Human Resources Final Exam

human resource management

Employee Compensation

• All forms of pay going to employees and arising from their employment. \n • Main components: \n – Direct financial payments (wages, salaries, incentives, commissions, and \n bonuses). \n – Indirect financial payments (financial benefits like employer-paid insurance and \n vacations).

Aligning Total Rewards with Strategy

• Aligned reward strategy is directly related to employee behaviors the firm needs to achieve its competitive strategy. \n • Total rewards include also more challenging jobs, career development, and recognition programs. \n • Considerations in setting compensation policy: \n – Does the firm want to be a leader or follower regarding pay. \n – Business strategy. \n – Cost of different types of compensation.

Five Components of Total Rewards

1\. Compensation \n 2. Benefits \n 3. Work-life programs \n 4. Performance and recognition \n 5. Development and career opportunities

Basic Considerations in Determining Pay Rates

• Legal considerations in compensation \n • Employment/Labour Standards Act \n • Pay Equity Acts \n • Human Rights Acts \n • Canada/Quebec Pension Plan \n • other legislation (worker’s comp., EI) \n • Union influences

Establishing Pay Rates

Stage 3: Combine job evaluation and salary survey to determine pay \n Stage 2: Conduct wage/salary survey \n Stage 1: Job evaluation

Stage 1: Preparing for Job Evaluation

Job evaluation is a systemic comparison to determine the relative worth of a job. Establish a benchmark job against which other jobs are compared. Compensable factors: May include know-how, problem solving, accountability. All comparable jobs are evaluated using the same factors. Job evaluation methods: Classification/grading: Classes are groups of similar jobs. Grades are jobs similar in difficulty but otherwise different. Pay grade comprises jobs of approximately equal value or importance. Point method identifies number of compensable factors in a job. Pay grades created to combine jobs of approximate equal value or importance. Contains jobs that fall within a specific range of points

Factor

Skill, Effort, Responsibility, and Working Conditions

Sub factors

Education and Experience, Interpersonal Skill, Physical Effort, Mental Effort, Supervision of Others, Planning, Physical Environment, and Travel

Stage 2: Conduct a Wage/Salary Survey

Use survey to: Determine pay rates for benchmark jobs. Determine pay based on marketplace rates. Collect data on benefits, pay-for-performance, etc. Formal/informal surveys by the employer. Commercial, professional, and government salary surveys. Any survey data must be carefully assessed for accuracy.

Stage 3: Combine Job Evaluation and Salary \n Surveys to Determine Pay for Jobs

Wage Curve - a graphic description of the relationship between the value of the job and the average wage paid for this job. Pay Ranges - a series of steps or levels within a pay grade, \n usually based on years of service. Determine pay for pay grades and develop rate ranges. Benefits of using pay ranges: Allows employers to provide for performance differences. More flexibility for employees with greater experience of \n seniority. Broadbanding reduces the number of salary grades and ranges; allows flexibility in compensation.

Pay for Knowledge

Competency-based pay (managers, professionals)Skill-based pay (manufacturing employees). Pay-for-knowledge program should include: competencies/skills directly important to job performance. new competencies that replace competencies that are no longer important on-the-job training, not “in the classroom.”

Fixed Pay

• Compensation independent of performance levels. \n • Includes base pay and other forms of compensation.

Variable Pay

Any plan that links pay with productivity, profitability, or some other measure of organizational performance. Employers prefer variable pay plans while holding salary increases of fixed compensation at modest levels. Accurate performance appraisal is a condition of pay-for- performance plans.

Incentives for All Employees

• Merit pay \n • Employee share purchase/stock ownership plans \n • Profit-sharing plans \n • Scanlon plans \n • Gainsharing plans

Incentives for Senior Managers and Executives

Executive compensation includes salary, benefits, short- term incentives, long-term incentives, and perquisites

Team or Group Incentives

Options: All members receive pay earned by highest or lowest producer; or average earned by the group. \n Production standard is based on the final output of the group. All members receive same pay based on the piece rate for the job. Choose a measurable definition of group performance or productivity that the group can control.

