Human Resource Management Systems

Human Resource Management Systems

HUMAN RESOURCE MANAGEMENT SYSTEMS

NOTES

1. Human Resource Strategy and Practice

1. Introduction

1. Human-resource strategic planning is the process of providing capable and motivated people to carry out the organization’s mission and strategy.

1. A key part of this process is the staffing function, which involves the recruitment of employees – generating applicants; selection – making hiring decisions for each applicant; and socialization – orienting new hires to the organization.

1. Job Analysis

1. Job analysis is the procedure used to collect and classify information about tasks that the organization needs to complete.

1. Job analysis assists in the understanding of job activities required in a work process and helps define jobs, their interrelationships, and the demographic aptitude and ability and personality characteristics needed to do these jobs.

1. The worker characteristics of job analysis needed to meet the job requirements and specified in the job description are laid out in a job specification.

4.Job analysis the process that produces written job descriptions and

specifications.

1. Recruitment

1. Recruitment is the process of attracting the best qualified individuals to apply for a job.

1. Recruitment typically involves

a.Advertisement of a position vacancy.

b.Preliminary contact with potential job candidates.

c.Preliminary screening to obtain a pool of candidates.

1. External vs Internal Recruitment

a.External recruitment. External recruitment involves such sources as general advertisements, often in newspaper, trade journals, or via external Internet; word-of-mouth suggestions come from current employees; use of employment agencies; and applicant walk-ins.

b.Internal recruitment. By contrast, internal recruitment is a process for attracting job applicants from those currently working for the firm.

1. Selection

1. Introduction.

a.Once an applicant pool has been recruited, the selection aspect of staffing comes into play.

b.Selection involves the series of steps from initial applicant screening to final hiring of the new employee. The selection process involves completing application materials, conducting an interview, completing any necessary tests, doing a background investigation, and deciding to hire or not to hire.

1. Steps in Selection Process

a.Application materials. These materials may involve a traditional application form requesting various aspects of background and experience.

b.Employment interviews. Interviews are a mainstay of the selection process, perhaps because they can serve as public relations tools for the organization.

c.Tests. Tests may be administered either before or after the interview. They include cognitive aptitude or ability and personality tests and, increasingly, tests for drug use.

• Performance tests. Performance tests take many forms but often ask candidates to perform tasks that are identical to or at least closely related to what will be required on the job.

• Assessment centers. Assessment Centers provide a firm with a comprehensive view of a candidate by evaluating the candidate’s performance across many situations. Such assessments typically involve one to four days of various tests, simulations, role plays, and interviews, all based on dimensions the person occupying the job will need to demonstrate.

d.Background investigation. Background investigation is yet another step that can be used wither early or late in the selection process. Typically, a background investigation involves reference checks.

e.Decision to hire. Base on the previous steps, the organization may choose to make the hiring decision and present a formal job offer. At this point, a physical examination may be required if it is shown to be relevant for job performance.

1. Training and Career Planning and Development

1. Training

1. Training is a set of activities that provides the opportunity to acquire and improve job-related skills. In addition to initial training, training to improve skills is important and might cover such areas as: computer skills, diversity, sexual harassment, and implementation of new systems or technology.

1. Training can be on the job, off the job, or both.

a.On-the-job training (OJT) involves job instruction while performing the job in the actual workplace. Internships, apprenticeships, and job rotation are common forms of OJT.

b.Apprenticeships involve learning a trade from an experienced worker. They are quite common in Europe and relatively uncommon in the United States.

c.Job rotation provides a broad range of experience in different kinds of jobs in a firm. It is often used as part of management training programs where future managers may spend from a few weeks to much longer in activities such as information processing, computer software, or computer sales.

d.Off-the-job training commonly involves lectures, videos, and simulations.

1. Career Planning and Development

1. In addition to employee training for short-term jobs, both the employee and the organization need to be concerned about longer term career planning and development, whereby individuals work with their managers and/or HR experts on career issues.

1. Figure 7.1 in the textbook offers a basic framework for formal career planning. The five steps in the framework begin with personal assessment and then progress through analysis of opportunities, selection of career objectives, and implementation of strategies, until the final step: evaluation of results.

1. The manager’s responsibility concerning career planning is twofold: First, planning and managing a personal career; second, assisting subordinates in assuming responsibility for their career planning and development.

1. Thoughts about careers take on a special relevance in the new workplace. We live and work in a time when the implications of constant change pressure us to continually review and reassess our career progress. In this setting, the old notions of a career based within a single organization that takes responsibility for a person’s career development are becoming increasingly obsolete.

a.Initial entry to a career. The full implications of the new workplace become apparent at the point of initial entry to a career. Whenever a job change is considered, the best advice is to know yourself and to learn as much as possible about the new job and the organization.

b.Adult life cycle and career stages. Chapter 4 showed that as people mature they pass through an adult life cycle with many different problems and prospects. As a manager, it is especially important to recognize the effects of this cycle on the people with whom you work.

