Structured interviews

An interviewing approach that involves developing a list of questions beforehand and asking the same questions in the same order to each candidate

Testing

Main categories include skills testing, personality testing, drug testing, and physical exams

References and Background Checks

References and background checks can uncover lies of potential employees

(Job Offers) Probationary period

A specific time frame (typically three to six months) during which a new hire can prove their worth on the job before they become permanent

Contingent Workers

Employees who do not expect regular, full-time jobs, including temporary full-time workers, independent contractors, and temporary agency or contract agency workers

Training and Development

Honing the Competitive Edge

Orientation

The first step in the training and development process, designed to introduce employees to the company culture and provide key administrative information

On-the-job training

A training approach that requires employees to simply begin their jobs—sometimes guided by more experienced employees—and to learn as they go

Apprenticeships

Structured training programs that mandate that each beginner serve as an assistant to a fully trained worker before gaining full credentials to work in the field

Off-The-Job-Training

Classroom training happens away from the job during work hours

Computer Based Training

• Training delivered via the Web

• Plays a crucial role in off-the-job training

Management development

Programs to help current and potential executives develop the skills they need to move into leadership positions

Evaluation

Assessing Employee Performance

Performance appraisal

A formal feedback process that requires managers to give their subordinates feedback on a one-to-one basis, typically by comparing actual results to expected results

HR role in performance appraisals is to

• Create evaluation tools that tie directly into the company’s objectives

• Coordinate the actual appraisal process

• Ensure that managers are trained in providing relevant and objective feedback

Compensation

Show Me the Money

Compensation

The combination of pay and benefits that employees receive in exchange for their work

• Factors involved include competition, contribution, and ability to pay, cost of living, and legislation

Wages

The pay that employees receive in exchange for the number of hours or days that they work

Salaries

The pay that employees receive over a fixed period, most often weekly or monthly

Commission

Commission involves payment as a percentage of sales. Usually, larger commissions go with smaller base pay

Bonuses

Bonuses are lump-sum payments, typically to reward strong performance from individual employees

Profit Sharing

Profit-sharing plans reward employees with a share of company profits above and beyond predetermined goals

Stock Options

Stock options are the right to buy shares of company stock at some future date for the price of the shares on the day that the company awarded the options.

Pay for Knowledge

This approach involves awarding bonuses and pay increases in exchange for increases in knowledge such as earning an MBA

Benefits

Non-cash compensation, including programs such as health insurance, vacation, and childcare

Cafeteria-style benefits

An approach to employee benefits that gives all employees a set dollar amount that they must spend on company benefits, allocated however they wish within broad limitations

Flextime

A scheduling option that allows workers to choose when they start and finish their workdays, as long as they complete the required number of hours

Compressed workweek

A version of flextime scheduling that allows employees to work a full-time number of hours in less than the standard workweek

Remote Work

• Offers both benefits and drawbacks to employees and employers

• Many employees “commute” via phones, videoconferencing, and broadband networks

Job Sharing

Includes benefits such as higher morale and better retention

Separation

Companies should proceed carefully while terminating employees in order to avoid wrongful-termination lawsuits

Reasons for separation

• Promotions or job offers

• Getting fired, transferred, or laid off

• Personal reasons, such as family needs, retirement, or a change in career aspirations

Civil Rights Act of 1964

Federal legislation that prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions, or privileges of employment based on race, color, religion, sex, or national origin

Title VII

A portion of the Civil Rights Act of 1964 that prohibits discrimination in hiring, hiring, compensation, apprenticeships, training, terms, conditions, or privileges of employment based on race, color, religion, sex, or national origin for employers with 15 or more workers

Equal Employment Opportunity Commission (EEOC)

A federal agency designed to regulate and enforce the provisions of Title VII

Affirmative action

Policies meant to increase employment and educational opportunities for historically marginalized groups—especially groups defined by race, ethnicity, or gender

• Seeks to make up for the systematic discrimination of the past by creating more opportunities in the present

Sexual harassment

Workplace discrimination against a person based on their gender

• Ranges from requests for sexual favors to the presence of a hostile work environment

Heightened national awareness of continuing systemic racism in the United States has prompted businesses to?

Reassess policies, especially in human resources