Incentives for Salespeople

Salary plan, Commission plan, and Combination plan

Developing Effective Incentive Plans Considerations

Performance pay cannot replace good management, Firms get what they pay for, “Pay is not a motivator”, Rewards rupture relationships, and Rewards may undermine responsiveness

How to Implement Incentive Plans

1\. Pay for performance \n 2. Link incentives to activities that engage employees \n 3. Link incentives to measurable, valuable competencies \n 4. Match incentives to organizational culture \n 5. Keep group incentives clear and simple \n 6. Overcommunicate \n 7. The greatest incentive is the work itself

Employee Recognition Programs

Emerging as a critical component of incentive plans. Traditionally, recognition has been for long service. Movement toward recognition throughout the career. Particularly effective in smaller entrepreneurial \n companies. Effective in achieving improved attitudes, increased workloads, and productivity.

Employee Benefits

Indirect financial payments that an employee receives \n during employment. Employee services are growing in importance as part of the total compensation. Benefits matter to employees. Useful in attracting talent. Important for aging workforce. Benefits aligned with business strategy help attract and \n retain the right people to achieve business objectives

Government-Mandated Benefits

Employment Insurance (EI), Canada/Quebec Pension Plan (C/QPP), Workers’ Compensation, Paid Time Off, Unpaid Leaves of Absence, and Pay on Termination

Voluntary Employer-Sponsored Benefits

Life Insurance, Supplementary Healthcare/Medical Insurance, Short Term Disability Plans and Sick Leave Plans, Long Term Disability, and Retirement Benefits

Family-Friendly Benefits

• Subsidized childcare \n • Eldercare

Flexible Work Schedules

Flextime, Telecommuting, Compressed work weeks, Job sharing, and Work sharing

Voluntary Job-Related Services

Transportation, Food services, Educational subsidies, Volunteering, and Sabbaticals

Personal Services

Credit unions, Counselling services, BAP’s, and Other services

Executive Perquisites

Salary guarantee, Relocation benefits, Outplacement services, Company cars/planes, Executing dining rooms, Legal services, Expense accounts, Club memberships, Education for dependents

Purpose of OH&S Legislation

Laws intended to protect workers by minimizing work-related accidents and illnesses. Laws have mandatory compliance requirements. OH&S laws in Canada: General rules. Rules for specific industries (e.g. mining). Rules related to specific hazards (e.g. asbestos).

Enforcement of OH&S Laws

Government inspectors have power to carry out safety inspections without a warrant. They can issue orders to stop work, stop using tools, install first aid equipment, and stop emission of contaminants. \n Penalties consist of fines and/or jail term. Bill C-45 imposes criminal liability on “all persons” who direct the work of others and fail to ensure an appropriate level of safety in the workplace.

Principle of joint responsibility

Both workers and employers must maintain a hazard-free workplace and enhance the health and safety in the workplace

Employer responsibilities

Exercise “due diligence” – taking every reasonable precaution to ensure health and safety of workers. \n Complete and file accident reports and maintain records. Ensure safety rules are enforced; use progressive discipline. Post safety notices and legislative information

Supervisor’s role in safety

Duty to ensure workers comply with OH&S regulations. Obligation to advise and instruct workers. Instill desire to work safely and minimize hazards

Employee responsibilities

Take reasonable care of their own and coworkers’ safety. Wear protective clothing, report breach of regulations.

Employee rights

To know about workplace safety hazards. To participate in the OH&S process. To refuse unsafe work if they have “reasonable cause” to believe \n the work is dangerous.