• Career stages are different points of work responsibility and achievement through which people pass during the course of their work lives.

• A career plateau is a position from which someone is unlikely to move to advance to a higher level of responsibility.

1. Performance Appraisal

1. Introduction

1. Yet another key HR management function, performance appraisal, helps both the manager and subordinate maintain the organization-job-employee characteristics match.

1. Formally defined, performance appraisal is a process of systematically evaluating performance and providing feedback on which performance adjustments can be made.

1. Purposes of Performance Appraisal

1. Any performance appraisal system is central to an organization’s human-resource management activities. Performance appraisals are intended to:

a.Define the specific job criteria against which performance will be measured.

b.Measure past job performance accurately.

c.Justify the rewards given to individuals and/or groups, thereby discriminating between high and low performance.

d.Define the development experiences the ratee needs to enhance performance in the current job and to prepare for future responsibilities.

1. These four functions describe two general purposes served by good performance appraisal systems: evaluation, and feedback and development.

a.Evaluative decisions. Evaluative decisions are concerned with such issues as promotions, terminations, and salary increases. When these decisions are made on the basis of performance criteria, as opposed to some other basis, such as seniority, a performance appraisal system is necessary.

b.Feedback and development decisions. Performance appraisals also can be used to let ratees know where they stand in terms of the organization’s expectations and performance objectives. Performance appraisal feedback should involve a detailed discussion of the ratee’s job-related strengths and weaknesses. The feedback can then be used for developmental purposes.

1. Who Does the Performance Appraisal?

1. Performance appraisals traditionally have been conducted by an individual’s immediate superior, the presumption being that since the immediate superior is responsible for the subordinate’s performance, the superior should do the appraisal.

1. In many cases, however, others may be able to better perform at least some aspects of the appraisal. For example, peers are closest to the action, and their appraisals can be especially valuable when they are obtained from several peers.

1. To obtain as much appraisal information as possible, as many as one quarter of U.S. organizations are now using not only evaluations of bosses, peers, and subordinates, but also self-ratings, customer ratings, and others with whom the ratee deals outside the immediate work unit. Such a comprehensive approach is called the 360-degree evaluation.

1. Dimensions and Standards of Performance Appraisal

1. In addition to performance outcomes, the behaviors or activities that result in these outcomes are frequently important to performance appraisal as well.

a.Output measures. A number of production and sales jobs provide ready measures of work output. For example, a final-stage assembler may have a goal of 15 completed computer monitors per hour. In addition, management may be interested in other performance dimensions, such as downtime of the equipment used for assembling. In this case, the assembler would be evaluated in terms of quantity and quality of assembly and equipment downtime.

b.Activity measures. In the preceding example, the output measures were straightforward, as was the measure of equipment downtime. Often, however, output measures may be a function of group efforts; or they may be extremely difficult to measure; or they may take so long to accomplish that they can’t be readily determined for a given individual during a given time period. For example it may be very difficult to determine the output of a research scientist attempting to advance new knowledge. In such a case, activity or behavioral measures may be called for, rather than output measures. The research scientist may be appraised in terms of his or her approach to problems, his or her interactions with other scientists, and the like.

• Activity measures are typically obtained from the evaluator’s observations and rating. In contrast, output measures are often obtained directly from written records or documents, such as production records.

1. Performance Appraisal Methods

1. Comparative methods of performance appraisal seek to identify one’s relative standing among those being rated; that is, comparative methods can establish that Bill is better than Mary, who is better than Leslie, who is better than Tom on a performance dimension. Comparative methods can indicate that one person is better than another on a given dimension, but not how much better.

1. Three comparative performance appraisal methods are ranking, paired comparison, and forced distribution.

a.Ranking. Ranking is a comparative technique of performance appraisal that involves rank ordering of each individual from best to worse on each performance dimension.

b.Paired comparison. Paired comparison is a comparative method of performance appraisal whereby each person is directly compared with every other person.

c.Forced distribution. Forced distribution is a method of performance appraisal that uses a small number of performance categories, such as “very good,” “good,” “adequate,” and “very poor” and forces a certain proportion of people into each.

1. In contrast to the comparative performance appraisal methods, absolute methods of performance appraisal specify precise measurement standards. Four of the most common absolute rating procedures are graphic rating scale, critical incident diary, behaviorally anchored rating scales, and management by objectives.

a.Graphic rating scales. A graphic rating scales is a scale that lists a variety of dimensions thought to be related to high performance outcomes in a given job and that the individual is expected to exhibit.

b.Critical incident diary. A critical incident diary is a method of performance appraisal that records incidents of unusual success or failure in a given performance aspect.

c.Behaviorally anchored rating scales. A behaviorally anchored rating scale (BARS) is a performance appraisal approach that describes observable job behaviors, each of which is evaluated to determine good versus bad performance.

d.Management by objectives. Management by objectives is a process of joint goal setting between a supervisor and a subordinate.