Joint health and safety committees

Management and labor work together to ensure safe and healthy workplace. Investigate employee complaints and accidents. Inspecting the workplace in order to identify potential health and safety hazards, evaluating the hazards, implementing solutions. \n Promoting measures to protect health and safety, \n disseminating information about health and safety laws and regulations. Committees are usually required to consist of between 2 and 12 members, as least half of whom must represent workers.

Control of Toxic Substances (WHMIS) – \n Workplace Hazardous Materials Information \n System

Legally mandated system designed to protect workers. WHMIS elements: Labelling of hazardous material containers. Material safety and data sheets (MSDS) to outline product’s potentially hazardous ingredients and the procedures for safe \n handling. Training to ensure employees can identify WHMIS symbols and labels; and read and apply information on the MSDS.

Unsafe Conditions

Examples: defective or improperly guarded equipment, hazardous procedures, unsafe storage, illumination or ventilation

Remedies

Eliminate or minimize unsafe conditions. Follow government standards. Use checklist to analyze job hazards

Other work-related factors

The job itself – some jobs are inherently more dangerous than others. Work schedules – shift work, fatigue and/or long working hours. Psychological climate of workplace – hostility among employees, stress causing factors, high seasonal layoff rate

Unsafe Acts

Caused by employees, not the situation: Operating at unsafe speeds. Making safety devices \n inoperative. Using unsafe procedures. Carrying/lifting improperly. Throwing materials. Taking unsafe positions. Acting irresponsibly

Personal Characteristics

May be the basis for certain attitudes and behavior. Tendency to take risks. Accident proneness is \n situational: Lack of motor skills may contribute.

Personal factors

Poor vision. Low literacy skills. Age. Perceptual vs motor skills.

Fostering a Culture of Safety

Management and employees both involved in safety promotion. Visible and interactive communication and collaboration on safety matters. Shared vision of safety excellence. Assign critical safety functions to specific individuals or teams. Continuous effort in identifying and correcting hazards- Encourage incident reporting.

Reducing Unsafe Conditions

Design jobs to remove or reduce physical hazards. Ensure employees wear personal protective equipment. Focus on changing employee behaviors.

Reducing Unsafe Acts

Selection testing for job-related physical skills and abilities. Leadership commitment through values, resource allocation and culture based on safety. \n Training and education to ensure safety procedures are followed. Positive reinforcement through collecting data and providing feedback on safety \n performance.

Before the Accident

The appropriate time to begin safety monitoring. \n Remove unsafe conditions. Screen out employees \n who might be accident- prone without violating human rights. Establish safety policy. Establish loss control goals

After the Accident

Provide first aid. Ensure quick medical attention. \n Demonstrate concern for the injured worker. Document the accident. File required accident report. Encourage speedy return to work. National Institute of Disability Management and Research recommends commitment, collaboration and creativity in managing accident events.

OH&S Challenges in Canada

Alcohol and Substance Abuse, Job-Related Stress, Burnout, Post-Traumatic Stress Disorder (PTSD), Repetitive Strain Injuries, Workplace Toxins, and Workplace Violence

Prevention and Control of Workplace Violence

Identify jobs with high risk of violence, Institute workplace violence policy, Create a healthy work environment, Heighten security measures, Provide workplace violence training, and Improve employee screening

Employee Wellness Programs

Proactive approach to employee health and well-being. Healthy workplace elements – physical and social environments, and health practices. Wellness initiatives encompass a wide variety of programs \n and activities. Focus on wellness is driven by shrinking workforce, increase in postponed retirement, increased awareness of mental health, and medical and technological advances. Wellness programs include: Stress management, Nutrition and weight management, Smoking cessation programs, Heart health, Physical fitness, Ergonomics and many other initiatives

Employee Exits

Challenge for organizations: Time, money and resources invested in recruiting, training, and \n maintaining employees. Disrupt ability to produce and maintain talent

Turnover

is the termination of employment either by the \n employee or employer

Reasons for turnover

Voluntary turnover, Involuntary turnover

Voluntary turnover

is employee initiated, usually in the form of quits, resignation or retirement.

Involuntary turnover

is employer initiated and is usually in the form \n of dismissals or layoffs.

Voluntary Reasons

Employee sought new challenges = 30 percent. Ineffective leadership = 25 percent. Poor relationship with managers = 22 percent. Employee desired work–life balance = 21 percent. Employee felt contributions weren’t valued = 21 percent. Employee seeking better compensation or benefits = 18 percent. Employee seeking better personal values = 17 percent. Employee seeking better fit for skills = 16 percent.

Involuntary Reasons

Downsizing or restructuring = 54 percent, Company financially unstable = 13 percent, and Company/job relocated = 12 percent

Cost of Turnover

Separation costs – exit interviews, administrative function, separation or severance pay. Vacancy costs – increased overtime, use of temporary workers, loss of sales. Replacement costs – recruiting and hiring. Training costs – for replacement

Challenges of Voluntary Turnover

Reasons for turnover: Insufficient pay or unfair pay practices. Lack of honesty, integrity, ethics. Lack of trust in senior leaders. Difficult managerial style. Lack of work-life balance. Lack of recognition. Toxic workplace environment. Unhealthy or undesired culture

Organizational Reasons for Involuntary Turnover

Job performance is below acceptable standards. Economic or financial pressures may result in downsizing. New strategic direction results in closing business units. Employer initiated turnover should be fair. All reasonable steps should be taken first to save the employment relationship.

Dismissal for Just Cause

Employer-initiated disciplinary step based on poor \n behaviors. No severance pay or reasonable notice. Management is required to prove sub-par performance, feedback, and opportunities to correct behaviors. Disobedience, incompetence, dishonesty, insubordination, or misconduct.

Downsizing

Intentional reduction of workforce to improve efficiency and/or effectiveness.

Layoff

Temporary withdrawal of employment for business and/or economic reasons. There is no work available for short term but management intends to recall employees. Alternatives to layoffs – voluntary pay reduction, use of vacation time, voluntary time off, work-share programs.

Providing Reasonable Notice

Required when terminating an employee if just cause does not exist

Reasonable notice legislation

requires an employer to notify employees of termination through layoffs. Minimum notice varies on size of layoffs. Payment in lieu of may \n be allowed

Wrongful dismissal

occurs when reasonable notice is not given except in termination for just cause. Damages may be \n awarded for certain cases.

Constructive Dismissal

Occurs when employer makes unilateral changes in the employment contract. Demotion, reduction in pay and benefits, forced resignation, forced early retirement, forced transfer, or changes in job duties \n and responsibilities. Unacceptable to employee. Not a formal termination. Employee may sue for wrongful dismissal.

Involuntary Termination

Preparation: Have clear termination clauses in employment contract. Document all disciplinary actions. Communicate discipline policy clearly in writing and apply policy consistently. Time termination around special occasions. Hold termination meeting in a private location during a discreet time of day. Include a third party in the termination meeting.

The Termination Interview

Plan and schedule the meeting. Get to the point immediately. Describe the situation; do not attack the person. Listen and prepare for variety of reactions that may range from hostile to emotional. Review elements of severance package. Explain where to go next.

Labor Union

An officially recognized body representing a group of \n employees who have joined together to present a collective voice in dealing with management. \n Primary goal is to obtain economic benefits and improve treatment of members.