1. Measurement Errors in Performance Appraisal

1. To be meaningful, an appraisal system must be both reliable – provide consistent results each time it is used – and valid – actually measure people on relevant job content. A number of measurement errors can threaten the reliability and validity of performance appraisals.

a.Halo error results when one person rates another person on several different dimensions and gives a similar rating for each one.

b.Leniency error is the tendency to give relatively high ratings to virtually everyone.

c.Strictness error occurs when a rater tends to give everyone a low rating.

d.Central tendency error occurs when managers lump everyone together around the average, or middle, category.

e.Low differentiation error occurs when raters restrict themselves to a small part of the rating scale.

f.Regency error is a biased rating that develops by allowing the individual’s most recent behavior to speak for his or her overall performance on a particular dimension.

g.Personal bias error occurs when a rater allows specific biases, such as racial, age, or gender, to enter into performance appraisal.

1. Improving Performance Appraisal

1. As is true of most other issues in organizational behavior, managers must recognize certain tradeoffs in setting up and implementing any performance appraisal system.

1. In addition to the pros and cons already mentioned for each method, some specific issues to keep in mind in order to reduce errors and improve appraisals include the following:

a.Train raters so that they understand the evaluation process rationale and can recognize the sources of measurement error.

b.Make sure that raters observe ratees on an ongoing, regular basis and that they do not try to limit all their evaluations to the formally designated evaluation period, for instance, every six months or every year.

c.Do not have the rater rate too many ratees. The ability to identify performance differences drops, and fatigue sets in when the evaluation of large numbers of people is involved.

d.Make sure that the performance dimensions and standards are stated clearly and that the standards are as non-contaminating and non-deficient as possible.

e.Avoid terms such as average because different evaluators tend to react differently to the terms.

1. Remember that the appraisal system cannot be used to discriminate against employees on the basis of age, gender, race, ethnicity, and so on.

1. Group Evaluation

1. As indicated earlier, the growing trend is toward group or team performance evaluations. Such an evaluation is consistent with self-managed teams and high performance organizations.

1. Reward and Reward Systems

1. Pay as an Extrinsic Reward

1. Pay is an especially complex extrinsic reward. It can help organizations attract and retain highly capable workers, and it can help satisfy and motivate these workers to work hard to achieve high performance.

1. Edward Lawler, a management expert, has contributed greatly to our understanding of pay as an extrinsic reward. His research generally concludes that, for pay to serve as a source of work motivation, high levels of job performance must be viewed as the path through which high pay can be achieved.

a.Merit pay is a compensation system that bases an individual’s salary or wage increase on a measure of the person’s performance accomplishments during a specific time period.

b.To work well, a merit pay plan should be based on realistic and accurate measures of individual work performance and create a belief among employees that the way to achieve high pay is to perform at high levels.

1. Creative Pay Practices

1. Skill-based pay is a system that rewards people for acquiring and developing job-relevant skills in number and variety relevant to the organization’s need.

1. Gain sharing is a pay system that links pay and performance by giving the workers the opportunity to share in productivity gains through increased earnings.

1. Profit sharing plans reward employees based on the entire organization’s performance.

1. ESOPs, like profit sharing, are based on the total organization’s performance – but measured in terms of stock price.

1. Lump sum increases is a pay system in which people elect to receive their wage or salary increase in one or more “lump sum” payments.

1. Flexible benefit plans are pay systems that allow workers to select benefits according to their individual needs.

KEY TERMS

Behaviorally anchored rating scales (BARS) – Is a performance appraisal approach

that describes observable job behaviors, each of which is evaluated to determine

good versus bad performance.

Career planning and development – Means working with managers and/or HR experts

on career issues.

Career plateau – A position from which someone is unlikely to move to advance to a

higher level of responsibility.

Career stages – Different points of work responsibility and achievement through which

people pass during the course of their work lives.

Central tendency error – Occurs when managers lump everyone together around the

average, or middle, category.

Critical incident diary – A method of performance appraisal that records incidents of

unusual success or failure in a given performance aspect.

ESOP – Similar to profit sharing, ESOPs are based on the total organization’s

performance – but measured in terms of stock price.

Flexible benefit plans – Are pay systems that allow workers to select benefits according

to their individual needs.

Forced distribution – Is a method of performance appraisal that uses a small number of

performance categories, such as “very good,” “good,” “adequate,” and “very