Organizational Strategies Regarding Unions

Union acceptance strategy, Union avoidance strategy, Union substitution approach, and Union suppression approach

Step 1: Employees Decide to seek Collective \n Representation

Reasons for employee desire to unionize include: \n Job dissatisfaction, Lack of job security, fear of job loss, Unfair or biased administration of policies and practices, Perceived inequities in pay, Lack of opportunity for advancement, Lack of influence on work-related decisions, Unpleasant work environment, low morale, Poor communication, and Belief that unions can improve pay and working conditions and get them their fair share

Step 2: Union Organizing Campaign

Gather information about employees’ sources of dissatisfaction. Organizing meeting to identify employees to help in campaign. Form in-house organizing committee. Present case to employees; encourage signing of authorization card. Outcomes – rejection or certification

Employer Response to Organizing Campaign

Campaign to counteract union drive. Communication strategies to remind employees about company’s good points. Inform supervisors what they can and cannot say. Obtain background information about union. Employers have the right to: Express their views on unions; prohibit distribution of union literature on company property. Increase wages, make promotions, or other HR actions

Step 3: Union Recognition

Voluntary recognition, Regular certification, Pre-hearing vote, and Termination of bargaining rights

Voluntary recognition

by the employer of the union as the official bargaining agent for a group of employees

Regular certification

union demonstrates high level of support, LRB grants certification

Pre-hearing vote

used when unfair labor practices are used in the organizing campaign, LRB may order a vote

Termination of bargaining rights

workers apply for decertification in cases where union has failed to produce or its’ members are dissatisfied.

Step 4: Collective Bargaining: Preparation

Plan bargaining strategy and process; assemble data. \n Analyze other collective agreements and trends. Review existing contract. Review prior grievances. \n Conduct external wage and salary surveys. Obtain input from management and union stewards. Obtain company financial information. Gather demographic information on membership. Obtain input from members. Make plans for possible strike or lockout.

Step 4: Collective Bargaining: Negotiations

Location, Frequency and duration of meetings, Establish climate in initial bargaining session, Parties argue for demands in subsequent sessions. Both are looking for compromise alternatives. Distributive bargaining, and Integrative bargaining

Distributive bargaining

win-lose strategy

Integrative bargaining

win-win solution

Step 4: Collective Bargaining: Contract Approval

Memorandum of settlement, and Ratification of the settlement

memorandum of settlement

is a summary of the terms and conditions agreed to by the parties that is submitted to the constituent groups for final approval

Ratification of the settlement

formal approval by secret- ballot vote of the bargaining unit members of the agreement negotiated between union and management.

Step 4: Collective Bargaining: Third-Party \n Assistance

Conciliation, Mediation, Arbitration, Interest Arbitration, Strike / Strike Vote / Picket, Boycott, Lockout, and Wildcat Strike

Step 5 – Day to Day Contract Administration

Major sources of Disagreement: Seniority, Discipline

Seniority

length of service

Discipline

interpretation, documented evidence

Grievance

a written allegation of a contract violation, filed by an individual bargaining unit member, the union, or \n management. The primary purpose of the grievance \n procedure is to ensure the application of the contract with a degree of justice for both parties.

Impact of Unionization on HRM

Collective agreements result in changes in HRM. Management has less freedom to make unilateral \n decisions. Increased responsibilities for HR. Requires more written records due to critical documentation for possible grievances and arbitration. Institute an open-door policy. Demonstrate concern for employee well-being. Form joint committees and training programs. Meet regularly. Use third-party assistance

How Inter-country Differences Affect HRM

Cultural factors, Economic systems, Legal systems, Labor cost factors, and Industrial relations factors

Considerations for Relocating Expatriates

Candidate identification, assessment and selection. Look for cultural sensitivity, interpersonal skills, and flexibility. Cost projections. Assignment letters. Compensation and benefits. Relocation assistance. Family support may include cultural orientation, educational assistance and emergency provisions

Cost projections

quantify total costs

Assignment letters

document specific job requirements and remuneration

Why Expatriate Assignments Fail

Changing business conditions. Inability of family to adjust or family problems. Emotional immaturity of the employee. Inability to cope with cultural differences and larger responsibilities.

Level 1

Focuses on the impact of cultural differences and on raising trainee awareness of such differences

Level 2

Focuses on attitudes and aims at getting participants to understand how attitudes are both negative and positive are formed and how they influence behavior